Document:

ALLSTATE LIFE INSURANCE COMPANY
                                                                 LOAN NO. 121873

                  RECOURSE INDEMNITY AGREEMENT
                  ----------------------------

         THIS RECOURSE INDEMNITY AGREEMENT (the "Agreement") is dated as of this
_____ day of September, 2000, among AG-CHEM EQUIPMENT CO., INC., a Minnesota
Corporation ("Borrower") (Borrower is also referred to as "Indemnitor") and
ALLSTATE LIFE INSURANCE COMPANY ("Lender").

                           RECITALS
                           --------

         A. Borrower is the present owner of the real and personal property
commonly known as Brenwood I, II, III, and IV, in Minnetonka, Minnesota, and
legally described in Exhibit A attached hereto (the "Property");

         B. Pursuant to Lender's commitment letter dated July 20, 2000, Borrower
has executed and delivered to Lender a mortgage note of even date herewith (the
"Note"), in the principal sum of $9,000,000.00, secured by a Mortgage,
Assignment of Leases, Rents and Contracts, Security Agreement and Fixture Filing
(the "Mortgage") on the Property. Borrower will benefit from the disbursement of
the loan (the "Loan") evidenced by the Note and secured by the Mortgage and
Collateral as defined in the Mortgage; and

         C. As a condition precedent to funding the Loan, Lender requires the
execution of this Agreement.

                           AGREEMENTS
                           ----------

         NOW THEREFORE, in order to induce Lender to accept the Property as
security for the Loan and to enter into the Loan and to disburse the proceeds of
the Loan, and in consideration of the matters described in the foregoing
Recitals, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1. Recitals. The Recitals are incorporated herein by this reference.

         2. Definitions: For purposes of this Agreement, "Recourse Obligations"
means and includes, (i) the tenant's rental obligation (at an annual rental rate
of $11 per square foot or $42,362.83 per month) and operating expenses,
allocable to the tenant space leased by Ag-Chem Equipment Co., Inc., (or its
successors or assigns) in the Property based on 46,214 square feet for the
unexpired portion of a lease term commencing no later than September 1, 2000 and
expiring no earlier than October 1, 2012; (ii) all real estate taxes and
assessments relating to the Property; (iii) Borrower's misappropriation or
misapplication of funds, fraud, waste, willful

<PAGE>

misrepresentation and willful damage relating to the Loan or Property; and (iv)
accounting for all tenant security deposits held by Ag-Chem Equipment Co., Inc.
as landlord or owing to tenants of the Property.

         3. Indemnification. Indemnitor hereby jointly and severally agrees, at
its sole cost and expense, to unconditionally indemnify, defend, and hold
Lender, its directors, officers, employees and agents harmless against any loss,
liability, damage (whether direct or consequential), expenses, claims,
penalties, fines, injunctions, suits, proceedings, disbursements or expenses
(including, without limitation, reasonable attorneys' and experts' fees and
disbursements and court costs) (collectively, the "Liabilities") for, arising
out of, or relating to the Recourse Obligations.

         Indemnitor shall assume the burden and expense of defending all suits,
administrative proceedings and disputes of any description with all persons,
entities, political subdivisions or government agencies arising out of the
matters to be indemnified under this Ageement. Indemnitor shall pay, promptly
upon entry, any nonappealable order, judgment or other final resolution of any
claim or dispute arising out of the matters to be indemnified under this
Agreement and shall pay promptly when due any fines, penalties or agreed
settlements arising out of the matters to be indemnified under this Agreement.
In the event that such payment is not made, Lender, at its sole discretion, may
proceed to file suit against Indemnitor to compel such payment.

         4. Duration of Indemnity. The duration of the indemnification hereunder
shall be until payment of the Note in full.

         5. Notices from Indemnitor. Indemnitor shall promptly after obtaining
knowledge thereof advise Lender in writing of any governmental or regulatory
actions instituted or threatened in writing under any Recourse Obligation
affecting the Property or any indemnification hereunder including, and all
claims made or threatened in writing by any third party against Borrower, any
Indemnitor or the Property relating to any Recourse Obligation. Indemnitor shall
deliver to Lender any documentation or records regarding the above as Lender may
reasonably request and which are susceptible of being obtained by Indemnitor
without undue cost or expense and without the necessity for initiating legal
proceedings to obtain the same.

                                      2
<PAGE>

         6. Notice and Settlement of Claims Against Lender.

              (a) Lender agrees that it shall provide Indemnitor with written
notice of any claim or demand which Lender has determined could give rise to a
right of indemnification under this Agreement. Such notice shall be given within
a reasonable time after Lender becomes aware of facts and shall specify, to the
best of Lender's knowledge, the facts giving rise to the alleged claim, and the
amount to the extent determinable, of liability for which indemnity is asserted.

              (b) Lender agrees that it will not settle or otherwise compromise
any action, suit or proceeding brought against Lender on a claim indemnified
hereunder without the prior written consent of Indemnitor which consent shall
not be unreasonably withheld. The Indemnitor also agrees that it will not settle
or compromise such action, suit or proceeding without Lender's prior written
consent which consent shall not be unreasonably withheld.

         7. Payment of Lender's Expenses. In any pending or threatened
litigation, contest, dispute, suit or proceeding (whether instituted by Lender,
Indemnitor, or any other party) in any way relating to this Agreement and the
indemnification described herein, or to enforce the indemnification hereunder,
Lender shall have the right to retain counsel of its own choice for advice or
other representation without affecting or otherwise impairing the
indenmification hereunder and all Liabilities arising from such services shall
be payable by Indemnitor within 30 days of demand.

         8. Obligations Absolute and Waivers.

            (a) The obligations of Indemnitor hereunder shall remain in full
force and shall not be impaired by: (i) any express or implied modification,
renewal, extension or acceleration of or to the Note, the Mortgage, any other
loan documents executed by Borrower or any other party in connection with the
Loan and all indemnity agreements executed by Borrower or any other party
including without limitation this Agreement (collectively the "Documents"); (ii)
any exercise or non-exercise by Lender of any right or privilege under any of
the Documents; (iii) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to any
Indemnitor or Borrower, or any affiliate of Borrower or any guarantor, or any
action taken with respect to this Agreement by any trustee or receiver or by any
court in any such proceeding, whether or not Indemnitor shall have had notice or
knowledge of any of the foregoing; (iv) any release, waiver or discharge of the
Borrower or any endorser or guarantor from liability under any of the Documents
or any Indemnitor's grant to Lender of a security interest, lien or encumbrance
in any of the Indemnitor's property; (v) any subordination, compromise,
settlement, release (by operation of law or otherwise), discharge, compound,
collection, or liquidation of any of the Documents or any collateral described
in any of the Documents or otherwise, or any substitution with respect thereto
except as specifically required by this Agreement; (vi) any assignment or other
transfer of any of the Documents, in whole or in part; (vii) any acceptance of
partial performance of any

                                       3
<PAGE>

of the obligations of Borrower under the Documents; (viii) any consent to the
transfer of any collateral described in the Documents or otherwise; and (ix) any
bid or purchase at any sale of the collateral described in the Documents or
otherwise.

              (b) Indemnitor unconditionally waives the following defenses to
enforcement of this Agreement: (i) all presentments, demands, demands for
performance, notices of nonperformance, protests, notices of protest, dishonor,
nonpayment, partial payment, default and protest, notices of acceptance of this
Agreement and all other notices and formalities to which the Indemnitor may be
entitled (except for notices which are specifically required by this Agreement);
(ii) any right to require Lender to proceed against Borrower, any Indemnitor or
any guarantor or to proceed against or exhaust any collateral described in the
Documents; (iii) any defense arising by reason of any invalidity or
unenforceability of any of the Documents or any disability of Borrower or any
guarantor; (iv) any defense arising by reason of the manner in which Lender has
exercised its remedies under the Documents; (v) any defense based upon an
election of remedies by Lender; (vi) any duty of Lender to advise Indemnitor of
any information known to Lender regarding the financial condition of Borrower
and all other circumstances affecting Borrower's ability to perforrn its
obligations to Lender, it being agreed that Indemnitor assumes the
responsibility for being and keeping informed regarding such condition or any
such circumstances; (vii) any right of subrogation and any rights to enforce any
remedy which Lender now has or may hereafter have against Borrower and any
benefit of, and any right to participate in, any security now or hereafter held
by Lender; and (viii) to the extent permitted by law, any right to assert
against Lender any legal or equitable defense, counterclaim, set off,
crossclaim or right of contribution which any Indemnitor may now or at any time
or times hereafter have against any other Indemnitor.

         9. No Waiver. Indemnitor's obligations hereunder shall in no way be
impaired, reduced or released by reason of Lender's omission or delay to
exercise any right described herein or in connection with any notice (except for
notices required of Lender pursuant to this Ageement), demand, warning or claim
regarding Recourse Obligations governing the Property.

         10. Recourse. Each Indemnitor's liability hereunder shall not be
subject to, limited by or affected in any way by any "non-recourse" provisions
contained in the Note, the Mortgage or any other documents executed and
delivered in connection with the Loan. Indemnitor agrees that the
indemnification contained herein is separate, independent of and in addition to
Borrower's undertakings under the Note. Indemnitor agrees that a separate action
may be brought to enforce the provisions of this Agreement which shall in no way
be deemed to be an action on the Note, whether or not Lender would be entitled
to a deficiency judgment following a judicial foreclosure or sale under the
Mortgage.

         11. Successors and Assigns. Subject to the provisions of paragraph 4,
this Agreement and the indemnification contained in this Agreement shall be
continuing, irrevocable and binding on the Indemnitor and its respective
successors and assigns, and this Agreement shall be binding upon and shall inure
to the benefit of Lender and Lender's successors and assigns. The death or

                                       4
<PAGE>

dissolution of any one or more of the Indemnitors shall not affect this
Agreement or any of each Indemnitor's obligations hereunder. It is agreed by the
Indemnitor that its liabilities hereunder are not contingent on the signature of
any other Indemnitor.

         12. Notices. Any notices which any party may be required, or may
desire, to give shall, unless otherwise specified, be in writing and shall be
(i) hand delivered, effective upon receipt (ii) sent by United States Express
Mail or by private overnight courier, effective upon receipt, or (iii) served by
certified mail, postage prepaid, return receipt requested and addressed as
follows:

         In the case of Borrower and Indemnitor, to:

             Ag-Chem Equipment Co., Inc.
             5720 Smetana Drive
             Minnetonka, MN 55343-9688
             Attn: Chief Financial Officer

         In the case of Lender, to:

             Allstate Life Insurance Company
             Allstate Plaza South, Suite G5C
             3075 Sanders Road
             Northbrook, Illinois 60062
             Attn: Commercial Mortgage Division
                   Servicing Division

         with a copy to:

             Allstate Life Insurance Company
             Allstate Plaza South, Suite G5A
             3075 Sanders Road
             Northbrook, Illinois 60062
             Attn: Investment Law Division

or such other address(es) or addressee(s) as the party to be served with notice
may have furnished to the other party in accordance with this paragraph.

         13. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter contained in this Agreement.

                                       5
<PAGE>

         14. Amendment and Waiver. This Agreement may not be amended except by a
writing signed by both parties nor shall observance of any term of this
Agreement be waived except with the written consent of the Lender.

         15. Governing Law. This Agreement shall be governed and construed as to
interpretation, enforcement, validity, construction, effect and in all other
respects by the laws, statutes and decisions of the State of Minnesota. The
United States District Court for the District of Minnesota and any court of
competent jurisdiction of the State of Minnesota shall have jurisdiction in any
action, suit or other proceeding instituted to enforce this Agreement.
Indemnitor hereby waives (a) any objections to the jurisdiction of such courts,
(b) any objections to venue and (c) its right to a trial by jury in any action,
proceeding or counterclaim brought by Lender.

         16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same agreement.

         17. Severability. All provisions contained in this Agreement are
severable and the invalidity or unenforceability of any provision shall not
affect or impair the validity or enforceability of the remaining provisions of
this Agreement.

         18. Headings. The descriptive headings of the paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

         IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.

BORROWER AND INDEMNITOR:

AG-CHEM EQUIPMENT CO., INC.

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

                                        6
<PAGE>

LENDER:

ALLSTATE LIFE INSURANCE COMPANY

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

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

<PAGE>

                  EXHIBIT A

Lots 2, 4 and 5, Block 1, Brenwood Business Park, Hennepin County, Minnesota

Lot 3, Block 1, Brenwood Business Park, Hennepin County, Minnesota

Together with a 30.00 foot perpetual easement for access purposes and a 42.00
foot perpetual easement for access purposes over, under and across a portion of
Lot 4, Block 1, Brenwood Business Park, according to the recorded plat thereof,
pursuant to warranty deed dated October 3, 1980, recorded October 9, 1980, as
Document No. 4594610, and warranty deed dated December 23, 1981, recorded
December 23, 1981, as Document No. 4629043.

And

Together with a perpetual easement for access purposes over, under and across
the South 26.00 feet of the North 59.00 feet of Lot 2, Block 1, Brenwood
Business Park, according to the recorded plat thereof, pursuant to warranty deed
dated October 3, 1980, recorded October 9, 1980, as Document No. 4594610, and
warranty deed dated December 23, 1981, recorded December 23, 1981, as Document
No. 4629043.

                                       8ALLSTATE LIFE INSURANCE COMPANY
                                                                 LOAN NO. 121873

                 ENVIRONMENTAL INDEMNITY AGREEMENT
                 ---------------------------------

         THIS ENVIRONMENTAL INDENDTITY AGREEMENT (the "Agreement") is dated as
of this _____ day of September, 2000, among AG-CHEM EQUIPMENT CO., INC., a
Minnesota Corporation ("Borrower") (Borrower is also referred to herein as
"Indemnitor") and ALLSTATE LIFE INSURANCE COMPANY ("Lender").

                           RECITALS
                           --------

         A. Borrower is the present owner of the real and personal property
commonly known as Brenwood I, II, III, and IV, in Minnetonka, Minnesota, and
legally described in EXHIBIT A attached hereto (the "Property");

         B. Pursuant to Lender's commitment letter dated July 20, 2000, Borrower
has executed and delivered to Lender a mortgage note of even date herewith (the
"Note"), in the principal sum of $9,000,000.00, secured by a Mortgage,
Assignment of Leases, Rents and Contracts, Security Agreement and Fixture Filing
(the "Mortgage") on the Property. Borrower will benefit from the disbursement of
the loan (the "Loan") evidenced by the Note and secured by the Mortgage and
Collateral as defined in the Mortgage;

         C. As a condition precedent to funding the Loan, Lender requires the
execution of this Agreement.

                           AGREEMENTS
                           ----------

         NOW THEREFORE, in order to induce Lender to accept the Property as
security for the Loan and to enter into the Loan and to disburse the proceeds of
the Loan, and in consideration of the matters described in the foregoing
Recitals, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1. Recitals. The Recitals are incorporated herein by this reference.

         2. Definitions. For purposes of this Agreement, "Hazardous Materials"
means and includes asbestos or any substance containing asbestos,
polychlorinated biphenyls, any explosives, radioactive materials, chemicals
known or suspected to cause cancer or reproductive toxicity, pollutants,
effluents, contaminants, emissions, infectious wastes, any petroleum or
petroleum-derived waste or product or related materials and any items defined as
hazardous, special or toxic materials, substances or waste under any Hazardous
Material Law, or any material which shall be removed from the Property pursuant
to any administrative order or

<PAGE>

enforcement proceeding or in order to place the Property in a condition that is
suitable for ordinary use. "Hazardous Material Laws" collectively means and
includes any present and future local, state, federal or international law or
treaty relating to public health, safety or the environment including without
limitation, the Resource Conservation and Recovery Act, as amended ("RCRA"), 42
U.S.C. ss. 6901 et seq., the Comprehensive Environmental Response, Compensation,
and Liability Act ("CERCLA"), 42 U.S.C. ss. 9601 et seq., as amended by the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Hazardous
Materials Transportation Act, 49 U.S.C. ss. 1801 et seq., the Clean Water Act,
33 U.S.C. ss. 125 1 et seq., the Clean Air Act, as amended 42 U.S.C. ss. 7401 et
seq., the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq., the Safe
Drinking Water Act, 42 U.S.C. ss. 300f et seq., the Uranium Mill Tailings
Radiation Control Act, 42 U.S.C. ss. 7901 et seq., the Occupational Safety and
Health Act, 29 U.S.C. ss. 655 et seq., the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. ss. 136 et seq., the National Environmental Policy
Act, 42 U.S.C. ss. 4321 et seq., the Noise Control Act, 42 U.S.C. ss. 4901 et
seq., and the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. ss.
11001 et seq., and the amendments, regulations, orders, decrees, permits,
licenses or deed restrictions now or hereafter promulgated thereunder.

         3. Indemnification. Indemnitor hereby jointly and severally agrees, at
its sole cost and expense, to unconditionally indemnify, defend, and hold
Lender, its directors, officers, employees and agents harmless against any loss,
liability, damage (whether direct or consequential), expenses, claims,
penalties, fines, injunctions, suits, proceedings, disbursements or expenses
(including, without limitation, reasonable attorneys' and experts' fees and
disbursements and court costs) (collectively, the "Liabilities") arising under
any Hazardous Material Law, or any other Liabilities which may be incurred by or
asserted against Lender directly or indirectly resulting from the presence of
Hazardous Material on the Property.

         Indemnitor shall assume the burden and expense of defending all suits,
administrative proceedings and disputes of any description with all persons,
entities, political subdivisions or government agencies arising out of the
matters to be indemnified under this Agreement. Indemnitor shall pay, promptly
upon entry, any nonappealable order, judgment or other final resolution of any
claim or dispute arising out of the matters to be indemnified under this
Agreement and shall pay promptly when due any fines, penalties or agreed
settlements arising out of the matters to be indemnified under this Agreement.
In the event that such payment is not made, Lender, at its sole discretion, may
proceed to file suit against Indemnitor to compel such payment.

         Promptly following completion of any actions imposed upon Indemnitor
under any Hazardous Material Law, Indemnitor shall obtain and deliver to
Lender, an environmental report in form and substance acceptable to Lender from
an environmental consultant acceptable to Lender, stating that all required
action has been taken, and that upon completion of such action, the Property is,
to the knowledge of such professional, then in compliance with the applicable
Hazardous Material Laws.

                                       2
<PAGE>

         4. Duration of Indemnity. The duration of the indemnification hereunder
shall be indefinite unless (a) in the case of payment of the Note, Borrower
delivers to Lender, after payment of the principal, interest and all other
amounts due under the Note, an environmental report from an environmental
consultant acceptable to Lender showing neither any violation of Hazardous
Material Laws nor the presence of any Hazardous Materials on the Property (other
than Hazardous Materials in quantities and of types reasonably and customarily
associated with general office use that are stored, used and disposed of in
compliance with Hazardous Material Law and do not require compliance with any
reporting requirements under any Hazardous Material Law) and in all other
respects acceptable in form and substance to Lender or (b) in the case of a
foreclosure, trustee's sale, deed-in-lieu of foreclosure or payment of the Note
in full, no notice of any violation of the Hazardous Material Laws or the
presence of any Hazardous Materials on the Property has been received by the
Borrower from Lender within five years after such foreclosure, trustee's sale,
acceptance of a deed-in-lieu of foreclosure or payment of the Note in full (the
"Cut-off Date"); provided that, if prior to the Cut-off Date, Lender has
notified Indemnitor of any claim or demand which Lender has determined is or
could become the subject of indemnification of Lender under this Agreement,
then, to the maximum extent permitted by law, the indemnification under this
Agreement shall survive the Cut-off Date only as to such claim or demand of
which Indemnitor has been so notified. Notwithstanding the above, this
Agreement shall not be construed to impose liability on the Indemnitor for
Hazardous Materials placed, released or disposed of on the property through no
fault of Borrower, Indemnitor or its respective agents, employees or contractors
after the date of (i) foreclosure, (ii) trustee's sale, (iii) the acceptance by
Lender of a deed in lieu of foreclosure or (iv) a transfer approved by Lender
conditional upon Lender's receipt of (1) a written certificate from the Borrower
that the Borrower has no notice or knowledge of any violation of the Hazardous
Material Laws or the presence of any Hazardous Materials on the Property prior
to such transfer and (2) an Environmental Indemnity Agreement in Lender's then
current standard form executed by the approved transferee.

         5. Notices from Indemnitor. Indemnitor shall promptly after obtaining
knowledge thereof advise Lender in writing of (a) any governmental or regulatory
actions instituted or threatened in writing under any Hazardous Material Law
affecting the Property or any indemnification hereunder including, without
limitation, any notice of inspection, abatement or noncompliance, (b) all claims
made or threatened in writing by any third party against Borrower, any
Indemnitor or the Property relating to any Hazardous Material or a violation of
a Hazardous Material Law, and (c) Indemnitor's discovery of any occurrence or
condition on the Property or any real property adjoining or in the vicinity of
the Property which could subject Borrower or the Property to a claim under any
Hazardous Material Law or to any restrictions on ownership, occupancy,
transferability or use of the Property under any Hazardous Material Law.
Indemnitor shall deliver to Lender any documentation or records regarding the
above as Lender may reasonably request and which are susceptible of being
obtained by Indemnitor without undue cost or expense and without the necessity
for initiating legal proceedings to obtain the same.

                                       3

<PAGE>

       6.   Notice and Settlement of Claims Against Lender.

              (a) Lender agrees that it shall provide Indemnitor with written
notice of any claim or demand which Lender has determined could give rise to a
right of indemnification under this Agreement. Such notice shall be given
within a reasonable time after Lender becomes aware of facts and shall specify,
to the best of Lender's knowledge, the facts giving rise to the alleged claim,
and the amount to the extent determinable, of liability for which indemnity is
asserted.

              (b) Lender agrees that it will not settle or otherwise compromise
any action, suit or proceeding brought against Lender on a claim indemnified
hereunder without the prior written consent of Indemnitor which consent shall
not be unreasonably withheld. The Indemnitor also agrees that it will not settle
or compromise such action, suit or proceeding without Lender's prior or written
consent which consent shall not be unreasonably withheld.

         7. Payment of Lender's Expenses. In any pending or threatened
litigation, contest, dispute, suit or proceeding (whether instituted by Lender,
Indemnitor, or any other party, including any governmental agency charged with
enforcement of any Hazardous Material Law) in any way relating to this Agreement
and the indemnification described herein, or to enforce the indemnification
hereunder or, if the Lender has a reasonable basis to believe that a violation
of the Hazardous Material Laws exists in regard to the Property, Lender shall
have the right to retain counsel and environmental sciences consultants of its
own choice for advice or other representation without affecting or otherwise
impairing the indemnification hereunder and all Liabilities arising from such
services shall be payable by Indemnitor within 30 days of demand.

       8.    Obligations Absolute and Waivers.

              (a) The obligations of Indemnitor hereunder shall remain in full
force and shall not be impaired by: (i) any express or implied modification,
renewal, extension or acceleration of or to the Note, the Mortgage, any other
loan documents executed by Borrower or any other party in connection with the
Loan and all environmental indemnity agreements executed by Borrower or any
other party including without limitation this Agreement (collectively the
"Documents"); (ii) any exercise or non-exercise by Lender of any right or
privilege under any of the Documents; (iii) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to any Indemnitor or Borrower, or any affiliate of Borrower
or any guarantor, or any action taken with respect to this Agreement by any
trustee or receiver or by any court in any such proceeding, whether or not
Indemnitor shall have had notice or knowledge, of any of the foregoing; (iv) any
release, waiver or discharge of the Borrower or any endorser or guarantor from
liability under any of the Documents or any Indemnitor's grant to Lender of a
security interest, lien or encumbrance in any of the Indemnitor's property; (v)
any subordination, compromise, settlement, release (by operation of law or
otherwise), discharge, compound, collection, or liquidation of any of the
Documents or any collateral described in any of the Documents or

                                       4

<PAGE>

otherwise, or any substitution with respect thereto except as specifically
required by this Agreement; (vi) any assignment or other transfer of any of the
Documents, in whole or in part; (vii) any acceptance of partial performance of
any of the obligations of Borrower under the Documents; (viii) any consent to
the transfer of any collateral described in the Documents or otherwise; and (ix)
any bid or purchase at any sale of the collateral described in the Documents or
otherwise.

              (b) Indemnitor unconditionally waives the following defenses to
enforcement of this Agreement: (i) all presentments, demands, demands for
performance, notices of nonperformance, protests, notices of protest, dishonor,
nonpayment, partial payment, default and protest, notices of acceptance of this
Ageement and all other notices and formalities to which the Indemnitor may be
entitled (except for notices which are specifically required by this Agreement);
(ii) any right to require Lender to proceed against Borrower, any Indemnitor or
any guarantor or to proceed against or exhaust any collateral described in the
Documents; (iii) any defense arising by reason of any invalidity or
unenforceability of any of the Documents or any disability of Borrower or any
guarantor; (iv) any defense arising by reason of the manner in which Lender has
exercised its remedies under the Documents; (v) any defense based upon an
election of remedies by Lender; (vi) any duty of Lender to advise Indemnitor of
any information known to Lender regarding the financial condition of Borrower
and all other circumstances affecting Borrower's ability to perform its
obligations to Lender, it being agreed that Indemnitor assumes the
responsibility for being and keeping informed regarding such condition or any
such circumstances; (vii) any right of subrogation and any rights to enforce any
remedy which Lender now has or may hereafter have against Borrower and any
benefit of, and any right to participate in, any security now or hereafter held
by Lender; and (viii) to the extent permitted by law, any right to assert
against Lender any legal or equitable defense, counterclaim, set off, crossclaim
or right of contribution which any Indemnitor may now or at any time or times
hereafter have against any other Indemnitor.

         9. No Waiver. Indemnitor's obligations hereunder shall in no way be
impaired, reduced or released by reason of Lender's omission or delay to
exercise any right described herein or in connection with any notice (except for
notices required of Lender pursuant to this Agreement), demand, warning or claim
regarding violations of any Hazardous Material Laws governing the Property.

         10. Recourse. Each Indemnitor's liability hereunder shall not be
subject to, limited by or affected in any way by any "non-recourse" provisions
contained in the Note, the Mortgage or any other documents executed and
delivered in connection with the Loan. Indemnitor agrees that the
indemnification contained herein is separate, independent of and in addition to
Borrower's undertakings under the Note. Indemnitor agrees that a separate action
may be brought to enforce the provisions of this Agreement which shall in no way
be deemed to be an action on the Note, whether or not Lender would be entitled
to a deficiency judgment following a judicial foreclosure or sale under the
Mortgage.

                                       5

<PAGE>

         11. Successors and Assigns. Subject to the provisions of paragraph 4,
this Agreement and the indemnification contained in this Agreement shall be
continuing, irrevocable and binding on each Indemnitor and its respective
successors and assigns, and this Agreement shall be bindmig upon and shall inure
to the benefit of Lender and Lender's successors and assigns. The death or
dissolution of any one or more of the Indemnitors shall not affect this
Agreement or any of each Indemnitor's obligations hereunder. It is agreed by the
Indemnitor that its respective liabilities hereunder are not contingent on the
signature of any other Indemnitor.

         12. Notices. Any notices which any party may be required, or may
desire, to give shall, unless otherwise specified, be in writing and shall be
(i) hand delivered, effective upon receipt (ii) sent by United States Express
Mail or by private overnight courier, effective upon receipt, or (iii) served by
certified mail, postage prepaid, return receipt requested and addressed as
follows:

         In the case of Borrower and Indemnitor, to:

             Ag-Chem Equipment Co., Inc.
             5720 Smetana Drive
             Minnetonka, MN 55343-9688
             Attn: Chief Financial Officer

         In the case of Lender, to:

             Allstate Life Insurance Company
             Allstate Plaza South, Suite G5C
             3075 Sanders Road
             Northbrook, Illinois 60062
             Attn: Commercial Mortgage Division
                   Servicing Division

         with a copy to:

             Allstate Life Insurance Company
             Allstate Plaza South, Suite G5A
             3075 Sanders Road
             Northbrook, Illinois 60062
             Attn: Investment Law Division

or such other address(es) or addressee(s) as the party to be served with notice
may have fumished to the other party in accordance with this paragraph.

         13. Entire Ageement. This Agreement constitutes the entire Agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and

                                       6

<PAGE>

understandings, both written and oral, between the parties with respect to the
subject matter contained in this Agreement.

         14. Amendment and Waiver. This Agreement may not be amended except by a
writing signed by both parties nor shall observance of any term of this
Agreement be waived except with the written consent of the Lender.

         15. Governing Law. This Agreement shall be governed and construed as to
interpretation, enforcement, validity, construction, effect and in all other
respects by the laws, statutes and decisions of the State of Minnesota. The
United States District Court for the District of Minnesota and any court of
competent jurisdiction of the State of Minnesota shall have jurisdiction in any
action, suit or other proceeding instituted to enforce this Agreement.
Indemnitor hereby waives (a) any objections to the jurisdiction of such courts,
(b) any objections to venue and (c) its right to a trial by jury in any action,
proceeding or counterclaim brought by Lender.

         16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same agreement.

         17. Severability. All provisions contained in this Agreement are
severable and the invalidity or unenforceability of any provision shall not
affect or impair the validity or enforceability of the remaining provisions of
this Agreement.

         18. Headings. The descriptive headings of the paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

         IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.

BORROWER AND INDEMNITOR:

AG-CHEM EQUIPMENT CO., INC.

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

                                        7

<PAGE>

LENDER:

ALLSTATE LIFE INSURANCE COMPANY

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

By:
    ----------------------------
Its Authonized Signatories

                                       8

<PAGE>

                                  EXHIBIT A

Lots 2, 4 and 5, Block 1, Brenwood Business Park, Hennepin County, Minnesota

Lot 3, Block 1, Brenwood Business Park, Hennepin County, Minnesota

Together with a 30.00 foot perpetual easement for access purposes and a 42.00
foot perpetual easement for access purposes over, under and across a portion of
Lot 4, Block 1, Brenwood Business Park, according to the recorded plat thereof,
pursuant to warranty deed dated October 3, 1980, recorded October 9, 1980, as
Document No. 4594610, and warranty deed dated December 23, 1981, recorded
December 23, 1981, as Document No. 4629043.

And

Together with a perpetual easement for access purposes over, under and across
the South 26.00 feet of the North 59.00 feet of Lot 2, Block 1, Brenwood
Business Park, according to the recorded plat thereof, pursuant to warranty deed
dated October 3, 1980, recorded October 9, 1980, as Document No. 4594610, and
warranty deed dated December 23, 1981, recorded December 23, 1981, as Document
No. 4629043.

                                        9

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