Document:

EXPLORATION AGREEMENT

            HAY RANCH PROSPECT, NORTH HUMBOLDT PROSPECT, TOANO DRAW
                     PROSPECT and ANTELOPE VALLEY PROSPECT
                        ELKO AND EUREKA COUNTIES, NEVADA

         THIS AGREEMENT  (this  "Agreement")  is made and entered into this 18th
day of October 2000, the "Effective  Date," by and between Foreland  Corporation
("Foreland"),  143 Union Blvd., Suite 230, Lakewood,  CO 80228,  Farakel Company
("Farakel"),  600  Jefferson,  Suite  350,  Houston,  TX  77002,  and  Deerfield
Production  Corporation  ("Deerfield"),  5949 Sherry Lane, Suite 620, Dallas, TX
75225,  referred  to  collectively  herein as  "Parties"  or  individually  as a
"Party."

         WHEREAS,  Foreland  and Farakel  have  entered  into a Letter of Intent
dated  May 25,  2000,  a copy of which is  attached  hereto as  Schedule  1 (the
"Farakel  Agreement")  that provides for the  exploration and development of oil
and gas in the Hay  Ranch,  North  Humboldt,  Toano  Draw  and  Antelope  Valley
Prospects, in Elko and Eureka Counties, Nevada (the "Prospects"). The leases and
lands  that make up the  Prospects  are set forth on  Exhibits  A1  through  A4,
respectively,  which  exhibits are attached  hereto and made a part hereof.  The
leases and lands  described  on Exhibits  A1, A2, A3 and A4 shall be referred to
hereinafter as the "Subject Lands";

         NOW,  THEREFORE,   in  consideration  of  the  mutual  obligations  and
covenants  contained herein, and of other good and valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the Parties hereby
agree as follows:

1.   DEERFIELD  AGREEMENT.  Deerfield  and  Foreland  are  parties  to a  letter
     agreement  dated May 1, 2000 as amended by Letter dated June 23, 2000, (the
     "Deerfield  Agreement"),  a copy of which is attached hereto as Schedule 2,
     which relates to a portion of the Subject Lands  described in the Deerfield
     Agreement  as the proposed Hay Ranch  Federal  Unit,  comprised of 5,345.96
     acres.  The  Deerfield  Agreement  provides  that  Deerfield  shall have no
     obligation to Foreland or to the Marshall Group ("Marshall")  thereunder if
     Foreland and Marshall do not enter into a written agreement consistent with
     the terms of the Deerfield Agreement by June 1, 2000.

<PAGE>

     Deerfield, Foreland and Farakel hereby agree that this Agreement is entered
     into in lieu of an agreement  between  Foreland  and  Farakel,  and each of
     Foreland,  Deerfield and Farakel agrees to be bound by all of the terms and
     conditions  of the  Deerfield  Agreement  as if (a) Farakel was an original
     party thereto and all  references  to Marshall in the  Deerfield  Agreement
     were  references  to  Farakel,  and  (b) an  Agreement  meeting  all of the
     requirements  of Section 8 of the  Deerfield  Agreement  was executed on or
     before June 1, 2000.  Notwithstanding anything to the contrary contained in
     this  Agreement,  in the event of any conflict or  discrepancy  between the
     terms or intent of the Deerfield Agreement and the terms of this Agreement,
     the terms and intent of the Deerfield Agreement shall control.

2.   REPRESENTATION:  Foreland represents,  but does not warrant,  that Foreland
     owns certain oil and gas leases lying within the North Humboldt, Toano Draw
     and Antelope Valley  Prospects.  Furthermore,  certain of the Subject Lands
     are  burdened  by existing  overriding  royalty  burdens  that are shown on
     Exhibits  A2  through  A4.  Foreland  further  represents  that none of the
     Subject  Lands  are  subject  to any  agreement  with  another  party  that
     conflicts  with the purposes of this  Agreement  with the  exception of the
     actual lease terms, existing royalty assignments, governmental regulations,
     and the  Deerfield  Agreement.  Under  the  terms of,  and  subject  to the
     conditions  of the  Deerfield  Agreement,  Farakel can earn  interests in a
     portion of the Subject Lands  described in the  Deerfield  Agreement as the
     proposed  Hay Ranch  Federal  Unit,  comprised of 5,345.96  acres,  as more
     particularly described on Exhibit E, attached hereto.

3.   APPROVAL OF  OPERATOR  AND  OPERATING  AGREEMENT:  The  Parties  agree that
     Foreland is designated the initial  Operator of the Subject  Lands,  and as
     such, Foreland will be Operator of any well or wells drilled on the Subject
     Lands by the Parties in accordance with the Operating Agreement executed by
     the  Parties.  The  Parties  further  agree to execute and adopt a separate
     operating  agreement for each Prospect in the form attached as Exhibit C to
     this  Agreement;  provided,  that with respect to any lands included within
     the  boundaries of the Hay Ranch Federal Unit,  the federal unit  operating
     agreement shall control.

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<PAGE>

4.   FARAKEL PARTICIPATION IN THE NORTH HUMBOLDT, TOANO DRAW AND ANTELOPE VALLEY
     PROSPECTS:  Farakel agrees to pay Foreland a monthly payment of $36,000, on
     or before the 1st day of each calendar month for five (5) months, beginning
     November  15, 2000,  in order to pay lease  rentals,  prospect  development
     costs and overhead. In consideration of such payment,  Foreland shall grant
     to Farakel the right to explore the North Humboldt, Toano Draw and Antelope
     Valley  Prospects  for a period of  eighteen  (18)  months,  subject to the
     following  conditions:  On or before the expiration of the initial five (5)
     month period, as defined below,  Farakel must commit to either the drilling
     of an initial  test well or a 3-D seismic  survey and analysis of each such
     Prospect.  Thus, if Farakel elects not to commit to drill a well or conduct
     a 3-D  seismic  study  on a  given  Prospect  by the  end  of  the  initial
     five-month  period,  then Farakel  shall forfeit its rights with respect to
     that Prospect.  For the purposes of this provision,  the initial five-month
     period shall be deemed to commence on the date that the initial well on the
     Hay Ranch  Prospect is completed as a producer or a dry hole.  Foreland may
     re-market  any  prospect  for  which  Farakel  does not  commit to drill or
     conduct a 3-D seismic study within the initial five-month period.

     The drilling of each initial test well with respect to the North  Humboldt,
     Toano  Draw  and  Antelope  Valley  Prospects  shall  earn  Farakel  (i) an
     assignment  of 75% of  Foreland's  right,  title and interest in and to all
     depths in the 160 acre quarter  section on which the well is located and in
     the 8 surrounding  160 acre quarter  sections and (ii) an assignment of 50%
     of  Foreland's  right,  title and  interest to all depths in the  remaining
     acreage  within the AMI for such  Prospect,  as  described  on  Exhibits B1
     through B4, lying outside of the nine 160 acre quarter  sections  described
     above.

5.   PARTICIPATION  IN HAY RANCH  INITIAL TEST WELL:  Foreland and Farakel agree
     that on or before the 1st day of  September,  2000,  Foreland will commence
     drilling  operations in the

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<PAGE>

     Hay  Ranch  Prospect  on an  initial  test  well and  drill  said well to a
     sufficient  depth  to test at  least  500  feet of the  Devonian  Carbonate
     section or to 8500 feet,  whichever is the lesser depth,  unless production
     is  established  at a lesser depth and the Parties  mutually  agree to stop
     drilling and attempt  completion at such depth. The well will be located in
     the SE/4NE/4 of Section 16, T.29N.,  R.52E., Eureka County, Nevada. Farakel
     shall pay 100% of the cost of the drilling and  completing  of such well to
     the tanks,  including the costs of all pipe,  pumping units, line and other
     equipment  necessary  to deliver  oil to the tanks (but not  including  the
     costs of the tanks  themselves) or gas to the pipeline.  If the cost of the
     initial  test well (or the second  well  contemplated  under the  Deerfield
     Agreement) at any time exceeds 115% of the dry hole cost as  represented in
     the applicable  AFE,  Farakel shall have the right to request that Foreland
     cease  operations  and plug and abandon the well.  However,  Deerfield  and
     Foreland  shall  have  the  option,  but not the  obligation,  to  continue
     operations under the terms of the operating agreement.  If either Deerfield
     or Foreland (or both) agree to continue,  then the electing  parties  shall
     assume responsibility for all costs effective at 12:01 a.m. on the day that
     Deerfield  and/or  Foreland elect to continue (the  "Effective  Time"),  in
     which case Farakel  shall  become a  non-consenting  party  pursuant to the
     terms of the  operating  agreement  with respect to all  expenses  incurred
     subsequent to the Effective Time.

     With  respect to the Hay Ranch  Prospect,  the drilling of the initial test
     well shall earn Farakel the interests described in the Deerfield Agreement,
     subject to the terms and conditions of the Deerfield Agreement.

6.   OPERATIONS  BY LESS THAN ALL PARTIES:  Notwithstanding  anything  contained
     herein to the contrary,  whenever the drilling of a well is to be conducted
     by less than all parties pursuant to the provisions of Article VI.B. of the
     Operating Agreement, the following shall apply: Upon commencement of actual
     drilling  operations  for any well drilled in a Prospect  subsequent to the
     initial  test well in such  Prospect  previously  referred to  ("Subsequent
     Wells"), the Non-Consenting Party shall be deemed to have relinquished 100%
     of its  leasehold  interest  in

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<PAGE>

     the well and in the  governmental  surveyed  quarter  section in which said
     well is located and in the surrounding eight governmental  surveyed quarter
     sections. However, the relinquished leasehold shall not include an existing
     well capable of producing oil or gas in paying quantities which is owned by
     one or more of the Parties hereto,  and the  governmental  surveyed quarter
     section in which it is located or the drillsite  spacing unit for such well
     as  determined  by the  applicable  governmental  authority  or 160  acres,
     whichever is greater. In the event a Subsequent Well is an earning well for
     any  oil  and  gas  rights,  the  Non-Consenting   Party  shall  have  also
     relinquished  100% of any and all  interest to be earned by the drilling of
     said well.

7.   CONFIDENTIALITY PROVISION: The Parties agree that all seismic,  geological,
     geophysical  and well data acquired  from the  effective  date hereof until
     June 30, 2003 shall be treated as confidential  and the exclusive  property
     of the Parties  hereto.  No seismic,  geological,  geophysical or well data
     shall be shown, conveyed, furnished, given or sold to third Parties without
     the  prior  written  consent  of  all  Parties  who   participated  in  the
     acquisition  of such  data.  The  sale of any data  shall be for the  joint
     account of the Parties who participated in the acquisition of such data and
     the  proceeds  from any such  sale  shall be  promptly  distributed  to the
     Parties  in the  proportion  that each  shared in the cost  thereof.  These
     restrictions  shall  not  apply  to  information  which is  required  to be
     disclosed  by  law  or  the  rules  of  any   governmental   agency  having
     jurisdiction  or  is  furnished  to  a  bona  fide  affiliate,   bona  fide
     prospective   purchaser,   mortgagee,    prospective   mortgagee,   lender,
     prospective  lender,  attorney  or  consultant  for  evaluation  or reserve
     determination purposes nor shall they apply to the distribution of periodic
     drilling status reports to PI and/or  Dwight's  (unless any party including
     third  parties  to this  Agreement  participating  in the well  objects  in
     writing to the Operator to said  release) and well sample data which may be
     released to a bona fide sample library (unless any party  participating  in
     the well  objects in writing to the  Operator to said  release);  provided,
     that the  disclosing  Party  advises the party  receiving  such data of the
     confidentiality  obligations  under this Agreement and shall be responsible
     for any  disclosures  by such party that would  constitute a breach of this
     Section 7 if made by a Party hereto.  These restrictions shall not apply to
     transfer of data

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<PAGE>

     between any Party hereto and any wholly owned  subsidiary,  partnership  or
     other entity which is solely  controlled  by any Party hereto or which is a
     successor to any Party hereto through acquisition or merger, and/or owns or
     controls in excess of 50% of the common stock of said Party. Any person who
     is furnished  information pursuant to this section must agree in writing to
     be bound by the confidentiality provisions of this Agreement and not to use
     any of the information for its own benefit.

8.   AREAS OF MUTUAL INTEREST: Foreland and Farakel hereby agree to create Areas
     of Mutual  Interest  ("AMIs")  for the  Prospects  as shown on  Exhibits B1
     through B4. The AMIs shall  remain in full force and effect  until June 30,
     2003. If, during the term of the AMIs,  either Foreland or Farakel acquires
     or has the  opportunity to acquire an Acquired  Interest (as defined below)
     it will  notify  the  other  Party  of  such  acquisition  or  opportunity,
     including  in such notice a  description  of the interest and the terms and
     conditions upon which it has been or can be acquired at actual cost and net
     revenue as  delivered to acquiring  party.  The notified  Party will have a
     period of 15 days after  receipt of the notice of  acquisition  in which it
     may elect by responsive  notice received by the acquiring Party within such
     period to acquire its proportionate  share of the interest described in the
     notice of  acquisition.  A failure to elect  affirmatively  to  participate
     within the period herein  provided will constitute  conclusive  election of
     the notified  party not to  participate  in the  interest  described in the
     notice of acquisition, and such party will have no further rights hereunder
     in respect of such  Acquired  Interest.  An  election to  participate  will
     constitute the binding obligation of the electing Party to pay or otherwise
     discharge  its  proportionate  share of the  costs  and/or  obligations  of
     acquisition  described  in the  acquisition  notice and such party shall be
     entitled to receive upon discharge of such obligation their percentage part
     of the Acquired Interest.

     An Acquired  Interest is any acquisition  from a third party of an interest
     in an oil and gas lease  (federal,  state or fee),  or extension or renewal
     thereof, fee mineral interest or option to lease, any royalty or overriding
     royalty interest,  farmin acquisitions,  acreage contributions  received in

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<PAGE>

     consideration  for the  drilling  of a well  within the AMI, or an interest
     obtained  under any third party  contract or agreement  relating to the AMI
     after  the  date  of this  Agreement.  Under  no  circumstances  shall  the
     provisions of this  paragraph be deemed to apply to the sale or transfer of
     any interest  among the parties to this  Agreement nor sale of any interest
     to a third party, nor is any  Preferential  Right of Purchase to be implied
     hereby.

     Deerfield  hereby agrees to be bound by the terms of this  paragraph 8, but
     only as to the area within the boundaries of the proposed Hay Ranch Federal
     Unit, as above described.

9.   PROPORTIONATE  REDUCTION: If it is found that Foreland or Deerfield owns an
     interest  in any of the  Subject  Lands  that  covers  less than the entire
     mineral  estate,  then any interest earned or assigned under this Agreement
     shall be proportionately reduced to reflect the actual leasehold ownership.

10.  TITLE DEFECTS AND  ADJUSTMENTS:  Title defects shall refer to those defects
     or  irregularities  that would cause  Farakel to receive  less than the net
     acres or net revenue interest set forth on Exhibit A or which create a lien
     or  encumbrance  on any portion of the Properties in favor of a party other
     than Energy  Income Fund,  L.P., a Delaware  limited  partnership  ("EIF").
     Title  defects  shall not refer to such  defects or  irregularities  in the
     title  to the  Properties  that  are  not  likely  to  interfere  with  the
     operation,  value or use of the  Properties  (or  portion  thereof) or that
     would not be considered material in accordance with industry standards.  To
     assist in title  examination,  Foreland shall supply Farakel with copies of
     leases,  assignments,  title memos and related  documentation in Foreland's
     possession.  If Farakel  earns  interests  from  Deerfield in the Hay Ranch
     Prospect  pursuant to paragraph 5 above,  Deerfield  agrees to cause EIF to
     release  its  liens  on the  interests  assigned  to  Farakel  pursuant  to
     paragraph 5 and the Deerfield Agreement.

     As soon as is reasonably practicable,  but in no event later than August 1,
     2000, Farakel shall provide Foreland with a notice of title defects stating
     its  objections,  if any, to the title.  Foreland may  undertake to satisfy
     some,  all, or none of the title  objections  at  Foreland's  sole cost and

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<PAGE>

     expense.  If any such title  defect  cannot be or is not cured by  Foreland
     within  thirty  (30)  days of  notice,  then the  portion  of the  Property
     affected will be excluded  from the prospect,  unless such defect is waived
     by Farakel,  and  Foreland  and  Farakel  will  negotiate  in good faith to
     determine whether an adjustment to the terms of the  consideration  paid by
     Farakel should be made to reflect the removal of the excluded property. All
     title  defects  not made  known to  Foreland  by  Farakel  within  the time
     provided  shall be deemed to be waived by Farakel and, as between  Foreland
     and Farakel  (but not  Deerfield),  shall become joint loss items under the
     Operating  Agreement.  Deerfield makes no  representation  or warranty with
     respect to its title to or  interest in any of the  Subject  Interests  and
     shall have no  liability  to Foreland or Farakel  with respect to any title
     defect or the cure thereof.

11.  JOINT  ASSUMPTION OF OBLIGATIONS:  Foreland and Farakel will jointly assume
     and shall timely  perform and discharge all duties and  obligations  of the
     owners of the Subject Lands at and after the Effective Date, including, but
     not limited to:  restoration  of the surface,  environmental  and pollution
     clean up, and plugging and abandonment of any and all wells.

12.  PAYMENT OF LEASE RENTALS:  Foreland shall diligently attempt to advance and
     pay all costs and expenses  incurred in connection  with the maintenance of
     the Subject  Lands with  respect to delay  rentals,  shut-in  payments  and
     minimum  royalties  owing on account of any  lease.  Foreland  shall not be
     liable to Farakel for failure to properly pay any rentals, shut-in payments
     or minimum royalties where such failure is due to inadvertence,  mistake or
     clerical error.

13.  RECORDING  COSTS:  Farakel shall be solely  responsible  for all filing and
     recording  of  documents  related  to the  transfer  or  assignment  of the
     Properties  to Farakel and for all fees,  and other costs of whatever  kind
     connected therewith.

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<PAGE>

14.  AMENDMENTS AND SEVERABILITY: No alterations, modifications,  amendments, or
     changes in this  Agreement  shall be effective  or binding  unless the same
     shall  be in  writing  and  signed  by  Foreland  and  Farakel  and,  where
     applicable,  Deerfield.  The  invalidity  of any one or more  covenants  or
     provisions  of  this  Agreement  shall  not  affect  the  validity  of this
     Agreement as a whole,  and in case of any such  invalidity,  this Agreement
     shall be  construed  as if such  invalid  provision  had not been  included
     herein.

15.  ASSIGNABILITY,  SUCCESSOR  AND  ASSIGNS:  No  assignment  shall  be made by
     Foreland or  Farakel,  in whole or in part,  of its rights and  obligations
     under this Agreement unless such assignment is approved, in writing, by all
     Parties  to  this  Agreement.  Such  approval  shall  not  be  unreasonably
     withheld.  The terms, covenants and conditions hereof shall be binding upon
     and shall inure to the benefit of Deerfield, Foreland and Farakel and their
     respective successors and assigns; and such terms, covenants and conditions
     shall be covenants running with the land and with each subsequent  transfer
     or assignment  of the  Properties.  Farakel  reserves the right to assign a
     portion of its interest to certain internal partners.  Farakel will provide
     the names and interest to be assigned prior to the assignments being made.

16.  NOTICES:  Any  notice,  communication,  request,  or  response  required or
     permitted by this Agreement shall be in writing. Notice may be given by any
     reasonable means,  including facsimile,  hand delivery (including overnight
     courier) and U.S.  mail.  Except as otherwise  provided in this  Agreement,
     notice  shall be  effective  when  actually  received  by the  party  being
     notified. The addresses of the parties for the purposes of Notice are:
<TABLE>
<CAPTION>
     <S>                            <C>                       <C>
     Foreland Corporation           Farakel Company           Deerfield Production Corp.
     2561 So. 1560 West, Suite 200  600 Jefferson, Suite 350  5949 Sherry Lane, Suite 620
     Woods Cross, Utah 84087        Houston, TX 77002         Dallas, TX  75225
     Fax:  (801)298-9889            Fax:  (713) 651-2387      Fax:  (214) 692-7777
</TABLE>

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<PAGE>

17.  RELATIONSHIP OF THE PARTIES:  This Agreement does not create a partnership,
     mining partnership,  joint venture,  relationship of trust or agency or any
     other  entity or  relationship  that makes one party liable for the acts or
     omissions of any other party.

18.  DATA  REQUIREMENTS:  Two copies of all  Geological  data,  as  described on
     Exhibit D hereto,  on any well  drilled  hereunder  shall be  furnished  to
     Farakel  and on any  well in the Hay  Ranch  AMI one copy to  Deerfield  by
     Foreland.  Farakel  and  Deerfield,  and  their  respective  employees  and
     representatives,  shall at all times,  at their own risk and expense,  have
     complete  access to the well  locations  and derrick  floor on prospects in
     which they own an interest.

19.  FEDERAL UNIT:  Foreland agrees to take the necessary action to finalize the
     formation  of the Hay  Ranch  Federal  Unit  prior to  commencement  of the
     drilling of the initial test well on the Hay Ranch Prospect,  which federal
     unit will  include a portion of the lands within the Hay Ranch AMI (Exhibit
     A1).  Farakel  agrees to ratify and join said federal  unit.  The Hay Ranch
     Federal Unit Operating  Agreement  will be the Rocky  Mountain  Mineral Law
     Foundation  Form 2 (Divided  Interest)  Agreement and will control over any
     other  operating  agreement  with  respect to acreage  within the Hay Ranch
     Federal  Unit.  The same form of operating  agreement,  attached  hereto as
     Exhibit "C," shall be executed by the Parties and used to govern operations
     on all non-Hay Ranch Federal Unit acreage subject to this Agreement.

20.  REASSIGNMENT:  As  between  Deerfield  and  Farakel,  with  respect  to any
     interests  earned by Farakel  pursuant  to  paragraph  5 and the  Deerfield
     Agreement,  and as between Foreland and Farakel,  with respect to any other
     interests  earned by Farakel  hereunder,  in the event  either  party,  its
     successors  or  assigns,  hereafter  desires  to  surrender,  let expire or
     abandon all or any portion of the lease acreage described in Exhibit A, the
     Surrendering  Party  agrees to give the other party at least 60 days notice
     in writing of its intention to so surrender. Such Surrendering Party shall,
     if requested to do so, reassign said lease acreage insofar as it covers the
     portion

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<PAGE>

     being surrendered, expiring or abandoned to the other acreage insofar as it
     covers the portion  being  surrendered,  expiring or abandoned to the other
     party  free  of  any  encumbrances   suffered  by,  through  or  under  the
     Surrendering Party.

21.  HEADINGS:  Titles and headings in this  Agreement  are included  solely for
     ease of  reference  and  are  not to be  considered  in  interpretation  or
     construction of this Assignment.

22.  GOVERNING LAW: This contract  shall be governed by and construed  under the
     laws of the State of Nevada,  excluding  any conflict of law rules that may
     require the application of the laws of another jurisdiction.

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<PAGE>

          IN WITNESS  WHEREOF,  the parties have executed this  Agreement on the
day and year set forth below, but effective as of the Effective Date.

                                                       FORELAND CORPORATION

                                              By:      s/Bruce C. Decker
                                              Its:     Vice-President
                                              Date:    10/24/00

                                                       FARAKEL COMPANY

                                              By:      s/Douglas B. Marshall
                                              Its:     Director
                                              Date:    9/29/2000

                                              By:      s/James Jones
                                              Its:     President
                                              Date:    10/18/00

                                                       DEERFIELD PRODUCTION
                                                       CORPORATION

                                              By:      s/Steven McDonald
                                              Its:     Vice-President
                                              Date:    10/21/00

                                       12<PAGE>

                                                                  Exhibit 10.20

March 5, 2001

                                                                 HAND DELIVERED

Mr. Alwyn Rougier-Chapman
2018 San Lu Rae Dr. SE
Grand Rapids, MI 49506

   Re: Retirement Agreement

Dear Alwyn:

   This letter of understanding shall serve as the agreement between you and
Steelcase Inc. based on your voluntary resignation of employment and
retirement from the company (the "Agreement"). As used in this Agreement, the
term "Steelcase" or "company" shall include Steelcase Inc., its divisions,
subsidiaries, affiliates, joint ventures and past, present or future officers,
directors, shareholders, employees, agents and representatives.

   You have served Steelcase as a valued member of executive management for
more than 19 years and presently serve as Senior Vice President, Finance and
Chief Financial Officer. The company has received and accepted your voluntary
resignation from employment for the purpose of retirement. In consideration of
certain compensation and benefits offered by Steelcase, you have agreed to
make certain commitments as set forth in this Agreement, which fully and
finally sets forth the understanding between you and the company on the terms
and conditions that follow:

     1. Resignation. This Agreement incorporates by reference your voluntary
  resignation and retirement from employment with Steelcase effective April
  20, 2001 and the company's acceptance of such resignation and retirement.

     2. Severance Payment. Your acceptance of this Agreement entitles you to
  receive a series of three (3) separate severance payments, as follows:

       (a) the amount of Four Hundred Thousand Dollars ($400,000) payable
    on January 5, 2002;

       (b) the amount of Four Hundred Thousand Dollars ($400,000) payable
    on January 5, 2003;

       (c) the amount of Four Hundred Thousand Dollars ($400,000) payable
    on January 5, 2004;

     3. Retiree Health Care Coverage. As a qualified retiree, you are
  eligible to purchase continued retiree health care coverage under the
  Steelcase Inc. Employee Benefit Plan and the company agrees to pay you the
  amount of Twenty Five Thousand Dollars ($25,000) upon the effective date of
  your retirement for the differential in retiree health care premiums as a
  result of retiring before age 65.

     4. Other Benefits. Regardless of your acceptance of this Agreement, you
  are entitled to receive any vested portion of your Profit Sharing, Money
  Purchase and 401(k) plan accounts, the Steelcase Inc. 1994 Executive
  Supplemental Retirement Plan, your 1989 and 1997 compensation deferral
  contracts, Restoration Retirement Plan and benefits relating to your Great
  West Life policy. You will also receive payment of all unused regular
  vacation days and personal days, less applicable payroll taxes.

     5. Release. In consideration of the severance payment provided to you
  under the terms of this Agreement, you hereby release and forever discharge
  Steelcase Inc., its divisions, subsidiaries, affiliates, joint ventures and
  their past, present or future officers, directors, shareholders, employees,
  agents and representatives, from any and all claims, causes of action,
  demands, rights, damages, liability, costs or expenses, of every kind and
  description, whether known or unknown, which you may now have or hereafter
  acquire, whether arising out of or in any way connected, directly or
  indirectly, with your employment and/or separation from employment with
  Steelcase, or arising from any other circumstances involving the company's
  interests, including but not limited to protection or enforcement of the
  company's confidential

                                       1
<PAGE>

  and proprietary information. This release is intended as a general release,
  including all claims whatsoever, whether arising under state or Federal
  laws of the United States of America or any other country and whether
  founded upon contract, tort, statute or regulation, wrongful discharge or
  discrimination, and specifically includes claims under the Age
  Discrimination in Employment Act of 1967, as amended, 20 U.S.C. Section 621
  et.seq. This waiver of rights and release of claims is knowing and
  voluntary. The invalidity in whole or in part of any provision of this
  release shall not effect the validity of any other provision.

     6. Review and Consultation. You are advised to consult an attorney
  before executing this Agreement. Upon execution you acknowledge that you
  have had sufficient opportunity to review the Agreement and to consult with
  advisors and attorneys of your choice concerning its terms and conditions.
  Execution of this Agreement further acknowledges your full and complete
  understanding of the terms and their significance, and that those terms
  have been accepted freely and voluntarily, thereby binding you and your
  heirs, successors, personal representatives and assigns.

     7. Period for Consideration or Revocation. It is acknowledged that
  Steelcase will provide you with a period of twenty-one (21) days from the
  date this Agreement is first presented to you in which to consider it. For
  a period of seven (7) days following the execution of this Agreement, you
  may revoke it by notifying me in writing. If not revoked in this matter,
  this Agreement will become effective on the eighth day following its
  execution.

     8. Confidential Information. You acknowledge that in the course of your
  employment with Steelcase you have had access to and control of
  confidential and proprietary information related to Steelcase's business,
  and that you have been and will continue to be under an obligation not to
  disclose to any third party, nor use for your benefit or the benefit of any
  third party, any trade secrets, confidential information or proprietary
  information concerning the financial and business affairs of Steelcase or
  any of its divisions, subsidiaries, affiliates, joint ventures or related
  entities, except as may be required by law. "Confidential and proprietary
  information" includes, but is not limited to, financial statements,
  marketing plans, product research and development, sales plans, ideas or
  other information regarding Steelcase's objectives and strategies and any
  information about the business and practices of Steelcase that was obtained
  during your course of employment or as a consultant with the company. You
  agree that any documents in your possession including such information
  shall be expeditiously returned to Steelcase. You also acknowledge that
  such confidential and proprietary information will not be disclosed,
  published, presented in lectures or other forums or otherwise used by you
  in any manner. The parties agree that any breach or threatened breach of
  this provision would cause irreparable harm to Steelcase, that no adequate
  remedy exists at law or in damages for such a breach or threatened breach,
  and that Steelcase shall be entitled to an immediate injunction or
  restraining order in addition to any other remedies that may be available
  by law or equity.

     9. Confidentiality of Agreement. It is mutually agreed that the terms of
  this Agreement are confidential and shall not be disclosed to any third
  party, except as required by law or in order to enforce the terms of this
  Agreement. You may, of course, disclose the terms of this Agreement to
  legal or financial advisors on a confidential basis for the sole purpose of
  obtaining legal or tax advice concerning the terms of this Agreement.

     10. Stock Options and Management Incentive Plan Payments. As a result of
  your retirement from employment with the company, your rights to receive
  compensation and/or other benefits will be determined as follows: (a) under
  the terms of the Steelcase Inc. Incentive Compensation Plan any stock
  options you have been awarded or may be awarded prior to the effective date
  of your retirement will be exercisable subject to the terms of the plan;
  and (b) under the terms of the Management Incentive Plan you are eligible
  to receive long-term account awards and payouts according to the schedule
  established by the plan.

     11. Disposition of Company Property. Any company-owned property in your
  possession, including any office equipment or other items, shall be
  delivered to a designated company representative within a reasonable time
  period following the effective date of your retirement.

                                       2
<PAGE>

     12. Corporate Credit Cards. Upon the effective date of your retirement,
  you agree to immediately discontinue the use of any credit cards issued to
  you by or through Steelcase and to return any such credit cards to an
  authorized Steelcase representative. In addition, you agree to promptly
  submit any expense reports required to account for outstanding charges and
  to cooperate in the process of reconciling any such charges with your
  expense reports. Any personal expenses incurred through use of company
  credit cards, or otherwise charged to the company, shall either be
  separately reimbursed by you or deducted from your severance payment.

     13. Related-Entity Director Positions and Consulting Opportunities. ou
  have agreed to continue serving as an elected member of the board of
  directors for certain company-related entities, including Steelcase
  Financial Services Inc., Steelcase Jeraisy Company Limited and CalPac,
  L.L.C. (a/k/a Tangram), subject to the requirements of the Bylaws of those
  entities, and will receive compensation and expense reimbursement for your
  service as designated for non-employee outside directors by each entity.
  You will remain covered by the terms and conditions of the company's
  Directors and Officers liability insurance for the time period during which
  you served as an officer of Steelcase Inc. and/or its subsidiaries or
  related-entities, and coverage will extend for any time period during which
  you continue to serve as a director for any such entities. It is also
  possible that you may be called upon by the company, from time to time, to
  serve in a consulting role on specific projects or initiatives, but we have
  not entered into agreement for such services at this time, and will agree
  upon the terms for any such assignment at the time a request for services
  is made and accepted.

     14. Governing Law. he validity, interpretation, construction and
  performance of this Agreement shall be governed by the laws of the State of
  Michigan, U.S.A.

     15.Jurisdiction.You agree that any dispute arising under this Agreement
  shall be filed, heard and decided in either Kent County Circuit Court
  (Michigan) or the United States District Court for the Western District of
  Michigan. You also agree to subject yourself to the personal jurisdiction
  and venue of the identified courts regardless of where you may be located
  at the time of the proceeding.

     16. Entire Agreement. his Agreement contains the entire understanding of
  the parties and there are no additional promises, representations,
  assurances, terms or provisions between the parties other than those
  specifically set forth herein. This Agreement may not be amended except in
  writing signed by you and an officer of Steelcase.

   If you agree with the foregoing, please execute both of the enclosed
original copies of this letter and return one to me.

   Very truly yours,

        /s/ James P. Hackett
_____________________________________
          James P. Hackett
    President and Chief Executive
               Officer
           Steelcase Inc.

                                          READ, UNDERSTOOD AND ACCEPTED

                                                 /s/ A. Rougier-Chapman
                                          By: _________________________________
                                                  Alwyn Rougier-Chapman

                                                         3/5/01
                                          Date: _______________________________

                                                   /s/ Jon D. Botsford
                                          Witness: ____________________________

                                       3

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