AGSCO INC, 10-12G, 1997-10-29

AGSCO INC
10-12G, 1997-10-29

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

AGSCO, INC.
------------------------------------
(Exact name of registrant as specified in its charter)

North Dakota 45-0222432
------------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Route 1, Box 151A
P.O. Box 13458
Grand Forks, North Dakota 58208-3458
------------------------------------- ------------
(Address of principal executive offices) Zip Code

Registrant's telephone number, including area code: (701) 775-5325
--------------

Securities to be registered pursuant to Section 12(b) of the Act: None
----

Securities to be registered pursuant to Section 12(g) of the Act:

Common Stock, $.10 par value per share
--------------------------------------
(Title of class)

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TABLE OF CONTENTS

Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Item 2. Selected Historical Financial and Other Data . . . . . . . . . . . 10

Item 3. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Item 4. Security Ownership of Certain Beneficial Owners and Management . . 18

Item 5. Directors and Executive Officers . . . . . . . . . . . . . . . . . 19

Item 6. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 22

Item 7. Certain Relationships and Related Transactions . . . . . . . . . . 23

Item 8. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 24

Item 9. Market Price of and Dividends on the Company's Common Equity and
Related Stockholder Matters. . . . . . . . . . . . . . . . . . . . 24

Item 10. Recent Sales of Unregistered Securities. . . . . . . . . . . . . . 24

Item 11. Description of Company's Securities to Be Registered . . . . . . . 25

Item 12. Indemnification of Officers and Directors. . . . . . . . . . . . . 25

Item 13. Financial Statements and Supplementary Data. . . . . . . . . . . . 26

Item 14. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . 26

Item 15. Financial Statements and Exhibits. . . . . . . . . . . . . . . . . 26

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ITEM 1. BUSINESS

GENERAL

AGSCO, Inc. ("AGSCO" or the "Company") formulates and distributes
agricultural chemicals and selected varieties of seeds, and manufactures
assemblies for the handling of liquid chemicals and other liquids in closed
systems. AGSCO serves approximately 4,000 customers in the states of North
Dakota, Montana, Minnesota, South Dakota and Kansas as well as in the Canadian
provinces of Manitoba, Saskatchewan and Alberta. The Company distributes its
products directly to farmers, dealers and other distributors and manufacturers.
The Company operates through a number of divisions, including AGSCO Precision
Farming Services, EN-DYN and AGSCO Capital Resources. The Company's objective
is to be a leader in supplying innovative, quality products and professional
services while promoting environmental awareness and a more profitable
agriculture. The Company fosters a positive work environment and continued
community involvement.

The Company's goal is to increase the territories into which it sells as
well as improve its market share in its current sales territories. The Company
believes that a strong focus on research and development is an important part of
the Company's strategy of developing better products and more effective methods
of seed treating, chemical transfer and application.

Currently, the Company employs approximately 100 full-time employees,
including 34 professional sales people. The Company's number of employees
expand to nearly 200 persons during the peak season of the spring and summer
months. The Company has over 4,000 accounts and has traditionally served North
Dakota, South Dakota, Minnesota and Montana. In 1995, the Company expanded its
business to include accounts in Kansas and the Canadian provinces of Manitoba,
Saskatchewan and Alberta. The Company maintains retail and warehouse outlets in
the Minnesota towns of Hallock, Crookston, Ada and Moorhead and in the North
Dakota towns of Grafton, Minot and Grand Forks.

On September 23, 1997, the Company commenced a public offering of its
common stock pursuant to Regulation A adopted under the Securities Act of 1933,
as amended (the "Regulation A Offering"), to raise a minimum of $2,500,000
during the first 180 days after the offering began. The maximum proceeds under
the offering are $4,200,000. If completed, approximately $1,800,000 of the
proceeds of the offering will be used for retiring term debt with the remaining
net proceeds to be used for funding the Company's financing division, AGSCO
Capital Resources, as well as for 1997 budget expenses.

The Company was founded as a partnership in 1934 and became a corporation
in 1948. The Company initially focused on fertilizer and pesticide sales and
subsequently expanded to offer many agricultural products and services in the
Upper Midwest. The Company's principal office is located at Route 1, Box 151A,
Grand Forks, North Dakota 58201 and its telephone number is (701) 775-5325.

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OPERATING STRATEGY

The Company's market strategy concentrates on the needs of its growers. As
a regional company, it has been the Company's philosophy to provide innovative
products and services to its customers. The Company maintains individual
contact with over 4,000 customers which enables it to determine what products or
services customers need to make better return on their investment. The
Company's products and services include (i) DB Green Products for small grain
seed treatment; (ii) Sun it II and Scoil - adjuvants that enhance the
performance of selected herbicides; (iii) Custom Blend Products, - seed
treatments and herbicides that are prescription blended for customers; (iv)
Dustret Products for Potatoes - Low Dust formulas which help reduce customer
exposure during product handling; (v) Chemical Air Delivery System, a mechanical
pump replacement system; and (vi) AGSCO Capital Resources, which provides
financing for growers' operating expenditure needs.

PRODUCTS AND SERVICES

AGRICULTURAL PRODUCTS

AGSCO's product line consists of over 100 products including seeds, seed
treatment, fungicides, insecticides, adjuvants, row crop and small grain
herbicides. AGSCO not only distributes its own products but also distributes
products of some of the world's largest chemical manufacturers, such as Agrevo
USA Company, Albaugh Inc., BASF Corporation, Dupont Agricultural Products, ISK
Biosciences Corporation, ELF Atochem North America, Inc., Gowan Company, Griffin
Corporation, Novartis Crop Protection, Inc., Riverdale Chemical Company, Rohm &
Haas Company, Rhone-Poulenc Ag Company and Valent USA Company. AGSCO
distributes its products to dealer networks as well as directly to growers.

On a national level, AGSCO supplies DB Green and Dustret Products to Helena
Chemical Company ("Helena"). Because Helena's marketing group is national in
scope, the Company believes Helena can bring AGSCO's products to areas outside
of the Company's traditional marketing area. AGSCO manufactures and supplies
Sun it II to American Cyanamid under an exclusive contract for the United States
and Canada. AGSCO also supplies DB Green to United Agri Products in Canada,
which then distributes AGSCO's products to a dealer network in Canada.

Pricing of products and services are primarily market driven. The Company
uses its own manufactured products and its Out-N-Back returnable container
system as a way of distinguishing what it considers to be its priority products
from the commodity products that the Company and other distributors buy from
manufacturers. Product margins vary by product, usage and sales area. Margins
on specialty products and priority products will range from 20% to 60% while
margins of commodity products will range from 3% to 20%.

PRECISION FARMING SERVICES

Through its division AGSCO Precision Farming Services, AGSCO offers soil
sampling and field mapping services using the U.S. Global Positioning System.
Additional services offered include

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data interpretation, professional recommendations and remote sensing/full
service digital imaging. The division's precision information team provides
recommendations and rate control data for variable rate fertilizer application
with the Soilection-Registered Trademark- System and the TerraGator-Registered
Trademark- System.

AG DEPOT WAREHOUSING SERVICES

The Company provides warehousing services of agricultural chemicals for
manufacturers, distributors and dealers at its AG DEPOT Distribution and
Production Center ("AG DEPOT") located three miles south of Grand Forks. At the
AG DEPOT, the Company also offers package and bulk storage, bulk packaging and
refilling, returnable tank lease programs, tank cleaning and maintenance and
inventory control services. The Company also has electronic dataface
interchange capabilities with its suppliers and customer.

AGSCO CAPITAL RESOURCES

The Company's service division, AGSCO Capital Resources, provides the
Company's customers with assistance in the funding of operating lines or capital
growth projects.

SAFETY PROGRAMS

The Company is extremely committed to following safety standards and takes
a very active approach in educating its staff regarding safety issues. For
example, all of the Company's sales people have or are in the process of passing
a certified crop advisor ("CCA") exam. The CCA program is a membership service
of the American Society of Agronomy ("ASA") developed in cooperation with
agribusinesses, retail dealers, cooperatives and manufacturers, state and
national trade associations, the USDA and independent consultants. The
requirements include passing a comprehensive international exam and a state,
regional, provincial or local exam evaluating knowledge of soil fertility, soil
and water management, integrated pest management and crop production.
Applicants are required to document their education and relevant work experience
and agree to uphold the CCA code of ethics. To maintain the CCA status, a
certificant must maintain 40 hours of continuing education every two years.
Although the Company is not required to have its sales people pass the CCA, the
Company believes the certification gives it a competitive advantage, as well as
ensures the protection of its employees and customers. The Company sponsors
monthly safety committee meetings and has established separate committees, such
as the Hazard Training Committee and the Accident/Near Miss Review Committee, to
deal with current and upcoming problems. One full-time person, certified in
Emergency Response/Hazardous Waste, is employed in the
safety/environmental/regulatory division.

The Company utilizes safety procedures at its facility the AG DEPOT, which
is a modern, state-of-the-art and environmentally friendly crop protection
facility. The site's ventilation system has the capability of 100% air exchange
in 26 minutes which is designed to ensure that upon detection, harmful or
hazardous vapors are eliminated throughout the entire building. A CO2 fire
prevention system has been installed in the building to help fight fires and
65,000 gallons of reserve water, along with a fire pump, are stored under the
building for use if an external fire starts. In addition, an 80-foot truck
scale is designed so chemicals may be dispensed and retrieved without the

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truck having to leave the scale. These features of the AG DEPOT demonstrate the
Company's planning for and commitment to safety.

ENVIRONMENT PROTECTION AND QUALITY CONTROL PROGRAMS

The Company is strongly committed to complying with various laws and
government regulations concerning environmental matters and employee safety and
health. United States federal environmental legislation having particular
impact on the Company includes the Toxic Substances Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Resource Conservation and
Recovery Act; the Clean Air Act; the Clean Water Act; the Safe Drinking Water
Act; and the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA," commonly known as "Superfund"), as amended by the Superfund
Amendments and Reauthorization Act ("SARA"). The Company is also subject to the
Occupational Safety and Health Act and regulations of the Occupational Safety
and Health Administration ("OSHA") concerning employee safety and health
matters. The Environmental Protection Agency ("EPA"), Department of
Transportation ("DOT"), OSHA and other federal agencies have the authority to
promulgate regulations which have an impact on the Company's operations. In
addition to these federal activities, various states have been delegated certain
authority under the aforementioned federal statutes. Many state and local
governments have adopted environmental and employee safety and health laws and
regulations, some of which are similar to federal requirements. State and
federal authorities may seek fines and penalties for violation of these laws and
regulations.

The Company promotes long-term environmental protection and compliance
programs that reduce and monitor emissions of hazardous materials into the
environment, as well as to the remediation of identified existing environmental
concerns. For this reason, the Company employs a full-time Environmental and
Regulatory Manager.

In 1989, the Company introduced the OUT-N-BACK service system which has
become an integral part of the business of crop protection. A bulk handling
system replaces the usage of non-returnable 2 1/2-gallon plastic jugs and
30-gallon drums with stainless steel returnable containers. Company sales
representatives deliver and pick up the containers thereby eliminating the
problems that farmers encounter when trying to dispose of the jugs and drums and
preventing over one million plastic jugs from being burned or disposed of in
landfills. A sophisticated bar coding system on the stainless steel containers
allows Company personnel to track the product and containers from the time each
container is filled until it is returned to the AG DEPOT where it is weighed,
bar coded and prepared for re-use.

The Company also utilizes the latest revolution in American agriculture
known as Global Positioning Systems ("GPS") which is often referred to as
"site-specific-farming" or "precision agriculture." This system utilizes
practices designed to maximize the economic returns to the grower and minimize
agriculture's impact on the environment. GPS is performed by mapping out an
area of interest and probing a parcel of land to collect samples to be analyzed.
Once the samples are analyzed, the correct products are applied to the field in
differing amounts depending upon the soil nutrient level. This process is
highly technical and utilizes satellites to determine the exact location the
products are to be applied. GPS is cost effective because chemicals and
fertilizers are not wasted

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and yields are improved due to the application of the proper products on the
correct areas of the field.

In 1996, the Company also started a new division, EN-DYN (Environmental
Dynamics), with the intent to bring to the market products, services and
processes that will have a significant impact on reducing or eliminating
negative human and economic impacts on the environment. EN-DYN's mission
statement reads, "Combining wisdom, common sense, economic sanity and technical
and scientific expertise to maintain a healthy environment." The dynamics of
new technologies designed to make the earth a more environmentally friendly
place to live, while allowing mankind to be progressive in seeking technologies
that make life better, is an exciting dimension of the global economy and one in
which EN-DYN plans to be a positive factor.

The Company is also involved with ISO 9000 which is a generic standard used
to document, implement, and demonstrate quality management and assurance
systems. Through ISO 9000, the Company will receive a registration certificate
that identifies its quality system as being in compliance with the regulations.
The Company believes this certification will enable it to compete more
effectively domestically as well as internationally.

SALES AND MARKETING

The Company's sales and marketing employees consist of one General Manager,
two sales managers, a purchasing manager, 34 account managers and two technical
support people. The Company's sales philosophy is "technical expertise and
service go with the product." The Company's primary marketing area is North
Dakota, Montana and Minnesota. Helena Chemical Company and American Cyanamid
distribute the Company's products domestically outside of this region and United
Agri Products distributes the Company's products internationally.

SEASONALITY

The Company sales are very seasonal, paralleling the activities of its farm
customers. During this concentration of sales, the Company may experience a
backlog.

COMPETITION

The Company encounters various types of competition, including price,
delivery, service, performance, product innovation, product recognition and
quality. The Company's primary competitors are the large national distributors.
The Company competes against companies such as Cenex Land-of-Lakes, United Agri
Products, Terra International Inc., J.R. Simplot Company/Simplot Soil Builders,
Wilbur Ellis Company, West Central Chemicals Inc., Helena Chemical Company and
Rosen's Inc. Other competitors include some independent chemical and fertilizer
dealerships as well as some grain elevators that handle chemicals.

The Company believes the diversified nature of its operations and its
focus on the present and future needs of its customers has helped it grow while
staying competitive. The size of the Company and the aggressive nature of its
management team enable it to respond to the needs of its present and expanding
customer base.

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EMPLOYEES

The Company currently employs approximately 100 permanent employees and
several temporary employees. The Company's employment has a seasonal pattern
and is greatest during the spring and summer months. The breakdown of employees
is as follows:

Sales 34
Sales Management and Support 18
Executive Management 5
Production 9
Out-N-Back Returnable Container Process 9
Warehousing 13
Administrative 17
En-Dyn 1
AGSCO Capital Resources 2

During the spring peak season, the Company adds approximately 100 temporary
employees to the OUT-N-BACK, Warehousing and Sales Support areas.

INTELLECTUAL PROPERTY

The Company owns one patent which relates to the Company's returnable
container process called the OUT-N-BACK System. In addition, the Company
maintains a number of trademarks and servicemarks under which it markets its
products and services. The Company believes that its trademarks and
servicemarks have been and will be useful in developing and protecting market
recognition for its products and services.

On February 26, 1997, the Company entered into a License Agreement with
NDSU Research Foundation, a corporation affiliated with North Dakota State
University, Fargo, North Dakota, to manufacture and market certain new "high pH
adjuvants for herbicidal compositions" patented by NDSU Research Foundation.
The Company has a 20-year exclusive license for these products and will pay a
royalty to NDSU Research Foundation of 5% of net sales and 50% of any sublicense
fees. The Company is subject to contractual obligations to use its best efforts
to market the products and may lose its license in areas in which it does not
market. Wide-scale testing will be undertaken in 1997; sales and marketing
activities are expected to get underway in 1998 on this product. The patent was
issued in May 1997.

Although the Company believes that its patent and patent rights may have
been useful in protecting its proprietary products and may be useful in
protecting future products, the Company believes its ability to efficiently
develop and sell its products on a timely-basis, whether patented or not, is
more crucial to the Company's future success.

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ITEM 2. SELECTED HISTORICAL FINANCIAL AND OTHER DATA

The following selected fiscal year financial data for the Company for its
fiscal years ending October 31, 1992, 1993, 1994, 1995 and 1996, which should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and with the Company's Financial Statements
and Notes thereto included elsewhere in this document, has been derived from the
financial statements of the Company prepared by Drees, Riskey & Vallager, Ltd.,
certified public accountants for the Company, Grand Forks, North Dakota. The
financial data for the nine months ended July 31, 1996 and 1997 is unaudited,
but in the opinion of management, reflects all adjustments of a normal recurring
nature necessary for a fair presentation of financial position and results of
operations. The results for the nine month period ended July 31, 1997 are not
necessarily indicative of the results to be expected for the entire year. The
pro forma financial data have not been audited.

<TABLE>
<CAPTION>
Fiscal Year
Year Ended October 31,
--------------------------------------------------------------------------

1992 1993 1994 1995 1996
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA
Revenue:
Sales and Commercial Revenue $ 19,959,134 $ 23,454,651 $ 27,812,015 $ 33,379,725 $ 40,331,881
Less Cash Discounts (80,397) (69,397) (82,656) (106,121) (128,774)
------------ ------------ ------------ ------------ ------------
$ 19,878,737 $ 23,385,254 $ 27,729,359 $ 33,273,604 $ 40,203,107
------------ ------------ ------------ ------------ ------------
Costs and Expenses:
Cost of Sales 15,183,131 18,143,991 21,714,616 26,573,260 32,781,072
Operating Expense 3,525,437 3,933,377 4,958,327 5,789,009 6,603,484
------------ ------------ ------------ ------------ ------------

Earnings from Operations: 1,170,169 1,307,886 1,056,416 911,335 818,551

Other Income (Expense) (94,881) (296,673) (28,342) (105,347) (139,902)
------------ ------------ ------------ ------------ ------------

Earnings Before Income Taxes: 1,075,288 1,011,213 1,028,074 805,998 678,649

Provision for Income Taxes: 439,267 428,917 408,435 339,453 297,559
------------ ------------ ------------ ------------ ------------

Net Earnings: $ 636,021 $ 582,296 $ 619,639 $ 466,535 $ 381,090
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------

AT OCTOBER 31, 1997
--------------------------------------------------------------------------
BALANCE SHEET DATA 1992 1993 1994 1995 1996
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Current Assets $ 7,148,944 $ 8,563,689 $ 11,512,761 $ 16,218,039 $ 14,156,340
Property and Equipment 2,845,037 3,132,016 3,265,034 4,731,054 5,365,761
Less Accumulated Depreciation (2,025,022) (2,151,290) (2,371,946) (2,744,042) (3,301,597)
------------ ------------ ------------ ------------ ------------
Net Property and Equipment 820,015 980,726 893,088 1,987,012 2,064,164
Other Assets 188,529 81,994 662,387 736,635 719,901
------------ ------------ ------------ ------------ ------------
Total Assets $ 8,157,488 $ 9,626,409 $ 13,068,236 $ 18,941,686 $ 16,940,405

Current Liabilities 4,142,183 5,077,137 7,955,906 12,457,557 9,893,258
Long-term Indebtedness 350,000 375,000 454,227 1,435,374 1,617,302
Shareholders' Equity 3,665,305 4,174,272 4,658,103 5,048,755 5,429,845

</TABLE>

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Nine Months Ended July 31,
-----------------------------
OPERATIONS DATA 1996 1997
- --------------- ------ ------
(unaudited)

Revenue:
Sales and Commercial Revenue $ 35,085,536 $ 37,696,513
Less Cash Discounts (107,420) (95,497)
------------ ------------

$ 34,978,116 $ 37,601,016
Expenses:
Costs of Sales $ 27,687,813 $ 29,918,418
Operating Expense 5,710,370 5,976,593
------------ ------------

Earnings from Operations 1,579,933 1,706,005
Other Income (Expenses) (388,938) (252,731)
------------ ------------

Earnings Before Income Taxes 1,190,995 1,453,274
Provision for Income Taxes (506,173) (617,230)
------------ ------------

Net Earnings $ 684,822 $ 836,044
------------ ------------
------------ ------------

At July 31,
-----------------------------
BALANCE SHEET DATA 1996 1997
- ------------------ ---- ----
(unaudited)

Current Assets $ 22,098,521 $ 27,937,429
Property and Equipment 5,377,943 5,779,173
Less Accumulated Depreciation (3,149,217) (3,745,248)
------------ ------------
Net Property and Equipment $ 2,228,726 $ 2,033,925
Other Assets 743,129 867,568
------------ ------------
Total Assets $ 25,070,376 $ 30,838,922
------------ ------------
------------ ------------

Current Liabilities $ 17,502,252 $ 23,438,719
Long-term Indebtedness $ 1,840,038 $ 1,134,312
Shareholders' Equity $ 5,728,086 $ 6,265,891

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

AGSCO formulates and distributes agricultural chemicals and selected
varieties of seeds, and manufactures assemblies for the handling of liquid
chemicals and other liquids in closed systems. AGSCO serves approximately 4,000
customers in the states of North Dakota, Montana, Minnesota, South Dakota and
Kansas as well as in the Canadian provinces of Manitoba, Saskatchewan and
Alberta. The Company's products include seed treatments, fungicides,
insecticides, adjuvants, row crop and small grain herbicides. The Company
distributes its products directly to farmers, dealers and other distributors and
manufacturers.

SEASONALITY

The Company's business is very seasonal. Accordingly, its inventory,
accounts receivable and working capital needs follow those of typical
agriculture industries.

- Prior to calendar year end, customers prepay for product they plan to
buy in the succeeding year. As of January 1, 1997, The Company had a
customer prepaid balance of $2,896,196.

- Customers charge seed treatment products during the months of March,
April and May, which become due as of June 15 of each year.

- Customers charge for herbicides during the months of June and July,
which become due as of August 15 of each year.

- Customers charge for fungicides during the months of August and
September, which become due as of October 15 of each year.

The Company often receives payment after its customers receive payment from
third parties. For example, a significant number of the Company's customers
receive payment from American Crystal Sugar Company on November 15th of each
year. This process happens every year and is factored in as part of the
Company's cash flow.

The Company's accounts receivable balance varies every year depending upon
the timing of planting and harvest. Therefore, the Company has to adapt to the
factors faced by its growers. The Company's policy is to have each grower make
payment in full by November 30 of each growing

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season. The Company provides incentives to its sales employees to collect all
of their accounts receivable charges by that date.

The Company's collection period runs from prepaid to 150 days past due and
averages 45 days. The Company's policy includes stamping the monthly statement
with a reminder notice, collection letters, crop liens, assignments and attorney
action.

RESULTS OF OPERATIONS

NINE MONTHS ENDED JULY 31, 1997 AND 1996

SALES AND COMMERCIAL REVENUE

The Company's sales and commercial revenues result from the sale of
agricultural chemicals, related small agricultural equipment, commercial
application and commercial warehouse leasing.
Total net sales and commercial revenue for the nine months ended July 31,
1997 were $37.6 million, a 7.4% increase from the nine months ended July 31,
1996. The increase in sales is primarily attributable to increased finished
goods (commodity products) purchased and resold.

COSTS AND EXPENSES

Gross margin decreased from 18.1% for the nine months ended July 31, 1996
to 17.6% for the nine months ended July 31, 1997. The decline in gross margin
is the result of volume changes in the Company's product sales mix. The
commodity products carry a smaller gross margin percentage than the Company's
manufactured products (proprietary products).

Operating expenses as a percent of net sales decreased from 13.6% for the
nine months ended July 31, 1996 to 13.0% for the nine months ended July 31,
1997. Infrastructure building tapered off in the first nine months of 1997
relative to the previous five years. Operating expenses are beginning to
reflect the economies of scale created with additional sales and commercial
revenue.

EARNINGS FROM OPERATIONS

Earnings from operations remained at 4.5% in both the fiscal 1996 and
fiscal 1997 nine month periods. Due to the increase in net sales and commercial
revenue, earnings from operations increased by $126,000 from July 31, 1996 to
July 31, 1997.

OTHER INCOME (EXPENSE)

Other expense decreased from an expense of 1.1% for the nine months ended
July 31, 1996 to an expense of 0.3% for the nine months ended July 31, 1997.
The decrease resulted from lower short-term borrowings through tighter Company
controls on inventories and accounts receivables, which created $99,000 in
interest expense savings.

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EXTRAORDINARY ITEM

The spring flood of 1997 in the Red River Valley caused a $138,000
extraordinary item for the nine months ended July 31, 1997. The Company
believes that the majority of the flood expenses have been accounted for through
the first nine months ended July 31, 1997.

EARNINGS BEFORE INCOME TAXES

Earnings before income taxes increased by $262,000 from 3.4% for the nine
months ended July 31, 1996 to 3.9% for the nine months ended July 31, 1997.

PROVISION FOR INCOME TAXES

Due to no recent significant corporate tax code changes, the tax provision
is set at an historical average rate of 42.5 % for the nine months ended July
31, 1997 with a comparable rate for the nine months ended July 31, 1996 of
42.2%.

NET EARNINGS

Net earnings increased by $151,000 for the nine months ended July 31, 1996
as compared to the nine months ended July 31, 1997. Earnings per share
increased $0.08 per share from $0.38 per share for the nine months ended July
31, 1996 to $0.46 per share for the nine months ended July 31, 1997.

YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

SALES AND COMMERCIAL REVENUES

Net sales and commercial revenues increased 20.8% from fiscal 1995 to
fiscal 1996 as a result of increased sales of the Company's proprietary
products and of commodity products. Net sales and commercial revenues increased
20.0% from fiscal 1994 to fiscal 1995 as a result of these same factors.

COSTS AND EXPENSES

Gross margin decreased to 18.5% in fiscal 1996 from 20.1% in fiscal 1995 as
a result of lower margin commodity products accounting for a higher percentage
of net sales and commercial revenues. Gross margins decreased from 21.7% in
fiscal 1994 to 20.1% in fiscal 1995 a result of lower margin commodity products
accounting for a higher percentage of net sales and commercial revenues.

Operating expenses decreased from 17.8% of net sales and commercial
revenues in fiscal 1994 and 17.4% in fiscal 1995 to 16.4% in fiscal 1996.
Operating expenses declined as a percent over the three year period primarily as
a result of the Company's increase in net sales and commercial revenue.

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EARNINGS FROM OPERATIONS

Earning from operations decreased from 3.8% of net sales and commercial
revenue in fiscal 1994 and 2.7% of net sales and commercial revenue in fiscal
1995 to 2.0% of net sales and commercial revenue in fiscal 1996, primarily as a
result of the Company's lower margin. In addition, over the three year period
of 1994 to 1996, the Company continued to add facilities and employees to
support the continued expansion of the Company's business and sales revenues.

OTHER INCOME (EXPENSE)

Other income (expense) increased from an expense of $28,342 in fiscal 1994
to an expense of $105,347 in fiscal 1995 to an expense of $139,902 in fiscal
1996. Other income (expense) consisted primarily of bank borrowings to support
the Company's working capital needs and increased as the Company's business
level increased.

EARNINGS BEFORE INCOME TAXES

Earnings before income taxes decreased from $1,028,074 or 3.7% of net sales
and commercial revenue in fiscal 1994 to $805,998 or 2.4% in fiscal 1995 and to
$678,649 or 1.7%. The decrease in earnings results from the Company's lower
gross margin together with continued Company investment in infrastructure
including additional facilities and employees.

PROVISION FOR INCOME TAXES

Provision for income taxes increased from 39.7% in fiscal 1994 to 42.1% in
fiscal 1995 to 43.8% in fiscal 1996 as a result of changing rates in the
deferred tax calculation.

NET EARNINGS

Earnings decreased from $619,639 in fiscal 1994 to $466,535 in fiscal 1995
to $381,090 in fiscal 1996 as a result of lower grow margin coupled with the
Company's aggressive expansion and investment in infrastructure.

LIQUIDITY AND CAPITAL RESOURCES

The Company's current assets and current liabilities at July 31, 1997,
October 31, 1996 and July 31, 1996 were as follows:

14
<PAGE>

July 31, 1997 October 31, 1996 July 31, 1996
------------- ---------------- -------------

Current assets $27,937,429 $14,156,340 $22,098,521
Current liabilities $23,438,719 $ 9,893,258 $17,502,252
Current ratio 1.19 1.43 1.26

Maintaining a current ratio greater than one enables the Company to remain
current on its short-term indebtedness.

At July 31, 1997 the Company had long-term debt of $1.1 million as compared
to long-term debt of $1.6 million at October 31, 1996 and $1.8 million at July
31, 1996. Likewise, the Company had at July 31, 1997 $6.3 million in
shareholders' equity as compared to $5.4 million in shareholders' equity at
October 31, 1996 and $5.7 million at July 31, 1996.

The Company has entered into a revised loan agreement dated July 21, 1997,
with three banks: First American Bank, National Association; First National
Bank of North Dakota; and Norwest Bank North Dakota, N.A., all of Grand Forks,
North Dakota. Under said loan agreement, the Company may borrow up to
$12,000,000 to meet its seasonal operating needs through September 23, 1997, and
thereafter the Company may borrow up to $10,300,000.

The terms of the loan agreement provide that the Company borrowings must be
repaid or refinanced by April 1, 1998, with an interest rate equal to the New
York prime rate as published in THE WALL STREET JOURNAL and requires the Company
to continue to meet certain financial covenants, including maintaining a
tangible net worth of not less than $5,750,000 (including the net worth of Ag
Park LLC); maintaining a current ratio (the ratio of current assets to current
liabilities) of not less than 1.2 to 1 at the end of each calendar month;
maintaining a maximum ratio of total indebtedness to tangible net worth of not
less than 2.5 to 1 as of the end of each fiscal year and, except for loans to Ag
Park LLC, not to make or permit loans to any subsidiaries, shareholders, or
affiliates in excess of $50,000 in the aggregate. The Company is currently in
compliance with all of loan covenants and, in the opinion of in the opinion of
management, will remain in compliance with the loan covenants.

The Company believes that existing cash, cash equivalents and funds
available under the loan agreement will be sufficient to fund its working
capital and capital resource needs for the next 12 months.

ITEM 3. PROPERTIES

The Company has long-term leases for the AG DEPOT, which is the
distribution and production center located three miles south of Grand Forks,
North Dakota, and for the Grafton office, which is an office and warehousing
facility located west of the city limits of Grafton, North Dakota. The AG DEPOT
has over 60,000 square feet of storage and bulk handling capacity, and is
equipped with the most sophisticated safety features available today. The
Company leases the AG DEPOT and Grafton facilities from Ag Park LLC, a North
Dakota limited liability company owned

15
<PAGE>

by the controlling shareholders of the Company. The AG DEPOT lease has a term
of 20 years from January 1, 1997 with a minimum monthly rent of $39,600. The
current rent for calendar year 1997 is $41,500 per month. The Grafton office
lease has a term of 15 years from March 15, 1997 with a minimum monthly rent of
$1,300. The current rent for calendar year 1997 is $1,300 per month. The
Company believes that the rent it pays on the AG DEPOT and Grafton facilities
are fair and reasonable to the Company and are competitive with rents charged
for similar facilities in each locality by landlords with no relationship to the
tenant.

In addition to the AG DEPOT and Grafton facilities, the Company owns or
leases the following facilities:

<TABLE>
<CAPTION>
Location Description Size Lease/Own
- -------- ----------- ---- ---------
<S> <C> <C> <C>
Falconer Township, Grand Steel Buildings for Warehousing 12.50 acres Own
Forks County, North Chemical and Equipment
Dakota Production

Ada, Noman County, Sales, Shop and Warehousing 8,500 sq. ft. Own
Minnesota Buildings

Hallock, Kittson County, Office, Warehouse and 5,000 sq. ft. Own
Minnesota Anhydrous Plant

Minot, Ward County, Office and Warehouse 9,500 sq. ft. Own
North Dakota

Moorhead, Clay County, Office and Warehouse .60 acres Own
Minnesota

Crookston, Minnesota Office and Storage Facility 4,000 sq. ft. Lease
</TABLE>

The Company's Mill Road facility in Grand Forks was damaged by the April
1997 Red River flood, which damage resulted in additional relocation and
replacement expenses estimated at $138,000 as of July 31, 1997. The Company
intends to build or lease a new corporate headquarters outside the flood plain
adjacent to its leased AG DEPOT facility in Grand Forks and to add warehouse and
production space to the AG DEPOT (estimated cost of $2,000,000) and to lease a
new Moorhead, Minnesota, sales facility during 1998. Otherwise, the Company has
no present plans for property improvements or development. The Company believes
that its properties are adequately insured for casualty loss.

16
<PAGE>

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Company's Articles of Incorporation authorize 10,000,000 shares of
Common Stock, $.10 par value. As of October 1, 1997, the Company had 1,815,000
shares of Common Stock outstanding. The following table sets forth certain
ownership information as of October 1, 1997 with respect to the Common Stock for
(i) those persons who directly or indirectly own, control or hold with the power
to vote 5% or more of the outstanding Common Stock, (ii) each of the directors
and named executive officers of the Company, and (iii) all directors and
officers as a group. These amounts are not adjusted to reflect shares that may
be sold in the Company's Regulation A Offering.

<TABLE>
<CAPTION>
COMMON STOCK PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED OUTSTANDING SHARES
---------------- ------------------ ------------------
<S> <C> <C>
David J. Glessner
901 Chestnut Street
Grand Forks, ND 58201 236,500(1) 13.0%

Matthew J. Glessner
2204 4th Avenue East
West Fargo, ND 58078 228,800(2) 12.6%

L. Russell Brown
255 Elks Drive
Grand Forks, ND 58201 210,650 11.6%

Randy R. Brown
425 Terrace Drive
Grand Forks, ND 58201 206,800 11.4%

Beverly J. Glessner
1514 7th Street South
Fargo, ND 58103 205,150 11.3%

Timothy L. Brown
1201 23rd Street South
Grand Forks, ND 58201 199,100 11.0%

Constance L. Brown
255 Elks Drive
Grand Forks, ND 58201 143,550 7.9%

John R. Glessner Testamentary Trust
901 Chestnut Street
Grand Forks, ND 58201 135,850 7.5%
(Co-Trustees David J. Glessner and
Matthew J. Glessner)

W. Lisa Salyer
3601 Cherry Street
Grand Forks, ND 58201 62,700 3.5%

James Champion
12801 South 86th Avenue
Palos Park, IL 60464 -0- *

By all Officers and Directors as a group
(7 persons): 1,008,700 55.58%
</TABLE>

----------
* Less than one percent.

(1) Includes 135,850 shares held by the John R. Glessner Testamentary Trust of
which Mr. David Glessner is a Trustee. Mr. David Glessner is a
beneficiary of 27,170 shares of the Trust but disclaims beneficial
ownership to the remaining 108,680 shares.

(2) Includes 135,850 shares held by the John R. Glessner Testamentary Trust of
which Mr. Matthew Glessner is a Trustee. Mr. Matthew Glessner is a
beneficiary of 27,170 shares of the Trust but disclaims beneficial
ownership to the remaining 108,680 shares.

17
<PAGE>

ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS

The executive officers and directors of the Company and their ages as of
October 1, 1997 are as follows:

NAME AGE POSITION WITH COMPANY
---- --- ---------------------

L. Russell Brown 62 Chairman of the Board, Treasurer and Advisor
Randy R. Brown 38 President, Chief Executive Officer and Director
Timothy L. Brown 36 Executive Vice President and Director
David J. Glessner 31 Chief Financial Officer, Secretary and Director
Matthew J. Glessner 29 Director and Manager, AGSCO Capital Resources
W. Lisa Salyer 34 Director
James Champion 51 Director

The following is a brief summary of the business experience of each of the
executive officers and directors of the Company:

L. RUSSELL BROWN. Mr. Brown started at AGSCO in 1959 in the Sales Division,
in Watertown, South Dakota. He returned to Grand Forks in 1962 and became the
Sales Manager at AGSCO. In 1976, Mr. Brown was named the President and CEO of
AGSCO and served in that position until 1995 when the continuation of a planned
transition moved Randy R. Brown into the Presidency of the Corporation and
Russell Brown retained the title of CEO. Mr. Brown has been a director of the
Company since 1962.

In 1995, Mr. Brown received the Builder of the Valley Award from the
Minnesota Red River Valley Development Association, was awarded the Grand Forks
Small Business Person of the Year from the Grand Forks Chamber of Commerce, was
awarded the North Dakota Business Innovator of the Year from the Center for
Innovation, University of North Dakota. In 1996, Mr. Brown was named the North
Dakota Small Business Person of the Year from the United States Small Business
Administration, was awarded the First Annual Tibbets Award from the United
States Small Business Administration, and was awarded the Community Service
Award from the Chemical Producers and Distributors Association.

Mr. Brown currently serves on the following Board of Directors: AGSCO,
Inc., First American Bank, Inter Industry Insurance, Ltd., RRV Winter Shows
Foundation, and the Center for Innovation & Business Development. Mr. Brown
attended the University of Idaho from 1953-1954 and attended the University of
North Dakota from 1956-1959.

18
<PAGE>

RANDY R. BROWN. Mr. Brown started at AGSCO in 1978 in Havre, Montana, as a
Sales Representative. Mr. Brown returned to Grand Forks in 1986 to join the
management staff as Sales Manager. In 1992, Mr. Brown was named Vice President
of Sales & Marketing. In 1995, Mr. Brown took over the Company as President;
and in 1997, Mr. Brown took on the additional responsibilities of CEO. Mr.
Brown has been a director of the Company since 1994.

Over the years Mr. Brown has served on a multitude of boards both
regionally and nationally. At present, Mr. Brown is on the board of the Grand
Forks Chamber of Commerce and serves on the North Dakota State Advisory
Committee of the Manufacturers Technology Partnership. Mr. Brown is also
involved in several Chemical Manufacturers advisory councils. Mr. Brown
attended High School in Grand Forks, North Dakota, from 1974-1977.

TIMOTHY L. BROWN. Mr. Brown started with AGSCO in 1981 in Glendive,
Montana, as a Sales Representative. Mr. Brown returned to Grand Forks in 1985
as Environmental and Regulatory Manager. In 1987, Mr. Brown was named
Production Manager but still retained all previous duties. In 1990, Mr. Brown
was named Operations Manager. In 1994, Mr. Brown was named Vice President of
Operations and in 1996 Executive Vice President. Mr. Brown has been a director
of the Company since 1994.

Mr. Brown attended Red River High School in Grand Forks, North Dakota, from
1977-1979 and attended the University of Minnesota at Crookston from 1980-1981.
Mr. Brown has served on the board of the Greater Grand Forks Safety Council and
is past Chairman of the Board. Mr. Brown currently holds a position on the
Board of the Chemical Producers and Distributors Association (CPDA).

DAVID J. GLESSNER. Mr. Glessner received his Bachelors of Business
Administration with the major being Financial Management from the University of
North Dakota (UND) in December of 1989. During his tenure at UND, Mr. Glessner
was very active in Student Government, culminating by being elected Student Body
President. Currently, Mr. Glessner is pursuing a Masters of Business
Administration (MBA) at UND.

Mr. Glessner has diversified work experiences including founding and
operating a successful restaurant and catering partnership in Detroit Lakes and
Dunvilla, Minnesota, from 1986 through 1990. Mr. Glessner began working for
Applebee's International, Incorporated in 1990 and worked in various
Minneapolis-St. Paul, Minnesota, urban and suburban locations. Mr. Glessner was
General Manager for the St. Paul location before moving to AGSCO.

Mr. Glessner was elected to AGSCO's Board of Directors in 1992 and joined
the Company in 1994 as Human Resources Manager. In 1995, Mr. Glessner also
became Precision Farming Manager. Currently, Mr. Glessner is Chief Financial
Officer.

MR. MATTHEW J. GLESSNER. Mr. Glessner graduated from Mayville State
University, Mayville, North Dakota, in 1991 with a Bachelor of Science in
Education (majoring in mathematics and

19
<PAGE>

business). Mr. Glessner taught mathematics in the West Fargo (North Dakota)
Public Schools from 1992 until 1996. During his employment at West Fargo, Mr.
Glessner was a member on the Long Range Technology Committee. Mr. Glessner
started employment with En-Dyn, a division of AGSCO, in 1996 as Field
Remediation Manager. Currently, Mr. Glessner is the manager of the Capital
Resource division of AGSCO. Mr. Glessner has passed the licenses for Series 7
(General Securities Representative), Series 24 (General Securities Principal)
and Series 63 (Uniform Securities Agent State Law Exam). Mr. Glessner has been
a director of the Company since 1994.

W. LISA SALYER. Ms. Salyer ran her own business from May 1990 through May
1996 before coming to AGSCO in June of 1996 to work for their new division,
EN-DYN. Ms. Salyer's main area was searching for technology transfers from
federal labs, universities, or private corporations that would be available to
us for commercialization. Currently, Ms. Salyer has moved from the EN-DYN
division to working with Investor Relations. Ms. Salyer attended Aaker's
Business College in 1982-1983. Ms. Salyer has been a director of the Company
since 1994.

JAMES CHAMPION. Mr. Champion graduated in 1967 from Western Michigan
University. Since 1971, he has been employed with Riverdale Chemical Company
where he has served as President since 1981. He is currently Chairman of the
Board and President of Riverdale Chemical Company. Mr. Champion also served as
a Captain in the United States Army and has served as a member of the Board of
Directors of the Midwest Agricultural Chemical Association and the Chemical
Producers Association. Mr. Champion is currently the director and Chairman of
RISE (Responsible Industry for a Sound Environment). Mr. Champion is also on
the Board of Advisors of Dober Chemical Company and the Board of Directors of
Heritage Community Bank. Mr. Champion has been a director of the Company since
September 1997.

20
<PAGE>

ITEM 6. EXECUTIVE COMPENSATION.

COMPENSATION SUMMARY

The following table shows the compensation earned for services rendered in
all capacities to the Company by the President and the other most highly
compensated executive officer of the Company whose salary and bonuses exceeded
$100,000 for the year ended October 31, 1996 (the "Named Executive Officers"):

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE FOR FISCAL YEAR 1996
ANNUAL COMPENSATION
-------------------

NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION SALARY BONUS COMPENSATION COMPENSATION
- ------------------ ------ ----- ------------ ------------
<S> <C> <C> <C> <C>
Randy R. Brown $ 77,330 $168,191 $ 7,565(1) 12,059(2)
CEO/President
Timothy L. Brown 70,152 158,191 7,464(3) 12,059(2)
Executive Vice President
L. Russell Brown 97,112 120,000 844(4) $12,059(2)
Treasurer

- ------------------
</TABLE>

(1) Consists of $844 for automobile use and $6,812 for other miscellaneous
taxable benefits.
(2) Consists of $8,059 contributions each to the Company's Employees Profit
Sharing Plus Plan and $4,000 in Board Fees.
(3) Consists of $844 for automobile use and $6,620 for other miscellaneous
taxable benefits.
(4) Consists of $844 for automobile use.

OPTION GRANTS

The Company made no option grants to the Named Executive Officers during
the fiscal year ended October 1996 and has no options outstanding.

EMPLOYMENT AGREEMENTS

None of the executive officers and directors of the Company are parties to
any employment or severance agreements.

COMPENSATION OF DIRECTORS

The Company pays members of its Board of Directors who are not employees of
the Company an annual fee of $4,000.

21
<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Not Applicable.

BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

For fiscal 1996, all decisions on compensation of the Company's executives
were made by the full Board of Directors. There was no formal Compensation
Committee for fiscal 1996.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following officers, directors, key personnel or principal shareholders
are related by blood or marriage, as described below:

Randy R. Brown, Timothy L. Brown and W. Lisa Salyer - are siblings and the
children of L. Russell Brown - Father.
David J. Glessner and Matthew J. Glessner are brothers - and nephews of L.
Russell Brown.

As of October 31, 1996 the 15 shareholders of AGSCO own 100% of Ag Park
LLC. Ag Park LLC, owns the AG DEPOT warehousing facility and the Grafton sales
office and warehousing facility. AGSCO, Inc., has long-term leases with Ag Park
LLC, for both of these facilities. These leases are triple net leases, with
AGSCO, Inc., responsible for payment of all taxes, insurance and maintenance.

AGSCO, Inc., has a long-term note, at prime plus 1%, due from Ag Park LLC,
at such time as Ag Park LLC, has paid its loan commitment (on the AG DEPOT
facility) to the Small Business Association.

Mr. James Champion, who commenced serving as a director of the Company on
September 22, 1997, is President and Chairman of Riverdale Chemical Company.
The Company in the past has bought products from Riverdale Chemical Company and
anticipates that it may buy additional product from Riverdale Chemical Company
in the future.

The Company believes the terms of the transactions with Ag Park LLC, were
no less favorable to the Company than would have been obtained from an
unaffiliated third party to similar transactions. All future material
affiliated transactions and loans will be made or entered into on terms that are
no less favorable to the Company than those that can be obtained from
unaffiliated parties. In addition, all future material affiliated transactions
and loans will be approved by a majority of the Company's independent directors
who do not have an interest in the transaction. On September 22, 1997, the
Company added an additional director, Mr. Champion, who is not affiliated with
Ag Park LLC.

22
<PAGE>

From time to time the Company has borrowed sums from officers for working
capital purposes. As of October 31, 1996, the Company had notes payable
outstanding to Mr. L.A. Brown and Mr. L. Russell Brown in the amounts of
$375,000 and $130,000, respectively. The interest rate on these notes are prime
and 1% over prime, respectively.

No company debt is personally guaranteed or co-signed by any of the
Company's officers, directors, key personnel or 10% shareholders.

ITEM 8. LEGAL PROCEEDINGS

At the date of this Registration Statement, there is no pending or
threatened litigation or administrative action which has had or may have a
material effect on the Company's business, financial condition or operations.

ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.

MARKET PRICE

Prior to the Company's Regulation A Offering, the Company was
privately-held. Accordingly, there is no established public market for the
Company's Common Stock. The Company intends to file an application for
quotation on the Nasdaq SmallCap Market or the Nasdaq National Market System at
such time as the Company believes it is eligible for quotation on either
systems.

HOLDERS

As of October 1, 1997, the Company had issued and outstanding 1,815,000
shares of Common Stock held by 15 holders of record.

DIVIDENDS

The Company had retained earnings of $4,341,722 as of October 31, 1996,
which under North Dakota law would legally be available to pay dividends. The
Company has not, however, paid dividends on its common stock since 1994 and has
no plans to do so at this time.

ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.

Except as noted below, the Company has not sold any securities in the past
three years. On September 23, 1997, the Company commenced a public offering of
a minimum of 277,778 and a maximum of 466,667 shares of its common stock
pursuant to Regulation A adopted under the Securities Act of 1933, as amended.
As of October 27, 1997, the Company had not yet achieved the minimum.

23
<PAGE>

ITEM 11. DESCRIPTION OF COMPANY'S SECURITIES TO BE REGISTERED.

The Company is authorized to issue 10,000,000 shares of Common Stock, $.10
par value per share. As of October 1, 1997, 1,815,000 shares of Common Stock
were outstanding.

COMMON STOCK

Each share of Common Stock is entitled to one vote on all matters submitted
to a vote of shareholders. The Common stock does have cumulative voting rights,
but does not have any preemptive rights.

ITEM 12. INDEMNIFICATION OF OFFICERS AND DIRECTORS.

Section 5.01 of the Company's Bylaws provides that no director shall be
personally liable to the Company or to its shareholders for monetary damages for
any breach of fiduciary duty as a director, except to the extent such exemption
from liability or limitation thereof is not permitted under the laws of the
State of North Dakota, as amended. The Bylaws also provide that any person who
at any time shall serve or shall have served as a director, officer or employee
of the Company, or of any other enterprise at the request of the Company, and
the heirs, executors and administrators of such person shall be indemnified by
the Company in accordance with, and to the fullest extent permitted by, the
provisions of the North Dakota Century Code, as it may be amended from time to
time.

Section 10-19.1-91 of the North Dakota Business Corporation Act provides
that a corporation shall indemnify a person made or threatened to be made a
party to a proceeding by reason of the former or present official capacity of
the person against judgments, penalties, fines, including, without limitation,
excise taxes assessed against the person with respect to an employee benefit
plan, settlements, and reasonable expenses, including attorneys' fees and
disbursements, incurred by the person in connection with the proceeding, if,
with respect to the acts or omissions of the person complained of in the
proceeding, the person:

(1) Has not been indemnified by another organization or employee benefit plan
for the same judgments, penalties, fines, including, without limitation,
excise taxes assessed against the person with respect to an employee
benefit plan, settlements, and reasonable expenses, including attorneys'
fees and disbursements, incurred by the person in connection with the
proceeding with respect to the same acts or omissions;

(2) Acted in good faith;

(3) Received no improper personal benefit and section 10-19.1-51, if
applicable, has been satisfied;

24
<PAGE>

(4) In the case of a criminal proceeding, had no reasonable cause to believe
the conduct was unlawful; and

(5) In the case of acts or omissions occurring in the official capacity
described in paragraph 1 or 2 of subdivision b of subsection 1, reasonably
believed that the conduct was in the best interests of the corporation, or
in the case of acts or omissions occurring in the official capacity
described in paragraph 3 of subdivision b of subsection 1, reasonably
believed that the conduct was not opposed to the best interests of the
corporation. If the person's acts or omissions complained of in the
proceeding relate to conduct as a director, officer, trustee, employee, or
agent of an employee benefit plan, the conduct is not considered to be
opposed to the best interests of the corporation if the person reasonably
believed that the conduct was in the best interests of the participants or
beneficiaries of the employee benefit plan.

ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplemental data required by this Item 13
follow the index of financial statements appearing at Item 15 of this Form
10.

ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS

FINANCIAL STATEMENTS
The following Financial Statements are filed as part of this Form 10:

Independent Auditors' Report of Drees, Riskey & Vallager, Ltd.

Balance Sheets as of October 31, 1995 and 1996

Statements of Operations for the years ended October 31, 1994, 1995
and 1996

Statements of Changes in Shareholders' Equity for the years ended
October 31, 1994, 1995 and 1996

Statements of Cash Flows for the years ended October 31, 1994, 1995

Notes to Financial Statements for the years ended October 31, 1994,
1995 and 1996

25
<PAGE>

Balance Sheet as of July 31, 1997 (unaudited)

Statement of Operations for the nine months ended July 31, 1996 and
1997 (unaudited)

Statement of Cash Flows for the nine months ended July 31, 1996 and
1997 (unaudited)

Notes to unaudited financial statements

26
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and
Stockholders of Agsco, Inc.
Grand Forks, North Dakota

We have audited the accompanying balance sheets of Agsco, Inc., as of October
31, 1995 and 1996, and the related statements of operations, stockholders'
equity, and cash flows for the years ended October 31, 1994, 1995 and 1996.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Agsco, Inc., as of October 31,
1995 and 1996, and the results of its operations and its cash flows for the
years ended October 31, 1994, 1995 and 1996 in conformity with generally
accepted accounting principles.

DREES, RISKEY & VALLAGER, LTD.

Certified Public Accountants
December 10, 1996
Grand Forks, North Dakota

F-1

<PAGE>

AGSCO, INC.
BALANCE SHEETS
OCTOBER 31, 1995 AND 1996

1995 1996
----------- -----------
ASSETS
------

CURRENT ASSETS:
Receivables
Trade accounts (net of allowance
for doubtful accounts 1995 -
$80,000; 1996 - $80,000) $ 5,722,783 $ 5,511,091
Note - Ag Park LLC
Employee accounts 5,876 24,717
Other receivables 2,481,373 3,522,140
Income tax refund 168,621 115,357
----------- -----------
8,378,653 9,173,305
----------- -----------

Inventories 7,527,257 4,798,155
----------- -----------

Prepaid expenses 146,485 82,514
----------- -----------

Deferred income taxes 165,644 102,366
----------- -----------

Total current assets 16,218,039 14,156,340
----------- -----------

PROPERTY AND EQUIPMENT 4,731,054 5,365,761
Less accumulated depreciation (2,744,042) (3,301,597)
----------- -----------
Net property and equipment 1,987,012 2,064,164
----------- -----------

OTHER ASSETS:
Note - Ag Park LLC 629,166 598,892
Cash surrender value of life
insurance policies 107,469 121,009
----------- -----------
Total other assets 736,635 719,901
----------- -----------

TOTAL ASSETS $18,941,686 $16,940,405
----------- -----------
----------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

CURRENT LIABILITIES
Short-term notes payable $ 8,674,000 $ 5,262,000
----------- -----------

Current installments of long-term debt 317,143 545,772
----------- -----------

Excess of outstanding checks
($465,640 and $825,127, respectively)
over cash on deposit 134,415 249,378
----------- -----------

Notes payable-officer 0 130,000
----------- -----------

Accounts payable 1,872,402 2,428,792
----------- -----------

Customer credit balances 376,874 256,249
----------- -----------

F-2

<PAGE>

AGSCO, INC.
BALANCE SHEETS
OCTOBER 31, 1995 AND 1996
(CONTINUED)
1995 1996
----------- -----------

Accrued taxes:
Payroll $ 51,960 $ 74,506
Sales 3,383 3,991
Environmental 104,184 40,816
Property 15,653 53,239
Income
----------- -----------
175,180 172,552
----------- -----------

Accrued salaries 554,176 613,515
----------- -----------

Accrued interest 100,287
----------- -----------

Other accrued expenses 253,080 235,000
----------- -----------

Total current liabilities 12,457,557 9,893,258
----------- -----------

LONG-TERM LIABILITIES:
Long-term indebtedness, excluding
current installments 1,027,353 1,169,611
Notes payable-officer 375,000 375,000
Deferred taxes 33,021 72,641
----------- -----------
Total long-term liabilities 1,435,374 1,617,302
----------- -----------

Total liabilities 13,892,931 11,510,560
----------- -----------

STOCKHOLDERS' EQUITY:
Common stock: 10,000 shares authorized
$100 par value, 3,300 shares issued
and outstanding at October 31, 1995
and 1996, respectively 330,000 330,000

Paid-in capital 758,123 758,123

Retained earnings 3,960,632 4,341,722
----------- -----------

Total stockholders' equity 5,048,755 5,429,845
----------- -----------

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $18,941,686 $16,940,405
----------- -----------
----------- -----------

The accompanying notes to financial statements are an integral part of this
statement.

F-3

<PAGE>

AGSCO, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996

1994 1995 1996
------------ ------------ ------------
<S> <C> <C> <C>
Sales and Commercial Revenue $27,812,015 $33,379,725 $40,331,881
Less: Cash discounts (82,656) (106,121) (128,774)
------------ ------------ ------------
Net sales and commercial revenue 27,729,359 33,273,604 40,203,107
------------ ------------ ------------

Cost of Sales:
Total cost of sales 21,714,616 26,573,260 32,781,072
------------ ------------ ------------

Gross Profit 6,014,743 6,700,344 7,422,035
------------ ------------ ------------

Operating Expenses:
General plant 423,930 707,134 288,297
Laboratory and research 69,720 105,459 101,846
Selling expense 2,542,577 3,001,414 4,083,781
General and administrative 1,922,100 1,975,002 2,129,560
------------ ------------ ------------
Total operating expenses 4,958,327 5,789,009 6,603,484
------------ ------------ ------------

Earnings from Operations 1,056,416 911,335 818,551
------------ ------------ ------------

Other Income (Expenses):
Accounts receivable service charges 128,419 184,075 424,753
Interest income 4,483 70,179 55,197
Gain on sale of property and equipment 17,467 2,409 3,135
Interest expense (196,207) (470,331) (589,477)
Bad debts - net of recoveries 49,919 97,999 (54,777)
Royalties (21,000) (19,980)
Hazardous site clean-up (30,000)
Other income 18,577 30,302 21,267
------------ ------------ ------------
Net other income (expenses) (28,342) (105,347) (139,902)
------------ ------------ ------------

Earnings Before Income Taxes 1,028,074 805,988 678,649
Provision for Income Taxes 408,435 339,453 297,559
------------ ------------ ------------

Earnings $ 619,639 $ 466,535 $ 381,090
------------ ------------ ------------
------------ ------------ ------------

</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.

F-4

<PAGE>

AGSCO, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996

Common Paid in Retained
Stock Capital Earnings
------------ ------------ ------------

<S> <C> <C> <C>
BALANCE OCTOBER 31, 1993 $ 342,400 $ 758,123 $ 3,073,749

Add Earnings for Year 619,639

Less Dividends (44,374)

Less Stock Retirement (7,500) (83,934)
------------ ------------ ------------

BALANCE OCTOBER 31, 1994 334,900 758,123 3,565,080

Add Earnings for Year 466,535

Less Stock Retirement (4,900) (70,983)
------------ ------------ ------------

BALANCE OCTOBER 31, 1995$ 330,000 $758,123 $3,960,632
------------ ------------ ------------

Add Earnings for Year 381,090

BALANCE OCTOBER 31, 1996 $ 330,000 $ 758,123 $ 4,341,722
------------ ------------ ------------
------------ ------------ ------------

</TABLE>

The accompanying notes to financial statements are an integral part of this
statement.

F-5

<PAGE>

AGSCO, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996

1994 1995 1996
------------ ------------ ------------

<S> <C> <C> <C>
CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
Earnings $ 619,639 $ 466,535 $ 381,090
Non-cash items included in earnings:
Depreciation 311,535 413,941 582,376
Gain on sale of equipment (17,467) (2,409) (3,135)
Decrease (Increase) in deferred tax assets (69,260) 22,074 102,898
Changes in:
Increase in receivables (324,432) (4,453,488) (794,652)
Increase in inventories (2,795,115) (218,927) 2,729,102
Increase in prepaid expenses (38,932) (60,911) 63,791
Increase (Decrease) in accounts payable 112,803 (50,783) 556,390
Increase (Decrease) in customer credit balances 321,797 (127,265) (120,625)
Increase (Decrease) in accrued expenses 522,241 (143,971) (61,656)
------------ ------------ ------------
Net cash provided (used) by operating activities (1,357,191) (4,155,204) 3,435,759
------------ ------------ ------------

CASH FLOWS FROM (TO) INVESTING ACTIVITIES:
Proceeds from sale of equipment 26,329 7,820 3,135
Purchase of equipment and land (232,759) (1,513,276) (659,528)
Increase in cash surrender value of life insurance (7,598) (17,877) (13,540)
Advance made on notes receivable -
Ag Park LLC (602,563) (26,603) 30,274
------------ ------------ ------------
Net cash used by investing activities (816,591) (1,549,936) (639,659)
------------ ------------ ------------

CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Change in excess of outstanding checks over
cash on deposit 264,700 (130,285) 114,963
Proceeds from note payable - officer 70,000 238,000
Payment on note payable - officer (70,000) (108,000)
Retirement of common stock (91,434) (75,883)
Dividends paid (34,146) (40,188)
New borrowings:
Short-term 14,520,000 20,927,000 20,946,000
Long-term 1,500,000 700,000
Debt reductions:
Short-term (12,873,000) (16,250,000) (24,358,000)
Long-term (155,504) 329,063)
------------ ------------ ------------
Net cash provided by financing activities 1,856,120 5,705,140 (2,796,100)
------------ ------------ ------------
------------ ------------ ------------

NET INCREASE (DECREASE) IN CASH (317,662) -0-

CASH, BEGINNING OF YEAR 317,662 -0-
------------ ------------ ------------

CASH, END OF YEAR $ -0- $ -0- $ -0-
------------ ------------ ------------
------------ ------------ ------------

</TABLE>

F-6

<PAGE>

AGSCO, INC.
STATEMENTS OF CASH FLOWS

1994 1995 1996
------------ ------------ ------------
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:

<S> <C> <C> <C>
Non-Cash Investing and Financing Activities:
-------------------------------------------
Dividends declared - not paid $ 40,188 $ -0- $ -0-
------------ ------------ ------------
------------ ------------ ------------

Other:
-----
Interest paid during the year $ 187,738 $ 405,898 $ 689,764
------------ ------------ ------------
------------ ------------ ------------

Income taxes paid during the year $ 454,803 $ 507,695 $ 141,399
------------ ------------ ------------
------------ ------------ ------------

Bad debts $ 193,162 $ 69,955 $ 108,009
------------ ------------ ------------
------------ ------------ ------------

</TABLE>

The accompanying notes to financial statements are an integral part of this
statement.

F-7

<PAGE>

AGSCO, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

Agsco, Inc., is a North Dakota corporation that manufactures and formulates
seed treating materials, herbicides, adjuvants and application equipment.
These products, as well as other brand name chemical products, are sold and
distributed throughout several Midwestern states.

During the years ended October 31, 1994, 1995 and 1996, one customer
accounted for $2,983,144, $2,706,784 and $2,674,114, respectively.

CASH AND CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.

INVENTORIES

Inventories are generally stated at the lower of cost (first-in, first-out
method) or market. Market is considered as the net realizable value.

SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK

As of October 31, 1996, the Corporation's receivables were from individuals
and companies in the agricultural industry. The Corporation has no policy
requiring collateral. However, if a customer exceeds his credit limit or
is chronically late with his payments, a lien is filed against the
individual's or company's agricultural crop.

The Company has a concentration of credit risk in its cash accounts, as
balances normally exceed federal insurance limits.

INCOME TAXES

The Company accounts for income taxes in accordance with Statements of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" which
requires the use of the "liability method" of accounting for income taxes.
Accordingly, deferred tax liabilities and assets are determined based on
the difference between the financial statement and tax bases of assets and
liabilities, using enacted tax rates in effect for the year in which the
differences are expected to reverse. Current income taxes are based on the
year's income taxable for Federal and State income tax reporting purposes.

ACCOUNTS RECEIVABLE - TRADE

Accounts receivable are carried at cost less an allowance for uncollectible
accounts. The allowance is based on prior years' experience and
management's analysis of possible bad debts.

F-8

<PAGE>

AGSCO, INC.
NOTES TO FINANCIAL STATEMENTS

DEPRECIATION

The Company depreciates its property and equipment using accelerated and
straight-line methods. The estimated useful lives are as follows:

Lives
-------------

Buildings 20-40 Years
Machinery and Equipment 3-15 Years
Spur Trackage 8 Years
Automotive 3-8 Years
Out-n-Back 5-11 Years
Office Equipment 3-10 Years
Research Equipment 5-10 Years

USE OF ESTIMATES

In preparing financial statements in conformity with generally
accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

NOTE 2 - OTHER RECEIVABLES

1995 1996
---------- ----------

Supplier rebates $1,779,323 $1,993,014
Purchase returns 696,194 1,118,344
Miscellaneous refunds 5,856 410,782
---------- ----------

$2,481,373 $3,522,140
---------- ----------
---------- ----------

NOTE 3 - INVENTORIES

The inventories at October 31, 1995 and 1996, are composed of the following:

1995 1996
---------- ----------

Raw material $ 517,159 $ 691,702
Work-in-progress 834,083 504,843
Finished goods 6,176,015 3,601,610
---------- ----------

$7,527,257 $4,798,155
---------- ----------
---------- ----------

F-9

<PAGE>

AGSCO, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 4 - PROPERTY AND EQUIPMENT

Following is a summary of property and equipment owned by the Company at October 31, 1995 and 1996:

1995 1996
------------ ------------------------------------------
Cost-Less Cost-Less
Accumulated Accumulated Accumulated
Description Cost Depreciation Depreciation
------------ ------------ ------------ ------------

<S> <C> <C> <C> <C>
Land $ 132,669 $ 132,669 $ $ 132,669
Buildings 40,091 637,840 607,984 29,856
Machinery and equipment 836,626 1,819,206 963,407 855,799
Out-n-backs 610,225 1,427,687 840,724 586,963
Automotive 102,819 520,109 354,305 165,804
Office equipment 263,748 786,051 493,517 292,534
Lab equipment 834 4,953 4,414 539
Spur trackage 37,246 37,246
------------ ------------ ------------ ------------

$ 1,987,012 $ 5,365,761 $ 3,301,597 $ 2,064,164
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------

</TABLE>

NOTE 5 - NOTE RECEIVABLE - AG PARK LLC

The Company has a note receivable from Ag Park LLC, a related party through
common ownership. Ag Park LLC constructed a building which is leased to Agsco,
Inc. The project cost $3.6 million of which 90% of the cost is financed by
financial institutions and the remaining 10% is financed on a long-term basis by
Agsco, Inc. The receivable of $598,892 consists of the 10% long-term investment
and the additional land purchased at the Ag Park LLC site. The investment
portion of the note carries an interest rate of 1% over prime. The remainder of
the note carries an interest rate of prime. At the present time there is no
formal repayment schedule. Repayment of the $360,000 long-term investment can
not take place until Ag Park LLC, has settled its debt with the banks. Upon
completion of the building Agsco, Inc., entered into a lease arrangement with Ag
Park LLC for a period of 20 years with rents currently set at $38,000 per month.

NOTE 6 - CASE SURRENDER VALUE OF LIFE INSURANCE

Following is a summary of the life insurance policies owned by the Company:

Type of Face Cash Surrender Value
Policy # Insured Beneficiary Insurance Amount 1995 1996
- ------------ ---------- ----------- ---------- ----------- -------------- -----------

<S> <C> <C> <C> <C> <C> <C>
Equitable L. Russell
#38217124 Brown Company Whole-Life $ 1,000,000 $ 92,863 $ 96,148
Equitable Beverly
#92045917 Glessner Company Whole-Life $ 1,000,000 14,606 24,861
----------- -----------

Total Cash Surrender Value $ 107,469 $ 121,009
----------- -----------
----------- -----------

F-10

<PAGE>

AGSCO, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 7 - SHORT-TERM NOTES PAYABLE

Details relative to the Company's short-term indebtedness are as follows:

Final Balance
Interest Maturity --------------------------
Payee Rate Date 1995 1996
- ------------------------ -------- --------- ---------- ----------

<S> <C> <C> <C> <C>
First Bank, Grand Forks 8.25% 03/01/97 $3,175,000 $1,503,427
First American Bank,
Grand Forks 8.25% 11/01/96 3,499,000 2,856,514
American Bank, Moorhead 8.25% 03/01/97 2,000,000 902,059
---------- ----------

$5,262,000 $8,674,000
---------- ----------
---------- ----------

</TABLE>

All of these notes are unsecured. The fair value of the long-term indebtedness
is estimated based on the current rates offered to the Company for debt of the
same remaining maturities. At October 31, 1995 and 1996, the fair value of the
long-term indebtedness approximates the amounts recorded in the financial
statement.

NOTE 8 - LONG-TERM INDEBTEDNESS

Details relative to the Company's long-term indebtedness as of October 31, 1995
and 1996, are as follows:

1996
Final ----------------------------
Interest Maturity 1995 Current
Payee Collateral Rate Date Total Portion Total
- -------------------- ----------- --------- --------- ---------- ------------- ----------

<S> <C> <C> <C> <C> <C> <C>
First Bank Unsecured 9.7% 3/98 $985,136 $212,745 $794,092
First Bank Unsecured 8.3% 8/98 359,360 233,350 136,987
First American Bank Unsecured 8.25% 3/97 97,987 344,000
First National Bank Unsecured 8.25% 3/97 98,053 343,991
---------- ---------- ----------
------------------
$1,344,496 $1,715,433 $545,772
---------- ---------- ----------
---------- ---------- ----------

</TABLE>

The principal portion of future payments on the above long-term debt at October
31, 1995, is as follows:

Years ended October 31,
1997 $ 545,772
1998 1,169,661
----------

Total due $1,715,433
----------
----------

The fair value of the long-term indebtedness is estimated based on the current
rates offered to the Company for debt of the same remaining maturities. At
October 31, 1995 and 1996, the fair value of the long-term indebtedness
approximates the amounts recorded in the financial statement.

F-11

<PAGE>

AGSCO, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 9 - NOTES PAYABLE - OFFICER

Balance
Maturity Interest -----------------------
Date Rate 1995 1996
-------- -------- -------- --------

L.A. Brown (Chairman of 12/31/96 prime $375,000 $375,000
Board)
L. Russell Brown (CEO) 07/16/97 1% over
prime 130,000
-------- --------

$375,000 $505,000
-------- --------
-------- --------

For financial statement purposes, these unsecured notes payable to L.A. Brown
are classified as long-term because management anticipates renewal for an
additional year.

NOTE 10 - PROFIT-SHARING PLAN

Agsco, Inc., is the sponsor of an employee profit-sharing plan. Larry A. Brown
and L. Russell Brown are trustees for the plan. Any Agsco, Inc., employee is
eligible for participation in the plan. Participation shall commence on the
first day of the plan year in which the employee completes one year of eligible
service, attain the age of twenty-one and performs 1,000 hours of service. An
employee is fully vested after 7 years of service. Contributions to the plan as
determined by the Board of Directors were $111,701, $117,066 and $50,915,
respectively, for the years ended October 31, 1994, 1995 and 1996.

On February 1, 1991, Agsco, Inc., set up a 401K plan as part of its employee
profit-sharing plan. Participation is elective on the anniversary date of the
employee after one year of employment. Any employer contributions to the plan
are fully vested. Their contributions for October 31, 1994, 1995 and 1996, were
$ 88,299, $82,934 and $149,085, respectively. Matching contributions are made
at the discretion of the Board of Directors.

F-12

<PAGE>

AGSCO, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 11 - COMPONENTS OF INCOME TAXES

The components of the Company's provision for income taxes are as follows:

1994 1995 1996
--------- --------- ---------

<S> <C> <C> <C>
Current federal and state income taxes $ 477,695 $ 317,379 $ 194,661
Changes in deferred income taxes (69,260) 22,074 102,898
--------- ---------

Provision for income taxes $ 408,435 $ 339,453 $ 297,559
--------- --------- ---------
--------- --------- ---------

Presentation of income taxes for financial statement purposes is as follows:

Current federal and state income taxes $ 477,695 $ 317,379 $ 194,661
Less prepayments 456,000 486,000 310,018
--------- --------- ---------

$ 21,695 $(168,621) $(115,357)
--------- --------- ---------
--------- --------- ---------

Income tax payable $ 25,103 $ $
Income tax refunds receivable 3,408 168,621 115,357
--------- --------- ---------

$ 21,695 $ 168,621 $ 115,357
--------- --------- ---------
--------- --------- ---------

Deferred tax liabilities consist of the following at October 31, 1995 and 1996:

Depreciation $ 9,227 $ 33,021 $ 72,641
--------- --------- ---------

Gross deferred tax liabilities $ 9,227 $ 33,021 $ 72,641
--------- --------- ---------
--------- --------- ---------

Deferred tax assets consist of the following at October 31, 1995 and 1996:

1994 1995 1996
--------- --------- ---------

Section 263(A) $ 106,724 $ 108,444 $ 67,166
Allowance for doubtful accounts 35,200 35,200 35,200
Hazard clean-up 22,000
--------- --------- ---------

Gross deferred tax assets $ 163,924 $ 165,644 $ 102,366
--------- --------- ---------
--------- --------- ---------

</TABLE>

NOTE 12 - LEASES

Agsco, Inc., leases warehouse space form Ag Park LLC, a related party, for
$38,000 per month. This 20 year lease began in February of 1995. The Company
leases other warehouses, vehicles and equipment under various operating lease
arrangements with varying expiration dates. total lease payments charged to
expenses during 1994, 1995 and 1996 were $152,129, $708,127 and $924,554,
respectively.

F-13

<PAGE>

AGSCO, INC.
NOTES TO FINANCIAL STATEMENTS

Minimum future lease payments for each f the next five years and in aggregate
are:

Years ending October 31,
1997 $ 734,129
1998 657,848
1999 549,002
2000 507,471
2001 477,364
----------

$2,925,814
----------
----------

NOTE 13 - COMMITMENTS AND CONTINGENCIES

LINES OF CREDIT

At October 31, 1996, Agsco, Inc., had unused unsecured lines of credit
available in the following amounts:

Total Unused
Expiration Line of Line of
Date Credit Credit
---------- ---------- ----------

First American Bank,
Grand Forks, ND 03/01/97 $4,750,000 $1,893,486
First Bank, Grand Forks, ND 03/01/97 2,500,000 996,573
American Bank and Trust,
Moorhead, MN 03/01/97 1,500,000 597,941

GUARANTEES

Ag Park LLC, a related party, built a warehouse storage facility for
agricultural products. The debt on that building of $3,025,550 on October 31,
1996, is guaranteed by Agsco, Inc.

F-14

<PAGE>

AGSCO, INC.

NINE-MONTH FINANCIAL STATEMENTS
JULY 31, 1997
(UNAUDITED)

The financial statements for the periods ended July 31, 1996 and 1997, have
been prepared by AGSCO, Inc., in accordance with generally accepted accounting
principles on a basis consistent with prior year financial statements. In the
opinion of management, the statements reflect the adjustments, which are of a
normal recurring nature, necessary to present fairly the Company's financial
position as of July 31, 1997, and the results of operations for the nine months
ended July 31, 1997.

These financial statements should be read in conjunction with the financial
statements and notes for the years ended October 31, 1995 and 1996, appearing
elsewhere in this Form 10.

In the opinion of management, there are no developments requiring footnote
disclosure for the periods covered by these financial statements that are not
adequately disclosed by the footnotes to the October 31, 1996, statements,
except the following:

1. FLOOD LOSSES. The April 1997 Red River flood inundated the Company's
corporate headquarters and warehouse facility located on Mill Road in Grand
Forks, North Dakota. Uninsured losses are estimated at $138,000 as of July 31,
1997, but will not otherwise materially affect the ability of the Company to
conduct business.

2. NDSU RESEARCH FOUNDATION LICENSE AGREEMENT. On February 26, 1997, the
Company entered into a License Agreement with NDSU Research Foundation, a
corporation affiliated with North Dakota State University, Fargo, North Dakota,
to manufacture and market certain new "high pH adjuvants for herbicidal
compositions" patented by NDSU Research Foundation. The Company has a 20-year
exclusive license for these products and will pay a royalty to NDSU Research
Foundation of 5% of net sales and 50% of any sublicense fees. The Company is
subject to contractual obligations to use its best efforts to market the
products and may lose its license in areas in which it does not market.

F-15

<PAGE>

AGSCO, INC.
BALANCE SHEET
JULY 31, 1997

ASSETS
1996 1997
-------- --------
CURRENT ASSETS:
Receivables:
Trade accounts (net of allowance for doubtful
accounts) 13,549,993 15,936,533
Employee accounts (Sales expense advances) 9,936 95,929
Other receivables 1,126,683 2,655,202
----------- -----------
Total Receivables 14,686,614 18,687,665
----------- -----------
Inventories 7,201,626 9,104,642
Prepaid Expense 77,658 115,398
Deferred Income Taxes 132,623 29,725
----------- -----------
Total Current Assets 22,098,521 27,937,429
----------- -----------

PROPERTY and EQUIPMENT: 5,377,943 5,779,173
Less: Accumulated Depr. (3,149,217) (3,745,248)
----------- -----------
Net Property and Equipment 2,228,726 2,033,925
----------- -----------

OTHER ASSETS:
Note - Ag Park LLC 635,660 746,559
Cash surrender value of life insurance policies 107,469 121,009
----------- -----------
Total Other Assets 743,129 867,568
----------- -----------
Total Assets 25,070,376 30,838,921
----------- -----------
----------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Short-term Notes Payable 6,439,000 4,413,000
Current installments of long-term debt 531,318 773,981
Excess of outstanding checks over cash
on deposit 3,581,014 6,480,392
Accounts Payable 5,209,731 9,424,541
Customer Credit Balances 412,481 582,487

1996 1997
-------- --------
Accrued Taxes:
Payroll 22,725 21,891
Sales 1,311 1,307
Environmental 57,920 72,749
Property 45,036 15,802
----------- -----------
Total Accrued Taxes 126,992 111,749
----------- -----------

Accrued Salaries 617,812 967,618
Accrued Interest 26,923 18,244
Other Accrued Expenses 187,828 194,185
Accrued Income Taxes 265,153 472,521
----------- -----------
Total Current Liabilities 17,502,252 23,438,719
----------- -----------

F-16
<PAGE>

LONG-TERM LIABILITIES:
Long-Term Debt 1,320,038 759,312
Notes payable - officer 520,000 375,000
----------- -----------
Total Long-Term Liabilities 1,840,038 1,134,312

Total Liabilities 19,342,290 24,573,032
----------- -----------
----------- -----------

STOCKHOLDERS' EQUITY:
Common Stock: 10,000,000 shares authorized
$.10 par value: 1,815,000 shares
issued and outstanding 330,000 181,500
Paid-in Capital 758,123 906,623
Retained Earnings 3,955,142 4,341,722
Current Earnings 684,821 836,045
----------- -----------
Total Stockholders' Equity 5,728,086 6,265,890
----------- -----------
Total Liabilities & Stockholders
Equity 25,070,376 30,838,921
----------- -----------
----------- -----------

F-17

<PAGE>

AGSCO, INC.
STATEMENTS OF OPERATIONS
JULY 31, 1997

1996 1997
-------- --------
Sales and Commercial Revenue $35,085,536 $37,696,513
Less: Cash discounts (107,420) (95,497)
----------- -----------
Net sales and commercial revenue 34,978,116 37,601,016
----------- -----------

Cost of Sales:
Total cost of sales 28,642,022 30,978,752
----------- -----------

Gross Profit 6,336,094 6,622,264
----------- -----------

Operating Expenses:
General plant 229,785 120,358
Laboratory and research 70,440 70,747
Selling expense 3,010,037 2,886,661
General and administrative 1,445,899 1,838,496
----------- -----------
Total operating expenses 4,756,161 4,916,260
----------- -----------

Earnings from Operations 1,579,933 1,706,005
----------- -----------

Other Income (Expenses):
Accounts receivable service charges 257,109 271,799
Interest income 41,720 44,061
Gain on sale of property and equipment 2,550 7,575
Interest expense (383,224) (286,514)
Bad debts - net of recoveries (301,113) (155,215)
Royalties (14,850) (14,985)
Other income (expense) 8,870 18,802
----------- -----------
Net other income/expense (388,938) (114,477)
----------- -----------

Earnings Before Extraordinary Items 1,190,994 1,591,527

Extraordinary (loss) - 1997 flood 0 (138,252)
----------- -----------
Profit (loss) before tax 1,190,994 1,453,275

Tax provision 506,173 617,230
----------- -----------
Profit (loss) after tax 684,821 36,045
----------- -----------
----------- -----------

F-18

<PAGE>

AGSCO, INC.
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED
JULY 31, 1997

1996 1997
-------- --------
CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
Earnings 684,821 838,045
Non-cash items included in earnings:
Depreciation 405,175 443,651
Gain on Sale of Equipment 2,550 7,575
Decrease (Increase) in Deferred tax assets 33,021 0
Changes in:
(Increase) Decrease in Receivables (6,307,961) (9,514,360)
(Increase) Decrease in Inventories 325,631 (4,306,487)
(Increase) Decrease in Prepaid Expenses 68,827 (32,884)
Increase (Decrease) in Accounts Payable 3,337,329 6,995,749
Increase (Decrease) in Customer Credit
Balances 35,607 326,238
Increase (Decrease) in Accrued Expenses 195,985 743,250
----------- -----------
Net cash provided (used) by operating
activities (1,414,999) (5,244,470)
----------- -----------

CASH FLOWS FROM (TO) INVESTING ACTIVITIES:
Proceeds from Sale of Equipment 0 19,348
(Purchases) of Equipment and Land (646,889) (413,412)
Increase in cash surrender value of Life
Insurance 0 0
(Advance made) Payment received on notes
receivable - Ag Park LLC (6,494) (147,667)
----------- -----------
Net cash used by investing activities (653,383) (541,730)
----------- -----------

CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Change in excess of outstanding checks over
cash on deposit 3,446,599 (6,231,014)
Proceeds from note payable - officer 0 0
(Payment) on note payable - officer 145,000 (130,000)
Retirement of Common Stock 0 0
New Borrowings:
Short-term 4,552,688 14,178,870
Long-term 750,000 250,000
Debt Reductions:
Short-term (6,737,688) (15,027,870)
Long-term (243,140) (479,385)
----------- -----------
Net cash used by financing activities 1,913,459 (7,439,400)
----------- -----------

NET INCREASE (DECREASE) IN CASH 0 0

CASH, BEGINNING OF YEAR 0 0
----------- -----------

CASH, END OF PERIOD 0 0
----------- -----------
----------- -----------

F-19
<PAGE>

LISTING OF EXHIBITS

3.1 Restated Articles of Incorporation, as amended to date

3.2 Bylaws, as amended to date

10.1 Qualified Employee Stock Purchase Plan

10.2 Lease Agreement between AG PARK LLC and the Company dated March 13,
1997, as amended, relating to all buildings, equipment, land and
improvements on the real property described in Grand Forks County,
North Dakota

10.3 Lease Agreement between AG PARK LLC and the Company dated March 13,
1997, as amended, relating to all buildings, equipment, land and
improvements on the real property described in Walsh County, North
Dakota

10.4 Loan Agreement dated as of June 14, 1996 and related Notes

10.5 Loan Agreement - Amendment No. 4 dated as of July 21, 1997 and
related Notes

10.6 License Agreement dated February 26, 1997 between NDSU Research
Foundation and the Company

24.1 Power of Attorney (included on signature page hereof)

27.1 Financial Data Schedule

<PAGE>

Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Grand Forks, State of North Dakota, on the 29th day of October, 1997.

AGSCO, INC.

By /s/ Randy R. Brown
--------------------------------------
Randy R. Brown
Chief Executive Officer, President and Director

POWER OF ATTORNEY

The undersigned hereby constitute and appoint Randy R. Brown, our true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for us and in our stead, in any and all capacities, to sign any
or all amendments to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as such person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute of substitutes may lawfully do
or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on October 29,
1997 in the capacities indicated.

Signature Title
--------- -----

/s/ L. Russell Brown Chairman of the Board, Treasurer and Advisor
- ---------------------------
L. Russell Brown

/s/ Randy R. Brown President, Chief Executive Officer and Director
- ---------------------------
Randy R. Brown

/s/ Timothy L. Brown Executive Vice President and Director
- ---------------------------
Timothy L. Brown

/s/ David J. Glessner Chief Financial Officer, Secretary and Director
- ---------------------------
David J. Glessner

/s/ Matthew J. Glessner Director and Manager, AGSCO Capital Resources
- ---------------------------
Matthew J. Glessner

<PAGE>

/s/ W. Lisa Salyer Director
- ---------------------------
W. Lisa Salyer

/s/ James Champion Director
- ---------------------------
James Champion

<PAGE>
EXHIBIT 3.1

ID #4015
File No. 630200
------------
ARTICLES OF AMENDMENT
AND
RESTATED ARTICLES OF INCORPORATION
OF
AGSCO INC.
----------

Pursuant to the provisions of Chapter 10-19.1-21 of the North Dakota
Century Code, the undersigned corporation adopts the following Articles of
Amendment and restates in its entirety its Articles of Incorporation:

ARTICLE 1. The name of the corporation is AGSCO, Inc.

ARTICLE 2. An amendment to the Articles of Incorporation was adopted on
January 31, 1997, in one of the following manners: (Please check one)

X by the shareholders, by the vote of a majority of outstanding
- ----- common stock,

by the incorporators, OR
- -----

by the board where no shares have been issued.
- -----

ARTICLE 3. The following Restated Articles of Incorporation of AGSCO, Inc.,
supersede the original Articles of Incorporation and all amendments thereto:

First: The name of the corporation shall be AGSCO, Inc.

Second: The address of the registered office of the corporation is P.O.
Box 13458, 2600 Mill Road, Grand Forks, North Dakota 58208-3458,
and the name of its registered agent at that address is Randy R.
Brown.

Third: The period of existence of the corporation shall be perpetual.

Fourth: The corporation shall have all of the powers of a North Dakota
business corporation.

Fifth: The aggregate number of shares that the corporation has authority
to issue is:

10,000,000 shares of common stock with a par value of $.10 per
share for total authorized capital of $1,000,000.

ARTICLE 4. The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows:

Each existing shareholder of the corporation shall receive 550 shares of common
stock for each share of common stock owned by such shareholder on January 31,
1997.

We, the undersigned, by virtue of the authority vested in us, have read the
foregoing Articles of Amendment and Restated Articles of Incorporation, know the
contents thereof, and verily believe the statements made therein to be true.

Dated: March 11 , 1997 By /s/
------ ---------------------------------------
Randy R. Brown, President

/s/
---------------------------------------
Dave Glessner, Secretary

3.1-1
<PAGE>

Office Use Only Receipt No: Filed By:
------- -----------------------------

Filed MARCH 19 , 19 97 .
---------------------------------- ------

/s/
- ----------------------------------------
Secretary of State

By
--------------------------------------
Deputy

3.1-2

<PAGE>

EXHIBIT 3.2

AMENDED BYLAWS
OF
AGSCO, INC.

ARTICLE I
OFFICES

SECTION 1.01 - PRINCIPAL OFFICE. The principal office of the corporation
in the State of North Dakota shall be located in the City of Grand Forks, County
of Grand Forks. The corporation may have such other offices, either within or
without the State of North Dakota as the Board of Directors may designate or as
the business of the corporation may require from time to time.

SECTION 1.02 - REGISTERED OFFICE. The registered office of the
corporation required by the North Dakota Business Corporation Act to be
maintained in the State of North Dakota may be, but need not be, identical with
the principal office in the State of North Dakota, and the address of the
registered office may be changed from time to time by the Board of Directors.

ARTICLE II
SHAREHOLDERS

SECTION 2.01 - REGULAR MEETINGS: Regular meetings of the shareholders of
the corporation entitled to vote shall be held on an annual, or other less
frequent basis, as shall be determined by the Board of Directors for the purpose
of electing Directors and for the transaction of such other business as may come
before the meeting. If the election of Directors shall not be held on the day
designated herein for any annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be held
at a special meeting of the shareholders as soon thereafter as conveniently may
be.

SECTION 2.02 - SPECIAL MEETINGS. Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by statute, may be
called by the President or by the Chairman of the Board or by the Board of
Directors, and shall be called by the President at the request of the holders of
not less than one-tenth of all outstanding shares of the corporation entitled to
vote at the meetings.

SECTION 2.03 - PLACE OF MEETING. The Board of Directors may designate
any place, either within or without the State of North Dakota, as the place of
meeting for any annual meeting or for any special meeting called by the Board of
Directors. A waiver of notice signed by all shareholders entitled to vote at a
meeting may designate any place either within or without the State of North
Dakota, as the place for the holding of such meeting. If no designation is
made, or if a

Ex. 3.2 -1
<PAGE>

special meeting be otherwise called, the place of meeting shall be the principal
office of the corporation in the State of North Dakota.

SECTION 2.04 - NOTICE OF MEETING. Written notice stating the place, day
and hour of the meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall, unless otherwise prescribed by
statute, be delivered not less than ten (10) nor more than fifty (50) days
before the date of the meeting, either personally or by mail, by or at the
direction of the President or the Secretary, or the persons calling the meeting,
to each shareholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his/her address as it appears on the stock
transfer books of the corporation, with postage thereon prepaid.

SECTION 2.05 - CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For
the purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
corporation may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty (50) days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books shall
be closed for at least ten (10) days immediately preceding such meeting. In
lieu of closing the stock transfer books, the Board of Directors may fix in
advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than fifty (50) days and, in case of a
meeting of shareholders, not less than ten (10) days prior to the date on which
the particular action, requiring such determination of shareholders is to be
taken. If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice of or to vote at a
meeting of shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on which
the resolution of the Board of Directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.

SECTION 2.06 - VOTING LISTS. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make a complete list of
the shareholders entitled to vote at each meeting of shareholders or any
adjournment thereof, arranged in alphabetical order, with the address of and the
number of shares held by each. Such list shall be produced and kept open at the
time and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting for the purposes thereof.

SECTION 2.07 - QUORUM. Thirty three percent (33%) of the corporation
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. If less than thirty three percent (33%) of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice.
At such

Ex. 3.2 -2
<PAGE>

adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.

SECTION 2.08 - PROXIES. At all meetings of shareholders, a shareholder
may vote in person or by proxy executed in writing by the shareholder or by
his/her duly authorized attorney in fact. Such proxy shall be filed with the
secretary of the corporation before or at the time of the meeting. No proxy
shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.

SECTION 2.09 - VOTING OF SHARES. Subject to the provisions of Section
2.12 of this Article II, each outstanding share entitled to vote shall be
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders.

SECTION 2.10 - VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in
the name of another corporation may be voted by such officer, agent or proxy as
the Bylaws of such corporation may prescribe, or, in the absence of such
provision, as the Board of Directors of such corporation may determine.

A. Shares held by an administrator, executor, guardian or conservator may
be voted by him/her, either in person or by proxy, without a transfer
of such shares into his/her name. Shares standing in the name of a
trustee may be voted by him/her, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him/her without a
transfer of such share into his/her name.
B. Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be
voted by such receiver without the transfer thereof into his/her name
if authority so to do be contained in an appropriate order of the
Court by which such receiver was appointed.
C. A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the
pledge, and thereafter the pledge shall be entitled to vote the shares
so transferred.
D. Neither shares of its own stock held by the corporation, nor those
held by another corporation if a majority of the shares entitled to
vote for the election of directors of such other corporation are held
by the corporation, shall be voted at any meeting or counted in
determining the total number of outstanding shares at any given time
for the purpose of any meeting.

SECTION 2.11 - INFORMAL ACTON BY SHAREHOLDERS. Any action required to be
taken at a meeting of the shareholders, or any action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.

Ex. 3.2 -3
<PAGE>

SECTION 2.12 - CUMULATIVE VOTING. At each election for Directors every
shareholder entitled to vote at such election shall have the right to vote, in
person or by proxy, the number of shares owned by him/her for as many persons as
there are Directors to be elected and for whose election he/she has a right to
vote, or to cumulate his/her votes by giving one candidate as many votes as the
number of such Directors multiplied by the number of his/her shares shall equal,
or by distributing such votes on the same principle among any number of
candidates.

SECTION 2.13 - WAIVER OF NOTICE: A shareholder may waive notice of any
meeting before, at or after the meeting, in writing, orally or by attendance.
Attendance at a meeting by a shareholder is a waiver of notice of that meeting
unless the shareholder objects at the beginning of the meeting to the
transaction of business because the meeting is not lawfully called or convened,
or objects before a vote on an item of business because the item may not be
lawfully considered at such meeting and does not participate in the
consideration of the item of such meeting.

SECTION 2.14 - PROPERLY BROUGHT BUSINESS: At the regular meeting, the
shareholders shall elect directors of the corporation and shall transact such
other business as may properly come before them. To be properly brought before
the meeting, business must be of a nature that is appropriate for consideration
at a regular meeting and must be (i) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (ii)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (iii) otherwise properly brought before the meeting by a
shareholder. In addition to any other applicable requirements, for business to
be properly brought before the regular meeting by a shareholder, the shareholder
must have given timely notice thereof in writing to the secretary of the
corporation. To be timely, each such notice must be given, either by personal
delivery or by United States mail, postage prepaid, to the secretary of the
corporation, not less than sixty (60) days nor more than ninety (90) days prior
to a meeting date corresponding to the previous year's regular meeting. Each
such notice to the secretary shall set forth as to each matter the shareholder
proposes to bring before the regular meeting (a) a brief description of the
business desired to be brought before the regular meeting and the reasons for
conducting such business at the regular meeting, (b) the name and address of
record of the shareholders proposing such business, (c) the class or series (if
any) and number of shares of the corporation which are owned by the shareholder,
and (d) any material interest of the shareholder in such business.
Notwithstanding anything in these Amended Bylaws to the contrary, no business
shall be transacted at the regular meeting except in accordance with the
procedures set forth in the Article; provided, however, that nothing in the
Article shall be deemed to preclude discussion by any shareholder of any
business properly brought before the regular meeting, in accordance with these
Amended Bylaws. The amendment or repeal of this section or the adoption of any
provision inconsistent therewith shall require the approval of the holders of
shares representing at least 70% of the outstanding shares of the common stock.

ARTICLE III
BOARD OF DIRECTORS

Ex. 3.2 -4
<PAGE>

SECTION 3.01 - GENERAL POWERS. The business and affairs of the
corporation shall be managed by its Board of Directors. The corporation Board
of Directors shall be responsible for the overall policy issues set for the
company.

A. OBJECTIVES. The Board is to protect the continued financial integrity
of the company while setting policy for the economic well-being of the
company present and future.
B. RESPONSIBILITY AND AUTHORITY. The Board of Directors shall deal with
all stock related issues including the determination of priority
redemption based upon requests, previous commitments and current
events. The Board of Directors also shall:
1. Provide leadership and vision.
2. Set the goals, strategies and policies of the company.
3. Monitor the achievement of those goals.
4. Review the resources of the people in the company.
5. Be the final authority on Compensation Plan approval, annual
budgets and any changes that singularly or cumulatively impact
the budgeted pretax profit by 10% of more, negatively or
positively, during the operating year.
6. Appoint the CEO.
7. Review the performance of the CEO and the executive team.
8. Determine annual stock dividends/cash disbursements.
9. Approval of, and final authority on any activities involving
mergers, sale, or acquisitions.
10. Have all other powers allowable by law.

SECTION 3.02 - DIRECTORS - VOTING AND ADVISORY NON-VOTING.
A. NUMBER, TENURE, AND QUALIFICATIONS OF VOTING DIRECTORS. The number
of directors of the corporation shall be fixed at no less than seven
(7) and no more than nine (9) - six (6) internal and up to three (3)
external. Each Director shall hold office until the next annual
meeting of shareholders and until his/her successor shall have been
elected and qualified. Directors need not be residents of the State
of North Dakota. The number of Directors may be increased at any time
by the affirmative vote of a majority of the directors (or by the
affirmative vote of a majority in interest of the stockholders) at a
regular meeting or a special meeting called for that purpose, and by
vote, the additional directors may be chosen at such meeting to hold
office until the next election of the class for which the Directors
have been chosen, and until their successors are elected and
qualified.
B. NON-VOTING DIRECTORS. Advisory members of the Board shall consist of
internal and external advisory members. Internal members shall be
those members who are currently employed by the corporation and
external members are defined as those individuals who are not
employees of the corporation. Advisory members shall not have any
voting rights at any meeting. All non-voting members shall be
appointed by a majority vote of the Board of Directors. The Board of
Directors shall fix the length of term to be served by any Advisory
Board Member. Whether

Ex. 3.2 -5
<PAGE>

to add Advisory members to the Board of Directors shall be at the
discretion of the Board of Directors and likewise the number of
Advisory members to be included on the Board of Directors shall be at
the Board of Directors' discretion.

SECTION 3.03 - REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held, without other notice than this Bylaw, so as to coincide
with the annual meeting of stockholders. The Board of Directors shall have a
minimum of six (6) additional meetings per year. The Board of Directors may
provide, by resolution, the time and place, either within or without the State
of North Dakota for the holding of additional regular meetings without other
notice than such resolution. Directors may be allowed to attend a regular
meeting of the Board of Directors via telephone or other electronic means.

SECTION 3.04 - SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board, the
President or any two Directors. The person or persons authorized to call
special meetings of the Board of Directors may fix any place, either within or
without the State of North Dakota, as the place for holding any special meeting
of the Board of Directors called by them. Directors may be allowed to attend a
regular meeting of the Board of Directors via telephone or other electronic
means.

SECTION 3.05 - NOTICE. Notice of any special meeting shall be given at
least two days previously thereto by written notice delivered personally or
mailed to each Director at his/her business address, or by telegram. If mailed,
such notice shall be deemed to be delivered when deposited in the United States
mail, so addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Any Directors may waive notice of any
meeting. The attendance of a Director at a meeting shall constitute a waiver of
notice of such meeting, except when a Director attends a meeting for the express
purpose of objecting to the transaction of any business because the meeting is
not lawfully called or convened. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice of waiver of such meeting.

SECTION 3.06 - QUORUM. A majority of the number of Directors fixed by
Section 3.02 of this Article III shall constitute a quorum for the transaction
of business at any meeting of the Board of Directors, but if less than such
majority is present at a meeting, a majority of the Directors present may
adjourn the meeting from time to time without further notice. Either the
President, Chairman of the Board or a Vice President must be part of the
majority of qualified Directors in order to constitute a quorum for the
transaction of business.

SECTION 3.07 - MANNER OF ACTION. The act of the majority of the Directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.

SECTION 3.08 - ACTION WITHOUT A MEETING. Pursuant to 10-19.1-47 of the
North Dakota Century Code any action, other than an action requiring shareholder
approval, may be taken

Ex. 3.2 -6
<PAGE>

by written action signed by the number of directors that would be required to
take the same action at a meeting of the Board of Directors at which all
directors were present.

SECTION 3.09 - VACANCIES. Any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of a majority of the remaining Directors
though less than a quorum of the Board of Directors. A Director elected to
fill a vacancy shall be elected for the unexpired term of his/her predecessor in
office. Any directorship to be filled by reason of an increase in the number of
Directors may be filled by election by the Board of Directors for a term of
office continuing only until the next election of Directors by the shareholders.

SECTION 3.10 - COMPENSATION. By resolution of the Board of Directors, each
Director may be paid his/her expenses, if any, for attendance at each meeting of
the Board of Directors, and may be paid a stated salary as director or a fixed
sum for attendance at each meeting of the Board of Directors or both. No such
payment shall preclude any Director from serving the corporation in any other
capacity and receiving compensation therefore. Compensation for external
advisory members of Corporate Board, internal advisory members of the Board and
voting members of Board of Directors shall be reviewed each year and shall be
set during the regular October Board Meeting.

SECTION 3.11 - PRESUMPTION OF ASSENT. A Director of the corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action taken
unless his/her dissent shall be entered in the minutes of the meeting or unless
he/she shall file his/her written dissent to such action with the person acting
as a secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered mail to the Secretary of the corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply to
a Director who voted in favor of such action.

SECTION 3.12 - VISION, MISSION, PLANNING, BUDGETS. The Board of
Directors shall have the responsibility of defining the mission of the company
and a shared responsibility with the Executive Committee in providing the vision
for short and long range plans and strategic plans for operations. In addition,
they shall have the responsibility of approving the product and expense budgets
along with annual projected income statements and balance sheets on an annual
basis as a part of the short and/or long range plans, as developed and approved
by the Executive Committee.

SECTION 3.13 - MANAGEMENT SUCCESSION. The Board of Directors shall
hire/remove all corporate officers and approve the succession plans of such
officers, those officers being the President, Vice President(s), Secretary and
Treasurer. The Board of Directors shall also approve the hiring/removal and
succession plans of the Chief Executive Officer, the Chief Financial Officer and
the Chief Operating Officer.

SECTION 3.14 - EXPENDITURE LEVELS, EMPLOYEE AND COMMUNITY RELATIONS,
REGULATORY ACTIONS AND MAJOR POLICY ACTIONS. The Board of Directors shall
have the responsibility for the continued review of employee and community
relations. It also shall approve material changes that could affect the
earnings of the corporation. The Board

Ex. 3.2 -7
<PAGE>

of Directors shall also keep itself abreast of all major regulatory violations
and review the regulatory policies periodically as developed by the Executive
Committee. The Board of Directors shall also make final approval for major
changes in policy (new, deleted or revised).

SECTION 3.15 - COMPENSATION COMMITTEE. The Board of Directors shall act
in the capacity of the Compensation Committee and shall appoint Compensation
Sub-Committees, which can include both Board and non-board members, to develop
compensation recommendations to be submitted to the Board for final approval.

SECTION 3.16 - NOMINATION OF OFFICERS. The Board of Directors shall
nominate and elect the Chairman of the Board. The Chairman of the Board shall
nominate the other officers of the corporation to be elected by the Board of
Directors.

SECTION 3.17 - ABSENT DIRECTORS: A director may give advance written
consent or opposition to a proposal to be acted on at a Board meeting. If the
director is not present at the meeting, consent or opposition to a proposal does
not constitute presence for purposes of determining the existence of a quorum,
but consent or opposition shall be counted as a vote in favor of or against the
proposal and shall be entered in the minutes of the meeting, if the proposal
acted on at the meeting is substantially the same or has substantially the same
effect as the proposal to which the director has consented or objected.

ARTICLE IV
OFFICERS

SECTION 4.01 - NUMBER. The officers of the corporation shall consist of
the President, one or more Vice Presidents (the number thereof to be determined
by the Board of Directors and shall include an Executive Vice President if the
Board of Directors elects the same), a Secretary, and a Treasurer. Any two or
more offices may be held by the same person, except the offices of President and
Secretary, or the office of President and Vice President.

SECTION 4.02 - ELECTION AND TERM OF OFFICE. The officers of the
corporation to be elected by the Board of Directors shall be elected annually by
the Board of Directors at the first meeting of the Board of Directors held after
each annual meeting of the shareholders. If the election of officers shall not
be held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his/her successor
shall have been duly elected and shall have qualified or until his/her death or
until he/she shall resign or shall have been removed in the manner hereinafter
provided.

SECTION 4.03 - REMOVAL. Any officer or agent may be removed by the Board
of Directors whenever in its judgment, the best interests of the corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of
an officer or agent shall not of itself create contract rights.

Ex. 3.2 -8
<PAGE>

SECTION 4.04 - VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.

SECTION 4.05 - CHAIRMAN OF THE BOARD. The Chairman of the Board shall be,
or shall have been, a senior officer providing advice to the Board and
performing duties on behalf of the Board of Directors as authorized by the Board
of Directors. The office of the Chairman of Board shall be filled only by
individuals who have previously served as the principal executive officer of the
corporation. The Chairman of the Board shall preside at all meetings of the
shareholders and the Board of Directors. During the absence or disability of
the Chairman, ordering a vacancy in the office of the Chairman of the Board, the
President or, during the absence or disability of the President, the designated
Vice President, shall preside at all meetings of the shareholders and the Board
of Directors.

SECTION 4.06 - PRESIDENT. In the absence of the Chairman of the Board the
President shall preside at all meetings of the shareholders and the Board of
Directors. He/She, with the Secretary or any other proper officer of the
corporation thereunto authorized by the Board of Directors, may sign
certificates for shares of the corporation, deeds, mortgages, bonds, contracts,
or other instruments which the Board of Directors has authorized to be executed,
except in cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other officer or
agent of the corporation, or shall be required by law to be otherwise signed or
executed; and in general shall perform all duties incident to the office of
President and such other duties as may be prescribed by the Board of Directors
from time to time.

SECTION 4.07 - CHIEF EXECUTIVE OFFICER. Unless otherwise designated by the
Board, the President shall be the principal executive officer of the corporation
and, subject to the control of the Board of Directors, shall in general
supervise and control all of the business and affairs of the corporation. If
the Board of Directors elects to do so, the Chief Executive Officer can be
appointed from qualified management candidates as determined by a majority of
the Board of Directors. The Chief Executive Officer shall be the management
head of the corporation and in the recess of the Board of Directors shall have
the general control and management of all of the business and affairs of the
corporation. He/She shall also exercise the powers and perform such other
duties as may from time to time be conferred upon or assigned by the bylaws or
the Board of Directors. He/She, in conjunction with the President and the
Chairman of The Board, shall make annual reports, and submit the same to the
Board of Directors and also to the shareholders at their annual meeting,
showing the condition and affairs of the corporation. He/She shall from time to
time make such recommendations to the Board of Directors, the Executive
Committee and any other committees he/she thinks proper and shall bring before
the Board of Directors, the Executive Committee, and any other committee, such
information as may be required, relating to the business of the corporation.

SECTION 4.08 - THE VICE PRESIDENT(S). In the absence of the President or
in the event of his death, inability or refusal to act, the Vice President (or
in the event there be more than one Vice President, the Vice Presidents in the
order designated at the time of their election, or in the absence

Ex. 3.2 -9
<PAGE>

of any designation, then in the order of their election) shall perform the
duties of the President, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. Any Vice President may
sign, with the Secretary or an Assistant Secretary, certificates for shares of
the corporation; and shall perform such other duties as from time to time may be
assigned to him by the President or by the Board of Directors. The Board may
appoint an Executive Vice President who shall be first in line to serve in the
absence of the President or in the absence of the Chief Executive Officer.

SECTION 4.09 - THE SECRETARY. The Secretary shall: (a) keep the minutes
of the proceedings of the shareholders and of the Board of Directors in one or
more books provided for that purpose; (b) see that all notices are duly given
in accordance with the provisions of these Bylaws or as required by law; ( c )
be custodian of the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents and execution of
which on behalf of the corporation under its seal is duly authorized; (d) keep
a register of the post office address of each shareholder which shall be
furnished to the Secretary by such shareholder; (e) sign with the President, or
a Vice President, certificates for shares of the corporation, the issuance of
which shall have been authorized by resolution of the Board of Directors; (f)
have general charge of the stock transfer books of the corporation; and (g) in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him/her by the President or by
the Board of Directors.

SECTION 4.10 - THE TREASURER. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the corporation;
(b) receive and give receipts for moneys due and payable to the corporation from
any source whatsoever and deposit all such moneys in the name of the corporation
in such banks, trust companies or other depositories as shall be selected in
accordance with the provisions of Article VI of these Bylaws; and (c) in general
perform all of the duties incident to the office of Treasurer and such other
duties as from time to time may be assigned to him/her by the President or by
the Board of Directors. If required by the Board of Directors, the Treasurer
shall give a bond for the faithful discharge of his/her duties in such sum and
with such surety or sureties as the Board of Directors shall determine.

ARTICLE V
INDEMNIFICATION

SECTION 5.01 - LIABILITY AND INDEMNIFICATION. No director shall be
personally liable to the corporation or to its shareholders for monetary damages
for any breach of fiduciary duty as a director, except to the extent such
exemption from liability or limitation thereof is not permitted under the laws
of the State of North Dakota as the same may exist or may hereafter be amended.
Any repeal or modification of the provisions of this Article shall not adversely
affect any right of protection of a director of the corporation existing at the
time of such repeal or modification.
Any person who at any time shall serve or shall have served as a director,
officer, or employee of the corporation, or of any other enterprise at the
request of the corporation, and the heirs,

Ex. 3.2 -10
<PAGE>

executors and administrators of such person shall be indemnified by the
corporation in accordance with, and to the fullest extent permitted by, the
provisions of the North Dakota Century Code, as it may be amended from time to
time.

SECTION 5.02 - INSURANCE. The corporation shall have the power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him or her and
incurred by him or her in any such capacity or arising out of his or her status
as such, whether or not the corporation would have the poser to indemnify him or
her against such liability under the provisions of the North Dakota Century
Code.

ARTICLE VI
EXECUTIVE COMMITTEE

SECTION 6.01 - EXECUTIVE COMMITTEE AND ITS POWERS. The voting members of
the Executive Committee shall consist of the President, Vice President(s),
Secretary, CEO, CFO, COO and any other members that might be appointed to the
Executive Committee by the Board of Directors. The Executive Committee will be
directly responsible to the Board of Directors. The President shall be the
presiding officer of the Committee. The Executive Committee shall have the
authority to transact such business of the corporation that may require their
attention between meetings of the Board of Directors and all business transacted
by such Executive Committee shall be submitted to, and final approval granted
by, the Board of Directors at their next regular meeting. The Executive
Committee shall have the shared responsibility with the Board of Directors of
providing the vision for the company and developing and submitting short and
long range plans and strategic plans for operations to the Board of Directors on
an annual basis for approval. In addition they shall prepare product and
expense budgets along with annual income statements and balance sheets and other
financial information of importance as a part of the short and long range
performance against short and long range plans on an annual basis and submit to
the Board at each meeting of the Board for final approval. The Executive
Committee shall approve cumulative expenses that do not exceed approved budgets
by more than 10% of budgeted pre-tax profits. The Executive Committee shall
have the power to cause the seal of the corporation to be affixed to all papers
that require it and to perform the necessary acts to maintain the day to day
operation of the corporation and it's various endeavors.

SECTION 6.02 - REGULAR MEETINGS. The voting members of the Executive
Committee shall officially meet once a month at a time designated by the
President and acceptable to the majority of the Committee members. The Chairman
of the Board, as the senior advisory (non-voting) member of the Executive
Committee, shall meet with the Executive Committee no less than once each fiscal
quarter. Interim special meetings may be called by the President or any two or
more other voting members of the Executive Committee.

Ex. 3.2 -11
<PAGE>

SECTION 6.03 - REPORTS OF THE EXECUTIVE COMMITTEE. The Executive
Committee shall keep regular minutes of its meetings. These minutes are to be
included with the minutes of the Board of Directors' meetings that are sent out
prior to the Board of Directors meeting.

SECTION 6.04 - EXPENDITURE LEVELS. Expenditure levels shall be
reflected in the approved annul budget. Expenditures in excess of the amount
authorized in the approved budgets must be submitted to the President and to the
Executive Committee for approval of amounts that will not to change budgeted
pre-tax income in excess 10%. Changes in excess of 10% of budgeted pre-tax
income must be approved by the Board of Directors.

ARTICLE VII
CONTRACTS, LOANS, CHECKS AND DEPOSITS

SECTION 7.01 - CONTRACTS. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.

SECTION 7.02 - LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.

SECTION 7.03 - CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.

SECTION 7.04 - DEPOSITS. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.

ARTICLE VIII
CERTIFICATES FOR SHARES AND THEIR TRANSFER

SECTION 8.01 - CERTIFICATES FOR SHARES. Confirmation statements or
certificates representing shares of the corporation shall be in such form as
shall be determined by the Board of Directors. Certificates, if issued, shall
be signed by the President or a Vice President and by the Secretary or an
Assistant Secretary and sealed with the corporate seal or a facsimile thereof.
The signatures of such officers upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent, or registered by a registrar,
other than the corporation itself or one of its employees. The name and address
of the person to whom the shares represented thereby are issued, with the

Ex. 3.2 -12
<PAGE>

number of shares and date of issue, shall be entered on the stock transfer books
of the corporation. All certificates surrendered to the corporation for
transfer shall be canceled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed or mutilated certificate a
new one may be issued therefore upon such terms and indemnity to the corporation
as the Board of Directors may prescribe.

SECTION 8.02 - TRANSFER OF SHARES. Transfer of shares of the corporation
shall be made only on the stock transfer books of the corporation by the holder
of record thereof or by his/her legal representative, who shall furnish proper
evidence of authority to transfer, or by his/her attorney thereunto authorized
by power of attorney duly executed and filed with the Secretary of the
corporation, and on surrender for cancellation of the certificate for such
shares. The person in whose name shares stand on the books of the corporation
shall be deemed by the corporation to be the owner thereof for all purposes.

SECTION 8.03 - STOCK RECORD: As used in these Amended Bylaws, the term
"shareholder" shall mean the person, firm or corporation in whose name
outstanding share of capital stock of the corporation are currently register on
the stock record books of the corporation. The corporation shall keep, at its
principal executive office or at another place or places within the United
States determined by the Board, a share register not more that one year old
containing the names and addresses of the shareholders and the number and
classes of shares held by each shareholder. The corporation shall also deep at
its principal executive office or at another place or places within the United
States determined by the Board, a record of the dates on which certificates
representing shares were issued. Every certificate surrendered to the
corporation for exchange or transfer shall be canceled and no new certificate or
certificates shall be issued in exchange for any existing certificate until such
existing certificate shall have been so canceled (except as provided for in
Section 8.04 of this Article 8).

SECTION 8.04 - LOST CERTIFICATE: Any shareholder claiming a certificate of
stock to be lost or destroyed shall make an affidavit or affirmation of that
fact in such form as the Board of Directors may require, and shall, if the
directors so require, give the corporation a bond of indemnity in form and with
one or more sureties satisfactory to the Board of at least double the value, as
determined by the Board, of the stock represented by such certificate in order
to indemnify the corporation against any claim that may be made against it on
account of the alleged loss or destruction of such certificate, whereupon a new
certificate may be issued in the same tenor and for the same number of shares as
the one alleged to have been destroyed or lost.

ARTICLE IX
STOCK ACQUISITIONS AND DISTRIBUTIONS

SECTION 9.01 - DISTRIBUTIONS: ACQUISITIONS OF SHARES: The Board of
Directors may authorize the acquisition of the corporation's shares and may
authorize distributions whenever and is such amounts as, in its opinion, the
conditions of the affairs of the corporation shall render it advisable.

Ex. 3.2 -13
<PAGE>

SECTION 9.02 - PURCHASE AND SALE OF SECURITIES: Unless otherwise ordered
by the Board of Directors, the Chief Executive Officer shall have full power and
authority on behalf of the corporation to purchase, sell, transfer or encumber
securities of any other company owned by the corporation which represent not
more than 10% of the outstanding securities at such issue, and may execute and
deliver such documents as may be necessary to effectuate such purchase, sale,
transfer or encumbrance. The Board of Directors may from time to time confer
like powers upon any other person or persons.

ARTICLE X
FISCAL YEAR

The fiscal year of the corporation shall begin on the 1st day of November and
end on the 31st day of October in each year.

ARTICLE XI
DIVIDENDS

The Board of Directors may, from time to time, declare, and the corporation may
pay, dividends on its outstanding shares in the manner, and upon the terms and
conditions provided by law and its Articles of Incorporation.

ARTICLE XII
WAIVER OF NOTICE

Whenever any notice is required to be given to any shareholder or director of
the corporation under the provisions of these Bylaws or under the provisions of
the Articles of Incorporation or under the provisions of the North Dakota
Business Corporation Act, a waiver thereof in writing signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving such notice.

ARTICLE XIII
AMENDMENTS

These Bylaws may be altered, amended or repealed and new Bylaws may be adopted
by the Board of Directors at any regular or special meeting of the Board of
Director.

Ex. 3.2 -14

<PAGE>

EXHIBIT 10.1

AGSCO, INC.
QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
JUNE 13, 1997

AGSCO, INC., a North Dakota Corporation, of Grand Forks, North Dakota
(hereinafter the "Company") hereby adopts the following Employee Stock Purchase
Plan.

1. PURPOSE OF THE PLAN. The purpose of this Plan is to provide eligible
employees who wish to become shareholders in the Company a convenient method of
doing so. There have been requests from a number of employees that the Company
establish a Plan whereby employees may acquire the Company's authorized but
unissued common shares directly from the Company and on a payroll deduction
basis, if desired, making it easier for them to acquire such shares. It is felt
that employee participation in the ownership of the business will be to the
mutual benefit of both the employees and the Company.

2. EMPLOYEES ELIGIBLE TO PARTICIPATE. Any employee of the company or any
of its subsidiaries who is in the employment of the Company at the offering
dates is eligible to participate in the Plan, except (a) employees who have been
employed less than one year, (b) employees whose customary employment is 20
hours or less per week, (c) employees whose customary employment is for not more
than five months in any calendar year, and (d) employees who own 5 percent or
more of the common stock of the Company. The word "employee" shall include
officers but not persons who are solely directors. Any officer who is a highly
compensated employee, as defined in Section 414(q) of the Internal Revenue Code
of 1986 shall be ineligible to participate in this Plan.

3. OFFERING. The Company has filed with the Securities and Exchange
Commission a Form 1A Regulation A offering statement for 466,667 shares of its
common stock for sale to the public at $9.00 per share. Upon the effective date
of said Regulation A offering and until its termination, eligible employees may
purchase shares of the Company's common stock under this Plan. The maximum
number of shares offered under this Plan is 40,000 shares.

4. PRICE. The purchase price per share shall be ($7.65 per share) 85
percent of the $9.00 sale price of the shares under said Regulation A offering.

5. LIMITS OF PARTICIPATION. The minimum number of shares for which an
employee will be permitted to subscribe is ten and the maximum is 3,000
($22,950) during any 12-month period.

6. METHOD OF PAYMENT. Payment may be in cash at the time the shares are
subscribed for, at the employee's option, or through weekly payroll deductions
over a period of not

Ex. 10.1 - 1
<PAGE>

more than 12 months. A participating employee may prepay the amount due by him
in whole or in part at any time.

7. CANCELLATION OF PARTICIPATION IN PLAN. Each participating employee
shall have the right to cancel his subscription at any time prior to payment in
full for the shares for which he has subscribed by giving the Company written
notice thereof, whereupon he will be refunded all money he has paid in. Should
any installment be due and unpaid for 15 days without satisfactory arrangement
for the payment thereof being made within such 15-day period, the contract to
purchase shall thereby be automatically terminated and the money previously paid
refunded to the employee.

8. EMPLOYEES' RIGHTS AS SHAREHOLDERS. No participating employee shall
have any rights as a shareholder until full payment has been made for the shares
he has subscribed for and the stock certificate actually issued.

9. INTEREST. Interest shall accrue on the purchase price at the rate of
9 percent per annum. Notwithstanding the foregoing, in no event shall the
interest rate be less than that required by law to preclude the
recharacterization of any payment of principal as interest for federal income
tax purposes.

10. RIGHTS NOT TRANSFERABLE. Except as hereinafter set forth and unless
otherwise provided by law, no participating employee shall have the right to
sell, assign, transfer, pledge, or otherwise dispose of or encumber either his
right to participate in the plan or his interest in the fund accumulated for his
benefit, and such right and interest shall not be liable for or subject to the
debts, contracts, or liabilities of such employee. If any such action is taken
by the employee, or any claim asserted by another party in respect of such right
and interest, such action or claim will be treated as notice of cancellation,
and except as may otherwise be required by law, refund will be made to such
employee as provided in paragraph 7. Upon the death of a participating
employee, his estate shall have the right, for a period of 60 days from the date
of his death, to pay the entire balance due and receive the shares subscribed
for.

11. TERMINATION OF EMPLOYMENT. Upon termination of employment for any
reason whatsoever, including, but not limited to, death or retirement, the
participating employee or his estate may elect within 60 days after the
happening of such event to pay the entire balance due and receive the shares
subscribed for. The failure to make such election within such period will be
treated as notice of cancellation and, except as may otherwise be required by
law, refund will be made to such employee or his estate as provided in paragraph
7.

12. AMENDMENT OR DISCONTINUANCE OF THE PLAN. The Board of Directors of
the Company shall have the right to amend, modify, or terminate the Plan at any
time without notice, provided that no employee's existing rights are adversely
affected thereby, and provided further that no such amendment of the Plan shall,
except as provided in paragraph 13, (a) increase above 40,000 the total number
of shares to be offered; (b) change the formula used to

Ex. 10.1 - 2
<PAGE>

determine the price (85% of share price to public) at which the shares shall be
sold is determined; and (c) increase the maxim= number of shares which an
eligible employee can purchase.

13. ADJUSTMENT OF SUBSCRIPTIONS. In the event of reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, offerings of rights, or any other change in the structure of the
common shares of the Company, the Board of Directors may make such adjustment,
if any, as it may deem appropriate in the number, kind, and the subscription
price of shares available for purchase under the Plan, and in the minimum and
maximum number of shares which an employee is entitled to purchase.

14. SHARE OWNERSHIP. Notwithstanding anything herein to the contrary, no
employee shall be permitted to subscribe for any shares under the Plan if such
employee, immediately after such subscription, owns shares (including all shares
which may be purchased under outstanding subscriptions under the Plan)
possessing 5 percent or more of the total combined voting power or value of all
classes of shares of the Company or of its parent or subsidiary corporation.
For the foregoing purposes the rules of section 423(b)(3) of the Internal
Revenue Code of 1986 shall apply in determining share ownership. Nor shall any
employee be allowed to subscribe for any shares under the Plan which permits his
rights to purchase shares under all stock purchase plans of the Company and its
parent and subsidiary corporations to accrue at a rate which exceeds $25,000 of
the fair market value of such shares (determined at the time such right to
subscribe is granted) for each calendar year in which such right to subscribe is
outstanding at any time.

17. APPROVAL OF SHAREHOLDERS. The Plan has been adopted by the Board of
Directors of the Company and its shareholders on June 13, 1997.

AGSCO, INC.

By /s/ RANDY R. BROWN
-----------------------------------

Its PRESIDENT/CEO
----------------------------

Ex. 10.1 - 3

<PAGE>

EXHIBIT 10.2

LEASE AGREEMENT

THIS LEASE AGREEMENT is made this 13TH day of MARCH , 1997, by and
between AG PARK, L.L.C., a North Dakota limited liability company ("Landlord")
and AGSCO, INC., a North Dakota corporation ("Tenant").

1. PREMISES. Landlord, in consideration of the rents and covenants
hereinafter mentioned, to be paid and performed by Tenant, does hereby demise,
lease and let unto Tenant, and Tenant does hereby hire and take from Landlord
those certain premises including all buildings, equipment, land and improvements
on the real property legally described as follows:

The south 950' of the west 1200' of the Southwest Quarter
of the Northwest Quarter (SW1/4NW1/4) of Section Five
(5), Township One Hundred Fifty (150) North, Range Fifty
(50), West of the Fifth Principal Meridian, Grand Forks
County, North Dakota, containing 26.17 acres, more or
less.

2. TERMS. The term of this Lease shall be for a term of 20 years (240
months) commencing on the 1st day of January , 199 7 , (the
"Commencement Date") and terminating 20 years from date, unless sooner
terminated or further extended as herein provided. The term "Lease Year", as
used herein, shall mean the twelve (12) month period beginning with the
Commencement Date is other than the first day of a month, and each successive
twelve-month period thereafter during the term of this Lease.

3. RENEWAL. Provided Tenant is not then in default under any of the
terms of this Lease, Tenant shall have the right, at its option, to renew the
term of this Lease under the same terms, conditions and rentals as provided
herein for five (5) consecutive periods of five (5) years each. To exercise any
renewal option, Tenant must notify Landlord in writing of Tenant's election to
so renew not later than ninety (90) days prior to the end of the initial term or
due date of the last monthly lease payment.

4. RENT. Tenant shall pay Landlord during the term of this Lease,
Annual Minimum Rent payable in equal monthly installments, on or before the
first day of each month in advance, at the office of Landlord or at such other
place designated by Landlord without prior demand therefor. In the event that
the Commencement Date occurs on a date other than the first day of a month, rent
for a period from the Commencement Date to the first day of the first Lease Year
shall be paid on a prorated basis.

Ex. 10.2 - 1
<PAGE>

4.1. MONTHLY RENT. Monthly Minimum Rent (1/12th of Annual Minimum Rent)
shall be in the amount of Thirty-nine Thousand Six Hundred and NO/100
($39,600.00) Dollars per month during the first year.

4.2. RENTAL ADJUSTMENTS. The Annual Minimum Rent referenced in paragraph
4 above and payable under paragraph 4.1 above shall be reappraised
annually, in advance of the annual anniversary of the Commencement Date, by
agreement between the parties for the ensuing rental period. In the event
the parties are unable to agree upon such reappraisal then each of the
parties shall select one arbitrator and the two arbitrators so selected
shall select a third arbitrator and the three arbitrators so selected shall
fix and determine the rent to be paid by the Tenant to the Landlord for the
ensuing rental period. The annual reappraisal of the Annual Minimum Rent
shall be addressed in this Lease by the attached Addendum executed by the
parties.

5. CONDITION AND USE OF PREMISES. Tenant shall use the Premises for
storage and marketing of agricultural fertilizer, seed, and chemical products.
Tenant shall not use the Premises for any unlawful purposes and Tenant shall
further comply with such lawful requirements of the State, municipal or public
authorities which relate to the use and occupancy of the Premises, but Tenant
shall not be required to make any alterations, additions or improvements to the
Premises unless the same are required by the nature of Tenant's occupancy or the
terms of this Lease. The Premises is being delivered to Tenant in "AS IS"
condition, with all faults, including, without limitations, latent and patent
defects. Landlord has no obligation to alter, improve or repair the Premises
during the Lease term.

6. COVENANTS OF LANDLORD. Landlord covenants and warrants with Tenant:

6.1. That Landlord has the right to lease the Premises on the
terms herein contained;

6.2. That Landlord has good and marketable title to the Premises,
free and clear of all tenants and occupants and the rights of either;

6.3. That Tenant, upon paying the rent and performing the
covenants of this Lease, may quietly have, hold and enjoy the Premises
during the term hereof and any renewal thereof.

7. UTILITIES. Tenant shall pay all charges for utilities on the
Premises, including, but not limited to, charges for gas, electricity, water and
sewage, and lighting for the parking lot.

Tenant shall also pay any and all charges relating to snow removal,
graveling, parking lot and roads, assessments for improvements to roads, and
maintenance of lawn or grounds regarding the Premises.

Ex. 10.2 - 2
<PAGE>

8. REAL ESTATE TAXES AND SPECIAL ASSESSMENTS. Tenant shall pay all
real property taxes and installments of special assessments, payable during the
term of this Lease and any renewal thereof. The real property taxes and
installments of special assessments payable during the first and last Lease
Years shall be prorated for the period of Tenant's occupancy for such period.

9. REPAIR AND MAINTENANCE. Tenant shall, at its own expense maintain
the roof, exterior, interior and all structural components and equipment of and
in the building located on the Premises, including, without limitation, the
electrical system, the plumbing, any heating, ventilating and air conditioning
systems, all drains, fixtures, appliances, overhead doors, loading docks,
entryways, and the parking lot, in good repair and in good sanitary condition
during the term at this Lease or any renewals thereof.

Tenant shall replace at its own expense promptly any and all glass broken
in or about the Premises with glass of the same quality used when originally
installed, except glass broken by Landlord, its employees, or agents.

Tenant does further agree that it will not in any manner deface, injure or
destroy the Premises, or any part thereof, and to the extent that the Premises
are defaced, injured or destroyed by an act of negligence of Tenant, its agents,
invitees, customers, and/or employees, tenant will at its own expense,
notwithstanding anything contained in this Lease to the contrary, repair or
restore the Premises to the original condition at commencement of this Lease.

10. ALTERATIONS. Tenant shall not make any alterations, additions,
installations or changes in or to the Premises without Landlord's prior written
consent, which consent shall not be unreasonably withheld. All alterations,
additions, installations and change in and to the Premises shall be at Tenant's
sole cost and expense and shall remain on and be surrendered with the Premises
as a part thereof at the termination at this Lease. Provided, however, that if
such alterations, additions and/or improvements costs of signs, trade fixtures,
equipment and/or other property which is not normally considered to be a
structural part of such premises, Tenant may remove the same at or prior to the
termination of this lease on condition that it repair any damage caused to the
Premises by reason of such removal. All such alterations, additions,
improvements, and changes shall be done in a good and workmanlike manner, in
compliance with applicable laws, building codes and regulations, shall not
weaken any structural portions of the Premises, and Tenant shall not permit any
laborer's mechanic's or materialmen's liens to attach to the Premises by reason
thereof. Tenant shall have the right to contest any mechanic's lien or other
lien which attaches to the Premises, provided that Tenant provides Landlord with
reasonable security for the same.

11. SIGNS. Tenant shall have the right to install or affix signs on the
Premises setting forth its name and/or its sublessee's name and the products
they distribute, providing the same comply with all applicable laws, orders,
ordinances, regulations and requirements of the State, country and/or municipal
authorities, and providing further, that said signs do not injure any structural
portion of the Premises.

Ex. 10.2 - 3
<PAGE>

12. LIABILITY. Landlord shall not be responsible or liable to Tenant,
and Tenant hereby indemnifies and holds Landlord harmless for any damage, loss
or expense to Tenant or its property caused by or incurred by reason of fire,
water, snow, rain, backing up of water mains or sewers, frost, steam, sewage,
gas, electricity and by the bursting, stoppage or leaking of pipes or radiators,
plumbing sinks and fixtures in or about the Premises or by reason of the
collapse of the building of which the Premises are a part. Further, Landlord
shall not be responsible or liable for, and Tenant hereby indemnifies and holds
Landlord harmless for any damage, either to person or persons or property or the
loss of property, sustained by Tenant or by any other person or persons due to
any act or neglect of Tenant. Further, Tenant shall not be responsible or
liable for, and Landlord hereby indemnifies and holds Tenant harmless for any
damage, either to person or persons or to property or the less of property,
sustained by Landlord or by any other person or persons due to any act or
neglect of Landlord.

13. INSURANCE. Tenant agrees that during the term of this Lease or any
renewal thereof it will carry and provide to Landlord copies of policies or
certificates evidencing proof of the existence of (a) fire and extended coverage
insurance on the building situated on the Premises and the contents thereof for
the full replacement value thereof, and Tenant shall cause Landlord to be
designated as an additional named insured under such policy or policies and
Tenant hereby waives all claims against Landlord for loss or damage resulting
from fire or other insurable hazards regardless of the cause of such damage,
including damage resulting from the negligence of Landlord, its agent, servants
or employees, and Tenant agrees to obtain waiver of subrogation endorsements on
Tenant's insurance policies which cover the Premises in the event of a happening
of such hazards; (b) comprehensive public liability insurance naming Landlord as
the insured, to insure against injury to property, person or loss of life
arising out of the ownership, use, occupancy or maintenance of the Premises with
limits of public liability not less than Two Million Dollars/Four Million
Dollars ($2,000,000.00/$4,000,000.00) for death and/or bodily injury, including
personal injury and property damage liability, also covering intentional acts of
the insured and contractual liability voluntarily assumed by the insured; (c)
plate glass insurance; and (d) workers' compensation insurance with limits of
liability not less than that required by applicable law.

14. DESTRUCTION OF OR DAMAGE TO PREMISES. If the Premises are destroyed
by or damaged by fire, or any action of the elements, or other casualty,
Landlord agrees, with reasonable dispatch after notice thereof, at its own cost
and expense, to the extent of insurance proceeds, to restore the Premises to a
kind and quality substantially similar to those existing as of the commencement
of this Lease. In the event the destruction or damage is so extensive as to
make it unfeasible for Tenant to conduct its business on the Premises, rent
shall be payable until Tenant resumes the conduct of its business on the
Premises.

Ex. 10.2 - 4
<PAGE>

lease, or without terminating this Lease, terminate the Tenant's right to
possession of the Premises. Besides any other rights and remedies Landlord may
have by law or otherwise, it shall have the immediate right of re-entry and may
remove all persons and property from the Premises. Landlord's entry upon and
taking possession of the Premises shall not in any way terminate this Lease or
release Tenant in whole or in part from Tenant's obligation to pay the rental
hereunder for the full Lease term or discharge Tenant from liability for any
loss or damage sustained by Landlord on account of Tenant's breach of the Lease
unless Landlord elects in writing to terminate the Lease. Upon Landlord's
re-entering the Premises, it may attempt to relet all or any part of the
Premises for such term or terms and at such rent or rentals as Landlord, in the
exercise of its sole discretion, may deem advisable. Upon such reletting, all
rent and other sums received by Landlord shall be applied; first, to the payment
of any costs and expenses of such reletting, including reasonable attorney's
fees incurred by Landlord due to Tenant's default, brokerage fees ind reasonable
costs of alterations and repairs undertaken for such reletting; second, to
payment of any indebtedness other than rent due hereunder from Tenant to
Landlord; third, to the payment of rent and other charges due and unpaid
hereunder; and the residue, if any, shall be held by Landlord and applied to the
payment of any future amounts that become due and payable hereunder. If such
rental and other sums received from such reletting during any month be less than
the rental (and the costs set forth in the previous sentence) to be paid during
such month by Tenant hereunder, Tenant shall pay over such deficiency
immediately to Landlord.

Landlord may, but shall not be obligated to, cure, at any time upon
reasonable notice to Tenant, any default by Tenant under this Lease, and
whenever Landlord so elects, all costs and expenses, including reasonable
attorney's fees, incurred by Landlord incurring the default, together with
interest thereon at an annual rate of 18% from the date of such payment, shall
be payable as additional rent to Landlord on demand.

16. BREACH BY LANDLORD. If Landlord shall fail to perform any covenant
agreed by it to be performed herein, and said covenant obligates Landlord to
expend a certain sum of money, Tenant may cure said default of Landlord by the
expenditure of the money required and may deduct the amount spent from any rent
due or to become due hereunder, provided that Tenant gives Landlord written
notice of such default after which notice Landlord shall have thirty (30) days
to cure the same or to commence to cure the same in the event that the default
by its nature requires a greater length of time. In the event Landlord's breach
is such that the expenditure of money cannot cure such breach, Tenant may
suspend payment of rent.

17. HOLDING OVER. If Tenant shall remain in possession after the
expiration of the term of this Lease or any renewal thereof with Landlord's
acquiescence, Tenant shall be a tenant at will on a month-to-month basis at an
annual minimum rent one and one-half times the most recent annual minimum rent
paid by Tenant and there shall he no renewal of this Lease by operation of law.

18. SURRENDER OF PREMISES. Tenant shall, at the expiration of this
Lease, surrender the Premises, including all improvements subsequently made
thereon, except as hereinabove provided,

Ex. 10.2 - 5
<PAGE>

to Landlord in as good condition and repair as at the time possession thereof
was taken, damage from natural wear and tear excepted, and except for damage
from an insured casualty.

19. SUBLEASE AND ASSIGNMENT. Tenant shall not assign or sublet the
Premises without the prior written consent of Landlord. In the event Tenant
desires to assign or sublet the Premises or cease operations upon the Premises;
Tenant shall give Landlord one hundred twenty (120) days written notice.
Landlord shall have the right at its sole option to terminate this Lease by
giving Tenant written notice of such termination prior to the expiration of the
one hundred twenty (120) days.

Consent by Landlord to any one assignment or subletting shall not operate
as a waiver of Landlord's rights as to any subsequent assignments or subletting.
No subletting or assignment shall release Tenant or any guarantor of this Lease
of any of its or their obligations under this Lease or be construed or taken as
a waiver of any of Landlord's right or remedies hereunder.

20. EMINENT DOMAIN AND CONDEMNATION. All damages awarded for a taking
under the power of eminent domain of all or any part of the Premises shall
belong to and be the property of Landlord; provided, however, that Tenant shall
be entitled to any separate award made for relocation of Tenant's business and
depreciation or damage to and cost of removal of Tenant's personal property and
trade fixtures. The provisions contained in this paragraph shall apply in like
way to any sale made under imminent threat of such taking. In the event of any
lessor taking or sale, this Lease shall continue in full force and effect as if
said taking had not occurred, but Landlord shall restore the improvements to a
condition as nearly as practicable to their former condition at Landlord's sole
cost and expense.

21. ENVIRONMENTAL MATTERS. Tenant will not, nor shall it permit any
approved subtenant or other party, to install, store, treat, use, transport or
dispose, or permit or acquiesce in the installation, storage, use, treatment,
transportation or disposal, on the Premises of any chemical, material, or
substance which is regulated as toxic or hazardous or exposure to which is
prohibited, limited or regulated by any federal, state, county, regional, local
or governmental authority or which, even if not so regulated, may or could pose
a hazard to the health and safety of the occupants of the Premises or the
occupants of adjoining buildings or properties, unless written approval of the
Landlord is obtained by Lessee approving of the installation, storage,
treatment, use, transportation or disposal of a certain chemical, material or
substance. In the event of any such installation, storage, treatment, use,
transportation or disposal, whether approved by Landlord or not, the Tenant
shall, as required by applicable law or at the direction of the Landlord or any
federal, state or local authority, remove any such hazardous materials, or
otherwise comply with the regulations or orders of such authority, all at the
expense of Tenant. It the Tenant shall fail to proceed with such removal or
otherwise comply with such regulations or orders within any reasonable cure
period set by the Landlord, or within the cure period permitted under the
applicable regulation or order, Landlord, at its option, may declare that an
event of default has occurred hereunder, or Landlord may, but shall not be
obligated to, do whatever is necessary to eliminate such hazardous materials
from the Premises or otherwise comply with the applicable regulation or order,
and the cost thereof shall

Ex. 10.2 - 6
<PAGE>

become immediately due and payable from Tenant, without notice. Further, Tenant
shall indemnify Landlord and hold Landlord harmless from and against all loss,
damage and expense (including, without limitation, reasonable attorney's fees
and costs incurred in the investigation, defense, and settlement of claims) that
Landlord may incur as a result of or in connection with the assertion against
Landlord of any claim relating directly or indirectly, in whole or in part, to
the presence or removal of any hazardous materials, or compliance with any
federal, state or local laws, rules, regulations or orders relating thereto.
The liability of Tenant under the provisions of this paragraph shall survive the
expiration or other termination of this Lease or the transfer of Landlord's
interest in the Premises.

22. WAIVER. No terms or conditions of this Lease shall be in any manner
altered, waived or abandoned except by written instrument acknowledged and
delivered by Tenant to Landlord of any of the terms and conditions of this Lease
shall be deemed or taken to be a waiver of any succeeding breach of said terms
and conditions.

23. BINDING CLAUSE. The covenants, conditions and agreements contained
herein shall bind and inure to the benefit of Landlord and Tenant and their
respective legal representatives, successors and assigns.

24. BROKER'S COMMISSION. Each of the parties represents and warrants
that there are no claims for brokerage commissions or finder's fees in
connection with the execution of this Lease and each of the parties agrees to
indemnify the other against and hold them harmless from all liabilities arising
from any such claim.

25. NOTICES. Notices given hereunder shall be in writing and delivered
in person or sent by United States certified or registered mail, postage prepaid
to the parties at the following addresses:

Landlord: AG PARK, L.L.C.
2600 Mill Road
Grand Forks, ND 56208-3458

Tenant: Agsco, Inc.
2600 Mill Road
Grand Forks, ND 58208-3458

Any notice required hereunder shall be deemed given on the date postmarked.

Ex. 10.2 - 7
<PAGE>

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the day
and year first above written.

AG PARK, L.L.C.

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

Its:
----------------------------------

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

Its:
----------------------------------

Agsco, Inc.

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

Its:
----------------------------------

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

Its:
----------------------------------

STATE OF NORTH DAKOTA )
) ss.
COUNTY OF GRAND FORKS )

The foregoing instrument was acknowledged before me this 13th day of
March , 1997, by Randy R. Brown , the President and
David J. Glessner , the Secretary of AG PARK, L.L.C., a North Dakota
limited liability company, on behalf of the company.

-------------------------------------------
Notary Public
My Commission Expires:

Ex. 10.2 - 8
<PAGE>

STATE OF NORTH DAKOTA )
) ss.
COUNTY OF GRAND FORKS )

The foregoing instrument was acknowledged before me this 13TH day of
March , 1997, by Randy R. Brown , the President and
David J. Glessner , the Secretary of Agsco, Inc., a North Dakota
limited liability company, on behalf of the corporation.

-------------------------------------------
Notary Public
My Commission Expires:

Ex. 10.2 - 9
<PAGE>

ADDENDUM

Section 4.1 of that certain Lease Agreement dated March 13 , 199 7 , by
and between AG PARK, L.L.C. and Agsco, Inc., shall be amended as of the date of
this Addendum to read as follows:

4.1 MONTHLY RENT. Monthly Minimum Rent (1/12th of Annual Minimum Rent)
shall be in the amount of Forty-one Thousand five hundred and no/100
Dollars ($ 41,500.00 ) during the Lease Year commencing JANUARY 1, 1997
, and ending December 31, 1997 .

DATED this 13TH day of March , 1997 .
-------- -------------- ---------

AG PARK, L.L.C.

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

Its:
----------------------------------

Agsco, Inc.

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

Its:
----------------------------------

<PAGE>

EXHIBIT 10.3

LEASE AGREEMENT

THIS LEASE AGREEMENT is made this 13th day of March , 1997, by
and between AG PARK, L.L.C., a North Dakota limited liability company
("Landlord") and AGSCO, INC., a North Dakota corporation ("Tenant").

A tract of land located in the NE 1/4 of Section 23, in
Township 157 North, of Range 53 West;

Beginning at a point 100 ft. South and 1,200 ft. East of the
Northwest Corner of said Northeast Quarter; thence South
parallel with the West section line of said Northeast
Quarter a distance of 421.5 ft.; thence East parallel with
the North line of said quarter a distance of 200 ft.; thence
North parallel with the West line of said quarter a distance
of 421.5 ft.; thence West parallel to the North line of said
quarter a distance of 200 ft. to the point of beginning,
provided, however, that the northerly 40 ft. of said
property is hereby reserved to the public for street
purposes, but in the event said 40 ft. strip is not used for
street purposes within a period of 10 years from September
24, 1976, said 40 ft. strip shall revert to the Vendee as
its property absolutely (WALSH COUNTY, ND).

2. TERMS. The term of this Lease shall be for a term of 15 years (180
months) commencing on the 1st day of January , 1997, (the
"Commencement Date") and terminating 15 years from date, unless sooner
terminated or further extended as herein provided. The term "Lease Year", as
used herein, shall mean the twelve (12) month period beginning with the
Commencement Date, or the first day of the first full month of the term if the
Commencement Date is other than the first day of a month, and each successive
twelve-month period thereafter during the term of this Lease.

Ex. 10.3 - 1
<PAGE>

4. RENT. Tenant shall pay Landlord during the term of this Lease, Annual
Minimum Rent payable in equal monthly installments, on or before the first day
of each month in advance, at the office of Landlord or at such other place
designated by Landlord without prior demand therefor. In the event that the
Commencement Date occurs on a date other than the first day of a month, rent for
a period from the Commencement Date to the first day of the first Lease Year
shall be paid on a prorated basis.

4.1. MONTHLY RENT. Monthly Minimum Rent (1/12th of Annual Minimum
Rant) shall be in the amount of One Thousand Three Hundred ($1,300.00)
Dollars per month during the first year.

4.2. RENTAL ADJUSTMENTS. The Annual Minimum Rent referenced in
paragraph 4 above and payable under paragraph 4.1 above shall be
reappraised annually, in advance of the annual anniversary of the
Commencement Date, by agreement between the parties for the ensuing rental
period. In the event the parties are unable to agree upon such reappraisal
then each of the parties shall select one arbitrator and the two
arbitrators so selected shall select a third arbitrator and the three
arbitrators so selected shall fix and determine the rent to be paid by the
Tenant to the Landlord for the ensuing rental period. The annual
reappraisal of the Annual Minimum Rent shall be addressed in this Lease by
the attached Addendum executed by the parties.

6. COVENANTS OF LANDLORD. Landlord covenants and warrants with Tenant:

6.1. That Landlord has the right to lease the Premises on the terms
herein contained;

6.2. That Landlord has good and marketable title to the Premises,
free and clear of all tenants and occupants and the rights of either;

6.3. That Tenant, upon paying the rent and performing the covenants
of this Lease, may quietly have, hold and enjoy the Premises during the
term hereof and any renewal thereof.

Ex. 10.3 - 2
<PAGE>

7. UTILITIES. Tenant shall pay all charges for utilities on the
Premises, including, but not limited to, charges for gas, electricity, water and
sewage, and lighting for the parking lot.

Tenant shall also pay any and all charges relating to snow removal,
graveling, parking lot and roads, assessments for improvements to roads, and
maintenance of lawn or grounds regarding the Premises.

8. REAL ESTATE TAXES AND SPECIAL ASSESSMENTS. Tenant shall pay all real
property taxes and installments of special assessments, payable during the term
of this Lease and any renewal thereof. The real property taxes and installments
of special assessments payable during the first and last Lease Years shall be
prorated for the period of Tenant's occupancy for such period.

9. REPAIR AND MAINTENANCE. Tenant shall, at its own expense, maintain
the roof, exterior, interior and all structural components and equipment of and
in the building located on the Premises, including, without limitation, the
electrical system, the plumbing, any heating, ventilating and air conditioning
systems, all drains, fixtures, appliances, overhead doors, loading docks,
entryways, and the parking lot, in good repair and in good sanitary condition
during the term of this Lease or any renewals thereof.

10. ALTERATIONS. Tenant shall not make any alterations, additions,
installations or changes in or to the Premises without Landlord's prior written
consent, which consent shall not be unreasonably withheld. All alterations,
additions, installations and change in and to the Premises shall be at Tenant's
sole cost and expense and shall remain on and be surrendered with the Premises
as a part thereof at the termination of this Lease. Provided, however, that if
such alterations, additions and/or improvements costs of signs, trade fixtures,
equipment and/or other property which is not normally considered to be a
structural part of such premises, Tenant may remove the same at or prior to the
termination of this lease on condition that it repair any damage caused to the
Premises by reason of such removal. All such alterations, additions,
improvements, and changes shall be done in a good and workmanlike manner, in
compliance with applicable laws, building codes and regulations, shall not
weaken any structural portions of the Premises, and Tenant shall not permit any
laborer's mechanic's or materialmen's liens to attach to the Premises by reason
thereof. Tenant shall have the right to contest any mechanic's lien or other
lien which attaches to the Premises, provided that Tenant provides Landlord with
reasonable security for the same.

Ex. 10.3 - 3
<PAGE>

12. LIABILITY. Landlord shall not be responsible or liable to Tenant, and
Tenant hereby indemnifies and holds Landlord harmless for any damage, loss or
expense to Tenant or its property caused by or incurred by reason of fire,
water, snow , rain, backing up of water mains or sewers, frost, steam, sewage,
gas, electricity and by the bursting, stoppage or leaking of pipes or radiators,
plumbing sinks and fixtures in or about the Premises or by reason of the
collapse of the building of which the Premises are a part. Further, Landlord
shall not be responsible or liable for, and Tenant hereby indemnifies and holds
Landlord harmless for any damage, either to person or persons or property or the
loss of property, sustained by Tenant or by any other person or persons due to
any act or neglect of Tenant. Further, Tenant shall not be responsible or
liable for, and Landlord hereby indemnifies and holds Tenant harmless for any
damage, either to person or persons or to property or the less of property,
sustained by Landlord or by any other person or persons due to any act or
neglect of Landlord.

14. DESTRUCTION OF OR DAMAGE TO PREMISES. If the Premises are destroyed
by or damaged by fire, or any action of the elements, or other casualty,
Landlord agrees, with reasonable dispatch after notice thereof, at its own rest
and expense, to the extent of insurance proceeds, to restore the Premises to a
kind and quality substantially similar to those existing as of the commencement
of this Lease. In the event the destruction or damage is so extensive as to
make it unfeasible for Tenant to conduct its business on the Premises, rent
shall be payable until Tenant resumes the conduct of its business on the
Premises.

Ex. 10.3 - 4
<PAGE>

15. DEFAULT. If Tenant shall be in default in performing any of the terms
and provisions of this Lease, Landlord shall give Tenant notice in writing by
certified mail of such default, and if Tenant shall fail to cure such default
within ten (10) days after the receipt of such notice (or shall fail in that
time to commence to cure a default whose cure would require more than 10 days) ,
then and in any such event, Landlord may, without further notice or demand,
elect to either terminate this lease, or without terminating this Lease,
terminate the Tenant's right to possession of the Premises. Besides any other
rights and remedies Landlord may have by law or otherwise, it shall have the
immediate right of re-entry and may remove all persons and property from the
Premises. Landlord's entry upon and taking possession of the Premises shall not
in any way terminate this Lease or release Tenant in whole or in part from
Tenant's obligation to pay the rental hereunder for the full Lease term or
discharge Tenant from liability for any loss or damage sustained by Landlord on
account of Tenant's breach of the Lease unless Landlord elects in writing to
terminate the Lease. Upon Landlord's re-entering the Premises, it may attempt
to relet all or any part of the Premises for such term or terms and at such rent
or rentals as Landlord, in the exercise of its sole discretion, may deem
advisable. Upon such reletting, all rent and other sums received by Landlord
shall be applied; first, to the payment of any costs and expenses of such
reletting, including reasonable attorney's fees incurred by Landlord due to
Tenant's default, brokerage fees and reasonable costs of alterations and repairs
undertaken for such reletting; second, to payment of any indebtedness other than
rent due hereunder from Tenant to Landlord; third, to the payment of rent and
other charges due and unpaid hereunder; and the residue, if any, shall be held
by Landlord and applied to the payment of any future amounts that become due and
payable hereunder. If such rental and other sums received from such reletting
during any month be less than the rental (and the costs set forth in the
previous sentence) to paid during such month by Tenant hereunder, Tenant shall
pay over such deficiency immediately to Landlord.

17. HOLDING OVER. If Tenant shall remain in possession after the
expiration of the term of this Lease or any renewal thereof with Landlord's
acquiescence, Tenant shall be a tenant at will

Ex. 10.3 - 5
<PAGE>

on a month-to-month basis at an annual minimum rent one and one-half times the
most recent annual minimum rent paid by Tenant and there shall be no renewal of
this Lease by operation of law.

18. SURRENDER OF PREMISES. Tenant shall, at the expiration of this Lease,
surrender the Premises, including all improvements subsequently made thereon,
except as hereinabove provided, to Landlord in as good condition and repair as
at the time possession thereof was taken, damage from natural wear and tear
excepted, and except for damage from an insured casualty.

20. EMINENT DOMAIN AND CONDEMNATION. All damages awarded for a taking
under the power of eminent domain of all or any part of the Premises shall
belong to and be the property of Landlord; provided, however, that Tenant shall
be entitled to any separate award made for relocation of Tenant's business and
depreciation or damage to and cost of removal of Tenant's personal property and
trade fixtures. The provisions contained in this paragraph shall apply in like
way to any sale made under imminent threat at such taking. In the event at any
lessor taking or sale, this Lease shall continue in full force and effect as if
said taking had not occurred, but Landlord shall restore the improvements to a
condition as nearly as practicable to their former condition at Landlord's sole
cost and expense.

21. ENVIRONMENTAL MATTERS. Tenant will not, nor shall it permit any
approved subtenant or other party, to install, store, treat, use, transport or
dispose, or permit or acquiesce in the installation, storage, use, treatment,
transportation or disposal, on the Premises of any chemical, material, or
substance which is regulated as toxic or hazardous or exposure to which is
prohibited, limited or regulated by any federal, state, county, regional, local
or governmental authority or which, even if not so regulated, may or could pose
a hazard to the health and safety of the occupants of the Premises or the
occupants of adjoining buildings or properties, unless written approval of the
Landlord is obtained by Lessee approving of the installation, storage,
treatment, use, transportation or disposal of a certain chemical, material or
substance. In the event of any such installation, storage, treatment, use,
transportation or disposal, whether approved by Landlord or not, the Tenant
shall, as required by applicable law or at the direction of the Landlord or any
federal, state or local authority, remove any such hazardous materials, or
otherwise comply with the regulations or orders of such authority, all at the
expense of Tenant. If the Tenant shall fail to proceed with such removal

Ex. 10.3 - 6
<PAGE>

or otherwise comply with such regulations or orders within any reasonable cure
period set by the Landlord, or within the cure period permitted under the
applicable regulation or order, Landlord, at its option, may declare that an
event of default has occurred hereunder, or Landlord may, but shall not be
obligated to, do whatever is necessary to eliminate such hazardous materials
from the Premises or otherwise comply with the applicable regulation or order,
and the cost thereof shall become immediately due and payable from Tenant,
without notice. Further, Tenant shall indemnify Landlord and hold Landlord
harmless from and against all loss, damage and expense (including, without
limitation, reasonable attorney's fees and costs incurred in the investigation,
defense, and settlement of claims) that Landlord may incur as a result of or in
connection with the assertion against Landlord of any claim relating directly or
indirectly, in whole or in part, to the presence or removal of any hazardous
materials, or compliance with any federal, state or local laws, rules,
regulations or orders relating thereto. The liability of Tenant under the
provisions of this paragraph shall survive the expiration or other termination
of this Lease or the transfer of Landlord's interest in the Premises.

24. BROKER'S COMMISSION. Each of the parties represents and warrants that
there are no claims for brokerage commissions or finder's fees in connection
with the execution of this Lease and each of the parties agrees to indemnify the
other against and hold them harmless from all liabilities arising from any such
claim.

25. NOTICES. Notices given hereunder shall be in writing and delivered in
person or sent by United States certified or registered mail, postage prepaid to
the parties at the following addresses:

Landlord: AG PARK, L.L.C.
2600 Mill Road
Grand Forks, ND 58208-3458

Tenant: Agsco, Inc.
2600 Mill Road
Grand Forks, ND 58208-3458

Any notice required hereunder shall be deemed given on the date postmarked.

Ex. 10.3 - 7
<PAGE>

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the day
and year first above written.

AG PARK, L.L.C.

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

Its:
----------------------------------

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

Its:
----------------------------------

Agsco, Inc.

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

Its:
----------------------------------

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

Its:
----------------------------------

Ex. 10.3 - 8
<PAGE>

STATE OF NORTH DAKOTA )
) ss.
COUNTY OF GRAND FORKS )

The foregoing instrument was acknowledged before me this 13th day of
March , 1997, by Randy R. Brown, the President and David
J. Glessner, the Secretary of AG PARK, L.L.C., a North Dakota limited
liability company, on behalf of the company.

----------------------------------------------
Notary Public
My Commission Expires:

STATE OF NORTH DAKOTA )
) ss.
COUNTY OF GRAND FORKS )

The foregoing instrument was acknowledged before me this 13th day of
March , 1997, by Randy R. Brown, the President and David
J. Glessner, the Secretary of Agsco, Inc., a North Dakota limited
liability company, on behalf of the corporation.

----------------------------------------------
Notary Public
My Commission Expires:

Ex. 10.3 - 9
<PAGE>

ADDENDUM

Section 4.1 of that certain Lease Agreement dated March 13, 1997, by
and between AG PARK, L.L.C. and Agsco, Inc., shall be amended as of the date of
this Addendum to read as follows:

4.1 MONTHLY RENT. Monthly Minimum Rent (1/11th of Annual Minimum Rent)
shall be in the amount of One Thousand Three Hundred and No/100 Dollars
($ 1,300.00 ) during the Lease Year commencing February 1, 1997, and
ending December 31, 1997.

DATED this 13th day of March ,1997 .

AG PARK, L.L.C.

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

Its:
----------------------------------

Agsco, Inc.

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

Its:
----------------------------------

Ex. 10.3 - 10

<PAGE>

EXHIBIT 10.4

LOAN AGREEMENT

THIS AGREEMENT, made as of the 14th day of June, 1996, by and between
AGSCO, INC., a North Dakota corporation ("Borrower"), and First American Bank
Valley, a North Dakota banking corporation, First National Bank North Dakota, a
national banking association and American Bank Moorhead, a Minnesota banking
corporation (hereafter individually referred to as "Bank" and collectively
referred to as "Banks").

RECITALS

A. The Borrower has requested extensions of credit from the Banks; and

B. The Banks are willing to agree to provide the requested credit to the
Borrower on the terms and conditions provided herein.

NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereby agree as follows:

1. DEFINITIONS. The following terms when used in this Agreement shall,
except where the context otherwise requires, have the following meanings (such
definitions to apply to the singular and plural forms thereof):

"AGENT" shall mean First American Bank Valley, a North Dakota banking
corporation.

"BANK" shall have the meaning provided in the preamble hereto.

"BORROWER" shall have the meaning provided in the preamble hereto.

"BORROWING" shall mean a borrowing consisting of Loans or Term Loans
made on the same day by the Banks.

"BORROWING BASE" shall mean an amount equal to the sum of (i) 70% of
Borrower's Eligible Accounts PLUS (ii) 60% of Eligible Inventory.

"BUSINESS DAY" shall mean a banking business day of all of the Banks.

"COMMITMENT" shall have the meaning provided in Section 2.1.

"COMMITMENT FEE" shall have the meaning provided in Section 2.7(b).

Ex. 10.4 - 1
<PAGE>

"DEFAULT" shall mean any event which if continued uncured would, with
notice or lapse of time or both, constitute an Event of Default.

"ELIGIBLE ACCOUNTS" shall mean such accounts receivable of the
Borrower as to which the Bank, in its sole discretion, shall from time to
time determine to be collectable in a timely manner in the ordinary course
of business without dispute or set off. Eligible Accounts shall not
include any account with respect to which: (a) any product warranty is
breached as to any account; (b) the account is not paid by the account
debtor within 90 days from the date of the invoice ; (c) the account debtor
disputes liability or makes any claim with respect to any account; (d) a
petition in bankruptcy or other application for relief under any insolvency
law is filed with respect to the account debtor; (e) the account debtor
assigns for the benefit of creditors, becomes insolvent, fails, suspends,
or goes out of business; (f) the account arises from a sale to an account
debtor outside the United States or Canada, unless the sale is on letter of
credit, acceptance or other terms acceptable to the Bank; (g) the account
debtor on an account is a supplier to or creditor of the Borrower or an
affiliate thereof, (h) the account debtor on an account is an affiliate of
the Borrower or is controlled by an affiliate of the Borrower; (i) the
accounts are due from an account debtor that has more than 10% of its total
accounts due to the Borrower more than 90 days past their invoice dates;
(j) the account represents a manufacturer's rebate that has not been
invoiced but only to the extent such rebates exceed 4.5% of aggregate sales
of such manufacturer's products; or (k) the Bank shall reasonably become
dissatisfied with the creditworthiness of an account debtor owing an
account.

"ELIGIBLE INVENTORY" shall mean be the value of all of Borrower's
inventory held for sale to customers and work in process. The value of
such inventory and work in process shall be the lowest of (i) Borrower's
cost; (ii) the book value of such inventory and work in process; or (iii)
the fair market value of such inventory and work in process. Eligible
Inventory shall not include any inventory held on consignment.

"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may from time to time be amended, and the rules and
regulations promulgated thereunder by any governmental agency or authority,
as from time to time in effect.

"EVENT OF DEFAULT" shall have the meaning specified in Section 7.

"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean those principles
in effect on the date hereof applied in a manner consistent with those used
in preparing the Borrower's financial statements.

"GUARANTY" shall mean any agreements, undertaking or arrangement by
which the respective obligor guarantees, endorses or otherwise becomes or
is contingently liable upon (by direct or indirect agreement contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise
to invest in, a debtor, or otherwise to assure a creditor against

Ex. 10.4 - 2
<PAGE>

loss) the debt, obligation or other liability of any Person (other than
guaranties or endorsements of instruments in the course of collection), or
guarantees the payment of dividends or other distributions upon the shares
of any Person.

"INDEBTEDNESS" of any Person shall mean all liabilities, indebtedness
and obligations that would be shown as liabilities on such Person's balance
sheet prepared in accordance with Generally Accepted Accounting Principles.

"LOAN" shall mean a loan by a Bank to the Borrower pursuant to Section
2.

"MAJORITY BANKS" shall mean at any time the Agent and at least one of
the other Banks.

"MAXIMUM AVAILABLE LOANS" shall at any time mean the lesser of: (a)
the Borrowing Base (as reported on the most recent Borrowing Base and
Compliance Certificate delivered pursuant to Section 5.3 hereof); or (b)
the Total Revolving Credit Commitment Amount.

"NOTE" or "NOTES" shall have the meaning provided in Section 2.3.

"NOTICE OF BORROWING" shall have the meaning provided in Section 2.2.

"OBLIGATIONS" shall mean all obligations of the Borrower to any Bank
under the Notes, this Agreement and any other document delivered hereunder.

"PERCENTAGE" shall have the meaning provided in Section 2.1.

"PERSON" shall mean any natural person, corporation, firm,
association, partnership, joint venture, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or other
capacity.

"PLAN" shall mean each employee benefit plan or other class of
benefits covered by Title IV of ERISA, in either case whether now in
existence or hereafter instituted, of Borrower.

"REFERENCE RATE" shall mean the lowest New York Prime Rate, as
published in the WALL STREET JOURNAL, as the same may change from time to
time; the Banks may lend to their other customers at rates that are at,
above or below the Reference Rate.

"SECURITY INTEREST" shall mean any lien, pledge, mortgage,
encumbrance, charge or security interest of any kind whatsoever (including,
without limitation, the lien or retained security title of a conditional
vendor) whether arising under a security instrument or as a matter of law,
judicial process or otherwise.

Ex. 10.4 - 3
<PAGE>

"TERM BANK(S)" shall have the meaning specified in Section 3.1.

"TERM LOANS" shall mean a loan by a Term Bank to the Borrower pursuant
to Section 3.

"TERM LOAN COMMITMENT AMOUNT" shall mean $1,000,000.00.

"TERM LOAN OBLIGATIONS" shall mean the unpaid principal balance of the
Term Notes.

"TERM LOAN PERCENTAGE" shall have the meaning specified in Section
3.1.

"TERM NOTES" shall have the meaning specified in Section 3.2 hereof.

"TERM NOTICE OF BORROWING" shall have the meaning provided in Section
3.2.

"TERMINATION DATE" shall have the meaning provided in Section 2.1.

"TOTAL BANK COMMITMENT AMOUNT" shall mean for each Bank, at any time
the start of (i) an amount equal to such Bank's Percentage of the Total
Revolving Credit Commitment Amount; plus (ii) such Bank's Term Loan
Percentage of the Term Loan Commitment Amount.

"TOTAL REVOLVING CREDIT COMMITMENT AMOUNT" shall mean the sum of
$8,750,000.00.

"TOTAL COMMITMENTS" shall mean at any time the start of (a) the Total
Revolving Credit Commitment Amount; plus (b) the Term Loan Commitment
Amount.

2. REVOLVING CREDIT COMMITMENT OF BANKS.

2.1 COMMITMENTS. Subject to the terms and conditions of this
Agreement, each Bank for itself alone agrees (such agreement as to each
Bank, called its "Commitment") that it will, from time to time on any
Business Day occurring during the period from the date hereof through the
date which is the earlier of ("Termination Date") March 1, 1997, or the
date of termination of the Commitments pursuant to Section 2.5, make Loans
to Borrower pursuant to Section 2.2, equal to the percentage (as to each
Bank, called its "Percentage" and specified opposite the name of such Bank
on the signature page hereof) of the aggregate amount of Loans requested by
Borrower from all Banks on such Business Day; PROVIDED, HOWEVER, that no
Bank shall be required or permitted on any date to make any Loan if after
giving effect thereto the start of the aggregate outstanding principal
amount of all Loans would exceed the Maximum Available Loans, or the sum of
the aggregate outstanding principal amount of all Loans made by such Bank
would exceed its Percentage of the Maximum Available Loans. Subject to the
terms and conditions of this Agreement, Borrower may from time to time
borrow, repay and reborrow amounts pursuant to the Commitments.

Ex. 10.4 - 4
<PAGE>

2.2 BORROWING PROCEDURE. Borrower may from time to time by written
telecopied notice or notice transmitted electronically through the Agent's
Execubank Service (the "Notice of Borrowing") delivered by not later than
11:00 a.m. (Central Time) on any Business Day to the Agent (which shall
give notice thereof to each other Bank on or before 12:30 p.m. on such
Business Day) request Loans from all Banks in an integral multiple of
$1,000.00 to be made on the same Business Day specified in such notice. On
or before 2:00 p.m., Central Time, on the date specified in such notice,
each Bank shall furnish or make available for the account of the Agent, in
immediately available funds, or the Agent shall have been advised of a
confirming Federal Reserve Bank wire number, an amount equal to such Banks'
Percentage of the aggregate amount of Loans requested. All Loans shall be
made at the office of the Agent by credit in immediately available funds to
Borrower's general deposit account maintained with the Agent on the
Business Day specified. In the case of any Loan by any Bank other than the
Agent, the Agent shall be required to make such credit only to the extent
that it shall have received immediately available funds or been advised of
a confirming Federal Reserve Bank wire number from such Bank as above
provided. Each Notice of Borrowing shall be in the form of EXHIBIT A
attached hereto. Each Notice of Borrowing shall be irrevocable and binding
on the Borrower.

Unless the Agent shall have received notice from a Bank prior to the
date of any Borrowing that such Bank will not make available to the Agent
such Banks' Percentage of such Borrowing, the Agent may assume that such
Bank has made such portion available to the Agent on the date of such
Borrowing in accordance with this Section 2.2 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date
a corresponding meant. If and to the extent such Bank shall not have so
made such Percentage available to the Agent, such Bank agrees to repay to
the Agent forthwith on demand such corresponding meant together with
interest thereon, for each day from the date such mount is made available
to the Borrower until the date such amount is repaid to the Agent, at the
Reference Rate; PROVIDED, HOWEVER, if such Bank shall repay to the Agent
such corresponding amount, the amount repaid shall constitute such Bank's
Loan as part of such Borrowing for purposes of this Agreement.

The failure of any Bank to make the Loan as part of any Borrowing
shall not relieve any other Bank of its obligation to make its Loan on the
date of such Borrowing, but no Bank shall be responsible for the failure of
any other Bank to make the Loan to be made by such other Bank. The Agent
shall use its best efforts to give Borrower notice of any Banks' failure to
make its Loan.

2.3 NOTES. All Loans made by any Bank shall be evidenced by a
promissory note of Borrower, dated the date hereof (herein, together with
all promissory notes, if any, accepted in substitution or replacement
therefor, called individually a "Note" and collectively the "Notes"),
payable to the order of such Bank in a principal meant equal to its
Percentage of the Total Revolving Credit Commitment Amount. The aggregate
unpaid amount of Loans set forth on the records of a Bank shall be
rebuttable presumptive evidence of the principal

Ex. 10.4 - 5
<PAGE>

amount owing and unpaid on the Note of such Bank. Each of the Notes shall
be in the form of EXHIBIT C attached to this Agreement.

2.4 MATURITY. The Notes will all mature and be due and payable in
full on March 1, 1997.

2.5 TERMINATION. The Commitments of the Banks shall terminate and
the Banks shall be relieved of their obligations to make any further Loans:

(a) five (5) Business Days after notice is given, at any
time when no Loans are outstanding, by Borrower to Agent (of which
Agent shall give prompt notice to each other Bank); or

(b) immediately and without further action upon the
occurrence of any Event of Default of the nature referred to in clause
(d) of Section 7.1; or

(c) immediately when any Event of Default (other than of
the nature specified in clause (d) of Section 7.1) shall have occurred
and be continuing and the Notes shall be declared to be due and
payable pursuant to this Section 2; or

(d) immediately when any Event of Default (other than of
the nature specified in clause (d) of Section 7.1) shall have occurred
and be continuing and the Majority Banks shall so elect by notice to
Borrower from the Agent for purposes of this clause.

2.6 INTEREST.

(a) Interest accrued on the Notes shall be payable on the
first day of each month commencing July 1, 1996.

(b) Interest will accrue on the Notes at a fluctuating rate per
annum at all times equal to the Reference Rate.

2.7 LATE FEES. Borrower agrees to pay a late payment service
charge in mount equal to five percent (5.0%) OF any installment of
principal or interest (including any final installment) not received by any
Bank within ten (10) days of the date due.

2.8 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of any
Bank to make any advances against any of the Notes shall be subject to the
further conditions precedent that on the date of such advance the following
statements shall be true (the receipt by the Borrower of the proceeds of
such advance shall be deemed to constitute a representation or warranty by
the Borrower that such statements are true):

Ex. 10.4 - 6
<PAGE>

(a) The representations and warranties contained in Section
4 hereof are correct on and as of the date of such advance as though
made on or as of such date; and
(b) No Default or Event of Default has occurred and is
continuing.

2.9 COMPUTATIONS. Interest on the Notes, and any other
compensation payable to the Banks hereunder shall be computed utilizing the
actual number of days elapsed in a year of 360 days.

2.10 VOLUNTARY PAYMENT. Borrower shall have the right at any time,
not later than 11:00 a.m. Central Time on the same Business Day m such
payment, to pay the Notes in whole or in part without premium of penalty
but with seemed interest to the date or prepayment on the amount prepaid.

2.11 PAYMENT TO AGENT. Any other provision of this Agreement to the
contrary notwithstanding, Borrower shall make all payments of accrued
interest on and principal of the Notes in immediately available funds to
the Agent at its office shown in Section 9.4 hereof for the account of the
Banks or holders of Notes thereof in accordance with each Banks' Percentage
of such payments. The Borrower hereby authorizes the Agent to charge from
time to time against the Borrower's account with it any amount so due on
the due date thereof. The Borrower hereby further authorizes each Bank, if
and to the extent payment is not made when due hereunder or under the Note
held by such Bank, to charge from time to time against the Borrower's
account with such Bank any amount so due. The Agent shall promptly
distribute to each Bank in immediately available funds its respective
Percentage of all payments of principal or interest received by it for the
account of such Bank. Any payment due from the Agent to any Bank pursuant
to this paragraph shall bear interest commencing the first Business Day
following the Business Day the Agent received such payment at a rate equal
to the Reference Rate. Subject to the provisions of Section 2.12, all
amounts received by each Bank (whether as a result of payment transmitted
by Borrower or otherwise) on account of payment of interest on or principal
of the Notes, as the case may be, shall be so applied by it to such
payment.

2.12 PRO RATA SHARING.

(a) If any holder of any Note shall obtain any payment
(whether voluntary, involuntary, by application of offset or
otherwise) upon any principal of or interest on such Note in excess of
its Percentage of payments then or thereafter obtained by all holders
upon principal of or interest on all Notes, such holder shall purchase
from the other holders of Notes such participations therein as shall
be necessary for such purchasing holder to share the excess payment
received with such other holders according to each such holder's
Percentage; PROVIDED, HOWEVER, that if all or any portion of the
excess payment is thereafter recovered from such purchasing holder,
then purchase shall be rescinded and the purchase price restored pro
rate according

Ex. 10.4 - 7
<PAGE>

to the extent of such recovery, but without interest. Any payments
received by any Bank shall be applied first to the outstanding amount
of any Loans in accordance with each Banks' respective Percentage
thereof.

(b) Following any Default or Event of Default hereunder and
continuing until such Default or Event of Default is remedied or
waived as provided herein, any payments received by any Bank pursuant
to this Agreement shall be applied ratably to the outstanding amount
of any Loans and Term Loans according to the percentage that each
Bank's total outstanding balances bear to the aggregate outstanding
balances of all the Banks on such Loans and Term Loans. To the extent
any Bank receives payments in excess of what is required pursuant to
this Section 2.12, such Bank shall purchase participations from the
other Banks as may be necessary for the purchasing Bank to share the
excess received by the purchasing Bank in accordance with the priority
set forth above.

2.13 MANDATORY PREPAYMENT. At least once prior to the maturity of
the Notes, reduce the outstanding balance of principal and interest on the
Notes to zero for a period of thirty (30) consecutive days.

3. TERM LOANS.

3.1 TERM LOANS. Subject to compliance with all terms and
conditions hereof, each of First American Bank Valley and First National
Bank North Dakota (hereinafter individually "Term Bank" and collectively,
the "Term Banks") hereby alone agrees (such agreement as to each Term Bank
called its "Term Loan Commitment Amount") that will from time to time
during the period from the date hereof through the date which is the
earlier of the Termination Date, or the date of termination of the Term
Loans pursuant to Section 3.5, make Term Loans to Borrower pursuant to
Section 3.2, equal to the percentage (as to each Term Bank called its "Term
Loan Percentage" and specified opposite the name of each Term Bank on the
signature page hereof) of the aggregate amount of such Term Loans so
requested by Borrower; PROVIDED, HOWEVER, that no Term Bank shall be
required or permitted on any date to make any Term Loan if after giving
effect thereto the sum of the aggregate amount of all Term Loans made would
exceed the Term Loan Commitment Amount or the aggregate amount of all Term
Loans made by such Term Bank would exceed its Term Loan Percentage of the
Term Loan Commitment Amount.

3.2 BORROWING PROCEDURE. Borrower may from time to time but not
more often than once each calendar month, by written telecopied notice (the
"Term Notice of Borrowing") delivered by not later than 11:00 a.m. (Central
Time) on any Business Day to the Agent (which shall give prompt notice
thereof to each other Term Bank) request Term Loans from the Term Banks in
a minimum aggregate amount of $100,000.00, to be made on the same Business
Day specified in such notice. The Term Notice of Borrowing shall be
accompanied by invoices, purchase orders and other information requested by
Agent

Ex. 10.4 - 8
<PAGE>

describing the fixed assets acquired with the proceeds of such requested
Borrowing. On or before 2:00 p.m., Central Time, on the date specified in
such notice, each Term Bank shall furnish or make available for the account
of the Agent, in immediately available funds or the Agent shall have been
advised of a continuing Federal Reserve Bank wire number, an amount equal
to such Term Banks' Term Loan Percentage of the aggregate amount of Term
Loans requested. All Term Loans shall be made at the office of the Agent
by credit in immediately available funds to Borrower's general deposit
account maintained with the Agent on the Business Day specified. In the
case of any Term Loan by any Term Bank other than the Agent, the Agent
shall be required to make such credit only to the extent that it shall have
received immediately available funds or been advised of a continuing
Federal Reserve Bank wire number from such Term Bank as above provided.
Each Term Notice of Borrowing shall be in the form of EXHIBIT B attached
hereto. Each Term Notice of Borrowing shall be irrevocable and binding on
the Borrower.

Unless the Agent shall have received notice from a Term Bank prior to
the date of any Borrowing that such Term Bank will not make available to
the Agent such Term Banks' percentage of such Borrowing, the Agent may
assume that such Term Bank has made such portion available to the Agent on
the date of such Borrowing in accordance with this Section 3.2 and the
Agent may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent such Term Bank
shall not have so made such Term Loan Percentage available to the Agent,
such Term Bank agrees to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such
amount is repaid to the Agent, at the Reference Rate; PROVIDED, HOWEVER, if
such Term Bank shall repay to the Agent such corresponding amount, the
amount repaid shall constitute such Term Banks' Term Loan as part of such
Borrowing for purposes of this Agreement.

The failure of any Term Bank to make the Term Loans as part of any
Borrowing shall not relieve any other Term Bank of its obligation to make
its Term Loan on the date of such Borrowing, but no Term Bank shall be
responsible for the failure of any other Term Bank to make the Loan to be
made by such other Term Bank. The Agent shall use its best efforts to give
Borrower notice of any Term Banks' failure to make its Term Loan.

3.3 TERM NOTES. All Term Loans made by the Term Banks shall be
evidenced by a promissory note of Borrower, dated the date hereof and in
the form of EXHIBIT D attached hereto (herein, together with all promissory
notes, if any, accepted in substitution or replacement therefor, called
individually a "Term Note" and collectively, the "Term Notes"), payable to
the order of such Term Bank in a principal amount equal to $500,000.00. The
aggregate paid amount of Term Loans set forth on the records of a Term Bank
shall be rebuttable presumptive evidence of the principal amount owing and
unpaid on the Term Note of such Term Bank.

Ex. 10.4 - 9
<PAGE>

3.4 MATURITY OF TERM NOTES. The Term Notes will all mature and be
due and payable in full on March 1, 1997.

3.5 TERMINATION. The Term Loan Commitments Amount of the Term
Banks shall terminate and the Term Banks shall be relieved of their
obligations to make any further Term Loans:

(a) five (5) Business Days after notice is given, at any
time when no Term Loans are outstanding, by Borrower to Agent (of
which Agent shall give prompt notice to each other Term Bank); or

(b) immediately and without further action upon the
occurrence of any Event of Default of the nature referred to in clause
(d) of Section 7.1; or

(c) immediately when any Event of Default (other than of
the nature specified in clause (d) of Section 7.1) shall have occurred
and be continuing and the Term Notes shall be declared to be due and
payable pursuant to this Section 3; or

(d) immediately when any Event of Default (other than of
the nature specified in clause (d) of Section 7.1) shall have occurred
and be continuing and the Term Banks shall so elect by notice to
Borrower from the Agent for purposes of this clause; or

(e) At such time as the Term Banks have advanced against
the Term Notes, in the aggregate, the Term Loan Commitment Amount.

3.6 INTEREST AND PAYMENTS ON THE TERM NOTES.

(a) Borrower agrees to pay interest on the Term Notes from
the date of this Agreement until all principal and interest thereon
has been paid in full at a rate per annum equal at all times to the
Reference Rate.

(b) Interest seemed on the Term Notes and the principal
thereof, shall be payable as provided in the Term Notes.

(c) No provision of this Agreement or the Term Notes shall
require the payment or permit the collection of interest in excess of
the rate permitted by applicable law.

3.7 LATE FEES. Borrower agrees to pay a late payment service
charge in an amount equal to five percent (5.0%) of any installment of
principal or interest (including any final installment) not received by any
Term Bank within ten (10) days of the date due.

Ex. 10.4 - 10
<PAGE>

3.8 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of any
Term Bank to make any advances against any of the Term Notes shall be
subject to the further conditions precedent that on the date of such
advance the following statements shall be true (the receipt by the Borrower
of the proceeds of such advance shall be deemed to constitute a
representation or warranty by the Borrower that such statements are true):

(a) The representation and warranties contained in Section
4 hereof are correct on and as of the date of such advance as though
made on or as of such date; and

(b) No Default or Event of Default has occurred and is
continuing.

3.9 COMPUTATIONS. Interest on the Term Notes, and any other
compensation payable to the Term Banks hereunder shall be computed
utilizing the actual number of days elapsed in a year of 360 days.

3.10 VOLUNTARY PAYMENT. Borrower shall have the right at any time,
by giving notice to the Agent no later than 11:00 a.m. Central Time on the
same Business Day to pay the Term Notes in whole or in part without premium
or penalty but with seemed interest to the date of prepayment on the amount
prepaid.

3.11 PAYMENT TO AGENT. Any other provision of this Agreement to the
contrary notwithstanding, Borrower shall make all payments of seemed
interest on and principal of the Term Notes in immediately available funds
to the Agent at its office shown on in Section 9.4 hereof for the account
of Term Banks or holders of Term Notes thereof in accordance with each such
Bank's Term Loan Percentage of such payments. The Borrower hereby
authorizes the Agent to charge from time to time against the Borrower's
account with it any amount so due on the due date thereof. The Borrower
hereby further authorizes each Term Bank, if and to the extent payment is
not made when due hereunder or under the Term Note held by such Term Bank,
to charge from time to time against the Borrower's account with such Term
Bank any meant so due. The Agent shall promptly distribute to each Term
Bank in immediately available funds its respective Term Loan Percentage of
all payments of principal or interest received by it for the account of
such Term Bank. Any payment due from the Agent to any Term Bank pursuant
to this paragraph shall bear interest commencing the first Business Day
following the Business Day the Agent received such payment at a rate equal
to the Reference Rate. Subject to the provisions of Section 3.12, all
amounts received by each Term Bank (whether as a result of payment
transmitted by Borrower or otherwise) on account of payment of interest on
or principal of the Term Notes, as the case may be, shall be so applied by
it to such payment.

3.12 PRO-RATA SHARING.

Ex. 10.4 - 11
<PAGE>

(a) If any holder of any Term Note shall obtain any payment
(whether voluntary, involuntary, by application of offset or
otherwise) upon any principal of or interest on such Term Note in
excess of its Term Loan Percentage of payments then or thereafter
obtained by all holders upon principal of or interest on all Term
Notes, such holder shall purchaser from the other holders of Term
Notes such participations therein as shall be necessary for such
purchasing holder to share the excess payment received with such other
holders according to each such holder's Term Loan Percentage;
PROVIDED, HOWEVER, that if all or any portion of the excess payment is
thereafter recovered from such purchasing holder, the purchase shall
be rescinded and the purchase price restored pro rate according to the
extent of such recovery, but without interest.

(b) Following any Default or Event of Default hereunder and
continuing until such Default or Event of Default is remedied or
waived as provided herein, any payments received by any Bank pursuant
to this Agreement shall be applied ratably to the outstanding amount
of any Loans, Term Loans according to the percentage that each Bank's
total outstanding balances bear to the aggregate outstanding balances
of all the Banks on such Loans and Term Loans. To the extent any Bank
receives payments in excess of what is required pursuant to this
Section 3.12(b), such Bank shall purchase participations from the
other Banks as may be necessary for the purchasing Bank to share the
excess received by the purchasing Bank in accordance with the priority
set forth above.

4. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to each of the Banks that:

4.1 ORGANIZATION, QUALIFICATION AND AUTHORIZATION.
Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the State of North Dakota; has the
corporate power and authority to own its property and to carry on its
business as now being conducted; and is duly qualified and licensed to
do business, and is in good standing, in every jurisdiction in which
the nature of the business in which it is engaged makes such
qualification or licensing necessary, except for those jurisdiction
where its failure to be qualified, licensed or in good standing would
not have a material adverse effect on its business or property.

4.2 VALIDITY OF OBLIGATIONS. Borrower has full power,
right and authority to execute and deliver this Loan Agreement, the
Notes and all other documents and agreements required to be delivered
by Borrower hereunder ("Loan Documents"), to obtain the credit herein
provided for, and to perform and observe each and all of the matters
and things provided for in the Loan Documents. The execution and
delivery of the Loan Documents and the performance or observance of
the terms thereof have been duly authorized by all necessary and
corporate and shareholder action and do not contravene or violate any
provision of law or any charter or bylaw provision or any

Ex. 10.4 - 12
<PAGE>

covenant, indenture or agreement of or binding upon Borrower, nor
require the consent or approval of any governmental entity or agency
thereof.

4.3 TITLE TO ASSETS. The Borrower has good and marketable
title to all of its property and assets reflected in its balance
sheet, prepared and delivered to the Bank, subject to the encumbrances
as therein detailed.

4.4 LITIGATION. No actions, suits or proceedings are
pending or, to the Borrower's knowledge, threatened, against or
affecting it before any court, governmental or administrative body or
agency which might result in any material adverse change in the
operations, business property, assets or condition (financial or
otherwise) of the Borrower, or which would question the validity of
this Agreement or of any action taken or to be taken by Borrower
pursuant to or in connection with this Agreement.

4.5 NO EVENTS OF DEFAULT. No Default or Event of Default
has occurred and is continuing as of the date hereof.

4.6 SUBSIDIARIES AND AFFILIATES. Borrower has no
subsidiaries [corporations in which Borrower owns or controls,
directly or indirectly, more than 50% of the voting stock of such
corporation ("Subsidiaries")] or affiliates except those listed on
EXHIBIT G attached hereto.

4.7 ERISA COMPLIANCE. The provisions of each Plan comply in all
material respects with all applicable requirements of ERISA, and Borrower
has not incurred any "accumulated funding deficiency" within the meaning of
ERISA which is material, in connection with any Plan. Borrower does not
participate in any multi-employer pension Plan.

4.8 GUARANTY OR SURETYSHIP. Except as disclosed on EXHIBIT H
attached hereto, Borrower is not a party to any contract of Guaranty or
suretyship and none of its assets is subject to such a contract.

4.9 ACCURACY OF INFORMATION. All factual information heretofore or
contemporaneously herewith furnished by or on behalf of Borrower or to any
Bank for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of the Borrower to any Bank will be,
true and accurate in every material respect on the date as of which such
information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information not misleading.

4.10 TAX RETURNS; AUDITS. Borrower has filed all federal, state and
provincial income tax returns which are required to be filed, and have paid
all taxes as shown on said returns and on all assessments received by it to
the extent that such notes have become due

Ex. 10.4 - 13
<PAGE>

or have obtained extensions with respect to the filing of such returns and
have made provision for the payment of taxes anticipated to be payable in
connection with such returns. Borrower has made all required withholding
deposits. Federal income tax returns of Borrower have been examined and
approved or adjusted by the applicable taxing authorities or closed by
applicable statutes for all fiscal years prior to and including the fiscal
year ended 1992. Except as disclosed to the Banks in writing prior to the
date hereof, Borrower has no knowledge of any objections to or claims for
additional taxes by federal, state or local taxing authorities for
subsequent years.

4.11 INDEBTEDNESS. Except for Indebtedness hereunder, Indebtedness
for accounts payable incurred in the ordinary course of business and
Indebtedness disclosed on EXHIBIT H attached hereto, the Borrower has no
outstanding Indebtedness.

4.12 COMPLIANCE WITH OTHER AGREEMENTS. The Borrower is not in
material violation of its Articles of Incorporation, Bylaws or other
governing documents. Borrower is not in default in the performance of any
obligation, agreement, or condition contained in any bond, debenture, note,
or in any indenture, loan agreement, or other agreement.

5. AFFIRMATIVE COVENANTS. The Borrower covenants and agrees with the
Banks that so long as any amount remains unpaid on the Notes or the Term Notes,
or the Banks have any obligation to advance against the Notes, Borrower will:

5.1 MAINTAIN ASSETS. Maintain and keep its assets, properties and
equipment in good repair, working order and condition and from time to time
make or cause to be made all needed renewals, replacements and repairs so
that at all times the Borrower's businesses can be operated efficiently.

5.2 INSURANCE. Insure and keep insured all of its property of an
insurable value under all-risk policies in an amount reasonably acceptable
to the Banks and carry such other insurance as is usually carried by
persons engaged in the same or similar business, all such insurance to name
the Agent, as agent for the Banks, an additional insured on liability
coverages, and from time to time furnish to the Agent upon request
appropriate evidence of the carrying of all insurance required by this
Section.

5.3 FINANCIAL STATEMENTS. Furnish to the Bank:

(a) Within ninety (90) days after the end of each of
Borrowers fiscal years, audited annual financial statements for
Borrower, which include a balance sheet and income statement prepared
by accountants reasonably acceptable to the Banks and in accordance
with Generally Accepted Accounting Principles consistently applied.

(b) Within ninety (90) days after the end of each of the
fiscal years of Ag Park, LLC, a North Dakota limited liability company
("Ag Park"), reviewed annual

Ex. 10.4 - 14
<PAGE>

financial statements for Ag Park which include a balance sheet and
income statement prepared by accountants reasonably acceptable to the
Banks and in accordance with Generally Accepted Accounting Principles
consistently applied.

(c) Within ninety (90) days after the end of Borrower's
fiscal years, consolidated and consolidating financial statements for
Borrower and Ag Park, which include a balance sheet and consolidated
income statement prepared by accountants reasonably acceptable to the
Banks and in accordance with Generally Accepted Accounting Principles
consistently applied.

(d) Within thirty (30) days after the end of each calendar
month, compiled, consolidated and consolidating interim financial
statements for Borrower and Ag Park, which include an internally
prepared balance sheet, profit and loss statements and accounts
receivable aging summary as of the end of such calendar month,
together with a narrative explaining any significant trends or
variances from budget.

(e) On or before the twentieth (20th) day of each month
hereafter, a Borrowing Base and Compliance Certificate as of the end
of the immediately preceding month in the form of EXHIBIT I.

(f) At least annually, and more frequently at Agent's
request, a complete listing and aging of Borrower's accounts
receivable.

(g) Such other information as the Banks may reasonably
request from time to time.

5.4 ACCESS TO RECORDS. Permit any person designated by the Banks,
at the Banks' expense, to visit and inspect any of its properties, books
and financial records and to discuss the Borrower's affairs, finances and
accounts with the Borrower, all at such reasonable times and as often as
Banks any reasonably request.

5.5 TAXES, ASSESSMENTS AND CHARGES. Promptly pay over to the
appropriate authorities all starts for taxes deducted and withheld from
wages as well as the employer's contributions and other governmental
charges imposed upon or asserted against the Borrower's income, profits,
properties and rental charges or otherwise which are or might become a lien
charged upon the Borrower's properties, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves shall have
been established on the Borrower's books with respect thereto.

5.6 NOTIFICATION OF CHANGES Promptly notify the Banks of:

(a) Any litigation which might materially and adversely
affect the Borrower or any of its properties;

Ex. 10.4 - 15
<PAGE>

(b) The occurrence of any Default or Event of Default under
this Agreement.

(c) Any material adverse change in the operations,
business, properties, assets or conditions, financial or otherwise, of
the Borrower which could adversely and materially affect the
Borrower's ability to perform its obligations under the Loan
Documents.

(d) Any casualty or other losses in excess of $50,000.00
whether or not covered by insurance.

5.7 CORPORATE EXISTENCE. Maintain its corporate existence and
conduct the same general type of business as is now being carried on and
continue compliance with all applicable statutes, laws, rules and
regulations.

5.8 BOOKS AND RECORDS. Keep true and accurate books of records and
in accordance with Generally Accepted Accounting Principles.

5.9 REIMBURSEMENT OF EXPENSES. Promptly reimburse the Agent for:

(a) any and all reasonable expenses, fees and
disbursements, including attorneys' fees and inventory and receivable
audit fees, incurred in connection with the preparation of this
Agreement and the instruments and documents related thereto up to a
maximum of $6,500.00; and

(b) all expenses of collection of any loans made or to be
made hereunder, including reasonable attorneys' fees.

5.10 MINIMUM TANGIBLE NET WORTH. Cause Ag Park and Borrower to
maintain as of each of Borrower's fiscal year ends, a consolidated minimum
Tangible Net Worth of not less than $5,250,000.00. The term "Tangible Net
Worth" as used herein shall mean the start of Borrower's and Ag Park's
consolidated net worth determined in accordance with Generally Accepted
Accounting Principles, exclusive of goodwill, prepaid expenses, amounts due
from officers, and other intangible assets.

5.11 MINIMUM CURRENT RATIO. Cause Ag Park and Borrower to maintain
a ratio of their consolidated current assets (determined in accordance with
Generally Accepted Accounting Principles) to their consolidated current
liabilities (determined in accordance with Generally Accepted Accounting
Principles) of not less than the following for the periods indicated:

Ex. 10.4 - 16
<PAGE>

PERIOD MAXIMUM RATIO
------ -------------

On 6/30/96 1.15 to 1
On 7/31/96 1.15 to 1
On 8/31/96 1.15 to 1
On 9/30/96 1.15 to 1
On 10/31/96 1.20 to 1
On 11/30196 and
each month end thereafter 1.15 to 1

5.12 MAXIMUM DEBT/TANGIBLE NET WORTH RATIO. Cause Ag Park and
Borrower to maintain at all times a ratio of its consolidated Indebtedness
to consolidated Tangible Net Worth of not greater than the following for
the periods indicated:

PERIOD MAXIMUM RATIO
------ -------------

On 6/30/96 5.00 to 1
On 7/31/96 5.00 to I
On 8/31/96 5.00 to 1
On 9/30/96 5.00 to 1
On 10/31/96 2.75 to 1
On 11/30/96 and
each month end thereafter 5.00 to 1

For the purposes hereof, "Indebtedness" shall mean all liabilities,
indebtedness and obligations that would be shown as liabilities on
Borrower's and Ag Park's balance sheets prepared in accordance with
Generally Accepted Accounting Principles. For the purposes hereof,
"Tangible Net Worth" shall have the meaning provided in Section 5.10.

5.13 CASH FLOW COVERAGE RATIO. Cause Ag Park and Borrower to
maintain a minimum consolidated Cash Flow Coverage Ratio of not less than
1.20 to 1 as of October 31, 1996. The term "Cash Flow Coverage" shall mean
the sum of Borrower's and Ag Park's net income plus interest and
depreciation, divided by the sum of mandatory debt retirement plus
interest, plus dividends, plus Net Capital Purchases, all determined on a
consolidated basis in accordance with Generally Accepted Accounting
Principles. For the purposes hereof, "Net Capital Purchases" shall mean
the difference between total capital expenditures and the cumulative amount
of all advances against the Term Notes, determined in accordance with
Generally Accepted Accounting Principles.

5.14 MAINTAIN ACCOUNTS. Maintain all primary depository accounts
with the Agent.

5.15 PLANS. Maintain all Plans in strict compliance with the ERISA,
as amended.

Ex. 10.4 - 17
<PAGE>

5.16 USE OF TERM LOAN PROCEEDS. Use proceeds of any Term Loans
solely to purchase fixed assets for use in Borrower's business and
operations.

6. NEGATIVE COVENANTS. The Borrower hereby covenants and agrees with the
Banks that so long as any amount shall remain unpaid on the Notes or the Term
Notes or so long as the Banks have any obligation to make advances hereunder,
Borrower will not:

6.1 MERGE, CONSOLIDATE OR SELL. Transfer, lease or sell all or
substantially all of the Borrower's property and business to any other
entity or entities. other than in the ordinary course of business.

6.2 DEFAULT ON OTHER OBLIGATIONS. Default upon or fail to pay any
of the other debts or obligations as the same mature, unless the same are
being contested in good faith by appropriate proceedings and adequate
reserves shall have been established with respect thereto.

6.3 LIENS AND ENCUMBRANCES. Create, assume, incur or suffer to
exist any pledge, mortgage, assignment or other lien or encumbrance of any
kind, or upon any of its property of any kind, whether now owned or
hereafter acquired, or of or upon the income or profits therefrom except
for:

(a) Liens for taxes, assessments and other governmental
charges which are not delinquent or which are being contested in good
faith by appropriate proceedings diligently conducted, against which
required reserves have been set up;

(b) Liens incurred or deposits made in the ordinary course
of business in connection with workmen's compensation, unemployment
insurance or other similar laws or to secure the performance of
statutory obligations of a like nature (exclusive of obligations for
the payment of money borrowed);

(c) Liens imposed by law in connection with transactions in
the ordinary course of business, such as liens of carriers,
warehousemen, mechanics and materialmen for sums not yet due or being
contested in good faith and by appropriate proceedings diligently
conducted, against which adequate reserves have been set up;

(d) Landlords' liens under authorized leases to which the
Borrower is a party; and

(e) Zoning restrictions, licenses and minor encumbrances
and irregularities in title, all of which in the aggregate do not
materially detract from the value of the property involved or
materially impair their use in the operation of Borrower's business.

Ex. 10.4 - 18
<PAGE>

6.4 GUARANTEES. Except as disclosed on EXHIBIT H attached hereto,
assume, guarantee, endorse or otherwise become liable for the obligation of
any person, firm or corporation except by endorsement of negotiable
instruments for deposit or collection in the ordinary course of business,
nor sell any notes or accounts receivable with recourse.

6.5 INVESTMENTS. Except as disclosed on EXHIBIT H attached hereto,
make or permit to exist any loans or advances to or investments in any
person, firm or corporation, or any other entity, other than through the
purchase or sale of negotiable instruments.

6.6 LOANS TO AFFILIATES. Make or permit to exist loans or advances
to Subsidiaries, stockholders or affiliates of Borrower in excess of
$50,000.00 in the aggregate outstanding at any time.

6.7 INDEBTEDNESS. Issue, assume, incur or otherwise become
obligated for any Indebtedness except for Indebtedness for accounts payable
incurred in the ordinary course of business, the Indebtedness hereunder and
the Indebtedness listed on EXHIBIT H attached hereto.

6.8 NO NEW SUBSIDIARIES. Create or permit to exist any
Subsidiaries.

6.9 FISCAL YEAR. Change its fiscal year.

7. DEFAULTS.

7.1 EVENT OF DEFAULT. Any one or more of the following events
shall constitute an Event of Default:

(a) PAYMENT. The Borrower shall fail to pay the Notes or
the Term Notes upon the terms and conditions therein set forth or fail
to pay any fees or expenses payable pursuant hereto and such failure
shall continue unremedied for five (5) days; or

(b) OTHER OBLIGATIONS. The Borrower shall default under
the terms and conditions of any note, agreement or other document
governing, or evidencing any indebtedness and such default shall be
sufficient to entitle the lender thereunder to accelerate payment of
such indebtedness or otherwise exercise any remedies with respect to
such indebtedness; or

(c) OTHER COVENANTS OR AGREEMENTS HEREIN. The Borrower
shall default in the due performance or observance of any term,
covenant or agreement contained in this Agreement (excluding those
defaults otherwise covered by this Section 7.1), or in any other
documents or agreement delivered pursuant hereto or in connection

Ex. 10.4 - 19
<PAGE>

herewith and such default shall continue for a period of thirty (30)
days after written notice thereof shall have been given by Bank to the
Borrower; or

(d) INSOLVENCY. The Borrower shall (i) become insolvent or
unable to pay its debts generally as they mature, (ii) suspends
business, (iii) makes a general assignment for the benefit of
creditors, (iv) admits in writing its inability to pay its debts
generally as they mature, (v) files a petition in bankruptcy or a
petition or answer seeking a reorganization, arrangement with
creditors or other similar relief under the Federal bankruptcy laws or
under any other applicable law of the United States of America or any
State thereof, (vi) consents to the appointment of a trustee or
receiver for the Borrower or for a substantial part of its property,
(vii) is adjudicated a bankrupt on an involuntary petition in
bankruptcy, (viii) takes any corporate action for the purpose of
effecting or consenting to any of the foregoing, or (ix) has an order,
judgment or decree entered appointing, without its consent, a trustee
or receiver for Borrower or any guarantor or for a substantial part of
its property, or approving a petition filed against the Borrower
seeking a reorganization, arrangement with creditors or other similar
relief under the Federal bankruptcy laws or under any other applicable
law of the United States of America or any State hereof, which order,
judgment or decree shall not be vacated or set aside or stayed within
thirty (30) days from the date of entry; or

(e) REPRESENTATIONS AND WARRANTIES. If any representation
or warranty contained in this Agreement any other document or any
letter or certificate furnished or to be furnished to the Banks proves
to be false as of the date the Agreement or such documents is executed
or at the time such letter or certificate is delivered to the Banks;
or

(f) CHANGE IN OWNERSHIP. Ownership of more than five
percent (5%) of the voting stock of the Borrower shall change
without the Banks' prior written approval; or

(g) JUDGMENTS. Judgments against the Borrower for the
payment of money totaling in excess of $25,000.00 shall be
outstanding for a period of thirty (30) days without a stay of
execution.

7.2 BANKS' RIGHTS ON DEFAULT. If an Event of Default described in
Section 7.l(d) shall occur, the full unpaid principal amount of the Notes
and the Term Notes and all other Obligations of Borrower hereunder shall
automatically be due and payable without declaration, notice, presentment,
protest or demand of any kind (all of which we hereby waived) and the
obligation of Banks to make additional Loans shall automatically terminate.
If any other Event of Default shall occur and be continuing, the Agent may
at the direction of the Majority Banks (unless precluded from doing so by
operation of law, an order of a court of competent jurisdiction or stay
imposed by law): (a) terminate the obligation of each

Ex. 10.4 - 20
<PAGE>

Bank to make additional Loans and may at the direction of the Majority
Banks declare the outstanding principal mount of the Notes and the Term
Notes to be due and payable and any or all other Obligations of Borrower
hereunder owing to be due and payable, without notice, presentment, protest
or demand of any kind (all of which are hereby waived), whereupon the full
unpaid meant of such Notes and the Term Notes and any and all other
Obligations of Borrower hereunder, which shall be so declared due and
payable shall be and become immediately due and payable; and (b) take such
actions as may otherwise be available in equity or at law. All remedies of
the Banks shall be cumulative.

8. AGENT BANK.

8.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby appoints First
American Bank Valley, a North Dakota banking corporation as the Agent with
such powers and duties as are specifically delegated or required of the
Agent by the terms hereof and such other powers as are reasonably
incidental thereto. Each Bank hereby authorizes, consents to and directs
the Borrower to deal with the Agent as the true and lawful agents of such
Bank to the full extent provided herein. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein with
respect to its role as Agent, or any fiduciary relationship with any Bank,
and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or otherwise exist against
the Agent. The Agent may execute any of its duties under this Agreement by
and through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected ed by them with reasonable care. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes and the Term Notes) the
Agent shall be required to act or refrain from acting upon the instructions
of the Majority Banks and such instruction shall be binding upon all Banks
and holders of the Notes and the Term Notes.

8.2 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable to any Bank for
any action taken or omitted to be taken by it or them under this Agreement
or any document executed pursuant hereto, or in connection herewith or
therewith, except for its or their own willful misconduct or gross
negligence, nor responsible for any recitals or warranties herein or
therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any document executed pursuant hereto nor to
make any inquiry respecting the performance by Borrower of its Obligations
hereunder or thereunder. The Agent shall be entitled to rely upon advice
of counsel concerning legal matters and upon any notice, consent,
certificate, statements or writing which they believe to be genuine and to
have been presented by a proper Person. The provisions of this Section
shall survive termination of this Agreement.

Ex. 10.4 - 21
<PAGE>

8.3 SUCCESSOR AGENT. The Agent may resign as such at any time upon
at least thirty (30) days prior written notice to Borrower and all Banks.
If the Agent at any time shall resign, the Majority Banks may appoint a
successor Agent, which shall be one of the Banks, and which shall thereupon
become the Agent, hereunder and shall be entitled to receive from the prior
Agent, documents of transfer and assignment as such successor Agent may
reasonably request.

8.4 LOANS BY THE AGENT. The Agent shall have the same rights and
powers with respect to the Loans made by them and the Notes and the Term
Notes held by them as any Bank and may exercise the same as if they were
not the Agent, and the term "Bank" and when appropriate, "holder" shall
include the Agent in its individual capacity.

8.5 CREDIT DECISIONS. Each Bank acknowledged that it has
independently of the Agent and each other Bank and based on the financial
information delivered to it by the Borrower and such other documents,
information and investigations as it has deemed appropriate, made its own
credit decisions to extend its Commitment to make Loans and the loans
evidenced by the Term Notes hereunder from time to time. Each Bank also
acknowledges that it will, independently of the Agent and each other Bank
and based on such other documents, information and investigations as it
shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights
and privileges available to it under this Agreement or any instrument
executed pursuant hereto.

8.6 INDEMNIFICATION. To the extent the Agent is not reimbursed and
indemnified by the Borrower, the Banks will reimburse and indemnify the
Agent, in the same proportion that such Banks' Total Bank Commitment Amount
bears to the Total Commitments, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements or any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent (or either of them)
in performing their duties hereunder or under any other document delivered
pursuant hereto, in any way relating to or arising out of this Agreement or
any other document delivered pursuant hereto; provided that no Bank shall
be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct.

8.7 BALANCES. Each Bank shall from time to time on request of
Agent confirm to the Agent balances on its respective Notes.

9. MISCELLANEOUS.

9.1 BINDING EFFECT. The parties hereto agree that this Agreement
shall be binding upon and inure to the benefit of their respective heirs,
successors in interest and assigns including any holder of the Notes or the
Term Notes, provided, however, that the Borrower

Ex. 10.4 - 22
<PAGE>

may not assign or transfer its interest hereunder without the prior written
cement of the Bank; and provided further, that any assignment of all the
Banks' interests hereunder and under the other Loan Documents (except for
sales of participations contemplated by Section 9.2 hereof) shall not be
binding upon Borrower unless and until Borrower has received written notice
of such assignment.

9.2 PARTICIPATIONS. The Company acknowledges that the Banks may
sell one or more participations in the loan evidenced hereby to other
financial institutions.

9.3 GOVERNING LAW. This Agreement and the rights and obligations
of the parties hereunder and under the Notes, and any other documents
delivered herewith shall be construed in accordance with and governed by
the laws of the State of North Dakota. The Borrower hereby consents to the
jurisdiction of the courts of the State of North Dakota for any actions
brought hereon or on the Notes or the Term Notes.

9.4 NOTICES. Any notices required or contemplated hereunder shall
be effective the second business day after the placing thereof in the
United States mails, certified mail and with return receipt requested,
postage prepaid, and addressed as follows:

If to Borrower: AGSCO, INC.
P.O. Box 13458
Grand Forks, North Dakota 58208-3459
Attn: Randy Brown, President

With a Copy To: Fischer, Olson, Daley & Bata Ltd.
315 First Avenue North
Grand Forks, North Dakota 58203
Attn: Richard W. Olson

If to Agent First American Bank Valley
or Banks: 3100 South Columbia Road
P.O. Box 13118
Grand Forks, North Dakota 58208-3118
Attn: John D. Erickson

First National Bank North Dakota
4th and DeMers Avenue
Grand Forks, North Dakota 58201
Attn: Karl Bollingberg

Ex. 10.4 - 23
<PAGE>

American Bank Moorhead
P.O. Box 220
Moorhead, Minnesota 56560-0220
Attn: Neil Qualey

With a Copy to: Christoffel, Elliott & Albrecht, P.A.
805 Capital Centre
386 North Wabasha Street
St. Paul, Minnesota 55102
Attn: James F. Christoffel

9.5 RIGHT OF OFFSET. In addition to, and without limitation of,
any rights of any Bank under any applicable law or otherwise, each Bank
may, when any Default of the nature referred to in clause (d) of Section
7.1 or any other Event of Default shall have occurred and be continuing and
without notice or demand of any kind, appropriate and apply toward payment
of any Obligations owing to it whether or not due) any amounts, property,
balances, credits, deposit accounts or moneys of Borrower in the possession
or control of such Bank for any purpose; PROVIDED, HOWEVER, that any such
amount, property, balances, credits, deposit accounts or money, so applied
by any Bank on any of the Obligations owing to it shall be subject to the
provisions of Sections 2.12 and 3.12.

Each Bank agrees to give Borrower notice of any offset promptly after
effecting such offset.

9.6 NO WAIVERS. No failure or delay on the part of Bank in
exercising any right, power or privilege hereunder and no course of dealing
between the Borrower and Bank shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power, or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.

9.7 HEADINGS. The headings of various sections of this Agreement
have inserted for reference only and shall not be deemed to be a part of
this Agreement.

9.8 AMENDMENT AND WAIVER. Neither this Agreement nor any provision
hereof may be modified, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought.

9.9 INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by the Banks, Borrower hereby agrees to
indemnify, exonerate and hold each Bank, and each of its officers,
directors, employees and agents of that Bank (the "Bank Parties") free and
harmless from and against any and all actions, causes of action, suits,
losses, liabilities and damages, and expenses in connection therewith,
including, without limitation,

Ex. 10.4 - 24
<PAGE>

reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by the Bank Parties or any of them as a result of,
or arising out of, or relating to:

(a) any transaction financed or to be financed in whole or
in part directly or indirectly with proceeds of the Loans and the Term
Loans, or

(b) the execution, delivery, performance or enforcement of
this Agreement by any of the Bank Parties,

except for any such Indemnified Liabilities arising on account of any Bank
Party's gross negligence or willful misconduct, and if and to the extent
that the foregoing undertaking may be unenforceable for any reason,
Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. The provisions of this Section shall survive
termination of this Agreement.

9.10 COUNTERPARTS. This Agreement may be executed in a number of
counterparts, each of which shall be deemed an original and all of which
shall constitute one and the same document.

10 DOCUMENT REQUIREMENTS. To induce the Banks to commit to make
the requested Loans and the Term Loans pursuant to the terms and conditions
hereof, and as a condition to any advance to the Borrower hereunder, the
Borrower shall on or before the date hereof, deliver to the Banks the
following documents all dated of even date herewith (the "Loan Documents"):

10.1 NOTES. The Notes in the amount of each Banks' Commitment
payable to each of the respective Banks;

10.2 TERM NOTES. The Term Notes each in the amount $500,000.00
payable to the Term Banks;

10.3 CERTIFICATE OF AUTHORITY. A completed Certificate of Authority
for Borrower in the form of EXHIBIT E attached hereto.

10.4 CERTIFICATE OF GOOD STANDING. A current Certificate of Good
Standing for Borrower issued by the office of the North Dakota Secretary of
State.

10.5 FINANCIAL STATEMENTS. Current financial statements for
Borrower.

10.6 OPINION OF COUNSEL. An opinion of Borrower's counsel in the
form of EXHIBIT F attached hereto.

Ex. 10.4 - 25
<PAGE>

Executed in _________________________ as of the year and day first above
written.

AGSCO, INC.

BY:
--------------------------------------
Randy Brown
Its President

First American Bank Valley

By:
--------------------------------------
Its:
-------------------------------

PERCENTAGE COMMITMENT OF FABV TERM NOTE TERM NOTE TO FABV
- ---------- ------------------ PERCENTAGE -----------------
----------

54.2857% $4,750,000.00 50% $500,000.00

First National Bank of North Dakota

By:
--------------------------------------
Its:
-------------------------------

PERCENTAGE COMMITMENT OF FNBGF TERM NOTE TO
- ---------- ------------------- TERM NOTE ------------
PERCENTAGE FNBGF
---------- -----

28.5714% $2,500,000.00 50% $500,000.00

Ex. 10.4 - 26
<PAGE>

American Bank Moorhead

By:
--------------------------------------
Its:
-------------------------------

PERCENTAGE COMMITMENT OF AMERICAN BANK MOORHEAD
- ---------- ------------------------------------
17.1429% $1,500,000.00

Ex. 10.4 - 27
<PAGE>

EXHIBITS

A. Notice of Borrowing

B. Term Notice of Borrowing

C. Form of Note

D. Form of Tem Note

E. Certificate of Authority

F. Form of Opinion of Counsel

G. Subsidiaries

H. Exceptions to Section 4.8, 4.11, 6.4, 6.5 and 6.7

I. Borrowing Base and Compliance Certificate

Ex. 10.4 - 28
<PAGE>

EXHIBIT A
FORM OF NOTICE OF BORROWING
AND PAYMENTS

First American Bank Valley
200 First Avenue North
P.O. Box 13118
Grand Forks, North Dakota 58208-3118

Attention: John D. Erickson

Gentlemen:

The undersigned, AGSCO, INC., a North Dakota corporation refers to the Loan
Agreement dated as of June 14, 1996 (the "Loan Agreement"; the terms defined
therein being used herein as therein defined), between the undersigned, the bank
parties thereto (the "Banks") and you, as the Agent (the "Agent") and hereby
gives you notice, pursuant to Section 2.2 of the Loan Agreement, that the
undersigned hereby requests a Loan under the Loan Agreement, and in that
connection sets forth below the information relating to such Loan (the
"Requested Advance") or a payment of the Notes ("Payment"):

(a) The requested Business Day of the Requested Advance/Payment
(circle one) is ________________, 199_;

(b) check one

The aggregate principal amount of the Requested Advance is
------ U.S. $_________ and the aggregate unpaid principal amount of
all Loans after giving effect to the Requested Advance is
$___________; or

The aggregate principal amount of the Payment is U.S.
------ $_________ and the aggregate unpaid balance of all Loans
after giving effect to the Payment is $___________.

(c) The undersigned confirms that the conditions precedent set
forth in Section 2.8 of the Loan Agreement are satisfied as of the date
hereof.

AGSCO, INC.

By:
--------------------------------------
Its:
-------------------------------

Ex. 10.4 - 29
<PAGE>

EXHIBIT B
FORM OF TERM NOTICE OF BORROWING

First American Bank Valley
200 First Avenue North
P.O. Box 13118
Grand Forks, North Dakota 58208-3118

Attention: John D. Erickson

Gentlemen:

The undersigned, AGSCO, INC., a North Dakota corporation refers to the Loan
Agreement dated as of June 14, 1996 (the "Loan Agreement"; the terms defined
therein being used herein as therein defined), between the undersigned, the Tom
Banks and you, as the Agent (the "Agent") and hereby gives you notice, pursuant
to Section 3.2 of the Loan Agreement, that the undersigned hereby requests a
Term Loan under the Loan Agreement, and in that connection sets forth below the
information relating to such Term Loan (the "Proposed Loan"):

(a) The requested Business Day of the Proposed Loan is ___________,
199_;

(b) The aggregate principal amount of the Proposed Loan is U.S.
$_________________.

(c) The cumulative principal amount of all Term Loan Borrowing
Loans after giving effect to the Proposed Loan is $____________.

(d) The remaining Term Loan Commitment is ($1,000,000.00 LESS (c)
above) $____________.

(e) The undersigned confirms that the conditions precedent set
forth in Section 3.8 of the Loan Agreement we satisfied as of the date
hereof.

AGSCO, INC.

By:
--------------------------------------
Its:
-------------------------------

Ex. 10.4 - 30
<PAGE>

EXHIBIT C
NOTE

$______________ Grand Forks, North Dakota
Due: March 1, 1997 June 14, 1996

FOR VALUE RECEIVED, the undersigned, AGSCO, INC., a North Dakota
corporation, promises to pay to the order of _________________________________,
a _______________ (the "Bank"), at the office of its agent bank, First American
Bank Valley, at such agents office in Grand Forks, North Dakota. the sum of
_____________________________ AND NO/100THS DOLLARS ($__________________), or
such lesser star m may actually be owing under borrowings made pursuant to that
certain Loan Agreement (the "Loan Agreement") of even date herewith between the
undersigned and the Bank, with interest on the principal balance from the date
hereof calculated at a rate per annum at all times equal to the Reference Rate
(computed on the basis of actual days elapsed in a year of 360 days).

The term "Reference Rate" shall be that rate of interest published in the
WALL STREET JOURNAL as the lowest New York Prime Rate. All changes in the rate
of interest due hereon are effective automatically on the same day the Reference
Rate change takes effect.

From and after the date hereof this Note shall be payable as follows:

(a) interest accrued hereon shall be payable on the first day of
each month commencing July 1, 1997; and

(b) all unpaid principal and interest accrued thereon shall be due
and payable in fall on Mach 1, 1997.

All payments trader this Note shall be applied initially against seemed
interest and thereafter in reduction of principal.

The undersigned agrees to pay a late payment service charge in an amount
equal to five percent (5.0%) of any installment of principal or interest
(including any final installment) not received by the Bank within ten (10) days
of the due date.

This Note may be prepaid at any time without premium or penalty.

This Note is issued in connection with the Loan Agreement. The holder
hereof shall have all the advantages of the Low Agreement and reference to the
Loan Agreement is hereby made for a statement of the terms and conditions trader
which the indebtedness evidenced hereby was incurred, trader which borrowings
hereunder may be limited and under which the amounts outstanding hereunder may
be accelerated.

Ex. 10.4 - 31
<PAGE>

NOTE
PAGE TWO

$________________ Grand Forks, North Dakota
Due: March 1, 1997 June 14, 1996

So long as no Event of Default (as defined in the Loan Agreement) and no
event which would be an Event of Default on the giving of notice, lapse of time
or both, has occurred and is continuing and subject to compliance with all the
terms and conditions of this Note and the Loan Agreement, the undersigned may
borrow, repay and reborrow regardless of the cumulative meant of advances
hereunder up to the Bank's Percentage of the Maximum Available Loans specified
in the Loan Agreement.

Presentment and demand for payment, notice of dishonor, protest and notice
of protest we hereby waived. In the Event of Default, as set forth above, the
undersigned agrees to pay costs of collection and reasonable attorneys' fees.

The undersigned hereby submits itself to the jurisdiction of the courts of
the State of North Dakota and the Federal courts of the United States located in
such state in respect of all actions arising out of or in connection with the
interpretation or enforcement of this Note, waives any argument that venue in
such forums is not convenient and agrees that any action instituted by it shall
be venued in such forums.

AGSCO, INC.

By:
-----------------------------
Randy Brown
Its President

Ex. 10.4 - 32
<PAGE>

EXHIBIT D
TERM NOTE

$500,000.00 Grand Forks, North Dakota
Due: March 1, 1997 June 14, 1996

FOR VALUE RECEIVED, the undersigned, AGSCO, INC., a North Dakota
corporation, promises to pay to the order of __________________________, a
___________________ (the "Bank"), at the office of its agent bank, First
American Bank Valley, at such agents office in Grand Forks, North Dakota, the
sum of FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS ($500,000.00), or such lesser
am as may actually be owing trader borrowings made pursuant to that certain Loan
Agreement (the "Loan Agreement") of even date herewith between the undersigned
and the Bank, with interest on the principal balance from the date hereof
calculated at a rate per annum at all times equal to the Reference Rate
(computed on the basis of actual days elapsed in a year of 360 days).

The term "Reference Rate" shall be that rate of interest published in the
WALL STREET JOURNAL as the lowest New York Prime Rate. All changes in the rate
of interest due hereon we effective automatically on the same day the Reference
Rate change takes effect.

From and after the date hereof this Note shall be payable as follows:

(a) the undersigned shall make equal installment payments in the
amount of $10,225.00 on the first day of each month hereafter commencing on
the first day of the calendar month following the initial advance
hereunder; and

(b) all unpaid principal and interest seemed thereon shall be due
and payable in full on March 1, 1997.

All payments trader this Note shall be applied initially against seemed
interest and thereafter in reduction of principal.

The undersigned agrees to pay a late payment service charge in an meant
equal to five percent (5.0%) of any installment of principal or interest
(including any final installment) not received by the Bank within ten (10) days
of the due date.

This Note may be prepaid at any time without premium or penalty.

This Note is issued in connection with the Loan Agreement. The holder
hereof shall have all the advantages of the Loan Agreement and reference to the
Loan Agreement is hereby made for a statement of the terms and conditions under
which the indebtedness evidenced hereby was incurred, trader which borrowings
hereunder may be limited and under which the amounts outstanding hereunder may
be accelerated.

Ex. 10.4 - 33
<PAGE>

TERM NOTE
PAGE TWO

$500,000.00 Grand Forks, North Dakota
Due: March 1, 1997 June 14, 1996

Presentment and demand for payment, notice of dishonor, protest and notice
of protest are hereby waived. In the Event of Default, m set forth above, the
undersigned agrees to pay costs of collection and reasonable attorneys' fees.

AGSCO, INC.

By:
---------------------------------
Randy Brown
Its President

Ex. 10.4 - 34
<PAGE>

EXHIBIT E
CERTIFICATE OF AUTHORITY
OF AGSCO, INC.

I, Timothy Brown, do hereby certify as follows:

1. I am the Secretary of AGSCO, INC., a corporation organized and
existing under the laws of the State of North Dakota (hereinafter called "this
Corporation").

2. The Articles of Incorporation attached hereto AS EXHIBIT 1 and the
Bylaws attached hereto as EXHIBIT 2 are, respectively, true, complete and
correct copies of the Corporation's Articles of Incorporation, duly filed with
the Secretary of State of the State of North Dakota, and the By-Laws of the
Corporation, which Articles and By-Laws have been duly adopted by the
Corporation and are presently in fall force and effect.

3. The following is a true, complete and correct copy of resolutions duly
adopted by the Board of Directors of the Corporation, and said resolutions are
now in full force and effect:

FIRST RESOLUTION

RESOLVED, that the President be, and hereby is, authorized, for and on
behalf of and in the came of this Corporation;

(i) To borrow money and obtain other credit and financial
accommodations, in any amount, from First American Bank Valley, a North
Dakota banking corporation, First National Bank North Dakota, a national
banking association and American Bank Moorhead, a Minnesota banking
corporation (collectively, the "Banks");

(ii) To mortgage, pledge, grant a security interest or lien in and
on all or such part of its real and personal property as such officer may
deem to be appropriate to secure to the Banks repayment of any indebtedness
by this Corporation to the Banks and to execute such security agreements,
mortgages, financing statements, assignments, pledge agreements and other
documents and instruments as may be requested by the Banks to create,
perfect or continue such mortgage, pledge, security interest, lien or
assignment;

(iii) To sign, execute and deliver loan and credit agreements,
security agreements, promissory notes, acceptances and other evidences of
indebtedness therefor, as collateral therefor or in renewal thereof, in
such amounts and for such time, at such rates of interest and upon such
terms as such officer may see fit;

(vi) To do such other acts and things, make such other agreements
and execute and deliver such other certificates, instruments and other
writings as may be required or as

Ex. 10.4 - 35
<PAGE>

the Banks or such officer may dem to be appropriate in connection with any
of the foregoing or the following resolutions.

SECOND RESOLUTION

RESOLVED, FURTHER, that (without limiting the generality of the foregoing
resolution) each officer referred to in the foregoing resolution, acting
alone or acting with others, be and is hereby authorized and directed to
execute, acknowledge, deliver and perform the following agreements,
instruments, certificates, and other writings for, on behalf of and in the
name of this Corporation, and that all of such agreements, instruments,
certificates and other writings and all other matters contemplated thereby
be and the same hereby we ratified, approved and confirmed:

1. A Loan Agreement to be dated, made and delivered to the Banks
by this Corporation (the "Loan Agreement").

2. The Notes to be dated, made and delivered to the Banks by this
Corporation in the form contemplated in and pursuant to the
Loan Agreement ("Notes").

3. All such other agreements, certificates, instruments, and other
writings m may reasonably be required to affect the
transactions contemplated in the Loan Agreement.

THIRD RESOLUTION

RESOLVED, FURTHER, that any of L. Russell Brown, Randy Brown, Diana I.
Randall or David Glessner, acting alone, is authorized to request advances
and authorize payments on the loans obtained from the Banks pursuant to the
Loan Agreement and the Notes.

FOURTH RESOLUTION

RESOLVED, FURTHER, that the Secretary shall certify to the Banks the names
and signatures of the persons who presently we duly elected, qualified and
acting as the officer or employees refused to in the foregoing resolutions,
and the Secretary shall from time to time hereafter, upon a change in the
facts so certified, immediately certify to the Banks the names and
signatures of the persons then authorized to sign or to set; the Banks
shall be fully protected in relying on such certificates and on the
obligation of the Secretary (set forth above) immediately to certify to the
Banks any change in any facts so certified; and the Banks shall be
indemnified and saved harmless by this Corporation from any claims,
demands, expenses, losses and damages resulting from or growing out of
honoring or relying on the signature or other authority (whether or not
properly used) of any officer

Ex. 10.4 - 36
<PAGE>

whose name and signature was so certified, or refusing to honor any
signature or authority not so certified.

FIFTH RESOLUTION

RESOLVED, FURTHER, that the foregoing resolutions are in addition to, and
do not limit and shall not be limited by, any resolutions heretofore or
hereafter adopted by this Corporation for the conduct of business with the
Banks; and the foregoing resolutions shall continue in force until express
written notice of their prospective rescission or modification, as to
further transactions not then undertaken or committed for, has been
received by the Banks.

SIXTH RESOLUTION

RESOLVED, FURTHER, that any and all transactions by or on behalf of this
Corporation with the Banks prior to the adoption of these resolutions be
and the same hereby we in all respects ratified, approved and confirmed.

4. The Board of Directors of this Corporation has, and at the time of
adoption of the foregoing resolutions had, full power and lawful authority to
adopt the foregoing resolutions and to confer the powers therein granted to the
persons named, and such persons have full power and authority to exercise the
same. The signatures appearing below are the true, authentic and official
signatures of the officers and other employees referred to in the foregoing
resolutions; and the persons named below as officers and other employees have
been duty elected to and now hold the office in this Corporation or we currently
employed by this Corporation in the capacity set forth opposite their names:

Name Title Sample Signature
---- ----- ----------------

Randy Brown President
--------------------------

L. Russell Brown Chief Executive Officer
--------------------------

Diana I. Randall Senior Accountant
--------------------------

David Glessner Manager of Production
Financing --------------------------

Timothy Brown Secretary
--------------------------

5. The foregoing resolutions are effective and binding on this
Corporation without approval of its shareholders.

Ex. 10.4 - 37
<PAGE>

6. The forms of the Loan Agreement, Revolving Note and any other writings
executed, on behalf of this Corporation by an officer of this Corporation, dated
as of the date hereof, and delivered to the Banks are the agreements and
writings referred to in and approved by the Second Resolution set forth above.

IN WITNESS WHEREOF, I hereunto subscribed any name this 14th day of June,
1996.

----------------------------------
Secretary

Ex. 10.4 - 38
<PAGE>

EXHIBIT F
OPINION OF COUNSEL

[ON BORROWER'S COUNSEL'S LETTERHEAD]

June 14, 1996
First American Bank Valley
200 First Avenue North
P.O. Box 13118
Grand Forks, North Dakota 58208-3118
Attention: John D. Erickson

First National Bank North Dakota
4th and DeMers Avenue
Grand Forks, North Dakota 58201
Attn: Karl Bollingberg

American Bank Moorhead
P.O. Box 220
Moorhead, Minnesota 56560-0220
Attn: Neil Qualey

Re: AGREEMENT WITH AGSCO, INC.

Ladies and Gentlemen:

We have acted as counsel to AGSCO, INC., a corporation organized trader the
laws of the State of North Dakota (the "Borrower"), in connection with the
preparation, execution and delivery of a Loan Agreement (the "Agreement") dated
as of among the Borrower and you.

In that connection we have examined (a) the Articles and Bylaws of the
Borrower and all amendments thereto (the "Articles and Bylaws"), (b) resolution
of the board of directors of the Borrower regarding this transaction, (c) the
Agreement, the Notes and the Schedules and Exhibits attached thereto and all
other documents executed and delivered by Borrower pursuant to the Agreement
("Loan Documents"), (d) such other documents, corporate and official records and
other instruments, and such laws and regulations, as we have deemed necessary in
order to render this opinion.

All capitalized terms used herein, except as otherwise defined herein, are
used with the same meaning as defined in or used in the Agreement.

Based upon such examination and subject to the foregoing, it is our opinion
that:

Ex. 10.4 - 39
<PAGE>

1. The Borrower is a corporation validly organized and existing
and in good standing under the laws of the State of North Dakota, has full
power and authority to own its property and conduct its business
substantially as presently conducted by it and is duly qualified to do
business and is in good standing in each jurisdiction where the nature of
its business makes such qualification necessary and where the failure to so
qualify would permanently preclude the Borrower from enforcing its rights
with respect to its assets. The Borrower has full power and authority to
enter into and to perform its obligations trader the Loan Documents and to
obtain Loans pursuant to the terms of the Agreement.

2. The execution and delivery by the Borrower of, and the
Borrower's obtaining loans and performing its obligations from time to time
under, the Loan Documents have been duly authorized by all necessary
corporate action, does not require any approval or consent of, or any
registration, qualification or filing with, any governmental agency or
authority or any approval or consent of any other person or entity
(including, without limitation, any stockholder), does not and will not
conflict with, result in any violation of or constitute any default trader,
any provision of the Articles and ByLaws or, to our knowledge, any
agreement, other instrument, any law or governmental regulation or any
court decree or order, binding upon or applicable to it and will not result
in the creation or imposition of any security interest in or lien or
encumbrance on any of its properties pursuant to the provisions of any
agreement or other document known to us binding upon or applicable to it.

3. The Loan Documents executed by the Borrower have been duly
executed and delivered and are, the legal, valid and binding obligations of
the Borrower enforceable in accordance with their respective terms, subject
only to bankruptcy, insolvency, reorganization, moratorium or similar laws
at the time in effect affecting the enforceability of rights of creditors
generally and by general equitable principles which may limit the right to
obtain equitable remedies.

4. To the best of our knowledge except as disclosed to you on
Schedule A attached hereto, there is no action, suit or proceeding at law
or equity, or before or by any federal, state, local or other governmental
department, commission, head, bureau, agency or instrumentality, domestic
or foreign, pending, or threatened against the Borrower or its properties;
and to our knowledge the Borrower is not in default with respect to any
final judgment, writ, injunction, decree, rate or regulation of any court
or federal, state, local or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign.

5. To the best of our knowledge the Borrower is not in violation
of any law, regulation, ordinance or rule(including those of any
non-governmental self-regulatory agency) applicable to it.

Ex. 10.4 - 40
<PAGE>

6. The interest, fees, other expenses and charges payable by the
Borrower under the Loan Documents are not usurious.

Sincerely,

Ex. 10.4 - 41
<PAGE>

EXHIBIT G
SUBSIDIARIES

None

Ex. 10.4 - 42
<PAGE>

EXHIBIT H

EXCEPTIONS TO SECTIONS 4.8, 4.11, 6.4 AND 6.5

As to Section 4.8 and 6.4: (Guaranty or Suretyship)

None

As to Section 4.1 1 and 6.7: (Indebtedness)

Creditor Amount Goods covered
-------- ------ -------------

First Bank fsb $891,676.94 Unsecured
$297,584.91 Unsecured

Larry A. Brown $375,000.00 Unsecured

As to Section 6.5: (Investments)

None

Ex. 10.4 - 43
<PAGE>

EXHIBIT I
BORROWING BASE COMPLIANCE CERTIFICATE

First American Bank Valley
200 First Avenue North
P.O. Box 13118
Grand Forks, North Dakota 58208-3118
Attention: John D. Erickson

First National Bank North Dakota
4th and DeMers Avenue
Grand Forks, North Dakota 58201
Attn: Karl Bollingberg

American Bank Moorhead
P.O. Box 220
Moorhead, Minnesota 56560-0220
Attn: Neil Qualey

Re: Loan Agreement between AGSCO, INC., a North Dakota corporation
("Borrower") and First American Bank Valley, a North Dakota banking
corporation, First National Bank North Dakota, a national banking
association and American Bank Moorhead, a Minnesota banking
corporation (collectively, the "Banks") dated __________________
("Loan Agreement").

Ladies and Gentlemen:

Pursuant to that certain Loan Agreement, and any amendments thereto and
extensions thereof, the Borrower hereby:

A. repeats and reaffirms to the Banks each and all of the representations
and warranties made by the Borrower in the Loan Agreement and the agreements
related thereto, and certifies to the Banks that each and all of said warranties
and representations are true and correct as of the date hereof; and

B. represents, warrants and certifies that the Borrower owns, subject
only to the security interest granted to the Banks, the following properties:

1. Accounts

(a) Accounts Receivable
as of __________, 199_ $
-----------------

Ex. 10.4 - 44
<PAGE>

(b) Accrued Rebates Receivable
(Limited to 4.5% of commodity sales) $
-----------------
(c) Invoiced Rebates Receivable $
-----------------
(d) Total Accounts Receivable $
-----------------
(e) Less: Ineligible Accounts Receivable
(i) Over 90 days $
--------
(ii) 10% over 90 days $
--------
(iii) bankruptcy of
account debtor $
--------
(iv) accounts receivable
from related parties $
--------
(v) accrued rebates receivable
in excess of 4.5% of
commodity sales $
--------
(vi) other accounts
deemed ineligible
by bank $
--------
Total Ineligibles $
-----------------
(f) Eligible Accounts Receivable
(Line 1(d) minus Line 1(e)) $
-----------------
(g) Loan Value of Accounts Receivable
(Line 1(f) times 70%) $
-----------------

2. Inventory

(a) Total Inventory as of
_____________, 19__ $
-----------------
(b) Work in Process $
-----------------
(c) Eligible Inventory
(Line 2(a) plus Line 2(b)) $
-----------------
(d) Loan Value of Inventory
(Line 2(c) times 60%) $
-----------------

3. Outstanding Balance of Revolving Notes $
-----------------

4. Margin (Deficit)
(Line 1g plus 2d minus Line 3) $
-----------------

C. represents, warrants and certifies that there has not been (except as
may be otherwise indicated below) any change since the computation dates
specified above to the date hereof which would materially reduce the amounts
shown above if such amounts were computed as of the date of this Certificate.

Ex. 10.4 - 45
<PAGE>

D. The undersigned, the senior accountant officer of the Borrower, hereby
certifies as of ___________, 199_ that the following computations of financial
covenants and tests contained in the Loan Agreement and related documents are as
follows:

Tangible Net Worth:

a) Net Worth
-----------------
b) Intangible Assets
-----------------
c) Tangible Net Worth (a-b)
-----------------

Required: Greater than or equal to $5,250,000.00 (Section 5.10)

Debt to Tangible Net Worth:

a) Indebtedness
-----------------
b) Tangible Net Worth
-----------------
c) Debt to Tangible Net
Worth (a divided by b)
-----------------

Required: Less than or equal to the following: (Section 5.12)

Period Maximum Ratio
------ -------------
On 6/30/96 5.00 to 1
On 7/31/96 5.00 to 1
On 8/31/96 5.00 to 1
On 9/30/96 5.00 to 1
On 10/31/96 2.75 to 1
On 11/30/96 and
each month end thereafter 5.00 to 1

Current Ratio:

a) Current Assets
-----------------
b) Current Liability
-----------------
c) Current Ratio
(a divided by b)
-----------------

Required: Greater than or equal to the following: (Section 5.11)

Period Maximum ratio
------ -------------
On 6/30/96 1.15 to 1
On 7/31/96 1.15 to 1
On 8/31/96 1.15 to 1

Ex. 10.4 - 46
<PAGE>

On 9/30/96 1.15 to 1
On 10/31/96 1.20 to 1
On 11/30/96 and
each month end thereafter 1.15 to 1

Cash Flow Coverage Ratio:

a) Consolidated Net Income $
-----------------
b) Interest $
-----------------
c) Depreciation $
-----------------
d) Total Cash Available
(lines a + b + c) $
-----------------
e) Mandatory Debt Retirement $
-----------------
f) Interest $
-----------------
g) Dividends $
-----------------
h) Net Capital Purchase
(i) Capital Expenditures $
--------
(ii) Aggregate Term Note
Advances $
--------
(iii) Total
(Line h(i) less h(ii)) $
-----------------
i) Total Cash Requirements
(lines e + f + g + h(iii)) $
-----------------
j) Cash Flow Coverage Ratio
[line(d) divided by line (i)] $
-----------------

Required: Not less than 1.20 as of October 31, 1996 (Section 5.13)

Advances to Stockholders

a) Outstanding to date
-------------------

Required: Less than or equal to $50,000.00 (Section 6.6)

All capitalized terms not defined herein shall have the meaning ascribed to
them in the Loan Agreement.

The undersigned further confirms that each representation and warranty
contained in the Loan Agreement and related documents is true and accurate as
the date hereof.

Ex. 10.4 - 47
<PAGE>

The undersigned further confirms that no Event of Default has occurred or
is continuing and no event which with the giving notice or the passage of time
or both would mature into an Event of Default has occurred or is continuing.

Sincerely,

AGSCO, INC.

By:
------------------------------
Its:
-----------------

Ex. 10.4 - 48

<PAGE>

EXHIBIT 10.5

AMENDMENT NO. 4 TO LOAN AGREEMENT

THIS AMENDMENT NO. 4 TO LOAN AGREEMENT dated as of July 21, 1997 between
AGSCO, INC., a North Dakota corporation (the "Borrower") and First American
Bank, National Association, a national banking association, formerly known as
First American Bank Valley, a North Dakota banking corporation, First National
Bank of North Dakota, a national banking association and Norwest Bank North
Dakota, N.A., a national banking association (hereafter individually referred to
as "Bank" and collectively referred to as "Banks").

RECITALS:

A. The Borrower and the Banks are parties to that certain Loan Agreement
dated as of June 14, 1996, as amended by that certain Amendment No. 1 to Loan
Agreement dated February 28, 1997, that certain Amendment No. 2 to Loan
Agreement dated March 31, 1997, and that certain Amendment No. 3 to Loan
Agreement dated April 15, 1997 (as amended, the "Loan Agreement");

B. The Borrower has requested additional credit and an extension of
existing credit from the Banks;

C. The Banks are willing to agree to Borrower's requests on the condition
that the Loan Agreement be amended as provided herein; and

NOW, THEREFORE, in consideration of the above premises and for other good
and valuable consideration, the receipt of which is hereby acknowledged by each
of the parties hereto, the Loan Agreement is hereby amended as follows:

1. DEFINITIONS.

(a) All capitalized terms used herein shall have the meaning ascribed
to them in the Loan Agreement unless otherwise specifically defined herein;

(b) The following new definition is hereby added to Section 1 of the
Loan Agreement:

"AMENDMENT NO. 4 TO LOAN AGREEMENT" shall mean that certain
Amendment No. 4 to Loan Agreement dated July 21, 1997 executed by the
Borrower and the Banks.

Ex. 10.5 - 1
<PAGE>

(c) The definition of "Total Revolving Credit Commitment Amount" is
hereby amended to mean the sum of $12,000,000.00 for the period from and
after the date hereof through September 23, 1997, and thereafter the sum of
$10,300,000.00.

2. AMENDMENTS.

(a) Section 2.1 of the Loan Agreement is hereby amended as follows:

"2.1 COMMITMENTS. Subject to the terms and conditions of this
Agreement, each Bank for itself alone agrees (such agreement as to
each Bank, called its "Commitment") that it will, from time to time on
any Business Day occurring during the period from the date hereof
through the date which is the earlier of ("Termination Date") April 1,
1998, or the date of termination of the Commitments pursuant to
Section 2.5, make Loans to Borrower pursuant to Section 2.2, equal to
the percentage for the periods specified (as to each Bank, called its
"Percentage" and specified opposite the name of such Bank on the
signature page on Amendment No. 4 to Loan Agreement) of the aggregate
amount of Loans requested by Borrower from all Banks on such Business
Day; PROVIDED, HOWEVER, that no Bank shall be required or permitted on
any date to make any Loan if after giving effect thereto the sum of
the aggregate outstanding principal amount of all Loans would exceed
the Maximum Available Loans, or the sum of the aggregate outstanding
principal amount of all Loans made by such Bank would exceed its
Percentage of the Maximum Available Loans. Subject to the terms and
conditions of this Agreement, Borrower may from time to time borrow,
repay and reborrow amounts pursuant to the Commitments."

(b) Section 2.3 of the Loan Agreement is hereby amended as follows:

"2.3 NOTES. All Loans made by any Bank shall be evidenced by a
Third Amended and Restated Note of Borrower, dated July 21, 1997
(herein, together with all promissory notes, if any, accepted in
substitution or replacement therefor, called individually a "Note" and
collectively the "Notes"), payable to the order of such Bank in a
principal amount equal to its Percentage of the Total Revolving Credit
Commitment Amount. The aggregate unpaid amount of Loans set forth on
the records of a Bank shall be rebuttable presumptive evidence of the
principal amount owing and unpaid on the Note of such Bank. Each of
the Notes shall be in the form of EXHIBIT A attached to Amendment No.
4 to Loan Agreement.

"Section 2.13. MANDATORY PREPAYMENT. After July 21, 1997, and
at least once prior to the maturity of the Notes, reduce the
outstanding balance of principal and interest on the Notes to zero for
a period of thirty (30) consecutive days."

Ex. 10.5 - 2
<PAGE>

(d) A new section 5.3(h) is hereby added to the Loan Agreement to
state as follows:

"(h) At least annually, and more frequently at Agent's request,
a budget projecting the Borrower's operations for the upcoming fiscal
year of Borrower."

(e) Section 5.13 of the Loan Agreement is hereby amended to delete
the reference to "October 31, 1996" and replace therefor with reference to
"October 31, 1997".

(f) Exhibit I to the Loan Agreement is hereby replaced with Exhibit I
attached to this Amendment No. 4 to Loan Agreement.

(g) The reference to "Amendment No. 4" in the first line of the
preamble to Amendment No. 3 to the Loan Agreement is hereby deleted and
replaced with the reference "Amendment No. 3".

3. EFFECTIVE DATE. The amendment provided for herein shall be effective
as of the date hereof, except as specifically provided for herein.

4. NO DEFAULTS. After giving effect to this Amendment No. 4, the
Borrower hereby represents and warrants to the Banks that no Default or Event of
Default has occurred or is continuing under the Loan Agreement, as amended
hereby, and no event has occurred which with the passage of time or giving of
notice would mature into a Default or an Event of Default.

5. REFERENCES. All references in the Notes and all other Loan Documents
to the Loan Agreement shall mean the Loan Agreement as amended by this Amendment
No. 4.

6. REPRESENTATIONS AND WARRANTIES. The Borrower hereby restates and
reaffirms to the Banks all the representations and warranties contained in the
Loan Agreement the same as if made on the date hereof and fully set forth
herein.

7. NO OTHER AMENDMENTS. Except as specifically amended herein, all of
the terms, covenants and conditions of the Loan Agreement remain in full force
and effect.

8. RECITALS. The above recitals are true and correct as of the date
hereof and constitute a part of this Agreement.

9. COUNTERPARTS. This Amendment No. 4 to Loan Agreement may be executed
in a number of counterparts, each of which shall be deemed an original and all
of which shall constitute one and the same document.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4
as of the date and year first written above.

Ex. 10.5 - 3
<PAGE>

AGSCO, INC.

By:
--------------------------------
Randy Brown
Its President

First American Bank, National Association,
f/k/a First American Bank Valley

By
----------------------------------
Its
---------------------------------

Commitment Term Note Term Note
---------- --------- ---------
Period Percentage of Bank Percentage to Bank
------ ---------- ------- ---------- -------

Date hereof
through
9/23/97 44.17% $5,300,000.00 50% $787,500.00

From and after
9/24/97 48.54% $5,000,00.00 50% $787,500.00

Ex. 10.5 - 4
<PAGE>

First National Bank North Dakota

By
----------------------------------
Its
---------------------------------

Commitment Term Note Term Note
---------- --------- ---------
Period Percentage of Bank Percentage to Bank
------ ---------- ------- ---------- -------
Date hereof
through 9/23/97 28.33% $3,400,000.00 50% $787,500.00

From and after
9/24/97 29.13% $3,000,00.00 50% $787,500.00

Ex. 10.5 - 5
<PAGE>

Norwest Bank North Dakota, N.A.

By
----------------------------------
Its
---------------------------------

Period Percentage Commitment of Bank
- ------ ---------- ------------------
Date hereof
through 9/23/97 27.50% $3,300,000.00

From and after
9/24/97 22.33% $2,300,00.00

Ex. 10.5 - 6
<PAGE>

EXHIBIT A
THIRD AMENDED AND RESTATED NOTE

As evidence of its obligations to , as ,
under that certain Second Amended and Restated Note dated March 31, 1997 in the
original principal amount of $ and to evidence an additional extension
of credit, the undersigned delivers this Third Amended and Restated Note in
substitution for, but not in payment of, such Note and to evidence such
additional credit.

$ Grand Forks, North Dakota
Due: April 1, 1998 July 21, 1997

FOR VALUE RECEIVED, the undersigned, AGSCO, INC., a North Dakota
corporation, promises to pay to the order of , a
(the "Bank"), at the office of its agent bank, First American Bank,
National Association, at such agents office in Grand Forks, North Dakota, the
sum of AND NO/100THS DOLLARS ($ ), or such
lesser sum as may actually be owing under borrowings made pursuant to that
certain Loan Agreement (the "Loan Agreement") dated June 14, 1996, as amended by
that certain Amendment No. 1 to Loan Agreement dated February 28, 1997, that
certain Amendment No. 2 to Loan Agreement dated March 31, 1997, that certain
Amendment No. 3 to Loan Agreement dated April 15, 1997, and that certain
Amendment No. 4 to Loan Agreement dated July 21, 1997, between the undersigned
and the Bank, with interest on the principal balance from the date hereof
calculated at a rate per annum at all times equal to the Reference Rate
(computed on the basis of actual days elapsed in a year of 360 days).

From and after the date hereof this Note shall be payable as follows:

(a) interest accrued hereon shall be payable on the first day of each
month commencing August 1, 1997; and

(b) all unpaid principal and interest accrued thereon shall be due
and payable in full on April 1, 1998.

All payments under this Note shall be applied initially against accrued
interest and thereafter in reduction of principal.

Ex. 10.5 - 7
<PAGE>

THIRD AMENDED AND RESTATED NOTE
PAGE TWO

$ Grand Forks, North Dakota
Due: April 1, 1998 July 21, 1997

This Note may be prepaid at any time without premium or penalty.

This Note is issued in connection with the Loan Agreement. The holder
hereof shall have all the advantages of the Loan Agreement and reference to the
Loan Agreement is hereby made for a statement of the terms and conditions under
which the indebtedness evidenced hereby was incurred, under which borrowings
hereunder may be limited and under which the amounts outstanding hereunder may
be accelerated.

So long as no Event of Default (as defined in the Loan Agreement) and no
event which would be an Event of Default on the giving of notice, lapse of time
or both, has occurred and is continuing and subject to compliance with all the
terms and conditions of this Note and the Loan Agreement, the undersigned may
borrow, repay and reborrow regardless of the cumulative amount of advances
hereunder up to the Bank's Percentage of the Maximum Available Loans specified
in the Loan Agreement.

Presentment and demand for payment, notice of dishonor, protest and notice
of protest are hereby waived. In the Event of Default, as set forth above, the
undersigned agrees to pay costs of collection and reasonable attorneys' fees.

AGSCO, INC.

By:
-----------------------------------------
Randy Brown
Its President

Ex. 10.5 - 8
<PAGE>

EXHIBIT I
BORROWING BASE AND COMPLIANCE CERTIFICATE

First American Bank, National Association
200 First Avenue North
P.O. Box 13118
Grand Forks, North Dakota 58208-3118
Attention: John D. Erickson

First National Bank North Dakota
4th and DeMers Avenue
Grand Forks, North Dakota 58201
Attn: Karl Bollingberg

Norwest Bank North Dakota, N.A.
P.O. Box 220
Moorhead, Minnesota 56560-0220
Attn: Neil Qualey

Re: Loan Agreement between AGSCO, INC., a North Dakota corporation
("Borrower") and First American Bank, National Association, a national
association, formerly known as First American Bank Valley, a North
Dakota banking corporation, First National Bank North Dakota, a
national banking association and Norwest Bank North Dakota, N.A., a
national banking association, formerly known as American Bank
Moorhead, a Minnesota banking corporation (collectively, the "Banks")
dated June 14, 1996, as amended by that certain Amendment No. 1 to
Loan Agreement dated February 28, 1997, that certain Amendment No. 2
to Loan Agreement dated March 31, 1997, that certain Amendment No. 3
to Loan Agreement dated April 15, 1997, and that certain Amendment No.
4 to Loan Agreement dated July 21, 1997 ("Loan Agreement").

Ladies and Gentlemen:

Pursuant to that certain Loan Agreement, and any amendments thereto and
extensions thereof, the Borrower hereby:

Ex. 10.5 - 9
<PAGE>

B. represents, warrants and certifies that the Borrower owns, subject
only to the security interest granted to the Banks, the following properties:

1. Accounts

(a) Accounts Receivable
as of , 199 $
----------
(b) Accrued Rebates Receivable
(Limited to 4.5% of commodity sales) $
----------
(c) Invoiced Rebates Receivable $
----------
(d) Total Accounts Receivable $
----------
(e) Less: Ineligible Accounts Receivable
(i) Over 90 days $
---------
(ii) 10% over 90 days $
---------
(iii) bankruptcy of $
---------
account debtor $
---------
(iv) accounts receivable from
related parties $
---------
(v) accrued rebates receivable
in excess of 4.5% of
commodity sales $
---------
(vi) other accounts deemed
ineligible by Bank $
---------
Total Ineligibles $
----------
(f) Eligible Accounts Receivable
(Line 1(d) minus Line 1(e)) $
----------
(g) Loan Value of Accounts Receivable
(Line 1(f) times 70%) $
----------

2. Inventory

(a) Total Inventory as of , 19 $
----------
(b) Work in Process $
----------
(c) Eligible Inventory
(Line 2(a) plus Line 2(b)) $
----------
(d) Loan Value of Inventory
(Line 2(c) times 60%) $
----------

3. Outstanding Balance of Revolving Notes $
----------

4. Margin (Deficit)
(Line 1d plus 2b minus Line 3) $
----------

Ex. 10.5 - 10
<PAGE>

D. The undersigned, the senior accountant officer of the Borrower, hereby
certifies as of ____________, 199__ that the following computations of
financial covenants and tests contained in the Loan Agreement and related
documents are as follows:

Tangible Net Worth:
a) Net Worth ---------------------
b) Intangible Assets ---------------------
c) Tangible Net Worth (a-b) ---------------------

Required: Greater than or equal to $5,750,000.00 (Section 5.10)

Debt to Tangible Net Worth:

a) Indebtedness ---------------------
b) Tangible Net Worth ---------------------
c) Debt to Tangible Net
Worth (a divided by b) ---------------------

Required: Less than or equal to 2.5 to 1 for each fiscal year end
(Section 5.12)

Current Ratio:

a) Current Assets ---------------------
b) Current Liability ---------------------
c) Current Ratio
(a divided by b) ---------------------

Required: Greater than or equal to 1.2 to 1 at each fiscal year end and
greater than or equal to 1.1 to 1 at the end of each calendar
month (Section 5.11)

Cash Flow Coverage Ratio:

a) Consolidated Net Income $
--------------------
b) Interest $
--------------------
c) Depreciation $
--------------------
d) Total Cash Available
(lines a + b + c) $
--------------------
e) Mandatory Debt Retirement $
--------------------

Ex. 10.5 - 11
<PAGE>

f) Interest $
--------------------
g) Dividends $
--------------------
h) Net Capital Purchase $
--------------------
(i) Capital Expenditures $
--------------------
(ii) Aggregate Term
Note Advances $
--------------------
(iii) Total
(Line h(i) less h(ii)) $
--------------------
i) Total Cash Requirements
(lines e + f + g + h(iii)) $
--------------------
(j) Cash Flow Coverage Ratio
(line (d) divided by line (i)) $
--------------------

Required: Not less than 1.20 as of October 31, 1996 (Section 5.13)

Advances to Stockholders
a) Outstanding to date
--------------------

Required: Less than or equal to $50,000.00 (Section 6.6)

All capitalized terms not defined herein shall have the meaning ascribed to
them in the Loan Agreement.

The undersigned further confirms that each representation and warranty
contained in the Loan Agreement and related documents is true and accurate as
the date hereof.

Sincerely,

AGSCO, INC.

By
--------------------------------
Its
--------------------------------

Ex. 10.5 - 12
<PAGE>

THIRD AMENDED AND RESTATED NOTE

As evidence of its obligations to First American Bank, National
Association, a national banking association, formerly known as First American
Bank Valley, a North Dakota banking corporation, under that certain Second
Amended and Restated Note dated March 31, 1997 in the original principal amount
of $5,000,000.00 and to evidence an additional extension of credit, the
undersigned delivers this Third Amended and Restated Note in substitution for,
but not in payment of, such Note and to evidence such additional credit.

$5,300,000.00 Grand Forks, North Dakota
Due: April 1, 1998 July 21, 1997

FOR VALUE RECEIVED, the undersigned, AGSCO, INC., a North Dakota
corporation, promises to pay to the order of FIRST AMERICAN BANK, NATIONAL
ASSOCIATION, a national banking association, formerly known as First American
Bank Valley, a North Dakota banking corporation (the "Bank"), at Grand Forks,
North Dakota, the sum of FIVE MILLION THREE HUNDRED THOUSAND AND NO/100THS
DOLLARS ($5,300,000.00), or such lesser sum as may actually be owing under
borrowings made pursuant to that certain Loan Agreement (the "Loan Agreement")
dated June 14, 1996, as amended by that certain Amendment No. 1 to Loan
Agreement dated February 28, 1997, that certain Amendment No. 2 to Loan
Agreement dated March 31, 1997, that certain Amendment No. 3 to Loan Agreement
dated April 15, 1997, and that certain Amendment No. 4 to Loan Agreement dated
July 21, 1997, between the undersigned and the Bank, with interest on the
principal balance from the date hereof calculated at a rate per annum at all
times equal to the Reference Rate (computed on the basis of actual days elapsed
in a year of 360 days).

From and after the date hereof this Note shall be payable as follows:

(a) interest accrued hereon shall be payable on the first day of
each month commencing August 1, 1997; and

(b) all unpaid principal and interest accrued thereon shall be due
and payable in full on April 1, 1998.

All payments under this Note shall be applied initially against accrued
interest and thereafter in reduction of principal.

Ex. 10.5 - 13
<PAGE>

THIRD AMENDED AND RESTATED NOTE
PAGE TWO

$5,300,000.00 Grand Forks, North Dakota
Due: April 1, 1998 July 21, 1997

This Note may be prepaid at any time without premium or penalty.

This Note is issued in connection with the Loan Agreement. The holder
hereof shall have all the advantages of the Loan Agreement and reference to the
Loan Agreement is hereby made for a statement of the terms and conditions under
which the indebtedness evidenced hereby was incurred, under which borrowings
hereunder may be limited and under which the amounts outstanding hereunder may
be accelerated.

So long as no Event of Default (as defined in the Loan Agreement) and no
event which would be an Event of Default on the giving of notice, lapse of time
or both, has occurred and is continuing and subject to compliance with all the
terms and conditions of this Note and the Loan Agreement, the undersigned may
borrow, repay and reborrow regardless of the cumulative amount of advances
hereunder up to the Bank's Percentage of the Maximum Available Loans specified
in the Loan Agreement.

AGSCO, INC.

By:
------------------------------------------
Randy Brown
Its President

Ex. 10.5 - 14
<PAGE>

THIRD AMENDED AND RESTATED NOTE

As evidence of its obligations to First National Bank North Dakota, a
national banking association, under that certain Second Amended and Restated
Note dated March 31, 1997 in the original principal amount of $3,000,000.00 and
to evidence an additional extension of credit, the undersigned delivers this
Third Amended and Restated Note in substitution for, but not in payment of, such
Note and to evidence such additional credit.

$3,400,000.00 Grand Forks, North Dakota
Due: April 1, 1998 July 21, 1997

FOR VALUE RECEIVED, the undersigned, AGSCO, INC., a North Dakota
corporation, promises to pay to the order of FIRST NATIONAL BANK NORTH DAKOTA, a
national banking association (the "Bank"), at the office of its agent bank,
First American Bank Valley, at such agents office in Grand Forks, North Dakota,
the sum of THREE MILLION FOUR HUNDRED THOUSAND AND NO/100THS DOLLARS
($3,400,000.00), or such lesser sum as may actually be owing under borrowings
made pursuant to that certain Loan Agreement (the "Loan Agreement") dated June
14, 1996, as amended by that certain Amendment No. 1 to Loan Agreement dated
February 28, 1997, that certain Amendment No. 2 to Loan Agreement dated March
31, 1997, that certain Amendment No. 3 to Loan Agreement dated April 15, 1997,
and that certain Amendment No. 4 to Loan Agreement dated July 21, 1997, between
the undersigned and the Bank, with interest on the principal balance from the
date hereof calculated at a rate per annum at all times equal to the Reference
Rate (computed on the basis of actual days elapsed in a year of 360 days).

From and after the date hereof this Note shall be payable as follows:

(a) interest accrued hereon shall be payable on the first day of
each month commencing August 1, 1997; and

(b) all unpaid principal and interest accrued thereon shall be due
and payable in full on April 1, 1998.

All payments under this Note shall be applied initially against accrued
interest and thereafter in reduction of principal.

Ex. 10.5 - 15
<PAGE>

THIRD AMENDED AND RESTATED NOTE
PAGE TWO

$3,400,000.00 Grand Forks, North Dakota
Due: April 1, 1998 July 21, 1997

This Note may be prepaid at any time without premium or penalty.

This Note is issued in connection with the Loan Agreement. The holder
hereof shall have all the advantages of the Loan Agreement and reference to the
Loan Agreement is hereby made for a statement of the terms and conditions under
which the indebtedness evidenced hereby was incurred, under which borrowings
hereunder may be limited and under which the amounts outstanding hereunder may
be accelerated.

So long as no Event of Default (as defined in the Loan Agreement) and no
event which would be an Event of Default on the giving of notice, lapse of time
or both, has occurred and is continuing and subject to compliance with all the
terms and conditions of this Note and the Loan Agreement, the undersigned may
borrow, repay and reborrow regardless of the cumulative amount of advances
hereunder up to the Bank's Percentage of the Maximum Available Loans specified
in the Loan Agreement.

AGSCO, INC.

By:
-----------------------------------------
Randy Brown
Its President

Ex. 10.5 - 16
<PAGE>

THIRD AMENDED AND RESTATED NOTE

As evidence of its obligations to Norwest Bank North Dakota, N.A., a
national banking association, under that certain Second Amended and Restated
Note dated March 31, 1997 in the original principal amount of $2,300,000.00 and
to evidence an additional extension of credit, the undersigned delivers this
Third Amended and Restated Note in substitution for, but not in payment of, such
Note and to evidence such additional credit.

$3,300,000.00 Grand Forks, North Dakota
Due: April 1, 1998 July 21, 1997

FOR VALUE RECEIVED, the undersigned, AGSCO, INC., a North Dakota
corporation, promises to pay to the order of NORWEST BANK NORTH DAKOTA, N.A., a
national banking association (the "Bank"), at the office of its agent bank,
First American Bank Valley, at such agents office in Grand Forks, North Dakota,
the sum of THREE MILLION THREE HUNDRED THOUSAND AND NO/100THS DOLLARS
($3,300,000.00), or such lesser sum as may actually be owing under borrowings
made pursuant to that certain Loan Agreement (the "Loan Agreement") dated June
14, 1996, as amended by that certain Amendment No. 1 to Loan Agreement dated
February 28, 1997, that certain Amendment No. 2 to Loan Agreement dated March
31, 1997, that certain Amendment No. 3 to Loan Agreement dated April 15, 1997,
and that certain Amendment No. 4 to Loan Agreement dated July 21, 1997, between
the undersigned and the Bank, with interest on the principal balance from the
date hereof calculated at a rate per annum at all times equal to the Reference
Rate (computed on the basis of actual days elapsed in a year of 360 days).

From and after the date hereof this Note shall be payable as follows:

(a) interest accrued hereon shall be payable on the first day of
each month commencing August 1, 1997; and

(b) all unpaid principal and interest accrued thereon shall be due
and payable in full on April 1, 1998.

All payments under this Note shall be applied initially against accrued
interest and thereafter in reduction of principal.

Ex. 10.5 - 17
<PAGE>

THIRD AMENDED AND RESTATED NOTE
PAGE TWO

$3,300,000.00 Grand Forks, North Dakota
Due: April 1, 1998 July 21, 1997

This Note may be prepaid at any time without premium or penalty.

This Note is issued in connection with the Loan Agreement. The holder
hereof shall have all the advantages of the Loan Agreement and reference to the
Loan Agreement is hereby made for a statement of the terms and conditions under
which the indebtedness evidenced hereby was incurred, under which borrowings
hereunder may be limited and under which the amounts outstanding hereunder may
be accelerated.

So long as no Event of Default (as defined in the Loan Agreement) and no
event which would be an Event of Default on the giving of notice, lapse of time
or both, has occurred and is continuing and subject to compliance with all the
terms and conditions of this Note and the Loan Agreement, the undersigned may
borrow, repay and reborrow regardless of the cumulative amount of advances
hereunder up to the Bank's Percentage of the Maximum Available Loans specified
in the Loan Agreement.

AGSCO, INC.

By:
-------------------------------------------
Randy Brown
Its President

Ex. 10.5 - 18

<PAGE>

EXHIBIT 10.6

LICENSE AGREEMENT: EXCLUSIVE, PATENTED

This Agreement is made and entered into this day of February 26, 1997,
(the "Effective Date") by and between NDSU Research Foundation, a corporation
duly organized and existing under the laws of North Dakota and having its
principal office at P.O. Box 5014, ND 58105-5014, U.S.A. (hereinafter referred
to as "NDSU/RF"), and Agsco, Inc., a company duly organized under the laws of
North Dakota and having its principal office at P.O. Box 13458, Grand Forks, ND
58208-3458, (hereinafter referred to as "LICENSEE").

WITNESSETH

WHEREAS, NDSU/RF is the owner of certain PATENT RIGHTS, (as later defined
herein) relating to "high pH adjuvants for herbicidal compositions" by John D.
Nalewaja, Robert Matysiak, and Zenon Woznica and has the right to grant licenses
under said PATENT RIGHTS;

WHEREAS, NDSU/RF desired to have the PATENT RIGHTS developed and
commercialized to benefit the public and is willing to grant a license
thereunder;

WHEREAS, LICENSEE has represented NDSU/RF, to induce NDSU/RF to enter into
this Agreement, that LICENSEE is experienced in the development, production,
manufacture, marketing, and sale of products similar to the LICENSED PRODUCT(s)
(as later defined herein) and/or the use of the LICENSED PROCESS(es) (as later
defined herein) and that it shall commit itself to a thorough, vigorous, and
diligent program of exploiting the PATENT RIGHTS so that public utilization
shall result therefrom; and

WHEREAS, LICENSEE desires to obtain a license under the PATENT RIGHTS upon
the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:

ARTICLE 1 - DEFINITIONS

For the purposes of this Agreement, the following words and phrases shall
have the following meanings:

1.1 "LICENSEE" shall include a related company or affiliate of Agsco, Inc.,
the voting stock of which is directly or indirectly at least fifty percent
(50%) owned or controlled by Agsco, Inc., an organization which directly
or indirectly controls more than fifty percent (50%) of the voting stock
of Agsco, Inc. and an organization, the majority ownership of which is
directly or indirectly common to the ownership of Agsco, Inc.

Ex. 10.6 - 1
<PAGE>

1.2 "PATENT RIGHTS" shall mean all of the following NDSU/RF intellectual
property:

(a) the United States and foreign patents and/or patent applications
listed in Appendices A and B;

(b) United States and foreign patents issued from the applications listed
in Appendices A and B and from divisional and continuations of these
applications;

(c) claims of U.S. and foreign continuation-in-part applications, and of
the resulting patents, which are directed to subject matter
specifically described in the U.S. and foreign applications listed in
Appendices A and B;

(d) claims of all foreign patent applications, and of the resulting
patents, which are directed to subject mater specifically described
in the United States patents and/or patent applications described in
(a), (b) or (c) above; and

(e) any reissues of United States patents described in (a), (b) or (c)
above.

1.3 A "LICENSED PRODUCT" shall mean any product or part thereof which:

(a) is covered in whole or in part by an issued, unexpired claim or a
pending claim contained in the PATENT RIGHTS in the country in which
any such product or part thereof is made, used or sold; or

(b) is manufactured by using a process or is employed to practice a
process which is covered in whole or in part by an issued, unexpired
claim or a pending claim contained in the PATENT RIGHTS in the
country in which any LICENSED PROCESS is used or in which such
product or part thereof is used or sold.

1.4 A "LICENSED PROCESS" shall mean any process which is covered in whole or
in part by an issued, unexpired claim or a pending claim contained in the
PATENT RIGHTS.

1.5 "NET SALES" shall mean LICENSEE's (and its sublicensees') billings for
LICENSED PRODUCTS and LICENSED PROCESSES produced hereunder less the sum
of the following:

(a) discounts allowed in amounts customary in the trade;

(b) sales, tariff duties, and/or use taxes directly imposed and with
reference to particular sales;

Ex. 10.6 - 2
<PAGE>

No deductions shall be made for commissions paid to individuals whether
they be with independent sales agencies or regularly employed by LICENSEE
and on its payroll, or for cost of collections. LICENSED PRODUCTS shall
be considered "sold" when billed out or invoiced.

1.6 "KNOW-HOW" means accumulated knowledge, technical information,
specifications, design, properties, and methods of use, and the like
(whether patentable or not) concerning PRODUCTS which NDSU/RF has in its
possession on or before the date of this Agreement; or which it acquired
at any time within five (5) years immediately following the date of this
Agreement (including improvements made by the INVENTOR(s) which are
assigned to NDSU/RF), providing NDSU/RF or the INVENTOR(s) are not
restricted from disclosing such future KNOW-HOW to LICENSEE (e.g., NDSU/RF
may acquire information from others in the future on terms that prohibit
further disclosure of that information to LICENSEE or a sponsor or
research at North Dakota State University may have rights in or to the
results of its sponsored research). KNOW-HOW may be communicated in
writing or orally or visually, and may be embodied in product samples.

1.7 "INITIAL IMPROVEMENTS" means any and all improvements, data, or new
developments made or owned by either party with regard to LICENSED PRODUCT
and LICENSED PROCESS during the five (5) years immediately following the
Effective Date of this Agreement.

1.8 "SECONDARY IMPROVEMENTS" mean any and all improvements, data, or new
developments made or owned by either party with regard to LICENSED PRODUCT
and LICENSED PROCESS made during years 6 through 20 following the
effective date of this agreement.

1.9 "TERRITORY" shall mean world wide.

1.10 "FIELD OF USE" shall mean herbicides.

ARTICLE 2 - GRANT

2.1 NDSU/RF hereby grants to LICENSEE the right and license in the TERRITORY
for the FIELD OF USE to practice under the PATENT RIGHTS and, to the
extent not prohibited by other patents, to make, have made, use, lease,
sell, and import LICENSED PRODUCTS and to practice the LICENSED PROCESSES,
until the end of the term for which the PATIENT RIGHTS are granted unless
this Agreement shall be sooner terminated according to the terms hereof.
However, at no time will LICENSEE make or sell LICENSED PRODUCTS or
disclose NDSU/RF KNOW-HOW to persons or destinations in violations of U.S.
law. As to SECONDARY LICENSED PRODUCTS, NDSU/RF hereby grants the
LICENSEE the right and license in the TERRITORY for the

Ex. 10.6 - 3
<PAGE>

FIELD OF USE to practice under the PATIENT RIGHTS, and to the extent not
prohibited by other patents, to make, have made, use, lease, sell, and
import SECONDARY LICENSED PRODUCTS and to practice the LICENSED PROCESSES,
until the end of the term for which PATENT RIGHTS are granted unless this
Agreement shall be sooner terminated according to the terms hereof. Such
right to use these SECONDARY LICENSED PRODUCTS shall be limited solely to
those PRODUCTS which are solely and exclusively developed by LICENSEE or
LICENSE's agent or solely and exclusively paid for by LICENSEE. In the
event that NDSU/RF, its agents, or those people who have developed the
PATENT shall be involved in the SECONDARY IMPROVEMENTS, those shall not be
part of this Agreement. All other SECONDARY LICENSED PRODUCTS shall be a
part of this AGREEMENT. However, at no time will LICENSEE make or sell
SECONDARY LICENSED PRODUCTS or disclose NDSU/RF KNOW-HOW to persons or
destinations in violation of the law.

2.2 LICENSEE agrees that LICENSED PRODUCTS leased or sold in the United States
shall be manufactured substantially in the United States.

2.3 In order to establish a period of exclusivity for LICENSEE, NDSU/RF hereby
agrees that it shall not grant any other license to make, have made, use,
lease, and sell LICENSED PRODUCTS or to utilize LICENSED PROCESSES in the
TERRITORY for the FIELD OF USE during the period of time commencing with
the Effective Date of this Agreement and terminating with the first to
occur of:

(a) the expiration of twenty (20) years after the first commercial sales
of a LICENSED PRODUCT or first commercial use of a LICENSED PROCESS;
or

(b) the expiration of twenty (20) years after the Effective Date of this
Agreement.

2.4 At the end of the exclusive period, the license granted hereunder shall
become nonexclusive and shall extend to the end of the term or terms for
which any PATENT RIGHTS are issued, unless sooner terminated as
hereinafter provided.

2.5 NDSU/RF reserves the right to practice under the PATENT RIGHTS and to use
and distribute to third parties the TANGIBLE PROPERTY for its own
noncommercial research purposes.

2.6 LICENSEE shall have the right to enter into sublicensing agreements for
the rights, privileges and licenses granted hereunder only during the
exclusive period of this Agreement. Such sublicensees shall be subject to
NDSU/RF's approval which approval shall not be unreasonably withheld and
sublicenses may extend past the expiration date of the exclusive period of
this Agreement but any exclusivity of such sublicenses shall expire upon
the expiration of LICENSEE's exclusivity. Upon any termination of this
Agreement, sublicensees' rights shall also terminate, subject to Article
13.6 hereof.

Ex. 10.6 - 4
<PAGE>

2.7 LICENSEE agrees that any sublicenses granted by it shall provide that the
obligations to NDSU/RF of Articles 2, 5, 7, 8, 9, 10, 12, 13, and 15 of
this Agreement shall be binding upon the sublicensee as if it were a party
to this Agreement. LICENSEE further agrees to attach copies of these
Articles to sublicense agreements.

2.8 LICENSEE agrees to forward to NDSU/RF a copy of any and all sublicense
agreements promptly upon execution by the parties.

2.9 LICENSEE shall not receive from sublicensees anything of value in lieu of
cash payments in consideration for any sublicense under this Agreement,
without the express prior written permission of NDSU/RF.

2.10 The license granted hereunder shall not be construed to confer any rights
upon LICENSEE by implication, estoppel, or otherwise as to any technology
not specifically set forth in Appendices A and B hereof.

ARTICLE 3 - DUE DILIGENCE

3.1 LICENSEE shall use its best efforts to bring one or more LICENSED PRODUCTS
or LICENSED PROCESSES to market through a thorough, vigorous, and diligent
program for exploitation of the PATENT RIGHTS and to continue active,
diligent marketing efforts for one or more LICENSED PRODUCTS or LICENSED
PROCESSES throughout the life of this Agreement. In the event that
LICENSEE abandons a LICENSED PRODUCT or LICENSED PROCESS by failing to do
any research and development, actively pursue any sales, or any further
commercialization of the LICENSED PRODUCT or LICENSED PROCESS of a period
of one (1) year, then that LICENSED PRODUCT or LICENSED PROCESS shall be
considered abandoned and no longer a part of this Agreement. In the event
of abandonment of the LICENSED PRODUCT or LICENSED PROCESS, the LICENSED
PRODUCT or LICENSED PROCESS reverts to NDSU/RF and NDSU/RF may take any
action it desires on that LICENSED PRODUCT or LICENSED PROCESS including
but not limited to its own research and development and marketing and/or
licensing it to another entity.

3.2 LICENSEE recognizes that within the TERRITORY it has the responsibility
for developing the market potential for LICENSED PRODUCTS. LICENSEE
agrees to use its best efforts, consistent with its reasonable business
judgment, to develop the full potential for the sale of LICENSED PRODUCTS
within the TERRITORY.

3.3 If LICENSEE is not selling one or more LICENSED PRODUCTS in or to any
specific country within the TERRITORY that is of interest to NDSU/RF by
December 31, 1997 and NDSU/RF then has a genuine interest in developing
the market for the LICENSED PRODUCTS in such country or has a licensing or
other business opportunity to do so, NDSU/RF shall have the right to give
LICENSEE one hundred twenty (120) days notice

Ex. 10.6 - 5
<PAGE>

of NDSU/RF's intent to reduce the size of the TERRITORY by removing the
designated specific country or countries form the licensed TERRITORY. The
country or countries designated in the notice shall automatically be
removed from the definition of TERRITORY unless LICENSEE provided proof to
NDSU/RF within the same one hundred twenty (120) days that LICENSEE is
either: (a) selling products in or to the designated country; or (b)
LICENSEE has a business plan to enter the country within one hundred
twenty (120) and does so. In the event the TERRITORY is ever reduced in
size by excluding certain countries or other geographical areas, LICENSEE
shall not thereafter actively solicit orders for sales of LICENSED
PRODUCTS in or to areas outside the TERRITORY as reduced.

3.4 In addition, LICENSEE shall adhere to the following milestones:

(a) LICENSEE shall deliver to NDSU/RF on or before December 31, 1996, a
status report showing the amount of money, number and kind of
personnel, and time budgeted and planned for the development of the
LICENSED PRODUCTS and LICENSED PROCESSES and shall provide similar
reports to NDSU/RF on or before December 31 of each year.

(b) NDSU/RF may, at its own expense and on reasonable notice, visit the
relevant offices and facilities of LICENSEE at mutually convenient
times to study and otherwise acquire or exchange information
concerning LICENSED PRODUCTS including improvements.

3.5 LICENSEE's failure to perform in accordance with Article 3.1 and 3.4 above
shall be grounds for NDSU/RF to terminate this Agreement pursuant to
Article 13.3 hereof.

ARTICLE 4 - ROYALTIES

4.1 For the rights, privileges, and license granted hereunder, LICENSEE shall
pay royalties to NDSU/RF in the manner hereinafter provided to the end of
the term of the PATENT RIGHTS or until this Agreement shall be terminated:

(a) Running Royalties in an amount equal to FIVE percent (5%) of NET
SALES of the LICENSED PRODUCTS and LICENSED PROCESSES used, leased or
sole by and/or for LICENSEE and/or its sublicensees. Royalty
payments shall be due October 31 of each year under this Agreement.

(b) In addition to Running Royalties, Fifty Percent (50%) of any
payments, including, but not limited to, sublicense issue fees,
received from sublicensees in consideration for the LICENSED PRODUCTS
and LICENSED PROCESSES.

Ex. 10.6 - 6
<PAGE>

4.2 All payments due hereunder shall be paid in full, without deduction of
taxes or other fees which may be imposed by any government and which shall
be paid by LICENSEE.

4.3 For purposes of determining royalties, only a single royalty shall be paid
to NDSU/RF for each product and royalties for use of the KNOW-HOW shall be
waived so long as LICENSEE is paying royalties to NDSU/RF on the same
product for use of any LICENSED PATENT. Royalties for the use of patents
shall be paid for the life of each patent. Royalties for use of the
KNOW-HOW shall begin on the Effective Date of the Agreement and continue
until ten (10) years from the date of First Commercial Production. To
encourage development and commercialization of the LICENSED PRODUCTS or
LICENSED PROCESSES, the applicable royalty for sales made in each of the
first two contract years shall be FIVE percent (5%). If a United States
patent is not issued, and LICENSEE wishes to commercialize the LICENSED
PRODUCT or LICENSED PROCESS utilizing the KNOW-HOW, both parties agree to
negotiate in good faith an applicable royalty, if any.

4.4 Royalty payments shall be paid in United States dollars in Fargo, North
Dakota, or at such other place as NDSU/RF may reasonably designate
consistent with the laws and regulations controlling in any foreign
country. If any conversion of foreign currency to U.S. dollars shall be
required in connection with the payment of royalties hereunder, such
conversion shall be made by using the exchange rate existing in the United
States (as reports in THE FORUM or, if not THE FORUM, then in the WALL
STREET JOURNAL) on the last business day of the calendar quarterly
reporting period to which such royalty payments relate.

ARTICLE 5 - REPORTS AND RECORDS

5.1 LICENSEE shall keep full, true, and accurate books of account containing
all particulars that may be necessary for the purpose of showing the
amounts payable to NDSU/RF hereunder. Said books of account shall be kept
at LICENSEE's principal place of business or the principal place of
business of the appropriate division of LICENSEE to which this Agreement
relates. Said books and the supporting data shall be open at all
reasonable times for five (5) years following the end of the calendar year
to which they pertain, to the inspection of NDSU/RF or its agents for the
purpose of verifying LICENSEE's royalty statement or compliance in other
respects with this Agreement. Should such inspection lead to the
discovery of a greater than two percent (2%) discrepancy in reporting to
NDSU/RF's detriment, LICENSEE agrees to pay the full cost of such
inspection.

5.2 Before the first commercial sale of a LICENSED PRODUCT or LICENSED
PROCESS, LICENSEE shall submit the reports due under Article 3.4(a) on
December 31, of each year. After the first commercial sale of a LICENSED
PRODUCT or LICENSED PROCESS, LICENSEE, on or before October 31, of each
year, shall deliver to NDSU/RF

Ex. 10.6 - 7
<PAGE>

true and accurate reports, giving such particulars of the business
conducted by LICENSEE and its sublicensees during the preceding one-year
period under this Agreement as shall be pertinent to a royalty accounting
hereunder. These shall include at least the following:

(a) number of LICENSED PRODUCTS manufactured and sold by LICENSEE and all
sublicensees;

(b) total billings for LICENSED PRODUCTS sold by LICENSEE and all
sublicensees;

(d) deductions applicable as provided in Paragraph 1.5;

(e) royalties due on additional payments from sublicensees under
Paragraph 4.1(b);

(f) total royalties due; and

(g) names and addresses of all sublicensees of LICENSE.

5.3 With each such report submitted, LICENSEE shall pay to NDSU/RF the
royalties due and payable under this Agreement. If no royalties shall be
due, LICENSEE shall so report.

5.4 On or before the ninetieth (90) day following the close of LICENSEE's
fiscal year, LICENSEE shall provide NDSU/RF with LICENSEE's certified
financial statements for the preceding fiscal year including, at a
minimum, a Balance Sheet and an Operating Statement.

5.5 The royalty payments set forth in this Agreement and amounts due under
Article 6 shall, if overdue, shall be subject to an interest charge at the
applicable referenced prime rate used by the Bank of North Dakota, plus
two percentage points. The payment of such interest shall not foreclose
NDSU/RF from exercising any other rights it may have as a consequence of
the lateness of any payment.

ARTICLE 6 - PATENT PROSECUTION

6.1 NDSU/RF shall apply for, seek prompt issuance of, and maintain during the
term of this Agreement the PATENT RIGHTS in the United States and in the
foreign countries listed in Appendix B hereto. Appendix B may be amended
by verbal agreement of both parties, such agreement to be confirmed in
writing within ten (10) days. The prosecution, filing,

Ex. 10.6 - 8
<PAGE>

and maintenance of all PATENT RIGHTS patents and applications shall be the
primary responsibility of NDSU/RF; provided, however, LICENSEE shall have
reasonable opportunities to advise NDSU/RF and shall cooperate with
NDSU/RF in such prosecution, filing, and maintenance.

6.2 Payment of all fees and costs relating to the filing, prosecution, and
maintenance of the PATENT RIGHTS shall be the responsibility of LICENSEE,
whether such fees and costs were incurred before or after the date of this
Agreement. The parties agree that they will consult prior to any
patenting or licensing of the product in any jurisdiction and will
coordinate and discuss the costs incurred and the strategy to be used in
licensing or patenting the product in that particular jurisdiction. The
parties agree to use their best efforts to license the product in the most
feasible and economical manner in all jurisdictions.

6.3 ALL IMPROVEMENTS relating to LICENSED PRODUCTS or the LICENSED PROCESS
(including manufacturing processes), whether patentable or not, which
LICENSEE may make, discover, conceive, or acquire during the life of this
Agreement shall promptly be disclosed to NDSU/RF. LICENSEE hereby grants
to NDSU a perpetual, worldwide, non-exclusive royalty free license, with
right to sublicense, to use all such IMPROVEMENTS in any manner not in
conflict with LICENSEE's rights under this Agreement.

5.4 In the event that any IMPROVEMENT which is or may be patentable is jointly
invented by one or more persons obligated to assign their rights to
LICENSEE and one or more persons obligated to sign their rights to NDSU,
the parties shall discuss the possibility of filing patent application and
all patent costs will be the responsibility of LICENSEE as under Article
6.2 above.

ARTICLE 7 - INFRINGEMENT

7.1 LICENSEE shall inform NDSU/RF promptly in writing of any alleged
infringement of the PATENT RIGHTS by a third party and of any available
evidence thereof.

7.2 With respect to any PATENT RIGHTS under which LICENSEE is exclusively
licensed pursuant to this Agreement, LICENSEE or its sublicensee shall
have the right to prosecute in its own name and at its own expense any
infringement of such patent, so long as such license is exclusive at the
time of the commencement of such action. NDSU/RF agrees to notify
LICENSEE promptly of each infringement of such patents of which NDSU/RF is
or becomes aware. Before LICENSEE or is sublicensees commences an action
with respect to any infringement of such patents, LICENSEE shall give
careful consideration to the views of NDSU/RF and to potential effects on
the public interest in making its decision whether or not to sue and in
the case of a LICENSEE sublicense, shall report such views to the
sublicensee.

Ex. 10.6 - 9
<PAGE>

7.3 If LICENSEE or its sublicensee elects to commence an action as described
above and NDSU/RF is a legally indispensable party to such action, NDSU/RF
shall have the right to assign to LICENSEE all of NDSU/RF's right, title,
and interest in each patent which is a part of the PATENT RIGHTS and is
the subject of such action (subject to all NDSU/RF's obligations to the
government and others having rights in such patent). In the event that
NDSU/RF makes such an assignment, such assignment shall be irrevocable,
and such action by LICENSEE on that patent or patents shall thereafter be
brought or continued without NDSU/RF as a party, if NDSU/RF is no longer
an indispensable party. Notwithstanding any such assignment to LICENSEE
by NDSU/RF and regardless of whether NDSU/RF is or is not an indispensable
party, NDSU/RF shall cooperate fully with LICENSEE in connection with any
such action. In the event that any patent is assigned to LICENSEE by
NDSU/RF, pursuant to this paragraph, such assignment shall require
LICENSEE to continue to meet its obligations under this Agreement as if
the assigned patent or patent application were still licensed to LICENSEE.

7.4 If LICENSEE or its sublicensee elects to commence an action described
above and NDSU/RF is a legally indispensable party to such action, NDSU/RF
may join the action as a co-plaintiff. Upon doing so, NDSU/RF shall
jointly control the action with LICENSEE or its sublicensee.

7.5 LICENSEE shall reimburse NDSU/RF for any costs it incurs as part of an
action brought by LICENSEE or its sublicensee, irrespective of whether
NDSU/RF shall become a co-plaintiff.

7.6 If LICENSEE or its sublicensee elects to commence an action as described
above, LICENSEE may reduce, by up to fifty percent (50%), the royalty due
to NDSU/RF earned under the patent subject to suit by fifty percent (50%)
of the amount of the expenses and costs of such action, including attorney
fees. In the event that such fifty percent (50%) of such expenses and
costs exceed the amount of royalties withheld by LICENSEE for any calendar
year, LICENSEE may to that extent reduce the royalties due to NDSU/RF from
LICENSEE in succeeding calendar years, but never by more than fifty
percent (50%) of the royalty due in any one year.

7.7 No settlement, consent judgment, or other voluntary final disposition of
the suit may be entered into without the consent of NDSU/RF, which consent
shall not be unreasonably withheld.

7.8 Recoveries or reimbursements from such action shall first be applied to
reimburse LICENSEE and NDSU/RF for litigation costs not paid from
royalties and then to reimburse NDSU/RF for royalties withheld. Any
remaining recoveries or reimbursements shall be shared equally by LICENSEE
and NDSU/RF.

Ex. 10.6 - 10
<PAGE>

7.9 In the event that LICENSEE and its sublicensee, if any, elect not to
exercise their right to prosecute an infringement of the PATENT RIGHTS
pursuant to the above paragraphs. NDSU/RF may do so at its own expense,
controlling such action and retaining all recoveries therefrom.

7.10 If a declaratory judgment action alleging invalidity of any of the PATENT
RIGHTS shall be brought against LICENSEE or NDSU/RF, then NDSU/RF, at its
sole option, shall have the right to intervene and take over the sole
defense of the action at its own expense.

7.11 LICENSEE, during the exclusive period of this Agreement, shall have the
sole right in accordance with the terms and conditions herein to
sublicense any alleged infringer in the TERRITORY for the FIELD OF USE for
future use of the PATENT RIGHTS. Any up-front fees as part of such a
sublicense shall be shared equally between LICENSEE and NDSU/RF; other
royalties shall be treated per Article 4.

ARTICLE 8 - PRODUCT LIABILITY

8.1 LICENSEE shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold NDSU/RF, its trustees, directors,
officers, employees, and affiliates, harmless against all claims,
proceedings, demands, and liabilities of any kind whatsoever, including
legal expenses and reasonable attorneys' fees, arising out of the death of
or injury to any person or persons or out of any damage to property, or
resulting from the production, manufacture, sale, use, lease, consumption,
or advertisement of the LICENSED PRODUCT(s) and/or LICENSED PROCESS(es) or
arising form any obligation of LICENSEE hereunder, excepting only claims
that the PATENT RIGHTS infringe third party intellectual property.

8.2 LICENSEE shall obtain and carry in full force and effect commercial,
general liability insurance which shall protect LICENSEE and NDSU/RF with
respect to events covered by Article 8.1 above. Such insurance shall be
written by a reputable insurance company authorized to do business in the
State of North Dakota, shall list NDSU/RF as an additional named insured
thereunder, shall be endorsed to include product liability coverage, and
shall require thirty (30) days written notice to be given to NDSU/RF prior
to any cancellation or material change thereof. The limits of such
insurance shall not be less than Two Hundred Fifty Thousand ($250,000) per
occurrence with an aggregate of One Million Dollars ($1,000,000) for
personal injury or death, and Two Hundred Fifty Thousand ($250,000) per
occurrence with an aggregate of One Million Dollars ($1,000,000) for
property damage. LICENSEE shall provide NDSU/RF with Certificates of
Insurance evidencing the same.

8.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NDSU/RF, ITS
TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, AND AFFILIATES MAKE NO
REPRESENTATIONS AND EXTEND NO WARRANTIES

Ex. 10.6 - 11
<PAGE>

OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY
OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. NOTHING IN THIS AGREEMENT
SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY NDSU/RF
THAT THE PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOT
INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY. IN NO EVENT SHALL NDSU/RF,
ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE
OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER NDSU/RF
SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW
OF THE POSSIBILITY. NOTWITHSTANDING ANY OTHER PROVISION TO THE CONTRARY
IN THIS SECTION, NDSU/RF SHALL NOT BE RELIEVED OF LIABILITY, IF ANY
EXISTS, WHEREBY NDSU/RF HAS ACTUAL KNOWLEDGE OF A DEFECT IN THE LICENSED
PRODUCT OR LICENSED PROCESS THAT WAS CREATED BY THE PATENT INVENTOR OR BY
AN ACTION OF NDSU/RF WHICH WAS SECRETED FROM LICENSEE.

ARTICLE 9 - EXPORT CONTROLS

It is understood that NDSU/RF is subject to United States laws and regulations
controlling the export of technical data, computer software, laboratory
prototypes, and other commodities (including the Arms Export Control Act, as
amended and the Export Administration Act of 1979), and that its obligations
hereunder are contingent on compliance with applicable United States export laws
and regulations. The transfer of certain technical data and commodities may
require a license from the cognizant agency of the United States Government
and/or written assurances by LICENSEE that LICENSEE shall not export data or
commodities to certain foreign countries without prior approval of such agency.
NDSU/RF neither represents that a license shall not be required nor that, if
required, it shall be issued.

ARTICLE 10 - NON-USE OF NAMES

LICENSEE shall not use the names or trademarks of the NDSU/RF, North Dakota
State University, or North Dakota Agricultural Experiment Station, nor any
adaptation thereof, nor the names of any of their employees, in any advertising,
promotional or sales literature without prior written consent obtained from
NDSU/RF, or said employee, in each case, except that LICENSEE may state that it
is licensed by NDSU/RF under one or more of the patents and/or applications
comprising the PATENT RIGHTS.

ARTICLE 11 - ASSIGNMENT

Ex. 10.6 - 12
<PAGE>

This Agreement is not assignable and any attempt to do so shall be void.

ARTICLE 12 - DISPUTE RESOLUTION

12.1 Both LICENSEE and NDSU/RF wish to avoid disputes relating to or arising
out of this Agreement. In the event of any dispute or perceived problem
other than those identified in Articles 13.1, 13.2, and 13.3, each pledges
itself to give notice to the other party and to seek first an amicable
resolution without regard to litigation. Each party shall be given sixty
(60) days from the date of such notice to correct its performance under
this Agreement or otherwise cure any breach of contract.

12.2 All disputes arising out of or relating to this Agreement (including any
questions of fraud or questions concerning the validity or enforceability
of this Agreement or any of the rights herein conveyed) shall, unless
earlier resolved according to Article 12.1 hereof, be settled by
arbitration to be held in Fargo, North Dakota. Such arbitration shall be
conducted before a panel of three arbitrators in accordance with the
then-existing Commercial Rules of the American Arbitration Association.
Each party shall select an arbitrator (which must be from its own
management or University staff group) within thirty (30) days of the
filing of any demand for arbitration and each shall be responsible for the
compensation of its own arbitrator. If the parties fail to timely appoint
their own arbitrator, the vacancies in the arbitration panel (as well as
the neutral arbitrator) shall be appointed by and according to the rules
of the American Arbitration Association from arbitrators having at least
ten years experience in the research, manufacture, sale, supervision, or
licensing of industrial or agricultural technology (e.g., chemistry or
plant breeding). The party appointed arbitrators (but not the neutral
arbitrator) shall have the right to consult with the party appointing them
in advance of the arbitration hearing. It is the parties' desire that the
arbitration be speedily concluded with the hearing to take place and the
awards to be made within ninety (90) days of the filing of any demands for
arbitration. Judgment upon the award of all or a majority of the
arbitrators shall be binding upon the parties hereto and may be entered in
any court having jurisdiction. Specific performance and injunctive relief
may be ordered by the award. Costs and attorney fees shall be paid as the
Arbitrator's award shall specify. As the sole exception to arbitration,
each party shall have the rights to obtain injunctive relief, only, from
any court having jurisdiction as to preserve that party's rights for
resolution in any pending or imminent arbitration proceedings but no such
injunction shall prohibit or postpone such arbitration proceedings and the
injunctions may be modified or vacated as a result of the arbitration
award.

12.3 Notwithstanding the foregoing, nothing in this Article shall be construed
to waive any rights or timely performance of any obligations existing
under this Agreement.

ARTICLE 13 - TERMINATION

Ex. 10.6 - 13
<PAGE>

13.1 If LICENSEE shall cease to carry on its business, this Agreement shall
terminate upon notice by NDSU/RF.

13.2 Should LICENSEE fail to make any payment whatsoever due and payable to
NDSU/RF hereunder, NDSU/RF shall have the right to terminate this
Agreement effective on thirty (30) days' notice, unless LICENSEE shall
make all such payments to NDSU/RF within said thirty (30) day period.
Upon the expiration of the thirty (30) day period, if LICENSEE shall not
have made all such payments to NDSU/RF, the rights, privileges, and
license granted hereunder shall automatically terminate.

13.3 Upon any material breach or default of this Agreement by LICENSEE
(including, but not limited to, breach or default under Article 3.5),
other than those occurrences set out in Article 13.1 and 13.2 hereinabove,
which shall always take precedence in that order over any material breach
or default referred to in this Article 13.3, NDSU/RF shall have the right
to terminate this Agreement and the rights, privileges, and license
granted hereunder effective on ninety (90) days' notice to LICENSEE. Such
termination shall become automatically effective unless LICENSEE shall
have cured any such material breach or default prior to the expiration of
the ninety (90) day period.

13.4 LICENSEE shall have the right to terminate this Agreement at any time on
six (6) months notice to NDSU/RF, and upon payment of all amounts due
NDSU/RF through the effective date of the termination.

13.5 Upon termination of this Agreement for any reason, nothing herein shall be
construed to release either party from any obligation that matured prior
to the effective date of such termination; and Articles 1, 8, 9, 10, 13.5,
13.6, and 16 shall survive any such termination. LICENSEE and any
sublicensee thereof may, however, after the effective date of such
termination, sell all LICENSED PRODUCTS, and complete LICENSED PRODUCTS in
the process of manufacture at the time of such termination and sell the
same, provided that LICENSEE shall make the payments to NDSU/RF as
required by Article 4 of this Agreement and shall submit the reports
required by Article 5 hereof.

13.6 Upon termination of this Agreement for any reason, any sublicensee not
then in default shall have the right to seek a license from NDSU/RF.
NDSU/RF agrees to negotiate such licenses in good faith under reasonable
terms and conditions.

ARTICLE 14 - LICENSEE IS AN INDEPENDENT CONTRACTOR

14.1 It is intended and agreed between the parties that LICENSEE is an
independent contractor functioning as an independent licensee of NDSU/RF.
LICENSEE shall not in any way act or hold itself out as an agent of
NDSU/RF, and LICENSEE shall have no power to incur any obligations of any
kind on behalf of NDSU/RF.

Ex. 10.6 - 14
<PAGE>

ARTICLE 15 - PAYMENTS, NOTICES
AND OTHER COMMUNICATIONS

Any payment, notice, or other communication pursuant to this Agreement shall be
sufficiently made or given on the date of mailing if sent to such party by
certified first class mail, postage prepaid, addressed to it at its address
below or as it shall designate by written notice given to the other party:

In the case of NDSU/RF:

Executive Director
NDSU Research Foundation
Box 5014
Fargo, ND 58105-5014

In the case of LICENSEE:

Russ Brown, CEO
Ag Park, LLC
P.O. Box 13458
Grand Forks, ND 58208-3458

ARTICLE 16 - MISCELLANEOUS PROVISIONS

16.1 This Agreement shall be construed, governed, interpreted, and applied in
accordance with the laws of the State of North Dakota, U.S.A., except that
questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent was granted.

16.2 The parties hereto acknowledge that this Agreement sets forth the entire
Agreement and understanding of the parties hereto as to the subject matter
hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.

16.3 The provisions of this Agreement are severable, and in the event that any
provisions of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or
enforceability of the remaining provisions hereof.

16.4 LICENSEE agrees to mark the LICENSED PRODUCTS sold in the United States
with all applicable United States patent numbers. All LICENSED PRODUCTS
shipped to or sold in other countries shall be marked in such a manner as
to conform with the patent laws and practice of the country of manufacture
or sale.

Ex. 10.6 - 15
<PAGE>

16.5 LICENSEE agrees to obtain all regulatory approvals required for the
manufacture and sale of LICENSED PRODUCTS and LICENSEES PROCESSES.

16.6 The failure of either party to assert a right hereunder or to insist upon
compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure
to perform any such term or condition by the other party.

IN WITNESS WHEREOF, the parties have duly executed this Agreement the day
and year set forth below.

NDSU RESEARCH FOUNDATION

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

Dale Zetocha
Executive Director

Date:
------------------------------

AGSCO, INC.

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

Name:
------------------------------

Title:
-----------------------------

Date:
------------------------------

Ex. 10.6 - 16
<PAGE>

APPENDIX A

UNITED STATES PATENT RIGHTS

NDSU/RF Case No. FITCH, EVEN, TABIN & FLANNERY FILE NO. 59235 TO BE FILED

"ADJUVANTS FOR HERBICIDAL COMPOSITIONS"

_.S.S.N.
----------------------

By
----------------------------

Filed on
----------------------

Ex. 10.6 - 17
<PAGE>

APPENDIX B

1. Foreign patent applications and patents within the PATENT RIGHTS as of
Effective Date:

For NDSU/RF Case No. :

2. Foreign countries in which PATENT RIGHTS shall be filed, prosecuted and
maintained in accordance with Article 6:

For NDSU/RF Case No. FITCH, EVEN, TABIN & FLANNERY FILE NO. 59235
"ADJUVANTS FOR HERBICIDAL COMPOSITIONS" TO BE FILED:

Canada and other countries jointly agreed upon.

Ex. 10.6 - 18

<PAGE>
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