Exhibit 10.36


 


AMENDMENT TO LOAN DOCUMENTS


 


This Amendment to Loan Documents (this “Amendment”) is entered into as
of December 4, 2007 between TITAN MACHINERY INC.,
a North Dakota corporation (“Borrower”) and BREMER BANK,
N.A., and it amends the following loan documents (the “Loan
Documents”): (i) the Loan Agreement dated August 6, 2007 between the Borrower
(collectively, the “Loan Agreement”; terms not defined herein shall have the
meaning given to them in the Loan Agreement); (ii) the Collateral Documents
(including, without limitation, the Security Agreement); and (iii) the Notes.


 


RECITALS:


 


A.                                   Pursuant
to the Loan Documents, the Bank has established a credit facility for the
benefit of the Borrower.


 


B.                                     The
Borrower is pursuing an initial public offering of its shares of common
stock  (the “IPO”).


 


C.                                     In
connection with the IPO, Borrower will consummate various transactions or
matters in connection therewith (the IPO and such transactions and matters, the
“IPO Related Matters”), including, without limitation, (i) convert to a
Delaware corporation and adopt a certificate of incorporation and new bylaws in
connection therewith pursuant to a plan of conversion (the “Re-Incorporation”),
(ii) convert its convertible debentures into shares of capital stock of the
Borrower, (iii) pay accrued dividends on its shares of preferred stock in
connection with the conversion of such shares into shares of Common Stock, (iv)
repay subordinated debentures in the aggregate principal amount of $142,424,
(v) repay the subordinated note issued to CNH Capital, LLC in an aggregate
principal amount of $7.5 million, (vi) repay the subordinated debenture in the
aggregate principal amount of $1.8 million issued to Titan Income Holdings,
LLLP, and (vii) increase its wholesale line with CNH Capital, LLC to $200
million.


 


D.                                    The
parties wish to enter into this Amendment to reflect their agreements and
understandings with respect to the IPO and matters related thereto.


 


AMENDMENT:


 


1.                                       IPO
Related Matters; Amendments and Supplements. The Bank hereby consents to
the IPO Related Matters.


 


(a)                                  Section
1.1 of the Loan Agreement is hereby amended to add the following definitions:


 


“ “IPO” means
an initial public offering of the Borrower’s securities.


 


1

















 


“Change of Control” means “Change of Control”
means any of the following transactions (it being further acknowledged and
agreed that a public offering shall not be deemed to constitute a Change of
Control):


 


(a)                                 a merger,
consolidation or reorganization, unless securities representing more than fifty
percent (50%) of the total combined voting power of the outstanding voting
securities of the successor corporation are immediately thereafter beneficially
owned, directly or indirectly, by the persons who beneficially owned Borrower’s
outstanding voting securities immediately prior to such transaction;


 


(b)                                any sale of all or
substantially all of Borrower’s assets;


 


(c)                                 any transaction or
series of related transactions (other than from the sale of shares issued or
sold in any registered offering of Borrower’s securities) pursuant to which any
person or any group of persons comprising a “group” within the meaning of Rule
13d-5(b)(1) under the Securities Exchange Act of 1934, as amended (other than
Borrower or a person that, prior to such transaction or series of related
transactions, directly or indirectly controls, is controlled by or is under
common control with, Borrower) becomes directly or indirectly the beneficial
owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934,
as amended) of securities possessing (or convertible into or exercisable for
securities possessing) twenty (20%) percent) or more of the total combined
voting power of Borrower’s securities (determined by the power to vote with
respect to the elections of Board members) outstanding immediately after the
consummation of such transaction or series of related transactions; or


 


(d)                                a change in the
composition of the Board of Borrower over a period of eighteen (18) consecutive
months or less such that a majority of the Board members ceases, by reason of
one or more contested elections for Board membership, to be comprised of
individuals who either (i) were Board members at the beginning of such period
or (ii) have been elected or nominated for election as  Board members during such period by at least
a majority of the Board members described in clause (i) who were still in
office at the time the Board approved such election or nomination.”


 


(b)                                 Section
4.1 is hereby amended in its entirety to read as follows from and after
consummation of the Re-Incorporation:


 


“Section
4.1  Existence and Power. The Borrower is
a Delaware corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and is duly licensed or qualified to
transact business in all jurisdictions, where the character of the property
owned or leased or the nature of the business transacted by it makes such
licensing or qualification necessary. The Borrower’s chief executive office is
located in Fargo, North Dakota. The Borrower has all requisite power and
authority to conduct its business, to own its properties and to


 


2

















 


execute and
deliver, and to perform all of its obligations under this Agreement, the Notes
and the Collateral Documents.”


 


(c)                                  It
is acknowledged and agreed that the IPO Related Matters do not constitute a
Default or Event of Default under the Loan Documents. Without limiting the
generality of the foregoing, it is acknowledged and agreed that the IPO Related
Matters do not constitute a violation of Sections 5.1(g), 6.1, 6.11, 6.15,
6.17, 7.1(h), 7.1(k)  of the Loan
Agreement.


 


(d)                                 From
and after consummation of the IPO, Schedule 6.17 of the Loan Agreement is hereby
amended to include the IPO.


 


(e)                                  From
and after consummation of the Re-Incorporation, Section 7.1(h) is hereby
amended to read as follows:


 


“(h)                          If the
Borrower shall dissolve or no longer cease to be a validly existing corporation
under the laws of the State of Delaware or be authorized to do business, if
required by applicable law, in the States of North Dakota, South Dakota, Iowa,
Minnesota or any other jurisdiction in which it is required to be authorized to
do business.”


 


(f)                                    From
and after consummation of the IPO, Section 7.1(k) of the Loan Agreement is
hereby amended to read as follows:


 


“(k)                           Upon a
Change of Control unless the Bank consents in writing thereto.”


 


(g)                                 It
is acknowledged and agreed that Section 8.15 of the Loan Agreement shall continue
in full force and effect.


 


2.                                       Additional
Credit Facility. Effective as of November 9, 2007, the Bank and the
Borrower agree as follows:


 


(a)                                  All terms defined in the Loan
Agreement that are not otherwise defined herein shall have the meanings given them
in the Loan Agreement. In addition, Section 1.1 of the Loan Agreement is
amended by adding the following definitions (which, in the case of definitions
already defined in the Loan Agreement, hereby amend such definitions in their
entirety to read as set forth below):


 


“ “Advance” means and advance by the Bank to the Borrower pursuant to
Section 2.1, 2.2, 2.4 or 2.4A.


 


“Borrowing Base Certificate” means a writing, in the form of Exhibit
“A” attached to the Amendment, completed and signed by the Borrower as
contemplated by the Loan Agreement.


 


3

















 


“Amendment” means the Amendment to Loan Documents dated as of December
4, 2007 among the Bank and the Borrower.


 


“New Note I” means the promissory note referred to in Section 2.4A
together with any subsequent renewals, extensions, modifications and
substitutions thereof.


 


“Notes” means individually and collectively the Revolving Note, Floor
Plan Note, Term Note and New Note I, together with any subsequent renewals, modifications,
extensions or substitutions thereof.


 


“Total Loan Value” means (i) seventy-five percent (75%) of the Borrower’s
Eligible Receivables; plus (ii) fifty percent (50%) of the Borrower’s Eligible
Equipment less an amount equal to the unpaid balance of any obligations owing
any Person supplying or financing the purchase of or having a lien or security
interest in any equipment, other than the Bank; plus (iii) fifty percent (50%)
of the Borrower’s Eligible Equipment Inventory less an amount equal to the
unpaid balance of any obligations owing the person supplying or financing the
purchase of any equipment inventory or having a lien or security interest in
any equipment inventory, other than the Bank; plus (iv) the Borrower’s Eligible
Parts Inventory less an amount equal to the unpaid balance of any obligations
owing any Person supplying or financing the purchase of any parts inventory or
having a lien or security interest in any parts inventory, other than the Bank,
all multiplied by fifty percent (50%); less (v) the Letter of Credit Amount;
less (vi) the unpaid balance of the Term Note and New Note I all as determined
by the Borrower in accordance with GAAP, consistently applied and as reflected
by and determined in accordance with the Borrowing Base Certificate.”


 


(b)                                 Section
2.4A is hereby added to the Loan Agreement as follows:


 


“Section 2.4A New Term Loan. Subject to and upon the terms,
covenants and conditions set forth in this Agreement, the Bank agrees to make
Advances to the Borrower under this Section in the aggregate amount not to
exceed the sum of Two Million Dollars ($2,000,000). The obligation to repay the
Advances made pursuant to this Section shall be evidenced by a promissory note
payable to the Bank containing the terms relating to the repayment, interest
rate and other matters as set forth in Exhibit “B” attached to and made
a part of the First Amendment (“New Note I”). Notwithstanding any provision of
New Note I, interest shall be payable at the rate provided for therein only on
such portion of the loan proceeds as actually have been disbursed pursuant to
this Section and remain unpaid. The Bank’s record shall be conclusive evidence
as to whether the Borrower has authorized any loan pursuant to this Section and
as to the amount of the loans which have been made and remain unpaid. The


 


4

















 


Advances made pursuant to this Section shall not be on a revolving
credit basis and, accordingly, the Borrower shall not be entitled to reborrow
upon any repayment or prepayment.


 


Section 2.4A.1 Purpose of Advances. The purpose for the Advances
under this Section 2.4A is for the long term working capital needs of the
Borrower.


 


Section 2.4A.2  Making
Advances. Each Advance under New Note I shall be made on written, oral,
electronic or telephonic request from any Person purporting to be authorized to
request Advances on behalf of the Borrower, which notice or request shall
specify the date of the requested Advance and the amount thereof. Upon the
Borrower’s fulfillment of the applicable conditions set forth in Article III,
the Bank may disburse the amount of the requested Advance by crediting the same
to the Borrower’s demand deposit account maintained with the Bank or in such
other manner as the Bank and the Borrower may from time to time agree. Any
request for an Advance, whether written, oral, electronic or telephonic, shall
be deemed to be a representation that the statements set forth in Section 3.2
are correct. Any Advance request pursuant to Section 2.4A shall be made at
least one bank business day prior to the date of the desired Advance and shall
be in an amount not less than $100,000 and shall be made by Kevin Harrison or
David J. Meyer or Ted Christianson or Peter Christianson on behalf of the
Borrower. Notwithstanding the immediately foregoing sentence, in the absence of
bad faith on the part of the Bank, the Borrower shall be obligated to repay all
Advances notwithstanding the fact that the Person requesting the same was not
in fact authorized to do so.


 


Section 2.4A.3 Discretionary Advances. Notwithstanding that
conditions to Advances and various covenants and Events of Default are set
forth herein as would be common to a loan agreement in which the lender made a
commitment to lend, the Bank may, in its sole discretion and for any reason
whatsoever, refuse to make Advances pursuant to Section 2.4A even though the
Borrower may be in perfect compliance with this Agreement.”


 


(c)                                  Section
2.8 of the Loan Agreement is hereby amended and restated in its entirety to
provide as follows:


 


“Section 2.8 Prepayment Premium. The Borrower may prepay the
Term Note and New Note I, in whole or in part, at any time and from time to
time subject to the prepayment premium set forth in this Section. Specifically,
the amount of prepayment, if any, in excess of ten percent (10%) of any
regularly scheduled


 


5

















 


principal payment under the Term Note or New Note I shall be subject to
a prepayment premium (which the Borrower shall pay on demand by the Bank) equal
to the present value of the income lost by the Bank based upon the difference
between the rate of interest with respect to the Term Note or New Note I at the
time of prepayment and the yield on a similar term note priced in the interest
rate environment at the time of prepayment over the same remaining pricing
maturity. Any payments on the principal of the Term Note or New Note I using
proceeds of any condemnation or insurance award, from refinancing, from the
sale of any of the property subject to the Collateral Documents and any other
payments on the principal of the Term Note or New Note I from any other source
in excess of any principal payment scheduled pursuant to the Term Note or New
Note I shall be deemed a prepayment for purposes of this Section. All
prepayments may be applied by the Bank first toward reduction of the last
maturing installment or installments of the Term Note or New Note I and shall
not modify the due date or amount of the remaining unpaid installments.”


 


3.                                       Representations
and Warranties. To induce the Bank to execute and deliver this Amendment
the Borrower represents and warrants to the Bank now and after the date of the
Re-Incorporation that:


 


(a)                                  this
Amendment, and the documents to be executed in connection with this Amendment,
have been duly authorized, executed and delivered and constitute the legal,
valid and binding obligations, contracts and agreements of the Borrower
enforceable against it in accordance with their terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws or equitable principles relating to or limiting creditors’ rights
generally;


 


(b)                                 the
Loan Documents, as amended by this Amendment, constitute the legal, valid and
binding obligations, contracts and agreements of the Borrower enforceable
against it in accordance with their terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors’ rights generally;


 


(c)                                  the
execution, delivery and performance by the Borrower of this Amendment, and its
related documents, (i) has been duly authorized by all requisite corporate
action of the Borrower and, if required, shareholder action, (ii) does not
require the consent or approval of any governmental or regulatory body or
agency, and (iii) will not (A) violate (1) any provision of law, statute, rule
or the Borrower’s articles of incorporation or bylaws, (2) any order of any
court or any rule, regulation or order of any other agency or government
binding upon them, or (3) any provision of any material indenture, agreement or
other instrument to which it is a party or by which its properties or assets
are or may be bound, or (B) result in a breach of or constitute (alone or with
due notice or lapse of time or both) a default under any indenture, agreement
or other instrument referred to in clause (iii)(A)(3) of this paragraph 3.1(c)
and


 


6

















 


(d)                                 all
the representations and warranties contained in Article IV of the Loan
Agreement are true and correct in all material respects with the same force and
effect as if made by the Borrower on and as of the date hereof.


 


4.                                       General.


 


(a)                                  Except
as amended hereby, the Loan Documents shall continue in full force and effect.


 


(b)                                 This
Amendment shall be construed in connection with and as a part of the Loan
Documents, and except as modified and expressly amended by this Amendment, all
terms, conditions and covenants contained in the Loan Documents shall be and
remain in full force and effect.


 


(c)                                  The
Borrower warrants and represents that the Loan Agreement, as amended herein,
the Notes, the Collateral Documents and the Guaranty are legally valid and
binding obligations of the Borrower and the Guarantor subject to no defenses,
set-offs or counterclaims and are in full force and effect notwithstanding this
Amendment or the IPO Related Matters.


 


(d)                                 By
entering into this Amendment, the Bank does not waive any right, power or
remedy to which it is entitled as a result of any Event of Default which may
exist with respect to the Loan Documents or Guaranty.


 


(e)                                  The
Borrower agrees to do such further acts and things and execute and deliver, or
cause to be executed and delivered, such agreements, powers and instruments as
the Bank may reasonably require or deem necessary to carry into effect the
purposes of this Amendment.


 


(f)                                    This
Amendment, together with the Loan Documents, constitutes the entire Agreement
between the parties and shall not in any way be modified, varied or amended
unless in writing signed by the parties. This Amendment supersedes any prior
amendments to the Loan Agreement.


 


(g)                                 This
Amendment shall control with respect to any of its provisions that conflict or
are inconsistent with the Loan Documents, but to the extent not conflicting or
inconsistent, the Loan Documents and any other such documents executed in
connection with the transaction contemplated by this Amendment and the Loan
Documents shall be in full force and effect.


 


7

















 


IN WITNESS
WHEREOF, the undersigned have executed this Amendment effective as of the date
first set forth above.


 


	
   

  	
  TITAN MACHINERY INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ted O. Christianson

  	
   

  
	
   

  	
  Its:

  	
  V.P. – Finance, Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BREMER BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wes Well

  	
   

  
	
   

  	
  Its:

  	
  President

  	
   

  



 

















 


ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR


 


The
undersigned, a guarantor of the indebtedness of Titan Machinery, Inc. (“Borrower”)
to Bremer Bank, N.A. (“Bank”), a national banking association pursuant to a
guaranty previously executed and delivered to the Bank, ( “Guaranty”), hereby:
(i) acknowledges receipt of the foregoing Amendment; (ii) consents to the terms
and conditions thereof; (iii) reaffirms its obligations to the Bank pursuant to
the terms of its Guaranty; and (iv) acknowledges that the Bank may amend, or
restate, extend, renew or otherwise modify the Loan Agreement and any
indebtedness or agreement of the Borrower, or enter into any agreement or
extend additional or other credit accommodations, without notifying or
obtaining the consent of the undersigned and without impairing the liability of
the undersigned under its Guaranty for all of the Borrower’s present and future
indebtedness to the Bank.


 


 


	
  Date:
  December     , 2007

  	
   

  	
   

  
	
   

  	
  David J.
  Meyer

  



 

















 


EXHIBIT A

BORROWING BASE AND COMPLIANCE CERTIFICATE

(Accounts Receivable, Equipment & Inventory)


 


TO:                            Bremer
Bank, N.A. (“Bank”)


 


Pursuant to that certain Loan Agreement dated August 7, 2007 by and between
Titan Machinery Inc., a North Dakota corporation (the “Borrower”), and the
Bank, the Borrower hereby:


 


A.                                   repeats
and reaffirms to the Bank 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 Bank 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 Bank, (unless otherwise provided for in the Loan
Agreement) the following properties:


 


BORROWING BASE


 


1.                                       Accounts
Receivable:


 


	
  (a)                                  Total Accounts
  Receivable as of              ,
  200   

  	
   

  	
  $                       

  
	
  (b)                                 Less:  Ineligible Accounts Receivable

  	
   

  	
   

  
	
  (i)                                    Over 90 days

  	
  $                       

  	
   

  
	
  (ii)                                 10% over 90 days

  	
  $                       

  	
   

  
	
  (iii)                              bankruptcy of account
  debtor

  	
  $                       

  	
   

  
	
  (iv)                             intercompany accounts
  receivable

  	
  $                       

  	
   

  
	
  (v)                                other accounts deemed
  ineligible by Bank

  	
  $                       

  	
   

  
	
   

  	
   

  	
  $                       

  
	
  (c)                                  Eligible Accounts
  Receivable [Line 1(a) minus Line 1(b)]

  	
   

  	
  $                       

  
	
  (d)                                 Loan Value of
  Eligible Accounts Receivable (Line 1(c) times 75%)

  	
   

  	
  $                       

  



 

















 


	
  2.                                       Eligible
  Equipment:

  	
   

  	
   

  
	
   

  	
   

  	
  Loan
  Date 

  2006

  
	
   

  	
   

  	
   

  
	
  (a)                                  Net Book Value of
  Eligible Equipment.

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  (b)                                 Less Prior Liens

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  (c)                                  Eligible Equipment
  [Line 2(a), 

  less Line 2(b)]

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  (d)                                 Loan Value [50% of
  line 2(c)]

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  3.                                       Eligible
  Equipment Inventory

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)                                  New & Used
  Wholegood Inventories

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  (b)                                 Less Bremer
  Floorplan Note #320166

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  (c)                                  Less Other
  Floorplans

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  (d)                                 Eligible Inventory
  (Line 3(a) minus Line 3(b) minus Line 3(c) )

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  (e)                                  Loan Value (50% of
  Line 3(d) )

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.                                       Eligible
  Parts Inventory

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)                                  Book value of parts
  inventory

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  (b)                                 Less liens and
  payables

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  (c)                                  Eligible Parts
  (Line 4(a) minus Line 4(b)

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  (d)                                 Loan Value [50% of
  Line 4(c)

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  



 


2

















 


	
  5.                                       Outstanding Letters
  of Credit

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  6.                                       Eligible
  Borrowing Base (Line 1(d) plus 

  Line 2(d) plus Line 3(e) plus Line 4(d) 

  minus Line 5)

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  7.                                       Amount of
  Promissory Note Borrowing 

  Base Used to Support Advances 

  (outstanding balance of Loan #320164)

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  8.                                       Less Balance
  of Existing Term Loan #320164

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  9.                                       Less Balance
  of New Term Note #                         
  

  	
   

  	
  $                                    

  
	
   

  	
   

  	
   

  
	
  9.                                       Margin
  (Deficit) (Line 6 minus Lines 7, 8, and 9)

  	
   

  	
  $                                    

  



 


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.


 


D.                                    certifies
as of                    ,
200     that the following computations of financial
covenants and tests contained in the Loan Agreement and related documents are
as follows:


 


	
  Debt to Capital Base:

  	
   

  	
   

  
	
  a)                                      Indebtedness

  	
   

  	
  $                                    

  
	
  b)                                     Capital Base

  	
   

  	
  $                                    

  
	
  c)                                      Debt to Capital
  Base 

  (a divided by b)

  	
   

  	
   

  



 


Required:  Less than or equal
to:  5.0 to 1 (Section 6.9)


 


	
  Current Ratio

  	
   

  	
   

  
	
  a)                                      Current Assets

  	
   

  	
  $                                    

  
	
  b)                                     Current
  Liabilities

  	
   

  	
  $                                    

  
	
  c)                                      Current Ratio

  (a divided by b)

  	
   

  	
   

  
	
  Required: 
  Greater than 1.20 to 1

  	
   

  	
  (Section 6.8)

  



 


3

















 


Debt Service Coverage Ratio:


	
  a)                                      Net Operating
  Income

  	
   

  	
  $                                    

  
	
  b)                                     Depreciation
  & Amortization Expense

  	
   

  	
  $                                    

  
	
  c)                                      Interest
  Expense

  	
   

  	
  $                                    

  
	
  d)                                     Current
  Maturities of Long Term Debt

  	
   

  	
  $                                    

  
	
  e)                                      Interest
  Expense Paid

  	
   

  	
  $                                    

  
	
  f)                                        Capital
  Expenditures (Not Financed)

  	
   

  	
  $                                    

  
	
  g)                                     Debt Service
  Coverage Ratio

  	
   

  	
   

  
	
  (g=(a plus b plus c); divided by (d plus e plus f) )

  	
   

  



Required:  Greater than 1.20:1                                     (Section
6.10)


 


New Equipment Inventory Turnover:


	
  a)                                      Gross Sales of
  New Equipment

  	
   

  	
  $                                    

  
	
  b)                                     New Equipment
  Inventory

  	
   

  	
  $                                    

  
	
  c)                                      New Equipment
  Turnover

  (c=a divided by b)

  	
   

  	
   

  



Required:  Greater than 2.0:1                                           (Section
6.18)


 


Used Equipment Inventory Turnover:


	
  a)                                      Gross Sales of
  Used Equipment

  	
   

  	
  $                                    

  
	
  b)                                     Used Equipment
  Inventory

  	
   

  	
  $                                    

  
	
  c)                                      Used Equipment
  Turnover

  (c=a divided by b)

  	
   

  	
   

  



Required:  Greater than 2.0:1                                           (Section
6.19)


 


Parts Inventory Turnover:


	
  a)                                      Gross Sales of
  Parts 

  	
   

  	
  $                                    

  
	
  b)                                     Parts Inventory

  	
   

  	
  $                                    

  
	
  c)                                      Parts Turnover

  (c=a divided by b)

  	
   

  	
   

  



Required:  Greater than 1.50:1                                     (Section
6.20)


 


4

















 


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.


 


	
   

  	
  Signed 
  

  	
   

  	
   Date 

  	
   

  



 


5

















 


EXHIBIT B


NON REVOLVING


PROMISSORY NOTE


(New Note I)


 


	
  $2,000,000

  	
   

  	
  Lisbon, North Dakota

  
	
   

  	
   

  	
  November     , 2007

  



 


For value
received, the undersigned, TITAN MACHINERY INC.,
a North Dakota corporation (“Borrower”), promises to pay to the order of BREMER BANK, NATIONAL ASSOCIATION, a national banking
association, (“Bank”) at its office in Lisbon, North Dakota or such other place
as the holder hereof may from time to time in writing designate, in lawful
money of the United States of America, the principal sum of Two Million Dollars
($2,000,000) or, if less, the aggregate unpaid principal amount of all Advances
made by the Bank to the undersigned pursuant to Section 2.4A of that certain
Loan Agreement between the Borrower and the Bank dated August 7, 2007,
(together with all amendments, modifications and restatements thereof the
“Agreement”), and remaining unpaid at maturity, together with interest on all
principal amounts hereunder remaining unpaid from time to time from the date of
the initial Advance hereunder at an annual rate (computed on a 365/360 basis;
that is by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding) equal to 8 %.  Under no circumstances will the interest rate
on this New Note I be more than the maximum rate allowed by applicable law.


 


The Advances
made pursuant to this New Note I shall not be on a revolving credit basis and,
accordingly, the Borrower shall not be entitled to reborrow upon any
prepayment.


 


Principal and
interest due under this New Note I shall be payable in consecutive monthly
installments of $40,000, commencing on January 1, 2008 and continuing on the
1st day of each month thereafter until December 1, 2012 when the balance of all
unpaid principal and accrued interest of this New Note I shall be due and
payable in full unless payment in full is demanded earlier under the Agreement.


 


This
promissory note is the New Note I referred to in the Agreement and the holders
hereof are entitled to all of the benefits provided for in the Agreement, to
which Agreement reference is hereby made for a statement of the terms and
conditions under which this indebtedness was incurred and is to be repaid and
under which provisions of the due date of this New Note I may be
accelerated.  Payment of this New Note I
is secured by the Collateral Documents and guaranteed by the Guaranty referred
to in the Agreement.  The provisions of
the Agreement are incorporated by reference herein with the same force and
effect as though fully set forth herein. 
The terms used in this New Note I shall have the same definitions as
provided for in the Agreement.


 


This New Note
I shall be subject to a late payment service charge as set forth in the
Agreement.  This New Note I is also
subject to the prepayment premium contemplated by the Agreement.


 

















 


EXHIBIT “B”


 


All payments
on this New Note I shall be first applied to the payment of any costs of
collection and attorneys’ fees that may be due hereon (as allowed by law), then
to the payment of accrued interest and finally to the payment of principal.


 


This New Note
I is issued and shall be governed by the laws of the State of North
Dakota.  All makers, endorsers, sureties,
guarantors, and other accommodation parties hereby waive presentment for
payment, protest and notice of non-payment; and a consent without affecting
their liability hereunder, to any and all extensions, renewals, substitutions,
and alterations of any of the terms of this New Note I and to release of, or
failure by the Bank to exercise any rights against, any party liable for or any
property securing payment thereof.


 


The Borrower hereby
waives the right to any jury trial in any action, proceeding or counterclaim
brought by either the Bank or the Borrower against the other.


 


	
   

  	
  TITAN
  MACHINERY INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  David J.
  Meyer

  
	
   

  	
   

  	
  Its CEO
  & Chairman