Exhibit 10.20


SHAREHOLDER RIGHTS AGREEMENT


This Shareholder Rights Agreement (this “Agreement”) is made as of April 7, 2003 by
and among Titan Machinery Inc., a North Dakota
corporation (the “Company”), and
the persons identified on Schedule A hereto (as such Schedule is updated
from time-to-time by the Company) who have or who hereafter execute a signature
page hereto and who hold shares of Common Stock or Preferred Stock in the
Company (individually referred to herein as an “Shareholder” and collectively referred to herein as the “Shareholders”).


The parties hereto agree as follows:


ARTICLE
1.


CERTAIN
DEFINITIONS


1.1           Certain
Definitions.  The
following terms shall have the following meanings:


(a)           “Initial Public Offering” means a public
offering of the Company’s Common Stock, pursuant to a registration statement
under the Securities Act (other than a registration statement relating either
to the sale of securities to employees or consultants of the Company pursuant
to a stock option, stock purchase or similar plan or a Commission Rule 145
transaction).


(b)           “Major Shareholder” shall mean a
Shareholder who holds at least 10,000 shares of Common Stock (or shares of
Common Stock issuable upon conversion of Preferred Stock).


(c)           “Pro Rata” portion or basis shall mean the
fraction, the numerator of which is the aggregate number of shares of Common
Stock then held by the Shareholder or issuable upon conversion of any shares of
Preferred Stock then held by the Shareholder, and the denominator of which is
the total number of Common Stock then outstanding plus the number issuable upon
conversion or exercise of all convertible securities, options, rights or
warrants then outstanding.


(d)          
“Registrable Securities” shall
mean shares of Common Stock held by the Shareholders, and any securities with
respect thereto upon any stock split, stock dividend, recapitalization or
similar event.  Registrable Securities
shall cease to be Registrable Securities when (x) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (y) they shall be eligible to be distributed
pursuant to Rule 144 promulgated under the Securities Act in a single
three-month period by the holder thereof, or (z) they shall have ceased to be
outstanding.



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(e)           The
terms “register,” “registered,” and “registration” shall mean a registration
effected by preparing and filing a registration statement in compliance with
the Securities Act of 1933, as amended, and the declaration or ordering of the
effectiveness of such registration statement.


(f)            “Registration Expenses” shall mean all
expenses incurred by the Company in registration, including, without limitation,
all registration, qualification and filing fees, printing expenses, escrow
fees, fees and disbursements of counsel for the Company, blue sky fees and
expenses, marketing expenses and the expense of any special audit incident to
or required by any such registration, as well as the compensation of regular
employees of the Company.


(g)           “Sale of the Company” means (i) the sale,
conveyance, or other disposition of all or substantially all of the Corporation’s
assets, or (ii) the merger or consolidation with any other corporation or other
entity (other than a wholly-owned subsidiary of the Corporation) where the
shareholders of the Corporation immediately prior to the completion of the
merger or consolidation have less than 50% of the voting power of the surviving
entity


(h)           “SEC” shall mean the U.S. Securities and
Exchange Commission.


(i)            “Securities Act” shall mean the Securities
Act of 1933, as amended.


(j)            “Selling Expenses” shall mean all
underwriting discounts, selling commissions and stock transfer taxes applicable
to the securities registered.


(k)           “Shares” means shares of the Company’s
capital stock, including Common Stock and Preferred Stock.


ARTICLE
2.


PIGGYBACK
REGISTRATION RIGHTS


2.1           Piggyback
Registration Rights.


(a)           Notice of Registration.  Whenever the Company shall determine to
register any of its securities for its own account (other than a
registration statement in connection with an initial public offering of the
Company’s securities, Form S-8, Form S-4 or other limited purpose form, and other than a registration relating solely to
employee benefit plans, or a registration relating solely to an SEC Rule 145
transaction, or a transaction relating solely to the sale of debt or
convertible debt instruments ), the
Company will:


(i)            promptly
give to the Shareholders written notice thereof; and



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(ii)           except
as provided herein, register pursuant to such registration statement such
number of Registrable Securities as shall be specified in a written request or
requests by the Shareholders made within 30 days after such written notice from
the Company.


(b)           Underwriting.  If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Shareholders as a part of the written notice given
pursuant to Section 2.1(a) above.  In
such event, the right of the Shareholders to registration pursuant to Section
2.1(a) shall be conditioned upon such Shareholders’ participation in such
underwriting and the inclusion of Registrable Securities in the underwriting to
the extent provided herein on the same terms as the securities otherwise being
sold through the underwriting.  The
Shareholders, if they are proposing to distribute their Registrable Securities
through such underwriting, shall (together with the Company) enter into an
underwriting agreement in customary form with the underwriter(s) selected for
such underwriting by the Company. 
Notwithstanding any other provision of this Section 2.1, if the managing
underwriter determines that marketing factors require a limitation of the
number of Registrable Securities to be underwritten, the managing underwriter
may limit or exclude the Registrable Securities requested to be included in
such registration, such limitation to be on a pro rata basis based on the
relation that such Registrable Securities bear to the total number of
securities (including, without limitation, Registrable Securities) proposed to
be registered pursuant to the registration statement covered by this Section
2.1 by the Shareholders and by other persons selling securities pursuant to
registration rights granted them by the Company or otherwise; provided,
however, that no such reduction may reduce the securities being offered by the
Company for its own account and any such reductions shall be subject to any
superior registration rights granted by the Company to any other party or
parties.  No Registrable Securities
excluded from the underwriting by reason of the underwriters’ marketing
limitation shall be included in such registration.  The Company shall advise the Shareholders of
the number of Registrable Securities that may be included in the registration
and underwriting.  If the Shareholders do
not approve of the terms of any such underwriting, they may elect to withdraw
therefrom, without loss to the Shareholders of any rights under this Section
2.1, by written notice to the Company and the managing underwriter.


(c)           Right
to Terminate Registration.  The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 2.1 prior to the effectiveness of such registration,
whether or not the Shareholders have elected to include securities in such
registration.


(d)           Expenses
of Registration.  All Selling
Expenses incurred in connection with any registration pursuant to this Section
2.1 shall be borne by the Shareholders and all Registration Expenses as well as
the fees and expenses of one counsel for the holders



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of a majority of the Registrable Securities covered by such
registration incurred in connection with any registration shall be borne by the
Company.


2.2           Registration
Procedures.  In the case
of each registration effected by the Company pursuant to this Agreement, the
Company will furnish to one counsel selected by the holders of a majority of
the Registrable Securities covered by such registration statement, copies of
all such documents proposed to be filed with the Securities and Exchange
Commission, which documents will be subject to the review of such counsel.


2.3           Indemnification.


(a)           Indemnification
by Company.  The Company will
indemnify, to the extent permitted by law, each holder of Registrable
Securities, its officers and directors and each person who controls such holder
(within the meaning of the Securities Act) against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), commenced or
threatened, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any registration statement,
prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of circumstances
in which they were made, not misleading, or any violation by the Company of any
rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse the Shareholders and each person who controls
any of the Shareholders, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission, made in reliance upon and
in conformity with information furnished to the Company in writing by any of
the Shareholders or any such controlling person expressly for use therein.


(b)           Indemnification
by Shareholders.  Each holder of
Registrable Securities, to the extent permitted by law, will indemnify the
Company, each of its directors and officers, each underwriter, if any, of the
Company’s securities covered by such a registration statement and each person
who controls the Company or such underwriter (within the meaning of the
Securities Act), against all expenses, claims, losses, damages or liabilities,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of material fact contained in any such registration
statement, prospectus, offering circular or other document, or any amendment or
supplement thereto, incident to any such registration, or based on any omission
(or alleged omission) of a material fact required to be stated therein or
necessary to make the statements therein, in



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light of the circumstances in which they were made, not misleading, and
will reimburse the Company, each such underwriter and each person who controls
the Company or any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating, preparing or defending
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with information furnished to the Company in writing by such of
the Shareholders for use therein.


(c)           Notice
Requirements.  Each party entitled to
indemnification under this Section (the “Indemnified
Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought.  The
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section, unless
the failure to give such notice is materially prejudicial to an Indemnifying
Party’s ability to defend such action. 
Upon notice thereof, the Indemnifying Party shall be permitted to assume
the defense of any such claim or any litigation resulting therefrom; provided,
however, that (i) counsel for the Indemnifying Party, who shall conduct the
defense of such claim or litigation, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and (ii) the Indemnified
Party may participate in such defense at such party’s expense.  No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as a unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.


2.4           Other Registration Rights.  Each Shareholder acknowledges and agrees that
nothing in this Agreement shall in any way prohibit or otherwise limit the
Company’s ability to grant registration rights in the future, which rights may
be superior to the rights granted to Shareholders under this Agreement.


2.5           Stand-Off Agreement.  Each holder of Registrable Securities agrees,
in connection with the Company’s initial public offering, upon request of the
Company or the underwriters managing such offering, not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of
any Common Unit of the Company (other than those, if any, that may be included
in the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not exceeding 180
days) from the effective date of such registration as may be requested by the
underwriters; provided, however,
that all of the directors and officers of the Company who own Common Stock of
the Company must also agree to not less onerous restrictions.



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2.6           Assignment of Registration
Rights.  A Shareholder’s rights
under this Article may be assigned (but only with all related obligations) by a
Shareholder to (i) an affiliate of such Shareholder, or (ii) an assignee of at
least 10,000 Shares (appropriately adjusted to reflect subsequent stock splits,
stock dividends, combinations or other recapitalizations), provided, such
assignee or transferee shall agree in writing to be bound by this Agreement as
if it were a Shareholder herein.  Any
assignment of rights under this Article shall only be effective provided that
(i) the Company is, within a reasonable time after such transfer, furnished
with written notice of the name and address of such assignee and the securities
with respect to which such registration rights are being assigned; (ii) such
transferee or assignee agrees in writing to be bound by and subject to the
terms and conditions of this Agreement, and (iii) such assignment shall be
effective only if immediately following such assignment the further disposition
of such securities by the transferee or assignee is restricted under the
Securities Act.


2.7           Termination of
Registration Rights. This Article, and all of the Company’s
obligations (other than its obligations pursuant to Section 2.3, which Section
shall survive such termination) hereunder, shall terminate upon the earliest to
occur of (i) the date on which there are no Registrable Securities outstanding,
(ii) the third anniversary of the effective date of the registration statement
filed with respect to the Company’s initial public offering, and (iii) a Sale
of the Company.


ARTICLE
3.


PRO RATA RIGHT TO PURCHASE
NEW SECURITIES


3.1           Pro Rata Right to Purchase
New Securities.  The
Company hereby grants to each of the Shareholders a right to purchase, on a Pro
Rata basis, all or any part of New Securities (as defined below) that the
Company may, from time to time, propose to sell and issue, or has sold and
issued, in a financing subject to the terms and conditions set forth
below.  Notwithstanding the foregoing,
the Company’s obligations to sell New Securities to any Shareholder are subject
to the Company’s securing exemption from the registration requirements of the
federal and applicable state securities laws in reliance on such exemptions as
the Company, in its discretion, may elect to rely on, and the Company may
further require that any Shareholder purchasing such New Securities be an “accredited
investor” within the meaning of Regulation D of the Securities Act..


3.2           New
Securities.  “New Securities” shall mean any Common Stock or Preferred
Stock of the Company, regardless of whether now authorized, and convertible
securities, rights, options or warrants to purchase Common Stock or Preferred
Stock; provided, however, that the term “New Securities” does not
include:


(a)           securities
offered to the public pursuant to a registration statement;



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(b)           securities
issued for non-cash consideration;


(c)           securities
issued or issuable for the acquisition of another company or business by the
Company by merger, purchase of substantially all the assets of such company or
business, or other reorganization resulting in the ownership by the Company of
not less than 51% of the voting power of such company or business;


(d)           securities
issued or issuable to any vendor or licensor of products or services to the
Company, to any other strategic partner of the Company or to any Company
customer or to any other purchaser of the Company’s products or services;


(e)           securities
issued or issuable to the Company’s or its subsidiaries’ employees, directors,
officers, agents, consultants, contractors or other service providers to the
Company;


(f)            securities
issued as a result of any stock split, stock dividend or reclassification of
stock, distributable on a pro rata basis to all holders of the Company’s Common
Stock,


(g)           securities issued
(A) in connection with any stock split, stock dividend or recapitalization by
the Company, so long as immediately after such stock split, stock dividend or
recapitalization the Shareholders own the same relative proportion of the
Company’s equity securities as immediately prior to such stock split, stock
dividend or recapitalization, or (B) upon conversion or exercise of convertible
or exercisable securities that are outstanding as of the date of this
Agreement, including, without limitation, upon conversion of Subordinated
Convertible Debentures outstanding on the date hereof,


(h)           securities
issued or issuable to any other party (including one or more Shareholders or
their affiliates) if Shareholders holding a majority of all Common Stock
(determined on an as if converted basis for shares of convertible Preferred
Stock) then held by all Shareholders (including one or more Shareholders or
their affiliates purchasing such securities) consent in writing thereto or
waive the Shareholders’ rights under this Article with respect thereto.


3.3           Notice.  In the event the Company intends to issue New
Securities, or within ninety (90) days after the issuance of any New
Securities, it shall give the Shareholders written notice of such intention,
describing the type of New Securities to be issued or issued, the price thereof
and the general terms upon which the Company proposes to effect or has effected
such issuance.  Each of the Shareholders
shall have 15 days from the date of any such notice to agree to purchase all or
part of its Pro Rata share of such New Securities for the price and upon the



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general terms and conditions specified in the
Company’s notice by giving written notice to the Company stating the quantity
of New Securities to be so purchased.


3.4           Termination
of Rights.  The rights set
forth in this Article  shall
terminate as to each Shareholder and be of no further force or effect on the
earlier to occur of (i) immediately prior to the consummation of the
Company’s Initial Public Offering, or (ii) a Sale of the Company.  Further, a Shareholder shall no longer have
any further rights under this Article hereof upon transfer of all of the
Shareholder’s Shares.


ARTICLE
4.


FINANCIAL
INFORMATION


4.1           Annual Audited Financial
Information.  The Company
will furnish to each Shareholder as soon as practicable after the end of each
fiscal year of the Company, and in any event within one hundred twenty (120)
days thereafter, a consolidated and consolidating balance sheet of the Company
and its subsidiaries, if any, as of the end of such fiscal year, and
consolidated and consolidating statements of income and cash flow of the
Company and its subsidiaries, if any, for such year, prepared in accordance
with generally accepted accounting principles consistently applied, all in
reasonable detail and audited.


4.2           Quarterly Unaudited
Financial Information. 
The Company will furnish to each Major Shareholder as soon as
practicable after the end of each quarterly accounting period in each fiscal
year of the Company, and in any event within sixty (60) days thereafter, a
consolidated and consolidating balance sheet of the Company and its
subsidiaries, if any, as of the end of each such quarterly period, and
consolidated and consolidating statements of income and cash flow of the
Company and its subsidiaries, if any, for such period and for the current
fiscal year to date, prepared in accordance with generally accepted accounting
principles consistently applied, subject to changes resulting from normal
year-end audit adjustments, all in reasonable detail, except that such
statements need not contain the notes required by generally accepted accounting
principles.


4.3           Termination of Rights.  The rights set forth in this Article  shall terminate as to each Shareholder and
be of no further force or effect on the earlier to occur of
(i) immediately prior to the consummation of the Company’s Initial Public
Offering, or (ii) a Sale of the Company. 
Further, a Shareholder shall no longer have any further rights under
this Article hereof upon transfer of all of the Shareholder’s Shares.



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ARTICLE
5.


GENERAL


5.1           Governing
Law.  The parties have
agreed that the validity, construction, operation and effect of any and all of
the terms and provisions of this Agreement, and the respective rights, duties
and obligations of the parties hereunder, shall be determined and enforced in
accordance with the laws of the State of North Dakota without giving effect to
principles of conflicts of law thereunder.


5.2           Amendment;
Etc.


(a)           Any modification,
amendment, waiver or termination of this Agreement or any provision hereof
shall be in writing and executed by the Company and Shareholders holding a
majority of all shares of Common Stock (as determined based on an as if
converted basis for outstanding shares of Preferred Stock) then held by all
Shareholders.  Each Shareholder
acknowledges that, except as otherwise provided herein, by the operation of
this Section, the holders of a majority or more of the outstanding Shares
subject to this Agreement may have the right and power to diminish or eliminate
any or all rights, to change or add obligations, of such Shareholder under this
Agreement.


(b)           Further, the Company
may admit additional parties as Shareholders upon such parties executing and
delivering a signature page hereto, or otherwise agreeing in writing to become
a party hereto, and in connection therewith, the Company may update Schedule A
from time to time to reflect the Shareholders who are a party hereto, and the
Common Units owned by them.  Without
limiting the generality of the foregoing, the Company, in its discretion, may
admit the Company’s officers, directors, Common Stock shareholders and others
as Shareholders.  The Company may also
update Schedule A from time-to-time.


5.3           Entire
Agreement.  This Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof, and supersedes and terminates all prior agreements, arrangements
and understandings among the parties with respect to the subject matter hereof.


5.4           Assignability.  Except as set forth above, this Agreement may
not be assigned by any of the Shareholders without the Company’s written
consent.


5.5           Notices.  All notices and other communications
hereunder shall be deemed given if given in writing and delivered personally,
by mail  or by overnight courier (postage
prepaid) to the Company at its principal office and to a Shareholder at such
Shareholder’s address as shown in the records of the Company. Notices may also
be sent by the Company to a Shareholder by facsimile or email at such
Shareholders’ facsimile number or email address as shown in the



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records of the Company. Notice shall be
deemed given upon deposit in a U.S. mail receptacle and otherwise upon
delivery.


5.6           Severability.  The invalidity of any portion of this
Agreement shall not affect the enforceability of the remaining portions of this
Agreement or any part thereof, all of which are inserted herein conditionally
on them being valid in law.  In the event
that any portion contained herein shall be invalid, this Agreement shall be
construed so as to make such portion valid or, if such construction is not
legally possible, as if such invalid portion had not been inserted.


5.7           Counterparts.  This Agreement may be executed in two or more
counterparts, any one of which need not contain the signature of more than one
party, but all such counterparts together will constitute one and the same
agreement.



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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.


	
   

  	
  Titan Machinery Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  



 



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SHAREHOLDER
SIGNATURE PAGE


TO


TITAN MACHINERY INC.


SHAREHOLDER RIGHTS AGREEMENT


The undersigned is a holder of shares of capital stock
of Titan Machinery Inc., and by execution hereof, agrees to become a party to
the Shareholder Rights Agreement (as such agreement may be amended from time to
time) as a “Shareholder.”


	
  

  	
   

  
	
   

  	
  David Meyer

  



 



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SHAREHOLDER
SIGNATURE PAGE


TO


TITAN MACHINERY INC.


SHAREHOLDER RIGHTS AGREEMENT


The undersigned is a holder of shares of capital stock
of Titan Machinery Inc., and by execution hereof, agrees to become a party to
the Shareholder Rights Agreement (as such agreement may be amended from time to
time) as a “Shareholder.”


	
  

  	
  ADAM SMITH SPECULATIVE GROWTH PARTNERS,

  
	
   

  	
  A LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By: ADAM SMITH COMPANIES, LLC

  
	
   

  	
  Its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Tony J. Christianson, Chairman

  



 



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SHAREHOLDER
SIGNATURE PAGE


TO


TITAN MACHINERY INC.


SHAREHOLDER RIGHTS AGREEMENT


The undersigned is a holder of shares of capital stock
of Titan Machinery Inc., and by execution hereof, agrees to become a party to
the Shareholder Rights Agreement (as such agreement may be amended from time to
time) as a “Shareholder.”


	
  Individuals:

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Entities:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TITAN MACHINERY INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Its

  	
   

  	
   

  	
   

  
						



 



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Schedule A


to


Shareholder Rights Agreement


	
  Shareholder

  	
   

  	
  Shares