Document:

Ex-10.1

 

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

     THIS AGREEMENT, is made this 4th day of April, 2006, by and between BOWATER
INCORPORATED, a Delaware corporation having a mailing address of 55 East Camperdown Way,
Greenville, South Carolina 29601 (the “Corporation”), and David J. Paterson (the “Executive”).

     WHEREAS, the Corporation desires to employ the Executive as President and Chief Executive Officer
and a member of the board of directors of the Corporation (the “Board”); and

     WHEREAS, the Executive is desirous of serving the Corporation in such capacity;

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Employment. The Corporation agrees to employ the Executive, and the Executive agrees to
be employed by the Corporation, effective the Effective Date, in accordance with and subject to the
provisions of this Agreement.

     2. Term. (a) Subject to the provisions of subparagraphs (b) and (c) of this Section 2, the
term of the Executive’s employment shall begin on May l, 2006 (“Effective Date”) and shall continue
thereafter until terminated by either party by written notice given to the other party at least
ninety (90) days prior to the effective date of any such termination. The effective date of the
termination shall be the date stated in such notice, provided that if the Corporation or Executive
specifies an effective date that is more than ninety (90) days following the date of such notice,
the Executive or the Corporation, as the case may be, may, upon ninety (90) days’ written notice to
the Corporation or the Executive, as the case may be, accelerate the effective date of such
termination.

          (b) The parties shall enter into a Change in Control Agreement effective the Effective Date, in
the form previously provided to the Executive (“Change in Control Agreement”). Notwithstanding
Section 2(a), upon the occurrence of a Change in Control, as defined in the Change in Control
Agreement, for purposes of the Change in Control Agreement, the term of the Executive’s employment
shall continue until terminated, but in any event, for a period of not less than three (3) years
following the date of the Change in Control, unless such termination shall be at the Executive’s
election for other than “Good Reason” as that term is defined in the Change in Control Agreement.

          (c) Notwithstanding Section 2(a), the term of the Executive’s employment shall end upon:

 

 

               (i) the death of the Executive;

               (ii) the inability of the Executive to perform his duties properly, whether by reason of
ill-health, injury or other similar cause, for a period of one hundred and eighty (180) consecutive
days or for periods totaling one hundred and eighty (180) days occurring within any twelve (12)
consecutive calendar months; or

               (iii) the Executive’s retirement on his early or normal retirement date in accordance with the
Corporation’s tax-qualified retirement plan in which the Executive participates.

     3. Position and Duties. (a) Throughout the term of the Executive’s employment, the
Executive shall be employed as President and Chief Executive Officer, with the duties and
responsibilities customarily attendant to that office, provided that the Executive shall undertake
such other and further assignments and responsibilities of at least comparable status as the Board
may direct. The Executive shall diligently and faithfully devote his full working time and best
efforts to the performance of the services under this Agreement and to the furtherance of the best
interests of the Corporation. The Executive shall report to the Board.

          (b) Other Activities. During the term of the Executive’s employment, the Executive shall
not engage in any other business activities, as an employee, director, consultant or in any other
capacity, whether or not he receives any compensation therefor, without the prior written consent
of the Board; provided that the Executive may serve on up to two corporate boards (other than the
Board) with the approval of the Board, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing provisions of this subsection (b), it shall not be a violation of
this Agreement for the Executive to serve on civic or charitable boards or committees to the extent
that such service does not interfere with his duties under this Agreement.

     4. Place of Employment. The Executive will be employed at the Corporation’s offices in the
City of Greenville, South Carolina or at such other place as the Corporation shall designate from
time to time, provided, however, that if the Executive is so transferred to another place of
employment, necessitating a change in his residence, the Executive shall be entitled to financial
assistance in accordance with the terms of the Corporation’s relocation policy then in effect.

     5. Compensation and Benefits. (a) Base Salary. The Corporation shall pay to the
Executive an annual base salary of $825,000 (“Base Salary”) payable in substantially equal periodic
installments on the Corporation’s regular payroll dates. The Base Salary shall be reviewed at least
annually and from time to time may be

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increased (or reduced, if such reduction is effected pursuant to across-the-board salary reductions
similarly affecting all management personnel of the Corporation).

          (b) Annual Incentive Plan. In addition to Base Salary, the Executive shall be eligible to
receive an annual bonus under the Corporation’s annual incentive plan in effect from time to time
determined by Board in the manner, at the time, and within the criteria set forth by the Board in
plan. The Executive shall be eligible under such plan for a target bonus of not less than 68% of
Base Salary (“Target Bonus”), subject to reduction by the Board if such reduction is effected
pursuant to across-the-board bonus reductions similarly affecting all management personnel of the
Corporation, with a maximum eligible payout under such plan of 200% of the Target Bonus (“Maximum
Bonus”). Notwithstanding the foregoing, the Executive will be paid, with respect to calendar year
2006 (payable in January of 2007), not less than 100% of such Target Bonus, prorated to reflect the
percentage of the year 2006 that the Executive was actually employed by the Corporation.

          (c) Long Term Incentive. The Executive shall be entitled to participate in the
Corporation’s long term incentive and stock-based incentive compensation plans beginning in 2007 on
a basis commensurate with his position.

          (d) Initial Equity Grant. The Corporation shall grant Executive an award of an option to
purchase 250,000 shares of the Corporation’s common stock having an exercise price equal to the
fair market value of the common stock at the close of business on the Effective Date, a ten (10)
year exercise term and vesting as to 83,333 shares on each of the first and second anniversaries
and as to 83,334 shares on the third anniversary of the Effective Date. The initial stock option
grant will be subject to further terms and conditions as set forth in the award document effective
as of the Effective Date. The Corporation shall also grant to the Executive an award of 50,000
shares of restricted stock units (“Stock Grant”) effective as of May 10, 2006. The Stock Grant
shall provide (i) that the award shall vest in full on the first anniversary of the grant date,
(ii) the right to dividends on all such shares declared and paid to other shareholders shall be
accrued during the vesting period and paid to the Executive upon vesting, (iii) upon vesting, the
Corporation shall satisfy the Executive’s tax liability for the Stock Grant by withholding such
number of shares from the Stock Grant as have an aggregate fair market value (as calculated in the
plan under which the Stock Grant is made), provided, however, that such shares may be used to
satisfy not more than the Corporation’s minimum statutory withholding obligation (based on minimum
statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income), and shall remit such amount as withholding tax to
the applicable taxing authorities, and (iv) the Stock Grant shall fully vest upon an involuntary
termination of the Executive’s employment without Cause or a voluntary termination for Good Reason
(each term as defined below).

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          (e) Deferred Compensation. The Corporation shall enroll the Executive in its new
Retirement Savings Plan effective as of January 1, 2007, in accordance with the summary of plan
terms previously provided to the Executive. The plan provides for an annual Corporation
contribution of 20.5%, if the Executive contributes 5%, each as a percentage of the sum of the
Executive’s Base Salary and annual bonus (referred to in Section 5(b), above) paid to Executive
each calendar year. In lieu of any deferred plan participation or payment to which Executive
otherwise may be entitled by reason of his employment by the Corporation in 2006, the Executive
shall be entitled to a contribution in respect of 2006 on the foregoing basis (including his 5%
elective deferral), but based on the Base Salary paid in 2006 and the 2006 bonus paid in January of
2007, all of which shall be credited as nonqualified deferred compensation under the Retirement
Savings Plan as of January 1, 2007. The Executive shall be vested in this benefit upon the third
anniversary of the Effective Date, and shall be entitled to a lump sum payment of a pro rata
portion of this benefit in the event prior to the third anniversary of the Effective Date of an
involuntary termination without Cause or a termination by the Executive for Good Reason, other than
with respect to the 4.5% portion of the Corporation contribution (i.e., 21.95% of the total
Corporation contribution) that shall remain subject in all events to three-year vesting.

          (f) Benefit Plans. The Corporation shall make contributions on the Executive’s behalf to
the various benefit plans and programs of the Corporation in which the Executive is eligible to
participate in accordance with the provisions thereof as in effect from time to time.

          (g) Vacations. The Executive shall be entitled to five weeks of annual paid vacation, and
otherwise in keeping with the Corporation’s policy as in effect from time to time.

          (h) Expenses. The Corporation shall reimburse the Executive for all reasonable expenses
properly incurred, and appropriately documented, by the Executive in connection with the business
of the Corporation.

          (i) Perquisites. The Corporation shall make available to the Executive all perquisites to
which he is entitled by virtue of his position.

          (j) Legal Expenses. The Executive shall be entitled to reimbursement of reasonable legal
fees and expenses incurred in the negotiation and documentation of this Agreement promptly upon
execution hereof up to a maximum amount of $30,000.

          (k) Relocation. The Executive shall be entitled to full relocation benefits in accordance
with the Corporation’s relocation program for its senior executives.

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     6. Nondisclosure. During and after the term of the Executive’s employment, the Executive
shall not without the written consent of the Board, except in the discharge of his duties hereunder
and in furtherance of the business of the Corporation or any of its subsidiaries and affiliates,
disclose or use directly or indirectly, any of the trade secrets or other confidential information
or proprietary data of the Corporation or its subsidiaries or affiliates; provided, however, that
confidential information shall not include any information known generally to the public (other
than as a result of unauthorized disclosure by the Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same or similar businesses.

     7. Noncompetition. (a) Executive represents and warrants that he is not subject to and
will not bring any material that is subject to any 

non-competition, non-disclosure, discoveries and
works or other agreements that would prevent or restrict him from rendering services to the
Corporation pursuant to this Agreement. Executive further represents and warrants that his
employment and use of any material he brings will not violate the rights of any third party,
including without limitation, pursuant to any non-competition or non-solicitation agreement.

          (b) During the term of the Executive’s employment and for a period of two (2) years after the date
the Executive’s employment terminates (the “Covenant Period”), the Executive shall not, without the
prior approval of the Board in the same or a similar capacity engage in or invest in, or aid or
assist anyone else in the conduct of any business (other than the businesses of the Corporation and
its subsidiaries and affiliates) which directly competes with the business of the Corporation and
its subsidiaries and affiliates as conducted during the term hereof. During the Covenant Period,
the Executive shall not, without the prior approval of the Board in the same or a similar capacity
engage in or invest in, or aid or assist anyone else in any manner to solicit from any Corporation
customer or vendor business of the type performed by the Corporation for the customer or by the
vendor for the Corporation, as the case may be, or to persuade any customer or vendor to cease to
do business or to reduce the amount of business which any such customer or vendor has customarily
done or is reasonably expected to do with the Corporation, whether or not the relationship between
the Corporation and such customer or vendor was originally established in whole or in part through
the Executive’s efforts. If any court of competent jurisdiction shall determine that any of the
provisions of this Section 7 shall not be enforceable because of the duration or scope thereof, the
parties hereto agree that said court shall have the power to reduce the duration and scope of such
provision to the extent necessary to make it enforceable and this Agreement in its reduced form
shall be valid and enforceable to the extent permitted by law. The Executive acknowledges that the
Corporation’s remedy at law for a breach by the Executive of the provisions of this Section 7 will
be inadequate. Accordingly, in the event of the breach or threatened breach by the

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Executive of this Section 7, the Corporation shall be entitled to injunctive relief in addition to
any other remedy it may have without the obligation of posting any bond in order to enforce its
rights hereunder.

     8. Severance Pay. (a) If the Executive’s employment hereunder is involuntarily terminated
for any reason other than those set forth in Section 2(c) hereof or if Executive terminates his
employment hereunder for “Good Reason,” then, unless the Corporation shall have terminated the
Executive for “Cause,” the Corporation shall pay the Executive severance pay in an amount equal to
twenty-four (24) months of the Executive’s Base Salary on the effective date of the termination,
plus 1/12 of the amount of the last annual bonus paid to the Executive under the Corporation’s
bonus plan applicable to the Executive for each month in the period beginning on January 1 of the
year in which the date of the termination occurs and ending on the date of the termination and for
each month’s Base Salary to which the Executive is entitled under this Section 8. Such payment
shall be made in a lump sum within ten (10) business days following the effective date of the
termination. The severance pay shall be in lieu of all other compensation or payments of any kind
relating to the termination of the Executive’s employment hereunder; provided that the Executive’s
entitlement to compensation or payments under the Corporation’s welfare benefit plans, retirement
plans, stock option or incentive plans, savings plans or bonus plans attributable to service
rendered prior to the effective date of the termination shall not be affected by this clause and
shall continue to be governed by the applicable provisions of such plans; and further provided that
in lieu hereof, at his election, the Executive shall be entitled to the benefits of the Change in
Control Agreement if a termination of his employment occurs in a manner and at a time when such
Change in Control Agreement is applicable.

          (b) For purposes of this Agreement, the term for “Cause” shall mean: (i) because of gross
negligence or willful misconduct by the Executive either in the course of his employment hereunder
or which has a material adverse effect on the Corporation or the Executive’s ability to perform
adequately and effectively his duties hereunder, or (ii) conviction of (or pleads guilty or nolo
contendere) to a felony.

          (c) For purposes of this Agreement, the term for “Good Reason” shall mean: (i) a reduction by the
Corporation in the Executive’s Base Salary, Target Bonus or Maximum Bonus percentages unless such
reduction is effected pursuant to across-the-board salary or bonus reductions similarly affecting
all management personnel of the Corporation, (ii) a material diminution in the Executive’s titles,
duties or responsibilities, (iii) a change in Executive’s reporting lines such that he no longer
reports to the Board, (iv) an unconsented relocation of Executive’s principal place of work to a
location more than thirty (30) miles from the initial location referred to in Section 4, or (v) the
failure of a successor to expressly assume

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this Agreement; provided, that for a termination for Good Reason under clause (i), (ii) or
(iii), the Executive shall have provided the Corporation with written notice, and the Corporation
shall fail to cure the basis for Cause within twenty (20) days of such notice.

          (d) The Executive shall not be obligated to seek mitigation of any severance payment payable
hereunder. The Corporation shall not be entitled to offset or seek reimbursement of any amount
payable or paid to the Executive hereunder in satisfaction of any other amount owed by the
Executive to the Corporation, except that the Corporation shall be entitled to seek reimbursement
of any severance payment made hereunder in the event of a breach of Executive’s post-termination
obligations in Sections 6 and 7.

     9. Notices. Any notices required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given when delivered or, if mailed by registered or
certified mail, return receipt requested, within three business days after such mailing, to the
address set forth above or the Executive’s home address as recorded in the Corporation’s records,
or to such other address as any party hereto shall designate to the other party in writing pursuant
to the terms of this Section 9.

     10. Severability. The provisions of this Agreement are severable, and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of any other
provision.

     11. Governing Law. This Agreement shall be governed by and interpreted in accordance with
the substantive laws of the State of Delaware.

     12. Supersedure. This Agreement shall cancel and supersede all prior agreements relating
to employment between the Executive and the Corporation. In the event of any inconsistency between
(a) this Agreement and the Change in Control Agreement and (b) any other plan, program, practice or
agreement of the Corporation in which the Executive participates or is a party, this Agreement and
the Change in Control Agreement, as the case may be, shall control unless the parties specifically
agree, by reference to this Section 12, that such other plan, program, practice or agreement
controls.

     13. Waiver of Breach. The waiver by a party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any prior or subsequent breach by any of the
parties hereto.

     14. Binding Effect. The terms of this Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Corporation and the heirs, executors, administrators
and successors of the Executive, but this Agreement may

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not be assigned by the Executive. The Corporation shall assign its rights and obligations
hereunder to a successor to all or substantially all of the assets or business of the Corporation,
provided, that such successor expressly assumes the Corporation’s obligations hereunder.

     15. Code Section 409A. It is intended that any amounts payable under this Agreement and
the Corporation’s and the Executive’s exercise of authority or discretion hereunder shall comply
with the provisions of Internal Revenue Code Section 409A and the Treasury Regulations relating
thereto so as not to subject the Executive to the payment of Interest and tax penalty which may be
imposed under Code Section 409A. In furtherance of this interest, to the extent that any
regulations or other guidance issued under Code Section 409A after the date of this Agreement would
result in the Executive being subject to payment of interest and tax penalty under Code Section
409A, the parties agree to amend this Agreement to the minimum possible extent in order to bring
this Agreement into compliance with Code Section 409A while preserving the agreements and purposes
otherwise expressed in this Agreement and the Change in Control Agreement.

     16. Public Announcement. The Corporation shall give the Executive a reasonable
opportunity to review and comment on any public announcement (including all filings with
governmental agencies and stock exchanges) relating to this Agreement or the Executive’s employment
by the Company.

          IN WITNESS WHEREOF, the Corporation and the Executive have executed this Agreement as of the day
and year first above written.

	 	 	 	 	 
	BOWATER INCORPORATED
	 	 	 	 
	 
	 	 	 	 
	/s/ Togo D. West, Jr.
	 	 	 	 
	 

By: Togo D. West, Jr.

	 	 	 	 
	Title: Chairman, Human Resources and Compensation Committee	 	 
	 
	 	 	 	 
	EXECUTIVE
	 	 	 	 
	 
	 	 	 	 
	/s/ David J. Paterson
	 	 	 	 
	 

Name: David J. Paterson

	 	 	 	 

8<PAGE>

                                                                    EXHIBIT 10.1

                       FIFTH AMENDMENT TO CREDIT AGREEMENT

     This FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") dated as of
March 22, 2006, by and among AGCO CORPORATION, a Delaware corporation ("AGCO"),
AGCO CANADA, LTD., a Saskatchewan corporation ("Canadian Subsidiary"), AGCO
LIMITED, an English corporation ("English Subsidiary One"), AGCO INTERNATIONAL
LIMITED, an English corporation ("English Subsidiary Two"), AGCO HOLDING B.V., a
Netherlands corporation ("Netherlands Subsidiary"), AGCO DEUTSCHLAND HOLDING
LIMITED & CO. KG, a German limited partnership ("German Subsidiary"), and VALTRA
HOLDING OY, a Finnish limited liability company ("Finnish Subsidiary"; AGCO,
Canadian Subsidiary, English Subsidiary One, English Subsidiary Two, Netherlands
Subsidiary, German Subsidiary and Finnish Subsidiary are referred to herein
collectively as the "Borrowers" and individually as a "Borrower"); the lenders
(the "Lenders") signatory hereto; COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", CANADIAN BRANCH, as
Canadian administrative agent for the Canadian Lenders (together with any
successor, in such capacity, the "Canadian Administrative Agent"); and
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW
YORK BRANCH, as administrative agent for the Lenders (together with any
successor, in such capacity, the "Administrative Agent").

                                   WITNESSETH:

     WHEREAS, the Borrowers, the Administrative Agent, the Canadian
Administrative Agent, the Lenders, the Issuing Banks (as defined in the Credit
Agreement), SunTrust Bank and Morgan Stanley Senior Funding, Inc., as
Co-Syndication Agents, and CoBank, ACB and The Bank of Tokyo-Mitsubishi, Ltd.,
NY Branch, as Co-Documentation Agents, are parties to that certain Credit
Agreement dated as of December 22, 2003 (as amended by that certain First
Amendment to Credit Agreement and Consent dated as of April 12, 2004, as further
amended by that certain Second Amendment to Credit Agreement dated as of August
17, 2004, as further amended by that certain Third Amendment to Credit Agreement
dated as of March 21, 2005, as further amended by that certain Fourth Amendment
to Credit Agreement and Consent dated as of June 2, 2005 and as further amended,
restated, supplemented or modified from time to time, the "Credit Agreement");
and

     WHEREAS, the Borrowers have requested that certain terms and conditions of
the Credit Agreement be amended, and the Lenders signatory hereto, the Canadian
Administrative Agent and the Administrative Agent have agreed to the requested
amendments on the terms and conditions set forth herein;

<PAGE>

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree that
all capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Credit Agreement, and further agree as follows:

     SECTION 1. Amendments.

               (a) Section 1.1 of the Credit Agreement, Certain Defined Terms,
is hereby amended and modified by deleting the table contained in the definition
of "Applicable Margin" set forth therein in its entirety and by substituting the
following in lieu thereof:

<TABLE>
<CAPTION>
                                       Applicable
                                       Margin for
                                       LIBO Rate
                                       Revolving
                                     Loans and for
                                       Base Rate       Applicable
                                       Revolving     Margin for Base
                                        Loans in     Rate Revolving    Applicable
                                        Offshore      Loans in U.S.    Margin for
         Senior Debt Ratio             Currencies        Dollars       Unused Fee
         -----------------           -------------   ---------------   ----------
<S>                                  <C>             <C>               <C>
Greater than or equal to 3.00 to         2.00%            0.75%           0.50%
1.00

Less than 3.00 to 1.00 but greater       1.75%            0.50%          0.425%
than or equal to 2.50 to 1.00

Less than 2.50 to 1.00 but greater       1.50%            0.25%          0.350%
than or equal to 2.00 to 1.00

Less than 2.00 to 1.00                   1.25%            0.00%          0.275%
</TABLE>

               (b) Section 7.4 of the Credit Agreement, Restricted Payments and
Purchases, is hereby amended and modified as follows: (i) by deleting "and" at
the end of subsection (c)(iv) thereof and inserting "," in lieu thereof; (ii) by
deleting "." at the end of subsection (c)(v) thereof and inserting "and" in lieu
thereof; and (iii) by inserting the following as new subsection (c)(vi):

          "(vi) purchase, redeem, retire or otherwise acquire shares of its own
     outstanding Stock for cash in an aggregate amount for all such shares
     acquired pursuant to this clause (vi) during the term of this Agreement not
     to exceed the sum of (A) $100,000,000, and (B) 50% of the Excess Cash

                                      -2-

<PAGE>

     Flow for the fiscal year ending 2006 and each fiscal year thereafter on a
     cumulative basis (provided, however, that such percentage of the Excess
     Cash Flow for any fiscal year shall not be added until the Administrative
     Agent shall have received the annual audit report for such fiscal year
     pursuant to Section 6.1(c) hereof)."

               (c) Section 7.18 of the Credit Agreement, Financial Covenants, is
hereby amended and modified by deleting subsection (a), Total Debt Ratio, in its
entirety and by substituting the following in lieu thereof:

          "(a) Total Debt Ratio. AGCO shall not allow, as of the end of each
     fiscal quarter of AGCO, the Total Debt Ratio to exceed the ratio set forth
     below for the applicable fiscal quarter corresponding thereto:

<TABLE>
<CAPTION>
Fiscal Quarters Ending:      Ratio:
-----------------------      ------
<S>                          <C>
From December 31, 2003       5.35 to 1.00
through September 30, 2004

December 31, 2004 through    5.10 to 1.00
September 30, 2005

December 31, 2005 through    4.60 to 1.00
September 30, 2006

December 31, 2006 through    4.25 to 1.00
September 30, 2007

December 31, 2007 and        4.00 to 1.00
thereafter
</TABLE>
"

               (d) Section 7.18 of the Credit Agreement, Financial Covenants, is
hereby further amended and modified by deleting subsection (b), Senior Debt
Ratio, in its entirety and by substituting the following in lieu thereof:

          "(b) Senior Debt Ratio. AGCO shall not allow, as of the end of each
     fiscal quarter of AGCO, the Senior Debt Ratio to exceed the ratio set forth
     below for the applicable fiscal quarter corresponding thereto:

                                      -3-

<PAGE>

<TABLE>
<CAPTION>
Fiscal Quarters Ending:            Ratio:
-----------------------            ------
<S>                                <C>
From December 31, 2003 through     3.70 to 1.00
September 30, 2004

December 31, 2004 through          3.50 to 1.00
September 30, 2005

December 31, 2005                  3.00 to 1.00

March 31, 2006 through September   3.25 to 1.00
30, 2006

December 31, 2006 through          3.00 to 1.00
September 30, 2007

December 31, 2007 and thereafter   2.75 to 1.00
</TABLE>
"

               (e) Section 7.18 of the Credit Agreement, Financial Covenants, is
hereby further amended and modified by deleting subsection (c), Fixed Charge
Coverage Ratio, in its entirety and by substituting the following in lieu
thereof:

          "(c) Fixed Charge Coverage Ratio. AGCO shall maintain, as of the end
     of each fiscal quarter of AGCO, a Fixed Charge Coverage Ratio for the four
     fiscal quarter period then ended of not less than the ratio set forth below
     for the applicable fiscal quarter corresponding thereto:

<TABLE>
<CAPTION>
Fiscal Quarters Ending:           Ratio:
-----------------------           ------
<S>                               <C>
From December 31, 2003 through    1.50 to 1.00
December 31, 2005

March 31, 2006 through December   1.50 to 1.00
31, 2006

March 31, 2007 and thereafter     1.60 to 1.00
</TABLE>
"

     SECTION 2. Representations and Warranties. Each of AGCO and the other
Borrowers represents and warrants as follows:

               (a) The execution, delivery and performance by each Borrower of
this Amendment and the other transactions contemplated hereby, are within such

                                      -4-

<PAGE>

Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Borrower's charter or bylaws;
(ii) violate any Applicable Law (including, without limitation, to the extent
applicable, the Securities Exchange Act of 1934, the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970 and any
similar statute); (iii) conflict with or result in the breach of, or constitute
a default under, any contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting any Borrower, any of
its Subsidiaries or any of their properties (including any of the Applicable
Capital Market Transaction Documents); or (iv) except for the Liens created
under the Security Documents, result in or require the creation or imposition of
any Lien upon or with respect to any of the properties of any Borrower or any of
its Subsidiaries;

               (b) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or regulatory body or any
other third party is required for the due execution, delivery or performance by
any Borrower of this Amendment and each other Loan Document contemplated hereby
to which it is or is to be a party;

               (c) This Amendment and each other document required to be
delivered by a Borrower hereunder has been duly executed and delivered by each
Borrower thereto, and constitutes the legal, valid and binding obligation of
each Borrower thereto, enforceable against such Borrower in accordance with its
terms;

               (d) The representations and warranties contained in Article 4 of
the Credit Agreement, and in each of the other Loan Documents, are true and
correct on and as of the date hereof as though made on and as of such date,
other than (i) any such representations and warranties that, by their terms,
expressly refer to an earlier date, and (ii) as a result of changes permitted by
the terms of the Credit Agreement; and

               (e) After giving effect hereto, no event has occurred and is
continuing which constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time elapse or both.

     SECTION 3. Conditions Precedent to Effectiveness of this Amendment. This
Amendment shall be effective as of the date first set forth above when the
Administrative Agent shall have received, in form and substance satisfactory to
it, each of the following:

               (a) this Amendment, duly executed by the Borrowers, the Canadian
Administrative Agent and the Administrative Agent, and Lender Addendum, in the
form attached hereto, duly executed by all of the Multi-Currency Lenders, all of
the Canadian Lenders, and the Required Lenders;

               (b) an amendment fee for the account of each Lender that
delivered to the Administrative Agent prior to 5:00 p.m. (New York City time) on
March

                                      -5-

<PAGE>

22, 2006 such Lender's executed Lender Addenda to this Amendment, in an amount
equal to two and one-half (2.5) basis points for each such Lender's Commitment;
and

               (c) the payment of such other fees, and the delivery of such
other documents, instruments and information, as the Administrative Agent may
reasonably request.

     SECTION 4. Reference to and Effect on the Credit Agreement. Upon the
effectiveness of this Amendment as set forth in Section 3 hereof, on and after
the date hereof, each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import shall mean and be a
reference to the Credit Agreement as amended hereby, and each reference in the
Notes and the other Loan Documents to the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended hereby.

     SECTION 5. Reaffirmation of Guaranty. By executing this Amendment, each
Guarantor hereby acknowledges, consents and agrees that all of its obligations
and liability under the Guaranty Agreements to which it is a party remain in
full force and effect, and that the execution and delivery of this Amendment and
any and all documents executed in connection therewith shall not alter, amend,
reduce or modify its obligations and liability under such Guaranty Agreements or
any of the other Loan Documents to which it is a party.

     SECTION 6. Costs, Expenses and Taxes. The Borrowers agree, jointly and
severally, to pay on demand all costs and expenses of the Administrative Agent
in connection with the preparation, execution and delivery of this Amendment and
the other instruments and documents to be delivered hereunder (including,
without limitation, the fees and expenses of counsel for the Administrative
Agent with respect thereto).

     SECTION 7. No Other Amendments. Except as otherwise expressed herein, the
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of the Agents or the Lenders under the
Credit Agreement, or any of the other Loan Documents, nor constitute a waiver of
any provision of the Credit Agreement or any of the other Loan Documents. Except
for the amendments set forth above, the text of the Credit Agreement and all
other Loan Documents shall remain unchanged and in full force and effect and the
Borrowers hereby ratify and confirm their respective obligations thereunder.
This Amendment shall not constitute a modification of the Credit Agreement or a
course of dealing with the Administrative Agent at variance with the Credit
Agreement such as to require further notice by the Administrative Agent to
require strict compliance with the terms of the Credit Agreement and the other
Loan Documents in the future, except as expressly set forth herein. The
Borrowers acknowledge and expressly agree that the Agents and the Lenders
reserve the right to, and do in fact, require strict compliance with all terms
and provisions of the Credit Agreement and the other Loan Documents (in each
case as amended hereby).

                                      -6-

<PAGE>

     SECTION 8. Execution in Counterparts. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument. Delivery of a signature page hereto by facsimile
transmission or via email transmission of an Adobe portable document format file
(also known as a "PDF File") shall be as effective as delivery of a manually
executed counterpart hereof.

     SECTION 9. Delivery of Lender Addenda. Each Lender executing this Amendment
shall do so by delivering to the Administrative Agent a Lender Addendum,
substantially in the form of Annex I attached hereto, duly executed by such
Lender.

     SECTION 10. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws (without giving effect to the conflicts
of laws principles thereof) of the State of New York.

     SECTION 11. Final Agreement. This Amendment represents the final agreement
between the Borrowers, the Administrative Agent, the Canadian Administrative
Agent and the Lenders as to the subject matter hereof and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties. There are no unwritten oral agreements between the parties. The
Amendment shall constitute a Loan Document for all purposes.

               [the remainder of the page is intentionally blank]

                                      -7-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

BORROWERS:

                                        AGCO CORPORATION

                                        By:    /s/ Andrew H. Beck
                                            ------------------------------------
                                        Title: S.V.P.
                                               ---------------------------------

                                        AGCO CANADA, LTD.

                                        By:    /s/ Andrew H. Beck
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        AGCO LIMITED

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        AGCO INTERNATIONAL LIMITED

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        AGCO HOLDING B.V.

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                       Fifth Amendment to Credit Agreement
                                Signature Page 1
<PAGE>

                                        AGCO DEUTSCHLAND HOLDING LIMITED & CO.
                                        KG

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        VALTRA HOLDING OY

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

GUARANTORS:                             VALTRA DEUTSCHLAND GMBH
                                        (formerly known as RM 2379
                                        VERMOGENSVERWALTUNGS GMBH)

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        AGCO VERTRIEBS GMBH

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                       Fifth Amendment to Credit Agreement
                                Signature Page 2

<PAGE>

                                        AGCO GMBH

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        AGCO FRANCE S.A.

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        AGCO S.A.

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        VALTRA TRACTEURS FRANCE S.A.S.

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        VALTRA INTERNATIONAL B.V.

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                       Fifth Amendment to Credit Agreement
                                Signature Page 3

<PAGE>

                                        MASSEY FERGUSON CORP.

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        AGCO EQUIPMENT COMPANY

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        SUNFLOWER MANUFACTURING COMPANY, INC.

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        AGCO MANUFACTURING LTD.

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        AGCO SERVICES LTD.

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                       Fifth Amendment to Credit Agreement
                                Signature Page 4

<PAGE>

                                        VALTRA VUOKRAUS OY

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        AGCO DO BRASIL COMERCIA E INDUSTRIA
                                        LTDA.

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        VALTRA DO BRASIL LTDA.

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        EXPORT MARKET SERVICES LLC

                                        By:    /s/ Stephen D. Lupton
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                       Fifth Amendment to Credit Agreement
                                Signature Page 5

<PAGE>

AGENTS, ISSUING BANKS                   COOPERATIEVE CENTRALE RAIFFEISEN-
AND SWING LINE BANK:                    BOERENLEENBANK B.A., "RABOBANK
                                        NEDERLAND," NEW YORK BRANCH, as
                                        Administrative Agent and Multi-Currency
                                        Issuing Bank

                                        By:    /s/ Kimberly English
                                            ------------------------------------
                                        Title: Executive Director
                                               ---------------------------------

                                        By:    /s/ Brett Delfino
                                            ------------------------------------
                                        Title: Executive Director
                                               ---------------------------------

                                        COOPERATIEVE CENTRALE
                                        RAIFFEISEN-BOERENLEENBANK B.A.,
                                        "RABOBANK NEDERLAND," CANADIAN BRANCH,
                                        as Canadian Administrative Agent and
                                        Canadian Issuing Bank

                                        By:    /s/ Rommel J. Domingo
                                            ------------------------------------
                                        Title: Vice President
                                               ---------------------------------

                                        By:    /s/ Khurram Rahman-Khan
                                            ------------------------------------
                                        Title: Executive Director
                                               ---------------------------------

LENDERS:                                See each Lender Addendum attached hereto

                       Fifth Amendment to Credit Agreement
                                Signature Page 7

<PAGE>

                                 LENDER ADDENDUM

          Reference is made to the Credit Agreement dated as of December 22,
2003 (as amended by that certain First Amendment to Credit Agreement and Consent
dated as of April 12, 2004, as further amended by that certain Second Amendment
to Credit Agreement dated as of August 17, 2004, as further amended by that
certain Third Amendment to Credit Agreement dated as of March 21, 2005, as
further amended by that certain Fourth Amendment to Credit Agreement and Consent
dated as of June 2, 2005 and as further amended, restated, renewed, supplemented
or otherwise modified from time to time, the "Credit Agreement") among AGCO
Corporation, AGCO Canada Ltd., AGCO Limited, AGCO International Limited, AGCO
Holding B.V., AGCO Deutschland Holding Limited & Co. KG and Valtra Holding Oy
(collectively, the "Borrowers"), the lenders signatory thereto (together with
any other financial institution that subsequently becomes a Lender thereunder,
the "Lenders"), the Issuing Banks (as defined in the Credit Agreement),
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland",
Canadian Branch, as Canadian Administrative Agent, SunTrust Bank and Morgan
Stanley Senior Funding, Inc., as Co-Syndication Agents, CoBank, ACB and The Bank
of Tokyo-Mitsubishi, Ltd., NY Branch, as Co-Documentation Agents, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New
York Branch, as the Administrative Agent (the "Administrative Agent").
Capitalized terms used herein without definition shall have the respective
meanings ascribed to those terms in the Credit Agreement.

          Upon execution and delivery of this Lender Addendum by the undersigned
Lender, the undersigned Lender hereby consents to and agrees with all of the
terms and conditions contained in, and shall become a party to, the Fifth
Amendment to Credit Agreement dated as of March 22, 2006.

          THIS LENDER ADDENDUM SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          This Lender Addendum may be executed by one or more of the parties
hereto on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
Delivery of an executed signature page hereof by facsimile transmission or via
email transmission of an Adobe portable document file (also known as a "PDF
File") shall be effective as delivery of a manually executed counterpart hereof.

            [The remainder of this page is intentionally left blank.]

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Lender
Addendum to be duly executed and delivered by their proper and duly authorized
officers effective as of the date set forth herein.

                                        [NAME OF LENDER]

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                 Lender Addendum
                                 Signature Page

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