Document:

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
  & ChairmanExhibit 10.1

 

CHANGE OF CONTROL

EMPLOYMENT AGREEMENT

 

AGREEMENT by and between Louisiana-Pacific
Corporation, a Delaware corporation (the “Company”), and                                     
(the “Executive”), dated as of the 1st day of January, 2008.

 

The Board of Directors of the Company (the “Board”),
has determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued dedication of
the Executive, notwithstanding the possibility, threat or occurrence of a
Change of Control (as defined below) of the Company. The Board believes it is
imperative to diminish the inevitable distraction of the Executive by virtue of
the personal uncertainties and risks created by a pending or threatened Change of
Control and to encourage the Executive’s full attention and dedication to the
Company currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and benefits
arrangements upon a Change of Control which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order to accomplish
these objectives, the Board has caused the Company to enter into this
Agreement.

 

This Agreement supersedes and replaces the Change of
Control Employment Agreement dated                ,
between the Company and Executive (the “Prior Agreement”). Upon execution of
this Agreement by Company and Executive, the Prior Agreement shall, effective
as of December 31, 2007, terminate and be of no further force or effect.

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

1.                                       Certain
Definitions.

 

(a)                                  The
“Effective Date” shall mean the first date during the Change of Control Period
(as defined in Section (b)) on which a Change of Control (as defined in Section 2)
occurs. Anything in this Agreement to the contrary notwithstanding, if a Change
of Control occurs during the Change of Control Period and if the Executive’s
employment with the Company is terminated prior to the date on which the Change
of Control occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a third party who
has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise
arose in connection with or anticipation of a Change of Control, then for all
purposes of this Agreement the “Effective Date” shall mean the date immediately
prior to the date of such termination of employment.

 

(b)                                 The
“Change of Control Period” shall mean the period commencing January 1,
2008, and ending on the second anniversary of the date on which the Company
gives written notice to the Executive that the Change of Control Period shall
end.

 

1

 

2.                                       Change
of Control. For the purpose of this Agreement, a “Change of Control” shall
mean:

 

(a)                                  The
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however,
that for purposes of this subsection (a), the following acquisitions shall
not constitute a Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (iv) any
acquisition pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (c) of this Section 2; or

 

(b)                                 Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board; or

 

(c)                                  Consummation
by the Company of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the
acquisition of assets of another entity (a “Business Combination”), in each
case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no Person
(excluding any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of 

 

2

 

common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business Combination; or

 

(d)                                 Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

 

3.                                       Employment
Period. The Company hereby agrees to continue the Executive in its employ,
and the Executive hereby agrees to remain in the employ of the Company subject
to the terms and conditions of this Agreement, for the period commencing on the
Effective Date and ending on the third anniversary of such date (the “Employment
Period”).

 

4.                                       Terms
of Employment.

 

(a)                                  Position
and Duties.

 

(i)                                     During
the Employment Period, (A) the Executive’s position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned to the Executive at
any time during the 120-day period immediately preceding the Effective Date and
(B) the Executive’s services shall be performed at the location where the
Executive was employed immediately preceding the Effective Date or any office
or location less than 50 miles from such location.

 

(ii)                                  During
the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or teach at
educational institutions and (C) manage personal investments, so long as
such activities do not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.

 

3

 

(b)                                 Compensation.

 

(i)                                     Base
Salary. During the Employment Period, the Executive shall receive an annual
base salary (“Annual Base Salary”), which shall be paid at a monthly rate, at
least equal to twelve times the highest monthly base salary paid or payable,
including any base salary which has been earned but deferred, to the Executive
by the Company and its affiliated companies in respect of the twelve-month
period immediately preceding the month in which the Effective Date occurs.
During the Employment Period, the Annual Base Salary shall be reviewed no more
than 12 months after the last salary increase awarded to the Executive prior to
the Effective Date and thereafter at least annually. Any increase in Annual
Base Salary shall not serve to limit or reduce any other obligation to the
Executive under this Agreement. Annual Base Salary shall not be reduced after
any such increase and the term Annual Base Salary as utilized in this Agreement
shall refer to Annual Base Salary as so increased. As used in this Agreement,
the term “affiliated companies” shall include any company controlled by,
controlling or under common control with the Company.

 

(ii)                                  Annual
Bonus. In addition to Annual Base Salary, the Executive shall be awarded,
for each fiscal year ending during the Employment Period, an annual bonus (the “Annual
Bonus”) in cash at least equal to the Executive’s target bonus under the
Company’s annual incentive plans for the fiscal year in which the Effective
Date occurs (or if no target bonus has been set for such fiscal year, the
Executive’s target bonus for the immediately preceding fiscal year (the “Target
Bonus”)). Each such Annual Bonus shall be paid no later than 75 days after the
last day of the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus.

 

(iii)                               Incentive,
Savings and Retirement Plans. During the Employment Period, the Executive
shall be entitled to participate in all incentive, savings and retirement
plans, practices, policies and programs applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in
each case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.

 

(iv)                              Welfare
Benefit Plans. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company and its affiliated 

 

4

 

companies (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life, group
life, accidental death and travel accident insurance plans and programs) to the
extent applicable generally to other peer executives of the Company and its
affiliated companies, but in no event shall such plans, practices, policies and
programs provide the Executive with benefits which are less favorable, in the
aggregate, than the most favorable of such plans, practices, policies and
programs in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.

 

(v)                                 Expenses.
During the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
accordance with the most favorable policies, practices and procedures of the
Company and its affiliated companies in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.

 

(vi)                              Fringe
Benefits. During the Employment Period, the Executive shall be entitled to
fringe benefits, including, without limitation, tax and financial planning
services, payment of club dues, and, if applicable, use of an automobile and
payment of related expenses, in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives
of the Company and its affiliated companies.

 

(vii)                           Office
and Support Staff. During the Employment Period, the Executive shall be
entitled to an office or offices of a size and with furnishings and other
appointments, and to personal secretarial and other assistance, at least equal
to the most favorable of the foregoing provided to the Executive by the Company
and its affiliated companies at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as
provided generally at any time thereafter with respect to other peer executives
of the Company and its affiliated companies.

 

(viii)                        Vacation.
During the Employment Period, the Executive shall be entitled to paid vacation
in accordance with the most favorable plans, policies, programs and practices
of the Company and its affiliated companies as in effect for the Executive at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.

 

5

 

5.                                       Termination
of Employment.

 

(a)                                  Death
or Disability. The Executive’s employment shall terminate automatically
upon the Executive’s death during the Employment Period. If the Company
determines in good faith that the Disability of the Executive has occurred
during the Employment Period (pursuant to the definition of Disability set
forth below), it may give to the Executive written notice in accordance with Section 12(b) of
this Agreement of its intention to terminate the Executive’s employment. In
such event, the Executive’s employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the Executive (the “Disability
Effective Date”), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the Executive’s
duties. For purposes of this Agreement, “Disability” shall mean the absence of
the Executive from the Executive’s duties with the Company on a full-time basis
for 180 consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive’s legal representative.

 

(b)                                 Cause.
The Company may terminate the Executive’s employment during the Employment
Period for Cause. For purposes of this Agreement, “Cause” shall mean:

 

(i)                                     the
willful and continued failure of the Executive to perform substantially the
Executive’s duties with the Company or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental illness),
after a written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board or Chief Executive
Officer believes that the Executive has not substantially performed the
Executive’s duties, or

 

(ii)                                  the
willful engaging by the Executive in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Company.

 

For purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered “willful” unless it is done, or omitted
to be done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer or a senior officer of the Company or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
The cessation of employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before
the Board), finding that, in the good faith opinion of the 

 

6

 

Board, the Executive is guilty of the conduct described in subparagraph
(i) or (ii) above, and specifying the particulars thereof in detail.

 

(c)                                  Good
Reason. The Executive’s employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, “Good Reason” shall mean:

 

(i)                                     any
change by the Company of the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities that
does not comply with the provisions of Section 4(a)(i)(A) of this
Agreement, excluding for this purpose any isolated, insubstantial and
inadvertent action by the Company not taken in bad faith and which is remedied
by the Company promptly after receipt of notice thereof given by the Executive;

 

(ii)                                  any
failure by the Company to comply with any of the provisions of Section 4(b) of
this Agreement, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;

 

(iii)                               the
Company’s requiring the Executive to be based at any office or location other
than as provided in Section 4(a)(i)(B) hereof or the Company’s
requiring the Executive to travel on Company business to a substantially
greater extent than required immediately prior to the Effective Date;

 

(iv)                              any
purported termination by the Company of the Executive’s employment otherwise
than as expressly permitted by this Agreement; or

 

(v)                                 any
failure by the Company to comply with and satisfy Section 11(c) of
this Agreement.

 

(d)                                 Notice
of Termination. Any termination by the Company for Cause, or by the Executive
for Good Reason, shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 12(b) of this
Agreement. For purposes of this Agreement, a “Notice of Termination” means a
written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and (iii) if
the Date of Termination (as defined below) is other than the date of receipt of
such notice, specifies the termination date (which date shall be not more than
thirty days after the giving of such notice). The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive’s or the Company’s rights hereunder.

 

(e)                                  Date
of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified 

 

7

 

therein, as the case may be, (ii) if the
Executive’s employment is terminated by the Company other than for Cause or
Disability, the date on which the Company notifies the Executive of such
termination and (iii) if the Executive’s employment is terminated by
reason of death or Disability, the date of death of the Executive or the
Disability Effective Date, as the case may be.

 

6.                                       Obligations
of the Company upon Termination.

 

(a)                                  Good
Reason; Other Than for Cause, Death or Disability. If, during the
Employment Period, the Company shall terminate the Executive’s employment other
than for Cause or Disability or the Executive shall terminate employment for
Good Reason:

 

(i)                                     the
Company shall pay to the Executive, in a lump sum in cash on the first business
day that is at least six months after the Date of Termination (or, if earlier,
on the first business day of the first calendar month following the date of the
Executive’s death), the aggregate of the following amounts:

 

(A)                              the
sum of (1) the Executive’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (2) the product of (x) the
Target Bonus and (y) a fraction, the numerator of which is the number of days
in the current fiscal year through the Date of Termination, and the denominator
of which is 365 and (3) any compensation previously deferred by the
Executive (together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not theretofore paid (the sum
of the amounts described in clauses (1), (2), and (3) shall be hereinafter
referred to as the “Accrued Obligations”); and

 

(B)                                the
amount equal to the product of (1) three and (2) the sum of (x) the
Executive’s Annual Base Salary and (y) the Target Bonus; and

 

(C)                                an
amount equal to the difference between (a) the aggregate benefit under the
Company’s qualified defined benefit retirement plans (collectively, the “Retirement
Plan”) and any excess or supplemental defined benefit retirement plans in which
the Executive participates (collectively, the “SERP”) which the Executive would
have accrued (whether or not vested) if the Executive’s employment had
continued for three years after the Date of Termination, based on the
assumption that the Executive’s compensation in each of the three years
following such termination would have been that required by Section 4(b)(i) and
Section 4(b)(ii) and computed without regard to any accrued benefit
enhancements under the provisions of the Retirement Plan and the SERP that
arise by reason of a Change of Control and (b) the actual vested benefit,
if any, of the Executive under the Retirement Plan and the SERP, determined as
of the Date of Termination. The foregoing amounts shall be computed on an
actuarial present value basis, and using actuarial assumptions and early
retirement reduction factors no less favorable to the Executive than the most
favorable of those in effect for purposes of computing benefit 

 

8

 

entitlements under the Retirement Plan and the SERP at
any time from the day before the Effective Date through the Date of Termination;
and

 

(D)                               Interest
on the amounts described in paragraphs A, B, and C of this Section 6(a)(i) from the Date of Termination
through the date of payment at the six month London InterBank Offered Rate
(LIBOR) as published in the Wall Street Journal plus 85 bps, which rate will be
set on the Date of Termination.

 

(ii)                                  for
three years after the Executive’s Date of Termination, or such longer period as
may be provided by the terms of the appropriate plan, program, practice or
policy, the Company shall continue benefits to the Executive and/or the
Executive’s family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described
in Section 4(b)(iv) of this Agreement if the Executive’s employment
had not been terminated or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies and their families, provided, however,
that if the Executive becomes re-employed with another employer and is eligible
to receive medical or other welfare benefits under another employer-provided
plan, the medical and other welfare benefits described herein shall be
secondary to those provided under such other plan during such applicable period
of eligibility, and for purposes of determining eligibility (but not the time
of commencement of benefits) of the Executive for retiree benefits pursuant to
such plans, practices, programs and policies, the Executive shall be considered
to have remained employed until three years after the Date of Termination and
to have retired on the last day of such period;

 

(iii)                               the
Company shall, for a period of 12 months after the Executive’s Date of
Termination and at its sole expense as incurred (not to exceed, in total, an
amount equal to 10 percent of the Executive’s Annual Base Salary), provide the
Executive with reasonable and customary outplacement services, the provider of
which shall be selected by the Executive in the Executive’s sole discretion;
and

 

(iv)                              to
the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Company and its affiliated
companies (such other amounts and benefits shall be hereinafter referred to as
the “Other Benefits”).

 

(b)                                 Death.
If the Executive’s employment is terminated by reason of the Executive’s death
during the Employment Period, this Agreement shall terminate without further
obligations to the Executive’s legal representatives under this Agreement,
other than for payment of Accrued Obligations and the timely payment or provision
of Other Benefits. Accrued Obligations shall be paid to the Executive’s estate
or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date
of Termination. With 

 

9

 

respect to the provision of Other Benefits, the term
Other Benefits as utilized in this Section 6(b) shall include,
without limitation, and the Executive’s estate and/or beneficiaries shall be
entitled to receive, benefits at least equal to the most favorable benefits
provided by the Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such affiliated companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive’s estate and/or the
Executive’s beneficiaries, as in effect on the date of the Executive’s death
with respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.

 

(c)                                  Disability.
If the Executive’s employment is terminated by reason of the Executive’s
Disability during the Employment Period, this Agreement shall terminate without
further obligations to the Executive, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination. With respect to the provision of Other Benefits,
the term Other Benefits as utilized in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability Effective
Date to receive, disability and other benefits at least equal to the most
favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive’s family, as in effect
at any time thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.

 

(d)                                 Cause;
Other than for Good Reason. If the Executive’s employment shall be
terminated for Cause during the Employment Period or the Executive voluntarily
terminates employment during the Employment Period, excluding a termination for
Good Reason, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive (x) the Annual Base
Salary through the Date of Termination, (y) the amount of any compensation
previously deferred by the Executive, and (z) Other Benefits, in each case to
the extent theretofore unpaid.

 

7.                                       Non-exclusivity
of Rights. Nothing in this Agreement shall prevent or limit the Executive’s
continuing or future participation in any plan, program, policy or practice
provided by the Company or any of its affiliated companies and for which the
Executive may qualify, nor, subject to Section 12(f), shall anything
herein limit or otherwise affect such rights as the Executive may have under
any contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.

 

10

 

8.                                       Full
Settlement; Legal Fees. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations hereunder
shall not be affected by any set-off, counterclaim, recoupment, defense or
other claim, right or action which the Company may have against the Executive
or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and except as
specifically provided in Section 6(a)(ii), such amounts shall not be
reduced whether or not the Executive obtains other employment. The Company
agrees to pay as incurred, to the full extent permitted by law, all legal fees
and expenses which the Executive may reasonably incur as a result of any
contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability or entitlement under,
any provision of this Agreement or any guarantee of performance thereof
(whether such contest is between the Company and the Executive or between
either of them and any third party, and including as a result of any contest by
the Executive about the amount of any payment pursuant to this Agreement), plus
in each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of
1986, as amended (the “Code”).

 

9.                                       Certain
Additional Payments by the Company.

 

(a)                                  Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, award, benefit or distribution by the Company (or
any of its affiliated entities) or by any entity which effectuates a Change of
Control (or any of its affiliated entities) to or for the benefit of the
Executive (whether pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section 9)
(a “Payment”) would be subject to the excise tax imposed by Section 4999
of the Code or any corresponding provisions of state or local tax laws, or any
interest or penalties are incurred by the Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Executive
shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. The payment of a Gross-Up Payment under this Section 9(a) shall
not be conditioned upon the Executive’s termination of employment.
Notwithstanding the foregoing provisions of this Section 9(a), if it shall
be determined that the Executive is entitled to a Gross-Up Payment, but that
the portion of the Payments that would be treated as “parachute payments” under
Section 280G of the Code does not exceed 110% of the greatest amount (the “Safe
Harbor Amount”) that could be paid to the Executive such that the receipt of
Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall
be made to the Executive and the amounts payable under this Agreement shall be
reduced so that the Payments, in the aggregate, are reduced to the Safe Harbor
Amount. The reduction of the amounts payable hereunder, if applicable, shall be
made by first reducing the payments under Section 6(a)(i)(B), unless an
alternative method of reduction is elected by the Executive. For purposes of
reducing the 

 

11

 

Payments to the Safe Harbor Amount, only amounts
payable under this Agreement (and no other Payments) shall be reduced. If the
reduction of the amounts payable under this Agreement would not result in a
reduction of the Payments to the Safe Harbor Amount, no amounts payable under
this Agreement shall be reduced pursuant to this Section 9(a).

 

(b)                                 Subject
to the provisions of Section 9(c), all determinations required to be made
under this Section 9, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Deloitte &
Touche LLP or such other certified public accounting firm as may be designated
by the Executive (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, the Executive shall appoint
another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 9, shall be paid by the Company to the Executive within five
days of the receipt of the Accounting Firm’s determination. Any determination
by the Accounting Firm shall be binding upon the Company and the Executive. As
a result of the uncertainty in the application of Section 4999 of the Code
at the time of the initial determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments which will not have been made by the Company
should have been made (“Underpayment”), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 9(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.

 

(c)                                  The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which the Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall:

 

(i)                                     give
the Company any information reasonably requested by the Company relating to
such claim,

 

(ii)                                  take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, 

 

12

 

without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,

 

(iii)                               cooperate
with the Company in good faith in order effectively to contest such claim, and

 

(iv)                              permit
the Company to participate in any proceedings relating to such claim;

 

provided,
however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing provisions of this Section 9(c),
the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.

 

(d)                                 If,
after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 9(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company’s
complying with the requirements of Section 9(c) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

 

13

 

10.                                 Confidential
Information. The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or
data relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive’s employment by the Company or any of its affiliated companies
and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive’s employment with the Company, the Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.

 

11.                                 Successors.

 

(a)                                  This
Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive’s legal representatives.

 

(b)                                 This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

 

(c)                                  The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, or otherwise.

 

12.                                 Miscellaneous.

 

(a)                                  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without reference to principles of conflict of laws. The
captions of this Agreement are not part of the provisions hereof and shall have
no force or effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.

 

(b)                                 All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

 

14

 

	
   

  	
  If to the Executive:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  If to the Company:

  
	
   

  	
   

  
	
   

  	
   

  	
  Louisiana-Pacific
  Corporation

  
	
   

  	
   

  	
  414 Union Street, Suite 2000

  
	
   

  	
   

  	
  Nashville, Tennessee 37219-1711

  
	
   

  	
   

  	
  Attention: General
  Counsel

  
					

 

or to such other address as either party shall have
furnished to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the addressee.

 

(c)                                  The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.

 

(d)                                 The
Company may withhold from any amounts payable under this Agreement such
Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

 

(e)                                  The
Executive’s or the Company’s failure to insist upon strict compliance with any
provision hereof or any other provision 6f this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Section 5(c)(i) to 5(c)(v) of this Agreement,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.

 

(f)                                    The
Executive and the Company acknowledge that, except as may otherwise be provided
under any other written agreement between the Executive and the Company, the
employment of the Executive by the Company is “at will” and, prior to the
Effective Date, the Executive’s employment may be terminated by either the
Executive or the Company at any time prior to the Effective Date, in which case
the Executive shall have no further rights under this Agreement. From and after
the Effective Date this Agreement shall supersede any other agreement between
the parties with respect to the subject matter hereof, including, without
limitation, the right of the Executive to participate in any severance plan of
the Company or otherwise receive severance benefits from the Company during the
Employment Period.

 

15

 

IN WITNESS WHEREOF, the Executive has hereunto set the
Executive’s hand and, pursuant to the authorization from its Board of
Directors, the Company has caused this Agreement to be executed in its name on
its behalf, all as of the day and year first above written.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  (Executive)

  
	
   

  
	
   

  
	
   

  	
  LOUISIANA-PACIFIC
  CORPORATION

  
	
   

  
	
   

  	
  By

  	
   

  	
   

  
				

 

16

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