UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2009

Commission File No. 001-33866

TITAN MACHINERY INC.

(Exact name of registrant as specified in its charter)

Delaware		No. 45-0357838
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

4876 Rocking Horse Circle
Fargo, ND 58104-6049

(Address of Principal Executive Offices)

Registrant’s telephone number (701) 356-0130

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES o NO x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES o NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer x

Non-accelerated filer o		Smaller reporting company o
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO x

The number of shares outstanding of the registrant’s common stock as of September 1, 2009 was: Common Stock, $0.00001 par value, 17,761,588 shares.

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TITAN MACHINERY INC.

QUARTERLY REPORT ON FORM 10-Q

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		Page No.
PART I. FINANCIAL INFORMATION		1

ITEM 1.	FINANCIAL STATEMENTS	1

	Consolidated Balance Sheets as of July 31, 2009 and January 31, 2009	1

	Consolidated Statements of Operations for the three and six months ended July 31, 2009 and 2008	2

	Consolidated Statements of Cash Flows for the six months ended July 31, 2009 and 2008	3

	Notes to Consolidated Financial Statements	5

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20

ITEM 4.	CONTROLS AND PROCEDURES	20

PART II. OTHER INFORMATION		21

ITEM 1.	LEGAL PROCEEDINGS	21

ITEM 1A.	RISK FACTORS	21

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	21

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	21

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	21

ITEM 5.	OTHER INFORMATION	22

ITEM 6.	EXHIBITS	22

Signatures		23

Exhibit Index		24

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PART I. – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TITAN MACHINERY INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	July 31,		January 31,
	2009		2009
	(Unaudited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	85,981	$	41,047
U.S. treasury bills	—		44,994
Total cash, cash equivalents and U.S. treasury bills	85,981		86,041

Receivables, net	20,524		19,627
Inventories	346,463		241,094
Prepaid expenses	695		532
Income taxes receivable	—		1,433
Deferred income taxes	1,923		1,426

Total current assets	455,586		350,153

INTANGIBLES AND OTHER ASSETS
Parts inventory in excess of amounts expected to be sold currently	1,784		1,509
Goodwill	13,702		12,464
Intangible assets, net of accumulated amortization	329		366
Other	538		487
	16,353		14,826

PROPERTY AND EQUIPMENT, net of accumulated depreciation	47,609		45,269

	$	519,548	$	410,248

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable	$	14,685	$	18,652
Floorplan notes payable	257,563		166,481
Current maturities of long-term debt and short-term advances	11,511		7,623
Customer deposits	9,516		15,158
Accrued expenses	7,402		8,308
Income taxes payable	1,609		—

Total current liabilities	302,286		216,222

LONG-TERM LIABILITIES
Long-term debt, less current maturities	28,107		14,810
Deferred income taxes	4,389		3,503
Other long-term liabilities	3,926		1,946
	36,422		20,259

STOCKHOLDERS’ EQUITY
Common stock, par value $.00001 per share, authorized - 25,000 shares; issued and outstanding - 17,755 at July 31, 2009 and 17,657, at January 31, 2009	—		—
Additional paid-in-capital	138,187		137,755
Retained earnings	42,653		36,012
	180,840		173,767

	$	519,548	$	410,248

See Notes to Consolidated Financial Statements

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TITAN MACHINERY INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	July 31,						July 31,
	2009			2008			2009			2008

REVENUE
Equipment	$	141,142		$	97,840		$	266,007		$	218,754
Parts	32,454			23,612			58,852			45,116
Service	15,640			10,788			28,182			19,732
Other, including trucking and rental	3,956			2,665			6,452			3,885
TOTAL REVENUE	193,192			134,905			359,493			287,487

COST OF REVENUE
Equipment	125,452			86,986			237,752			194,904
Parts	22,939			16,689			41,476			32,483
Service	5,586			3,907			10,186			7,325
Other, including trucking and rental	3,207			1,894			5,555			2,747
TOTAL COST OF REVENUE	157,184			109,476			294,969			237,459

GROSS PROFIT	36,008			25,429			64,524			50,028

OPERATING EXPENSES	26,662			19,470			51,367			37,652

INCOME FROM OPERATIONS	9,346			5,959			13,157			12,376

OTHER INCOME (EXPENSE)
Interest and other income	140			450			351			761
Floorplan interest expense	(932		)	(578		)	(1,663		)	(1,299		)
Interest expense other	(328		)	(230		)	(591		)	(543		)

INCOME BEFORE INCOME TAXES	8,226			5,601			11,254			11,295

PROVISION FOR INCOME TAXES	(3,375		)	(2,269		)	(4,613		)	(4,575		)

NET INCOME	$	4,851		$	3,332		$	6,641		$	6,720

EARNINGS PER SHARE - NOTE 1

EARNINGS PER SHARE - BASIC	$	0.28		$	0.20		$	0.38		$	0.45
EARNINGS PER SHARE - DILUTED	$	0.27		$	0.19		$	0.37		$	0.43

WEIGHTED AVERAGE SHARES - BASIC	17,589			16,630			17,577			15,006
WEIGHTED AVERAGE SHARES - DILUTED	17,998			17,170			17,930			15,512

See Notes to Consolidated Financial Statements

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TITAN MACHINERY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Six Months Ended July 31,
	2009			2008

OPERATING ACTIVITIES
Net income	$	6,641		$	6,720
Adjustments to reconcile net income to net cash from operations
Depreciation and amortization	3,962			1,873
Deferred income taxes	329			80
Stock-based compensation expense	432			309
Other	(22		)	(80		)
Changes in assets and liabilities, net of purchase of equipment dealerships assets and assumption of liabilities
Receivables and prepaid expenses	(755		)	(7,837		)
Inventories	(35,238		)	(6,952		)
Floorplan notes payable	2,989			(1,745		)
Accounts payable, customer deposits, accrued expenses and other long-term liabilities	(8,785		)	14,605
Income taxes	3,042			424

NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	(27,405		)	7,397

INVESTING ACTIVITIES
Sales of U.S. treasury bills, net of purchases	44,994			—
Property and equipment purchases	(7,635		)	(3,690		)
Net proceeds from sale of equipment	190			146
Purchase of equipment dealerships, net of cash purchased	(4,025		)	(20,329		)

NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	33,524			(23,873		)

FINANCING ACTIVITIES
Proceeds from follow-on offering of common stock net of underwriting discount of $4,389 and other direct costs of $354	—			78,857
Net change in non-manufacturer floorplan notes payable	25,185			(1,985		)
Short-term advances related to customer contracts in transit	2,700			—
Proceeds from long-term debt borrowings	20,388			564
Principal payments on long-term debt and subordinated debentures	(9,458		)	(16,817		)
Other	—			40

NET CASH PROVIDED BY FINANCING ACTIVITIES	38,815			60,659

NET CHANGE IN CASH AND CASH EQUIVALENTS	44,934			44,183

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	41,047			42,803

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	85,981		$	86,986

See Notes to Consolidated Financial Statements

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Page – 2

(in thousands)

	Six Months Ended July 31,
	2009			2008

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period
Income taxes, net of refunds	$	1,688		$	4,070
Interest	$	2,206		$	1,927

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES
Property and equipment purchased with long-term debt	$	1,688		$	—
Net transfer of equipment from fixed assets to inventories	$	4,292		$	—

Acquisition of equipment dealership assets in exchange for cash and assumption of liabilities including purchase accounting adjustments on prior acquisitions
Receivables	$	(305	)	$	(1,255	)
Inventories	(6,203		)	(18,200		)
Deferred income taxes, net	133			328
Property and equipment	(786		)	(5,344		)
Goodwill	(1,238		)	(727		)
Accounts payable	(211		)	346
Floorplan notes payable	2,398			3,361
Customer deposits	205			392
Accrued expenses	188			43
Income taxes payable	(73		)	242
Long-term debt	1,867			485
Cash paid for dealerships, net of cash purchased, and adjustments on prior acquisitions	$	(4,025	)	$	(20,329	)

See Notes to Consolidated Financial Statements

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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended July 31, 2009 are not necessarily indicative of the results that may be expected for the year ending January 31, 2010. The information contained in the balance sheet as of January 31, 2009 was derived from the Company’s audited financial statements for the year then ended. These consolidated financial statements should be read in conjunction with the audited consolidated financial statement and notes thereto included in our Form 10-K for the fiscal year ended January 31, 2009 as filed with the SEC.

Nature of Business

Titan Machinery Inc. (the “Company”) is engaged in the retail sale, service and rental of agricultural and industrial machinery through stores in North Dakota, South Dakota, Minnesota, Iowa, Nebraska, Montana and Wyoming.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Transportation Solutions, LLC. All significant accounts, transactions and profits between the consolidated companies have been eliminated in consolidation.

Fair Value of Financial Instruments

The carrying amount of cash, receivables, payables, short-term debt and other current liabilities approximates fair value because of the short maturity and/or frequent repricing of those instruments. Based upon current borrowing rates with similar maturities, the carrying value of the long-term debt approximates the fair value as of July 31, 2009 and January 31, 2009.

Recently Issued Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162, (“the Codification”) as the single source of authoritative nongovernmental GAAP. All existing accounting standard documents, excluding guidance from the Securities and Exchange Commission (“SEC”), will be superseded by the Codification. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become nonauthoritative. The Codification does not change GAAP, but instead introduces a new structure that will combine all authoritative standards into a comprehensive, topically organized online database. The Codification will be effective for interim or annual periods ending after September 15, 2009, and will impact the Company’s financial statement disclosures beginning with the quarter ending October 31, 2009 as all future references to authoritative

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accounting literature will be referenced in accordance with the Codification. There will be no changes to the content of the Company’s consolidated financial statements or disclosures as a result of implementing the Codification.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events. SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The Company adopted SFAS 165 as of July 31, 2009. Its adoption did not have a material effect on the Company’s consolidated financial statements.

In April 2009, the FASB issued FASB Staff Position (“FSP”) FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies. This pronouncement provides guidance on the accounting and disclosure of assets acquired and liabilities assumed in a business combination that arise from contingencies, and subsequent accounting for these contingencies. This FSP will be effective for the Company on February 1, 2010. Its adoption is not expected to have a material effect on the Company’s consolidated financial statements based on the nature of the assets acquired and liabilities assumed in our business combinations.

In April 2009, the FASB issued FSP FAS 107 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This pronouncement requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies, in addition to inclusion in annual financial statements. The Company adopted this FSP as of July 31, 2009. Its adoption did not have a material effect on the Company’s consolidated financial statements.

In February 2008, the FASB issued FSP FAS 157-2, Effective Date of FASB Statement No. 157 (“FSP FAS 157-2”), which permits a one year deferral of the application of SFAS 157 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The Company adopted SFAS 157 for non-financial assets and non-financial liabilities on February 1, 2009. Its adoption did not have a material effect on the Company’s results of operations, financial position or cash flows.

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R provides additional guidance on improving the relevance, representational faithfulness, and comparability of the financial information that a reporting entity provides in its financial reports about a business combination and its effects. SFAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company adopted SFAS 141R effective February 1, 2009. Its adoption did not have a material effect on the Company’s consolidated financial statements. Any acquisition we make in fiscal 2010 and future periods will be subject to this new accounting guidance.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS 160”). SFAS 160 applies to all entities that prepare consolidated financial statements and have an outstanding noncontrolling interest in one or more subsidiaries. SFAS 160 amends Accounting Research Bulletin No. 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company adopted SFAS 160 effective as of February 1, 2009. Its adoption did not have a material effect on the Company’s consolidated financial statements.

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Earnings Per Share

The following table sets forth the denominator for the computation of basic and diluted earnings per share:

	Three Months Ended July 31,		Six Months Ended July 31,
(in thousands)	2009	2008	2009	2008

Basic weighted-average shares outstanding	17,589	16,630	17,577	15,006
Plus: Incremental shares from assumed conversions
Restricted Stock	137	85	117	85
Warrants	79	116	80	113
Stock Options	193	339	156	308
Diluted weighted-average shares outstanding	17,998	17,170	17,930	15,512

There were 163,500 and 20,000 stock options outstanding as of July 31, 2009 and 2008, respectively, that were not included in the computation of diluted earnings per share because they were anti-dilutive.

NOTE 2 - INVENTORIES

	July 31,		January 31,
	2009		2009
	(in thousands)
New equipment	$	216,560	$	132,502
Used equipment	84,905		68,333
Parts, tires and attachments	40,504		37,314
Work in process	4,494		2,945

	$	346,463	$	241,094

In addition to the above amounts, the Company has estimated that a portion of its parts inventory will not be sold in the next operating cycle. Accordingly, these balances have been classified as noncurrent assets.

NOTE 3 - LINES OF CREDIT/FLOORPLAN NOTES PAYABLE

Operating Line of Credit

On July 15, 2009, the Company entered into a Loan Agreement (the “Loan Agreement”) with Bremer Bank National Association (“Bremer Bank”) which provides for a $25.0 million revolving operating line of credit (“Revolving Loan”) and a $15.0 million term loan (“Term Loan”). The Revolving Loan may be used to fund short term working capital requirements of the Company, and replaces the Company’s previous $25.0 million operating line of credit with Bremer Bank. The Revolving Loan has a variable interest rate of 0.25% per annum below a Bremer Bank reference rate (subject to a minimum interest rate floor of 4.5%), requires monthly payments of accrued interest commencing August 1, 2009, and has a maturity date of July 14, 2010. Advances under the Loan Agreement are secured by substantially all of the Company’s assets. See discussion of the Term Loan in Note 4.

The Company had no amount outstanding on the Revolving Loan at July 31, 2009. The Loan Agreement contains certain financial covenants which impose minimum levels of current ratio, debt service coverage, and inventory turnover ratio and a maximum level of debt to tangible net worth ratio. As of July 31, 2009, the Company was in compliance with all of these financial covenants. The Company had a standby letter of credit outstanding in the amount of $0.3 million, which reduced the amount of borrowings available on its Revolving Loan to $24.7 million as of July 31, 2009. The letter of credit expired on August 1, 2009 and was not renewed.

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Floorplan Lines of Credit

The Company has discretionary floorplan lines of credit for equipment purchases totaling approximately $365.0 million with various lending institutions, including a $300.0 million Wholesale Floorplan Credit Facility with CNH Capital America LLC (“CNH”). The available borrowings under the CNH credit facility are reduced by outstanding floorplan notes payable, rental fleet financing and other acquisition-related financing arrangements with CNH. As of July 31, 2009, the interest rate for new borrowings under the CNH Capital floorplan line of credit is equal to the prime rate plus 0.3% per annum for most purposes, subject to any interest-free periods offered by CNH. Effective September 1, 2009, the interest rates will be the prime rate plus 4% on the first $25.0 million in floorplan borrowings prior to December 31, 2009 and the prime rate plus 6% on all other floorplan borrowings. The CNH Capital credit facility automatically renews on August 31 of each year through August 31, 2012, unless earlier terminated by either party. Under covenants of the CNH credit facility, the Company has agreed, among other things, to maintain various financial ratio levels and to submit certain financial information. As of July 31, 2009, the Company was in compliance with all floorplan financial covenants.

Floorplan notes payable relating to these credit facilities totaled approximately $238.8 million of the total floorplan notes payable balance of $257.6 million outstanding as of July 31, 2009 and $153.8 million of the total floorplan notes payable balance of $166.5 million outstanding as of January 31, 2009. As of July 31, 2009, the Company had approximately $105.9 million in available borrowings remaining under these lines of credit. These floorplan notes carried various interest rates primarily ranging from 3.25 to 9.25% as of July 31, 2009 and January 31, 2009, and are secured by the related inventory. Repayment terms vary by individual notes, but generally payments are made from sales proceeds or rental revenue from the related inventories.

NOTE 4 - LONG-TERM DEBT

As discussed in Note 3, on July 15, 2009 the Company entered into a Loan Agreement with Bremer Bank that provides for a $25.0 million Revolving Loan and a $15.0 million Term Loan. The Term Loan will be used for the long term working capital requirements of the Company. The Term Loan has a fixed interest rate of 5.9%, requires monthly payments of principal and interest commencing August 1, 2009, and has a maturity date of July 1, 2014. Advances under the Loan Agreement are secured by substantially all of the Company’s assets. The Loan Agreement contains certain financial covenants that impose minimum levels of current ratio, debt service coverage, and inventory turnover ratio and a maximum level of debt to tangible net worth ratio. As of July 31, 2009, the Company was in compliance with all of these financial covenants. See discussion of the Revolving Loan in Note 3.

There was $15.0 million outstanding on this Term Loan as of July 15, 2009. Future maturities on this Term Loan are as follows:

12 Months Ending July 31,	Amount
	(in thousands)
2010	$	2,682
2011	2,810
2012	2,982
2013	3,167
2014	3,359
Thereafter	—
	$	15,000

NOTE 5 - INCOME TAXES

In August 2009, the Internal Revenue Service (“IRS”) completed its audit of the Company, including the uncertain tax position taken during fiscal 2008. The Company’s unrecognized tax benefit and related interest was $455,000 as of July 31, 2009, which includes $9,000 in accrued interest expense recognized in the six months ended July 31, 2009. As a result of the IRS audit, the $455,000 is included in income taxes payable as of July 31, 2009 and is expected to cover the payments owed to the IRS and applicable state tax authorities. The Company is no longer subject to U.S. federal income tax examinations for fiscal years ending prior to January 31, 2009.

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NOTE 6 - STOCK WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK

Common Stock Warrants

The following table summarizes stock warrant activity for the six months ended July 31, 2009:

(number of warrants and aggregate intrinsic value in thousands)

							Weighted
			Weighted				Average
			Average		Aggregate		Remaining
	Number of		Exercise		Intrinsic		Contractual
	Warrants		Price		Value		Life (Years)

Outstanding and exercisable at January 31, 2009	123		$	3.45
Granted	—		—
Exercised	(37	)	3.50
Forfeited	—		—
Outstanding and exercisable at July 31, 2009	86		$	3.43	$	776	2.8

Stock Options

The following table summarizes stock option activity for the six months ended July 31, 2009:

(number of stock options and aggregate intrinsic value in thousands)

						Weighted
		Weighted				Average
		Average		Aggregate		Remaining
	Number of	Exercise		Intrinsic		Contractual
	Options	Price		Value		Life (Years)

Outstanding at January 31, 2009	646	$	10.91
Granted	5	11.16
Exercised	—	—
Forfeited	—	—
Outstanding at July 31, 2009	651	$	10.91	$	2,352	7.5

Exercisable at July 31, 2009	168	$	7.87	$	897	7.0

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Restricted Stock

The following table summarizes restricted stock activity for the six months ended July 31, 2009:

(number of restricted shares in thousands)

					Weighted
			Weighted		Average
			Average		Remaining
			Grant Date		Contractual
	Shares		Fair Value		Term
Nonvested at January 31, 2009	92		$	10.18	2.1
Granted	75		13.09
Forfeited	(3	)	11.28
Vested	(7	)	15.30
Nonvested at July 31, 2009	157		11.31		3.0

The weighted average grant date fair value of restricted stock granted was $13.09 and $17.53 per share for the six months ended July 31, 2009 and 2008, respectively. The total fair value of restricted stock vested was $114,000 and $1,000 for the six months ended July 31, 2009 and 2008, respectively. As of July 31, 2009, there was approximately $787,000 of unrecognized compensation cost on non-vested restricted stock that is expected to be recognized over a weighted-average period of 3.0 years.

NOTE 7 - BUSINESS COMBINATIONS

On May 1, 2009, the Company acquired 100% of the outstanding stock of Winger Implement, Inc. The acquired entity consisted of one agricultural equipment store located in Winger, Minnesota and expands the Company’s presence in the Red River Valley. The total cash purchase price for the dealership was $1,450,000. The Company expects the allocation of the purchase price to be finalized within one year of the acquisition date.

On May 28, 2009, the Company acquired certain assets of Arthur Mercantile, Co. The acquired entity consisted of one agricultural equipment store located in Arthur, North Dakota and expands the Company’s presence in the Red River Valley. The total cash purchase price for the dealership was $831,697. The Company expects the allocation of the purchase price to be finalized within one year of the acquisition date. James L. Williams, Arthur Mercantile, Co.’s President and Treasurer, is a Titan Machinery director.

On June 30, 2009, the Company acquired certain assets of Valley Equipment, Inc. The acquired entity consisted of one agricultural equipment store located in Mayville, North Dakota and expands the Company’s presence in the Red River Valley. The total cash purchase price for the dealership was $753,404. The Company expects the allocation of the purchase price to be finalized within one year of the acquisition date.

During the six months ended July 31, 2009 adjustments were recorded to finalize the purchase price allocations of prior acquisitions and for additional consideration of $1,063,000 earned and paid under agreements disclosed in our Form 10-K for the fiscal year ended January 31, 2009 as filed with the SEC. These adjustments and additional consideration resulted in a net increase in goodwill of $865,000.

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The allocations of the purchase prices in the above business combinations and adjustments on prior acquisitions are presented in the following table:

	*(in thousands)*

Cash	73
Receivables	305
Inventories	6,203
Deferred income taxes	8
Property and equipment	786
Goodwill	1,238

	$	8,613

Accounts payable	$	(211	)
Floorplan notes payable	2,398
Customer deposits	205
Accrued expenses	188
Income taxes payable	(73		)
Long-term debt	1,867
Deferred income taxes	141

	$	4,515

Consideration given	$	4,098

NOTE 8 - SUBSEQUENT EVENTS

On August 14, 2009, the Company acquired the assets of Lickness Bros. Implement Co., for approximately $210,000. The acquired entity consisted of one agricultural equipment store located in Britton, South Dakota and is strategically located in the James River Valley of northeast South Dakota between Titan Machinery’s Lisbon, North Dakota and Aberdeen, South Dakota stores.

The Company evaluated for the occurrence of subsequent events through September 9, 2009, the issuance date of the Company’s financial statements. No recognized or non-recognized subsequent events occurred except as disclosed in Notes 3, 5 and 8 above.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim consolidated financial statements and related notes included in Item 1 of Part 1 of this Quarterly Report, and the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended January 31, 2009.

Critical Accounting Policies

There have been no material changes in our Critical Accounting Policies, as disclosed in our Annual Report on Form 10-K for the year ended January 31, 2009.

Overview

We own and operate one of the largest networks of full service agricultural and construction equipment stores in North America. We are the world’s largest retail dealer of Case IH Agriculture equipment and a major retail dealer of New Holland Agriculture, Case Construction and New Holland Construction equipment in the U.S. We sell and rent agricultural and construction equipment, sell parts, and service the equipment operating in the areas surrounding our stores.

Our net income was $4.9 million, or $0.27 per diluted share, for the three months ended July 31, 2009, compared to $3.3 million, or $0.19 per diluted share, for the three months ended July 31, 2008. Significant factors impacting the quarter were:

· Overall revenue growth due to acquisitions and increased same-store sales, despite revenue from acquisitions being negatively impacted by the slow construction market and the large number of construction stores acquired in the prior year;

· Increase in gross profits primarily due to increased revenues;

· Increase in operating expenses primarily due to acquisitions; and

· Increase in inventories which aligns with historical stocking levels to support future sales.

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Results of Operations

Comparative financial data for each of our four sources of revenue are expressed below. The results for these periods include the operating results of the acquisitions made during these periods. The period-to-period comparisons included below are not necessarily indicative of future results:

	Three Months Ended July 31,						Six Months Ended July 31,
					Percent						Percent
	2009		2008		Change		2009		2008		Change
	(dollars in thousands)						(dollars in thousands)
Equipment
Revenue	$	141,142	$	97,840	44.3	%	$	266,007	$	218,754	21.6	%
Cost of revenue	125,452		86,986		44.2	%	237,752		194,904		22.0	%
Gross profit	$	15,690	$	10,854	44.6	%	$	28,255	$	23,850	18.5	%

Parts
Revenue	$	32,454	$	23,612	37.4	%	$	58,852	$	45,116	30.4	%
Cost of revenue	22,939		16,689		37.4	%	41,476		32,483		27.7	%
Gross profit	$	9,515	$	6,923	37.4	%	$	17,376	$	12,633	37.5	%

Service
Revenue	$	15,640	$	10,788	45.0	%	$	28,182	$	19,732	42.8	%
Cost of revenue	5,586		3,907		43.0	%	10,186		7,325		39.1	%
Gross profit	$	10,054	$	6,881	46.1	%	$	17,996	$	12,407	45.0	%

Other, including trucking and rental
Revenue	$	3,956	$	2,665	48.4	%	$	6,452	$	3,885	66.1	%
Cost of revenue	3,207		1,894		69.3	%	5,555		2,747		102.2	%
Gross profit	$	749	$	771	(2.9	)%	$	897	$	1,138	(21.2	)%

The following table sets forth our statements of operations data expressed as a percentage for each of our four sources of revenue for the periods indicated:

	Three Months Ended July 31,				Six Months Ended July 31,
	2009		2008		2009		2008

Revenue
Equipment	73.1	%	72.5	%	74.0	%	76.1	%
Parts	16.8	%	17.5	%	16.4	%	15.7	%
Service	8.1	%	8.0	%	7.8	%	6.8	%
Other, including trucking and rental	2.0	%	2.0	%	1.8	%	1.4	%
Total revenue	100.0	%	100.0	%	100.0	%	100.0	%

Cost of revenue
Equipment	64.9	%	64.5	%	66.1	%	67.8	%
Parts	11.9	%	12.4	%	11.6	%	11.3	%
Service	2.9	%	2.9	%	2.8	%	2.5	%
Other, including trucking and rental	1.7	%	1.4	%	1.6	%	1.0	%
Total cost of revenue	81.4	%	81.2	%	82.1	%	82.6	%

Gross profit	18.6	%	18.8	%	17.9	%	17.4	%

Operating expenses	13.8	%	14.4	%	14.2	%	13.1	%

Income from operations	4.8	%	4.4	%	3.7	%	4.3	%

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Three Months Ended July 31, 2009 Compared to Three Months Ended July 31, 2008

Revenue

	Three months ended		Three months ended				Percent
	July 31, 2009		July 31, 2008		Increase		Change
	(dollars in thousands)

Equipment	$	141,142	$	97,840	$	43,302	44.3	%
Parts	32,454		23,612		8,842		37.4	%
Service	15,640		10,788		4,852		45.0	%
Other, including trucking and rental	3,956		2,665		1,291		48.4	%

Total Revenue	$	193,192	$	134,905	$	58,287	43.2	%

The increase in revenue for the three months ended July 31, 2009, as compared to the same period last year, was due to acquisitions contributing to current period revenue and same-store sales growth. Acquisitions contributed $32.0 million in total revenue, or 54.9% of the increase, while same-store sales growth contributed $26.3 million, or 45.1% of the increase. Revenue from acquisitions was negatively impacted by the slow construction market we are currently experiencing and the large number of construction stores acquired in the prior year. Same-store sales increased 20.2% over the same period of the prior year reflecting more traditional timing of equipment sales between the first and second quarters.

Cost of Revenue

	Three months ended		Three months ended				Percent
	July 31, 2009		July 31, 2008		Increase		Change
	(dollars in thousands)

Equipment	$	125,452	$	86,986	$	38,466	44.2	%
Parts	22,939		16,689		6,250		37.4	%
Service	5,586		3,907		1,679		43.0	%
Other, including trucking and rental	3,207		1,894		1,313		69.3	%

Total cost of revenue	$	157,184	$	109,476	$	47,708	43.6	%

The increase in cost of revenue for the three months ended July 31, 2009, as compared to the same period last year, was primarily due to increased revenue. Acquisitions contributed $26.0 million in total cost of revenue, or 54.4% of the increase, while same-store sales growth contributed $21.7 million, or 45.6% of the increase. As a percentage of revenue, cost of revenue was 81.4% compared to 81.2% for the second quarter of fiscal 2009.

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Gross Profit

	Three months ended		Three months ended		Increase/			Percent
	July 31, 2009		July 31, 2008		(Decrease)			Change
	(dollars in thousands)

Equipment	$	15,690	$	10,854	$	4,836		44.6	%
Parts	9,515		6,923		2,592			37.4	%
Service	10,054		6,881		3,173			46.1	%
Other, including trucking and rental	749		771		(22		)	(2.9	)%

Total Gross Profit	$	36,008	$	25,429	$	10,579		41.6	%

The $10.6 million increase in gross profit for the three months ended July 31, 2009, as compared to the same period last year, was primarily due to increased revenue. Acquisitions contributed $6.1 million to the gross profit for the three months ended July 31, 2009, which was 57.1% of the increase in total gross profit, while increases in same-store sales gross profits provided the remaining $4.5 million, or 42.9% of the increase over the three months ended July 31, 2008. Gross profit margins were 18.6% for the second quarter of fiscal 2010, compared to 18.8% for the second quarter of fiscal 2009. Decrease in gross profit margins resulted from an increase in equipment revenues as a percentage of net revenue, which is a lower-margin revenue source. The decrease in gross profit margins on other, including trucking and rental, was due to a lower utilization of our rental fleet. We are working to maximize the utilization of our rental fleet and expect to have increased margins as utilization improves.

Operating Expenses

	Three months ended		Three months ended				Percent
	July 31, 2009		July 31, 2008		Increase		Change
	(dollars in thousands)
Operating Expenses	$	26,662	$	19,470	$	7,192	36.9	%

The $7.2 million increase in operating expenses, as compared to the same period last year, was primarily due to the additional costs associated with acquisitions such as compensation, rent and depreciation. As a percentage of total revenue, operating expenses decreased to 13.8% for the second quarter of fiscal 2010 compared to 14.4 % for the second quarter of fiscal 2009. The strong sales resulted in improved fixed operating expense utilization as a percentage of sales in the second quarter of fiscal 2010.

Other Income (Expense)

	Three months ended			Three months ended			Increase/			Percent
	July 31, 2009			July 31, 2008			(Decrease)			Change
	(dollars in thousands)
Interest and other income	$	140		$	450		$	(310	)	(68.9	)%
Floorplan interest expense	(932		)	(578		)	354			61.2	%
Interest expense	(328		)	(230		)	98			42.6	%

Interest and other income decreased $0.3 million for the three months ended July 31, 2009, as compared to the same period last year, as we invested our cash balances in highly secure investments that carried lower interest rates than those earned in the three months ended July 31, 2008. The increase in floorplan interest expense was due to the increase in floorplan notes payable balances for the three months ended July 31, 2009 compared to the same period in the prior year, partially offset by lower borrowing rates compared to the prior year. The increase in interest expense resulted from higher long-term debt balances.

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Provision for Income Taxes

	Three months ended		Three months ended				Percent
	July 31, 2009		July 31, 2008		Increase		Change
	(dollars in thousands)
Provision for income taxes	$	3,375	$	2,269	$	1,106	48.7	%

The effective tax rate increased to 41.0% for the three months ended July 31, 2009 from 40.5% for the three months ended July 31, 2008. The increase in the effective tax rate from the prior year primarily reflects the changing mix of sales originating in states with higher tax rates.

Six Months Ended July 31, 2009 Compared to Six Months Ended July 31, 2008

Revenue

	Six Months Ended		Six Months Ended				Percent
	July 31, 2009		July 31, 2008		Increase		Change
	(dollars in thousands)
Equipment	$	266,007	$	218,754	$	47,253	21.6	%
Parts	58,852		45,116		13,736		30.4	%
Service	28,182		19,732		8,450		42.8	%
Other, including trucking and rental	6,452		3,885		2,567		66.1	%

Total Revenue	$	359,493	$	287,487	$	72,006	25.0	%

The increase in revenue for the six months ended July 31, 2009, as compared to the same period last year, was due to acquisitions contributing to current period revenue and same-store sales growth. Acquisitions contributed $62.2 million in total revenue, or 86.4% of the increase, while same-store sales growth contributed $9.8 million, or 13.6% of the increase. Revenue from acquisitions was negatively impacted by the slow construction market we are currently experiencing and the large number of construction stores acquired in the prior year. Same-store sales increased 3.5% over the same period of the prior year.

Cost of Revenue

	Six Months Ended		Six Months Ended				Percent
	July 31, 2009		July 31, 2008		Increase		Change
	(dollars in thousands)
Equipment	$	237,752	$	194,904	$	42,848	22.0	%
Parts	41,476		32,483		8,993		27.7	%
Service	10,186		7,325		2,861		39.1	%
Other, including trucking and rental	5,555		2,747		2,808		102.2	%

Total cost of revenue	$	294,969	$	237,459	$	57,510	24.2	%

The increase in cost of revenue for the six months ended July 31, 2009, as compared to the same period last year, was primarily due to increased revenue. Acquisitions contributed $50.7 million in total cost of revenue, or 88.2% of the increase, while the same-store sales growth contributed $6.8 million, or 11.8% of the increase. As a percentage of revenue, cost of revenue was 82.1% for the first six months of fiscal 2010 compared to 82.6% for the first six months of fiscal 2009.

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Gross Profit

	Six Months Ended		Six Months Ended		Increase/			Percent
	July 31, 2009		July 31, 2008		(Decrease)			Change
	(dollars in thousands)

Equipment	$	28,255	$	23,850	$	4,405		18.5	%
Parts	17,376		12,633		4,743			37.5	%
Service	17,996		12,407		5,589			45.0	%
Other, including trucking and rental	897		1,138		(241		)	(21.2	)%

Total Gross Profit	$	64,524	$	50,028	$	14,496		29.0	%

The $14.5 million increase in gross profit for the six months ended July 31, 2009, as compared to the same period last year, was primarily due to increased revenue as well as stronger margins on parts and service revenues. Acquisitions contributed $11.5 million to the gross profit for the six months ended July 31, 2009, or 79.3% of the increase, while increases in same-store sale gross profits provided the remaining $3.0 million, or 20.7% of the gross profit improvement. Gross profit margins were 17.9% for the six months ended July 31, 2009, compared to 17.4% for the six months ended July 31, 2008. Improvement in gross profit margins resulted from an increase in parts and service revenues as a percentage of net revenue, which are higher-margin revenue sources. The decrease in gross profit margins on other, including trucking and rental, was due to a lower utilization of our rental fleet. We are working to maximize the utilization of our rental fleet and expect increased margins as utilization improves.

Operating Expenses

	Six Months Ended		Six Months Ended				Percent
	July 31, 2009		July 31, 2008		Increase		Change
	(dollars in thousands)
Operating Expenses	$	51,367	$	37,652	$	13,715	36.4	%

The $13.7 million increase in operating expenses for the six months ended July 31, 2009, as compared to the same period last year, was primarily due to the additional costs associated with acquisitions such as compensation, rent and depreciation. As a percentage of total revenue, operating expenses increased to 14.2% for the six months ended July 31, 2009, compared to 13.1% for the six months ended July 31, 2008. This increase from the prior year is due to the increased number of construction stores, which have higher operating expenses as a percent of revenue.

Other Income (Expense)

	Six Months Ended			Six Months Ended			Increase/			Percent
	July 31, 2009			July 31, 2008			(Decrease)			Change
	(dollars in thousands)
Interest and other income	$	351		$	761		$	(410	)	(53.9	)%
Floorplan interest expense	(1,663		)	(1,299		)	364			28.0	%
Interest expense	(591		)	(543		)	48			8.8	%

Interest and other income decreased $0.4 million for the six months ended July 31, 2009 as we invested our cash balances in highly secure investments that carried lower interest rates than those earned in the six months ended July 31, 2008. The increase in floorplan interest expense was due to the increase in floorplan notes payable balances for the six months ended July 31, 2009 compared to the same period in the prior year, partially offset by lower borrowing rates compared to the prior year. The slight increase in interest expense resulted from higher long-term debt balances, offset by lower borrowing rates compared to the prior year quarter.

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Provision for Income Taxes

	Six Months Ended		Six Months Ended				Percent
	July 31, 2009		July 31, 2008		Increase		Change
	(dollars in thousands)
Provision for income taxes	$	4,613	$	4,575	$	38	0.8	%

The effective tax rate increased to 41.0% for the six months ended July 31, 2009 from 40.5% for the six months ended July 31, 2008. The increase in the effective tax rate from the prior year primarily reflects the changing mix of sales originating in states with higher tax rates.

Liquidity and Capital Resources

Cash Flow from Operating Activities

For the six months ended July 31, 2009, our cash flow used in operating activities was $27.4 million. Our cash flow from operations was primarily the result of our reported net income of $6.6 million, an increase in floorplan notes payable of $3.0 million, an increase in income taxes payable of $3.0 million, and an add-back of non-cash depreciation and amortization of $4.0 million. This amount was principally offset by an increase in inventories of $35.2 million and a net decrease in accounts payable, customer deposits, accrued expenses and other long-term liabilities of $8.8 million. Increase in inventories reflects historical stocking levels to support future sales.

For the six months ended July 31, 2008, our cash flow provided by operating activities was $7.4 million. Our cash flow from operations was primarily the result of our reported net income of $6.7 million, a net increase in accounts payable, customer deposits, accrued expenses and other long-term liabilities of $14.6 million, and an add-back of non-cash depreciation and amortization of $1.9 million. This amount was principally offset by a net increase in receivables and prepaid expenses of $7.8 million and an increase in inventories of $7.0 million.

We evaluate our cash flow from operating activities net of all floorplan activity and short-term advances related to customer contracts in transit. Taking these adjustments into account, our non-GAAP cash flow provided by operating activities as of July 31, 2009 was $0.5 million. For a reconciliation of this non-GAAP financial measure, please see the Non-GAAP Cash Flow Reconciliation below.

Cash Flow from Investing Activities

For the six months ended July 31, 2009, cash provided by investing activities was $33.5 million. Our cash provided by investing activities primarily consisted of the sale of U.S. treasury bills of $45.0 million, offset by purchases of property and equipment for $7.6 million, and purchases of equipment dealerships of $4.0 million. We are now investing our excess cash balances in investments that are classified as cash equivalents.

For the six months ended July 31, 2008, cash used for investing activities was $23.9 million. Our cash used for investing activities primarily consisted of equipment dealership purchases of $20.3 million and purchases of property and equipment for $3.7 million. The second quarter $14.4 million purchase of the assets of Mid-Land Equipment Company was the most significant cash acquisition during the six months ended July 31, 2008.

Cash Flow from Financing Activities

For the six months ended July 31, 2009, cash provided by financing activities was $38.9 million. Cash provided by financing activities was primarily the result of an increase in non-manufacturer floorplan notes payable of $25.2 million and proceeds from long-term debt and short-term advances exceeding principal payments on long-term debt by $13.6 million.

For the six months ended July 31, 2008, cash provided by financing activities was $60.7 million. Cash provided by financing activities was primarily the result of $78.9 million in net proceeds from our May 2008 follow-on common stock offering. Partially offsetting these proceeds were principal payments on long-term debt and subordinated debentures of $16.8 million.

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Non-GAAP Cash Flow Reconciliation

Non-GAAP cash flow provided by (used for) operating activities is a non-GAAP financial measure which is adjusted for the following:

· Non-manufacturer floorplan notes payable: We review our cash flow from operating activities to include all floorplan notes payable activity regardless of whether we obtain the financing from a manufacturer or a non-manufacturer. We consider inventory financing with both manufacturers and non-manufacturers to be part of the normal operations of our business and use the adjusted cash flow analysis in the evaluation of our inventory and inventory flooring needs. GAAP categorizes non-manufacturer floorplan payable as financing activities in the Consolidated Statement of Cash Flows.

· Short-term advances related to customer contracts in transit: We review our cash flow from operating activities to include short-term advances related to customer contracts in transit. These advances are directly related to our contracts in transit and are considered part of our working capital. GAAP categorizes short-term advances related to customer contracts in transit as financing activities in the Consolidated Statements of Cash Flows.

The following table reconciles net cash provided by (used for) operating activities, a GAAP measure, to non-GAAP cash flow provided by operating activities as of July 31, 2009 and net cash provided by financing activities, a GAAP measure, to non-GAAP cash flow provided by financing activities as of July 31, 2009 (in thousands):

				Adjustment			Adjustment			Non-GAAP
	As Reported			(1)			(2)			Measures

Net cash provided by (used for) operating activities	$	(27,405	)	$	25,185		$	2,700		$	480

Net cash provided by financing activities	38,815			(25,185		)	(2,700		)	10,930

(1) - Net change in non-manufacturer floorplan notes payable

(2) - Short-term advances related to customer contracts in transit

Non-GAAP cash flow provided by (used for) operating activities should be evaluated in addition to, and not considered a substitute for, or superior to, other GAAP measures such as net cash provided by (used for) operating activities.

Sources of Liquidity

Our primary sources of liquidity are cash reserves, cash flow from operations, proceeds from the issuance of debt and borrowings under our credit facilities. We expect that ongoing requirements for debt service and capital expenditures will be funded from these sources.

Adequacy of Capital Resources

Our primary uses of cash have been to fund our strategic acquisitions, finance the purchase of inventory, meet debt service requirements and fund operating activities, working capital, payments due under building space operating leases and manufacturer floorplan notes payable.

Based on our current operational performance, we believe our cash flow from operations, available cash and available borrowings under the existing credit facilities will adequately provide our liquidity needs for, at a minimum, the next 12 months.

Contractual and Commercial Commitments

At July 31, 2009, our long-term debt obligations had increased to $39.6 million, primarily as a result of the $15 million term loan from Bremer Bank. There were no other material changes in our contractual obligations from those disclosed in our

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Annual Report on Form 10-K for the fiscal year ended January 31, 2009. Please see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Contractual and Commercial Commitment”.

Certain Information Concerning Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We are, therefore, not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships. In the normal course of our business activities, we lease rental equipment and buildings under operating leases.

PRIVATE SECURITIES LITIGATION REFORM ACT

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Such “forward-looking” information is included in this Quarterly Report on Form 10-Q, including in “Management’s Discussion And Analysis Of Financial Condition And Results Of Operations,” as well as in our Annual Report on Form 10-K for the year ended January 31, 2009 that was filed with the Securities and Exchange Commission, and in other materials filed or to be filed by the Company with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by the Company).

Forward-looking statements include all statements based on future expectations and specifically include, among other things, all statements relating to (i) our expectations regarding utilization of our rental fleet and increased margins from such utilization, (ii) our expectations regarding our primary liquidity sources, and (iii) our expectations and beliefs with respect to the uses and adequacy of our capital resources. Any statements that are not based upon historical facts, including the outcome of events that have not yet occurred and our expectations for future performance, are forward-looking statements. The words “potential,” “believe,” “estimate,” “expect,” “intend,” “may,” “could,” “will,” “plan,” “anticipate,” and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of our management. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, but are not limited to, adverse market conditions in the agricultural and construction equipment industries, the continuation of unfavorable conditions in the credit markets and those matters identified and discussed in our Annual Report on Form 10-K under the section titled “Risk Factors”.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices such as interest rates. For fixed rate debt, interest rate changes affect the fair value of financial instruments but do not impact earnings or cash flows. Conversely, for floating rate debt, interest rate changes generally do not affect the fair value but do impact future earnings and cash flows, assuming other factors are held constant.

Based upon balances and interest rates as of July 31, 2009, holding other variables constant, a one percentage point increase in interest rates for the next 12-month period would decrease pre-tax earnings and cash flow by approximately $1.1 million. Conversely, a one percentage point decrease in interest rates for the next 12-month period would result in an increase to pre-tax earnings and cash flow of approximately $1.1 million. At July 31, 2009, we had variable rate floorplan notes payable of $257.6 million, of which approximately $89.6 million was interest-bearing, variable notes payable and long-term debt of $16.9 million, and fixed rate notes payable and long-term debt of $22.7 million.

Our policy is not to enter into derivatives or other financial instruments for trading or speculative purposes.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. After evaluating the effectiveness of the Company’s disclosure controls and procedures pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 the (“Exchange Act”) as of the end of the period covered by this quarterly report, our Chief Executive Officer and Chief Financial Officer with the participation of the Company’s management, have concluded that the

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Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) are effective to ensure that information that is required to be disclosed by the Company in reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules of the Securities Exchange Commission. Our Chief Executive Officer and Chief Financial Officer, with the participation of the Company’s management, have also concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures.

(b) Changes in internal controls. There has not been any change in the Company’s internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during its most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. - - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are currently not a party to any material pending legal proceedings.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, including the important information in “Private Securities Litigation Reform Act,” you should carefully consider the “Risk Factors” discussed in our Form 10-K for the year ended January 31, 2009 as filed with the United States Securities and Exchange Commission. Those factors, if they were to occur, could cause our actual results to differ materially from those expressed in our forward-looking statements in this report, and materially adversely affect our financial condition or future results. Although we are not aware of any other factors that we currently anticipate will cause our forward-looking statements to differ materially from our future actual results, or materially affect the Company’s financial condition or future results, additional risks and uncertainties not currently known to us or that we currently deem to be immaterial might materially adversely affect our actual business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The stockholders of the Company voted on one item, the election of three Class II directors, at the Annual Meeting of Stockholders held on June 12, 2009:

Proxies for the Annual Meeting were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934. There was no solicitation in opposition to management’s nominees, and the stockholders elected the following persons as directors of the Company to serve until the 2012 Annual Meeting or until their successors are elected and qualified:

	Votes	Votes
Nominee	For	Withheld
Peter Christianson	14,570,390	1,570,139
Gordon Paul Anderson	15,553,002	587,527
James Williams	15,152,686	987,843

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ITEM 5. OTHER INFORMATION

As previously disclosed in Item 1.01 of the Current Report on Form 8-K filed on July 21, 2009, on July 15, 2009, the Company entered into a Loan Agreement (the “Loan Agreement”) with Bremer Bank, N.A. (“Bremer”), which provides for a $25 million revolving operating line of credit (the “Revolving Loan”) and a $15 million term loan (the “Term Loan”). The Revolving Loan may be used to fund short term working capital requirements of the Company, and replaces the Company’s previous $25 million operating line of credit with Bremer. The Revolving Loan has a variable interest rate of 0.25% per annum below a Bremer reference rate (subject to a minimum interest rate floor of 4.5%), requires monthly payments of accrued interest commencing August 1, 2009, and has a maturity date of July 14, 2010. The Term Loan will be used for the long term working capital requirements of the Company. The Term Loan has a fixed interest rate of 5.90%, requires monthly payments of principal and interest commencing August 1, 2009, and has a maturity date of July 1, 2014. Advances under the Loan Agreement are secured by substantially all of the Company’s assets. The Loan Agreement contains customary financial covenants and various restrictive covenants that are substantially identical to those of the previous Bremer loan agreement. This information is included here for the purpose of also filing it under Item 2.03 of Form 8-K. Additional information required to be disclosed under Item 2.03 is as follows: The Loan Agreement contains customary event of default triggers, as well as event of default triggers if the Company is in default of its master dealer agreements with Case IH or New Holland, if such agreements are terminated for any reason, or if the Company’s dealerships representing more than 25% or more of the Company’s gross revenues, cease to be authorized Case IH or New Holland dealers. If an event of default occurs, Bremer may accelerate all obligations of the Company under the Loan Agreement.

On July 29, 2009, the Company and CNH Capital America LLC entered into an amendment (the “Amendment”) to the Amended and Restated Wholesale Floor Plan Credit Facility and Security Agreement dated November 13, 2007. Pursuant to the Amendment, effective September 1, 2009, the interest rates will be the prime rate plus 4% on the first $25.0 million in floorplan borrowings prior to December 31, 2009 and the prime rate plus 6% on all other floorplan borrowings. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is included in Exhibit 10.2 filed herewith.

ITEM 6. EXHIBITS

(a) Exhibits - - See “Exhibit Index” on page following signatures.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: September 9, 2009

	TITAN MACHINERY INC.


	By	/s/ Peter J. Christianson
		Peter J. Christianson
		President and Chief Financial Officer
		(Principal Financial Officer)

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EXHIBIT INDEX

TITAN MACHINERY INCORPORATED

FORM 10-Q

Exhibit No.		Description
*10.1		Loan Agreement dated July 15, 2009 between Bremer Bank, N.A. and the registrant

*10.2		Letter Agreements dated July 29, 2009 and October 17, 2008 between CNH Capital America LLC and the registrant

*31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*32.2		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*Filed herewith

Exhibit 10.1

LOAN AGREEMENT

THIS LOAN AGREEMENT is made as of July 15, 2009, between TITAN MACHINERY INC., a Delaware corporation with its principal offices located in Fargo, North Dakota, and BREMER BANK, N.A., a national banking association with offices located in Lisbon, North Dakota.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth below, the Bank and the Borrower agree as follows:

ARTICLE I - DEFINITIONS

Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a) The terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular.

(b) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP.

“Advance” means an advance by the Bank to the Borrower pursuant to Section 2.1, 2.2. or 2.3.

“Agreement” means this Loan Agreement together with all amendments, modifications and restatements thereof.

“Bank” means Bremer Bank, N.A., it successors or assigns.

“Borrower” means Titan Machinery Inc.

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

“Collateral Documents” means the security agreement, financing statement, pledges, intercreditor agreements, landlord disclaimer and consent agreements and all other collateral documents referred to in Section 3.1 and Section 8.20.

“Cost of Goods Sold” shall have the meaning assigned to it in accordance with GAAP.

“Current Assets” shall mean the aggregate amount of the Borrower’s assets properly shown as current assets on its balance sheet, determined in accordance with GAAP, minus the following: receivables and other amounts due from any shareholder, director, officer or employee of the

Borrower, and receivables and other amounts due from any other related or affiliated Person of the Borrower.

“Current Liabilities” shall mean the aggregate amount of the Borrower’s liabilities properly shown as current liabilities on its balance sheet, determined in accordance with GAAP.

“Debt” shall mean the aggregate amount of the Borrower’s items properly shown as liabilities on its balance sheet, determined in accordance with GAAP, less any liabilities that constitute Subordinated Debt.

“Eligible Equipment” means the dollar value of all equipment (including vehicles) of the Borrower accounted for at the lower of net book value as determined in accordance with GAAP or the appraised value of such equipment as determined by Steffes Auction Company or such other auction company selected by the Bank pursuant to an appraisal on terms and conditions satisfactory to the Bank. Without limiting the discretion of the Bank to consider any item of equipment not to be Eligible Equipment, and by way of example only of types of equipment that the Bank will consider not to be Eligible Equipment, notwithstanding any earlier classification of eligibility, the following shall not be considered Eligible Equipment (i) any equipment which is not located on the Premises of the Borrower; (ii) any equipment which is obsolete or not useable in the normal course of the Borrower’s operations; (iii) any equipment in which the Bank does not have a perfected security interest constituting a first lien; and (iv) any equipment inventory in Borrower’s rental fleet held for rent by the Borrower.

“Eligible Equipment Inventory” means the dollar value of New Equipment Inventory and Used Equipment Inventory of the Borrower in which the Bank holds a first perfected security interest accounted for at the lower of cost or fair market value computed on a first-in-first-out basis in accordance with GAAP, which New Equipment Inventory and Used Equipment Inventory has been paid for by the Borrower in full and provided, further, that Eligible Equipment Inventory, shall not, in any event, include:

(a) inventory which is (i) in-transit; or (ii) not located on the Borrower’s Premises or in another location approved by the Bank in writing; or (iii) not subject to an effective financing statement filed by the Bank to perfect a first security interest in such inventory; or (iv) on consignment to or from any other Person or subject to any bailment; or (v) subject to any lien in favor of any Person other than the Bank;

(b) raw materials and work in process;

(d) inventory that is damaged, obsolete or not currently saleable in the normal course of the Borrower’s operations;

(e) inventory that the Borrower has returned, has attempted to return, is in the process of returning or intends to return to the vendor thereof; and

(f) inventory otherwise deemed ineligible by the Bank in its sole discretion.

“Eligible Parts Inventory” means the dollar value of the parts inventory of the Borrower in which the Bank holds a perfected first security interest accounted for at the lower of cost or fair market value computed on a first-in-first—out basis in accordance with GAAP. Without limiting the discretion of the Bank to consider any parts not to be Eligible Parts Inventory, and by way of example only, Eligible Parts Inventory shall not, in any event, include:

(a) parts inventory which is (i) in-transit; or (ii) not located on the Borrower’s Premises or in another location approved by the Bank in writing; or (iii) not subject to an effective financing statement filed by the Bank to perfect a security interest in such inventory; or (iv) on consignment to or from any other Person or subject to any bailment.

(b) parts inventory that is damaged, obsolete or not currently saleable in the normal course of the Borrower’s operations;

(c) parts inventory that the Borrower has returned, has attempted to return, is in the process of returning or intends to return to the vendor thereof; and

(d) parts inventory otherwise deemed ineligible by the Bank in its sole discretion.

“Eligible Receivables” means only such accounts receivable of the Borrower as the Bank, in its sole discretion, shall deem eligible. Without limiting the discretion of the Bank to consider any account receivable not to be an Eligible Receivable, and by way of example only of types of accounts receivable that the Bank will consider not to be Eligible Receivables, notwithstanding any earlier classification of eligibility, the following accounts receivable shall not be considered Eligible Receivables: (i) any account receivable which is not paid in full within 90 days after it is created; (ii) any account receivable as to which any warranty is breached; (iii) any account receivable as to which the account debtor or other obligor disputes liability or makes any claim; (iv) any account receivable owed by any officer, director or shareholder of the Borrower or any of their relatives or any Person wholly or partly owned or controlled directly or indirectly by any of them or any of their relatives; (v) any account receivable owed by any Person as to whom a petition in bankruptcy or other application for relief is filed under any bankruptcy, reorganization, receivership, moratorium, insolvency or similar law; (vi) any account receivable owed by any Person who makes an assignment for the benefit of creditors, becomes insolvent, fails, suspends business, or goes out of business; (vii) any account receivable owed by the United States government or any agency of the United States government or any account owned by a Native American Sovereign Nation; (viii) any account receivable owed by any Person if 10% or more in amount of accounts receivable owed by such Person to the Borrower are considered ineligible; (ix) consignment receivables; (x) bonded receivables; (xi) any account receivable constituting a retainage; (xii) any account receivable for

goods which have not been shipped or work which has not been fully performed; (xiii) any account receivable owed by any Person outside the United States of America; (xiv) any account receivable owed by any Person with whose creditworthiness the Bank becomes dissatisfied; (xv) any intercompany account receivable; and (xvi) any account receivable in which the Bank does not have a perfected security interest constituting a first lien.

In the event the Borrower owes any amount to any Person that owes an account receivable to the Borrower, such amount owed by the Borrower shall be deducted from that portion of the account receivable which would otherwise qualify as an Eligible Receivable and only the difference thereof shall be considered an Eligible Receivable. No account receivable which does not qualify as an Eligible Receivable shall be considered an Eligible Receivable unless the Bank, upon the written request of the Borrower, states in writing that such account receivable is to be considered an Eligible Receivable.

“Environmental Laws” means all federal, state, local and foreign laws, statutes, codes, ordinances, regulations, requirements, rules and common law relating in any way to any hazardous or toxic materials or the protection of the environment.

“Event of Default” has the meaning specified in Section 7.1.

“GAAP” means the generally accepted accounting principles in the United States in effect from time to time including, but not limited to, Financial Accounting Standards Board (FASB) Standards and Interpretations, Accounting Principals Board (APB) Opinions and Interpretations, and certain other accounting principles which have substantial authoritative support.

“Letter of Credit” means any one or more irrevocable letters of credit which may be issued by the Bank for the account of the Borrower. (Nothing in this Agreement shall be construed as a commitment by the Bank to issue any letters of credit for the account of the Borrower.)

“Letter of Credit Amount” means the sum of (i) the aggregate amount available for drawing under any issued and outstanding Letter of Credit, and (ii) amounts drawn under any Letter of Credit for which the Bank has not been reimbursed.

“L/C Application” means an application and agreement for letters of credit in the Bank’s then current standard form.

“Net Worth” shall mean the aggregate amount of the Borrower’s items properly shown as assets on its balance sheet minus the aggregate amount of the Borrower’s items properly shown as liabilities on its balance sheet, determined in accordance with GAAP, plus Subordinated Debt.

“New Equipment Inventory” means new whole goods inventory held for sale by the Borrower in the ordinary course of the Borrower’s business which new equipment inventory (i) is ready for sale to customers of the Borrower; (ii) meets all standards imposed by any governmental agency; (iii) is located on the Premises of the Borrower; (iv) is not obsolete; (v) is not on

consignment to or from any other Person or been sold or otherwise delivered, transferred or conveyed to any other Person or is subject to any bailment or lease; (vi) is subject to a perfected security interest constituting a first lien in favor of the Bank; (vii) does not have more than fifty (50) hours of use; and (viii) is not Used Equipment Inventory.

“Notes” means individually and collectively the promissory notes described in Section 2.1 and 2.3 together with any subsequent renewals, modifications, extensions and substitutions thereof.

“Obligations” means each and every debt, liability and obligation of every type and description which the Borrower may now or at any time hereafter owe to the Bank including, without limitation, the indebtedness arising under this Agreement, the Notes and the L/C Applications.

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, cooperative or other business entity, unincorporated organization, or government or any agency or political subdivision thereof.

“Premises” means the equipment dealerships operated by the Borrower in Lisbon, Lidgerwood, Kulm, Wishek, Jamestown, LaMoure, Wahpeton, Casselton, Bismarck, West Fargo, Mandan, Grand Forks, Kintyre, Minot, Mayville, Arthur and Fargo, North Dakota; Watertown, Aberdeen, Sioux Falls, Rapid City, Huron, Pierre, Highmore, Miller and Redfield, South Dakota; Pipestone, Graceville, Marshall, Fergus Falls, Elbow Lake, Roseau, Crookston, Ada, Thief River Falls, Winger and Moorhead, Minnesota; Waverly, Kingsley, Le Mars, Cherokee, Anthon, Dike, Des Moines, Blairstown, Cedar Rapids, Grundy Center, Davenport, Avoca, Greenfield, Clear Lake and Sioux City, Iowa; Omaha and Lincoln, Nebraska; Billings, Belgrade, Great Falls, Missoula and Kalispell, Montana; and Cheyenne, Casper and Gillette Wyoming.

“Revolving Note” means the promissory note referred to in Section 2.1 together with any subsequent renewals, extensions, modifications and substitutions thereof.

“Subordinated Debt” shall mean Debt that is expressly subordinated to the Bank in a writing acceptable to the Bank.

“Tangible Net Worth” shall mean Net Worth minus the aggregate amount of the Borrower’s items properly shown as the following types of assets on its balance sheet determined in accordance with GAAP: (i) goodwill, patents, non-competes, copyrights, mailing lists, trade names, trademarks, servicing rights, organizational and franchise costs, bond underwriting costs, and other like assets properly classified as intangible; (ii) leasehold improvements; (iii) receivables, loans and other amount due from any shareholder, director, officer or employee of the Borrower, and receivables, loans and other amounts due from any other related or affiliated Person of the Borrower; and (iv) investments or other interests in non-public companies, cooperatives, entities or partnerships.

“Term Note” means the promissory note referred to in Section 2.3 together with any subsequent renewals, extensions, modifications and 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) fifty percent (50%) of 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; less (v) the Letter of Credit Amount less (vi) the unpaid balance of the Term Note 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.

“Used Equipment Inventory” means all used whole goods inventory held for sale by the Borrower in the ordinary course of the Borrower’s business which used equipment inventory (i) is ready for sale to customers of the Borrower; (ii) meets all standards imposed by any governmental agency; (iii) is located on the Premises of the Borrower; (iv) is not obsolete; (v) is not on consignment to or from any other Person or been sold or otherwise delivered, transferred or conveyed to any other Person or is subject to any bailment or lease; (vi) is subject to a perfected security interest constituting a first lien in favor of the Bank; and (vii) is not New Equipment Inventory.

ARTICLE II - AMOUNT AND TERMS OF LOANS

Section 2.1 Revolving Loan . Subject to the terms and conditions of this Agreement, the Bank may, in its discretion, make Advances to the Borrower under this Section from time to time from the date hereof in the aggregate amount not to exceed at any one time outstanding the sum of Twenty-five Million Dollars ($25,000,000). Within the limits set forth in this Section, the Borrower may borrow, prepay and re-borrow under this Section. The obligation to repay the Advances made pursuant to this Section shall be evidenced by a promissory note payable to the Bank and containing the terms relating to the repayment, interest rate and other matters as set forth in Schedule 2.1 attached to and made a part of this Agreement (“Revolving Note”).

Section 2.1.1 Purpose of Advances. The purpose for the first Advance under Section 2.1 is to replace, but not satisfy, an existing obligation of the Borrower to the Bank dated August 28, 2008, in the original principal amount of $25,000,000. Subsequent Advances under Section 2.1 shall be used solely for the short term working capital requirements of the Borrower.

Section 2.1.2 Making Advances. Advances pursuant to Section 2.1 shall be made in accordance with the terms and conditions of a cash management agreement(s) among the Bank and the Borrower.

In addition to Advances made by the Bank to the Borrower pursuant to any cash management agreement(s), the Borrower may also request Advances directly from the Bank under the Revolving Note in accordance with this Section. Each such Advance under the Revolving Note 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 Advance pursuant to Section 2.1 not made in accordance with a cash management agreement shall be made at least one bank business day prior to the date of the desired Advance and such Advance request shall be made by Mark Kalvoda or Jon Swanson 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, regardless of how the Advance is made or requested, 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.

Any request for an Advance, whether written, oral, electronic, telephonic or by way of a cash management agreement shall be deemed to be a representation by the Borrower that the statements set forth in Section 3.2 are correct.

Section 2.1.3 Discretionary Advances. The Borrower understands and agrees that 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 2.1 even though the Borrower may be in perfect compliance with this Agreement.

Section 2.1.4 Loan Advance Formula. The Borrower’s ability to request Advances pursuant to Section 2.1 shall be limited in the aggregate principal amount at any one time outstanding, to the lesser of: (a) $25,000,000; or (b) the Total Loan Value. Notwithstanding anything to the contrary in this Agreement or under the terms of the Notes, if at any time the aggregate principal amount outstanding under the Revolving Note exceeds the lesser of (a) $25,000,000 or (b) the Total Loan Value, the Borrower shall immediately repay to the Bank the amount of the excess which payment shall be applied to the Revolving Note.

Section 2.1.5 Clean Up. Notwithstanding anything to the contrary contained in this Agreement or the Revolving Note, the Borrower agrees that for a period of fifteen (15) consecutive days during the term of the Revolving Note, there shall be no outstanding balance owing the Bank under the Revolving Note.

Section 2.1.6 Non-Usage Fee. The Borrower shall pay the Bank a non-usage fee (“Non-Usage Fee”) at an annual rate equal to .50% applied to the average monthly unused

amount of the Revolving Note, as determined by the Bank in its reasonable discretion, payable monthly on the 1st day of each month, in arrears. Any Non-Usage Fee remaining unpaid at the time the Revolving Note is due and payable in full shall be due and payable on that date.

Section 2.2 Letters of Credit. The Bank may in its sole discretion, issue for the Borrower’s account, from the date hereof to and including July 13, 2010, or until an Event of Default occurs, whichever occurs first, one or more irrevocable standby letters of credit (each a “Letter of Credit”) to be used to secure payment to supplier(s) of the Borrower in connection with the Borrower’s purchase of inventory from such suppliers. The Bank shall have no obligation to issue any Letter of Credit to the extent its face amount would exceed, when combined with the face amount of other issued Letters of Credit, the sum of $1,000,000 or, when combined with Advances made under Section 2.1 would exceed the Total Loan Value. Each Letter of Credit, if any, shall be issued pursuant to a separate L/C Application entered into by the Borrower and the Bank for the benefit of the issuer, completed in a manner satisfactory to the Bank. The terms and conditions set forth in each such L/C Application shall supplement the terms and conditions hereof, but if the terms of any such L/C Application and the terms of this Agreement are inconsistent, the terms of this Agreement shall control. No Letter of Credit shall be issued with an expiry date later than July 14, 2010.

Section 2.2.1 Payment of Amounts drawn under Letters of Credit; Obligation of Reimbursement. The Borrower shall reimburse the Bank for all draws under any Letter of Credit in accordance with the applicable L/C Application as follows:

(a) The Borrower hereby agrees to pay the Bank on the day a draft is honored under any Letter of Credit a sum equal to all amounts drawn under such Letter of Credit plus any and all reasonable charges and expenses that the Bank may pay or incur relative to such draw and the applicable L/C Application, plus interest on all such amounts, charges and expenses as set forth below (the Borrower’s obligation to pay all such amounts is herein referred to as the “Obligation of Reimbursement”).

(b) Whenever a draft is submitted under a Letter of Credit, the Bank may make an Advance under Section 2.1 in the amount of the Obligation of Reimbursement and shall apply the proceeds of such Advance thereto. Such Advance shall be repayable in accordance with and be treated in all other respects as an Advance under Section 2.1.

(c) If a draft is submitted under a Letter of Credit when the Borrower is unable, because an Event of Default then exists or for any other reason, to obtain an Advance to pay the Obligation of Reimbursement, the Borrower shall pay to the Bank on demand and in immediately available funds, the amount of the Obligation of Reimbursement together with interest, accrued from the date of the draft until payment in full. Notwithstanding the Borrower’s inability to obtain an Advance for any reason, the Bank is irrevocably authorized, in

its sole discretion, to make an Advance in an amount sufficient to discharge the Obligation of Reimbursement and all accrued but unpaid interest thereon.

(d) The Borrower’s obligation to repay any Advance made under this Section 2.2, shall be evidenced by the Revolving Note.

Section 2.2.2 Discretionary Advances. The Bank may at any time and for any reason refuse to make an Advance or to issue a Letter of Credit for the Borrower’s account whether the Borrower is or is not in compliance with this Agreement. The Bank need not show that an adverse change has occurred in the Borrower’s condition, financial or otherwise, in order to refuse to issue any Letter of Credit.

Section 2.3 Term Loan. Subject to and upon the terms, covenants and conditions set forth in this Agreement, the Bank agrees to make a single Advance to the Borrower under this Section in the amount of Fifteen Million Dollars ($15,000,000.00). The obligation to repay the Advance 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 Schedule 2.3 attached to and made a part of this Agreement (“Term Note”). The Advance 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. The purpose for the Advance under this Section 2.3 is for the long term working capital requirements of the Borrower.

Section 2.4 Payment. All payments of principal and interest under this Agreement or the Notes shall be made to the Bank in immediately available funds. The Borrower agrees that the amount shown on the books and records of the Bank as being the aggregate amount of Advances outstanding under the Notes shall be prima facie evidence of the principal amount of the Notes then outstanding. The Borrower hereby authorizes the Bank, if and to the extent payment is not promptly made pursuant hereto, to charge against the Borrower’s account with the Bank an amount equal to the accrued interest and principle from time to time due and payable to the Bank under the Notes.

Section 2.5 Payment on Non-Business Days. Whenever any payment to be made hereunder or under the Notes shall be stated to be due on a Saturday, Sunday or a holiday for banks under the laws of the State of North Dakota, or the United States, such payment may be made on the next succeeding bank business day, and such extension of time shall in such case be included in the computation of payment of interest on the Notes.

Section 2.6 Late Fees. The Borrower agrees to pay to the Bank a late payment service charge in an amount equal to five percent (5%) of any installment of principal or interest (excluding any final installment) not received by the Bank with respect to the Notes within ten (10) days of the date due but in no event shall such late payment service charge exceed the maximum amount allowed by law. Acceptance by the Bank of any late fee shall not constitute a waiver of any Event of Default.

Section 2.7 Prepayment Premium. The Borrower shall be entitled to prepay the Term Note in whole or in part from time to time, which prepayment shall be applied to the last maturing installment or installments of the Term Note but shall not change the amount of the required monthly payment or in any manner modify the payment schedule of the Term Note. Any such prepayment shall be subject to a prepayment premium (which the Borrower shall pay on demand to the Bank) equal to five percent (5%) of the principal portion of the prepayment in the event the prepayment is made during the first year of the Term Note; four percent (4%) of the principal portion of the prepayment in the event the prepayment is made during the second year of the Term Note; three percent (3%) of the principal portion of the prepayment in the event the prepayment is made during the third year of the Term Note; two percent (2%) of the principal portion of the prepayment in the event the prepayment is made during the fourth year of the Term Note; and one percent (1%) of the principal portion of the prepayment in the event the prepayment is made during the fifth year of the Term Note.

ARTICLE III - CONDITIONS OF LENDING

Section 3.1 Conditions Precedent to Initial Advance. The willingness of the Bank to consider making the Advances under Article II (including the initial Advance) is subject to the condition precedent that the Bank shall have received on or before the day of such Advance all of the following, each dated (unless otherwise indicated) such day, in form and substance satisfactory to the Bank:

(a) The Revolving Note and Term Note duly executed.

(b) A certified copy of the resolutions of the Borrower authorizing the execution, delivery and performance of this Agreement, the Notes, Collateral Documents and other matters contemplated hereby.

(c) Copies of the articles of incorporation and bylaws of the Borrower certified by its secretary as being true and correct.

(d) Evidence that the Borrower is in good standing with the office of the Delaware Secretary of State, North Dakota Secretary of State, Minnesota Secretary of State, South Dakota Secretary of State, Nebraska Secretary of State, Iowa Secretary of State, Montana Secretary of State and Wyoming Secretary of State.

(e) Intercreditor agreements executed by Case LLC, Case Credit Corporation, New Holland Credit Company, LLC, New Holland North America, Inc., GE Commercial Distribution Finance Corporation and such other third party creditors of the Borrower as the Bank deems necessary, in form and content satisfactory to the Bank.

(f) A security agreement duly executed and related financing statement, together with any such other documentation required by the Bank, whereby to secure the Obligations of the Borrower to the Bank, the Borrower grants the Bank a perfected security interest in all of the Borrower’s inventory, equipment, fixtures, contract rights, chattel paper, accounts and other rights to payment, deposit accounts and general intangibles whether now owned or hereafter acquired and wherever located and the products and proceeds thereof all as more specifically set forth in the security agreement.

(g) Evidence that the security interest granted by the security agreement referred to in (f) above is subject only to the prior liens, if any, contemplated by the intercreditor agreements referred to in (e) above and the purchase money liens contemplated by Section 6.2 (f).

(h) A certificate of insurance evidencing a policy or policies of insurance covering the Borrower’s operations and property as required by Section 5.7 of this Agreement, such policy to insure against all risks and names the Bank as mortgagee/lender loss payee on all property policies which insures the property of the Borrower subject to the Collateral Documents.

(i) A signed copy of an opinion of counsel for the Borrower addressed to the Bank and its participants in form and substance acceptable to the Bank.

(j) A completed Borrowing Base Certificate.

(k) Copies of all leases of real property under which the Borrower is a tenant, together with a Landlord’s Disclaimer and Consent in favor of the Bank, in form and content acceptable to the Bank, from the landlord of each such lease properly executed on behalf of such landlord.

(l) Any and all other agreements, documents, instruments and powers as the Bank may require or deem necessary, in its sole discretion, to carry into effect the purposes of the documents described in this Section 3.1 and this Agreement.

Section 3.2 Conditions Precedent to Advance. The willingness of the Bank to consider making each Advance (including the initial Advance) under Article II is subject to the further conditions precedent that on the date of such Advance.

(a) The representations and warranties contained in Article IV are correct on and as of the date of such Advance as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date.

(b) No event has occurred and is continuing, or would result from such Advance, 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.

ARTICLE IV - REPRESENTATIONS AND WARRANTIES

In order to induce the Bank to consider making the Advances described in this Agreement, the Borrower hereby represents, warrants and certifies to the Bank as follows:

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 execute and deliver, and to perform all of its obligations under this Agreement, the Notes, L/C Applications and the Collateral Documents.

Section 4.2 Authorization of Borrowing; No Conflict as to Law or Agreements. The execution, delivery and performance by the Borrower of this Agreement, the Notes, L/C Applications and the Collateral Documents, has been duly authorized by all necessary corporate action and does and will not (i) require any consent or approval of the shareholders of the Borrower, or any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect having applicability to the Borrower or of the articles of incorporation or bylaws of the Borrower, (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement, lease or instrument to which the Borrower is a party or by which its properties may be bound or affected, or (iv) result in or require the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest, or other charge or encumbrance of any nature (other than under the Collateral Documents) upon or with respect to any of the properties now owned or hereafter acquired by the Borrower.

Section 4.3 Financial Condition. The Borrower has furnished the Bank with an audited financial statement as of January 31, 2009. The financial statement fairly represents the financial condition of the Borrower on the date thereof, and was prepared in accordance with GAAP. There has been no material adverse change in the business, properties or condition (financial or otherwise) of the Borrower since the date of the financial statement.

Section 4.4 Litigation. There are no actions, suits or proceedings pending or, to the knowledge of the Borrower, threatened or affecting the Borrower or the properties of the Borrower before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which, if determined adversely, would have a material adverse affect on the financial condition, properties or operations of the Borrower.

Section 4.5 Taxes. The Borrower has filed all federal, state and local tax returns which are required to be filed and has paid or caused to be paid to the respective taxing authorities all taxes as shown on said returns or on any assessment received by them to the extent such taxes have become due.

Section 4.6 Titles and Liens. The Borrower has good title to each of the properties and assets reflected in the latest financial statement referred to in Section 4.3 free and clear of all mortgages, security interests, liens and encumbrances except for mortgages, security interests and liens disclosed on such financial statement.

Section 4.7 Legal Agreements. This Agreement constitutes, and the Notes, L/C Applications and the Collateral Documents, when executed and delivered hereunder, will constitute the legal, valid and binding obligations of the Borrower (or the maker thereof), enforceable against it in accordance with their respective terms, except as enforcement may be limited by the application of bankruptcy and other laws effecting creditors’ rights generally.

Section 4.8 Default. The Borrower is not in default of a material provision under any material agreement, instrument, decree or order to which it is a party or by which its properties are bound or affected.

Section 4.9 Pension Plans. The Borrower has not established or maintained, or made any contributions to, any employee benefit plan which is subject to Part 3 of Subtitle B of Title 1 of ERISA or, if such a plan has been so established, maintained or contributed to, such plan did not have any “accumulated funding deficiency” (as that term is defined in Section 302 of ERISA) as of the date hereof, and, without limiting the generality of the foregoing, the Borrower has not incurred any material liability to the Pension Benefit Guaranty Corporation with respect to any such plan.

Section 4.10 Environmental Matters.

(a) The Borrower is not in violation of any Environmental Laws; and

(b) No disposal or release of any hazardous or toxic material has occurred on, from or under any property owned, operated or controlled by the Borrower, except as may have occurred in accordance with all applicable Environmental Laws; and

(c) There has been no treatment, manufacturing, refining, handling or storage of any hazardous or toxic material at any property owned, operated or controlled by the Borrower, except as may have occurred in accordance with all applicable Environmental Laws; and

(d) No litigation, investigation or administrative action has been commenced or is pending or threatened, nor has any settlement been reached with any public or private party or parties, or any order issued, relating in any way to any

alleged or actual presence, disposal or release of any hazardous or toxic material or any violation of any Environmental Laws with respect to any property owned, operated or controlled by the Borrower; and

(e) The Borrower and all tenants of the Borrower have filed all notices and permit applications required to be filed under the Environmental Laws with respect to their businesses, property and operations; and

(f) Except as set forth in Schedule 4.10 (f), the Borrower has no known contingent liability with respect to its business, property or operations as now or previously owned, operated, controlled or conducted by the Borrower in connection with any hazardous or toxic material or any Environmental Laws.

Section 4.11 Use of Loans. The Borrower is not engaged, or as one or its important activities, in the business of extending credit for the purpose of purchasing or carry margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Advance hereunder will be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing any such margin stock.

Section 4.12 Licenses, Franchises, Etc. The Borrower possesses adequate licenses, permits, franchises, patents, copyrights, trade marks and trade names, or rights thereto, to conduct its business substantially as now conducted and as presently proposed to be conducted.

Section 4.13 Consents. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any governmental authority or any third party is required in connection with the execution and delivery of this Agreement, the Notes, L/C Applications, Collateral Documents, or any other agreements or instruments mentioned in this Agreement to which the Borrower is a party, or in connection with the carrying out or performance of any of the transactions required or contemplated hereby or thereby or, if required, such consent, approval, order or authorization has been obtained or such registration, declaration or filing has been accomplished or such notice has been given prior to the date hereof.

Each of the representations and warranties made in this Article IV shall be deemed to be repeated and reaffirmed on and as of the date any Advance is made by the Bank to the Borrower pursuant to Article II hereof and as of the date any Letter of Credit is issued pursuant to Article II hereof.

ARTICLE V - AFFIRMATIVE COVENANTS

So long as Obligations to the Bank shall remain unpaid, the Borrower will comply with the following requirements unless the Bank shall otherwise consent in writing, all in form and substance acceptable to the Bank:

Section 5.1 Financial Statements, Litigation, Etc.

(a) The Borrower will deliver to the Bank, as soon as available and in any event within 120 days after the end of each fiscal year of the Borrower, a copy of the audit report of the Borrower with the unqualified opinion of independent certified public accountants selected by the Borrower and acceptable to the Bank, all in reasonable detail and all prepared in accordance with GAAP.

(b) The Borrower will deliver to the Bank within 30 days after the end of each calendar month, a balance sheet of the Borrower as of the end of such month, a related statement of earnings and retained earnings for such period and for the year to date, and an accounts receivable aging report and accounts payable report, in reasonable detail and stating in comparative form the figures for the corresponding date and period of the previous year, all prepared in accordance with GAAP.

(c) As soon as available and in any event within 120 days after the end of each fiscal year of the Borrower, the Borrower shall deliver to the Bank copies of the federal and state tax returns (including all forms and supporting schedules) filed by the Borrower for such year.

(d) Immediately after the commencement thereof, the Borrower shall provide the Bank with notice in writing of all litigation affecting the Borrower of the type described in Section 4.4 or which seek a monetary recovery against the Borrower in excess of $50,000.

(e) Immediately upon the occurrence thereof, the Borrower shall give the Bank notice of the occurrence of any Event of Default under this Agreement or any event of which the Borrower has knowledge and which, with the passage of time, or giving of notice or both, would constitute an Event of Default under this Agreement.

(f) Immediately upon the occurrence thereof, the Borrower shall give the Bank notice of any material adverse change in the operations, business, properties, assets or conditions, financial or otherwise, of the Borrower, which could adversely and materially affect the Borrower’s ability to perform its obligations under this Agreement, the Notes, L/C Applications or the Collateral Documents.

(g) The Borrower will deliver to the Bank within 30 days after the end of each calendar month, and as often as the Bank may request, a completed Borrowing Base Certificate.

(h) The Borrower will deliver to the Bank at such times as the Bank may request, the most current Dealer Statement from Case and New Holland detailing which items of the Borrower’s inventory are subject to floor plan financing

from Case and New Holland as well as comparable documentation from GE Commercial Distribution Finance Corporation.

(i) The Borrower will deliver to the Bank at such times as the Bank may request, a monthly inventory report and new inventory orders report of the Borrower.

(j) Concurrently with the delivery of the audit report referred to in (a) above, the Borrower will deliver to the Bank a certificate by the CEO of the Borrower (i) certifying as to whether there exists an Event of Default on the date of such certificate or if an Event of Default then exists specifying the details thereof and the action which the Borrower has taken or proposes to take with respect thereto, (ii) setting forth in reasonable detail calculations demonstrating compliance with the financial covenants set forth in this Agreement, and (iii) stating whether any change in GAAP or the application thereof has occurred since the date of the Borrower’s most recent previously delivered audited financial statements and, if any changes occurred, specifying the effect of such change on the financial statements accompanying such certificate.

(k) Concurrently with the delivery of the audit report referred to in (a) above, the Borrower will deliver to the Bank a certificate of the accounting firm reported on such financial statements stating whether it obtained any knowledge during the course of its examination of such financial statements of the occurrence of an Event of Default, (which certificate may be limited to the extent required by accounting rules and guidelines).

(l) The Borrower shall deliver such other information respecting the financial condition and results of operations of the Borrower as the Bank may from time to time request.

Section 5.2 Books and Records; Inspection and Examination. The Borrower will keep accurate books of record and account in which true and complete entries will be made in accordance with GAAP consistently applied and, upon request of the Bank, will give any representative of the Bank access to, and permit such representative to examine, copy or make extracts from, any and all books, records and documents in its possession, to inspect any of its properties and to discuss its affairs, finances and accounts with any of its principal officers, all at such times during normal business hours and as often as the Bank may reasonably request. In addition, the Borrower agrees to permit the Bank or its agents or representatives, at the Borrower’s expense, to conduct periodic collateral audits of the Borrower’s business and inventories, such audits to be conducted not less often than once each calendar quarter should the Bank so desire.

Section 5.3 Compliance with Laws. The Borrower will comply with the requirements of applicable laws and regulations, the noncompliance with which would materially and adversely affect its business or its financial condition.

Section 5.4 Payment of Taxes and Other Claims. The Borrower will pay or discharge all taxes, assessments and governmental charges levied or imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto and all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien or charge upon any properties of the Borrower provided, that the Borrower shall not be required to pay any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.

Section 5.5 Maintenance of Properties. The Borrower will keep and maintain all of its properties necessary or useful in its business in good condition, repair and working order; provided, however, that nothing in this Section shall prevent the Borrower from discontinuing the operation and maintenance of any of its properties if such discontinuance is, in its judgment, desirable in the conduct of its business and not disadvantageous in any material respect to the Bank as holder of the Notes.

Section 5.6 Preservation of Existence. The Borrower will preserve and maintain its corporate existence and all of its rights, privileges and franchises; provided, however, that the Borrower shall not be required to preserve any of its rights, privileges and franchises if the Borrower shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Borrower and that the loss thereof is not disadvantageous in any material respect to the Bank as the holder of the Notes.

Section 5.7 Insurance. The Borrower shall (i) keep all of its properties adequately insured at all times with responsible insurance carriers against loss or damage by fire and other hazards, (ii) maintain adequate insurance at all times with responsible insurance carriers against liability on account of damage to persons or property, and (iii) maintain adequate insurance covering such other risks as the Bank may reasonably request. For purposes of this Section, insurance shall be deemed adequate if the same is not less extensive in coverage and amount as is customarily maintained by other entities engaged in the same or similar business. All insurance policies shall name the Bank as loss payee or beneficiary and shall otherwise be acceptable to the Bank. The Borrower shall provide the Bank with a detailed list of the insurance in effect, setting forth the names of the insurance companies, the amounts and rights of insurance, the dates of expiration, and the properties and risks covered thereby. Acceptance of the insurance policies referred to above shall not bar the Bank from requiring additional insurance which it deems reasonably necessary. The policies of insurance referred to herein shall contain an agreement of the insurer to give not less than thirty (30) days advance written notice to the Bank in the event of cancellation of such policy or change affecting the coverage thereunder. All such insurance companies shall be licensed to transact business in the State where the insured property is located. In the event the Borrower fails to pay any premium on any such insurance, the Bank may do so, and the Borrower shall reimburse the Bank for any such payment on demand.

Section 5.8 Environment. The Borrower shall remain in compliance with the provisions of all Environmental Laws and shall notify the Bank immediately of any notice of any hazardous discharge or other environmental complaint received from any governmental agency or any other

Person and shall immediately contain or remove the same in compliance with all applicable laws and promptly pay any fine or penalty assessed in connection therewith. The Borrower hereby agrees to defend, indemnify, and hold the Bank harmless from and against any and all claims, damages, judgments, penalties, costs, and expenses (including attorney fees and court costs now or hereafter arising from the enforcement of this Section) arising directly or indirectly from the activities of the Borrower, its predecessors in interest, or third parties arising directly or indirectly from any violation of any Environmental Laws. This indemnity shall survive termination of this Agreement.

ARTICLE VI - NEGATIVE COVENANTS

So long as the Obligations of the Borrower to the Bank remain unpaid, the Borrower agrees that, without the prior written consent of the Bank:

Section 6.1 Indebtedness. The Borrower will not incur, create, assume or permit to exist any indebtedness or liability on account of deposits or advances or any indebtedness for borrowed money, or any other indebtedness or liability evidenced by notes, bonds, debentures, installment sale contracts or similar obligations except the following:

(a) Pledges or deposits held by the Borrower under federal and state laws relating to the payroll of the Borrower.

(b) The obligations to the Bank under the Notes.

(d) Purchase money obligations incurred by the Borrower for new inventory purchased by the Borrower in the ordinary course of the operation of the business of the Borrower.

Section 6.2 Liens. The Borrower will not create, incur, assume or suffer to exist any mortgage, deed of trust, pledge, lien, security interest, or other charge or encumbrance of any nature on any of its assets, now owned or hereafter acquired or assign or otherwise convey any right to receive income excluding, however, from the operation of the foregoing:

(a) Liens for taxes or assessments or other governmental charges to the extent not required to be paid by Section 5.4.

(b) Materialmen’s, merchants’, carriers’, workmen’s, repairmen’s or other like liens arising in the ordinary course of business to the extent not required to be paid by Section 5.4.

(c) Pledges or deposits to secure obligations under workmen’s compensation laws, unemployment insurance and social security laws, or to secure the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases or to secure

statutory obligations or surety or appeal bonds, or to secure indemnity, performance or other similar bonds in the ordinary course of business.

(d) Zoning restrictions, easements, licenses, restrictions on the use of real property or minor irregularities in title thereto, which do not materially impair the use of such property in the operation of the Borrower’s business or the value of such property for the purpose of such business.

(e) Security interest and liens granted to the Bank under the Collateral Documents.

(f) Purchase money security interests for new inventory purchased by the Borrower from its suppliers in the ordinary course of the operation of the business of the Borrower.

(g) The security interests, mortgages and liens that are reflected on the financial statement of the Borrower referred to in Section 4.3 of this Agreement.

Section 6.3 Conduct of Business. The Borrower will not enter into or engage in any business which is not presently conducted by the Borrower.

Section 6.4 Sale of Assets. The Borrower will not sell, lease, assign, transfer or otherwise dispose of any of its assets (whether in one transaction or in a series of transactions) to any Person other than in the ordinary course of business.

Section 6.5 Sale and Leaseback. The Borrower will not enter into any arrangement, directly or indirectly, with any other Person whereby it shall sell or transfer any real or personal property, whether now owned or hereafter acquired, and then or thereafter rent or lease as lessee such property or any part thereof or any other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

Section 6.6 Consolidation/Merger. The Borrower will not consolidate with or merge into any Person or permit any other Person to merge into it, or acquire (in a transaction analogous in purpose or effect to a consolidation or merger), any assets of any Person.

Section 6.7 Guaranties. The Borrower will not assume, guarantee, endorse or otherwise become liable for the obligation of any Person except by endorsement of negotiable instruments for deposit or collection in the ordinary course of business, nor sell any notes or accounts receivable with recourse.

Section 6.8 Current Ratio. As measured at the end of each fiscal quarter of the Borrower, the Borrower shall not allow its ratio of Current Assets to Current Liabilities to be less than 1.20 to 1.00.

Section 6.9 Debt to Tangible Net Worth. As measured at the end of each fiscal year of the Borrower, the Debt of the Borrower shall not exceed the Tangible Net Worth of the Borrower by a ratio greater than 3.50 to 1.00.

Section 6.10 Debt Service Coverage Ratio. As measured at the end of each fiscal quarter of the Borrower, the Borrower shall not allow its debt service coverage ratio to be less than 1.20 to 1.00 on a rolling twelve month basis. Debt service coverage ratio shall be defined as the ratio computed when the sum of (i) net operating income; plus (ii) depreciation and amortization expense; plus (iii) interest expense is divided by the sum of (i) current maturities of long term debt; plus (ii) interest expense for interest actually paid.

Section 6.11 Distributions. Upon the occurrence of an Event of Default, the Borrower shall not make any distributions to the shareholders of the Borrower whether in cash, assets or in obligations of the Borrower; or pay or remit any salary, loan, rent, bonus, consultant fee or other form of compensation to the shareholders of the Borrower or allocate or otherwise set apart any sum for the payment of any dividend or distribution on, or for the purchase or redemption of any shareholder interests; or make any other distribution to the shareholders of the Borrower.

Section 6.12 Subsidiaries. Except for Transportation Solutions LLC which is a wholly owned subsidiary of the Borrower, the Borrower has no subsidiaries [Persons in which the Borrower owns or controls, directly or indirectly, 50% or more of the voting ownership interest of such Person (“Subsidiaries”)] or affiliates and shall not create or permit to exist any Subsidiaries of the Borrower.

Section 6.13 Fiscal Year. The Borrower shall not change its fiscal year.

Section 6.14 Organizational Documents .. The Borrower shall not amend, modify, replace or restate its articles of incorporation or bylaws.

Section 6.15 Acquisitions. The Borrower shall not acquire, in whole or in part, any stock or other ownership interest in any Person nor shall it acquire in any transaction or series of transactions all or a substantial part of any of the assets of any Person.

Section 6.16 New Equipment Inventory Turnover. As measured at the end of each fiscal quarter of the Borrower, the Borrower shall not allow its ratio of (i) the cost of goods sold of New Equipment Inventory to (ii) the dollar value of the Borrower’s new equipment inventory, accounted for at the lower of cost or fair market value computed on a first-in first-out basis to be less than 1.75 to 1.00 on a rolling twelve month basis.

Section 6.17 Used Equipment Inventory Turnover. As measured at the end of each fiscal quarter of the Borrower, the Borrower shall not allow its ratio of (i) the cost of goods sold of Used Equipment Inventory to (ii) the dollar value of the Borrower’s Used Equipment Inventory, accounted for at the lower of cost or fair market value computed on a first-in first-out basis to be less than 1.75 to 1.00 on a rolling twelve month basis.

Section 6.18 Parts Inventory Turnover. As measured at the end of each fiscal quarter of the Borrower, the Borrower shall not allow its ratio of (i) the cost of goods sold of parts inventory to (ii) the dollar value of the Borrower’s parts inventory, accounted for at the lower of cost or fair market value computed on a first-in first-out basis to be less than 1.50 to 1.00 on a rolling twelve month basis.

ARTICLE VII - EVENTS OF DEFAULT, RIGHTS AND REMEDIES

Section 7.1 Event of Default. “Event of Default,” wherever used herein, means any one of the following events:

(a) Failure to make any payment, when due, of the principal or interest of any of the Notes.

(b) Any representation or warranty made by the Borrower in this Agreement or by the Borrower in any certificate, instrument or statement contemplated by or made or delivered pursuant to or in connection with this Agreement, shall prove to have been incorrect in any material respect when made.

(c) Default in the performance, or breach, of any covenant or agreement of the Borrower in this Agreement or by the Borrower or any maker of any covenant or agreement in the Collateral Documents, Notes, L/C Applications or any other agreement with the Bank (other than a covenant or agreement a default in whose performance or whose breach is elsewhere in this Section specifically dealt with).

(d) The Borrower shall voluntarily file, or have filed against them involuntarily, a petition for liquidation, reorganization, adjustment of debt or similar relief under the federal Bankruptcy Code or any present or future state or other federal bankruptcy or insolvency law, or a receiver, trustee, or similar officer shall be appointed for it or for all or a substantial part of their property.

(e) The rendering against the Borrower of a final judgment, decree or order for the payment of money and the continuance of such judgment, decree or order unsatisfied and in effect for any period of 30 consecutive days without a stay of execution.

(f) A default under any bond, debenture, note or other evidence of indebtedness of the Borrower (including to the Bank) or under any indenture or other instrument under which any such evidence of indebtedness has been issued or by which it is governed and the expiration of the applicable period of grace, if any, specified in such evidence of indebtedness, indenture or other instrument.

(g) The Collateral Documents shall, at any time after their execution and delivery and for any reason, cease (i) to create a valid and perfected first priority lien/security interest (unless otherwise provided for in this Agreement) in and to the property purported to be subject to such Collateral Documents; or (ii) to be in full force and effect or shall be declared null and void, or the validity or enforceability thereof shall be contested by the maker of such Collateral Documents, or the maker shall deny it has any further liability or obligation under the Collateral Documents.

(h) If the Borrower shall dissolve or cease to be a validly existing corporation under the laws of the State of Delaware or cease to be authorized to do business in the State(s) of North Dakota, South Dakota, Nebraska, Iowa, Montana, Wyoming and Minnesota or any other jurisdiction in which it is required to be authorized to do business.

(i) In the event the Borrower is in default of its Master Dealer Agreements with Case or New Holland.

(j) In the event the Master Dealer Agreements of the Borrower with Case or New Holland are cancelled or terminated for any reason.

(k) In the event the Borrower is no longer authorized, for any reason, to be a Case or New Holland dealer for any of its dealerships located at the Premises (or any dealership locations subsequently acquired) provided that the combined gross revenue from the dealerships that are no longer authorized to be Case or New Holland dealers equals or exceeds, in the aggregate, twenty-five percent (25%) or more of the gross revenue of the Borrower as set forth in the audited financial statement referred to in Section 4.3.

Section 7.2 Rights and Remedies. Immediately upon the occurrence of an Event of Default or at any time thereafter until such Event of Default is cured to the written satisfaction of the Bank, the Bank may exercise any one or more of the following rights and remedies:

(a) The Bank may, without notice to the Borrower, declare all Obligations then outstanding, all interest accrued and unpaid thereon, and all other amounts payable under this Agreement to be forthwith due and payable, whereupon such Obligations, all such accrued but unpaid interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower.

(b) The Bank may, without notice to the Borrower, and without further action, set-off and apply any and all money owing by the Bank to the Borrower to

the payment of the Obligations, then outstanding, including interest accrued thereon, and of all other sums then owing by the Borrower.

(c) The Bank may exercise and enforce the rights and remedies available to it under the Notes, Collateral Documents, or any other agreement or by law.

ARTICLE VIII - MISCELLANEOUS

Section 8.1 No Obligation To Renew. The Borrower understands and expressly agrees that the Bank is under no obligation to renew or extend this Agreement, the Notes or Letters of Credit or provide any other or additional financing. The Bank’s decision with respect to any renewals, extensions or additional financing will be a separate, independent decision and may involve factors other than, or in addition to, the Borrower’s creditworthiness or prior relationship with the Bank.

Section 8.2 No Waiver; Cumulative Remedies. No failure or delay on the part of the Bank in exercising any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

Section 8.3 Amendments. No amendment, modification, termination or waiver of any provision of this Agreement, the Collateral Documents, the Notes, or any other document contemplated by this Agreement, or consent by the Bank to any departure therefrom shall be effective unless the same shall be in writing and signed by the Bank and then such waiver or consent shall be effective only in the specific instance and for the specific purpose which given. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances.

Section 8.4 Addresses for Notices. Except as otherwise expressly provided herein, all notices, requests, demands and other communications provided for hereunder shall be in writing and mailed or delivered to the applicable party at its address indicated below:

If to the Borrower:

Titan Machinery Inc.

ATTN: David J. Meyer

PO Box 10818

Fargo, ND 58106-0818

If to the Bank:

Bremer Bank, N.A.

ATTN: Wes Well

PO Box 273

Lisbon, ND 58054-0273

or, as to each party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this section. All such notices, requests, demands and other communications shall, when mailed, be effective when deposited in the mails, addressed as aforesaid, except that notices or requests to the Bank pursuant to any of the provisions of Article II shall not be effective until received by the Bank.

Section 8.5 Execution in Counterparts. This Agreement 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 counterparts, when taken together, shall constitute but one and the same instrument.

Section 8.6 Binding Effect, Assignment. This Agreement shall be binding upon and inure to the benefit of the Borrower, and the Bank, and its respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Bank.

Section 8.7 Governing Law. The loan to the Borrower as evidenced by this Agreement was negotiated and made within the State of North Dakota and, accordingly, shall be governed by, and construed in accordance with, the laws of the State of North Dakota.

Section 8.8 Severability of Provisions. Any provision of this Agreement which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.

Section 8.9 Further Assurances. The Borrower agrees to do such further acts and things and execute and deliver such agreements, powers and instruments as the Bank may reasonably require or deem necessary to carry into effect the purposes of this Agreement.

Section 8.10 Conflicting Provisions. This Agreement shall control with respect to any of its provisions that conflict or are inconsistent with the Notes, Collateral Documents, and any other such documents executed in connection with this Agreement, but to the extent not conflicting or inconsistent, the Notes, Collateral Documents, and any other such documents executed in connection with this Agreement, shall be in full force and effect.

Section 8.11 Relationship. The Bank is acting in its sole capacity as a lending institution with respect to the Borrower and there is no partnership or agency relationship created. The Bank assumes no fiduciary duty and no conditions or suggestions of action or inaction shall be deemed to constitute participation by the Bank in the business of the Borrower.

Section 8.12 Ramification of Provisions. The Borrower has reviewed this Agreement, the Notes, Collateral Documents, and any other such documents executed in connection with this Agreement, and has had the opportunity to consult with its attorneys regarding the ramifications and

effect of this Agreement, the Notes, Collateral Documents, and other such documents executed in connection with this Agreement.

Section 8.13 Entire Agreement. This Agreement 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.

Section 8.14 Headings. Such headings used in this Agreement are for the convenience of reference only and shall not affect the construction of this Agreement.

Section 8.15 Jurisdiction/Venue. The Borrower consents to jurisdiction as to all issues concerning or relating to this Agreement, the Notes and the Collateral Documents with the federal or state district courts designated for Ransom County, North Dakota.

Section 8.16 Expenses. The Borrower shall, on demand by the Bank, reimburse the Bank for any and all costs and expenses, including without limitation reasonable attorneys’ fees, paid or incurred by either the Bank in connection with (i) the preparation of this Agreement, the Notes, the Collateral Documents, and any other document or agreement related hereto or thereto, and the transactions contemplated hereby, which amount shall be paid prior to the making of any Advance hereunder; (ii) the negotiation of any amendments, modifications or extensions to or any of the foregoing documents, instruments or agreements and the preparation of any and all documents necessary or desirable to effect such amendments, modifications or extensions; and (iii) the enforcement by the Bank during the term hereof or thereafter of any of the rights or remedies of the Bank under any of the foregoing documents, instruments or agreements or under applicable law, whether or not suit is filed with respect thereto.

Section 8.17 Adequate Financing. The Borrower warrants and represents that the extensions of credit provided for under the terms and conditions of this Agreement constitute adequate and sufficient financing by the Bank.

Section 8.18 Participation/Assignments. The Bank shall have the right, but not the obligation, to assign all or a portion of the indebtedness evidenced by the Notes or grant participation in all or a portion of the indebtedness evidenced by the Notes to other Persons and shall have the right to disclose any and all information, financial or otherwise, regarding the Borrower to such potential participants and assignees.

Section 8.19 Interest Limitation. All agreements between the Bank and the Borrower are expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of maturity or prepayment of the obligations of the Borrower owing the Bank, shall the amount of interest paid or agreed to be paid to Bank for the use, forbearance, loaning or retention of the obligations of the Borrower owing the Bank exceed the maximum permissible interest rate under applicable law. If, from any circumstances whatsoever, fulfillment of any provisions of any of the Notes or Collateral Documents shall involve transcending the limit of validity prescribed by law, then the obligation to be fulfilled shall automatically be reduced to the limit of such validity. If,

from any circumstances, the Bank should ever receive as interest an amount which would exceed the highest lawful interest rate, such amount which would be in excess of such highest lawful interest rate shall be applied to reduction of the principal balance evidenced by the Notes and not to the payment of interest. This provision shall control every other provision of the Notes and Collateral Documents between the Bank and the Borrower and shall be binding upon and available to any subsequent holder of the Notes.

Section 8.20 Prior Documentation. The Borrower shall be bound by and shall continue to comply with all documents previously executed and delivered to the Bank including, but not limited to, security agreements, financing statements and subordination agreements except to the extent that this Agreement is inconsistent or conflicting with any such previous agreements or documents. This Agreement shall replace that certain loan agreement among the Bank and the Borrower dated August 28, 2008.

Section 8.21 Waiver of Jury. In the interest of expediting any disputes that might arise between the parties to this Agreement, the parties hereby waive their respective rights to a trial by jury of any dispute or claim concerning this Agreement, the Notes, the Collateral Documents and any other documents or agreements contemplated by or executed in connection with this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

	BREMER BANK, N.A.


	By	/s/ Wes Well
		Wes Well
		President


	TITAN MACHINERY INC.


	By	/s/ David J. Meyer
		David J. Meyer
		Its CEO and Chairman

DISCRETIONARY REVOLVING

PROMISSORY NOTE

(Note)

$25,000,000		Lisbon, North Dakota
		July 15, 2009

For value received, the undersigned, TITAN MACHINERY INC., a Delaware 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 Twenty-five Million Dollars ($25,000,000), or, if less, the aggregate unpaid principal amount of all Advances made by the Bank to the undersigned pursuant to Section 2.1 of that certain Loan Agreement between the Borrower and the Bank dated July 15, 2009, (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 the Index Rate less .25 percentage points. Notwithstanding the foregoing, at no time shall the interest rate be less than four and one-half percent (4.5%). As used herein, the Index Rate means the rate of interest announced as the Bremer Financial Reference Rate which rate is subject to change from time to time. The Index Rate is not necessarily the lowest rate charged by the Bank on its loans and is set by the Bank in its sole discretion. The Borrower understands that the Bank may make loans based on other rates as well. If the Index Rate becomes unavailable during the term of this Revolving Note, the Bank may designate a substitute Index Rate. The Bank will advise the Borrower of the current Index Rate upon the Borrower’s written request. The Index Rate change will not occur more than once daily. The Index Rate as of the date of this Revolving Note is equal to three and one-quarter percent (3.25%) resulting in an initial rate of interest under this Revolving Note of three percent (3%) subject to the floor of four and one-half percent (4.50%) as set forth above. Under no circumstances will the interest rate on this Revolving Note be more than the maximum rate allowed by applicable law.

The entire principal balance, and any unpaid accrued interest, of this Revolving Note shall be due on July 14, 2010, unless payment in full is demanded earlier under the Agreement. Accrued interest on this Revolving Note shall be paid monthly commencing August 1, 2009, and continuing on the same day of each month thereafter until this Revolving Note is paid in full.

This Revolving Note is the Revolving Note 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 Revolving Note may

Schedule 2.1

be accelerated. Payment of this Revolving Note is secured by the Collateral Documents 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 Revolving Note shall have the same definitions as provided for in the Agreement.

This Revolving Note shall be subject to a late payment service charge as set forth in the Agreement.

This Revolving Note shall be subject to the Non-Usage Fee as set forth in the Agreement.

All payments on this Revolving Note 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 Revolving Note 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 Note 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	/s/ David J. Meyer
		David J. Meyer
		Its CEO and Chairman

PROMISSORY NOTE

(Term Note)

$15,000,000		Lisbon, North Dakota
		July 15, 2009

The Advance made pursuant to this Term Note 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 Term Note shall be payable in consecutive monthly installments of $289,300, commencing on August 1, 2009 and continuing on the 1st day of each month thereafter until July 1, 2014 when the balance of all unpaid principal and accrued interest of this Term Note shall be due and payable in full unless payment in full is demanded earlier under the Agreement.

This Term Note is the Term Note referred to in that certain Loan Agreement between the Bank and the Borrower dated July 15, 2009 (together with all amendments, modifications and restatements thereof 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 Term Note may be accelerated. Payment of this Term Note is secured by the Collateral Documents 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 Term Note shall have the same definitions as provided for in the Agreement.

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

Schedule 2.3

All payments on this Term Note 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 Term Note 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 Term Note 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	/s/ David J. Meyer
		David J. Meyer
		Its President

Exhibit 10.2

July 29, 2009

Titan Machinery, Inc

4876 Rocking Horse Circle

Fargo, ND 58103-7256

Attn: Ted O. Christianson,

Vice President, Finance and Treasurer

via facsimile

Dear Mr. Christianson:

Titan Machinery, Inc (“Titan”) and CNH Capital America LLC (“CNH”) are parties to an Amended and Restated Wholesale Floor Plan Credit Facility and Security Agreement dated November 13, 2007, as amended (“Agreement”). The Agreement contains certain terms which the parties agree are no longer suitable for the Agreement’s intended purposes. To that end, the parties have previously discussed and now wish to memorialize an amendment to the Agreement, which amendment shall be effective September 1, 2009.

The definition of “Interest Rate” appearing in section 1.01 of the Agreement shall be deleted in its entirety and replaced with the following:

“Interest Rate” means the rate(s) of interest provided in the Wholesale Finance Plans or as otherwise agreed to in writing by the Borrower and Lender.

The parties hereto further agree that between September 1, 2009 and December 31, 2009 (inclusive), the rate of interest charged on the first $25,000,000 on Credit Line 7 shall be Prime +4.00%. The rate of interest charged on Credit Line 7 after December 31, 2009, shall be the rate provided for in the Wholesale Finance Plans, unless otherwise agreed to in writing by the parties (the parties shall discuss the possibility of agreeing to an interest rate other than as provided in the Wholesale Finance Plans prior to November 30, 2009).

All amounts owing under credit lines other than Credit Line 7 shall accrue interest on and after September 1, 2009, at the rates of interest provided for in the Wholesale Finance Plans (Prime +6.00% as of the date of this letter). Titan shall be responsible for transferring units from Credit Line 1 upon the expiration of the interest free period. Any amounts remaining on Credit Line 1 after the expiration of the interest free period shall accrue interest at Prime +6.00%.

CNH Capital

233 Lake Avenue

Racine, WI 53403

Except as specifically amended herein, all other terms of the Agreement shall remain unchanged.

Very truly yours,

CNH Capital America LLC

/s/ Mike Morrone
Mike Morrone, Director N.A. Commercial Lending

Titan Machinery, Inc. agrees to the above described amendment to the Amended and Restated Wholesale Floor Plan Credit Facility and Security Agreement dated November 13, 2007, as amended.

Titan Machinery, Inc.

/s/ Ted O. Christianson
Ted O. Christianson, Vice President, Finance and Treasurer

October 17, 2008

Titan Machinery, Inc

Rocking Horse Circle

4645 8th Avenue Southwest, Suite 1

Fargo, North Dakota 58103-7256

Attn: Ted O. Christianson, Vice President, Finance and Treasurer

Dear Mr. Christianson:

You inquired about Titan Machinery, Inc’s (“Titan”) interest rates under its wholesale lines with CNH Capital America LLC (“CNH”). Pursuant to the most recent written agreement between the parties (the Amended and Restated Wholesale Floor Plan Credit Facility and Security Agreement dated November 13, 2007 (“Agreement”)) the rates of interest to be charged are as follows:

a) the Prime Rate plus 0.3% for credit lines 4, 5, 6, 7, 8, 9 and 11 (with respect to units for such line as to which Titan selects the floating rate option); and

b) the Prime Rate plus 1.6% for credit lines 1 and 2.

In an accommodation to Titan, CNH agreed to and shall continue to honor charging an interest rate of Prime for credit lines 4, 5, 6, 7, 8, 9 and 11 through December 31, 2008. As of January 1, 2009 the Agreement shall once again control the interest rate charged to Titan on all credit lines.

The Agreement is designed to run on a series of one year terms ending each August 31st, but automatically renewing each year unless one of the parties terminates the Agreement. Unless earlier terminated the Agreement shall terminate August 31, 2012. As August 31, 2009 draws closer CNH Capital will review its cost of funding and make a determination as to whether to continue under the existing Agreement. In the event either party decides to terminate the Agreement, 90 days advanced written notice is required.

You also inquired about Titan’s aggregate credit limit with CNH Capital. Titan has been approved for an aggregate credit limit of $300,000,000. However, this approval is subject to all of the terms, conditions and requirements contained in any agreement between the parties, including but not limited to the Agreement.

Titan is an extremely important customer and CNH Capital would like to thank you for your continued support. I hope this letter addresses each of Titan’s questions. If not, please feel free to call me at 262-636-5257.

Very truly yours,

CNH Capital America LLC

/s/ James A. Marinaro
James A. Marinaro, Chief Credit Officer

CNH Capital

233 Lake Avenue

Racine, WI 53403

EXHIBIT 31.1

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, David J. Meyer, certify that:

1. I have reviewed this report on Form 10-Q of Titan Machinery Inc.;

2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 9, 2009

	/s/ David J. Meyer
	David J. Meyer
	Chairman and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, Peter J. Christianson, certify that:

1. I have reviewed this report on Form 10-Q of Titan Machinery Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 9, 2009


	/s/ Peter J. Christianson
	Peter J. Christianson
	President and Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Titan Machinery Inc. (the “Company”) on Form 10-Q for the quarter ended July 31, 2009 as filed with the Securities and Exchange Commission (the “Report”), I, David J. Meyer, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: September 9, 2009


	/s/ David J. Meyer
	David J. Meyer
	Chairman and Chief Executive Officer

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Titan Machinery Inc. (the “Company”) on Form 10-Q for the quarter ended July 31, 2009 as filed with the Securities and Exchange Commission (the “Report”), I, Peter J. Christianson, President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: September 9, 2009


	/s/ Peter J. Christianson
	Peter J. Christianson
	President and Chief Financial Officer