AMENDMENT NO. 3 TO MULTI-YEAR CREDIT AGREEMENT

     This Amendment No. 3 to Multi- Year Credit Agreement (this “Agreement ”)
dated as of March 10, 2004 is made by and among THE TORO COMPANY, a Delaware
corporation (“Toro”), the SUBSIDIARY BORROWERS (as defined in the Credit
Agreement, defined below), TORO CREDIT COMPANY, a Minnesota corporation
(“Credit” and together with Toro and the Subsidiary Borrowers, the “Companies”),
BANK OF AMERICA, N.A., in its capacity as administrative agent (in such
capacity, the “Agent”) and each of the Banks (as defined in the Credit
Agreement, defined below) signatory hereto.

WITNESSETH:

     WHEREAS, the Companies, the Agent and the Banks have entered into that
certain Multi-Year Credit Agreement dated as of February 22, 2002, as amended by
that certain Amendment No. 1 to Multi-Year Credit Agreement dated December 11,
2002 and by that certain Amendment No. 2 to Multi- Year Credit Agreement dated
July 9, 2003 (as hereby further amended and as from time to time hereafter
further amended, modified, supplemented, restated, or amended and restated, the
“Credit Agreement ”; the capitalized terms as used in this Agreement not
otherwise defined herein shall have the respective meanings given thereto in the
Credit Agreement), pursuant to which the Banks have made available to the
Companies a revolving credit facility (including a letter of credit facility and
a swing line facility); and

     WHEREAS, the Companies have requested that the Credit Agreement be amended
to permit additional repurchases of Toro stock, and the Agent and the Banks have
agreed so to amend the Credit Agreement on the terms and conditions set forth
herein;

     NOW, THEREFORE, in consideration of the premises and further valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

     1. Amendment to Credit Agreement. Subject to the terms and conditions set
forth herein, the Credit Agreement is hereby amended as follows:

(a) Section 7.10 of the Credit Agreement is hereby amended by deleting the text
of such provision in its entirety and substituting in lieu thereof the
following:

“ Section 7.10 Use of Proceeds. Each Company shall use the proceeds of the Loans
for (a) general working capital needs and capital expenditures and (b) to
replace and refinance outstanding indebtedness under the Existing Facilities,
(c) subject to the proviso below, the purchase or other acquisition by Toro of
shares of its capital stock and related preferred stock purchase rights to the
extent permitted by Section 8.7(c), and (d) other lawful corporate purposes,
other than, directly or indirectly, (i) for purposes of undertaking an
Acquisition or Joint Venture in contravention of any Requirement of Law or of
any Loan Document, (ii) to purchase or carry Margin Stock, (iii) to repay or
otherwise refinance indebtedness of any Company or others incurred to purchase
or carry Margin Stock, (iv) to extend credit for the purpose of purchasing or
carrying any Margin Stock, or (v) to acquire any security in any transaction
that is subject to Section 13 or 14

 

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of the Exchange Act; provided, however, that notwithstanding clauses
(ii) through (v) above, Toro may use proceeds of Loans as described in clause
(c) above so long as either (x) the Margin Stock so acquired is promptly retired
following the purchase or other acquisition thereof or (y) at all times and
after giving effect to each such purchase or acquisition, not more than twenty
five percent (25%) of the total assets of the Companies and their Subsidiaries
on a consolidated basis are represented by Margin Stock owned by the Companies
and their Subsidiaries on a consolidated basis.”;

(b) Section 8.4 of the Credit Agreement is hereby amended by (i) deleting “and”
at the end of clause (f) thereof, (ii) deleting “.” at the end of clause
(g) thereof and substituting in lieu thereof “; and”, and (iii) adding the
following new clause (h):

     “(h) Purchases by Toro of shares of its capital stock and associated rights
to purchase shares of Toro’s preferred stock pursuant to Toro’s shareholder
rights plan to the extent permitted by Sections 7.10 and 8.7(c).”

(c) Section 8.7 of the Credit Agreement is hereby amended by deleting clause
(c) therefrom and inserting the following in lieu thereof the following new
clause (c):

     “(c) Toro may declare and pay cash dividends to its stockholders and
purchase, redeem or otherwise acquire shares of its capital stock or warrants,
rights or options to acquire any such shares for cash up to an amount equal to
(A) the sum of (i) 50% of the consolidated net income of Toro and its
Subsidiaries arising after October 31, 2001 and computed on a cumulative
consolidated basis, plus (ii) $50,000,000, plus (B) to the extent utilized
solely to purchase, redeem or otherwise acquire shares of its capital stock and
associated rights to purchase shares of Toro’s preferred stock pursuant to
Toro’s shareholder rights plan, an additional $175,000,000; provided, that,
immediately after giving effect to any such proposed action, no Default or Event
of Default would exist; and”

(d) Section 4(d) of Exhibit C, the Form of Compliance Certificate, is amended by
(i) amending the line denoted “Amount        $            ” to read

“Total Amount          $            ”, and

(ii) amending the line immediately below the line decscribed in clause (i) to
read as follows:

“Amount utilized for repurchases of Toro stock          $            ”.

     2. Conditions Precedent. The effectiveness of this Agreement and the
amendments to the Credit Agreement herein provided are subject to the
satisfaction of the following conditions precedent:

     (a) The Agent shall have received each of the following documents or
instruments in form and substance reasonably acceptable to the Agent:

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     (i) ten (10) original counterparts of this Agreement, duly executed by the
Companies, the Agent, and the Required Banks, together with all schedules and
exhibits thereto duly completed;

     (ii) such other documents, instruments, opinions, certifications,
undertakings, further assurances and other matters as the Agent shall reasonably
require.

     (b) all fees and expenses payable to the Agent and the Banks (including the
fees and expenses of counsel to the Agent) invoiced to date, including all fees
associated with this Agreement, shall have been paid in full.

     3. Reaffirmation by each of the Companies. Each of the Companies hereby
consents, acknowledges and agrees to the amendments of the Credit Agreement set
forth herein.

     4. Representations and Warranties. In order to induce the Agent and the
Banks to enter into this Agreement, each of the Companies represents and
warrants to the Agent and the Banks as follows:

     (a) The representations and warranties in Article VI of the Credit
Agreement (after giving effect to this Agreement) and in each of the other Loan
Documents to which such Company is a party are true and correct in all material
respects on and as of the date hereof, except to the extent that such
representations and warranties expressly relate to an earlier date;

     (b) There does not exist any pending or threatened action, suit,
investigation or proceeding in any court or before any arbitrator or
Governmental Authority that purports (A) to have a Material Adverse Effect on
any of the Companies or their Subsidiaries, or (B) to affect any transaction
contemplated under this Agreement or any Loan Document or the ability of any
Company to perform its respective obligations under this Agreement or any Loan
Document;

     (c) There has occurred since October 31, 2003, no event or circumstance
that has resulted or could reasonably be expected to result in a Material
Adverse Effect or a material adverse change in or a material adverse effect upon
the business, assets, liabilities (actual or contingent), operations, condition
(financial or otherwise), or prospects of Toro and its Subsidiaries taken as a
whole; and

     (d) No Default or Event of Default has occurred and is continuing.

     5. Entire Agreement. This Agreement, together with all the other Loan
Documents (collectively, the “Relevant Documents”), sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, condition, representation
or warranty, express or implied, not herein set forth shall bind any party
hereto, and not one of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledges that, except
as otherwise expressly stated in the Relevant Documents, no representations,
warranties or commitments, express or implied, have been made

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by any party to the other. None of the terms or conditions of this Agreement may
be changed, modified, waived or canceled orally or otherwise, except as
permitted pursuant to Section 12.1 of the Credit Agreement.

     6. Full Force and Effect of Agreement. Except as hereby specifically
amended, modified or supplemented, the Credit Agreement and all other Loan
Documents are hereby confirmed and ratified in all respects by each party hereto
and shall be and remain in full force and effect according to their respective
terms.

     7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which shall together constitute one
and the same instrument.

     8. Governing Law. This Agreement shall in all respects be governed by, and
construed in accordance with, the laws of the state of New York.

     9. Enforceability. Should any one or more of the provisions of this
Agreement be determined to be illegal or unenforceable as to one or more of the
parties hereto, all other provisions nevertheless shall remain effective and
binding on the parties hereto.

     10. References. All references in any of the Loan Documents to the “Credit
Agreement” shall mean the Credit Agreement, as amended hereby.

     11. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Companies, the Agent and each of the Banks, and their
respective successors, assigns and legal representatives; provided, however,
that no Company, without the prior consent of the Required Banks, may assign any
rights, powers, duties or obligations hereunder.

     12. Expenses. The Companies agree to pay to the Agent all reasonable
out-of-pocket expenses incurred or arising in connection with the negotiation
and preparation of this Agreement.

[Signature Pages Follow.]

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to
Multi-Year Credit Agreement to be made, executed and delivered by their duly
authorized officers as of the day and year first above written.

          THE TORO COMPANY  
 
     
By:
  /s/ THOMAS J. LARSON  

 

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Name:
  Thomas J. Larson  
Title:
  Assistant Treasurer  
 
      TORO CREDIT COMPANY  
 
     
By:
  /s/ THOMAS J. LARSON  

 

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Name:
  Thomas J. Larson  
Title:
  Secretary-Treasurer  
 
      TORO INTERNATIONAL COMPANY  
 
     
By:
  /s/ STEPHEN P. WOLFE  

 

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Name:
  Stephen P. Wolfe  
Title:
  V.P. and Treasurer  
 
      TOVER OVERSEAS, B.V.  
 
     
By:
  /s/ ROBERT BUITENDIJK  

 

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Name:
  Temmes Management Services BV  
Title:
  Director  
 
      TORO FACTORING COMPANY LIMITED (formerly TORO FACTORING COMPANY, N.V.)  
 
     
By:
  /s/ J. LAWRENCE MCINTYRE  

 

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Name:
  J. Lawrence McIntyre  
Title:
  Managing Director

Signature Page 1 of 9

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            TORO MANUFACTURING LLC
      By:   /s/ STEPHEN P. WOLFE         NAME: STEPHEN P. WOLFE        TITLE:
PRESIDENT     

            EXMARK MANUFACTURING COMPANY
INCORPORATED
      By:   /s/ J. LAWRENCE MCINTYRE       NAME: J. Lawrence McIntyre       
TITLE: Vice President And Secretary     

Signature Page 2 of 9

 

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            BANK OF AMERICA, N.A., as Administrative Agent
      BY: /s/ RENITA CUMMINGS       NAME: Renita Cummings      TITLE: Assistant
Vice President     

Signature Page 3 of 9

 

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            BANK OF AMERICA, N.A.,
as Issuing Bank, Swing Line Bank and a Bank
      BY: /s/ JEFFREY A. ARMITAGE       NAME: Jeffrey A. Armitage      TITLE:
Principal     

Signature Page 4 of 9

 

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WELLS FARGO BANK, NATIONAL ASSOCIATION
as a Bank   BY: /s/ SCOTT D. BJELDE       NAME: Scott D. Bjelde      TITLE:
Senior Vice President     

                  BY: /s/ JENNIFER D. BARRET       NAME: Jennifer D. Barrett   
  TITLE: Vice President and Loan Team Manager     

Signature Page 5 of 9

 

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            THE BANK OF NEW YORK, as a Bank
      BY: /s/ JOHN PAUL MAROTTA       NAME: John Paul Marotta      TITLE: Vice
President     

Signature Page 6 of 9

 

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            HARRIS TRUST AND SAVINGS BANK, as a Bank
      BY: /s/ ANDREW T. CLAAR       NAME: Andrew T. Claar      TITLE: Vice
President     

Signature Page 7 of 9

 

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            U.S. BANK NATIONAL ASSOCIATION, as a Bank
      BY: /s/ SAM S. PEPPER, JR.       NAME: Sam S. Pepper, Jr.      TITLE: Vice
President     

Signature Page 8 of 9

 

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            SUNTRUST BANK, as a Bank
      BY: /s/ MOLLY J. DRENNAN       NAME: Molly J. Drennan      TITLE:
Director     

Signature Page 9 of 9