Exhibit 10.1 Amendent No. 3 to Credit Agreement executed on April 9, 2007


    AMENDMENT
      NO. 3 TO CREDIT AGREEMENT

     

    This
      Amendment No. 3 to Credit Agreement (this “Amendment”),
      effective as of February 28, 2007, is made by and among THE
      TORO COMPANY,
      a
      Delaware corporation (“Toro”),
      TORO
      CREDIT COMPANY,
      a
      Minnesota corporation, TORO MANUFACTURING
      LLC,
      a
      Delaware limited liability company, EXMARK MANUFACTURING COMPANY
      INCORPORATED,
      a
      Nebraska corporation, TORO
      INTERNATIONAL COMPANY,
      a
      Minnesota corporation, TOVER
      OVERSEAS B.V.,
      a
      Netherlands company, and TORO FACTORING
      COMPANY LIMITED, a
      Guernsey, Channel Islands company (all of the foregoing, collectively, the
      “Borrowers”),
      each
      lender from time to time party hereto (collectively the “Lenders”),
      and
BANK
      OF AMERICA, N.A.,
      as
      Administrative Agent, Swing Line Lender and L/C Issuer (the “Administrative
      Agent”).
       

     

    WHEREAS,
      the Borrowers, the Administrative Agent and the Lenders have entered into that
      certain Credit Agreement dated as of September 8, 2004 (as amended by Amendment
      No. 1 to Credit Agreement dated as of October 25, 2005 and Amendment No. 2
      to
      Credit Agreement dated as of January 10, 2007, as hereby amended and as from
      time to time hereafter further amended, modified, supplemented, restated or
      amended and restated, the “Credit
      Agreement”
      (capitalized terms used and not otherwise defined in this Amendment shall have
      the respective meanings given thereto in the Credit Agreement), pursuant to
      which the Lenders have made available to the Borrowers a revolving credit
      facility (including a letter of credit facility and a swing line facility);
      and

     

    WHEREAS,
      the Borrowers have requested that the Administrative Agent and the Required
      Lenders (i) waive the Default (resulting from the Borrowers’ failure to
      accurately account deferred compensation plans on the financial statements
      required by the Credit Agreement), and (ii) amend certain provisions of the
      Credit Agreement as set forth herein; 

     

    WHEREAS,
      all conditions necessary to authorize the execution and delivery of this
      Amendment and to make this Amendment valid and binding have been complied with
      or have been done or performed;

     

    NOW,
      THEREFORE, in consideration of the foregoing and for other good and valuable
      consideration, receipt of which is hereby acknowledged, the parties hereto
      hereby agree as follows:

     

    1. Waiver
      and Consent.
      On
      February 28, 2007, Toro filed a current report on Form 8-K that disclosed that
      it would be restating previously issued financial statements due to reporting
      errors (the “Reporting
      Errors”)
      primarily arising with respect to the accounting for deferred compensation
      plans
      (the “Restatement”).
      Copies of this Form 8-K and related press release have been provided to the
      Lenders. Pursuant to the request of Toro and subject to the terms and conditions
      set forth herein, the Lenders, pursuant to Amendment, hereby waive all Defaults,
      if any, existing under the Credit Agreement due to the Restatement or the
      Reporting Errors, including any that may have resulted under Section
      6.01
      thereof
      from the past delivery of financial statements to the Lenders containing such
      Reporting Errors. Additionally, each Lender hereby approves and consents to
      the
      satisfaction of the condition precedent in Section
      4.02(a)
      of the
      Credit Agreement with respect to the representation and warranty in Section
      5.05
      of the
      Credit Agreement after giving effect to the Restatement. The
      waiver and approval set forth in this Waiver Letter is limited solely to the
      effects of the Restatement.

    


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

     

    (a) The
      definitions of the following terms and references thereto are deleted in the
      following sections of the Credit Agreement:

     

    “Receivables
      Loan Agreement” in Section
      1.01;
      and

     

    “Toro
      Receivables Company” in the definition of “Material Subsidiary” and Section
      7.08.

     

    (b) Clause
      (g) of the definition of “Indebtedness” in Section
      1.01
      is
      hereby amended by deleting such clause in its entirety and inserting the
      following in lieu thereof:

     

    (g) the
      unpaid amount of all Receivables sold by any Borrower for
      which such Borrower has recourse liability or portion thereof for which such
      Borrower has recourse liability in cases where such recourse liability is not
      full;
      and

     

    (c) The
      definition of “Receivables Purchase Facility” in Section
      1.01
      is
      hereby amended by deleting the definition in its entirety and inserting the
      following in lieu thereof:

     

    “Receivables
      Purchase Facility”
      shall mean any agreement of any Originator, approved by the Administrative
      Agent
      (such approval not to be unreasonably withheld), providing for sales, transfers
      or conveyances of Receivables of such Originator purporting to be sales (and
      considered sales under GAAP) that do not provide, directly or indirectly, for
      recourse against the seller of such Receivables (or against any of such seller’s
      Affiliates) by way of a guaranty or any other support arrangement, with respect
      to the amount of such Receivables (based on the financial condition or
      circumstances of the obligor thereunder), other than such limited recourse
      as is
      reasonable given market standards for transactions of a similar type, taking
      into account such factors as historical bad debt loss experience and obligor
      concentration levels.

     

    (d) Section
      7.02(d)
      of the
      Credit Agreement is hereby amended and restated in its entirety to read as
      follows:

     

    (d) dispositions
      by any Originator of Receivables pursuant to Receivables Purchase Facilities
      provided that the outstanding unpaid amount of all such Receivables so sold
      in
      the aggregate shall not at any time exceed $125,000,000 and such Receivables
      Purchase Facilities may be established only at a time when Toro has a Debt
      Rating by S&P of BBB- or better or by Moody’s of Baa3 or
      better;

     

    (e) Section
      7.11
      of the
      Credit Agreement is hereby amended and restated in its entirety to read as
      follows:

     

    7.11.
      Toro and TCC Portion of Sales Revenues.
      The
      consolidated total sales revenue of Toro and TCC at the end of each fiscal
      year
      shall not be less than 50% of the consolidated total sales revenue of Toro
      and
      its Subsidiaries at such time. 

     

    (f) Section
      8.01(e)
      of the
      Credit Agreement is hereby amended and restated in its entirety to read as
      follows:

     

    (e)
       Cross-Default.
      (i)
      Any Borrower or any Material Subsidiary (A) fails to make any payment in
      respect of any Indebtedness or Contingent Obligation, having an aggregate
      principal amount (including undrawn committed or available amounts and including
      amounts owing to all creditors under any combined or syndicated credit
      arrangement) of more than $10,000,000 when due (whether by scheduled maturity,
      required prepayment, acceleration, demand, or otherwise) and such failure
      continues after the applicable grace or notice period, if any, specified in
      the
      relevant document on the date of such failure; or (B) fails to perform or
      observe any other condition or covenant, or any other event shall occur or
      condition exist, under any agreement or instrument relating to any such
      Indebtedness or Contingent Obligation, and such failure continues after the
      applicable grace, cure or notice period, if any, specified in the relevant
      document on the date of such failure and if the effect of such failure, event
      or
      condition is to allow the holder or holders of such Indebtedness or beneficiary
      or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
      holder or holders or beneficiary or beneficiaries) to cause such Indebtedness
      to
      be declared to be due and payable prior to its stated maturity or such
      Contingent Obligation to become payable or cash collateral in respect thereof
      to
      be demanded; or (ii)(A) there occurs any termination, liquidation, unwind or
      similar event or circumstance under any Receivables Purchase Facility other
      than
      a voluntary termination by any Borrower or a scheduled termination, as a result
      of which any purchaser of receivables thereunder has ceased purchasing such
      Receivables and
      such purchaser may apply all collections on previously purchased Receivables
      thereunder to the payment of such purchaser’s interest in such previously
      purchased Receivables (any such event or circumstance referred to as a
“Receivables Purchase Facility Termination”) other than any such Receivables
      Purchase Facility Termination that arises solely as a result of (i) a
      down-grading of the credit rating of any bank or financial institution not
      affiliated with the Borrowers that provides liquidity, credit or other support
      in connection with such facility; or (ii) breach of a covenant contained in
      any
      Receivables Purchase Facility and this Agreement if the Lenders have previously
      waived compliance with such covenant under the terms of this Agreement with
      respect to the particular instance of non-compliance giving rise to the breach
      of such covenant under such Receivables Purchase Facility, it being acknowledged
      by the Borrowers that no waiver by the Lenders of compliance with the provisions
      of this Agreement in any particular instance shall constitute a waiver under
      either this Agreement or any Receivables Purchase Facility of any future
      non-compliance with such provision and (B) within 60 days after the effective
      date of such Receivables Purchase Facility Termination, additional financing
      and/or capitalization of the Borrowers in replacement of such Receivables
      Purchase Facility, in an amount substantially similar to the amount of the
      Receivables Purchase Facility and upon such terms as are acceptable to the
      Required Lenders, shall not be completed and funding thereunder shall not be
      available to the Borrowers; or

     

    (g) Section
      11.17(a)
      of the
      Credit Agreement is hereby amended and restated in its entirety to read as
      follows:

     

    All
      obligations of Toro and TCC or either one of them under this Agreement and
      the
      other Loan Documents to which they are a party, shall be joint and several
      obligations of Toro and TCC (each of the foregoing, a “Joint Borrower”). Only
      Toro shall be liable as a guarantor under Article X hereof for the obligations
      of the Subsidiary Borrowers under Article XI hereof. All obligations of the
      Subsidiary Borrowers under this Agreement and all of the other Loan Documents
      shall be several and not joint, the result of which shall be that each
      Subsidiary Borrower is obligated to repay only those Loans made by the Lenders
      to such Subsidiary Borrower and interest, fees, expenses and other obligations
      owing by such Subsidiary Borrower in connection with such Loans.


     

    (h) Section
      1(b) of Schedule
      2
      to
Exhibit
      D
      of the
      Credit Agreement is hereby amended by deleting such section in its entirety
      and
      inserting the following in lieu thereof:

     

    Aggregate
      outstanding unpaid amount of all Receivables sold by any Company pursuant to
      a
      Receivables Purchase Facility at any time:

     

    Amount   $__________

     

    Maximum   $125,000,000

    


    3. Conditions
      Precedent.
      The
      effectiveness of this Amendment is subject to the satisfaction of the following
      conditions precedent:

     

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

     

    (i) ten
      (10)
      original counterparts of this Amendment, duly executed by the Borrowers, the
      Administrative Agent and the Required Lenders, together with all schedules
      and
      exhibits thereto duly completed; and

     

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

     

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

     

    5. Representations
      and Warranties.
      In
      order to induce the Administrative Agent and the Lenders to enter into this
      Amendment, each of the Borrowers represents and warrants to the Administrative
      Agent and the Lenders as follows:

     

    (a) The
      representations and warranties of (i) the Borrowers contained in Article
      V
      (after
      giving effect to this Amendment) and (ii) each Loan Party contained in each
      other Loan Document or in any document furnished at any time under or in
      connection herewith or therewith, shall be true and correct on and as of the
      date hereof, except to the extent that such representations and warranties
      specifically refer to an earlier date, in which case they shall be true and
      correct as of such earlier date, and except that for purposes of this Amendment,
      the representations and warranties contained in subsections (a) and (b) of
      Section
      5.05
      shall be
      deemed to refer to the most recent statements furnished pursuant to clauses
      (a)
      and (b), respectively, of Section
      6.01.

     

    (b) There
      does not exist any pending or threatened action, suit, investigation or
      proceeding in any court or before any arbitrator or Government Authority that
      purports to affect any transaction contemplated under this Agreement or the
      ability of any Borrower to perform its respective obligations under this
      Agreement.

     

    (c) There
      has
      not occurred since January 11, 2007 any 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.

     

    6. Entire
      Agreement.
      This
      Agreement, together with all the 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
      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
      11.01
      of the
      Credit Agreement.

     

    7. 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.

     

    8. 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.

     

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

     

    10. Enforceability.
      Should
      any one or more of the provisions of this Amendment 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.

     

    11.
       References.
      All
      references in any of the Loan Documents to the “Credit Agreement” shall mean the
      Credit Agreement as amended hereby.

     

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

     

    13. Expenses.
      Toro
      agrees to pay to the Administrative Agent all reasonable out-of-pocket expenses
      incurred or arising in connection with the negotiation and preparation of this
      Amendment.

     

     

     

    Remainder
      of page left blank intentionally.

     

    


     


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

     

    THE
      TORO COMPANY

     

    By:
      /s/
      Thomas J. Larson

    Name:
      Thomas J. Larson

    Title:
      Treasurer

     

    TORO
      CREDIT COMPANY

     

    By:
      /s/
      Thomas J. Larson

    Name:
      Thomas J. Larson

    Title:
      Secretary-Treasurer

     

    TORO
      MANUFACTURING COMPANY

     

    By:
      /s/
      Stephen P. Wolfe

    Name:
      Stephen P. Wolfe

    Title:
      President

     

    EXMARK
      MANUFACTURING COMPANY INCORPORATED

     

    By:
      /s/
      Timothy P. Dordell

    Name:
      Timothy P. Dordell

    Title:
      Vice President & Secretary

     

    TORO
      INTERNATIONAL COMPANY

     

    By:
      /s/
      Stephen P. Wolfe

    Name:
      Stephen P. Wolfe

    Title:
      Vice President & Treasurer

    
 

    TOVER
      OVERSEAS B.V.

     

    By:
      /s/
      Paula M. Graff

    Name:
      Paula M. Graff

    Title:
      Authorized Signatory

     

    TORO
      FACTORING COMPANY LIMITED

     

    By:
      /s/
      Paula M. Graff

    Name:
      Paula M. Graff

    Title:
      Managing Director

     


    BANK
      OF AMERICA, N.A.,
      as
      Administrative Agent

     

    By:
      /s/
      Charlene Wright-Jones

    Name:
      Charlene Wright-Jones

    Title:
      Assistant Vice President

     

    BANK
      OF AMERICA, N.A.,
      as a
      Lender, L/C Issuer and Swing Line Lender

     

    By:
      /s/
      Charles R. Dickerson

    Name:
      Charles R. Dickerson

    Title:
      Managing Director

     


    SUNTRUST
      BANK,
      as a
      Lender and a Co-Syndication Agent

     

    By:
      /s/
      Michael Lapresi

    Name:
      Michael Lapresi

    Title:
      Managing Director

    
 

    U.S.
      BANK NATIONAL ASSOCIATION,
      as a
      Lender and a Co-Syndication Agent

     

    By:
      /s/
      Michael J. Staloch

    Name:
      Michael J. Stoloch

    Title:
      Senior Vice President

     

    HARRIS
      TRUST AND SAVINGS BANK,
      as a
      Lender and a Co-Documentation Agent

     

    By:
      /s/
      Philip Langheim

    Name:
      Philip Langheim

    Title:
      Director

     


    WELLS
      FARGO BANK, NATIONAL ASSOCIATION,
      as a
      Lender and a 

    Co-Documentation
      Agent

     

    By:
      /s/
      Allison S. Gelfman

    Name:
      Allison S. Gelfman

    Title:
      Vice President

     



    THE
      BANK OF NEW YORK,
      as a
      Lender

     

    By:
      /s/
      Walter C. Parelli

    Name:
      Walter C. Parelli

    Title:
      Vice President