exv10w1



 






Exhibit 10.1




FLOWSERVE CORPORATION




AMENDMENT AND WAIVER




     This AMENDMENT AND WAIVER is dated as of December 20, 2005 and entered into by and among
Flowserve Corporation, a New York corporation (the “Company”), the financial institutions executing
the Consent of Lender (the “Consent”) in the form of Exhibit A annexed hereto and Bank of
America, N.A., a national banking association, as administrative agent for the Lenders (in such
capacity, the “Administrative Agent”), and is made with reference to that certain Credit Agreement
is dated as of August 12, 2005 (the “Credit Agreement”) by and among the Company, the financial
institutions from time to time party thereto (collectively, the “Lenders” and individually, a
“Lender”), and Bank of America, N.A., as Swingline Lender, Administrative Agent and Collateral
Agent for the Lenders. Capitalized terms used herein without definition shall have the same
meanings as set forth in the Credit Agreement.



RECITALS




     WHEREAS, pursuant to Section 5.12 of the Credit Agreement, the Company is required have
completed its publicly announced restatement of its financial statements for periods from January
1, 2000 through March 31, 2004, delivered such restated financial statements to the Administrative
Agent, and filed a Form 10-K with the Securities Exchange Commission for its fiscal year ended
2004, in each case on or before December 31, 2005.



     WHEREAS, the Company has requested that the Required Lenders extend the deadline for
compliance with Section 5.12 of the Credit Agreement until February 28, 2006;



     WHEREAS, the Company has further requested that Required Lenders waive (i) the requirement
under Section 6.05(b) of the Credit Agreement that the General Services Sale be made for at least
75% cash consideration and (ii) the provisions of Section 6.04 of the Credit Agreement with respect
to certain intercompany restructuring transactions so as to permit such transactions (which could,
under the provisions of the Credit Agreement, be consummated through a sale or merger) to be
consummated by way of contribution;



     WHEREAS, the Company has requested that the Required Lenders agree that consenting Issuing
Banks may, upon request, issue Letters of Credit in the form of bank guarantees; and



     WHEREAS, the Lenders executing a Consent desire to grant such requests.


Section 1. EXTENSION OF SECTION 5.12 COMPLIANCE DEADLINE




     The Lenders hereby extend the date for compliance with the requirements of Section 5.12 of the
Credit Agreement from December 31, 2004 to February 28, 2006.



 









 





Exhibit 10.1




Section 2. ISSUANCE OF BANK GUARANTEES




     Required Lenders hereby agree that Company may request, and Issuing Banks may, in their
discretion, issue bank guarantees that constitute “Independent Undertakings” (as described in 12
CFR § 7.1016) supporting obligations of the Company or any of its Subsidiaries and such bank
guarantees shall be deemed to be Standby Letters of Credit for all purposes under the Credit
Agreement.



Section 3. WAIVERS





Subject to the terms and conditions herein, the Lenders hereby waive:




(i) the requirement under Section 6.05(b) of the Credit Agreement that consideration
for Asset Sales be at least 75% cash, solely with respect to the General Services
Sale.




(ii) the provisions of Section 6.04 of the Credit Agreement, solely with respect to
transfers of the type described in clause (b)(iv)(x) of the defined term “Asset
Sale”, so as to permit such transactions (that could otherwise be consummated by way
of sale or merger) to be consummated by way of a contribution.



Section 4. MISCELLANEOUS




     A. The extension in Section 1 and the waivers set forth in Section 3 shall be limited
precisely as written, and nothing in Section 1 or 3 shall be deemed to:




(i) constitute a waiver of compliance by the Company with respect to Sections 5.12,
6.04 or 6.05 in any other instance, or any other term, provision or condition of the
Credit Agreement or any other instrument or agreement referred to therein; or




(ii) prejudice any right or remedy that Administrative Agent or any Lender may now
have or may have in the future under or in connection with the Credit Agreement or
any other instrument or agreement referred to therein.



     B. Except as expressly set forth herein, the terms, provisions and conditions of the Credit
Agreement shall remain in full force and effect and in all other respects are hereby ratified and
confirmed.



Section 5. CONDITIONS TO EFFECTIVENESS




     Sections 1, 2 and 3 hereof shall become effective only upon satisfaction of all of the
following conditions precedent (the date of such satisfaction being referred to herein as the
“Effective Date”):



 









 





Exhibit 10.1




     A. On the Effective Date, (a) the representations and warranties contained in Section 4 hereof
and in Article III of the Credit Agreement shall be true and correct as of such date, as though
made on and as of such date; (b) no Default or Event of Default shall then exist; and (c) the
Company shall deliver to the Administrative Agent a certificate signed by a Responsible Officer of
Company confirming the foregoing;



     B. On or prior to the Effective Date, the Required Lenders shall have executed the Consent;
and



     C. The Administrative Agent shall have received payment, for the account of each Lender that
executes and delivers a Consent on or before 5:00 p.m. Eastern Standard Time on December 20, 2005
(the “Consent Deadline”), of an amendment fee equal to .025% of the sum of such Lender’s Revolving
Credit Commitment and the principal amount of Term Loans held by such Lender on the Effective Date.
In addition, and as a condition subsequent to the continued effectiveness of Section 1 hereof, if
the Company does not comply with the provisions of Section 5.12 of the Credit Agreement by the
original compliance date of December 31, 2005, Company shall, not later than 5:00 p.m. Eastern
Standard Time on January 4, 2006, pay to the Administrative Agent for the account of each Lender
that executed a Consent on or prior to the Consent Deadline, an additional amendment fee equal to
..025% of the sum of such Lender’s Revolving Credit Commitment and the principal and the principal
amount of Term Loans held by such Lender on January 3, 2006.



Section 6. MISCELLANEOUS




     A. Fees and Expenses. The Company acknowledges that all costs, fees and expenses as described
in Section 9.05 of the Credit Agreement incurred by the Administrative Agent and its counsel with
respect to this Amendment and Waiver and the documents and transactions contemplated hereby shall
be for the account of the Company.



     B. Headings. Section and subsection headings in this Amendment and Waiver are included herein
for convenience of reference only and shall not constitute a part of this Amendment and Waiver for
any other purpose or be given any substantive effect.



     C. Applicable Law. THIS AMENDMENT AND WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.



     D. Counterparts. This Amendment and Waiver may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to the same document.



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Exhibit 10.1




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



	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as the Administrative Agent

 	 
	 	By:  	/s/ John Pocalyko
 	 
	 	 	Name:  	John Pocalyko 	 
	 	 	Title:  	Senior Vice President 	 
	 



	 	 	 	 
	Acknowledged and agreed:



FLOWSERVE CORPORATION, as the Company

 	 
	By:  	/s/ Paul W. Fehlman
 	 
	Name:  	Paul W. Fehlman 	 
	Title:  	Vice President and Treasurer 	 
	 




 









 





Exhibit 10.1




EXHIBIT A




CONSENT OF LENDER




     This Consent of Lender is delivered by the undersigned Lender with reference to that certain
Credit Agreement dated as of August 12, 2005 (the “Credit Agreement”) by and among Flowserve
Corporation, a New York corporation, the financial institutions party thereto (the “Lenders”) and
Bank of America, N.A. as Swingline Lender, Administrative Agent and Collateral Agent for the
Lenders. The undersigned Lender hereby consents to the Amendment and Waiver to the Credit
Agreement dated as of December 20, 2005.



	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as the Administrative Agent

 	 
	 	By:  	/s/ John Pocalyko
 	 
	 	 	Name:  	John Pocalyko 	 
	 	 	Title:  	Senior Vice President