Document:

exv10w1

 

Exhibit 10.1

FLOWSERVE CORPORATION

LIMITED WAIVER AND THIRD
AMENDMENT TO FIRST AMENDED AND 

RESTATED CREDIT AGREEMENT

               This LIMITED WAIVER AND THIRD AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this
“Third Amendment”) is dated as of March 15, 2005 and entered into by and among Flowserve
Corporation, a New York corporation (the “Company”), Flowserve France SAS (the “Subsidiary
Borrower”), the Guarantors of the Company listed on the signature pages hereof (only for the
purposes of Section 6), the financial institutions executing the Consent of Lender (the “Consent”)
in the form of Exhibit A annexed hereto (each individually a “Lender” and collectively the
“Lenders”), 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 First Amended and Restated Credit Agreement dated as of May 2, 2002, as amended by that
certain First Amendment to First Amended and Restated Credit Agreement dated as of June 30, 2003
and that certain Second Amendment to First Amended and Restated Credit Agreement dated as of June
24, 2004 (as so amended, the “Credit Agreement”), each by and among the Company, the Subsidiary
Borrower, the Guarantors, the Lenders party thereto, the Administrative Agent and Credit Suisse
First Boston, as syndication agent. Capitalized terms used herein without definition shall have
the same meanings as set forth in the Credit Agreement.

RECITALS

               WHEREAS, pursuant to Sections 5.04(a) and 5.04(c) of the Credit Agreement the Company is
required to deliver the audited financial statements, opinion and the accountants’ certificate
referred to therein within 100 days after the end of each fiscal year;

               WHEREAS, the Company has requested that the Required Lenders waive compliance with such
requirements under Sections 5.04(a) and 5.04(c) of the Credit Agreement with respect to the fiscal
year ended December 31, 2004 until September 30, 2005 and any consequences resulting from such
noncompliance during such period;

               WHEREAS, the Company and the Lenders desire to amend the Credit Agreement to (i) permit the
Company to redeem, repurchase or otherwise acquire for consideration the Subordinated Notes, and
(ii) amend the defined term New Subordinated Debt to include new senior unsecured debt;

               NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree as follows:

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Section 1. AMENDMENTS TO CREDIT AGREEMENT

     A. Amendments to Definitions

     1. The definition of “Consolidated EBITDA” in Section 1.01 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

     “‘Consolidated EBITDA’ shall mean, for any period, Consolidated Net Income for such
period, plus (a) without duplication and to the extent deducted in determining such
Consolidated Net Income, the sum of (i) Consolidated Interest Expense for such period, (ii)
consolidated income tax expense for such period, (iii) all amounts attributable to
depreciation and amortization for such period, (iv) any extraordinary losses or
extraordinary non-cash charges for such period, (v) the amount of premium payments made by
Company or its Subsidiaries associated with the repurchase or prepayment of the Subordinated
Notes from the proceeds of the Fall 2001 Equity Issuance and the amount of such premium
payments and unamortized fees associated with any further repurchase or prepayment of the
Subordinated Notes to the extent such repurchase or prepayment is permitted hereunder, (vi)
integration and restructuring charges in connection with the IDP Transactions and taken with
respect to periods ended on or prior to December 31, 2001, (vii) integration and
restructuring charges in connection with the Acquisition and taken with respect to periods
ended on or prior to June 30, 2004, in an aggregate amount not to exceed $40,000,000, and
(viii) restructuring and integration charges taken with respect to periods beginning on July
1, 2003 and ended on or prior to December 31, 2004, in an aggregate amount not to exceed
$15,000,000, and minus (b) without duplication and to the extent included in determining
such Consolidated Net Income, any extraordinary gains for such period, all determined on a
consolidated basis in accordance with GAAP; provided that in the case of the Company,
Consolidated EBITDA shall be determined with reference to Schedule 1.01(d).”

     2. The definition of “Consolidated Interest Expense” in Section 1.01 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

          “‘Consolidated Interest Expense’ shall mean, for any period, for the Company and its
Subsidiaries on a consolidated basis, the sum, without duplication, of (a) all interest,
premium payments, fees, charges and related expenses payable by the Company and its
Subsidiaries in connection with borrowed money (including capitalized interest) (other than
premium payments associated with the repurchase or prepayment of the Subordinated Notes from
proceeds of the Fall 2001 Equity Issuance and premium payments and unamortized fees
associated with any further repurchase or prepayment of the Subordinated Notes to the extent
such repurchase or prepayment is permitted hereunder) or in connection with the deferred
purchase price of assets, in each case to the extent treated as interest in accordance with
GAAP and payable in cash, (b) the portion of rent payable by the Company and its
Subsidiaries with respect to such period under capital leases that is treated as interest in
accordance with GAAP and payable in cash and (c) all fees, discounts, premiums, expenses or
similar amounts incurred by the Company or any of its Subsidiaries in connection with the
Receivables Program for such period, including purchase discounts

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(net of any loss reserves), purchase premiums, operating expense fees, structuring
fees, collection agent fees, unutilized purchase limit fees and other similar fees and
expenses.”

     3. The definition of “New Subordinated Debt” in Section 1.01 of the Credit Agreement is
hereby amended by deleting it in its entirety and substituting therefor the following
defined term:

          “‘New Unsecured Debt’ means Indebtedness having the following characteristics: (i) the
issuer shall be the Company and/or FFBV and such Indebtedness may be guaranteed by one or
more of the Guarantors only, (ii) such Indebtedness shall be unsecured, (iii) if such
Indebtedness is subordinated, such Indebtedness shall be subordinated in right of payment to
the Obligations in a manner reasonably acceptable to the Administrative Agent, (iv) such
Indebtedness shall not have any scheduled payment of principal, scheduled prepayment,
scheduled mandatory redemption or sinking fund payment prior to December 31, 2009, (v) the
Net Cash Proceeds of such Indebtedness shall be applied as required by Section 2.13(e), (vi)
such Indebtedness shall not contain any provision prohibiting the creation or assumption of
any Lien on any of the properties or assets of Company or its Subsidiaries, whether then
owned or thereafter acquired, or prohibiting guaranties by Company or any of its
Subsidiaries to secure payment of the Obligations or any agreement renewing, refinancing or
extending the Obligations or this Agreement, (vii) the Company shall be in compliance with
Sections 6.11, 6.12 and 6.13 on a pro forma basis after giving effect to the incurrence of
such Indebtedness, (viii) other terms and conditions shall be no less favorable to the
Company or its Subsidiaries or the Lenders in any material respect than the terms and
conditions applicable to the Subordinated Notes, and (ix) such Indebtedness shall be issued
pursuant to documentation reasonably satisfactory to the Administrative Agent.”

     4. The definition of “Total Debt” in Section 1.01 of the Credit Agreement is hereby
amended deleting it in its entirety and substituting therefor the following defined term:

          “‘Total Debt’ shall mean, at any time, the total consolidated Indebtedness of the
Company and the Subsidiaries at such time (excluding (a) Indebtedness under Section 6.01(k),
and (b) Indebtedness of the type described in clause (i) of the definition of such term and
under Section 6.01(l), except in each case to the extent of any unreimbursed drawings or
payments thereunder).”

     B. Amendments to Article II – The Credits.

     1. Section 2.13(e) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

“(e) Subject to paragraph (k) below, in the event that any Loan Party or any subsidiary of a
Loan Party shall receive Net Cash Proceeds from (i) the issuance or other disposition of
Indebtedness for money borrowed of any Loan Party or any subsidiary of a Loan Party (other
than Indebtedness for money borrowed permitted pursuant to Section 6.01; provided that Net
Cash Proceeds from the issuance of any New Unsecured Debt shall be applied to redeem,
repurchase, prepay or otherwise acquire for consideration the Subordinated Notes

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(including any premium payments) and any remaining Net Cash Proceeds shall be applied to
prepay Term Loans in accordance with Section 2.13(h) ) or (ii) the establishment of the
Receivables Program or any subsequent increase thereto, the Borrowers shall, substantially
simultaneously with (and in any event not later than the fifth Business Day next following)
the receipt of such Net Cash Proceeds by a Loan Party or a subsidiary, apply an amount equal
to 100% of such Net Cash Proceeds to prepay outstanding Term Loans in accordance with
Section 2.13(h).”

     C. Amendments to Article VI -Negative Covenants

     1. Section 6.01(o) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

     “(o) Indebtedness constituting New Unsecured Debt in an aggregate principal amount not
to exceed $325,000,000 or its Dollar Equivalent; and”

     2. Section 6.08 of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:

“Engage at any time in any business or business activity other than the business currently
conducted by the Company and the Subsidiaries and business activities reasonably incidental
thereto, including any activities permitted hereunder, which, in the case of Finsub, shall
be limited solely to performing its obligations under the Receivables Program Documentation
and, in the case of FFBV, shall be limited solely to performing its obligations under the
Subordinated Note Documents and the Loan Documents and any document pursuant to which the
New Unsecured Debt is issued; provided, however, Company shall be entitled to create a
wholly-owned subsidiary engaged solely in the business of providing the insurance coverage
required under Section 5.02 hereof solely to the Company and the Subsidiaries, so long as
such subsidiary is adequately capitalized to satisfy the requirements of Section 5.02 and
investments therein do not exceed $1,000,000 in the aggregate (a “Captive Insurance
Company”).”

     3. Section 6.09(b) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

     “(b) (i) Make any distribution, whether in cash, property, securities or a
combination thereof, other than regular scheduled payments of interest as and when due (to
the extent not prohibited by applicable subordination provisions), in respect of, or pay, or
offer or commit to pay, or directly or indirectly redeem, repurchase, retire or otherwise
acquire for consideration, or set apart any sum for the aforesaid purposes, any subordinated
Indebtedness (except the redemption, repurchase or prepayment of the Subordinated Notes with
the proceeds of the issuance of New Unsecured Debt), or (ii) pay in cash any amount in
respect of any Indebtedness or preferred equity interests that may at the obligor’s option
be paid in kind or in other securities; provided that the Borrower was permitted to
repurchase and/or prepay the Subordinated Notes to the extent provided in the final proviso
of Section 2.13(c) of the Original Credit Agreement.”

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Section 2. WAIVER OF CERTAIN FINANCIAL REPORTING COVENANTS

          A. Subject to the terms and conditions set forth herein and in reliance on the representations
and warranties of the Company herein contained, the Lenders hereby waive any Default or Event of
Default arising from any incorrect representation under the last sentence of Section 3.16 of the
Credit Agreement on the First Amended and Restated Credit Agreement Closing Date.

          B. Subject to the terms and conditions set forth herein and in reliance on the representations
and warranties of the Company herein contained, the Lenders hereby temporarily waive (i) compliance
with the requirement under Sections 5.04(a) and (c) of the Credit Agreement that the financial
statements for the fiscal year ending December 31, 2004 delivered pursuant to Section 5.04(a) of
the Credit Agreement are audited and accompanied by an opinion of an independent public accountant
and a certificate of such accountant certifying matters set forth in Section 5.04(c) of the Credit
Agreement, (ii) any consequences or further affirmative obligations of the Company under the Credit
Agreement resulting from such noncompliance, and (iii) any Default or Event of Default arising from
an event of default under any agreement or instrument evidencing or governing Material Indebtedness
of the Company or any Subsidiary arising from the failure to provide similar financial information
(or opinions or certifications thereof) or annual or quarterly public filings during or for the
fiscal year ending December 31, 2004 or for the first three fiscal quarters of the fiscal year
ending December 31, 2005; in each case, during the period from the Third Amendment Effective Date
(as defined in Section 3) through and including the earlier to occur of (a) the date of delivery of
audited financial statements for the fiscal year ending December 31, 2004 and accompanying
accountant’s opinion and certificate in accordance with Sections 5.04(a) and (c) of the Credit
Agreement to the Lenders, and (b) September 30, 2005; provided, however, all waivers and
accommodations made to the Company in this Section 2B shall be rescinded and be null and void and
of no force and effect upon the commencement by any holder of Material Indebtedness of the Company
or any Subsidiary of any action exercising rights with respect to collateral or rights to
accelerate arising from any default or event of default under any agreement or instrument
evidencing or governing Material Indebtedness of the Company or any Subsidiary.

          C. The waivers set forth in Sections 2A and 2B (the “Waiver”) shall be limited precisely as
written and relate solely to the noncompliance or temporary noncompliance, as the case may be, by
the Company with the provisions of the Credit Agreement in the manner and to the extent described
above, and nothing in this Waiver shall be deemed to:

     1. constitute a waiver of compliance by the Company with respect to (i) Section 5.04 of
the Credit Agreement in any other instance or (ii) any other term, provision or condition of
the Credit Agreement or any other instrument or agreement referred to therein; or

     2. prejudice any right or remedy that Administrative Agent or any Lender may now have
(except to the extent such right or remedy was based upon existing defaults that will not
exist after giving effect to this Waiver) or may have in the future under or in connection
with the Credit Agreement or any other instrument or agreement referred to therein.

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          D. 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 3. CONDITIONS TO EFFECTIVENESS FOR WAIVER AND AMENDMENT

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

          A. On the Third Amendment Effective Date, (a) after giving effect to Sections 1 and 2 hereof,
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)
after giving effect to Sections 1 and 2 hereof, 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 Third Amendment Effective Date, the Company shall deliver to the Lenders
(or to the Administrative Agent for the Lenders) copies of this Third Amendment executed by each
Loan Party;

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

          D. The Administrative Agent shall have received payment, for the account of each Lender that
executes this Third Amendment on or before 5:00 p.m. Eastern Standard Time
on March 15, 2005, of
an amendment fee equal to 0.02% of the sum of such Lender’s Revolving Credit Commitment and the
principal amount of Term Loans held by such Lender on the Third Amendment Effective Date.

Section 4. REPRESENTATIONS AND WARRANTIES

          In order to induce the Lenders to enter into this Third Amendment, after giving effect to
Sections 1 and 2 hereof, the Company represents and warrants to each Lender that the following
statements are true, correct and complete on and as of the Third Amendment Effective Date:

          A. Organization; Powers. The Company and each of the Subsidiaries (i) (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization, (b)
has all requisite power and authority to own its property and assets and to carry on its business
as now conducted and as proposed to be conducted and (c) is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required, except where any such
failure, individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, and (ii) in the case of the Company and each Subsidiary that is a party hereto, has
the power and authority to execute, deliver and perform its obligations under the Credit Agreement
as amended by this Third Amendment (the “Amended Agreement”).

          B. Authorization. The Third Amendment (i) has been duly authorized by all requisite
corporate, and, if required, stockholder, action on the part of the Company and each

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Subsidiary that is a party hereto and (ii) will not (a) violate (1) any provision of law,
statute, rule or regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of the Company or any Subsidiary, (2) any order of any
Governmental Authority or (3) any provision of any indenture, agreement or other instrument to
which the Company or any Subsidiary is a party or by which any of them or any of their property is
or may be bound, (b) be in conflict with, result in a breach of or constitute (alone or with notice
or lapse of time or both) a default under, or give rise to any right to accelerate or to require
the prepayment, repurchase or redemption of any obligation under any such indenture, agreement or
other instrument or (c) result in the creation or imposition of any Lien upon or with respect to
any property or assets now owned or hereafter acquired by the Company or any Subsidiary (other than
any Lien created under the First Amended and Restated Security Documents).

          C. Enforceability. This Third Amendment has been duly executed and delivered by each Loan
Party which is a party hereto, and this Third Amendment and the Amended Agreement constitute a
legal, valid and binding obligation of each such Loan Party enforceable against each such Loan
Party in accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles relating to or
limiting creditors’ rights generally or by equitable principles relating to enforceability.

          D. Governmental Approvals. No action, consent or approval of, registration or filing with or
any other action by any Governmental Authority is or will be required in connection with the
execution and delivery of this Third Amendment, and the performance by the Company of the Amended
Agreement.

          E. Incorporation of Representations and Warranties from Credit Agreement. The representations
and warranties contained in Article III of the Credit Agreement are incorporated herein by this
reference and are and will be true, correct and complete in all material respects on and as of the
Third Amendment Effective Date to the same extent as though made on and as of that date, except to
the extent such representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of such earlier date.

          F. Absence of Default. No event has occurred and is continuing or will result from the
consummation of the transactions contemplated by this Third Amendment that would constitute a
Default or an Event of Default.

Section 5. MISCELLANEOUS

          A. Reference to and Effect on the Credit Agreement and the Other Loan Documents.

     1. On and after the Third Amendment Effective Date, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import
referring to the Credit Agreement, and each reference in the other Loan Documents to the
“First Amended and Restated Credit Agreement”, “Credit Agreement”, “thereunder”, “thereof”
or words of like import referring to the Credit Agreement shall mean and be a reference to
the Amended Agreement.

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     2. Except as specifically amended by this Third Amendment, the Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby ratified and
confirmed.

     3. The execution, delivery and performance of this Third Amendment shall not, except as
expressly provided in Section 2, constitute a waiver of any provision of, or operate as a
waiver of any right, power or remedy of the Administrative Agent or any Lender under, the
Credit Agreement or any of the other Loan Documents.

          B. 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 Third Amendment and the documents and transactions contemplated hereby shall be for
the account of the Company.

          C. Delivery of Financial Statements. The Company hereby agrees to provide within 100 days
after the end of the fiscal year ending December 31, 2004, its unaudited consolidated balance sheet
and related statements of income, stockholders’ equity and cash flows showing the financial
condition of the Company and its consolidated Subsidiaries as of the close of the fiscal year
ending 2004 and the results of its operations and the operations of such Subsidiaries during such
year, and a certificate of a Financial Officer opining on or certifying such statements and
certifying that no Event of Default or Default has occurred or, if such an Event of Default or
Default has occurred, specifying the nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto, and, setting forth the Company’s calculation of Excess
Cash Flow.

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

          E. Applicable Law. THIS THIRD AMENDMENT 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.

          F. Counterparts. This Third Amendment 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.

Section 6. ACKNOWLEDGEMENT AND CONSENT BY CREDIT SUPPORT PARTIES

          A. Each of the Guarantors is a party to the First Amended and Restated Guarantee Agreement and
certain of the First Amended and Restated Security Documents. The Guarantors are collectively
referred to herein as the “Credit Support Parties,” and the First Amended and Restated Guarantee
Agreement and the First Amended and Restated Security Documents are collectively referred to herein
as the “Credit Support Documents.”

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          B. Each Credit Support Party hereby acknowledges that it has read this Third Amendment and
consents to the terms thereof, and hereby confirms and agrees that, notwithstanding the
effectiveness of this Third Amendment, the obligations of each Guarantor under each Credit Support
Document to which it is a party or otherwise bound shall not be impaired or affected and each
Credit Support Document is, and shall continue to be, in full force and effect and is hereby
confirmed and ratified in all respects. Each Guarantor further agrees that nothing in the Credit
Agreement, this Third Amendment or any other Loan Document shall be deemed to require the consent
of such Guarantor to any future amendment to the Credit Agreement.

[Remainder of page intentionally left blank]

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

	 	 	 	 	 	 	 
	 	 	FLOWSERVE CORPORATION, as the Company
	 
	 	 	 	 	 	 
	 	 	By	 	/s/ John M. Nanos
	 	 	 	 	 
	

	 	 	 	Name:
	 	John M. Nanos
	

	 	 	 	Title:
	 	Assistant Secretary

	 	 	 	 	 	 	 
	 	 	FLOWSERVE FRANCE SAS, societe par actions simplifiee organized under the laws of France, as the Subsidiary Borrower
	 
	 	 	 	 	 	 
	 	 	By	 	/s/ John M. Nanos
	 	 	 	 	 
	

	 	 	 	Name:
	 	John M. Nanos
	

	 	 	 	Title:
	 	Director

	 	 	 	 	 	 	 
	 	 	FLOWSERVE US INC.
	 	 	FLOWSERVE INTERNATIONAL, INC.
	 	 	FLOWSERVE MANAGEMENT COMPANY
	 	 	BW/IP-NEW MEXICO, INC.
	 	 	FLOWSERVE INTERNATIONAL, LLC
	 	 	INGERSOLL-DRESSER PUMP COMPANY
	 	 	FLOWSERVE HOLDINGS, INC.
	 	 	(for purposes of Section 6 only) as Credit Support Parties
	 
	 	 	 	 	 	 
	 	 	By	 	/s/ John M. Nanos
	 	 	 	 	 
	

	 	 	 	Name:
	 	John M. Nanos
	

	 	 	 	Title:
	 	Vice President

S-1

 

	 	 	 	 	 	 	 
	 	 	FLOWSERVE FINANCE B.V., (for purposes of Section 6 only) as a Credit Support Party
	 
	 	 	 	 	 	 
	 	 	By	 	/s/ John M . Nanos
	 	 	 	 	 
	

	 	 	 	Name:
	 	John M. Nanos
	

	 	 	 	Title:
	 	Managing Director
	 
	 	 	 	 	 	 
	 	 	By	 	/s/ Adrianus H.G.M. Witters
	 	 	 	 	 
	

	 	 	 	Name:
	 	Adrianus H.G.M. Witters
	

	 	 	 	Title:
	 	Managing Director

	 	 	 	 	 	 	 
	 	 	FLOWSERVE INTERNATIONAL LIMITED, (for purposes of Section 6 only) as Credit Support Party
	 
	 	 	 	 	 	 
	 	 	By	 	/s/ John M. Nanos
	 	 	 	 	 
	

	 	 	 	Name:
	 	John M. Nanos
	

	 	 	 	Title:
	 	Director

S-2

 

	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., individually and as the Administrative Agent, the Collateral Agent and the Swingline Lender
	 
	 	 	 	 	 	 
	 	 	By	 	/s/ John Pocalyko
	 	 	 	 	 
	

	 	 	 	Name:
	 	John Pocalyko
	

	 	 	 	Title:
	 	Senior Vice President

S-3

 

EXHIBIT A

CONSENT OF LENDER

     This Consent of Lender is delivered by the undersigned Lender with reference to that certain
First Amended and Restated Credit Agreement dated as of May 2, 2002, as amended, among Flowserve
Corporation, a New York corporation, Flowserve France SAS, societe par actions simplifiee organized
under the laws of France, as the Subsidiary Borrower, the Lenders from time to time party thereto
(the “Lenders”), Bank of America, N.A., as Administrative Agent, Swingline Lender and Collateral
Agent, and Credit Suisse First Boston, as Syndication Agent. The undersigned Lender hereby
consents to the Limited Waiver and Third Amendment to First Amended and Restated Credit Agreement
dated as of ___, 2005.

	 	 	 	 	 
	 	 	 
	 	 	[Name of Lender]

	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	 
	

	 	Title:exv10w2

 

Exhibit 10.2

AMENDMENT NO . 1

     This AMENDMENT NO. 1 (this “Amendment”), is dated as of January 4, 2005, and is
entered into by and among FLOWSERVE RECEIVABLES CORPORATION, a Delaware corporation (the
“Seller”), FLOWSERVE US INC., a Delaware corporation, as the Servicer (the
“Servicer”), the funding sources party hereto as the financial institutions (the
“Financial Institutions”), JUPITER SECURITIZATION CORPORATION (together with the Financial
Institutions, the “Purchasers”), J. P. MORGAN SECURITIES INC. and JPMORGAN CHASE BANK, N.A.
(successor by merger to Bank One, NA (Main Office Chicago)), as agent (the “Agent”) for the
Purchasers.

W I T N E S S E T H:

     WHEREAS, the Seller, the Servicer, the Purchasers and the Agent are parties to that certain
Receivables Purchase Agreement, dated as of October 7, 2004 (as amended, restated, supplemented or
otherwise modified from time to time, the “RPA”);

     WHEREAS, the Seller, J. P. Morgan Securities Inc., Jupiter Securitization Corporation and the
Agent are parties to that certain Fee Letter, dated as of October 7, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the “Fee Letter” and together with
the RPA, the “Agreements”); and

     WHEREAS the parties hereto desire to amend the Agreements on the terms and conditions set
forth below;

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

     1.      Defined Terms. Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to such terms in the RPA.

     2.      Amendments to the RPA. Subject to the satisfaction of the conditions precedent set
forth in Section 6 below, the RPA is hereby amended as follows:

     (a)      All references in the RPA to “Bank One” or “Bank One, NA (Main Office Chicago)” shall
mean and constitute references to “JPMorgan Chase Bank, N.A. (successor by merger to Bank One,
NA (Main Office Chicago)).”

     (b)      The definition of “Eligible BAAN Receivable” set forth in Exhibit I to the RPA is
hereby amended to delete the reference to the date “December 31, 2004” and to replace such date
with the date “January 14, 2005.”

 

 

     3.      Amendments to the Fee Letter. Subject to the satisfaction of the conditions
precedent set forth in Section 6 below, the Fee Letter is hereby amended as follows:

     (a)      All references in the Fee Letter to “Bank One” or “Bank One, NA (Main Office Chicago)”
shall mean and constitute references to “JPMorgan Chase Bank, N.A. (successor by merger to Bank
One, NA (Main Office Chicago)).”

     (b)      The definition of “Facility Fee Rate” set forth in Exhibit I to the Fee Letter is
hereby amended to delete each reference to the date “December 31, 2004” and to replace each
reference to such date with the date “January 14, 2005.”

     4.      Representations and Warranties of the Seller. In order to induce the parties
hereto to enter into this Amendment, the Seller represents and warrants that:

     (a)      The representations and warranties of Seller set forth in Section 5.1 of the RPA are
true, correct and complete on the date hereof as if made on and as of the date hereof and there
exists no Amortization Event or Potential Amortization Event on the date hereof, provided that
in the case of any representation or warranty in Section 5.1 of the RPA that expressly relates
to facts in existence on an earlier date, the reaffirmation thereof under this Section
4(a) shall be made as of such earlier date.

     (b)      The execution and delivery by the Seller of this Amendment has been duly authorized by
proper corporate proceedings of the Seller and this Amendment, and the Agreements, as amended by
this Amendment, constitute the legal, valid and binding obligations of the Seller, enforceable
against the Seller in accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general
applicability affecting the enforcement of creditors’ rights generally.

     5.      Representations and Warranties of the Servicer. In order to induce the parties
hereto to enter into this Amendment, the Servicer represents and warrants that:

     (a)      The representations and warranties of the Servicer set forth in Section 5.1 of the RPA
are true, correct and complete on the date hereof as if made on and as of the date hereof and
there exists no Amortization Event or Potential Amortization Event on the date hereof, provided
that in the case of any representation or warranty in Section 5.1 of the RPA that expressly
relates to facts in existence on an earlier date, the reaffirmation thereof under this
Section 5(a) shall be made as of such earlier date.

     (b)      The execution and delivery by the Servicer of this Amendment has been duly authorized
by proper corporate proceedings of the Servicer and this Amendment, and the Agreements, as
amended by this Amendment, constitute the legal, valid and binding obligations of the Servicer,
enforceable against the Servicer in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws
of general applicability affecting the enforcement of creditors’ rights generally.

- 2 -

 

     6.      Conditions Precedent. The amendments to the Agreements provided for hereunder
shall become effective as of December 31, 2004 upon the Agent’s receipt of each of the following:

     (a)      counterparts of this Amendment executed by the Seller, the
Servicer, J. P. Morgan Securities Inc. and each Purchaser; and

     (b)      a Reaffirmation of Performance Undertaking in substantially the
form attached hereto as Exhibit A hereto, executed by the Provider in
respect of the Performance Undertaking.

     7.      Ratification. The Agreements, as amended hereby, are hereby ratified, approved and
confirmed in all respects.

     8.      Reference to Agreements. From and after the effective date hereof, each reference
in any Agreement to “this Agreement”, “hereof”, or “hereunder” or words of like import, and all
references to such Agreement in any and all agreements, instruments, documents, notes, certificates
and other writings of every kind and nature shall be deemed to mean such Agreement as amended by
this Amendment.

     9.      Costs and Expenses. The Seller agrees to pay all reasonable costs, fees and
out-of-pocket expenses (including attorneys’ fees and time charges of attorneys representing the
Agent, which attorneys may be employees of the Agent) incurred by the Agent in connection with the
preparation, execution and enforcement of this Amendment.

     10.      CHOICE OF LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

     11.      Execution of Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

	 	 	 	 	 
	 	FLOWSERVE RECEIVABLES

CORPORATION, as Seller

 	 
	 	By:  	/s/ John M. Nanos
 	 
	 	 	Name:  	John M. Nanos 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	FLOWSERVE US INC.,

as Servicer

 	 
	 	By:  	/s/ John M. Nanos
 	 
	 	 	Name:  	John M. Nanos 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Amendment No. 1

 

 

	 	 	 	 	 
	 	JUPITER SECURITIZATION

CORPORATION

 	 
	 	By:  	/s/ Leo Loughead
 	 
	 	 	Name:  	Leo Loughead 	 
	 	 	Title:  	Authorized Signer 	 
	 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A. (successor by merger

to Bank One, NA (Main Office Chicago)), as a

Financial Institution and as Agent

 	 
	 	By:  	/s/ Leo Loughead
 	 
	 	 	Name:  	Leo Loughead 	 
	 	 	Title:  	Managing Director, Capital Markets 	 
	 

	 	 	 	 	 
	 	J. P. MORGAN SECURITIES INC.

 	 
	 	By:  	/s/ Leo Loughead
 	 
	 	 	Name:  	Leo Loughead 	 
	 	 	Title:  	Managing Director, Capital Markets 	 
	 

Signature Page to Amendment No. 1

 

 

EXHIBIT A

FORM OF REAFFIRMATION OF PERFORMANCE UNDERTAKING

(attached)

 

 

REAFFIRMATION OF PERFORMANCE UNDERTAKING

January 4, 2005

JPMorgan Chase Bank, N.A.

(successor by merger to Bank One, N.A. (Main Office Chicago)), as Agent

c/o J.P. Morgan Securities Inc.

270 Park Avenue, 10th Floor

New York, New York 10017

     The undersigned, Flowserve Corporation, hereby:

     (i)      acknowledges, and consents to, the execution of that certain Amendment No. 1 (the
“Amendment”), of even date herewith, among Flowserve Receivables Corporation, Flowserve US
Inc., the funding sources party thereto as the Financial Institutions, Jupiter Securitization
Corporation (together with the Financial Institutions, the “Purchasers”), J. P. Morgan
Securities Inc. and JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA (Main Office
Chicago)), as agent;

     (ii)      reaffirms all of its obligations under that certain Performance Undertaking dated as of
October 7, 2004 (the “Performance Undertaking”) made by the undersigned in favor of the
Agent and the Purchasers; and

     (iii)      acknowledges and agrees that, after giving effect to the Amendment, such Performance
Undertaking remains in full force and effect and is hereby ratified and confirmed.

	 	 	 	 	 
	 	FLOWSERVE CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:

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