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.
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.
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.
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
consumm
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