FLOWSERVE CORP
EXHIBIT 10.1
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<DESCRIPTION>EXHIBIT 10.1
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<BR></FONT><FONT SIZE=2><B>FLOWSERVE CORPORATION<BR>  <BR>    SECOND AMENDMENT<BR>  TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This </FONT><FONT SIZE=2><B>SECOND AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT</B></FONT><FONT SIZE=2> (this "</FONT><FONT SIZE=2><B>Second
Amendment</B></FONT><FONT SIZE=2>") is dated as of June&nbsp;24, 2004 and entered into by and among Flowserve Corporation, a New York corporation (the
"</FONT><FONT SIZE=2><B>Borrower</B></FONT><FONT SIZE=2>"), Flowserve France SAS (the "</FONT><FONT SIZE=2><B>Subsidiary Borrower</B></FONT><FONT SIZE=2>"), the Guarantors of the Borrower listed on
the signature pages hereof (only for the purposes of Section&nbsp;5), the financial institutions executing the Consent of Lender (the "</FONT><FONT SIZE=2><B>Consent</B></FONT><FONT SIZE=2>") in
the form of </FONT><FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> annexed hereto (each individually a "</FONT><FONT SIZE=2><B>Lender</B></FONT><FONT SIZE=2>" and collectively the
"</FONT><FONT SIZE=2><B>Lenders</B></FONT><FONT SIZE=2>"), Credit Suisse First Boston, a bank organized under the laws of Switzerland, acting through its New York branch
("</FONT><FONT SIZE=2><B>CSFB</B></FONT><FONT SIZE=2>"), as syndication agent (the "</FONT><FONT SIZE=2><B>Syndication Agent</B></FONT><FONT SIZE=2>"), and Bank of America, N.A., a national banking
association ("</FONT><FONT SIZE=2><B>BofA</B></FONT><FONT SIZE=2>"), as swingline lender (in such capacity, the "</FONT><FONT SIZE=2><B>Swingline Lender</B></FONT><FONT SIZE=2>"), as administrative
agent (in such capacity, the "</FONT><FONT SIZE=2><B>Administrative Agent</B></FONT><FONT SIZE=2>") and as collateral agent (in such capacity, the "</FONT><FONT SIZE=2><B>Collateral
Agent</B></FONT><FONT SIZE=2>") for the Lenders, and is made with reference to that certain First Amended and Restated Credit Agreement dated as of May&nbsp;2, 2002, as amended by that certain First
Amendment to First Amended and Restated Credit Agreement dated as of June&nbsp;30, 2003 (as so amended, the "</FONT><FONT SIZE=2><B>Credit Agreement</B></FONT><FONT SIZE=2>"), by and among the
Borrower, the Lenders party thereto, the Syndication Agent, the Swingline Lender, the Administrative Agent and the Collateral Agent. Capitalized terms used herein without definition shall have the
same meanings as set forth in the Credit Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
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<BR></FONT><FONT SIZE=2><B>RECITALS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>WHEREAS,</B></FONT><FONT SIZE=2> the Borrower and the Lenders desire to amend the Credit Agreement to (i)&nbsp;permit the Company and
Flowserve B.V., a company organized under the laws of the Netherlands and a Subsidiary of the Company, to incur unsecured Indebtedness as co-borrowers under the EIB Facilty (as hereinafter
defined) and to permit Flowserve B.V. and its Subsidiaries to incur unsecured Indebtedness under the Calyon Facility (as hereinafter defined) in support of the EIB Facility, and (ii)&nbsp;amend the
Interest Coverage Ratio in Section&nbsp;6.11 of the Credit Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>WHEREAS,</B></FONT><FONT SIZE=2> subject to the terms and conditions of this Second Amendment, the Lenders are willing to agree to such amendments. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>NOW, THEREFORE,</B></FONT><FONT SIZE=2> in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree
as follows: </FONT></P>

<P><FONT SIZE=2><B>Section&nbsp;1. AMENDMENTS TO CREDIT AGREEMENT  </B></FONT></P>

<UL>

<P><FONT SIZE=2><B> A. Amendments to Article&nbsp;I: Definitions  </B></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.01
of the Credit Agreement is hereby amended by adding the following definitions to such Section in proper alphabetical order: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Calyon Facility</I></FONT><FONT SIZE=2>" shall mean that certain Letter of Credit Facility to be entered into among Calyon New York Branch, as administrative
agent, the lenders party thereto, Flowserve B.V., and the Company and the Material Subsidiaries of Flowserve B.V., as guarantors, in an aggregate principal amount not to exceed euro 80,500,000, and as
thereafter amended from time to time in accordance with the requirements thereof and of this Agreement, pursuant to which a letter of credit will be issued to support the obligations of the Company
under the EIB Facility (as defined in Section&nbsp;1.01). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>EIB Facility</I></FONT><FONT SIZE=2>" shall mean that certain Finance Contract to be entered into between the European Investment Bank, as lender, and the
Company and Flowserve B.V., as co-borrowers, in </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

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<P><FONT SIZE=2>an
aggregate principal amount not to exceed euro 70,000,000, and as thereafter amended from time to time in accordance with the requirements thereof and of this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Flowserve B.V.</I></FONT><FONT SIZE=2>" shall mean Flowserve B.V., a company organized under the laws of the Netherlands and a Subsidiary of the Company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Material Subsidiaries of Flowserve B.V.</I></FONT><FONT SIZE=2>" shall mean certain material subsidiaries of Flowserve B.V. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
definition of "</FONT><FONT SIZE=2><I>Net Cash Proceeds</I></FONT><FONT SIZE=2>" in Section&nbsp;1.01 of the Credit Agreement is hereby amended by adding the
phrase "or the EIB Facility" after the parenthetical appearing in clause&nbsp;(b) of such definition. </FONT></P>

<UL>

<P><FONT SIZE=2><B> B. Amendments to Article&nbsp;II: The Credits  </B></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;2.13(e)
of the Credit Agreement is hereby amended by (i)&nbsp;deleting the "or" at the end of clause&nbsp;(i) of such Section and substituting "," in
place thereof, and (ii)&nbsp;adding the following new clause&nbsp;(iii) at the end of clause&nbsp;(ii) of such Section: ", or (iii)&nbsp;the EIB Facility". </FONT></P>

<UL>

<P><FONT SIZE=2><B> C. Amendments to Article&nbsp;VI: Negative Covenants  </B></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.01(g)
of the Credit Agreement is hereby amended by deleting such Section in its entirety and substituting the following therefor: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(g)
Indebtedness incurred by (x)&nbsp;Foreign Subsidiaries in an aggregate principal amount, when combined with the outstanding principal amount of all Indebtedness listed on
Schedule&nbsp;6.01(g), not to exceed $25,000,000 at any time outstanding and Guarantees thereof by other Foreign Subsidiaries (other than Loan Parties), (y)&nbsp;Flowserve B.V. as a
co-borrower under the EIB Facility, in an aggregate principal amount not to exceed euro 70,000,000 at any time outstanding, and (z)&nbsp;Flowserve B.V. under the Calyon Facility in
support of the EIB Facility, in an aggregate principal amount not to exceed euro 80,500,000 at any time outstanding and Guarantees thereof by the Material Subsidiaries of Flowserve B.V.;" </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.01
of the Credit Agreement is hereby amended by (i)&nbsp;deleting the "and" at the end of clause&nbsp;(o) of such Section, (ii)&nbsp;deleting the
"(p)" appearing at the beginning of clause&nbsp;(p) of such Section and substituting "(q)" in place thereof, and (iii)&nbsp;adding the following new clause&nbsp;(p) at the end of
clause&nbsp;(o) of such Section: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(p)
Indebtedness of the Company as a co-borrower under the EIB Facility in an aggregate principal amount not to exceed euro 70,000,000 at any time outstanding; and" </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
second to last sentence of Section&nbsp;6.04(c) of the Credit Agreement is hereby amended by deleting such sentence in its entirety and substituting the following
therefor: </FONT></P>

<UL>

<P><FONT SIZE=2>"In
the case of each loan or advance permitted under clauses&nbsp;(i), (ii), (iii)&nbsp;or (iv)&nbsp;above, such loan or advance shall be permitted under this Section&nbsp;6.04 only if
evidenced by a promissory note (in form and substance satisfactory to the Agents) which promissory note shall be pledged to the Collateral Agent as security for the Obligations pursuant to the First
Amended and Restated Pledge Agreement; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, with respect to any promissory note evidencing any loan or advance permitted under clauses
(i), (ii), (iii)&nbsp;or (iv)&nbsp;to Flowserve B.V., such promissory note shall not be required to be pledged to the Collateral Agent as set forth above and the obligations of Flowserve B.V. to
the Company and/or the Guarantors under any such promissory note may be subordinated to the obligations of Flowserve B.V. to the lenders under the Calyon Facility." </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.11
of the Credit Agreement is hereby amended and restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"SECTION
6.11. </FONT><FONT SIZE=2><I>Interest Coverage Ratio.</I></FONT><FONT SIZE=2> Permit the Interest Coverage Ratio for any period of four consecutive fiscal quarters, in each
case taken as one accounting period, ending during any period set forth below to be less than the ratio set forth opposite such period below: </FONT></P>
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<TH WIDTH="87%" ALIGN="LEFT"><FONT SIZE=1><B>Period<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>Ratio</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TD WIDTH="87%"><FONT SIZE=2>From and including June 30, 2004 through and including December 30, 2005</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.75x</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="87%"><FONT SIZE=2>From and including December 31, 2005 through and including March 31, 2006</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3.75x</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD WIDTH="87%"><FONT SIZE=2>Thereafter</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4.00x</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>"</FONT></TD>
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<P><FONT SIZE=2><B>Section&nbsp;2. CONDITIONS TO EFFECTIVENESS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1 of this Second Amendment shall become effective as of June&nbsp;24, 2004 upon the satisfaction prior or concurrent satisfaction of all of the
following conditions precedent (the date of satisfaction of such conditions being referred to herein as the "</FONT><FONT SIZE=2><B>Second Amendment Effective Date</B></FONT><FONT SIZE=2>"): </FONT></P>


<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On or prior to the Second Amendment Effective Date, the Borrower shall deliver to the Lenders (or to the Administrative
Agent for the Lenders) copies of this Second Amendment executed by each Loan Party. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On or prior to the Second Amendment Effective Date, the Required Lenders shall have executed the Consent. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent shall have received payment, for the account of each Lender that executes this Second Amendment
on or before 5:00&nbsp;p.m. Central Daylight Time on June&nbsp;24, 2004, of an amendment fee equal to 0.05% of the sum of such Lender's Revolving Credit Commitment and the principal amount of Term
Loans held by such Lender. </FONT></P>

<P><FONT SIZE=2><B>Section&nbsp;3. REPRESENTATIONS AND WARRANTIES  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to induce the Lenders to enter into this Second Amendment and to amend the Credit Agreement in the manner provided herein, the Borrower represents and
warrants to each Lender that the following statements are true, correct and complete on and as of the Second Amendment Effective Date: </FONT></P>


<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Organization; Powers.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower and each of the Subsidiaries (i)&nbsp;(a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b)&nbsp;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)&nbsp;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)&nbsp;in the case of the Borrower 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 Second Amendment (the "</FONT><FONT SIZE=2><B>Amended
Agreement</B></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Authorization.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Second Amendment (i)&nbsp;has been duly authorized by all requisite corporate, and, if required,
stockholder, action on the part of the Borrower and each Subsidiary that is a party hereto and (ii)&nbsp;will not (a)&nbsp;violate (1)&nbsp;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 Borrower or any Subsidiary, (2)&nbsp;any order of any Governmental Authority or
(3)&nbsp;any provision of any indenture, agreement or other instrument to which the Borrower or any Subsidiary is a party or by which any of them or any of their property is or may be bound,
(b)&nbsp;be in conflict with, result in a breach of or </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<P><FONT SIZE=2>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)&nbsp;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
Borrower or any Subsidiary (other than any Lien created hereunder or under the First Amended and Restated Security Documents). </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Enforceability.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Second Amendment has been duly executed and delivered by each Loan Party which is a party hereto, and
this Second 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. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Governmental Approvals.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;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 Second Amendment, and the performance by the Borrower of the Amended Agreement. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Incorporation of Representations and Warranties from Credit Agreement.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The representations and warranties contained in
Article&nbsp;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 Second 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. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Absence of Default.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No event has occurred and is continuing or will result from the consummation of the transactions
contemplated by this Second Amendment that would constitute a Default or an Event of Default. </FONT></P>


<P><FONT SIZE=2><B>Section&nbsp;4. MISCELLANEOUS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>A. Reference to and Effect on the Credit Agreement and the Other Loan Documents.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
and after the Second 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 "Second 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. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as specifically amended by this Second Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified
and confirmed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
execution, delivery and performance of this Second Amendment shall not, except as expressly provided herein, 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. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Fees and Expenses.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower acknowledges that all costs, fees and expenses as described in Section&nbsp;9.05 of the
Credit Agreement incurred by the Administrative Agent and its counsel with respect to this Second Amendment and the documents and transactions contemplated hereby shall be for the account of the
Borrower. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Headings.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Section and subsection headings in this Second Amendment are included herein for convenience of reference only
and shall not constitute a part of this Second Amendment for any other purpose or be given any substantive effect. </FONT></P>


<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Applicable Law.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;THIS SECOND 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. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Counterparts; Effectiveness.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Second 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. This Second Amendment
(other than the provisions of Section&nbsp;1 hereof, the effectiveness of which is governed by Section&nbsp;2 hereof) shall become effective upon the execution of a counterpart hereof by each Loan
Party and the execution of the Consent by the Required Lenders and receipt by the Administrative Agent of written or telephonic notification of such execution and authorization of delivery thereof. </FONT></P>

<P><FONT SIZE=2><B>Section&nbsp;5. ACKNOWLEDGEMENT AND CONSENT BY CREDIT SUPPORT PARTIES  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 "</FONT><FONT SIZE=2><B>Credit Support Parties</B></FONT><FONT SIZE=2>," and the First Amended and Restated Guarantee Agreement and the First
Amended and Restated Security Documents are collectively referred to herein as the "</FONT><FONT SIZE=2><B>Credit Support Documents</B></FONT><FONT SIZE=2>." </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Credit Support Party hereby acknowledges that it has read this Second Amendment and consents to the terms thereof, and hereby confirms and agrees that, notwithstanding the
effectiveness of this Second 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 Second Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor to any future
amendment to the Credit Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
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<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>IN WITNESS WHEREOF,</B></FONT><FONT SIZE=2> the parties hereto have caused this Second Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above. </FONT></P>

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<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><B>FLOWSERVE CORPORATION, </B></FONT><FONT SIZE=2>as the Borrower</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><HR NOSHADE><FONT SIZE=2> Name:<BR>
Title:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>FLOWSERVE FRANCE SAS,</B></FONT><FONT SIZE=2> societe par actions simplifiee organized under the laws of France, as the Subsidiary Borrower</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><HR NOSHADE><FONT SIZE=2> Name:<BR>
Title:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>FLOWSERVE US&nbsp;INC.<BR>
FLOWSERVE INTERNATIONAL,&nbsp;INC.<BR>
FLOWSERVE MANAGEMENT COMPANY<BR>
BW/IP-NEW MEXICO,&nbsp;INC.<BR>
FLOWSERVE INTERNATIONAL, LLC<BR>
INGERSOLL-DRESSER PUMP COMPANY<BR>
FLOWSERVE HOLDINGS,&nbsp;INC.<BR> </B></FONT><FONT SIZE=2>(for purposes of Section&nbsp;5 only) as Credit Support Parties</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><HR NOSHADE><FONT SIZE=2> Name: John M. Nanos<BR>
Title: Vice President</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>FLOWSERVE FINANCE B.V.,</B></FONT><FONT SIZE=2> (for purposes of Section&nbsp;5 only) as a Credit Support Party</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><HR NOSHADE><FONT SIZE=2> Name: John M. Nanos<BR>
Title: Managing Director</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><HR NOSHADE><FONT SIZE=2> Name:<BR>
Title: Managing Director</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=6,EFW="2139313",CP="FLOWSERVE, CORP.",DN="2",CHK=135199,FOLIO='6',FILE='DISK015:[04DFW0.04DFW1420]KA1420A.;10',USER='ABEAULI',CD='25-JUN-2004;17:28' -->
<A NAME="page_ka1420_1_7"> </A>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>FLOWSERVE INTERNATIONAL LIMITED<BR>
FLOWSERVE FLOW CONTROL (UK) LIMITED,</B></FONT><FONT SIZE=2> (for purposes of Section&nbsp;5 only) as Credit Support Parties</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><HR NOSHADE><FONT SIZE=2> Name: John M. Nanos<BR>
Title: Director</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>BANK OF AMERICA, N.A., </B></FONT><FONT SIZE=2>individually<BR>
and as the Administrative Agent, the Collateral<BR>
Agent and the Swingline Lender</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><HR NOSHADE><FONT SIZE=2> Name:<BR>
Title:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>CREDIT SUISSE FIRST BOSTON,</B></FONT><FONT SIZE=2><BR>
individually and as the Syndication Agent</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><HR NOSHADE><FONT SIZE=2> Name:<BR>
Title:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><HR NOSHADE><FONT SIZE=2> Name:<BR>
Title:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>LENDERS</B></FONT><FONT SIZE=2><BR>
Per individual Consents executed by each signing Lender</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=7,EFW="2139313",CP="FLOWSERVE, CORP.",DN="2",CHK=866342,FOLIO='7',FILE='DISK015:[04DFW0.04DFW1420]KA1420A.;10',USER='ABEAULI',CD='25-JUN-2004;17:28' -->
<A NAME="page_ka1420_1_8"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ka1420_exhibit_a_consent_of_lender"> </A>
<A NAME="toc_ka1420_3"> </A>
<BR></FONT><FONT SIZE=2><B>EXHIBIT A<BR>  CONSENT OF LENDER    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&nbsp;2,
2002, as amended, among Flowserve Corporation, a New York corporation, the Lenders from time to time party thereto (the </FONT><FONT SIZE=2><B>"Lenders"</B></FONT><FONT SIZE=2>), 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 Second Amendment to First
Amended and Restated Credit Agreement dated as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2004. </FONT></P>

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<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="CENTER"><BR><HR NOSHADE><FONT SIZE=2> [Name of Lender]</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="50%" ALIGN="CENTER"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=8,EFW="2139313",CP="FLOWSERVE, CORP.",DN="2",CHK=305384,FOLIO='8',FILE='DISK015:[04DFW0.04DFW1420]KA1420A.;10',USER='ABEAULI',CD='25-JUN-2004;17:28' -->
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<BR>
<P><br><A NAME="04DFW1419_2">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ka1420_1">FLOWSERVE CORPORATION SECOND AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ka1420_2">RECITALS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ka1420_3">EXHIBIT A CONSENT OF LENDER</A></FONT><BR>

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