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EXHIBIT 99.5
October 26, 2000
EXCHANGE AGENT AGREEMENT
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Ladies and Gentlemen:
Flowserve Corporation, a New York corporation (the "Company"),
proposes to make an offer (the "Exchange Offer") to exchange all of its
outstanding 121/4% Senior Subordinated Notes due 2010 (the "Old Securities") for
its 121/4% Senior Subordinated Notes due 2010 (the "New Securities"). The terms
and conditions of the Exchange Offer as currently contemplated are set forth in
a prospectus, dated October 30, 2000 (the "Prospectus"), proposed to be
distributed to all record holders of the Old Securities. The Old Securities and
the New Securities are collectively referred to herein as the "Securities".
The Company hereby appoints The Bank of New York to act as
exchange agent (the "Exchange Agent") in connection with the Exchange Offer.
References hereinafter to "you" shall refer to The Bank of New York.
The Exchange Offer is expected to be commenced by the Company
on or about October 30, 2000. The Letter of Transmittal accompanying the
Prospectus (or in the case of book-entry securities, the Automated Tender Offer
Program ("ATOP") of the Book-Entry Transfer Facility (as defined below)) is to
be used by the holders of the Old Securities to accept the Exchange Offer and
contains instructions with respect to the delivery of certificates for Old
Securities tendered in connection therewith.
The Exchange Offer shall expire at 12:00 p.m., New York City
time (5:00 p.m. London time), on November 28, 2000 or on such subsequent date or
time to which the Company may extend the Exchange Offer (the "Expiration Date").
Subject to the terms and conditions set forth in the Prospectus, the Company
expressly reserves the right to extend the Exchange Offer from time to time and
may extend the Exchange Offer by giving oral (promptly confirmed in writing) or
written notice to you before 9:00 a.m., New York City time, on the business day
following the previously scheduled Expiration Date.
The Company expressly reserves the right to amend or terminate
the Exchange Offer, and not to accept for exchange any Old Securities not
theretofore
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accepted for exchange, upon the occurrence of any of the conditions of the
Exchange Offer specified in the Prospectus under the captions "The Exchange
Offer -- Expiration Date; Extensions; Amendments" and "The Exchange Offer --
Termination." The Company will give oral (promptly confirmed in writing) or
written notice of any amendment, termination or nonacceptance to you as promptly
as practicable.
In carrying out your duties as Exchange Agent, you are to act
in accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer" or as specifically set forth herein; provided, however, that in no way
will your general duty to act in good faith be discharged by the foregoing.
2. You will establish a book-entry account with respect to the
Old Securities at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Exchange Offer within two business days after the
date of the Prospectus, and any financial institution that is a participant in
the Book-Entry Transfer Facility's systems may make book-entry delivery of the
Old Securities by causing the Book-Entry Transfer Facility to transfer such Old
Securities into your account in accordance with the Book-Entry Transfer
Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Securities (or confirmation of book-entry transfer into
your account at the Book-Entry Transfer Facility) and any other documents
delivered or mailed to you by or for holders of the Old Securities to ascertain
whether: (i) the Letters of Transmittal and any such other documents are duly
executed and properly completed in accordance with instructions set forth
therein; and (ii) the Old Securities have otherwise been properly tendered. In
each case where the Letter of Transmittal or any other document has been
improperly completed or executed or any of the certificates for Old Securities
are not in proper form for transfer or some other irregularity in connection
with the acceptance of the Exchange Offer exists, you will endeavor to inform
the presenters of the need for fulfillment of all requirements and to take any
other action as may be reasonably necessary or advisable to cause such
irregularity to be corrected.
4. With the approval of the President or any Vice President of
the Company (such approval, if given orally, to be promptly confirmed in
writing) or any other party designated in writing, by such an officer, you are
authorized to waive any irregularities in connection with any tender of Old
Securities pursuant to the Exchange Offer.
5. Tenders of Old Securities may be made only as set forth in
the Letter of Transmittal and in the sections of the Prospectus captioned "The
Exchange Offer -- Procedures for Tendering", and "The Exchange Offer --
Guaranteed Delivery Procedures for Outstanding Dollar Notes", and Old Securities
shall be considered
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properly tendered to you only when tendered in accordance with the procedures
set forth therein.
Notwithstanding the provisions of this Section 5, Old
Securities which the President, Senior Vice President, or any Vice President of
the Company shall approve as having been properly tendered shall be considered
to be properly tendered (such approval, if given orally, shall be promptly
confirmed in writing).
6. You shall advise the Company with respect to any Old
Securities received subsequent to the Expiration Date and accept its
instructions with respect to disposition of such Old Securities.
7. You shall accept tenders:
(a) in cases where the Old Securities are registered in two or
more names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the
Letter of Transmittal) is acting in a fiduciary or a representative capacity
only when proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Old
Securities, provided that customary transfer requirements, including payment of
any applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Old Securities where so
indicated and as permitted in the Letter of Transmittal and deliver certificates
for Old Securities to the registrar for split-up and return any untendered Old
Securities to the holder (or such other person as may be designated in the
Letter of Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Company will notify you (such notice, if given orally, to be
promptly confirmed in writing) of its acceptance, promptly after the Expiration
Date, of all Old Securities properly tendered and you, on behalf of the Company,
will exchange such Old Securities for New Securities and cause such Old
Securities to be cancelled. Delivery of New Securities will be made on behalf of
the Company by you at the rate of $1,000 principal amount of New Securities for
each $1,000 principal amount of the corresponding series of Old Securities
tendered promptly after notice (such notice if given orally, to be promptly
confirmed in writing) of acceptance of said Old Securities by the Company;
provided, however, that in all cases, Old Securities tendered pursuant to the
Exchange Offer will be exchanged only after timely receipt by you of
certificates for such Old Securities (or confirmation of book-entry transfer
into your account at the Book-Entry Transfer Facility), a properly completed and
duly executed Letter of Transmittal (or manually signed facsimile thereof) with
any required signature guarantees
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and any other required documents. You shall issue New Securities only in
denominations of $1,000 or any integral multiple thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable,
except that, subject to the terms and upon the conditions set forth in the
Prospectus and the Letter of Transmittal, Old Securities tendered pursuant to
the Exchange Offer may be withdrawn at any time prior to the Expiration Date.
10. The Company shall not be required to exchange any Old
Securities tendered if any of the conditions set forth in the Exchange Offer are
not met. Notice of any decision by the Company not to exchange any Old
Securities tendered shall be given (if given orally, to be promptly confirmed in
writing) by the Company to you.
11. If, pursuant to the Exchange Offer, the Company does not
accept for exchange all or part of the Old Securities tendered because of an
invalid tender, the occurrence of certain other events set forth in the
Prospectus under the captions "The Exchange Offer -- Expiration Date;
Extensions; Amendments" and "The Exchange Offer -- Termination" or otherwise,
you shall as soon as practicable after the expiration or termination of the
Exchange Offer return those certificates for unaccepted Old Securities (or
effect appropriate book-entry transfer), together with any related required
documents and the Letters of Transmittal relating thereto that are in your
possession, to the persons who deposited them.
12. All certificates for reissued Old Securities, unaccepted
Old Securities or for New Securities shall be forwarded by first-class mail.
13. You are not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker, dealer, bank or
other persons or to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall not be liable for any action or omission to act
unless the same constitutes your own gross negligence, willful misconduct or bad
faith, and in no event shall you be liable to a securityholder, the Company or
any third party for special, indirect or consequential damages, or lost profits,
arising in connection with this Agreement.
(b) shall have no duties or obligations other than those
specifically set forth herein or as may be subsequently agreed to in writing
between you and the Company;
(c) will be regarded as making no representations and
having no responsibilities as to the validity, sufficiency, value or genuineness
of any of the certificates or the Old Securities represented thereby deposited
with you pursuant to the
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Exchange Offer, and will not be required to and will make no representation as
to the validity, value or genuineness of the Exchange Offer;
(d) shall not be obligated to take any legal action
hereunder which might in your reasonable judgment involve any expense or
liability, unless you shall have been furnished with indemnity reasonably
satisfactory to you;
(e) may reasonably rely on and shall be protected in
acting in reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to you and reasonably believed
by you to be genuine and to have been signed or presented by the proper person
or persons;
(f) may reasonably act upon any tender, statement,
request, document, agreement, certificate or other instrument whatsoever not
only as to its due execution and validity and effectiveness of its provisions,
but also as to the truth and accuracy of any information contained therein,
which you shall in good faith believe to be genuine or to have been signed or
presented by the proper person or persons;
(g) may reasonably rely on and shall be protected in
acting upon written or oral instructions from any authorized officer of the
Company;
(h) may consult with counsel of your selection with
respect to any questions relating to your duties and responsibilities and the
advice or opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken by
you hereunder in good faith and in accordance with the advice or opinion of such
counsel; and
(i) shall not advise any person tendering Old Securities
pursuant to the Exchange Offer as to the wisdom of making such tender or as to
the market value or decline or appreciation in market value of any Old
Securities.
15. You shall take such action as may from time to time be
requested by the Company or its counsel (and such other action as you may deem
reasonably appropriate) to furnish copies of the Prospectus, Letter of
Transmittal and the Notice of Guaranteed Delivery (as such terms are used in the
Prospectus) or such other forms as may be approved from time to time by the
Company, to all persons requesting such documents and to accept and comply with
telephone requests for information relating to the Exchange Offer, provided that
such information shall relate only to the procedures for accepting (or
withdrawing from) the Exchange Offer. The Company will furnish you with copies
of such documents on your request. All other requests for information relating
to the Exchange Offer shall be directed to the Company, Attention: Renee J.
Hornbaker, Vice President and Chief Financial Officer, Flowserve Corporation,
222 West Las Colinas Boulevard, Suite 1500, Irving, TX 75039.
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16. You shall advise by facsimile transmission Renee J.
Hornbaker, of the Company (at the facsimile number (972) 443-6821), and such
other person or persons as the Company may request, daily (and more frequently
during the week immediately preceding the Expiration Date if requested) up to
and including the Expiration Date, as to the number of Old Securities which have
been tendered pursuant to the Exchange Offer and the items received by you
pursuant to this Agreement, separately reporting and giving cumulative totals as
to items properly received and items improperly received. In addition, you will
also inform, and cooperate in making available to, the Company or any such other
person or persons upon oral request made from time to time prior to the
Expiration Date of such other information as they may reasonably request. Such
cooperation shall include, without limitation, the granting by you to the
Company and such person as the Company may request of access to those persons on
your staff who are responsible for receiving tenders, in order to ensure that
immediately prior to the Expiration Date the Company shall have received
information in sufficient detail to enable it to decide whether to extend the
Exchange Offer. You shall prepare a final list of all persons whose tenders were
accepted, the aggregate principal amount of Old Securities tendered, the
aggregate principal amount of Old Securities accepted and deliver said list to
the Company.
17. Letters of Transmittal and Notices of Guaranteed Delivery
shall be stamped by you as to the date and, after the expiration of the Exchange
Offer, the time, of receipt thereof and shall be preserved by you for a period
of time at least equal to the period of time you preserve other records
pertaining to the transfer of securities. You shall dispose of unused Letters of
Transmittal and other surplus materials by returning them to the Company.
18. For services rendered as Exchange Agent hereunder, you
shall be entitled to such compensation as set forth on Schedule I attached
hereto. The provisions of this section shall survive the termination of this
Agreement.
19. You hereby acknowledge receipt of the Prospectus and the
Letter of Transmittal and further acknowledge that you have examined each of
them. Any inconsistency between this Agreement, on the one hand, and the
Prospectus and the Letter of Transmittal (as they may be amended from time to
time), on the other hand, shall be resolved in favor of the latter two
documents, except with respect to your duties, liabilities and indemnification
as Exchange Agent.
20. The Company covenants and agrees to fully indemnify and
hold you harmless in your capacity as Exchange Agent hereunder against any and
all loss, liability, cost or expense, including attorneys' fees and expenses,
incurred without gross negligence or willful misconduct on your part, arising
out of or in connection with any act, omission, delay or refusal made by you in
reliance upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document reasonably believed
by you to be valid, genuine and sufficient and in accepting any tender
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or effecting any transfer of Old Securities reasonably believed by you in good
faith to be authorized, and in delaying or refusing in good faith to accept any
tenders or effect any transfer of Old Securities. In each case, the Company
shall be notified by you, by letter or facsimile transmission, of the written
assertion of a claim against you or of any other action commenced against you,
promptly after you shall have received any such written assertion or shall have
been served with a summons in connection therewith. The Company shall be
entitled to participate at its own expense in the defense of any such claim or
other action and, if the Company so elects, the Company shall assume the defense
of any suit brought to enforce any such claim. In the event that the Company
shall assume the defense of any such suit, the Company shall not be liable for
the fees and expenses of any additional counsel thereafter retained by you, so
long as the Company shall retain counsel satisfactory to you to defend such
suit, and so long as you have not determined, in your reasonable judgment, that
a conflict of interest exists between you and the Company. The provisions of
this section shall survive the termination of this Agreement.
21. You shall arrange to comply with all requirements under
the tax laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service.
22. You shall deliver or cause to be delivered, in a timely
manner to each governmental authority to which any transfer taxes are payable in
respect of the exchange of Old Securities, the Company's check in the amount of
all transfer taxes so payable; provided, however, that you shall reimburse the
Company for amounts refunded to you in respect of your payment of any such
transfer taxes, at such time as such refund is received by you.
23. This Agreement and your appointment as Exchange Agent
hereunder shall be construed and enforced in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely
within such state, and without regard to conflicts of law principles, and shall
inure to the benefit of, and the obligations created hereby shall be binding
upon, the successors and assigns of each of the parties hereto.
24. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
25. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
26. This Agreement shall not be deemed or construed to be
modified, amended, rescinded, cancelled or waived, in whole or in part, except
by a written
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instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
27. Unless otherwise provided herein, all notices, requests
and other communications to any party hereunder shall be in writing (including
facsimile or similar writing) and shall be given to such party, addressed to it,
at its address or telecopy number set forth below:
If to the Company:
Flowserve Corporation
222 West Las Colinas Boulevard
Suite 1500
Irving, TX 75039
Facsimile: (972) 443-6821
Attention: Renee J. Hornbaker
Copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Facsimile: (212) 848-7179
Attention: Christopher C. Paci, Esq.
If to the Exchange Agent:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Facsimile: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
28. Unless terminated earlier by the parties hereto, this
Agreement shall terminate 90 days following the Expiration Date. Notwithstanding
the foregoing, Sections 18 and 20 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver to
the Company any
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certificates for Securities, funds or property then held by you as Exchange
Agent under this Agreement.
29. This Agreement shall be binding and effective as of the
date hereof.
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Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
FLOWSERVE CORPORATION
By: /s/ RENEE J. HORNBAKER
----------------------
Name: Renee J. Hornbaker
Title: Vice President
and Chief
Financial Officer
Accepted as of the date
first above written:
THE BANK OF NEW YORK, as Exchange Agent
By: /s/ LUIS PEREZ
--------------------------
Name: Luis Perez
Title: Assistant Vice President
10
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SCHEDULE I
COMPENSATION OF EXCHANGE AGENT:
(for Euro Notes issued by Flowserve Finance B.V. and for Dollar Notes issued
by Flowserve Corporation)
$5,000 PLUS $500 PER EXTENSION OF OFFER PLUS OUT-OF POCKET
EXPENSES, INCLUDING WITHOUT LIMITATION, LEGAL FEES AND
EXPENSES
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October 26, 2000
EXCHANGE AGENT AGREEMENT
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Ladies and Gentlemen:
Flowserve Finance B.V., a Dutch corporation (the "Company"), proposes
to make an offer (the "Exchange Offer") to exchange all of its outstanding
12 1/4% Senior Subordinated Notes due 2010 (the "Old Securities") for its
12 1/4% Senior Subordinated Notes due 2010 (the "New Securities"). The terms and
conditions of the Exchange Offer as currently contemplated are set forth in a
prospectus, dated October 30, 2000 (the "Prospectus"), proposed to be
distributed to all record holders of the Old Securities. The Old Securities and
the New Securities are collectively referred to herein as the "Securities".
The Company hereby appoints The Bank of New York to act as exchange
agent (the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to The Bank of New York.
The Exchange Offer is expected to be commenced by the Company on or
about October 30, 2000. Holders of Old Securities are required to use book-entry
transfer pursuant to the standard operating procedures of Euroclear or
Clearstream Banking, Societe Anonyme, formerly Cedelbank ("Clearstream,
Luxemberg"), as the case may be, to accept the Exchange Offer and to tender
their Old Securities.
The Exchange Offer shall expire at 12:00 p.m., New York City time (5:00
p.m. London time), on November 28, 2000 or on such subsequent date or time to
which the Company may extend the Exchange Offer (the "Expiration Date"). Subject
to the terms and conditions set forth in the Prospectus, the Company expressly
reserves the right to extend the Exchange Offer from time to time and may extend
the Exchange Offer by giving oral (promptly confirmed in writing) or written
notice to you before 9:00 a.m., New York City time, on the business day
following the previously scheduled Expiration Date.
The Company expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Old Securities not
theretofore accepted for exchange, upon the occurrence of any of the conditions
of the Exchange
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Offer specified in the Prospectus under the captions "The Exchange Offer --
Expiration Date; Extensions; Amendments" and "The Exchange Offer --
Termination." The Company will give oral (promptly confirmed in writing) or
written notice of any amendment, termination or nonacceptance to you as promptly
as practicable.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer" or as specifically set forth herein; provided, however, that in no way
will your general duty to act in good faith be discharged by the foregoing.
2. You will establish a book-entry account with respect to the Old
Securities at Euroclear or Clearstream, Luxembourg (the "Book-Entry Transfer
Facility") for purposes of the Exchange Offer within two business days after the
date of the Prospectus, and any financial institution that is a participant in
the Book-Entry Transfer Facility's systems may make book-entry delivery of the
Old Securities by causing the Book-Entry Transfer Facility to transfer such Old
Securities into your account in accordance with the Book-Entry Transfer
Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Securities (or confirmation of book-entry transfer into
your account at the Book-Entry Transfer Facility) and any other documents
delivered or mailed to you by or for holders of the Old Securities to ascertain
whether: (i) the Letters of Transmittal and any such other documents are duly
executed and properly completed in accordance with instructions set forth
therein; and (ii) the Old Securities have otherwise been properly tendered. In
each case where the Letter of Transmittal or any other document has been
improperly completed or executed or any of the certificates for Old Securities
are not in proper form for transfer or some other irregularity in connection
with the acceptance of the Exchange Offer exists, you will endeavor to inform
the presenters of the need for fulfillment of all requirements and to take any
other action as may be reasonably necessary or advisable to cause such
irregularity to be corrected.
4. With the approval of any Managing Director of the Company (such
approval, if given orally, to be promptly confirmed in writing) or any other
party designated in writing, by such an officer, you are authorized to waive any
irregularities in connection with any tender of Old Securities pursuant to the
Exchange Offer.
5. Tenders of Old Securities may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer -- Procedures for Tendering", and Old Securities shall be
considered properly tendered to you only when tendered in accordance with the
procedures set forth therein.
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Notwithstanding the provisions of this Section 5, Old Securities which
any Managing Director of the Company shall approve as having been properly
tendered shall be considered to be properly tendered (such approval, if given
orally, shall be promptly confirmed in writing).
6. You shall advise the Company with respect to any Old Securities
received subsequent to the Expiration Date and accept its instructions with
respect to disposition of such Old Securities.
7. You shall accept tenders:
(a) in cases where the Old Securities are registered in two or
more names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter
of Transmittal) is acting in a fiduciary or a representative capacity only when
proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Old
Securities, provided that customary transfer requirements, including payment of
any applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Old Securities where so indicated
and as permitted in the Letter of Transmittal and deliver certificates for Old
Securities to the registrar for split-up and return any untendered Old
Securities to the holder (or such other person as may be designated in the
Letter of Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, the Company will notify you (such notice, if given orally, to be promptly
confirmed in writing) of its acceptance, promptly after the Expiration Date, of
all Old Securities properly tendered and you, on behalf of the Company, will
exchange such Old Securities for New Securities and cause such Old Securities to
be cancelled. Delivery of New Securities will be made on behalf of the Company
by you at the rate of "1,000 principal amount of New Securities for each "1,000
principal amount of the corresponding series of Old Securities tendered promptly
after notice (such notice if given orally, to be promptly confirmed in writing)
of acceptance of said Old Securities by the Company; provided, however, that in
all cases, Old Securities tendered pursuant to the Exchange Offer will be
exchanged only after timely receipt by you of certificates for such Old
Securities (or confirmation of book-entry transfer into your account at the
Book-Entry Transfer Facility), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) with any required signature
guarantees and any other required documents. You shall issue New Securities only
in denominations of "1,000 or any integral multiple thereof.
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9. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and upon the conditions set forth in the Prospectus and the
Letter of Transmittal, Old Securities tendered pursuant to the Exchange Offer
may be withdrawn at any time prior to the Expiration Date.
10. The Company shall not be required to exchange any Old Securities
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Company not to exchange any Old Securities
tendered shall be given (if given orally, to be promptly confirmed in writing)
by the Company to you.
11. If, pursuant to the Exchange Offer, the Company does not accept for
exchange all or part of the Old Securities tendered because of an invalid
tender, the occurrence of certain other events set forth in the Prospectus under
the captions "The Exchange Offer -- Expiration Date; Extensions; Amendments" and
"The Exchange Offer -- Termination" or otherwise, you shall as soon as
practicable after the expiration or termination of the Exchange Offer return
those certificates for unaccepted Old Securities (or effect appropriate
book-entry transfer), together with any related required documents and the
Letters of Transmittal relating thereto that are in your possession, to the
persons who deposited them.
12. All certificates for reissued Old Securities, unaccepted Old
Securities or for New Securities shall be forwarded by first-class mail.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall not be liable for any action or omission to act unless
the same constitutes your own gross negligence, willful misconduct or bad faith,
and in no event shall you be liable to a securityholder, the Company or any
third party for special, indirect or consequential damages, or lost profits,
arising in connection with this Agreement.
(b) shall have no duties or obligations other than those
specifically set forth herein or as may be subsequently agreed to in writing
between you and the Company;
(c) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of any of
the certificates or the Old Securities represented thereby deposited with you
pursuant to the Exchange Offer, and will not be required to and will make no
representation as to the validity, value or genuineness of the Exchange Offer;
<PAGE> 16
(d) shall not be obligated to take any legal action hereunder
which might in your reasonable judgment involve any expense or liability, unless
you shall have been furnished with indemnity reasonably satisfactory to you;
(e) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter, telegram or
other document or security delivered to you and reasonably believed by you to be
genuine and to have been signed or presented by the proper person or persons;
(f) may reasonably act upon any tender, statement, request,
document, agreement, certificate or other instrument whatsoever not only as to
its due execution and validity and effectiveness of its provisions, but also as
to the truth and accuracy of any information contained therein, which you shall
in good faith believe to be genuine or to have been signed or presented by the
proper person or persons;
(g) may reasonably rely on and shall be protected in acting upon
written or oral instructions from any authorized officer of the Company;
(h) may consult with counsel of your selection with respect to
any questions relating to your duties and responsibilities and the advice or
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by you hereunder
in good faith and in accordance with the advice or opinion of such counsel; and
(i) shall not advise any person tendering Old Securities pursuant
to the Exchange Offer as to the wisdom of making such tender or as to the market
value or decline or appreciation in market value of any Old Securities.
15. You shall take such action as may from time to time be requested by
the Company or its counsel (and such other action as you may deem reasonably
appropriate) to furnish copies of the Prospectus, Letter of Transmittal (as such
term is used in the Prospectus) or such other forms as may be approved from time
to time by the Company, to all persons requesting such documents and to accept
and comply with telephone requests for information relating to the Exchange
Offer, provided that such information shall relate only to the procedures for
accepting (or withdrawing from) the Exchange Offer. The Company will furnish you
with copies of such documents on your request. All other requests for
information relating to the Exchange Offer shall be directed to the Company, as
set forth in Section 27 below.
16. You shall advise by facsimile transmission Renve J.
Hornbaker, of Flowserve Corporation (at the facsimile number (972) 443-6821),
and such other person or persons as the Company may request, daily (and more
frequently during the week immediately preceding the Expiration Date if
requested) up to and including the Expiration Date, as to the number of Old
Securities which have been tendered pursuant to the Exchange Offer and the items
received by you pursuant to this Agreement, separately
<PAGE> 17
reporting and giving cumulative totals as to items properly received and items
improperly received. In addition, you will also inform, and cooperate in making
available to, the Company or any such other person or persons upon oral request
made from time to time prior to the Expiration Date of such other information as
they may reasonably request. Such cooperation shall include, without limitation,
the granting by you to the Company and such person as the Company may request of
access to those persons on your staff who are responsible for receiving tenders,
in order to ensure that immediately prior to the Expiration Date the Company
shall have received information in sufficient detail to enable it to decide
whether to extend the Exchange Offer. You shall prepare a final list of all
persons whose tenders were accepted, the aggregate principal amount of Old
Securities tendered, the aggregate principal amount of Old Securities accepted
and deliver said list to the Company.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and, after the expiration of the Exchange Offer,
the time, of receipt thereof and shall be preserved by you for a period of time
at least equal to the period of time you preserve other records pertaining to
the transfer of securities. You shall dispose of unused Letters of Transmittal
and other surplus materials by returning them to the Company.
18. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on Schedule I attached hereto. The
provisions of this section shall survive the termination of this Agreement.
19. You hereby acknowledge receipt of the Prospectus and the Letter of
Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to your duties, liabilities and indemnification as Exchange Agent.
20. The Company covenants and agrees to fully indemnify and hold you
harmless in your capacity as Exchange Agent hereunder against any and all loss,
liability, cost or expense, including attorneys' fees and expenses, incurred
without gross negligence or willful misconduct on your part, arising out of or
in connection with any act, omission, delay or refusal made by you in reliance
upon any signature, endorsement, assignment, certificate, order, request,
notice, instruction or other instrument or document reasonably believed by you
to be valid, genuine and sufficient and in accepting any tender or effecting any
transfer of Old Securities reasonably believed by you in good faith to be
authorized, and in delaying or refusing in good faith to accept any tenders or
effect any transfer of Old Securities. In each case, the Company shall be
notified by you, by letter or facsimile transmission, of the written assertion
of a claim against you or of any other action commenced against you, promptly
after you shall have received any such written assertion or shall have been
served with a summons in connection therewith. The
<PAGE> 18
Company shall be entitled to participate at its own expense in the defense of
any such claim or other action and, if the Company so elects, the Company shall
assume the defense of any suit brought to enforce any such claim. In the event
that the Company shall assume the defense of any such suit, the Company shall
not be liable for the fees and expenses of any additional counsel thereafter
retained by you, so long as the Company shall retain counsel satisfactory to you
to defend such suit, and so long as you have not determined, in your reasonable
judgment, that a conflict of interest exists between you and the Company. The
provisions of this section shall survive the termination of this Agreement.
21. You shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service.
22. You shall deliver or cause to be delivered, in a timely manner to
each governmental authority to which any transfer taxes are payable in respect
of the exchange of Old Securities, the Company's check in the amount of all
transfer taxes so payable; provided, however, that you shall reimburse the
Company for amounts refunded to you in respect of your payment of any such
transfer taxes, at such time as such refund is received by you.
23. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within such
state, and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto.
24. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which together shall
constitute one and the same agreement.
25. In case any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
26. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
27. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or telecopy number set forth below:
<PAGE> 19
If to the Company:
Flowserve Finance B.V.
Parallelweg 6
Etten-Leur 4870AA
The Netherlands
Facsimile:
Attention: Managing Director
Copy to:
Flowserve Corporation
222 West Las Colinas Boulevard
Suite 1500
Irving, TX 75039
Facsimile: (972) 443-6821
Attention: Renve J. Hornbaker
Copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Facsimile: (212) 848-7179
Attention: Christopher C. Paci, Esq.
If to the Exchange Agent:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Facsimile: (212) 875-3522
Attention: Corporate Trust Administration Global
Finance Unit
<PAGE> 20
28. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Sections 18 and 20 shall survive the termination of this Agreement.
Upon any termination of this Agreement, you shall promptly deliver to the
Company any certificates for Securities, funds or property then held by you as
Exchange Agent under this Agreement.
29. This Agreement shall be binding and effective as of the date
hereof.
<PAGE> 21
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
FLOWSERVE FINANCE B.V.
By: /s/ JOHN M. NANOS
------------------------------
Name: John M. Nanos
Title: Managing Director
By: /s/ M. KATHLEEN MCVAY
------------------------------
Name: M. Kathleen McVay
Title: Managing Director
Accepted as of the date first above written:
THE BANK OF NEW YORK, as Exchange Agent
By: /s/ LUIS PEREZ
-------------------------------
Name: Luis Perez
Title: Assistant Vice President
