Exhibit 10.5

NONCOMPETITION AGREEMENT

BETWEEN

THE TIMKEN COMPANY

AND

TIMKENSTEEL CORPORATION

Dated June 30, 2014

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I

  DEFINITIONS      2   

1.1

  Certain Definitions      2   

ARTICLE II

  TIMKEN NONCOMPETITION COVENANTS      5   

2.1

  Restrictions      5   

2.2

  Timken Exception for Stock Ownership      6   

2.3

  Timken Exception for Acquisition      6   

2.4

  Timken Nonsolicitation      6   

ARTICLE III

  TIMKENSTEEL NONCOMPETITION COVENANTS      6   

3.1

  Restrictions      6   

3.2

  TimkenSteel Exceptions for Stock Ownership      6   

3.3

  TimkenSteel Exception for Acquisition      7   

3.4

  TimkenSteel Nonsolicitation      7   

ARTICLE IV

  TERM      7   

4.1

  Term      7   

ARTICLE V

  DISPUTE RESOLUTION      7   

5.1

  Dispute Process      7   

5.2

  Informal Dispute Resolution      8   

5.3

  Arbitration      9   

5.4

  Interim Relief      10   

5.5

  Remedies; Failure of a Party to Comply with Dispute Resolution Process      10
  

5.6

  Expenses      10   

5.7

  Continuation of Services and Commitments      10   

ARTICLE VI

  MISCELLANEOUS      10   

6.1

  Termination      10   

6.2

  Immediate Right of Termination      10   

6.3

  Amendment and Modification      10   

6.4

  Waiver      11   

6.5

  Notices      11   

6.6

  Entire Agreement      11   

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TABLE OF CONTENTS

(continued)

 

         Page  

6.7

  Execution and Delivery      11   

6.8

  No Third-Party Beneficiaries      12   

6.9

  Governing Law      12   

6.10

  Assignment      12   

6.11

  Severability      12   

6.12

  Modifications      12   

6.13

  Rules of Construction      12   

6.14

  Counterparts      13   

 

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NONCOMPETITION AGREEMENT

This NONCOMPETITION AGREEMENT (this “Agreement”), dated as June 30, 2014 (the
“Effective Date”), is between The Timken Company, an Ohio corporation, and
TimkenSteel Corporation, an Ohio corporation.

RECITALS

A. Pursuant to the Separation and Distribution Agreement (the “Separation
Agreement”) dated as of June 30, 2014, Timken has agreed to distribute to its
stockholders all of the outstanding common shares of TimkenSteel owned by Timken
(the “Distribution”).

B. Before the Distribution, Timken and TimkenSteel operated as an integrated
company for almost 100 years. As a manufacturer of highly engineered bearings,
Timken has relied upon having a reliable source of high quality steel. Beginning
in 1917, Timken opened its first steelmaking plant not only to ensure a supply
of high quality steel, but also to develop metallurgy and steelmaking
technology. In September 2013, Timken’s Board of Directors decided to divide the
two aspects of Timken’s business into two separate operating companies so that
each stand-alone company can focus on its own distinct growth strategy within
its respective core market.

C. Following the Distribution, Timken will continue to conduct the Bearings
Business (as defined in the Separation Agreement) and TimkenSteel will continue
to conduct the Steel Business (as defined in the Separation Agreement).

D. In connection with the Distribution, Timken has transferred certain assets to
TimkenSteel, which may, because of the nature of the assets, contain proprietary
information and/or trade secrets still owned by Timken.

E. TimkenSteel’s employees were formerly employees of Timken and, because of the
synergies and interactions between the two aspects of Timken’s business before
the Distribution, maintain in their minds and memories proprietary information
and trade secrets owned by Timken.

F. Employees remaining with Timken, because of the synergies and interactions
between the two aspects of Timken’s business before the Distribution, maintain
in their minds and memories proprietary information and trade secrets now owned
by TimkenSteel.

G. In connection with the Distribution, the Parties have entered into that
certain Technology Cross License Agreement of even date herewith, pursuant to
which, each Party has licensed the other to use certain intellectual property
owned by the other.

H. The Parties have entered into that certain Research and Development
Collaboration Agreement of even date herewith, pursuant to which the Parties
will collaborate and work together to develop products and processes related to
steel grades and steel processing useful in the manufacture of products in the
Timken Business and the Parties will have access to each other’s relevant
intellectual property for that purpose.

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I. The Parties have entered into that certain Trademark License Agreement of
even date herewith that permits TimkenSteel to continue to use “TIMKEN” in the
Steel Business under the terms set forth therein in order to avoid trade and
consumer confusion.

J. The Parties have entered into that certain Supply Agreement of even date
herewith under which TimkenSteel will continue to supply and Timken will
continue to purchase highly-engineered steels for use in the manufacture of
products included in the Timken Business.

K. In connection with the Distribution and in furtherance of the aims of each of
the agreements described above, to permit Timken and TimkenSteel each to tailor
their respective business strategies to best address market opportunities in
their respective industries and to permit the shareholders of Timken and
TimkenSteel to enjoy the anticipated benefits of the separation of Timken into
two separate entities and maintain each Party’s value and goodwill, it is
necessary for each Party to temporarily limit its activities in the other
Party’s business as set forth herein.

In consideration of the foregoing and the mutual covenants and agreements
contained in this Agreement, and intending to be legally bound hereby, the
Parties agree as follows:

ARTICLE I

DEFINITIONS

1.1 Certain Definitions. The following terms, as used herein, have the following
meanings:

“Agreement” has the meaning set forth in the Preamble.

“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by Law to close.

“Compete” or “Competing” means (a) to conduct or participate or engage in, or
bid for or otherwise pursue, a business, whether as a principal, partner, joint
venturer, or owner of any debt or equity interest in any Person or business that
conducts, participates or engages in, or bids for or otherwise pursues, a
business or (b) to directly solicit customers in combination with or on behalf
of any Person or business that conducts, participates or engages in, or bids for
or otherwise pursues, a business. For avoidance of doubt, “Compete” or
“Competing” does not include: (i) designing or manufacturing components or
services for the designing or manufacturing Party’s internal use; or
(ii) designing or manufacturing components or services that are fully consumed
by the designing or manufacturing Party in its manufacturing process(es), or
transformed or incorporated into goods or services that said Party is not
otherwise restricted from designing, manufacturing or selling under this
Agreement.

 

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“Dispute” has the meaning set forth in Section 5.1(a).

“Dispute Notice” has the meaning set forth in Section 5.2.

“Distribution” has the meaning set forth in the Recitals.

“Distribution Date” has the meaning set forth in the Separation Agreement.

“Finished Components” means the following finished components made from
Materials (whether the Materials are of TimkenSteel or third party manufacture):
hydraulic cylinders, raised bore drill rods and blast hole drill pipes.

“Governance Committee” has the meaning set forth in Section 5.1(b).

“Governmental Authority” means any federal, state, local or foreign government
(including any political or other subdivision or judicial, legislative,
executive or administrative branch, agency, commission, authority or other body
of any of the foregoing).

“JAMS” means Judicial Arbitration and Mediation Services, Inc.

“Law” means any statute, law, ordinance, regulation, rule, code or other
requirement of a Governmental Authority or any order, writ, judgment,
injunction, decree or award entered by or with any Governmental Authority.

“Materials” means alloy steel (including, without limitation, special bar
quality steel, carbon steel, micro alloy steel, high alloy and stainless steel),
in ingots, blooms, billets, bars and tubes, which may be heat treated, bored or
cold finished.

“Mediation Period” has the meaning set forth in Section 5.2(e).

“Party” and “Parties” mean Timken and TimkenSteel individually or collectively.

“Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
Governmental Authority.

“Semi-finished Components” means Semi-finished components made from Materials
(whether the Materials are of TimkenSteel or third party manufacture).
“Semi-finished” means a state of manufacture in which substantive additional
manufacturing operations are required to transform the component into a finished
component ready for assembly and ultimate use in its intended end application.
Examples of components that TimkenSteel currently supplies or contemplates
supplying in the future in Semi-finished state include: forgings, cylinders,
drilling rods, raised bore drill rods, drill collar blanks, flow ports, swivel
joints, stator tubes, blast hole drill pipe, liner hangers, collars, adaptors,
tool joints, bushings, whipstock, down-the-hole hammers, constant velocity
joints, pins, loose gears, cylinder liners, green rings, cv joint cages, shafts,
axles, clutch races, gun barrels, mortar barrels, bomb bodies, motor housings,
and cold drawn products.

 

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“Separation Agreement” has the meaning set forth in the Recitals.

“Steel Services” means the following services performed for a fee:

(a) The following value-added services performed on or with respect to Materials
of third parties, including such services where the output, after such services
have been performed by TimkenSteel, is in the form of Semi-finished Components,
but excluding aftermarket services:

precision machining

heat-treating, including the Advantec process and materials

boring

honing, skiving, cutting, drilling, broaching, roller burnishing, grinding,
precision drilling, trepanning, turning, straightening, deburring, and milling

(b) The following metallurgical services performed on or with respect to
Materials of third parties:

steel failure analysis

metallurgical testing

experimental steel heats

clean steel modeling

steel life testing and modeling for gears

steel life testing for bearings

(c) Warehousing and inventory services exclusively for products within the
TimkenSteel Business

(d) Master distribution services exclusively for products within the TimkenSteel
Business

For the avoidance of doubt, scrap metal and scrap metal processing services are
not within the Steel Services.

“Subsidiary” of any Person means another Person (a) in which the first Person
owns, directly or indirectly, an amount of the voting securities, voting
partnership interests or other voting ownership sufficient to elect at least a
majority of its board of directors or other governing body (or, if there are no
such voting securities, interests or ownership, a majority of the equity
interests in such other Person), or (b) of which the first Person otherwise has
the power to direct the management and policies. A Subsidiary may be owned
directly or indirectly by such first Person or by another Subsidiary of such
first Person.

“Term” has the meaning set forth in Section 4.1.

 

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“Timken” means The Timken Company and its direct and indirect Subsidiaries,
other than TimkenSteel.

“Timken Business” means:

(a) the design, manufacture and/or sale of finished bearings products and
finished components for bearings, including tapered roller bearings, precision
cylindrical and ball bearings, needle bearings, and spherical and cylindrical
roller bearings;

(b) the design, manufacture and/or sale of finished products and finished
components of the category marketed and sold by Timken on or before the
Distribution Date for mechanical power transmission applications, including
chains, couplings, augers, gear drives and gear boxes, sensors, mechanical
seals, and lubrication systems;

(c) the design, manufacture and/or sale of Aerospace systems and finished
products and components of the category marketed and sold by Timken on or before
the Distribution Date for Aerospace systems, including transmissions, turbine
engine components, gears and rotor-head assemblies and housings, airfoils (such
as blades, vanes, rotors and diffusers), and nozzles;

(d) aftermarket services related to the systems, products and components
described in clauses (a), (b) and (c) above marketed and sold by Timken on or
before the Distribution Date, including bearing repair, gear drive and gearbox
repair, motor rewind/repair, transmission and engine overhaul, as well as
component reconditioning and supply of replacement parts and accessory systems;
and

(e) the design, manufacture and/or sale of pumps and motors, other than mud
motors.

“TimkenSteel” means TimkenSteel Corporation and its direct and indirect
Subsidiaries.

“TimkenSteel Business” means: (i) the design, manufacture and/or sale of
(a) Materials, (b) Semi-finished Components marketed and sold by TimkenSteel as
of the Distribution Date and (c) Finished Components; and (ii) supply of Steel
Services sold by TimkenSteel as of the Distribution Date.

ARTICLE II

TIMKEN NONCOMPETITION COVENANTS

2.1 Restrictions. During the Term and subject to the exclusions, exceptions and
limitations expressly set forth in this Agreement, Timken will not Compete,
directly or indirectly, in the TimkenSteel Business anywhere in the world. For
the avoidance of doubt, Timken shall not be restricted from Competing with
respect to: (i) any Semi-finished Components used in or related in any manner to
the Timken Business or (ii) any Steel Services used in or related in any manner
to the Timken Business.

 

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2.2 Timken Exception for Stock Ownership. Notwithstanding Section 2.1, nothing
in this Agreement will restrict Timken from owning less than 5% of the
outstanding stock of any publicly traded corporation.

2.3 Timken Exception for Acquisition. Notwithstanding Section 2.1, nothing in
this Agreement will restrict Timken from acquiring an entity, a portion of which
competes with TimkenSteel in the TimkenSteel Business provided that (a) the
portion of the acquired entity that competes with TimkenSteel in the TimkenSteel
Business represents no more than (i) 10% of the acquired entity or (ii) total
sales of $25 million or (b) Timken divests the portion of the acquired entity
which competes with TimkenSteel in the TimkenSteel Business within 180 days of
the acquisition.

2.4 Timken Nonsolicitation. During the Term, Timken will not, directly or
indirectly, on its own behalf or in conjunction with any person or legal entity,
recruit, solicit, or induce, or attempt to recruit, solicit or induce, any
non-clerical employee of TimkenSteel to terminate his or her employment
relationship with TimkenSteel. The foregoing restriction does not include the
placement of general advertisements for employment with Timken in the same types
of print or electronic publications used by Timken to advertise for employment
prior to the Effective Date and consistent with Timken practice prior to the
Effective Date. Timken will advise any third parties recruiting on Timken’s
behalf of the obligation set forth in this Section 2.4 and will direct those
third parties to comply with that obligation.

ARTICLE III

TIMKENSTEEL NONCOMPETITION COVENANTS

3.1 Restrictions. During the Term and subject to the exclusions, exceptions and
limitations expressly set forth in this Agreement, TimkenSteel will not Compete,
directly or indirectly, in the Timken Business anywhere in the world. For the
avoidance of doubt, TimkenSteel shall not be restricted from Competing with
respect to the supply of:

(a) the following finished components: (i) Finished Components, (ii) clutch
races, (iii) bushings, (iv) pins, (v) collars, and (vi) finished loose gears
(except finished loose gears for Aerospace systems as described in clause (c) of
the definition of Timken Business);

(b) finished components (except to the extent included in the Timken Business)
within the following applications: (i) top-hole and down-hole hammers, (ii) well
heads and (iii) down-hole drill strings; and

(c) aftermarket services related to the items in clauses (a) and (b).

3.2 TimkenSteel Exceptions for Stock Ownership. Notwithstanding Section 3.1,
nothing in this Agreement will restrict TimkenSteel from owning less than 5% of
the outstanding stock of any publicly traded corporation.

 

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3.3 TimkenSteel Exception for Acquisition. Notwithstanding Section 3.1, nothing
in this Agreement will restrict TimkenSteel from acquiring an entity, a portion
of which competes with Timken in the Timken Business provided that (a) the
portion of the acquired entity that competes with Timken in the Timken Business
represents no more than (i) 10% of the acquired entity or (ii) total sales of
$25 million or (b) TimkenSteel divests the portion of the acquired entity which
competes with Timken in the Timken Business within 180 days of the acquisition.

3.4 TimkenSteel Nonsolicitation. During the Term, TimkenSteel will not, directly
or indirectly, on its own behalf or in conjunction with any person or legal
entity, recruit, solicit, or induce, or attempt to recruit, solicit or induce,
any non-clerical employee of Timken to terminate their employment relationship
with Timken. The foregoing restriction does not include the placement of general
advertisements for employment with TimkenSteel in the same types of print or
electronic publications used by Timken to advertise for employment prior to the
Effective Date and consistent with Timken practice prior to the Effective Date.
TimkenSteel will advise any third parties recruiting on TimkenSteel’s behalf of
the obligation set forth in this Section 3.4 and will direct those third parties
to comply with that obligation.

ARTICLE IV

TERM

4.1 Term. Subject to the provisions of Section 5.1, the term of this Agreement
(the “Term”) will commence on the Effective Date and end on the fifth
anniversary of the Effective Date. The Parties agree said Term is reasonable and
appropriate based upon, inter alia, the proprietary information, trade secrets
and intellectual property shared by the Parties and consideration contributed by
each Party with respect to the separation of TimkenSteel from Timken and forming
the bases of the various agreements described in the Recitals. If, however, a
court of competent jurisdiction in a country shall find that such period is not
permissible with respect to that jurisdiction or country, then in such case,
this Agreement will terminate, with respect to such jurisdiction or country
only, at the end of the maximum period of time permissible under applicable Law,
but shall remain in full force and effect in all other jurisdictions.

ARTICLE V

DISPUTE RESOLUTION

5.1 Dispute Process.

(a) The Parties will use commercially reasonable efforts to resolve
expeditiously and on a mutually acceptable negotiated basis any dispute or
disagreement between the Parties arising out of or relating to this Agreement (a
“Dispute”) exclusively as follows: (i) first, by engaging in an informal dispute
resolution process with the possibility of mediation as provided in Section 5.2;
and (ii) then, if negotiation and mediation fail, by referring the Dispute to
binding arbitration as provided in Section 5.3. Each Party agrees that the
procedures set forth in this ARTICLE V will be the exclusive means for
resolution of any Dispute. The initiation of informal dispute resolution or
arbitration hereunder will toll the applicable statute of limitations for the
duration of any such proceedings.

 

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(b) Within three business days of receipt of a Dispute Notice by either Party
pursuant to Section 5.2(a), TimkenSteel and Timken will form a steering
committee (the “Governance Committee”), which will be comprised of four members,
two of whom will be appointed by TimkenSteel and two of whom will be appointed
by Timken. The Parties will use commercially reasonable efforts to cause their
respective members of the Governance Committee to make a good faith effort to
promptly resolve all Disputes referred to the Governance Committee pursuant to
Section 5.2.

5.2 Informal Dispute Resolution.

(a) The Dispute resolution process will begin with a written notice from one
Party to the other (a “Dispute Notice”), (i) reasonably describing the nature of
the Dispute and the outcome desired by the notifying Party and (ii) requesting
the formation of the Governance Committee and referral of the Dispute to the
Governance Committee for good faith negotiations and resolution.

(b) Following referral of the matter to the Governance Committee, the Parties
will cause the Governance Committee to meet as often as the Parties reasonably
deem necessary in order to gather and furnish to the other all Information with
respect to the Dispute which the Parties believe to be appropriate and germane
in connection with the resolution of the Dispute.

(c) During the course of the negotiation, subject to the Parties’ respective
confidentiality obligations, all reasonable requests made by either Party to the
other for Information will be honored in order that the members of the
Governance Committee may be fully advised in the matter. The specific format for
the Governance Committee’s discussions and negotiations will be left to the
discretion of the Governance Committee but may include the preparation of agreed
upon statements of fact or written statements of position furnished to the other
Party.

(d) If the Governance Committee does not agree to a resolution of a Dispute
within 30 days following the receipt of the Dispute Notice given under
Section 5.2(a), or if a resolution agreed to by the Governance Committee fails
to resolve the Dispute, a Party may by formal notice pursuant to Section 6.5
refer the Dispute for resolution by the Chief Executive Officer (“CEO”) of each
Party, each of whom will have the authority to resolve the Dispute on behalf of
their respective Party. The Parties’ CEOs will promptly meet in person or by
phone to attempt to resolve the Dispute in good faith.

(e) If the Dispute has not been resolved by the Parties’ CEOs within 30 days
following delivery of the formal notice given under Section 5.2(d), either Party
may submit the Dispute for resolution by mediation. The mediation will be
conducted in Canton, Ohio by a single mediator from JAMS. The Parties will
mutually select the mediator from the JAMS neutral panelists list. If the
Parties do not agree on the selection of the mediator within 30 days following
receipt by the Parties of the list of panelists, the mediator will be selected
from the list of neutral panelists pursuant to the rules for selection of
arbitrators in the JAMS Comprehensive Arbitration Rules and Procedures. The
mediator will have 30 days from the date the Dispute is submitted to

 

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him or her (or such longer period as the Parties may mutually agree in writing)
(the “Mediation Period”) to attempt to resolve the dispute, and the Parties will
cooperate fully in the mediation process. The Parties will share equally the
costs, fees and expenses of the mediator and any payments to JAMS for such
mediation. If the Dispute has not been resolved through mediation within the
Mediation Period, each Party may refer the dispute to arbitration in accordance
with Section 5.3.

(f) Except as otherwise independently discoverable, nothing said or disclosed,
nor any document produced, in the course of any negotiations, conferences or
discussions to settle a Dispute pursuant to this Section 5.2 will be offered or
received as evidence or used for impeachment or for any other purpose in any
proceedings, including the arbitration proceedings contemplated in Section 5.3,
but will be considered to have been disclosed for settlement purposes only.

5.3 Arbitration.

(a) If the mediation contemplated by Section 5.2(e) does not resolve the
Dispute, and a Party wishes to pursue its rights relating to such Dispute, then,
except as provided in and subject to Section 5.4, such Dispute will be submitted
to final and binding arbitration as provided in this Section 5.3. Any Dispute
concerning the propriety of the commencement of the arbitration will be finally
settled by such arbitration.

(b) The arbitration will be held in Canton, Ohio in accordance with the JAMS
Comprehensive Arbitration Rules and Procedures. The arbitration will be
conducted by a single arbitrator selected by mutual agreement of the Parties. If
the Parties do not agree on the selection of the arbitrator within 30 days
following receipt by the Parties of the list of panelists, the arbitrator will
be selected from the JAMS list of neutral panelists (exclusive of the mediator),
pursuant to the JAMS Comprehensive Arbitration Rules and Procedures.

(c) The decision of the arbitrator with respect to the Dispute will be final and
non-appealable (other than for fraud) and may be enforced in any court of
competent jurisdiction.

(d) The use of any mediation or other “alternative dispute resolution”
procedures will not be construed under the doctrine of laches, waiver or
estoppel to adversely affect the rights of any party to the Dispute.

(e) Discovery shall be allowed only pursuant to Rule 17 of the JAMS
Comprehensive Arbitration Rules and Procedures.

(f) The Parties will share equally the costs and expenses of the arbitrator, but
each Party shall bear its own costs and expenses associated with participating
in the arbitration, including its attorneys’ and experts’ fees, unless the
arbitrator decides that one Party should be responsible for all costs and
expenses, including the reasonable attorneys’ fees and experts’ fees of the
other Party.

 

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5.4 Interim Relief. Notwithstanding any other provision of ARTICLE V, at any
time during the resolution of a Dispute between the Parties, either Party may
request a court of competent jurisdiction to grant provisional interim relief,
including pre-arbitration attachments or injunctions, solely (a) for the purpose
of preventing or minimizing irreparable harm for which money damages would not
provide adequate relief, or (b) in matters involving the disclosure of such
Party’s Confidential Information. A delay in seeking injunctive relief
attributable to following the procedures of this ARTICLE V or otherwise seeking
to amicably resolve the Dispute with the other Party will not serve as a basis
to deny injunctive relief.

5.5 Remedies; Failure of a Party to Comply with Dispute Resolution Process. The
arbitrators will have no authority or power to limit, expand, alter, amend,
modify, revoke or suspend any condition or provision of this Agreement nor any
right or power to award punitive, exemplary or treble (or other multiple)
damages. If either Party does not act in accordance with this ARTICLE V, then
the other Party may seek all remedies available at law or in equity to enforce
this ARTICLE V.

5.6 Expenses. Except as otherwise provided in this ARTICLE V, each Party will
bear its own costs, expenses and attorneys’ fees in pursuit and resolution of
any Dispute.

5.7 Continuation of Services and Commitments. Unless otherwise agreed in
writing, the Parties will continue to honor all commitments under this Agreement
during the course of the dispute resolution pursuant to this ARTICLE V.

ARTICLE VI

MISCELLANEOUS

6.1 Termination. This Agreement may be terminated by the board of directors of
Timken, in its sole and absolute discretion, at any time prior to the
Distribution Date. In the event of any termination of this Agreement prior to
the Distribution Date, no Party (or any of their respective directors or
officers) will have any liability or further obligation to any other Party with
respect to this Agreement.

6.2 Immediate Right of Termination. A Party will have the right to terminate
this Agreement immediately by giving written notice to the second Party in the
event that: (a) the second Party files a petition in bankruptcy or is
adjudicated to be bankrupt or insolvent, or makes an assignment for the benefit
of creditors or an arrangement pursuant to any bankruptcy law; or (b) if the
second Party discontinues or dissolves its business or if a receiver is
appointed for the second Party or for the second Party’s business and such
receiver is not discharged within ninety (90) days.

6.3 Amendment and Modification. This Agreement may not be amended, modified or
supplemented in any manner, whether by course of conduct or otherwise, except by
an instrument in writing expressly designated as an amendment hereto and signed
by both Parties.

 

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6.4 Waiver. No failure or delay of any Party in exercising any right or remedy
under this Agreement will operate as a waiver thereof, nor will any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, or any course of
conduct, preclude any other or further exercise thereof or the exercise of any
other right or power. Any agreement on the part of any Party to any such waiver
will be valid only if set forth in a written instrument executed and delivered
by a duly authorized officer on behalf of such Party. The rights and remedies of
the Parties under this Agreement are cumulative and are not exclusive of any
rights or remedies that they would otherwise have under Law.

6.5 Notices. All notices and other communications hereunder will be in writing
and will be deemed duly given (a) on the date of delivery if delivered
personally, or if by facsimile or electronic transmission, upon written
confirmation of receipt by facsimile, e-mail or otherwise, (b) on the first
Business Day following the date of dispatch if delivered utilizing a next-day
service by a recognized next-day courier or (c) on the earlier of confirmed
receipt or the fifth Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All
notices hereunder will be delivered to the addresses set forth below, or
pursuant to such other instructions as may be designated in writing by the Party
to receive such notice:

If to Timken:

The Timken Company

4500 Mount Pleasant Street NW

North Canton, Ohio 44720-5450

Attention: Senior Vice President and General Counsel

if to TimkenSteel:

TimkenSteel Corporation

1835 Dueber Avenue, S.W.

Canton, Ohio 44706-2798

Attention: Executive Vice President and General Counsel

6.6 Entire Agreement. This Agreement constitutes the entire agreement between
the parties, and supersedes all prior written agreements, arrangements,
communications and understandings and all prior and contemporaneous oral
agreements, arrangements, communications and understandings among the Parties
with respect to the subject matter of this Agreement. This Agreement will not be
deemed to contain or imply any restriction, covenant, representation, warranty,
agreement or undertaking of any Party with respect to the transactions
contemplated hereby other than those expressly set forth in this Agreement or in
any document required to be delivered hereunder. Except as expressly stated in
this Agreement, there are no agreements or understandings between Timken and
TimkenSteel limiting in any way the extent to which or the means by which each
might choose to compete with the other.

6.7 Execution and Delivery. Notwithstanding any oral agreement or course of
action of the Parties or their representatives to the contrary, no Party to this
Agreement is under any legal obligation to enter into or complete the
transactions contemplated hereby unless and until this Agreement is executed and
delivered by each of the Parties.

 

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6.8 No Third-Party Beneficiaries. Nothing in this Agreement, express or implied,
is intended to or will confer upon any Person other than the Parties and their
respective successors and permitted assigns any legal or equitable right,
benefit or remedy of any nature under, or by reason of, this Agreement.

6.9 Governing Law. This Agreement and all disputes or controversies arising out
of or relating to this Agreement or the transactions contemplated hereby will be
governed by, and construed in accordance with, the Laws of the State of Ohio,
without regard to the conflicts of law rules thereof.

6.10 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned or delegated, in whole or in part, by
operation of law or otherwise, by either Party without the prior written consent
of the other Party, and any such assignment or delegation without such prior
written consent will be null and void. If either Party to this Agreement (or any
of its successors or permitted assigns) (a) consolidates with or merges into any
other Person and will not be the continuing or surviving corporation or entity
of such consolidation or merger or (b) transfers all or substantially all of its
property and/or assets to any Person, then, and in each such case, the Party (or
its successors or permitted assigns, as applicable) will ensure that such Person
assumes all of the obligations of such Party (or its successors or permitted
assigns, as applicable) under this Agreement, in which case the consent
described in the previous sentence will not be required.

6.11 Severability. Whenever possible, each provision or portion of any provision
of this Agreement will be interpreted in such manner as to be effective and
valid under applicable Law, but if any provision or portion of any provision of
this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable Law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or portion of
any provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained in
this Agreement.

6.12 Modifications. If any Governmental Authority determines that this
Agreement, or any part hereof, is unenforceable, it is the intention of the
Parties that such Governmental Authority have the power to modify this Agreement
to the extent necessary to render it fully enforceable and that, as so modified,
it will be enforced.

6.13 Rules of Construction. Interpretation of this Agreement will be governed by
the following rules of construction: (a) words in the singular will be held to
include the plural and vice versa, (b) references to the terms Article, Section,
and paragraph, are references to the Articles, Sections, and paragraphs of this
Agreement unless otherwise specified, (c) the terms “hereof,” “herein,”
“hereby,” “hereto,” and derivative or similar words refer to this entire
Agreement, (d) the word “including” and words of similar import when used in
this Agreement will mean “including without limitation,”

 

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unless otherwise specified, (e) the word “or” will not be exclusive,
(f) references to “written” or “in writing” include in electronic form, (g) the
word “will” will be construed to have the same meaning and effect as the word
“shall”, (h) provisions will apply, when appropriate, to successive events and
transactions, (i) the table of contents and headings contained in this Agreement
are for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement, (j) the Parties have each participated in the
negotiation and drafting of this Agreement and if an ambiguity or question of
interpretation should arise, this Agreement will be construed as if drafted
jointly by the Parties and no presumption or burden of proof will arise favoring
or burdening either Party by virtue of the authorship of any of the provisions
in this Agreement or any interim drafts of this Agreement, and (k) a reference
to any Person includes such Person’s successors and permitted assigns.

6.14 Counterparts. This Agreement may be executed in one or more counterparts,
and by each Party in separate counterparts, each of which when executed will be
deemed to be an original but all of which taken together will constitute one and
the same agreement. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile or portable document format (PDF) will be as
effective as delivery of a manually executed counterpart of any such Agreement.

[Signatures on Following Page]

 

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the
date first written above by their respective duly authorized officers.

 

THE TIMKEN COMPANY By:   /s/ Philip D. Fracassa   Name:   Philip D. Fracassa  
Title:   Chief Financial Officer

 

TIMKENSTEEL CORPORATION By:   /s/ Christopher J. Holding   Name:   Christopher
J. Holding   Title:  

Executive Vice President

and Chief Financial Officer