Exhibit 10.1

EXECUTION VERSION

 

 

 

CUSIP NO. 88738WAC7

REVOLVER CUSIP NO. 88738WAD5

THIRD AMENDED AND RESTATED

CREDIT AGREEMENT

Dated as of June 19, 2015

among

THE TIMKEN COMPANY,

as a Borrower,

BANK OF AMERICA, N.A. and KEYBANK NATIONAL ASSOCIATION,

as Co-Administrative Agents,

WELLS FARGO BANK, N.A.

as Syndication Agent,

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

JPMORGAN CHASE BANK, N.A.,

and PNC BANK, NATIONAL ASSOCIATION,

as Documentation Agents,

KEYBANK NATIONAL ASSOCIATION,

as Paying Agent, L/C Issuer and Swing Line Lender,

and

The Other Lenders Party Hereto

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

KEYBANC CAPITAL MARKETS INC.,

and WELLS FARGO SECURITIES, LLC,

as

Joint Lead Arrangers and Joint Bookrunners

 

 

 

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TABLE OF CONTENTS

 

     

Page

 

Article I DEFINITIONS AND ACCOUNTING TERMS

  1    1.01

Defined Terms.

  1    1.02

Other Interpretive Provisions.

  26    1.03

Accounting Terms.

  26    1.04

Rounding.

  27    1.05

References to Agreements and Laws.

  27    1.06

Times of Day.

  27    1.07

Letter of Credit Amounts.

  27    1.08

Currency Equivalents Generally.

  27   

Article II THE COMMITMENTS AND CREDIT EXTENSIONS

  28    2.01

The Loans.

  28    2.02

Borrowings, Conversions and Continuations of Loans.

  28    2.03

Letters of Credit.

  30    2.04

Swing Line Loans.

  38    2.05

Prepayments.

  40    2.06

Termination or Reduction of Commitments.

  42    2.07

Repayment of Loans.

  43    2.08

Interest.

  43    2.09

Fees.

  43    2.10

Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.

  44    2.11

Evidence of Indebtedness.

  44    2.12

Payments Generally.

  45    2.13

Sharing of Payments.

  47    2.14

Committed Currency Borrowings.

  48    2.15

Cash Collateral.

  49    2.16

Defaulting Lender.

  50    2.17

Designated Borrower.

  52   

Article III TAXES, YIELD PROTECTION AND ILLEGALITY

  53    3.01

Taxes.

  53    3.02

Illegality.

  54    3.03

Inability to Determine Rates.

  55    3.04

Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurocurrency
Rate Loans.

  55    3.05

Funding Losses.

  56    3.06

Matters Applicable to All Requests for Compensation.

  57    3.07

Survival.

  57   

Article IV [RESERVED]

  57   

Article V CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  57    5.01

Conditions of Initial Credit Extension.

  57    5.02

Conditions to all Credit Extensions.

  59   

Article VI REPRESENTATIONS AND WARRANTIES

  59    6.01

Existence, Qualification and Power; Compliance with Laws.

  59   

 

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6.02

Authorization; No Contravention.

  60    6.03

Governmental Authorization; Other Consents.

  60    6.04

Binding Effect.

  60    6.05

Financial Statements; No Material Adverse Effect.

  60    6.06

Litigation.

  61    6.07

No Default.

  61    6.08

Ownership of Property.

  61    6.09

Environmental Compliance.

  61    6.10

Taxes.

  61    6.11

Pension Plans.

  62    6.12

Margin Regulations; Investment Company Act.

  62    6.13

Disclosure.

  62    6.14

Compliance with Laws.

  63    6.15

OFAC.

  63    6.16

Anti-Corruption Laws.

  63    Article VII AFFIRMATIVE COVENANTS   63    7.01

Financial Statements.

  63    7.02

Certificates; Other Information.

  64    7.03

Notices.

  65    7.04

[Reserved]

  65    7.05

Preservation of Existence, Etc.

  65    7.06

Maintenance of Properties.

  65    7.07

Maintenance of Insurance.

  66    7.08

Compliance with Laws.

  66    7.09

Books and Records.

  66    7.10

Inspection Rights.

  66    7.11

Use of Proceeds.

  66    7.12

Covenant to Guarantee Obligations.

  66    7.13

[Reserved]

  67    7.14

Further Assurances.

  67    7.15

Anti-Corruption Laws.

  67    Article VIII NEGATIVE COVENANTS   68    8.01

Liens.

  68    8.02

Acquisitions and Joint Ventures.

  69    8.03

Indebtedness.

  70    8.04

Fundamental Changes.

  70    8.05

Dispositions.

  71    8.06

[Reserved]

  71    8.07

Change in Nature of Business.

  72    8.08

Transactions with Affiliates.

  72    8.09

[Reserved]

  72    8.10

Use of Proceeds.

  72    8.11

Financial Covenants.

  72    8.12

Sanctions.

  72    8.13

Anti-Corruption Laws.

  73    Article IX EVENTS OF DEFAULT AND REMEDIES   73    9.01

Events of Default.

  73    9.02

Remedies upon Event of Default.

  74   

 

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9.03

Application of Funds.

  75    Article X AGENTS   76    10.01

Appointment and Authority.

  76    10.02

Rights as a Lender.

  76    10.03

Exculpatory Provisions.

  77    10.04

Reliance by Agents.

  77    10.05

Delegation of Duties.

  78    10.06

Removal and Resignation of Agents.

  78    10.07

Non-Reliance on Agents and Other Lenders.

  79    10.08

No Other Duties; Etc.

  79    10.09

Agents May File Proofs of Claim.

  79    10.10

Guaranty Matters.

  80    Article XI MISCELLANEOUS   80    11.01

Amendments, Etc.

  80    11.02

Notices and Other Communications; Facsimile Copies.

  82    11.03

No Waiver; Cumulative Remedies; Enforcement.

  84    11.04

Attorney Costs and Expenses.

  84    11.05

Indemnification by Timken.

  85    11.06

Payments Set Aside.

  86    11.07

Successors and Assigns.

  86    11.08

Confidentiality.

  91    11.09

Setoff.

  92    11.10

Interest Rate Limitation.

  93    11.11

Counterparts.

  93    11.12

Integration.

  93    11.13

Survival of Representations and Warranties.

  94    11.14

Severability.

  94    11.15

Tax Forms.

  94    11.16

Replacement of Lenders.

  96    11.17

Judgment.

  96    11.18

Substitution of Currency.

  97    11.19

Governing Law; Jurisdiction, Etc.

  97    11.20

Waiver of Trial by Jury.

  98    11.21

No Advisory or Fiduciary Responsibility.

  99    11.22

USA Patriot Act Notice.

  99    11.23

Electronic Execution of Assignments and Certain Other Documents.

  99   

 

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SCHEDULES

I Certain Timken Stockholders II Existing Letters of Credit 2.01 Commitments and
Pro Rata Shares 6.09 Environmental Matters 6.11 Pension Plans 6.13 Projected
Financial Information 8.01 Existing Liens 8.08 Transactions with Affiliates
11.02 Paying Agent’s Office, Certain Addresses for Notices

EXHIBITS

Form of

A Committed Loan Notice B Swing Line Loan Notice C Revolving Credit Note D
Compliance Certificate E Assignment and Assumption F Joinder Agreement G
Subsidiary Guaranty Agreement H Timken Guaranty Agreement I Designated Borrower
Request and Assumption Agreement J Designated Borrower Notice

 

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THIRD AMENDED AND RESTATED

CREDIT AGREEMENT

This THIRD AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into
as of June 19, 2015, among THE TIMKEN COMPANY, an Ohio corporation (“Timken”),
any Subsidiary of Timken that becomes party hereto pursuant to Section 2.17
(each such Subsidiary, a “Designated Borrower” and, together with Timken, the
“Borrowers” and each a “Borrower”) BANK OF AMERICA, N.A. and KEYBANK NATIONAL
ASSOCIATION, as Co-Administrative Agents, KEYBANK NATIONAL ASSOCIATION, as
Paying Agent, each lender from time to time party hereto (collectively, the
“Lenders” and individually, a “Lender”) and KEYBANK NATIONAL ASSOCIATION, as L/C
Issuer and Swing Line Lender and further amends and restates that certain Second
Amended and Restated Credit Agreement dated as of May 11, 2011 among Timken,
certain financial institutions party thereto and Bank of America, N.A. and
KeyBank National Association, as co-administrative agents (the “Existing Credit
Agreement”).

PRELIMINARY STATEMENTS:

1.           Timken has requested that the Existing Credit Agreement be amended
and restated to make certain modifications thereto.

2.           The Co-Administrative Agents and the Lenders are willing to amend
and restate the Existing Credit Agreement, upon and subject to the terms and
conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

  1.01

Defined Terms.

As used in this Agreement, the following terms have the meanings specified
below:

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Paying Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified. “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.

“Agents” means, collectively, the Co-Administrative Agents and the Paying Agent.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Agreement” has the meaning specified in the preamble hereto.

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“Applicable Rate” means, from time to time, the following percentages per annum,
based upon the Debt Rating as set forth below:

 

Applicable Rate

 

    Pricing      
Level  

 

Debt Ratings    
S&P/Moody’s    

 

Facility Fee    

 

Eurocurrency    
Rate +    

Letters of    
Credit    

 

Base Rate +  

 

1     A- /A3 or better     0.100%     0.90%     0.00%   2     BBB+/Baa1    
0.125%     1.00%     0.00%   3     BBB/Baa2     0.150%     1.10%     0.10%  
4     BBB-/Baa3     0.200%     1.30%     0.30%   5    

BB+/Ba1 or    

worse    

0.250%     1.50%     0.50%  

“Debt Rating” means, as of any date of determination, the rating as determined
by either S&P or Moody’s (collectively, the “Debt Ratings”) of Timken’s
non-credit-enhanced, senior unsecured long-term debt; provided that (a) if the
respective Debt Ratings issued by the foregoing rating agencies differ by one
level, then the Pricing Level for the higher of such Debt Ratings shall apply
(with the Debt Rating for Pricing Level 1 being the highest and the Debt Rating
for Pricing Level 5 being the lowest); (b) if there is a split in Debt Ratings
of more than one level, then the Pricing Level that is one level lower than the
Pricing Level of the higher Debt Rating shall apply; (c) if Timken has only one
Debt Rating, the Pricing Level that is one level lower than that of such Debt
Rating shall apply; and (d) if Timken does not have any Debt Rating, Pricing
Level 5 shall apply.

Initially, the Applicable Rate shall be determined based upon Pricing Level 3.
Thereafter, each change in the Applicable Rate resulting from a publicly
announced change in the Debt Rating shall be effective, in the case of either an
upgrade or a downgrade, during the period commencing on the date of the public
announcement thereof and ending on the date immediately preceding the effective
date of the next such change (and Timken shall promptly provide notice to the
Paying Agent of any such publicly announced change in the Debt Rating).

“Appropriate Lender” means, at any time, (a) with respect to the Revolving
Credit Facility, the Lenders, (b) with respect to the Letter of Credit Sublimit,
(i) the L/C Issuer and (ii) if any Letters of Credit have been issued, or have
been deemed to have been issued, pursuant to Section 2.03(a), the Lenders, and
(c) with respect to the Swing Line Sublimit, (i) the Swing Line Lender and
(ii) if any Swing Line Loans are outstanding pursuant to Section 2.04(a), the
Lenders.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

“Arrangers” means, collectively, MLPF&S, KeyBanc Capital Markets Inc. and Wells
Fargo Securities, LLC, each in its capacity as a joint lead arranger.

“Assignment and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit E or any other form (including electronic documentation
generated by use of an electronic platform) approved by the Co-Administrative
Agents and Timken.

 

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“Attorney Costs” means and includes all reasonable fees, expenses and
disbursements of any one law firm or other external counsel and, if reasonably
necessary, a single external local counsel in each relevant jurisdiction and,
solely in the case of a conflict of interest, one additional counsel in each
relevant jurisdiction.

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

“Audited Financial Statements” means the audited consolidated balance sheet of
Timken and its Subsidiaries for the fiscal year ended December 31, 2014, and the
related consolidated statements of income or operations, shareholders’ equity
and cash flows for such fiscal year of Timken and its Subsidiaries, including
the notes thereto.

“Auto-Renewal Letter of Credit” has the meaning specified in
Section 2.03(b)(iii).

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.06, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 9.02.

“Bank of America” means Bank of America, N.A. and its successors.

“Bank of America Fee Letter” means the letter agreement, dated May 12, 2015,
among Timken, Bank of America and MLPF&S.

“Base Rate” means a rate per annum equal to the greatest of (a) the Prime Rate,
(b) one-half of one percent (0.50%) in excess of the Federal Funds Rate and
(c) the Eurocurrency Rate plus 1.0%; and if Base Rate shall be less than zero,
such rate shall be deemed zero for purposes of this Agreement. Any change in the
Base Rate shall be effective immediately from and after such change in the Base
Rate.

“Base Rate Loan” means a Loan denominated in Dollars that bears interest based
on the Base Rate.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 7.02.

“Borrowing” means a Revolving Credit Borrowing or a Swing Line Borrowing, as the
context may require.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Paying Agent’s Office is located and, if such day
relates to any Eurocurrency Rate Loan, means any such day on which dealings are
conducted by and between banks in the London Eurocurrency interbank market and
banks are open for business in London and in the country of issue of the
currency of such Eurocurrency Rate Loan (or, in the case of a Loan denominated
in Euro, on which the Trans-European Automated Real-Time Gross Settlement
Express Transfer (TARGET) System is open).

 

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“Cash Collateralize” means to pledge and deposit with or deliver to the Paying
Agent, for the benefit of one or more of the L/C Issuer or the Lenders, as
collateral for L/C Obligations or obligations of the Lenders to fund
participations in respect of L/C Obligations, cash or deposit account balances
or, if the Agents and the L/C Issuer shall agree in their sole discretion, other
credit support, in each case pursuant to documentation in form and substance
satisfactory to the Agents and the L/C Issuer. “Cash Collateral” shall have a
meaning correlative to the foregoing and shall include the proceeds of such cash
collateral and other credit support.

“Cash Equivalents” means any of the following types of Investments, to the
extent owned by Timken or any of its Subsidiaries free and clear of all Liens
(other than Liens permitted hereunder):

(a)        readily marketable obligations issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than 12 months from the
date of acquisition thereof; provided that the full faith and credit of the
United States of America is pledged in support thereof;

(b)        readily marketable obligations issued by the District of Columbia,
any state of the United States of America or any political subdivision thereof
(i) having maturities of not more than 12 months from the date of acquisition
thereof, and having an investment grade rating from either S&P or Moody’s (or
the equivalent thereof);

(c)        time deposits or repurchase agreements with, or insured certificates
of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a
Lender or (B) is organized under the laws of the United States of America, any
state thereof or the District of Columbia or is the principal banking subsidiary
of a bank holding company organized under the laws of the United States of
America, any state thereof or the District of Columbia, and is a member of the
Federal Reserve System, (ii) issues (or the parent of which issues) commercial
paper rated as described in clause (d) of this definition and (iii) has combined
capital and surplus of at least $250,000,000, in each case with maturities of
not more than 12 months from the date of acquisition thereof;

(d)        commercial paper or master notes issued by any Person organized under
the laws of any state of the United States of America and rated at least
“Prime-2” (or the then equivalent grade) by Moody’s or at least “A-2” (or the
then equivalent grade) by S& P, in each case with maturities of not more than 6
months from the date of acquisition thereof;

(e)        obligations issued by any Person organized under the laws of any
state of the United States of America (i) having maturities of not more than 12
months from the date of acquisition thereof and (ii) rated at least A by S&P and
at least A2 by Moody’s;

(f)        instruments with average maturities of 12 months or less from the
date of acquisition in mutual funds rated AAA- (or the equivalent thereof) or
better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s;

(g)        Investments, classified in accordance with GAAP as Current Assets of
Timken or any of its Subsidiaries, in money market investment programs
registered under the Investment Company Act of 1940 which are administered by
financial institutions having capital of at least $250,000,000 or its
equivalent, and the portfolios of which are limited solely to Investments of the
character, quality and maturity described in clauses (a), (b), (c), (d),(e) and
(f) of this definition;

 

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(h)        with respect to Foreign Subsidiaries, (i) the approximate foreign
equivalent of any of clauses (a) through (g) above and (ii) other short-term
investments utilized by Foreign Subsidiaries and in accordance with normal
investment practices for cash management in investments analogous to the
foregoing investments in clauses (a) through (g); and

(i)        Investments in investment funds investing at least 90% of their
assets in securities of the types described in clauses (a) through (h) above.

“CDOR” means the rate per annum equal to the Canadian Dealer Offered Rate, or a
comparable or successor rate which rate is approved by the Co-Administrative
Agents, as published on the applicable Bloomberg screen page (or such other
commercially available source providing such quotations as may be designated by
the Co-Administrative Agents from time to time) at or about 10:00 a.m. (Toronto,
Ontario time) two Business Days prior to the commencement of the applicable
Interest Period, for deposits in Canadian dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period.

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.

“CFC” means a Person that is a controlled foreign corporation under Section 957
of the Code.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided, that, notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

“Change of Control” means an event or series of events by which:

(a)        any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit
plan of Timken or its Subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such
plan), other than those Persons listed on Schedule I and the heirs,
administrators or executors of any such Persons and any trust established by or
for the benefit of such Persons, becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have “beneficial ownership” of all securities
that such person or group has the right to acquire (such right, an “option
right”), whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 30% or more of the equity securities of
Timken entitled to vote for members of the board of directors or equivalent
governing body of Timken on a fully-diluted basis (and taking into account all
such securities that such person or group has the right to acquire pursuant to
any option right); or

(b)        during any period of 24 consecutive months, a majority of the members
of the board of directors or other equivalent governing body of Timken cease to
be composed of

 

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individuals (i) who were members of that board or equivalent governing body on
the first day of such period, (ii) whose election or nomination to that board or
equivalent governing body was approved by individuals referred to in clause
(i) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was approved by
individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body.

“Closing Date” means June 19, 2015.

“Co-Administrative Agent” means each of Bank of America and KeyBank in its
capacity as a co-administrative agent under any of the Loan Documents, or any
successor co-administrative agent.

“Code” means the Internal Revenue Code of 1986.

“Commitment” means as to each Lender, its obligation to (a) make Revolving
Credit Loans to Timken and/or any Designated Borrower pursuant to Section 2.01,
(b) purchase participations in L/C Obligations, and (c) purchase participations
in Swing Line Loans, in an aggregate principal Dollar amount at any one time
outstanding not to exceed the amount set forth opposite such Lender’s name on
Schedule 2.01 under the caption “Commitment” or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
Dollar amount may be adjusted from time to time in accordance with this
Agreement.

“Committed Currencies” means Canadian dollars, pounds sterling, Japanese yen,
Euros and other freely transferable currencies satisfactory to the Lenders in
their sole discretion.

“Committed Currency Sublimit” means an amount equal to $250,000,000. The
Committed Currency Sublimit is part of, and not in addition to, the Revolving
Credit Facility.

“Committed L/C Currency Sublimit” means an amount equal to $100,000,000. The
Committed L/C Currency Sublimit is part of, and not in addition to, the Letter
of Credit Sublimit.

“Committed Loan Notice” means a notice of (a) a Revolving Credit Borrowing,
(b) a conversion of Loans from one Type to the other, or (c) a continuation of
Eurocurrency Rate Loans, pursuant to Section 2.02(a), which, if in writing,
shall be substantially in the form of Exhibit A or such other form as may be
approved by the Co-Administrative Agents (including any form on an electronic
platform or electronic transmission system as shall be approved by the
Co-Administrative Agents), appropriately completed and signed by a Responsible
Officer of Timken.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), and any successor statute, and any rules, regulations and orders
applicable thereto.

“Compensation Period” has the meaning specified in Section 2.12(c)(ii).

“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.

“Consolidated EBITDA” means, for any period, for Timken and its Subsidiaries on
a consolidated basis, an amount equal to Consolidated Net Income plus (a) the
following to the extent deducted in calculating such Consolidated Net Income:
(i) Consolidated Interest Charges for such period, (ii) the provision for
federal, state, local and foreign income taxes for such period, as determined in
accordance with GAAP, (iii) depreciation and amortization expense, as determined
in accordance with

 

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GAAP, (iv) other non-recurring charges and expenses of Timken and its
Subsidiaries reducing such Consolidated Net Income which do not represent a cash
item in such period or any future period, (v) any losses realized upon the
Disposition of assets outside the ordinary course of business, as determined in
accordance with GAAP, (vi) the aggregate amount of non-cash impairment,
restructuring, reorganization, implementation, manufacturing rationalization and
other special charges for such period, and (vii) non-cash stock-based
compensation expense for such period and minus (b) the sum of (i) all
non-recurring material non-cash items increasing Consolidated Net Income for
such period, (ii) any gains realized upon the Disposition of assets outside the
ordinary course of business, as determined in accordance with GAAP, and
(iii) payments (net of expenses) received with respect to the United States -
Continued Dumping and Subsidy Offset Act of 2000. Consolidated EBITDA shall be
calculated on a Pro Forma Basis after giving effect to any acquisitions for any
applicable period.

“Consolidated Funded Indebtedness” means, as of any date of determination, for
Timken and its Subsidiaries on a consolidated basis, the sum of (without
duplication) (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money (including Obligations hereunder) and
all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments (which amount, for the avoidance of doubt, includes only the
drawn portion of any line of credit or revolving credit facility), (b) all
purchase money Indebtedness, (c) all direct obligations arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments (which amount, for the
avoidance of doubt, includes only the drawn portion of any line of credit or
revolving credit facility), (d) all obligations in respect of the deferred
purchase price of property or services (other than (i) trade accounts payable in
the ordinary course of business and (ii) earn-outs, hold-backs and other
deferred payment of consideration in connection with Permitted Acquisitions to
the extent not required to be reflected as liabilities on the balance sheet of
Timken and its Subsidiaries in accordance with GAAP), (e) Attributable
Indebtedness, (f) all Off-Balance Sheet Liabilities, (g) without duplication,
all Guarantees with respect to outstanding Indebtedness (other than Indebtedness
that is contingent in nature) of the types specified in clauses (a) through
(f) above of Persons other than Timken or any Subsidiary, and (h) all
Indebtedness of the types referred to in clauses (a) through (g) above of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which Timken or a Subsidiary is a
general partner or joint venturer, unless such Indebtedness is expressly made
non-recourse to Timken or such Subsidiary.

“Consolidated Interest Charges” means, for any period, for Timken and its
Subsidiaries on a consolidated basis, the sum of all interest, premium payments,
debt discount, fees, charges and related expenses of Timken and its Subsidiaries
in connection with borrowed money (including capitalized interest) or in
connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, net of interest income in
accordance with GAAP.

“Consolidated Interest Coverage Ratio” means, as of any date of determination,
the ratio of (a) Consolidated EBITDA for the period of the four consecutive
fiscal quarters most recently ended to (b) Consolidated Interest Charges for
such period.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated
EBITDA for the period of the four consecutive fiscal quarters ended on such
date. The Consolidated Leverage Ratio shall be calculated on a Pro Forma Basis.

“Consolidated Net Income” means, for any period, for Timken and its Subsidiaries
on a consolidated basis, the net income of Timken and its Subsidiaries
(excluding extraordinary gains and extraordinary losses) for that period, as
determined in accordance with GAAP.

 

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“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Control” has the meaning specified in the definition of “Affiliate.”

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

“Current Assets” means, with respect to any Person, all assets of such Person
that, in accordance with GAAP, would be classified as current assets on the
balance sheet of a company conducting a business the same as or similar to that
of such Person, after deducting appropriate and adequate reserves therefrom in
each case in which a reserve is proper in accordance with GAAP.

“Debt Rating” has the meaning specified in the definition of “Applicable Rate.”

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means an interest rate equal to (a) the Applicable Rate, if any,
applicable to Base Rate Loans plus (b) 2.0% per annum; provided, however, that
with respect to a Eurocurrency Rate Loan, the Default Rate shall be an interest
rate equal to the interest rate (including any Applicable Rate) otherwise
applicable to such Loan plus 2.0% per annum, in each case to the fullest extent
permitted by applicable Laws.

“Defaulting Lender” means, subject to Section 2.16(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two Business Days of
the date such Loans were required to be funded hereunder unless such Lender
notifies the Co-Administrative Agents and Timken in writing that such failure is
the result of such Lender’s determination that one or more conditions precedent
to funding (each of which conditions precedent, together with any applicable
default, shall be specifically identified in such writing) has not been
satisfied, or (ii) pay to any Agent, the L/C Issuer, the Swing Line Lender or
any other Lender any other amount required to be paid by it hereunder (including
in respect of its participation in Letters of Credit or Swing Line Loans) within
two Business Days of the date when due, (b) has notified Timken, the
Co-Administrative Agents, the L/C Issuer or the Swing Line Lender in writing
that it does not intend to comply with its funding obligations hereunder, or has
made a public statement to that effect (unless such writing or public statement
relates to such Lender’s obligation to fund a Loan hereunder and states that
such position is based on such Lender’s determination that a condition precedent
to funding (which condition precedent, together with any applicable default,
shall be specifically identified in such writing or public statement) cannot be
satisfied), (c) has failed, within three Business Days after written request by
any Agent or Timken, to confirm in writing to the Co-Administrative Agents and
Timken that it will comply with its prospective funding obligations hereunder
(provided that such Lender shall cease to be a Defaulting Lender pursuant to
this clause (c) upon receipt of such written confirmation by the
Co-Administrative Agents and Timken), or (d) has, or has a direct or indirect
parent company that has, (i) become the subject of a proceeding under any Debtor
Relief Law, or (ii) had appointed for it a receiver, custodian, conservator,
trustee, administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or assets,

 

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including the Federal Deposit Insurance Corporation or any other state or
federal regulatory authority acting in such a capacity; provided that a Lender
shall not be a Defaulting Lender solely by virtue of the ownership or
acquisition of any Equity Interest in that Lender or any direct or indirect
parent company thereof by a Governmental Authority so long as such ownership
interest does not result in or provide such Lender with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by the Co-Administrative
Agents that a Lender is a Defaulting Lender under any one or more of clauses
(a) through (d) above, and of the effective date of such status, shall be
conclusive and binding absent manifest error, and such Lender shall be deemed to
be a Defaulting Lender (subject to Section 2.16(b)) as of the date established
therefor by the Co-Administrative Agents in a written notice of such
determination, which shall be delivered by the Co-Administrative Agents to
Timken, the L/C Issuer, the Swing Line Lender and each other Lender promptly
following such determination.

“Designated Borrower” has the meaning specified in the introductory paragraph
hereto.

“Designated Borrower Notice” has the meaning specified in Section 2.17.

“Designated Borrower Obligations” means with respect to a Designated Borrower,
all advances to, and debts, liabilities, obligations, covenants and duties of,
such Designated Borrower arising under any Loan Document or otherwise, with
respect to any Loan made to such Designated Borrower, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against such Designated Borrower of any
proceeding under any Debtor Relief Laws naming such Designated Borrower as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding. Without limiting the generality of the
foregoing, the Designated Borrower Obligations under the Loan Documents with
respect to a Designated Borrower include (a) the obligation to pay principal,
interest, charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other amounts payable by such Designated Borrower under any Loan
Document and (b) the obligation of such Designated Borrower to reimburse any
amount in respect of any of the foregoing that any Lender, in its sole
discretion, may elect to pay or advance on behalf of such Designated Borrower.
The foregoing shall also include (a) all obligations under any Swap Contract
between such Designated Borrower and any Swap Bank and (b) all obligations under
any Treasury Management Agreement between such Designated Borrower and any
Treasury Management Bank.

“Designated Borrower Request and Assumption Agreement” has the meaning specified
in Section 2.17.

“Designated Jurisdiction” means any country or territory to the extent that such
country or territory itself is the subject of any Sanctions that broadly
prohibit transactions or dealings with that country or territory (currently,
Crimea, Cuba, Iran, North Korea, Sudan and Syria).

“Determination Date” has the meaning specified in Section 2.14(a).

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

“Dollar” and “$” mean lawful money of the United States.

 

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“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of the United States.

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 11.07(b)(v) (subject to such consents, if any, as may be
required under Section 11.07(b)(iii)).

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, and binding judgments, orders,
decrees, Environmental Permits and agreements or governmental restrictions
relating to pollution and the protection of the environment or the release of
any materials into the environment, including those related to releases of
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of Timken, any other Loan Party or any of their
respective Subsidiaries resulting from or based upon violation of any
Environmental Law, or the release or threatened release of any Hazardous
Materials into the environment.

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“Equivalent” means, (a) with respect to a Loan denominated in a Committed
Currency, the Dollar equivalent of the principal amount of such Loan, determined
by the Paying Agent on the basis of its spot rate at approximately 11:00 a.m.,
London time, on the date two (2) Business Days before the date of such Loan, for
the purchase of the relevant Committed Currency with Dollars for delivery on the
date of such Loan, and (b) with respect to any other amount, if denominated in
Dollars, then such amount in Dollars, and otherwise the Dollar equivalent of
such amount, determined by the Paying Agent on the basis of its spot rate at
approximately 11:00 a.m., London time, on the date for which the Dollar
equivalent amount of such amount is being determined, for the purchase of the
relevant Committed Currency with Dollars for delivery on such date; provided,
however, that, in calculating the Equivalent for purposes of determining (i) the
Borrowers’ obligations to prepay Loans pursuant to Section 2.05 hereof, or
(ii) the Borrowers’ ability to request additional Loans pursuant to the
Commitments, the Paying Agent may, in its discretion, on any Business Day
selected by the Paying Agent (prior to the Obligations being Fully Satisfied),
calculate the Equivalent of each Loan denominated in a Committed Currency. The
Paying Agent shall notify Timken of the Equivalent of such Loan denominated in a
Committed Currency or any other amount at the time that Equivalent is
determined.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with Timken within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).

 

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“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) the withdrawal of Timken or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which such entity was a
“substantial employer” as defined in Section 4001(a) (2) of ERISA or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Timken or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate a Pension Plan
or the treatment of a Pension Plan amendment as a termination under Sections
4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to
terminate a Pension Plan; (f) any event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (g) the determination that any Pension
Plan is considered an at-risk plan within the meaning of Section 430 of the Code
or Section 303 of ERISA; or (h) the imposition of any liability under Title IV
of ERISA (including without limitation as a result of any prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan) ,
other than for PBGC premiums due but not delinquent under Section 4007 of ERISA,
upon Timken or any ERISA Affiliate.

“EURIBO Rate” means the rate appearing on Reuters Page EURIBOR01 (or on any
successor or substitute page of such service, or any successor to or substitute
for such service, providing rate quotations comparable to those currently
provided on such page of such service, as determined by the Paying Agent from
time to time for purposes of providing quotations of interest rates applicable
to deposits in Euro by reference to the Banking Federation of the European Union
Settlement Rates for deposits in Euro) at approximately 10:00 a.m., London time,
two Business Days prior to the commencement of the applicable Interest Period,
as the rate for deposits in Euro with a maturity comparable to such Interest
Period or, if for any reason such rate is not available, the average (rounded
upward, if necessary, to the nearest five decimal places) of the respective
rates per annum at which deposits in Euros are offered to the Paying Agent in
London by prime banks in the European interbank eurocurrency market at
approximately 10:00 a.m., London time, two Business Days prior to the
commencement of the such Interest Period in an amount substantially equal to the
Paying Agent’s (in its capacity as a Lender) Eurocurrency Rate Loan comprising
part of such Revolving Credit Borrowing to be outstanding during such Interest
Period and for a period equal to such Interest Period (subject, however, to the
provisions of Section 3.03).

“Euro” means the lawful currency of the European Union as constituted by the
Treaty of Rome which established the European Community, as such treaty may be
amended from time to time and as referred to in the EMU legislation.

“Eurocurrency Rate” means:

(a)        for any Interest Period with respect to any Eurocurrency Rate Loan
denominated in Dollars or any Committed Currency (other than Euros or Canadian
dollars) the rate per annum equal to the London Interbank Offered Rate (“LIBOR”)
or a comparable or successor rate, which rate is approved by the
Co-Administrative Agents, as published on the applicable Bloomberg screen page
(or such other commercially available source providing such quotations of LIBOR
as may be designated by the Paying Agent from time to time) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, for deposits in Dollars or the applicable Committed Currency
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period;

(b)        for any interest rate calculation with respect to a Base Rate Loan on
any date, the rate per annum equal to LIBOR, at approximately 11:00 a.m., London
time determined two

 

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Business Days prior to such date (provided that if such day is not a Business
Day, the next preceding Business Day) for Dollar deposits with a term of one
month commencing that day;

(c)        for any Interest Period with respect to any Eurocurrency Rate Loan
denominated in Euros, the EURIBO Rate; and

(d)        for any Interest Period with respect to any Eurocurrency Rate Loan
denominated in Canadian dollars, CDOR;

provided, (i) if the Eurocurrency Rate shall be less than zero, such rate shall
be deemed zero for purposes of this Agreement and (ii) that to the extent a
comparable or successor rate is approved by the Co-Administrative Agents in
connection herewith, the approved rate shall be applied in a manner consistent
with market practice; provided, further that to the extent such market practice
is not administratively feasible for the Co-Administrative Agents, such approved
rate shall be applied in a manner as otherwise reasonably determined by the
Co-Administrative Agents.

“Eurocurrency Rate Loan” means a Loan (other than a Base Rate Loan) denominated
in Dollars or a Committed Currency that bears interest at a rate based on clause
(a) of the definition of “Eurocurrency Rate”.

“Event of Default” has the meaning specified in Section 9.01.

“Existing Credit Agreement” has the meaning specified in the preamble hereto.

“Existing Letter of Credit” means each letter of credit listed on Schedule II.

“Excluded Subsidiary” means, as of any date of determination, (a) any direct or
indirect Foreign Subsidiary and (b) any direct or indirect Domestic Subsidiary
all or substantially all of the assets of which consist of, directly or
indirectly, the Equity Interests in one or more CFCs.

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Subsidiary
Guaranty Agreement of such Guarantor of such Swap Obligation (or any Guarantee
thereof) is or becomes illegal under the Commodity Exchange Act or any rule,
regulation or order of the Commodity Futures Trading Commission (or the
application or official interpretation of any thereof) by virtue of such
Guarantor’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act (determined after giving
effect to any and all guarantees of such Guarantor’s Swap Obligations by other
Loan Parties) at the time the Subsidiary Guaranty Agreement of such Guarantor
becomes effective with respect to such Swap Obligation. If a Swap Obligation
arises under a Master Agreement governing more than one Swap Contract, such
exclusion shall apply to only the portion of such Swap Obligation that is
attributable to Swap Contracts for which such Subsidiary Guaranty Agreement is
or becomes illegal.

“Facility Fee” has the meaning specified in Section 2.09(a).

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any applicable agreements
entered into pursuant to Section 1471(b)(1) of the Code and any applicable
intergovernmental agreements.

 

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“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to KeyBank on
such day on such transactions as determined by the Paying Agent.

“Foreign Lender” has the meaning specified in Section 11.15(a)(i).

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to the L/C Issuer, such Defaulting Lender’s Pro Rata Share of the
outstanding L/C Obligations other than L/C Obligations as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with
respect to the Swing Line Lender, such Defaulting Lender’s Pro Rata Share of
Swing Line Loans other than Swing Line Loans as to which such Defaulting
Lender’s participation obligation has been reallocated to other Lenders in
accordance with the terms hereof.

“Fully Satisfied” means, with respect to the Obligations as of any date, that,
as of such date, (a) all principal of and interest accrued to such date which
constitute Obligations shall have been irrevocably paid in full in cash, (b) all
fees, expenses and other amounts then due and payable which constitute
Obligations shall have been irrevocably paid in cash, (c) all outstanding
Letters of Credit shall have been (i) terminated, (ii) fully irrevocably Cash
Collateralized or (iii) secured by one or more letters of credit on terms and
conditions, and with one or more financial institutions, reasonably satisfactory
to the L/C Issuer and (d) the Commitments shall have expired or been terminated
in full.

“Fund” means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Granting Lender” has the meaning specified in Section 11.07(h).

 

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“Guarantors” means, (a) after the Springing Guaranty Date, collectively, the
Material Subsidiaries of Timken, if any, that execute and deliver a Subsidiary
Guaranty Agreement pursuant to Section 7.12 and (b) with respect to the
Designated Borrower Obligations, Timken. For purposes of clarification, the
Receivables Subsidiaries and any Excluded Subsidiary shall not be required to
become Guarantors pursuant to Section 7.12.

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing any Indebtedness payable by another
Person (the “primary obligor”) in any manner, whether directly or indirectly,
and including any obligation of such Person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness, (ii) to purchase or lease property, securities or services for the
purpose of assuring the obligee in respect of such Indebtedness of the payment
of such Indebtedness, (iii) to maintain working capital, equity capital or any
other financial statement condition or liquidity or level of income or cash flow
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness, or (iv) entered into for the purpose of assuring in any other
manner the obligee in respect of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness of any other
Person, whether or not such Indebtedness is assumed by such Person (or any
right, contingent or otherwise, of any holder of such Indebtedness to obtain any
such Lien). The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term “Guarantee” as a
verb has a corresponding meaning.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, as regulated
pursuant to any Environmental Law, including petroleum or petroleum distillates,
asbestos or asbestos-containing materials, polychlorinated biphenyls, and radon
gas.

“Honor Date” has the meaning specified in Section 2.03(c)(i).

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a)        all obligations of such Person for borrowed money and all obligations
of such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments (which amount, for the avoidance of doubt, includes only the
drawn portion of any line of credit or revolving credit facility);

(b)        all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

(c)        net obligations of such Person under any Swap Contract;

(d)        all obligations of such Person to pay the deferred purchase price of
property or services (other than (i) trade accounts payable in the ordinary
course of business and (ii) earn-outs, hold-backs and other deferred payment of
consideration in connection with Permitted Acquisitions to the extent not
required to be reflected as liabilities on the balance sheet of Timken and its
Subsidiaries in accordance with GAAP);

 

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(e)        indebtedness (excluding prepaid interest thereon) secured by a Lien
on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse;

(f)        capital leases, Off-Balance Sheet Liabilities and Synthetic Lease
Obligations;

(g)        all obligations of such Person to mandatorily purchase, redeem,
retire, defease or otherwise make any payment, in each case in cash, in respect
of any Equity Interests in such Person or any other Person or any warrants,
rights or options to acquire such Equity Interests, valued, in the case of
redeemable preferred interests, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends; and

(h)        all Guarantees of such Person in respect of any of the foregoing. For
the avoidance of doubt, a Guarantee of any obligation that is not Indebtedness
shall not constitute Indebtedness.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, except to the extent that such
Indebtedness is expressly made non-recourse to such Person. The amount of any
net obligation under any Swap Contract on any date shall be deemed to be the
Swap Termination Value thereof as of such date. The amount of any capital lease
or Synthetic Lease Obligation as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date.

“Indemnitees” has the meaning specified in Section 11.05.

“Information” has the meaning specified in Section 11.08.

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a Eurocurrency Rate
Loan exceeds three months, the respective dates that fall every three months
after the beginning of such Interest Period shall also be Interest Payment
Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last
Business Day of each March, June, September and December and the Maturity Date.

“Interest Period” means, as to each Eurocurrency Rate Loan, the period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted to
or continued as a Eurocurrency Rate Loan and ending on the date one, two, three
or six months thereafter (in each case, subject to availability), as selected by
Timken in its Committed Loan Notice; provided that:

(a)        any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the immediately preceding Business Day;

(b)        any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and

 

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(c)        no Interest Period shall extend beyond the Maturity Date.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit or all or a substantial part of the business of, such
Person. For purposes of covenant compliance, the amount of any Investment shall
be (i) the amount actually invested, without adjustment for subsequent increases
or decreases in the value of such Investment, minus (ii) the amount of dividends
or distributions received in connection with such Investment and any return of
capital or repayment of principal received in respect of such Investment that,
in each case, is received in cash, Cash Equivalents or short-term marketable
debt securities.

“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice, Inc. (or such later version thereof as may be in effect at the time of
issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and Timken (or any Subsidiary) or in favor of the L/C
Issuer and with respect to any such Letter of Credit.

“Joinder Agreement” means a joinder agreement substantially in the form of
Exhibit F executed by a direct or indirect Domestic Subsidiary in accordance
with the provisions of Section 7.12.

“KeyBank” means KeyBank National Association and its successors.

“KeyBank Fee Letter” means the letter agreement, dated May 12, 2015, among
Timken, KeyBank and KeyBanc Capital Markets Inc.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Pro Rata Share.

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Credit Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
(or deemed issuance) thereof or extension of the expiry date thereof, or the
renewal or increase of the amount thereof.

“L/C Issuer” means (a) KeyBank in its capacity as issuer of Letters of Credit
hereunder and/or (b) any other Lender from time to time designated by Timken as
an L/C Issuer with the consent of such

 

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Lender, in its sole discretion, and the Co-Administrative Agents (such consent
not to be unreasonably withheld or delayed), in each case in its capacity as
issuer of Letters of Credit hereunder, or any successor issuer of Letters of
Credit hereunder. For the purposes of the foregoing, the consent of the
Co-Administrative Agents shall not be withheld if (i) the credit rating of
KeyBank is unacceptable to the proposed beneficiary of a Letter of Credit or
(ii) the credit rating of KeyBank could reasonably be expected to result in
additional material costs or expenses being paid, or additional material
obligations being incurred, by Timken or any Subsidiary under or in connection
with any Contractual Obligations to which the proposed beneficiary of a Letter
of Credit is a party. In the event that there is more than one L/C Issuer at any
time, references herein and in the other Loan Documents to the L/C Issuer shall
be deemed to refer to the L/C Issuer in respect of the applicable Letter of
Credit or to all L/C Issuers, as the context requires.

“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings. For all purposes of
this Agreement, if on any date of determination a Letter of Credit has expired
by its terms but any amount may still be drawn thereunder by reason of the
operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be
“outstanding” in the amount so remaining available to be drawn.

“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the L/C Issuer and the Swing Line Lender.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify Timken and the Paying
Agent, which office may include any Affiliate of such Lender or any domestic or
foreign branch of such Lender or such Affiliate. Unless the context otherwise
requires each reference to a Lender shall include its applicable Lending Office.

“Letter of Credit” means any letter of credit issued hereunder, or deemed to
have been issued hereunder, including, without limitation, all Existing Letters
of Credit. A Letter of Credit may be a commercial letter of credit or a standby
letter of credit.

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.

“Letter of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date then in effect (or, if such day is not a Business Day, the next
preceding Business Day).

“Letter of Credit Fees” has the meaning specified in Section 2.03(h).

“Letter of Credit Sublimit” means an amount equal to $100,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Revolving Credit
Facility.

“Leverage Increase Period” means the four fiscal quarters ended immediately
following the consummation of an acquisition with an aggregate purchase price of
at least $200,000,000.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance

 

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on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).

“Loan” means (a) with respect to Timken, an extension of credit by a Lender to
Timken under Article II in the form of a Revolving Credit Loan or a Swing Line
Loan and (b) with respect to any Designated Borrower, an extension of credit by
a Lender to such Designated Borrower under Article II in the form of a Revolving
Credit Loan.

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the
Subsidiary Guaranty Agreement, (d) the Timken Guaranty Agreement, (e) the Bank
of America Fee Letter, (f) the KeyBank Fee Letter, (g) the Wells Fargo Fee
Letter, (h) each Letter of Credit Application, (i) each Joinder Agreement and
(j) the Designated Borrower Request and Assumption Agreement.

“Loan Parties” means, collectively, Timken, the Designated Borrowers and, after
the Springing Guaranty Date, each Guarantor.

“Master Agreement” has the meaning set forth in the definition of “Swap
Contract.”

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the business or financial condition of Timken and its
Subsidiaries taken as a whole, (b) a material adverse effect upon the rights and
remedies of any Agent or any Lender under any Loan Document, or (c) a material
impairment of the ability of any Borrower to perform its payment obligations
under any Loan Document to which it is a party.

“Material Subsidiary” means each Domestic Subsidiary now existing or hereafter
acquired or formed, and each successor thereto, which, after giving pro forma
effect to such acquisition or formation, or at any other time thereafter,
(i) Timken and its other Subsidiaries’ Investments in such Domestic Subsidiary
exceeds 5.0% of the total assets of Timken and its Subsidiaries on a
consolidated basis, (ii) Timken and its other Subsidiaries’ proportionate share
of the total assets (after intercompany eliminations) of such Domestic
Subsidiary exceeds 5.0% of the total assets of Timken and its Subsidiaries on a
consolidated basis, or (iii) Timken and its other Subsidiaries’ equity in the
income from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of such Domestic
Subsidiary exceeds 5.0% of the income of Timken and its Subsidiaries on a
consolidated basis, as of the last day of the most recently completed fiscal
quarter of Timken with respect to which, pursuant to clauses (a) or (b) of
Section 7.01, financial statements have been, or are required to have been,
delivered by Timken.

“Maturity Date” means the earlier of (i) June 19, 2020 and (ii) the date of
termination in whole of the Commitments, the Letter of Credit Sublimit, and the
Swing Line Sublimit pursuant to Section 2.06 or 9.02(b).

“Maximum Rate” has the meaning specified in Section 11.10.

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash
Collateral consisting of cash or deposit account balances provided to reduce or
eliminate Fronting Exposure during the existence of a Defaulting Lender, an
amount equal to 100% of the Fronting Exposure of the L/C Issuer with respect to
Letters of Credit issued and outstanding at such time, (ii) with respect to Cash
Collateral consisting of cash or deposit account balances provided in accordance
with the provisions of Section 2.15(a)(i) or (a)(ii), an amount equal to 100% of
the Outstanding Amount of all LC Obligations, and (iii) otherwise, an amount
determined by the Paying Agent and the L/C Issuer in their sole discretion.

 

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“MLPF&S” means Merrill Lynch, Pierce, Fenner & Smith Incorporated and its
successors.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which Timken or any ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.

“Multiple Employer Plan” means a plan described in Section 4064 of ERISA to
which Timken or any ERISA Affiliate is obligated to make contributions.

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that requires the approval of all Lenders or all affected
Lenders in accordance with the terms of Section 11.01 and is otherwise approved
by the Required Lenders.

“Non-Guarantor Subsidiary” means any Subsidiary of Timken that is not a
Guarantor.

“Nonrenewal Notice Date” has the meaning specified in Section 2.03(b)(iii).

“Note” means a Revolving Credit Note.

“NPL” means the National Priorities List under CERCLA.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding. Without limiting the generality of the foregoing, the
Obligations of the Loan Parties under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit commissions, charges,
expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts
payable by any Loan Party under any Loan Document and (b) the obligation of any
Loan Party to reimburse any amount in respect of any of the foregoing that any
Lender, in its sole discretion, may elect to pay or advance on behalf of such
Loan Party. The foregoing shall also include (a) all obligations under any Swap
Contract between any Loan Party and any Swap Bank and (b) all obligations under
any Treasury Management Agreement between any Loan Party and any Treasury
Management Bank; provided that the “Obligations” of a Guarantor shall exclude
any Excluded Swap Obligations with respect to such Guarantor.

“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

“Off-Balance Sheet Liabilities” means, with respect to any Person as of any date
of determination thereof, without duplication and to the extent not included as
a liability on the consolidated balance sheet of such Person and its
Subsidiaries in accordance with GAAP: (a) with respect to any asset
securitization transaction (including any accounts receivable purchase facility)
(i) the unrecovered investment of purchasers or transferees of assets so
transferred and (ii) any other payment, recourse, repurchase, hold harmless,
indemnity or similar obligation of such Person or any of its Subsidiaries in
respect of assets transferred or payments made in respect thereof, other than
limited recourse provisions that are customary for transactions of such type and
that neither (x) have the effect of limiting the loss or credit risk of such

 

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purchasers or transferees with respect to payment or performance by the obligors
of the assets so transferred nor (y) impair the characterization of the
transaction as a true sale under applicable Laws (including Debtor Relief Laws);
or (b) the monetary obligations under any sale and leaseback transaction which
does not create a liability on the consolidated balance sheet of such Person and
its Subsidiaries.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Taxes” has the meaning specified in Section 3.01(b).

“Outstanding Amount” means (i) with respect to Revolving Credit Loans and Swing
Line Loans on any date, the aggregate outstanding principal amount thereof
(based on the Equivalent in Dollars at such time) after giving effect to any
borrowings and prepayments or repayments of Revolving Credit Loans and Swing
Line Loans, as the case may be, occurring on such date; and (ii) with respect to
any L/C Obligations on any date, the amount of such L/C Obligations on such date
after giving effect to any L/C Credit Extension occurring on such date and any
other changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements of outstanding unpaid drawings under
any Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date.

“Participant” has the meaning specified in Section 11.07(d).

“Participant Register” has the meaning specified in Section 11.07(d).

“Paying Agent” means KeyBank in its capacity as a paying agent under any of the
Loan Documents, or any successor paying agent.

“Paying Agent’s Office” means the Paying Agent’s address and, as appropriate,
account as set forth on Schedule 11.02, or such other address or account as the
Paying Agent may from time to time notify Timken and the Lenders.

“Payment Office” means, for any Committed Currency, such office of KeyBank as
shall be from time to time selected by the Paying Agent and notified by the
Paying Agent to Timken and the Lenders.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Act” means the Pension Protection Act of 2006.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and set forth in, with respect to plan years ending prior to the effective
date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each
as in effect prior to the Pension Act and, thereafter, Section 412, 430 and 436
of the Code and Sections 302 and 303 of ERISA.

 

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“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA) (excluding a Multiple Employer Plan or a
Multiemployer Plan) that is maintained or is contributed to by Timken and any
ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the
Pension Funding Rules.

“Permitted Acquisition” means any purchase or other acquisition of all of the
Equity Interests in, or all or substantially all of the property and assets of,
any Person permitted by Section 8.02(i).

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any “employee benefit plan,” within the meaning of Section 3(3) of
ERISA (including a Pension Plan and excluding a Multiemployer Plan or a Multiple
Employer Plan), maintained for employees of Timken or any ERISA Affiliate and to
which Timken or any ERISA Affiliate is required to contribute on behalf of any
of its employees.

“Platform” has the meaning specified in Section 7.02.

“Pre-Approved Accounting Firm” means any of the following: Ernst & Young LLP,
PricewaterhouseCoopers LLP, Deloitte LLP or KPMG LLP.

“Primary Currency” has the meaning specified in Section 11.17(c).

“Prime Rate” means the interest rate established from time to time by the Paying
Agent as the Paying Agent’s prime rate, whether or not such rate is publicly
announced. The Prime Rate may not be the lowest interest rate charged by the
Paying Agent for commercial or other extensions of credit. Each change in the
Prime Rate shall be effective immediately from and after such change.

“Priority Debt” means, as of any date, the sum (without duplication) of the
(a) unsecured Indebtedness of the Non-Guarantor Subsidiaries of Timken (other
than unsecured intercompany Indebtedness) and (b) secured Indebtedness of Timken
and its Subsidiaries.

“Pro Forma Basis” means, for purposes of calculating the Consolidated Leverage
Ratio, that any Disposition of a Sold Business or Acquisition shall be deemed to
have occurred as of the first day of the most recent four consecutive fiscal
quarter period preceding the date of such transaction for which Timken has
delivered financial statements pursuant to Section 7.01(a) or (b). In connection
with the foregoing, (a) with respect to any Disposition of a Sold Business,
income statement and cash flow statement items (whether positive or negative)
attributable to the property disposed of shall be excluded to the extent
relating to any period occurring prior to the date of such transaction and
(b) with respect to any Acquisition income statement items (whether positive or
negative) attributable to the Person or property acquired shall be included to
the extent relating to any period applicable in such calculations to the extent
(i) such items are not otherwise included in such income statement items for
Timken and its Subsidiaries in accordance with GAAP or in accordance with any
defined terms set forth in Section 1.01 and (ii) such items are supported by
audited financial statements, if available, or such other information reasonably
satisfactory to the Co-Administrative Agents.

“Pro Rata Share” means, with respect to each Lender at any time, a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Commitment of such Lender at such time
and the denominator of which is the amount of the Aggregate Commitments at such
time; provided that if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section

 

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9.02, then the Pro Rata Share of each Lender shall be determined based on the
Pro Rata Share of such Lender immediately prior to such termination and after
giving effect to any subsequent assignments made pursuant to the terms hereof.
The initial Pro Rata Share of each Lender is set forth opposite the name of such
Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which
such Lender becomes a party hereto, as applicable.

“Public Lender” has the meaning specified in Section 7.02.

“Receivables Facility” has the meaning specified in Section 8.05(g).

“Receivables Subsidiary” has the meaning specified in Section 7.12.

“Register” has the meaning specified in Section 11.07(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of
such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Revolving Credit Loans, a Committed Loan Notice, (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice.

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the Commitment of each Lender to
make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 9.02, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Lender for purposes of this
definition); provided that, as set forth in Section 2.16, the Commitment of, and
the portion of the Total Outstandings held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders.

“Responsible Officer” means the chief executive officer, president, chief
financial officer, vice president, corporate controller, treasurer, or assistant
treasurer of a Loan Party and, with respect to certificates to be delivered
pursuant to Sections 5.01 and 5.02, notices to be delivered pursuant to
Section 7.03 and the requirements of Section 9.01, the general counsel or the
secretary of Timken. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous
Revolving Credit Loans of the same Type and, in the case of Eurocurrency Rate
Loans, having the same Interest Period made by each of the Lenders pursuant to
Section 2.01.

“Revolving Credit Borrowing Minimum” means, in respect of Revolving Credit Loans
denominated in Dollars, $5,000,000, and in respect of any Revolving Credit Loans
denominated in any Committed Currency, the Equivalent of $5,000,000.

 

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“Revolving Credit Borrowing Multiple” means, in respect of Revolving Credit
Loans denominated in Dollars, $1,000,000, and in respect of Revolving Credit
Loans denominated in any Committed Currency, the Equivalent of $1,000,000.

“Revolving Credit Facility” means, at any time, the aggregate amount of the
Lenders’ Commitments at such time.

“Revolving Credit Loan” has the meaning specified in Section 2.01.

“Revolving Credit Note” means a promissory note of any Borrower payable to the
order of any Lender, in substantially the form of Exhibit C, evidencing the
aggregate indebtedness of such Borrower to such Lender resulting from the
Revolving Credit Loans made by such Lender.

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The
McGraw-Hill Companies, Inc., and any successor thereto.

“Sanction(s)” means any sanction administered or enforced by the United States
Government (including OFAC), the United Nations Security Council, the European
Union or Her Majesty’s Treasury of the United Kingdom (“HMT”).

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Sold Business” means any material Person, property, business or asset sold,
transferred or otherwise disposed of by Timken or any Subsidiary, other than in
the ordinary course of business.

“Solvent” and “Solvency” mean, with respect to any Person, and its Subsidiaries
on a consolidated basis, on any date of determination, that on such date (a) the
fair value of the property of such Person, and its Subsidiaries on a
consolidated basis, is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, and its Subsidiaries
on a consolidated basis, (b) the present fair salable value of the assets of
such Person, and its Subsidiaries on a consolidated basis, is not less than the
amount that will be required to pay the probable liability of such Person, and
its Subsidiaries on a consolidated basis, on its debts as they become absolute
and matured, (c) such Person, and its Subsidiaries on a consolidated basis, does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person’s ability to pay such debts and liabilities as they mature
and (d) such Person, and its Subsidiaries on a consolidated basis, is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which the property of such Person, and its Subsidiaries on a
consolidated basis, would constitute an unreasonably small capital. The amount
of contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.

“SPC” has the meaning specified in Section 11.07(h).

“Springing Guaranty Date” means the date upon which both the corporate credit
rating of Timken is BB+ or less (or not rated) by S&P and the corporate family
rating of Timken is Ba1 or less (or not rated) by Moody’s.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or

 

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interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
Timken.

“Subsidiary Guaranty Agreement” means the Subsidiary Guaranty Agreement made by
the Guarantors (other than Timken) in favor of the Co-Administrative Agents and
the Lenders substantially in the form of Exhibit G.

“Swap Bank” means (a) any Person that is a Lender or an Affiliate of a Lender at
the time that it becomes a party to a Swap Contract with any Loan Party and
(b) any Lender or Affiliate of a Lender that is party to a Swap Contract with
any Loan Party in existence on the Closing Date.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Swap Obligations” means with respect to any Guarantor any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

“Swing Line Lender” means KeyBank in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B or such other form as approved by the Co-Administrative Agents
(including any form on an electronic platform or electronic

 

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transmission system as shall be approve by the Co-Administrative Agents),
appropriately completed and signed by a Responsible Officer of Timken.

“Swing Line Sublimit” means an amount equal to the lesser of (a) $50,000,000 and
(b) the Commitments. The Swing Line Sublimit is part of, and not in addition to,
the Revolving Credit Facility.

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

“Taxes” has the meaning specified in Section 3.01(a).

“Threshold Amount” means $80,000,000.

“Timken” has the meaning specified in the introductory paragraph.

“Timken Guaranty Agreement” means the Guaranty Agreement made by Timken in favor
of the Co-Administrative Agents and the Lenders substantially in the form of
Exhibit H.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

“Treasury Management Agreement” means any agreement governing the provision of
treasury or cash management services, including deposit accounts, overdraft,
credit or debit card, funds transfer, automated clearinghouse, zero balance
accounts, returned check concentration, controlled disbursement, lockbox,
account reconciliation and reporting and trade finance services and other cash
management services.

“Treasury Management Bank” means (a) any Person that is a Lender or an Affiliate
of a Lender at the time that it becomes a party to a Treasury Management
Agreement with any Loan Party and (b) any Lender or Affiliate of a Lender that
is a party to a Treasury Management Agreement with any Loan Party in existence
on the Closing Date.

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurocurrency Rate Loan.

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and
Practice for Documentary Credits, International Chamber of Commerce (“ICC”)
Publication No. 600 (or such later version thereof as may be in effect at the
time of issuance).

“United States” and “U.S.” mean the United States of America.

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

“USA Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)).

“U.S. Person” means any Person that is a “United States person” as defined in
Section 7701(a)(30) of the Code.

 

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“Wells Fargo Fee Letter” means the letter agreement, dated May 12, 2015, among
Timken, Wells Fargo Bank, National Association and Wells Fargo Securities, LLC.

 

  1.02

Other Interpretive Provisions.

With reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:

(a)        The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.

(b)        (i)           The words “herein,” “hereto,” “hereof” and “hereunder”
and words of similar import when used in any Loan Document shall refer to such
Loan Document as a whole and not to any particular provision thereof.

(ii)      Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.

(iii)    The term “including” is by way of example and not limitation.

(iv)     The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

(v)      Any reference herein to any Person shall be construed to include such
Person’s successors and assigns.

(c)        In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through” means “to and
including.”

(d)        Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.

 

  1.03

Accounting Terms.

(a)        All accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein. Notwithstanding the foregoing, for
purposes of determining compliance with any covenant (including the computation
of any financial covenant) contained herein, Indebtedness of Timken and its
Subsidiaries shall be deemed to be carried at 100% of the outstanding principal
amount thereof, and the effects of FASB ASC 825 on financial liabilities shall
be disregarded.

(b)        If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either Timken
or the Required Lenders

 

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shall so request, the Co-Administrative Agents, the Lenders and Timken shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders); provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) Timken shall provide to the Co-Administrative Agents and
the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.

(c)        All obligations of any Person that are or would be characterized as
operating lease obligations in accordance with GAAP on the Closing Date (whether
or not such operating lease obligations were in effect on such date) shall
continue to be accounted for as operating lease obligations (and not as
capitalized lease obligations) for purposes of this Agreement regardless of any
change in GAAP following the Closing Date that would otherwise require such
obligations to be recharacterized (on a prospective or retroactive basis or
otherwise) as capitalized lease obligations.

 

  1.04

Rounding.

Any financial ratios required to be maintained by Timken pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by
which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).

 

  1.05

References to Agreements and Laws.

Unless otherwise expressly provided herein, (a) references to Organization
Documents, agreements (including the Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, but only to the extent
that such amendments, restatements, extensions, supplements and other
modifications are not prohibited by any Loan Document; and (b) references to any
Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.

 

  1.06

Times of Day.

Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).

 

  1.07

Letter of Credit Amounts.

Unless otherwise specified, all references herein to the amount of a Letter of
Credit at any time shall be deemed to mean the maximum face amount of such
Letter of Credit at such time after giving effect to all increases thereof
contemplated by such Letter of Credit or the Letter of Credit Application
therefor, whether or not such maximum face amount is in effect at such time.

 

  1.08

Currency Equivalents Generally.

Any amount specified in this Agreement (other than in Articles II, X and XI) or
any of the other Loan Documents to be in Dollars shall also include the
equivalent of such amount in any currency other than Dollars, such equivalent
amount to be determined at the rate of exchange quoted by the Paying Agent in
its principal office at the close of business on the Business Day immediately
preceding any date

 

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of determination thereof, to prime banks in New York, New York for the spot
purchase in the New York foreign exchange market of such amount in Dollars with
such other currency.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

 

  2.01

The Loans.

Subject to the terms and conditions set forth herein, each Lender severally
agrees to make loans (each such loan, a “Revolving Credit Loan”) to each
Borrower from time to time, on any Business Day during the Availability Period,
in an aggregate principal amount (based in respect of any Revolving Credit Loans
to be denominated in a Committed Currency by reference to the Equivalent thereof
in Dollars determined on the date of delivery of the applicable Committed Loan
Notice) not to exceed at any time outstanding the amount of such Lender’s
Commitment; provided, however, that after giving effect to any Revolving Credit
Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments,(ii) the aggregate Outstanding Amount of all Revolving Credit Loans
denominated in a Committed Currency shall not exceed the Committed Currency
Sublimit and (iii) the aggregate Outstanding Amount of the Revolving Credit
Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount
of all L/C Obligations, plus such Lender’s Pro Rata Share of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lender’s Commitment. Within
the limits of each Lender’s Commitment, and subject to the other terms and
conditions hereof, the Borrowers may borrow under this Section 2.01, prepay
under Section 2.05, and reborrow under this Section 2.01. Revolving Credit Loans
may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein.

 

  2.02

Borrowings, Conversions and Continuations of Loans.

(a)        Each Revolving Credit Borrowing, each conversion of Revolving Credit
Loans from one Type to the other, and each continuation of Eurocurrency Rate
Loans shall be made upon Timken’s irrevocable notice to the Paying Agent, which
may be given by telephone. Each such notice must be received by the Paying Agent
not later than (i) 11:00 a.m. three Business Days prior to the requested date of
any Borrowing of, conversion to or continuation of Eurocurrency Rate Loans
denominated in Dollars or of any conversion of Eurocurrency Rate Loans
denominated in Dollars to Base Rate Loans denominated in Dollars, (ii) 4:00 p.m.
four Business Days prior to the requested date of any Revolving Credit Borrowing
consisting of Eurocurrency Rate Loans denominated in any Committed Currency, and
(iii) 11:00 a.m. on the requested date of any Borrowing of Base Rate Loans. Each
telephonic notice by Timken pursuant to this Section 2.02(a) must be confirmed
promptly by delivery to the Paying Agent of a written Committed Loan Notice,
appropriately completed and signed by a Responsible Officer of Timken. Each
Borrowing of, conversion to or continuation of Eurocurrency Rate Loans shall be
in a principal amount of not less than the Revolving Credit Borrowing Minimum or
the Revolving Credit Borrowing Multiple in excess thereof. Except as provided in
Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans
shall be in a principal amount of not less than the Revolving Credit Borrowing
Minimum or the Revolving Credit Borrowing Multiple in excess thereof. Each
Committed Loan Notice (whether telephonic or written) shall specify (i) whether
Timken is requesting a Revolving Credit Borrowing, a conversion of Revolving
Credit Loans from one Type to the other, or a continuation of Eurocurrency Rate
Loans, (ii) the requested date of the Borrowing, conversion or continuation, as
the case may be (which shall be a Business Day), (iii) the principal amount of
Loans to be borrowed, converted or continued, (iv) the Type of Loans to be
borrowed or to which existing Revolving Credit Loans are to be converted, (v) if
such Borrowing is a Revolving Credit Borrowing, the currency of such

 

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Borrowing, which shall be Dollars or a Committed Currency, (vi) if applicable,
the duration of the Interest Period with respect thereto and (vii) whether the
recipient of the Loan is Timken or a specified Designated Borrower. If Timken
fails to specify a Type of Loan in a Committed Loan Notice or if Timken fails to
give a timely notice requesting a conversion or continuation, then the
applicable Revolving Credit Loans shall be made as, or converted to, Base Rate
Loans. Any such automatic conversion to Base Rate Loans shall be effective as of
the last day of the Interest Period then in effect with respect to the
applicable Eurocurrency Rate Loans. If Timken requests a Borrowing of,
conversion to, or continuation of Eurocurrency Rate Loans in any such Committed
Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.

(b)        Following receipt of a Committed Loan Notice, the Paying Agent shall
promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Revolving Credit Loans, and if no timely notice of a conversion or
continuation is provided by Timken, the Paying Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans described in
Section 2.02(a). In the case of a Revolving Credit Borrowing, each Appropriate
Lender shall make the amount of its Loan available to the Paying Agent in
immediately available funds at the Paying Agent’s Office not later than 1:00
p.m. on the Business Day specified in the applicable Committed Loan Notice, in
the case of a Revolving Credit Borrowing consisting of Loans denominated in
Dollars, and before 5:00 p.m. on the date of such Revolving Credit Borrowing, in
the case of a Revolving Credit Borrowing consisting of Eurocurrency Rate Loans
denominated in any Committed Currency. Upon satisfaction of the applicable
conditions set forth in Section 5.02 (and, if such Borrowing is the initial
Credit Extension, Section 5.01), the Paying Agent shall make all funds so
received available to the applicable Borrower in like funds as received by the
Paying Agent either by (i) crediting the account of such Borrower on the books
of KeyBank with the amount of such funds or (ii) wire transfer of such funds, in
each case in accordance with instructions provided to the Paying Agent by such
Borrower; provided, however, that if, on the date a Committed Loan Notice with
respect to a Borrowing denominated in Dollars is given by Timken, there are
Swing Line Loans or L/C Borrowings outstanding, then the proceeds of such
Borrowing shall be applied, first, to the payment in full of any such L/C
Borrowings, second, to the payment in full of any such Swing Line Loans, and
third, to the applicable Borrower as provided above.

(c)        Except as otherwise provided herein, a Eurocurrency Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurocurrency Rate Loan.

(d)        The Paying Agent shall promptly notify Timken and the Lenders of the
interest rate applicable to any Interest Period for Eurocurrency Rate Loans upon
determination of such interest rate. The determination of the Eurocurrency Rate
by the Paying Agent shall be conclusive in the absence of manifest error. At any
time that Base Rate Loans are outstanding, the Paying Agent shall notify Timken
and the Lenders of any change in the Prime Rate used in determining the Base
Rate promptly following the public announcement of such change.

(e)        After giving effect to all Revolving Credit Borrowings, all
conversions of Revolving Credit Loans from one Type to the other, and all
continuations of Revolving Credit Loans as the same Type, there shall not be
more than ten Interest Periods in effect.

(f)        The failure of any Lender to make the Loan to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan

 

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on the date of such Borrowing, but no Lender shall be responsible for the
failure of any other Lender to make the Loan to be made by such other Lender on
the date of any Borrowing.

(g)        Timken may at any time and from time to time, upon prior written
notice by Timken to the Co-Administrative Agents, increase the Aggregate
Commitments (but not the Committed L/C Currency Sublimit and Committed Currency
Sublimit) by up to $250,000,000 with additional Commitments from any existing
Lender or new Commitments from any other Person selected by Timken and approved
by the Co-Administrative Agents (such approval not to be unreasonably withheld);
provided that:

(i)        any such increase shall be in a minimum principal amount of
$10,000,000 and in integral multiples of $5,000,000 in excess thereof;

(ii)        no Default or Event of Default shall exist and be continuing at the
time of any such increase;

(iii)        no existing Lender shall be under any obligation to increase its
Commitment and any such decision whether to increase its Commitment shall be in
such Lender’s sole and absolute discretion;

(iv)        any new Lender shall join this Agreement by executing such joinder
documents required by the Co-Administrative Agents; and

(v)        as a condition precedent to such increase, Timken shall deliver to
the Co-Administrative Agents a certificate of each Borrower and, following the
Springing Guaranty Date, each Guarantor dated as of the date of such increase
signed by a Responsible Officer of such party (A) certifying and attaching the
resolutions adopted by such Loan Party approving or consenting to such increase,
and (B) in the case of the Borrowers, certifying that, before and after giving
effect to such increase, (1) the representations and warranties contained in
Article VI and the other Loan Documents are true and correct in all material
respects on and as of the date of such increase, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and except that for
purposes of this Section 2.02(g), the representations and warranties contained
in subsections (a) and (b) of Section 6.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 7.01, and (2) no Default or Event of Default exists.

The Borrowers shall prepay any Loans owing by such Borrower and outstanding on
the date of any such increase (and pay any additional amounts required pursuant
to Section 3.05) to the extent necessary to keep the outstanding Loans ratable
with any revised Commitments arising from any nonratable increase in the
Commitments under this Section. In connection with any such increase in the
Aggregate Commitments, Schedule 2.01 shall be revised by the Co-Administrative
Agents to reflect the new Commitments and distributed to the Lenders.

 

  2.03

Letters of Credit.

(a)          The Letter of Credit Commitment.

(i)      On the Closing Date, each Existing Letter of Credit shall be deemed to
have been issued hereunder by the L/C Issuer. Subject to the terms and
conditions set

 

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forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the
other Lenders set forth in this Section 2.03, (1) from time to time on any
Business Day during the period from the Closing Date until the Letter of Credit
Expiration Date, to issue Letters of Credit for the account of Timken or any
Subsidiary in Dollars or any Committed Currency, and to amend or renew Letters
of Credit previously issued by it, in accordance with Section 2.03(b), and
(2) to honor drafts under the Letters of Credit; and (B) the Lenders severally
agree to participate in Letters of Credit issued (or deemed to have been issued)
for the account of Timken or any Subsidiary; provided that the L/C Issuer shall
not make any L/C Credit Extension with respect to any Letter of Credit, and no
Lender shall be obligated to participate in any Letter of Credit if as of the
date of such L/C Credit Extension, (w) the Total Outstandings would exceed the
Aggregate Commitments, (x) the aggregate Outstanding Amount of the Loans of any
Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C
Obligations, plus such Lender’s Pro Rata Share of the Outstanding Amount of all
Swing Line Loans would exceed such Lender’s Commitment, (y) the Outstanding
Amount of the L/C Obligations would exceed the Letter of Credit Sublimit and
(z) the Outstanding Amount of all L/C Obligations denominated in a Committed
Currency would exceed the Committed L/C Currency Sublimit. Each request by
Timken for an L/C Credit Extension shall be deemed to be a representation by
Timken that the L/C Credit Extension so requested complies with the conditions
set forth in the proviso to the preceding sentence. Within the foregoing limits,
and subject to the terms and conditions hereof, Timken’s ability to obtain
Letters of Credit shall be fully revolving, and accordingly Timken may, during
the foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.

(ii)      The L/C Issuer shall not be under any obligation to issue any Letter
of Credit if:

(A)        any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from
issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or
request that the L/C Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the L/C
Issuer with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated hereunder)
not in effect on the Closing Date, or shall impose upon the L/C Issuer any
unreimbursed loss, cost or expense which was not applicable on the Closing Date
and which the L/C Issuer in good faith deems material to it;

(B)        subject to Section 2.03(b)(iii), the expiry date of such requested
Letter of Credit would occur more than twelve months after the date of issuance
or last renewal, unless the Required Lenders have approved such expiry date;

(C)        the expiry date of such requested Letter of Credit would occur after
the Letter of Credit Expiration Date, unless all the Lenders have approved such
expiry date;

(D)        the issuance of such Letter of Credit would violate one or more
policies of the L/C Issuer applicable to letters of credit generally;

 

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(E)        such Letter of Credit is in an initial stated amount less than
$100,000, in the case of a commercial Letter of Credit, or $500,000, in the case
of a standby Letter of Credit, or is to be denominated in a currency other than
Dollars or a Committed Currency; or

(F)        any Lender is at that time a Defaulting Lender, unless the L/C Issuer
has entered into arrangements, including the delivery of Cash Collateral,
satisfactory to the L/C Issuer (in its sole discretion) with Timken or such
Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure
(after giving effect to Section 2.16(a)(iv)) with respect to the Defaulting
Lender arising from either the Letter of Credit then proposed to be issued or
that Letter of Credit and all other L/C Obligations as to which the L/C Issuer
has actual or potential Fronting Exposure, as it may elect in its sole
discretion.

(iii)    The L/C Issuer shall not be under any obligation to amend any Letter of
Credit if (A) the L/C Issuer would have no obligation at such time to issue such
Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.

(iv)    The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (A) provided to the
Agents in Article X with respect to any acts taken or omissions suffered by the
L/C Issuer in connection with Letters of Credit issued by it or proposed to be
issued by it and Issuer Documents pertaining to such Letters of Credit as fully,
and subject to the same limitations, as if the term “Agent” as used in Article X
included the L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the L/C Issuer.

(b)        Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.

(i)        Each Letter of Credit shall be issued or amended, as the case may be,
upon the request of Timken delivered to the L/C Issuer (with a copy to the
Paying Agent) in the form of a Letter of Credit Application, appropriately
completed and signed by a Responsible Officer of Timken. Such Letter of Credit
Application must be received by the L/C Issuer and the Paying Agent not later
than 11:00 a.m. at least two Business Days (or such later date and time as the
L/C Issuer and the Paying Agent may agree in a particular instance in their sole
discretion) prior to the proposed issuance date or date of amendment, as the
case may be. In the case of a request for an initial issuance of a Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested
Letter of Credit (which shall be a Business Day); (B) the amount thereof;
(C) the expiry date thereof; (D) the name and address of the beneficiary
thereof; (E) the documents to be presented by such beneficiary in case of any
drawing thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; (G) whether such Letter of Credit
is to be denominated in Dollars or a Committed Currency and in the absence of
such specification shall be deemed to be a request for a Letter of Credit
denominated in Dollars; (H) a general description of the purpose and nature of
the requested Letter of Credit; and (I) such other matters as the L/C Issuer may
reasonably require. In the case of a request for an amendment of any outstanding
Letter of Credit, such Letter of Credit Application shall specify in form and
detail satisfactory to the L/C Issuer (A) the Letter

 

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of Credit to be amended; (B) the proposed date of amendment thereof (which shall
be a Business Day); (C) the nature of the proposed amendment; and (D) such other
matters as the L/C Issuer may reasonably require. Additionally, Timken shall
furnish to the L/C Issuer and the Paying Agent such other documents and
information pertaining to such requested Letter of Credit issuance or amendment,
including any Issuer Documents, as the L/C Issuer or the Paying Agent may
reasonably require.

(ii)      Promptly after receipt of any Letter of Credit Application, the L/C
Issuer will confirm with the Paying Agent (by telephone or in writing) that the
Paying Agent has received a copy of such Letter of Credit Application from
Timken and, if not, the L/C Issuer will provide the Paying Agent with a copy
thereof. Upon receipt by the L/C Issuer of confirmation from the Paying Agent
that the requested issuance or amendment is permitted in accordance with the
terms hereof, then, subject to the terms and conditions hereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of Timken
or any Subsidiary or enter into the applicable amendment, as the case may be, in
each case in accordance with the L/C Issuer’s usual and customary business
practices. Immediately upon the issuance (or deemed issuance) of each Letter of
Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a risk participation in
such Letter of Credit in an amount equal to the product of such Lender’s Pro
Rata Share times the amount of such Letter of Credit.

(iii)      If Timken so requests in any applicable Letter of Credit Application,
the L/C Issuer shall agree to issue a Letter of Credit that has automatic
renewal provisions (each, an “Auto-Renewal Letter of Credit”); provided that any
such Auto-Renewal Letter of Credit must permit the L/C Issuer to prevent any
such renewal at least once in each twelve-month period (commencing with the date
of issuance of such Letter of Credit) by giving prior notice to the beneficiary
thereof not later than a day (the “Nonrenewal Notice Date”) in each such
twelvemonth period to be agreed upon at the time such Letter of Credit is
issued. Unless otherwise directed by the L/C Issuer, Timken shall not be
required to make a specific request to the L/C Issuer for any such renewal. Once
an Auto-Renewal Letter of Credit has been issued, the Lenders shall be deemed to
have authorized (but may not require) the L/C Issuer to permit the renewal of
such Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date; provided, however, that the L/C Issuer shall not permit
any such renewal if (A) the L/C Issuer has determined that it would have no
obligation at such time to issue such Letter of Credit in its renewed form under
the terms hereof (by reason of the provisions of Section 2.03(a)(ii) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is two Business Days before the Nonrenewal
Notice Date from the Paying Agent, any Lender or Timken that one or more of the
applicable conditions specified in Section 5.02 is not then satisfied.

(iv)      Promptly after its delivery of any Letter of Credit or any amendment
to a Letter of Credit to an advising bank with respect thereto or to the
beneficiary thereof, the L/C Issuer will also deliver to Timken and the Paying
Agent a true and complete copy of such Letter of Credit or amendment.

(c)        Drawings and Reimbursements; Funding of Participations.

(i)        Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer shall notify
Timken and the Paying

 

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Agent thereof. Not later than 12:00 noon on the date of any payment by the L/C
Issuer under a Letter of Credit (each such date, an “Honor Date”), Timken shall
reimburse the L/C Issuer through the Paying Agent in an amount equal to the
amount of such drawing. If Timken fails to so reimburse the L/C Issuer by such
time, the Paying Agent shall promptly notify each Lender of the Honor Date, the
amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the
Equivalent amount of such Lender’s Pro Rata Share thereof. In such event, Timken
shall be deemed to have requested a Revolving Credit Borrowing in Dollars of
Base Rate Loans to be disbursed on the Honor Date in an Equivalent amount equal
to the Unreimbursed Amount, without regard to the minimum and multiples
specified in Section 2.02 for the principal amount of Base Rate Loans, but
subject to the amount of the unutilized portion of the Commitments and the
conditions set forth in Section 5.02 (other than the delivery of a Committed
Loan Notice) and provided, that after giving effect to such Borrowing, the Total
Outstandings shall not exceed the Aggregate Commitments. Any notice given by the
L/C Issuer or the Paying Agent pursuant to this Section 2.03(c)(i) may be given
by telephone if immediately confirmed in writing; provided that the lack of such
an immediate confirmation shall not affect the conclusiveness or binding effect
of such notice.

(ii)      Each Lender (including any Lender acting as the L/C Issuer) shall upon
any notice pursuant to Section 2.03(c)(i) make funds available to the Paying
Agent (and the Paying Agent may apply Cash Collateral provided for this purpose)
for the account of the L/C Issuer at the Paying Agent’s Office in an Equivalent
amount equal to its Pro Rata Share of the Unreimbursed Amount not later than
1:00 p.m. on the Business Day specified in such notice by the Paying Agent,
whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that
so makes funds available shall be deemed to have made a Base Rate Loan in
Dollars to Timken in such amount. The Paying Agent shall remit the funds so
received to the L/C Issuer.

(iii)      With respect to any Unreimbursed Amount that is not fully refinanced
by a Revolving Credit Borrowing of Base Rate Loans because the conditions set
forth in Section 5.02 cannot be satisfied or for any other reason, Timken shall
be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of
the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be
due and payable on demand (together with interest) and shall bear interest at
the Default Rate. In such event, each Lender’s payment to the Paying Agent for
the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its participation
obligation under this Section 2.03.

(iv)      Until each Lender funds its Revolving Credit Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender’s Pro Rata
Share of such amount shall be solely for the account of the L/C Issuer.

(v)      So long as it has a Commitment hereunder, each Lender’s obligation to
make Revolving Credit Loans or L/C Advances to reimburse the L/C Issuer for
amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the L/C Issuer, Timken or any
other Person for any reason whatsoever; (B) the occurrence or continuance of a
Default or an Event of Default, or (C) any other

 

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occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Revolving Credit Loans
pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 5.02 (other than delivery by Timken of a Committed Loan Notice). No such
making of an L/C Advance shall relieve or otherwise impair the obligation of
Timken to reimburse the L/C Issuer for the amount of any payment made by the L/C
Issuer under any Letter of Credit, together with interest as provided herein.

(vi)        If any Lender fails to make available to the Paying Agent for the
account of the L/C Issuer any amount required to be paid by such Lender pursuant
to the foregoing provisions of this Section 2.03(c) by the time specified in
Section 2.03(c)(ii), then, without limiting the other provisions of this
Agreement, the L/C Issuer shall be entitled to recover from such Lender (acting
through the Paying Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the
greater of the Federal Funds Rate from time to time in effect and a rate
determined by the L/C Issuer in accordance with banking industry rules on
interbank compensation. A certificate of the L/C Issuer submitted to any Lender
(through the Paying Agent) with respect to any amounts owing under this
Section 2.03(c)(vi) shall be conclusive absent manifest error.

(d)        Repayment of Participations.

(i)        At any time after the L/C Issuer has made a payment under any Letter
of Credit and has received from any Lender such Lender’s L/C Advance in respect
of such payment in accordance with Section 2.03(c), if the Paying Agent receives
for the account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from Timken or
otherwise, including proceeds of Cash Collateral applied thereto by the Paying
Agent), the Paying Agent will distribute to such Lender its Pro Rata Share
thereof (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender’s L/C Advance was outstanding) in
the same funds as those received by the Paying Agent.

(ii)        If any payment received by the Paying Agent for the account of the
L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any
of the circumstances described in Section 11.06 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Lender shall
pay to the Paying Agent for the account of the L/C Issuer its Pro Rata Share
thereof on demand of the Paying Agent, plus interest thereon from the date of
such demand to the date such amount is returned by such Lender, at a rate per
annum equal to the Federal Funds Rate from time to time in effect. The
obligations of the Lenders under this clause shall survive the payment in full
of the Obligations and the termination of this Agreement.

(e)        Obligations Absolute.  The obligation of Timken to reimburse the L/C
Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

(i)        any lack of validity or enforceability of such Letter of Credit, this
Agreement or any other Loan Document;

 

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(ii)      the existence of any claim, counterclaim, setoff, defense or other
right that Timken or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction;

(iii)      any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

(iv)      any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law;

(v)      any exchange, release or nonperfection of any Cash Collateral, or any
release or amendment or waiver of or consent to departure from the Guaranty or
any other guarantee, for all or any of the L/C Obligations of Timken in respect
of such Letter of Credit; or

(vi)      any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, Timken or any Subsidiary.

Timken shall promptly examine a copy of each Letter of Credit and each amendment
thereto that is delivered to it and, in the event of any claim of noncompliance
with Timken’s instructions or other irregularity, Timken will immediately notify
the L/C Issuer. Timken shall be conclusively deemed to have waived any such
claim against the L/C Issuer and its correspondents unless such notice is given
as aforesaid.

(f)      Role of the L/C Issuer.    Each Lender and Timken agree that, in paying
any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by such Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
any Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable to any Lender for
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Lenders or the Required Lenders, as applicable; (ii) any
action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. Timken hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude Timken’s pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement. None of the L/C
Issuer, the Agents, any of their respective

 

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Related Parties nor any correspondent, participant or assignee of the L/C Issuer
shall be liable or responsible for any of the matters described in clauses
(i) through (v) of Section 2.03(e); provided, however, that anything in such
clauses to the contrary notwithstanding, Timken may have a claim against the L/C
Issuer, and the L/C Issuer may be liable to Timken, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by Timken which Timken proves were caused by the L/C Issuer’s willful
misconduct or gross negligence or the L/C Issuer’s willful failure to pay under
any Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit unless the L/C Issuer is prevented or prohibited from so paying
as a result of any order or directive of any court or other Governmental
Authority. In furtherance and not in limitation of the foregoing, the L/C Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason. The L/C Issuer may send a Letter of
Credit or conduct any communication to or from the beneficiary via the Society
for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or
overnight courier, or any other commercially reasonable means of communicating
with a beneficiary.

(g)        Applicability of ISP98 and UCP.   Unless otherwise expressly agreed
by the L/C Issuer and Timken when a Letter of Credit is issued (or deemed
issued), (i) the rules of the ISP shall apply to each standby Letter of Credit,
and (ii) the rules of the UCP shall apply to each commercial Letter of Credit.
Notwithstanding the foregoing, the L/C Issuer shall not be responsible to Timken
for, and the L/C Issuer’s rights and remedies against Timken shall not be
impaired by, any action or inaction of the L/C Issuer required or permitted
under any law, order, or practice that is required or permitted to be applied to
any Letter of Credit or this Agreement, including the Law or any order of a
jurisdiction where the L/C Issuer or the beneficiary is located, the practice
stated in the ISP or UCP, as applicable, or in the decisions, opinions, practice
statements, or official commentary of the ICC Banking Commission, the Bankers
Association for Finance and Trade - International Financial Services Association
(BAFT-IFSA), or the Institute of International Banking Law & Practice, whether
or not any Letter of Credit chooses such law or practice.

(h)        Letter of Credit Fees.   Timken shall pay to the Paying Agent for the
account of each Lender, subject to Section 2.16, in accordance with its Pro Rata
Share a Letter of Credit fee for each Letter of Credit equal to the Applicable
Rate times the daily maximum amount available to be drawn under such Letter of
Credit (whether or not such maximum amount is then in effect under such Letter
of Credit) (such fees, “Letter of Credit Fees”). Such Letter of Credit Fees
shall be computed on a quarterly basis in arrears. Such Letter of Credit Fees
shall be due and payable on the first Business Day after the end of each March,
June, September and December, commencing with the first such date to occur after
the issuance (or deemed issuance) of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. If there is any change in the
Applicable Rate during any quarter, the daily maximum amount of each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect.
Notwithstanding anything to the contrary contained herein, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

(i)        Fronting Fee and Documentary and Processing Charges Payable to the
L/C Issuer.   Timken shall pay directly to the L/C Issuer for its own account a
fronting fee with respect

 

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to each Letter of Credit issued (or deemed issued) by the L/C Issuer equal to
the rate per annum identified in the KeyBank Fee Letter times the daily maximum
amount available to be drawn under such Letter of Credit (whether or not such
maximum amount is then in effect under such Letter of Credit) and on a quarterly
basis in arrears. Such fronting fee shall be due and payable on the first
Business Day after the end of each March, June, September and December in
respect of the most recently-ended quarterly period (or portion thereof, in the
case of the first payment), commencing with the first such date to occur after
the issuance (or deemed issuance) of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. In addition, Timken shall pay
directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time in
effect. Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.

(j)        Conflict with Issuer Documents.   In the event of any conflict
between the terms hereof and the terms of any Issuer Document, the terms hereof
shall control.

 

  2.04

Swing Line Loans.

(a)        The Swing Line.  Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees to make loans (each such loan, a “Swing
Line Loan”) to Timken from time to time on any Business Day during the
Availability Period in an aggregate principal amount not to exceed at any time
outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that
such Swing Line Loans, when aggregated with the Pro Rata Share of the
Outstanding Amount of Loans and L/C Obligations of the Lender acting as Swing
Line Lender, may exceed the amount of such Lender’s Commitment; provided,
however, that after giving effect to any Swing Line Loan, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate
Outstanding Amount of the Revolving Credit Loans of any Lender, plus such
Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus
such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans
shall not exceed such Lender’s Commitment, and provided further that Timken
shall not use the proceeds of any Swing Line Loan to refinance any outstanding
Swing Line Loan. Within the foregoing limits, and subject to the other terms and
conditions hereof, Timken may borrow under this Section 2.04, prepay under
Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall
be a Base Rate Loan denominated in Dollars. Immediately upon the making of a
Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Lender’s Pro Rata Share times the amount of such Swing Line Loan.

(b)        Borrowing Procedures.  Each Swing Line Borrowing shall be made upon
Timken’s irrevocable notice to the Swing Line Lender and the Paying Agent, which
may be given by telephone. Each such notice must be received by the Swing Line
Lender and the Paying Agent not later than 1:00 p.m. on the requested borrowing
date, and shall specify (i) the amount to be borrowed, which shall be a minimum
of $100,000, and (ii) the requested borrowing date, which shall be a Business
Day. Each such telephonic notice must be confirmed promptly by delivery to the
Swing Line Lender and the Paying Agent of a written Swing Line Loan Notice,
appropriately completed and signed by a Responsible Officer of Timken. Promptly
after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice,
the Swing Line Lender will confirm with the Paying Agent (by telephone or in
writing) that the Paying Agent has also received such Swing Line Loan Notice
and, if not, the Swing Line Lender will notify the Paying Agent (by telephone or
in writing) of the contents thereof. Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Paying Agent (including at the
request of any Lender) prior to

 

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2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the
Swing Line Lender not to make such Swing Line Loan as a result of the
limitations set forth in the first proviso to the first sentence of
Section 2.04(a), or (B) that one or more of the applicable conditions specified
in Section 5.02 is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to Timken at its office by crediting the account of Timken on the
books of the Swing Line Lender in immediately available funds.

(c)        Refinancing of Swing Line Loans.

(i)        The Swing Line Lender at any time in its sole and absolute discretion
may request, on behalf of Timken (which hereby irrevocably authorizes the Swing
Line Lender to so request on its behalf), that each Lender make a Base Rate Loan
in an amount equal to such Lender’s Pro Rata Share of the amount of Swing Line
Loans then outstanding. Such request shall be made in writing (which written
request shall be deemed to be a Committed Loan Notice for purposes hereof) and
in accordance with the requirements of Section 2.02, without regard to the
minimum and multiples specified therein for the principal amount of Base Rate
Loans, but subject to the unutilized portion of the Commitments and the
conditions set forth in Section 5.02. The Swing Line Lender shall furnish Timken
with a copy of the applicable Committed Loan Notice promptly after delivering
such notice to the Paying Agent. Each Lender shall make an amount equal to its
Pro Rata Share of the amount specified in such Committed Loan Notice available
to the Paying Agent in immediately available funds (and the Paying Agent may
apply Cash Collateral available with respect to the applicable Swing Line Loan)
for the account of the Swing Line Lender at the Paying Agent’s Office not later
than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon,
subject to Section 2.04(c)(ii), each Lender that so makes funds available shall
be deemed to have made a Base Rate Loan to Timken in such amount. The Paying
Agent shall remit the funds so received to the Swing Line Lender.

(ii)        If for any reason any Swing Line Loan cannot be refinanced by a
Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the request
for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall
be deemed to be a request by the Swing Line Lender that each of the Lenders fund
its risk participation in the relevant Swing Line Loan and each Lender’s payment
to the Paying Agent for the account of the Swing Line Lender pursuant to
Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii)        If any Lender fails to make available to the Paying Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Paying Agent), on demand, such
amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the Swing
Line Lender at a rate per annum equal to the Federal Funds Rate from time to
time in effect. A certificate of the Swing Line Lender submitted to any Lender
(through the Paying Agent) with respect to any amounts owing under this
Section 2.04(c)(iii) shall be conclusive absent manifest error.

(iv)        Each Lender’s obligation to make Revolving Credit Loans or to
purchase and fund risk participations in Swing Line Loans pursuant to this
Section 2.04(c) shall be

 

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absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against the Swing Line Lender, Timken or any other Person
for any reason whatsoever, (B) the occurrence or continuance of a Default, or
(C) any other occurrence, event or condition, whether or not similar to any of
the foregoing; provided, however, that each Lender’s obligation to make
Revolving Credit Loans pursuant to this Section 2.04(c) is subject to the
conditions set forth in Section 5.02. No such funding of risk participations
shall relieve or otherwise impair the obligation of Timken to repay Swing Line
Loans, together with interest as provided herein.

(d)        Repayment of Participations.

(i)        At any time after any Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Pro Rata Share of such payment (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender’s risk participation was funded) in the same funds as those
received by the Swing Line Lender.

(ii)        If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by the
Swing Line Lender under any of the circumstances described in Section 11.06
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Lender shall pay to the Swing Line Lender its Pro Rata
Share thereof on demand of the Paying Agent, plus interest thereon from the date
of such demand to the date such amount is returned, at a rate per annum equal to
the Federal Funds Rate. The Paying Agent will make such demand upon the request
of the Swing Line Lender.

(e)        Interest for Account of Swing Line Lender.   The Swing Line Lender
shall be responsible for invoicing Timken for interest on the Swing Line Loans.
Until each Lender funds its Base Rate Loan or risk participation pursuant to
this Section 2.04 to refinance such Lender’s Pro Rata Share of any Swing Line
Loan, interest in respect of such Pro Rata Share shall be solely for the account
of the Swing Line Lender.

(f)        Payments Directly to Swing Line Lender.   Timken shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.

 

  2.05

Prepayments.

(a)        Optional.  (i) Each Borrower may, upon notice to the Paying Agent
provided by Timken, at any time or from time to time voluntarily prepay Loans in
whole or in part without premium or penalty; provided that (1) such notice must
be received by the Paying Agent not later than 11:00 a.m. (A) three Business
Days prior to any date of prepayment of Eurocurrency Rate Loans and (B) on the
date of prepayment of Base Rate Loans; (2) any prepayment of Revolving Credit
Loans shall be in a principal amount of not less than the Revolving Credit
Borrowing Minimum or the Revolving Credit Borrowing Multiple in excess thereof;
and (3) any prepayment of Swing Line Loans shall be in a principal amount of not
less than $100,000 or, in each case, if less, the entire principal amount
thereof then outstanding; provided further that such notice may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by Timken (by notice to the
Co-Administrative Agents on or prior to the specified prepayment date) if such
condition is not satisfied. Each such notice shall specify

 

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the date and amount of such prepayment and the Type(s) of Loans to be prepaid.
The Paying Agent will promptly notify each Lender of its receipt of each such
notice, and of the amount of such Lender’s Pro Rata Share of such prepayment. If
such notice is given, such Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein. Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all
accrued interest thereon, together with any additional amounts required pursuant
to Section 3.05. Subject to Section 2.16, each prepayment pursuant to this
Section 2.05(a) shall be paid to the Paying Agent for distribution to the
Appropriate Lenders in accordance with their respective Pro Rata Shares.

(ii)        Timken may, upon notice to the Swing Line Lender (with a copy to the
Paying Agent), at any time or from time to time, voluntarily prepay Swing Line
Loans in whole or in part without premium or penalty; provided that (1) such
notice must be received by the Swing Line Lender and the Paying Agent not later
than 1:00 p.m. on the date of the prepayment, and (2) any such prepayment shall
be in a minimum principal amount of $100,000; provided further that such notice
may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by Timken (by notice to the
Co-Administrative Agents on or prior to the specified prepayment date) if such
condition is not satisfied. Each such notice shall specify the date and amount
of such prepayment. If such notice is given by Timken, Timken shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.

(b)        Mandatory.

(i)        If for any reason (A) the Total Outstandings at any time exceed the
Aggregate Commitments then in effect or (B) the Swing Line Loans outstanding
exceed the Swing Line Sublimit, Timken and/or any Designated Borrower, as
applicable, shall immediately prepay the Revolving Credit Loans, the Swing Line
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that Timken shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section 2.05(b) unless after
the prepayment in full of the Loans and Swing Line Loans the Total Outstandings
exceed the Aggregate Commitments then in effect.

(ii)        Prepayments made pursuant to clause (i)(A) of this Section 2.05(b),
first, shall be applied to prepay L/C Borrowings outstanding at such time until
all such L/C Borrowings are paid in full, second, shall be applied to prepay
Swing Line Loans outstanding at such time until all such Swing Line Loans are
paid in full, third, shall be applied to prepay Revolving Credit Loans
outstanding at such time and, fourth, shall be used to Cash Collateralize the
L/C Obligations. Upon the drawing of any Letter of Credit which has been Cash
Collateralized, such funds shall be applied (without any further action by or
notice to or from Timken or any other Loan Party) to reimburse the L/C Issuer or
the Lenders, as applicable.

(c)        Prepayments of Committed Currency Loans.  If as of any Determination
Date (i) the Equivalent of the Outstanding Amount of all Revolving Credit Loans,
all Swing Line Loans and all L/C Obligations exceeds the Aggregate Commitments
then in effect or (ii) the Equivalent of all L/C Obligations exceeds the Letter
of Credit Sublimit, in each case, Timken and/or the applicable Designated
Borrower, as applicable, shall, on such Determination Date, prepay Revolving
Credit Loans denominated in Committed Currencies and/or Cash Collateralize
Letters

 

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of Credit denominated in a Committed Currency in an aggregate amount equal to
such excess. If as of any Determination Date the Equivalent of the Outstanding
Amount of all Revolving Credit Loans and all L/C Obligations denominated in a
Committed Currency exceeds 105% of the Committed Currency Sublimit then in
effect, Timken and/or the applicable Designated Borrower, as applicable, shall,
on such Determination Date, prepay Revolving Credit Loans denominated in
Committed Currencies and/or Cash Collateralize Letters of Credit denominated in
a Committed Currency in an aggregate amount equal to the amount by which such
Outstanding Amount exceeds the Committed Currency Sublimit.

(d)        Prepayments to Include Accrued Interest, Etc.    All prepayments
under this Section 2.05 shall be made together with (i) accrued and unpaid
interest to the date of such prepayment on the principal amount so prepaid and
(ii) in the case of any such prepayment of a Eurocurrency Rate Loan on a date
other than the last day of an Interest Period therefor, any amounts owing in
respect of such Eurocurrency Rate Loan pursuant to Section 3.05.

 

  2.06

Termination or Reduction of Commitments.

(a)        Optional.   Timken may, upon notice to the Paying Agent by Timken,
terminate the unused portions of the Letter of Credit Sublimit, the Committed
Currency Sublimit, the Committed L/C Currency Sublimit or the unused
Commitments, or from time to time permanently reduce the unused portions of the
Letter of Credit Sublimit, the Committed Currency Sublimit, the Committed L/C
Currency Sublimit or the unused Commitments; provided that (i) any such notice
shall be received by the Paying Agent not later than 11:00 a.m. three Business
Days prior to the date of termination or reduction, (ii) any such partial
reduction shall be in an aggregate amount of $10,000,000 or any whole multiple
of $1,000,000 in excess thereof, (iii) Timken shall not terminate or reduce the
unused portions of the Letter of Credit Sublimit, the Committed Currency
Sublimit, the Committed L/C Currency Sublimit or the unused Commitments if,
after giving effect thereto and to any concurrent prepayments hereunder, the
Total Outstandings would exceed the Aggregate Commitments, and (iv) if, after
giving effect to any reduction of the Revolving Credit Facility, the Letter of
Credit Sublimit, the Swing Line Sublimit, the Committed Currency Sublimit or the
Committed L/C Currency Sublimit exceeds the amount of the Revolving Credit
Facility, such Letter of Credit Sublimit, Swing Line Sublimit, Committed
Currency Sublimit or Committed L/C Currency Sublimit shall be automatically
reduced by the amount of such excess; provided further that such notice may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by Timken (by notice to the
Co-Administrative Agents on or prior to the specified termination date) if such
condition is not satisfied.

(b)        Mandatory.   If after giving effect to any reduction or termination
of unused Commitments under this Section 2.06, the Letter of Credit Sublimit,
the Committed Currency Sublimit, the Committed L/C Currency Sublimit or the
Swing Line Sublimit exceeds the amount of the Commitments, such sublimit shall
be automatically reduced by the amount of such excess.

(c)        Application of Commitment Reductions; Payment of Fees.   The Paying
Agent will promptly notify the Lenders of any termination or reduction of unused
portions of the Letter of Credit Sublimit, the Committed Currency Sublimit, the
Committed L/C Currency Sublimit or the unused Commitment under this
Section 2.06. Upon any reduction of unused Commitments, except as set forth in
Sections 2.16, the Commitment of each Lender shall be reduced by such Lender’s
Pro Rata Share of the amount by which the Commitments are reduced. All Facility
Fees accrued until the effective date of any termination of the Aggregate
Commitments shall be paid on the effective date of such termination.

 

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  2.07

Repayment of Loans.

(a)        Revolving Credit Loans.   The applicable Borrower shall repay to the
Paying Agent for the ratable account of the Lenders on the Maturity Date the
aggregate principal amount of all Revolving Credit Loans of such Borrower
outstanding on such date.

(b)        Swing Line Loans.   Timken shall repay each Swing Line Loan on the
earlier to occur of (i) the date agreed to between Timken and the Swing Line
Lender, but in no event more than 30 days after such Loan is made and (ii) the
Maturity Date.

 

  2.08

Interest.

(a)        Subject to the provisions of Section 2.08(b), (i) each Eurocurrency
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal the Eurocurrency Rate for such
Interest Period plus the Applicable Rate for Eurocurrency Rate Loans; (ii) each
Base Rate Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate for Base Rate Loans; and (iii) each Swing Line Loan
shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate for Base Rate Loans.

(b)        If any amount of principal, interest or fees payable under any of
Sections 2.03(h), 2.03(i) or 2.09 are not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, such amount shall thereafter bear interest at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws. Furthermore, upon the request of the Required
Lenders, while any Event of Default exists, Timken and/or any Designated
Borrower, as applicable, shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.

(c)        Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

 

  2.09

Fees.

In addition to certain fees described in Sections 2.03(h) and 2.03(i):

(a)        Facility Fee.   Timken shall pay to the Paying Agent for the account
of each Lender (except as otherwise provided in Section 2.16 with respect to
Defaulting Lenders) in accordance with its Pro Rata Share, a fee (the “Facility
Fee”) equal to, the Applicable Rate times the Aggregate Commitments (or, if the
Aggregate Commitments have been terminated, on the Outstanding Amount of all
Loans and L/C Obligations). The Facility Fee shall accrue at all times from the
Closing Date through the Maturity Date, including at any time during which one
or more of the conditions in Article V is not met, and shall be due and payable
in arrears on the last Business Day of each March, June, September and December,
and on the Maturity Date. The Facility Fee shall be calculated quarterly in
arrears, and if there is any change in the Applicable

 

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Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.

(b)        Other Fees.

(i)        Timken shall pay to the Arrangers for their own respective accounts
fees in the amounts and at the times specified in the Bank of America Fee
Letter, the KeyBank Fee Letter and the Wells Fargo Fee Letter. Such fees shall
be fully earned when paid and shall not be refundable for any reason whatsoever.

(ii)        Timken shall pay to the Agents such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.

 

  2.10

Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.

(a)        All computations of interest for Base Rate Loans (including Base Rate
Loans determined by reference to the Eurocurrency Rate) shall be made on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.
All other computations of fees and interest shall be made on the basis of a
360-day year and actual days elapsed (which results in more fees or interest, as
applicable, being paid than if computed on the basis of a 365-day year).
Interest shall accrue on each Loan for the day on which the Loan is made, and
shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid, provided that any Loan that is repaid on the same
day on which it is made shall, subject to Section 2.12(a), bear interest for one
day. Each determination by the Paying Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

(b)        If, as a result of any restatement of or other adjustment to the
financial statements of Timken or for any other reason, Timken or the Lenders
determine that (i) the Consolidated Leverage Ratio as calculated by Timken as of
any applicable date was inaccurate and (ii) a proper calculation of the
Consolidated Leverage Ratio would have resulted in higher pricing for such
period, Timken shall immediately and retroactively be obligated to pay to the
Paying Agent for the account of the applicable Lenders or the L/C Issuer, as the
case may be, promptly on demand by the Paying Agent (or, after the occurrence of
an actual or deemed entry of an order for relief with respect to Timken under
the Bankruptcy Code of the United States, automatically and without further
action by the Paying Agent, any Lender or the L/C Issuer), an amount equal to
the excess of the amount of interest and fees that should have been paid for
such period over the amount of interest and fees actually paid for such period.
This paragraph shall not limit the rights of any Agent, any Lender or the L/C
Issuer, as the case may be, under Section 2.03(c)(iii), 2.03(h) or 2.08(b) or
under Article IX. Timken’s obligations under this paragraph shall survive the
termination of the Commitments of all of the Lenders and the repayment of all
other Obligations hereunder.

 

  2.11

Evidence of Indebtedness.

(a)        The Credit Extensions made by each Lender shall be evidenced by one
or more accounts or records maintained by such Lender and by the Paying Agent in
the ordinary course of business. The accounts or records maintained by the
Paying Agent and each Lender shall be conclusive absent manifest error of the
amount of the Credit Extensions made by the Lenders to any Borrower and the
interest and payments thereon. Any failure to so record or any error in

 

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doing so shall not, however, limit or otherwise affect the obligation of each
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Paying Agent in respect of such
matters, the accounts and records of the Paying Agent shall control in the
absence of manifest error. Upon the request of any Lender made through the
Paying Agent, each Borrower shall execute and deliver to such Lender (through
the Paying Agent) a Note, which shall evidence such Lender’s Loans in addition
to such accounts or records. Each Lender may attach schedules to its Note and
endorse thereon the date, Type (if applicable), amount and maturity of its Loans
and payments with respect thereto.

(b)        In addition to the accounts and records referred to in
Section 2.11(a), each Lender and the Paying Agent shall maintain in accordance
with its usual practice accounts or records evidencing the purchases and sales
by such Lender of participations in Letters of Credit and Swing Line Loans. In
the event of any conflict between the accounts and records maintained by the
Paying Agent and the accounts and records of any Lender in respect of such
matters, the accounts and records of the Paying Agent shall control in the
absence of manifest error.

(c)        Entries made in good faith by the Paying Agent in the Register
pursuant to Section 2.11(b), and by each Lender in its account or accounts
pursuant to Section 2.11(a) above, shall be prima facie evidence of the amount
of principal and interest due and payable or to become due and payable from the
Borrowers to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement and the other Loan
Documents, absent manifest error; provided that the failure of the Paying Agent
or such Lender to make an entry, or any finding that an entry is incorrect, in
the Register or such account or accounts shall not limit or otherwise affect the
obligations of the Borrowers under this Agreement and the other Loan Documents.

 

  2.12

Payments Generally.

(a)        Except as provided in Section 3.01 and Section 11.15, all payments to
be made by the Borrowers shall be made free and clear of and without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by the Borrowers hereunder
(except with respect to principal of, interest on, and other amounts relating
to, Loans denominated in a Committed Currency) shall be made to the Paying
Agent, for the account of the respective Lenders to which such payment is owed,
at the Paying Agent’s Office in Dollars and in immediately available funds not
later than 2:00 p.m. on the date specified herein. Except as otherwise expressly
provided herein, all payments by the Borrowers with respect to principal of,
interest on, and other amounts relating to, Loans denominated in a Committed
Currency shall be made to the Paying Agent, for the account of the respective
Lenders to which such payment is owed, at the Payment Office in such Committed
Currency and in immediately available funds not later than 2:00 p.m. on the date
specified herein. The Paying Agent will promptly distribute to each Lender its
Pro Rata Share (or other applicable share as provided herein) of such payment in
like funds as received by wire transfer to such Lender’s Lending Office. All
payments received by the Paying Agent after 2:00 p.m. shall be deemed received
on the next succeeding Business Day and any applicable interest or fee shall
continue to accrue.

(b)        If any payment to be made by the Borrowers shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurocurrency Rate

 

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Loans to be made in the next succeeding calendar month, such payment shall be
made on the immediately preceding Business Day.

(c)        Unless Timken or any Lender has notified the Paying Agent, prior to
the date any payment is required to be made by it to the Paying Agent hereunder,
that any Borrower or such Lender, as the case may be, will not make such
payment, the Paying Agent may assume that such Borrower or such Lender, as the
case may be, has timely made such payment and may (but shall not be so required
to), in reliance thereon, make available a corresponding amount to the Person
entitled thereto. If and to the extent that such payment was not in fact made to
the Paying Agent in immediately available funds, then:

(i)        if the applicable Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Paying Agent the portion of such assumed
payment that was made available to such Lender in immediately available funds,
together with interest thereon in respect of each day from and including the
date such amount was made available by the Paying Agent to such Lender to the
date such amount is repaid to the Paying Agent in immediately available funds at
the higher of (A) Federal Funds Rate from time to time in effect in the case of
Loans denominated in Dollars or (B) the cost of funds incurred by the Paying
Agent in respect of such amount in the case of Loans denominated in Committed
Currencies; and

(ii)        if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Paying Agent the amount thereof in immediately
available funds, together with interest thereon for the period from the date
such amount was made available by the Paying Agent to the applicable Borrower to
the date such amount is recovered by the Paying Agent (the “Compensation
Period”) at a rate per annum equal to the higher of (A) Federal Funds Rate from
time to time in effect in the case of Loans denominated in Dollars or (B) the
cost of funds incurred by the Paying Agent in respect of such amount in the case
of Loans denominated in Committed Currencies. If such Lender pays such amount to
the Paying Agent, then such amount shall constitute such Lender’s Loan included
in the applicable Borrowing in the case of Loans denominated in Dollars or
(B) the cost of funds incurred by the Paying Agent in respect of such amount in
the case of Loans denominated in Committed Currencies. If such Lender does not
pay such amount forthwith upon the Paying Agent’s demand therefor, the Paying
Agent may make a demand therefor upon Timken, and the Borrowers shall pay such
amount to the Paying Agent, together with interest thereon for the Compensation
Period at a rate per annum equal to the rate of interest applicable to the
applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its Commitment or to prejudice any rights which the
Paying Agent or the Borrowers may have against any Lender as a result of any
default by such Lender hereunder.

A notice of the Paying Agent to any Lender or Timken with respect to any amount
owing under this Section 2.12(c) shall be conclusive, absent manifest error.

(d)        If any Lender makes available to the Paying Agent funds for any Loan
to be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to the applicable Borrower by
the Paying Agent because the conditions to the applicable Credit Extension set
forth in Article V are not satisfied or waived in accordance with the terms
hereof, the Paying Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

 

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(e)        The obligations of the Lenders hereunder to make Loans, to fund
participations in Letters of Credit and Swing Line Loans and to make payments
pursuant to Section 11.05(b) are several and not joint. The failure of any
Lender to make any Loan, to fund any such participation or to make any payment
under Section 11.05(b) on any date required hereunder shall not relieve any
other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Loan, to purchase its participation or to make its payment under
Section 11.05(b).

(f)        Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

(g)        Whenever any payment received by the Paying Agent under this
Agreement or any of the other Loan Documents is insufficient to pay in full all
amounts due and payable to the Agents and the Lenders under or in respect of
this Agreement and the other Loan Documents on any date, such payment shall be
distributed by the Paying Agent and applied by the Agents and the Lenders in the
order of priority set forth in Section 9.03. If the Paying Agent receives funds
for application to the Obligations of the Loan Parties under or in respect of
the Loan Documents under circumstances for which the Loan Documents do not
specify the manner in which such funds are to be applied, the Paying Agent may,
but shall not be obligated to, elect to distribute such funds to each of the
Lenders in accordance with such Lender’s Pro Rata Share of the sum of (A) the
Outstanding Amount of all Loans outstanding at such time and (b) the Outstanding
Amount of all L/C Obligations outstanding at such time, in repayment or
prepayment of such of the outstanding Loans or other Obligations then owing to
such Lender.

(h)        To the extent that the Paying Agent receives funds for application to
the amounts owing by any Borrower under or in respect of this Agreement or any
Note in currencies other than the currency or currencies required to enable the
Paying Agent to distribute funds to the Lenders in accordance with the terms of
this Section 2.12, the Paying Agent shall be entitled to convert or exchange
such funds into Dollars or into a Committed Currency or from Dollars to a
Committed Currency or from a Committed Currency to Dollars, as the case may be,
to the extent necessary to enable the Paying Agent to distribute such funds in
accordance with the terms of this Section 2.12; provided that the Borrowers and
each of the Lenders hereby agree that the Paying Agent shall not be liable or
responsible for any loss, cost or expense suffered by any Borrower or such
Lender as a result of any conversion or exchange of currencies affected pursuant
to this Section 2.12(h) or as a result of the failure of the Paying Agent to
effect any such conversion or exchange; and provided further that the Borrowers
agree to indemnify the Paying Agent and each Lender, and hold the Paying Agent
and each Lender harmless, for any and all losses, costs and expenses incurred by
the Paying Agent or any Lender for any conversion or exchange of currencies (or
the failure to convert or exchange any currencies) in accordance with this
Section 2.12(h).

 

  2.13

Sharing of Payments.

If, other than as expressly provided elsewhere herein, any Lender shall obtain
on account of the Loans made by it, or the participations in L/C Obligations or
in Swing Line Loans held by it (excluding any amounts applied by the Swing Line
Lender to outstanding Swing Line Loans and excluding any amounts received by the
L/C Issuer and/or the Swing Line Lender to secure the obligations of a
Defaulting Lender to fund risk participations hereunder), any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Paying Agent of
such fact,

 

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and (b) purchase from the other Lenders such participations in the Loans made by
them and/or such subparticipations in the participations in L/C Obligations or
Swing Line Loans held by them, as the case may be, as shall be necessary to
cause such purchasing Lender to share the excess payment in respect of such
Loans or such participations, as the case may be, pro rata with each of them;
provided, however, that (x) if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender under any of the circumstances
described in Section 11.06 (including pursuant to any settlement entered into by
the purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the amount of such
paying Lender’s required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon and (y) the provisions of this Section shall not be construed
to apply to (A) any payment made by or on behalf of any Borrower pursuant to and
in accordance with the express terms of this Agreement or (B) any payment
obtained by a Lender pursuant to Section 2.16 or as consideration for any
assignment or participation pursuant to Section 11.07. The Borrowers agree that
any Lender so purchasing a participation from another Lender may, to the fullest
extent permitted by law, exercise all its rights of payment (including the right
of setoff, but subject to Section 11.09) with respect to such participation as
fully as if such Lender were the direct creditor of any Borrower in the amount
of such participation. The Paying Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section 2.13 and will in each case notify the Lenders
following any such purchases or repayments. Each Lender that purchases a
participation pursuant to this Section 2.13 shall from and after such purchase
have the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.

 

  2.14

Committed Currency Borrowings.

(a)        Determination of Equivalents.   The Paying Agent will determine the
Equivalent amount on each of the following dates: (i) the last Business Day of
each month, (ii) the date a Request for Credit Extension is delivered to the
Paying Agent with respect to each Credit Extension issued or advanced that
results in an Outstanding Amount denominated in a Committed Currency, (iii) each
date on which any Outstanding Amount is due, (iv) each Interest Payment Date
applicable thereto, (v) the Honor Date with respect to each Letter of Credit
denominated in a Committed Currency, (vi) each date of an amendment of any such
Letter of Credit denominated in a Committed Currency having the effect of
increasing the amount thereof, (vii) any date on which an L/C Borrowing is
deemed to have been made with respect to a Letter of Credit denominated in a
Committed Currency, and (viii) any additional and more frequent dates as the
Agents in their sole discretion may, or at the direction of the Required Lenders
shall, select from time to time (each such date under clauses (i) through
(viii), being a “Determination Date”).

(b)        Notification of Availability.   If on any date on which a Revolving
Credit Loan denominated in a Committed Currency is requested to be made or
continued, in the event that the Committed Currency requested or elected by
Timken to be continued is not available to the Paying Agent, then the Paying
Agent shall notify Timken no later than 4:00 p.m., three Business Days prior to
the proposed Borrowing or proposed continuation.

(c)        Consequences of Non-Availability.   If the Paying Agent notifies
Timken pursuant to Section 2.14(b) that the Committed Currency requested or
elected by Timken to be continued is not available, such notification shall
(i) in the case of any request for a Borrowing, revoke such request and (ii) in
the case of any continuation or conversion, result in the

 

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Eurocurrency Rate Loans denominated in such Committed Currency being
automatically converted into Eurocurrency Rate Loans denominated in Dollars for
a one month Interest Period on the last day of the then current Interest Period
with respect to such Eurocurrency Rate Loans denominated in such Committed
Currency.

(d)        Automatic Conversions. During the existence of an Event of Default,
all outstanding Loans denominated in a Committed Currency shall be redenominated
and converted into their Equivalent of Base Rate Loans in Dollars on the last
day of the Interest Period applicable to any such Loans.

 

  2.15

Cash Collateral.

(a)        Certain Credit Support Events.   If (i) the L/C Issuer has honored
any full or partial drawing request under any Letter of Credit and such drawing
has resulted in an L/C Borrowing, (ii) as of the Letter of Credit Expiration
Date, any L/C Obligation for any reason remains outstanding, (iii) Timken shall
be required to provide Cash Collateral pursuant to Section 9.02(c), or
(iv) there shall exist a Defaulting Lender, Timken shall within one Business Day
following any request by the Paying Agent or the L/C Issuer, provide Cash
Collateral in an amount not less than the applicable Minimum Collateral Amount
(determined in the case of Cash Collateral provided pursuant to clause
(iv) above, after giving effect to Section 2.16(a)(iv) and any Cash Collateral
provided by the Defaulting Lender).

(b)        Grant of Security Interest.   Timken, and to the extent provided by
any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to
the control of) the Paying Agent, for the benefit of the Agents, the L/C Issuer
and the Lenders, and agrees to maintain, a first priority security interest in
all deposit accounts and all cash and balances deposited or held therein, and in
all proceeds of the foregoing, all as security for the obligations to which the
Cash Collateral may be applied pursuant to Section 2.15. If at any time the
Paying Agent determines that Cash Collateral is subject to any right or claim of
any Person other than the Paying Agent or the L/C Issuer as herein provided or
that the total amount of such Cash Collateral is less than the Minimum
Collateral Amount, Timken will, promptly upon demand by the Paying Agent,
deposit with, pay or provide to the Paying Agent additional Cash Collateral in
an amount sufficient to eliminate such deficiency. All Cash Collateral (other
than credit support not constituting funds subject to deposit) shall be
maintained in blocked, non-interest bearing deposit accounts at the Paying
Agent, in the name of Timken. Timken shall pay on demand therefor from time to
time all customary account opening, activity and other reasonable administrative
fees and charges in connection with the maintenance and disbursement of Cash
Collateral.

(c)        Application.   Notwithstanding anything to the contrary contained in
this Agreement, Cash Collateral provided under any of this Section 2.15 or
Sections 2.03, 2.05, 2.16 or 9.02 in respect of Letters of Credit shall be held
and applied to the satisfaction of the specific L/C Obligations, obligations to
fund participations therein (including, as to Cash Collateral provided by a
Defaulting Lender, any interest accrued on such obligation) and other
obligations for which the Cash Collateral was so provided, prior to any other
application of such property as may otherwise be provided for herein.

(d)        Release.   Cash Collateral (or the appropriate portion thereof)
provided to reduce Fronting Exposure or to secure other obligations, and the
security interest in such Cash Collateral shall be released promptly following
(i) the elimination of the applicable Fronting Exposure or other obligations
giving rise thereto (including by the termination of Defaulting Lender status of
the applicable Lender (or, as appropriate, its assignee following compliance
with Section

 

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11.06(b)(vi))), (ii) in the event Cash Collateral is provided pursuant to
Section 9.02(c), the cure or waiver of all Events of Default, or (iii) the
determination by the Paying Agent and the L/C Issuer that there exists excess
Cash Collateral; provided, however, the Person providing Cash Collateral and the
L/C Issuer may agree that Cash Collateral shall not be released but instead held
to support future anticipated Fronting Exposure or other obligations.

 

  2.16

Defaulting Lender.

(a)        Adjustments.   Notwithstanding anything to the contrary contained in
this Agreement, if any Lender becomes a Defaulting Lender, then, until such time
as that Lender is no longer a Defaulting Lender, to the extent permitted by
applicable Law:

(i)        Waivers and Amendments.  Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of “Required Lenders” and
Section 11.01.

(ii)        Defaulting Lender Waterfall.  Any payment of principal, interest,
fees or other amounts received by the Paying Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article IX or otherwise) or received by the Paying Agent from a Defaulting
Lender pursuant to Section 11.09 shall be applied at such time or times as may
be determined by the Paying Agent as follows: first, to the payment of any
amounts owing by such Defaulting Lender to the Paying Agent hereunder; second,
to the payment on a pro rata basis of any amounts owing by such Defaulting
Lender to the L/C Issuer or Swing Line Lender hereunder; third, to Cash
Collateralize the L/C Issuer’s Fronting Exposure with respect to such Defaulting
Lender in accordance with Section 2.15; fourth, as Timken may request (so long
as no Default or Event of Default exists), to the funding of any Loan in respect
of which such Defaulting Lender has failed to fund its portion thereof as
required by this Agreement, as determined by the Paying Agent; fifth, if so
determined by the Paying Agent and Timken, to be held in a deposit account and
released pro rata in order to (x) satisfy such Defaulting Lender’s potential
future funding obligations with respect to Loans under this Agreement and
(y) Cash Collateralize the L/C Issuer’s future Fronting Exposure with respect to
such Defaulting Lender with respect to future Letters of Credit issued under
this Agreement, in accordance with Section 2.15; sixth, to the payment of any
amounts owing to the Lenders, the L/C Issuer or Swing Line Lender as a result of
any judgment of a court of competent jurisdiction obtained by any Lender, the
L/C Issuer or the Swing Line Lender against such Defaulting Lender as a result
of such Defaulting Lender’s breach of its obligations under this Agreement;
seventh, so long as no Default or Event of Default exists, to the payment of any
amounts owing to any Borrower as a result of any judgment of a court of
competent jurisdiction obtained by such Borrower against such Defaulting Lender
as a result of such Defaulting Lender’s breach of its obligations under this
Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a
court of competent jurisdiction; provided that if (x) such payment is a payment
of the principal amount of any Loans or L/C Borrowings in respect of which such
Defaulting Lender has not fully funded its appropriate share, and (y) such Loans
were made or the related Letters of Credit were issued at a time when the
conditions set forth in Section 5.02 were satisfied or waived, such payment
shall be applied solely to pay the Loans of, and L/C Obligations owed to, all
Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment
of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such
time as all Loans and funded and unfunded participations in L/C Obligations and
Swing Line Loans are held by the Lenders pro rata in accordance with

 

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the Commitments hereunder without giving effect to Section 2.16(a)(iv). Any
payments, prepayments or other amounts paid or payable to a Defaulting Lender
that are applied (or held) to pay amounts owed by a Defaulting Lender or to post
Cash Collateral pursuant to this Section 2.16(a)(ii) shall be deemed paid to and
redirected by such Defaulting Lender, and each Lender irrevocably consents
hereto.

(iii)      Certain Fees.

(A)        The Defaulting Lender (x) shall not be entitled to receive or accrue
any fees payable under Section 2.09(a) or any Letter of Credit Fee for any
period during which that Lender is a Defaulting Lender (and Timken shall not be
required to pay any such fee that otherwise would have been required to have
been paid to that Defaulting Lender).

(B)        With respect to any fee payable under Section 2.09(a) or any Letter
of Credit Fee not required to be paid to any Defaulting Lender pursuant to
clause (A) or (B) above, Timken shall (x) pay to each Non-Defaulting Lender that
portion of any such fee otherwise payable to such Defaulting Lender with respect
to such Defaulting Lender’s participation in L/C Obligations or Swing Line Loans
that has been reallocated to such Non-Defaulting Lender pursuant to clause
(iv) below, (y) pay to the L/C Issuer and Swing Line Lender, as applicable, the
amount of any such fee otherwise payable to such Defaulting Lender to the extent
allocable to such L/C Issuer’s or Swing Line Lender’s Fronting Exposure to such
Defaulting Lender, and (z) not be required to pay the remaining amount of any
such fee.

(iv)     Reallocation of Pro Rata Shares to Reduce Fronting Exposure.   All or
any part of such Defaulting Lender’s participation in L/C Obligations and Swing
Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance
with their respective Pro Rata Shares (calculated without regard to such
Defaulting Lender’s Commitment) but only to the extent that such reallocation
does not cause the aggregate Total Outstandings of any Non-Defaulting Lender to
exceed such Non-Defaulting Lender’s Commitment. No reallocation hereunder shall
constitute a waiver or release of any claim of any party hereunder against a
Defaulting Lender arising from that Lender having become a Defaulting Lender,
including any claim of a Non-Defaulting Lender as a result of such
Non-Defaulting Lender’s increased exposure following such reallocation.

(v)      Cash Collateral, Repayment of Swing Line Loans.   If the reallocation
described in clause (a)(iv) above cannot, or can only partially, be effected,
Timken shall, without prejudice to any right or remedy available to it hereunder
or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal
to the Swing Line Lenders’ Fronting Exposure and (y) second, Cash Collateralize
the L/C Issuers’ Fronting Exposure in accordance with the procedures set forth
in Section 2.15.

(b)        Defaulting Lender Cure.  If Timken, the Co-Administrative Agents,
Swing Line Lender and the L/C Issuer agree in writing that a Lender is no longer
a Defaulting Lender, the Co-Administrative Agents will so notify the parties
hereto, whereupon as of the effective date specified in such notice and subject
to any conditions set forth therein (which may include arrangements with respect
to any Cash Collateral), that Lender will, to the extent applicable, purchase
that portion of outstanding Loans of the other Lenders or take such other
actions as the Co-Administrative Agents may determine to be necessary to cause
the Loans and funded and

 

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unfunded participations in Letters of Credit and Swing Line Loans to be held on
a pro rata basis by the Lenders in accordance with their Pro Rata Share (without
giving effect to Section 2.16(a)(iv)), whereupon such Lender will cease to be a
Defaulting Lender; provided that no adjustments will be made retroactively with
respect to fees accrued or payments made by or on behalf of any Borrower while
that Lender was a Defaulting Lender; and provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender to Lender will constitute a waiver or release of any
claim of any party hereunder arising from that Lender’s having been a Defaulting
Lender.

 

  2.17

Designated Borrower.

(a)        Timken may at any time and from time to time, upon not less than 10
Business Days’ notice from Timken to the Co-Administrative Agents (or such
shorter period as may be agreed by the Co-Administrative Agents in their sole
discretion), designate any Foreign Subsidiary of Timken (an “Applicant
Designated Borrower”) as a Designated Borrower to receive Loans hereunder by
delivering to the Co-Administrative Agents (which shall promptly deliver
counterparts thereof to each Lender) a duly executed notice and agreement in
substantially the form of Exhibit I (a “Designated Borrower Request and
Assumption Agreement”). The parties hereto acknowledge and agree that prior to
any Applicant Designated Borrower becoming entitled to utilize the credit
facilities provided for herein (i) the Co-Administrative Agents and the Lenders
must each agree in writing to such Designated Borrower becoming a Borrower
hereunder and (ii) the Co-Administrative Agent and the Lenders shall have
received such supporting resolutions, incumbency certificates, opinions of
counsel and other documents or information (including, without limitation, all
documentation and other information with respect to such Designated Borrower
requested by any such Lender in order to comply with its obligations under
applicable “know your customer” and anti-money laundering rules and regulations,
including the USA Patriot Act), in form, content and scope reasonably
satisfactory to the Co-Administrative Agents, as may be required by the
Co-Administrative Agents in their sole discretion, and Notes signed by such
Designated Borrower to the extent any Lenders so require. If the
Co-Administrative Agents and each of the Lenders agree that the Applicant
Designated Borrower shall be entitled to receive Loans hereunder, then promptly
following receipt of all such requested resolutions, incumbency certificates,
opinions of counsel and other documents or information and the fully executed
Timken Guaranty Agreement, the Co-Administrative Agents shall send a notice in
substantially the form of Exhibit J (a “Designated Borrower Notice”) to Timken
and the Lenders specifying the effective date upon which the Applicant
Designated Borrower shall constitute a Designated Borrower for purposes hereof,
whereupon each of the Lenders agrees to permit such Designated Borrower to
receive Loans hereunder, on the terms and conditions set forth herein, and each
of the parties agrees that such Designated Borrower otherwise shall be a
Borrower for all purposes of this Agreement; provided that no Committed Loan
Notice may be submitted on behalf of such Designated Borrower until the date
five Business Days after such effective date.

(b)        The Obligations of each Borrower (including each Designated Borrower)
shall be several in nature. Notwithstanding anything in this Agreement or any
other Loan Document to the contrary, (i) the obligation of each Designated
Borrower, in its capacity as such, under this Agreement and the other Loan
Documents is several and not joint and (ii) each Designated Borrower shall not
have any liability for the payment of any Obligation other than the Designated
Borrower Obligations of such Designated Borrower.

(c)        Any Foreign Subsidiary of Timken that becomes the “Designated
Borrower” pursuant to this Section 2.17 hereby irrevocably appoints Timken as
its agent for all purposes relevant to this Agreement and each of the other Loan
Documents, including (i) the giving and receipt of notices and (ii) the
execution and delivery of all documents, instruments and certificates
contemplated herein and all modifications hereto. Any acknowledgment, consent,
direction, certification or other action which might

 

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otherwise be valid or effective only if given or taken by all Borrowers, or by
Timken and the Designated Borrowers acting singly, shall be valid and effective
if given or taken only by Timken, whether or not the Designated Borrowers join
therein. Any notice, demand, consent, acknowledgement, direction, certification
or other communication delivered to Timken in accordance with the terms of this
Agreement shall be deemed to have been delivered to the applicable Designated
Borrower.

(d)        Timken may from time to time, upon not less than 10 Business Days’
notice from Timken to the Co-Administrative Agents (or such shorter period as
may be agreed by the Co-Administrative Agents in its sole discretion), terminate
any Designated Borrower’s status as such, provided that there are no outstanding
Loans payable by such Designated Borrower, or other amounts payable by such
Designated Borrower on account of any Loans made to it, as of the effective date
of such termination. The Co-Administrative Agents will promptly notify the
Lenders of any such termination of such Designated Borrower’s status.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

 

  3.01

Taxes.

(a)        Any and all payments by the Borrowers to or for the account of any
Agent or any Lender under any Loan Document shall be made free and clear of and
without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of each Agent and each
Lender, (1) taxes imposed on or measured by its overall net income, and
franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the Laws of which such Agent or
such Lender, as the case may be, is organized or maintains a Lending Office, or
to which such Agent or such Lender has a present or former connection (other
than connections arising from such recipient having executed, delivered, become
a party to, performed its obligations under, received payments under, received
or perfected a security interest under, engaged in any other transaction
pursuant to or enforced any Loan Document, or sold or assigned an interest in
any Loan or Loan Document) and (2) any U.S. federal withholding taxes imposed
under FATCA (all such non-excluded taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and liabilities being
hereinafter referred to as “Taxes”). If any Borrower shall be required by any
Laws to deduct any Taxes from or in respect of any sum payable under any Loan
Document to any Agent or any Lender, (i) the sum payable by such Borrower shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 3.01), each of such Agent and such Lender receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the Agent
or such Borrower shall make such deductions, (iii) the Agent or such Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable Laws, and (iv) such Borrower shall
furnish to the Paying Agent (which shall forward the same to such Agent or such
Lender, as the case may be) the original or a certified copy of a receipt
evidencing payment thereof to the extent such a receipt is issued therefor, or
other written proof of payment thereof that is reasonably satisfactory to the
Paying Agent.

(b)        In addition, each Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery,

 

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performance, enforcement or registration of, or otherwise with respect to, any
Loan Document (hereinafter referred to as “Other Taxes”).

(c)        Each Borrower agrees to indemnify each Agent and each Lender for
(i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this
Section 3.01) paid by such Agent and such Lender and (ii) any liability
(including additions to tax, penalties, interest and expenses) arising therefrom
or with respect thereto. Payment under this Section 3.01(d) shall be made within
30 days after the date such Lender or such Agent makes a demand therefor. A
certificate as to the amount of such payment or liability delivered to Timken by
a Lender (with a copy to the Paying Agent), or by an Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest error.

 

  3.02

Illegality.

If any Lender reasonably determines that the introduction of or Change in Law
has made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Loans whose interest is determined by reference to the Eurocurrency Rate in
Dollars or any Committed Currency, or to determine or charge interest rates
based upon the Eurocurrency Rate, then, on notice thereof by such Lender to
Timken through the Paying Agent, (i) any obligation of such Lender to make or
continue Eurocurrency Rate Loans in the applicable currency or to convert Base
Rate Loans to Eurocurrency Rate Loans in the applicable currency shall be
suspended and (ii) if such notice asserts the illegality of such Lender making
or maintaining Base Rate Loans the interest rate on which is determined by
reference to the Eurocurrency Rate component of the Base Rate, the interest rate
on which Base Rate Loans of such Lender shall, if necessary to avoid such
illegality, be determined by the Paying Agent without reference to the
Eurocurrency Rate component of the Base Rate, in each case until such Lender
notifies the Paying Agent and Timken that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, (x) Timken shall,
upon demand from such Lender (with a copy to the Paying Agent), prepay or, if
applicable, convert all such Eurocurrency Rate Loans of such Lender and/or Base
Rate Loans as to which the interest rate is determined with reference to with
reference to clause (b) of the definition of “Eurocurrency Rate,” as applicable,
to Base Rate Loans as to which the rate of interest is not determined with
reference to the Eurocurrency Rate (or if any such Eurocurrency Rate Loan is
denominated in any Committed Currency, be exchanged into an Equivalent amount of
Dollars and be converted into a Base Rate Loan as to which the rate of interest
is not determined with reference to the Eurocurrency Rate), either on the last
day of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurocurrency Rate Loans to such day, or immediately, if such
Lender may not lawfully continue to maintain such Eurocurrency Rate Loans and
(y) if such notice asserts the illegality of such Lender determining or charging
interest rates based upon the Eurocurrency Rate, the Paying Agent shall during
the period of such suspension compute the Base Rate applicable to such Lender
without reference to the Eurocurrency Rate component thereof until the Paying
Agent is advised in writing by such Lender that it is no longer illegal for such
Lender to determine or charge interest rates based upon the Eurocurrency Rate.
Each Lender agrees to notify the Paying Agent and Timken in writing promptly
upon becoming aware that it is no longer illegal for such Lender to determine or
charge interest rates based upon the Eurocurrency Rate. Notwithstanding the
foregoing and despite the illegality for such a Lender to make, maintain or fund
Eurocurrency Rate Loans or Base Rate Loans as to which the interest rate is
determined with reference to the Eurocurrency Rate, that Lender shall remain
committed to make Base Rate Loans and shall be entitled to recover interest at
the Base Rate (without giving effect to clause (c) thereof). Upon any such
prepayment or conversion, Timken shall also pay (or cause the applicable
Designated Borrower to pay) accrued interest on the amount so prepaid or
converted, but without liability under Section 3.05(a). Each Lender agrees to

 

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designate a different Lending Office if such designation will avoid the need for
such notice and will not, in the good faith judgment of such Lender, otherwise
be materially disadvantageous to such Lender.

 

  3.03

Inability to Determine Rates.

If the Co-Administrative Agents reasonably determine that for any reason in
connection with any request for a Loan or a conversion to or continuation
thereof that (a) Dollar or other Committed Currency deposits are not being
offered to banks in the London interbank eurocurrency market or, in the case of
Euro deposits, the European interbank eurocurrency market for the applicable
amount and Interest Period of such Loan, (b) adequate and reasonable means do
not exist for determining the Eurocurrency Rate for any requested Interest
Period with respect to a proposed Eurocurrency Rate Loan or in connection with a
Base Rate Loan, or (c) the Eurocurrency Rate for any requested Interest Period
with respect to a proposed Eurocurrency Rate Loan or in connection with a
Eurocurrency Rate Loan does not adequately and fairly reflect the cost to such
Lenders of funding such Loan, the Paying Agent will promptly so notify Timken
and each Lender. Thereafter, the obligation of the Lenders to make or maintain
Eurocurrency Rate Loans in the applicable currency or Base Rate Loans as to
which the interest rate is determined with reference to the Eurocurrency Rate,
as applicable, shall be suspended until the Paying Agent (upon the instruction
of the Required Lenders) revokes such notice. Upon receipt of such notice,
Timken may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurocurrency Rate Loans in the applicable currency or, failing
that, will be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein and shall be
entitled to recover interest at the Base Rate (without giving effect to clause
(c) thereof).

 

  3.04

Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurocurrency
Rate Loans.

(a)        If any Lender determines that as a result of the introduction of or
any Change in Law or such Lender’s compliance therewith, there shall be any
increase in the cost to such Lender of agreeing to make or making, funding or
maintaining any Loan the interest on which is determined by reference to the
Eurocurrency Rate or (as the case may be) issuing or participating in Letters of
Credit, or a reduction in the amount received or receivable by such Lender in
connection with any of the foregoing (excluding for purposes of this
Section 3.04(a) any such increased costs or reduction in amount resulting from
(i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) taxes
excluded from the definition of “Taxes” set forth in Section 3.01, and
(iii) reserve requirements contemplated by Section 3.04(c)), then from time to
time upon demand of such Lender (with a copy of such demand to the Paying
Agent), Timken shall pay (or cause the applicable Designated Borrower to pay) to
such Lender such additional amounts as will compensate such Lender for such
increased cost or reduction; provided, that such Lender shall be generally
seeking, or intending generally to seek, comparable compensation from similarly
situated borrowers under similar credit facilities (to the extent such Lender
has the right under such credit facilities to do so) in similar circumstances.

(b)        If any Lender reasonably determines that the introduction of any
Change in Law regarding capital adequacy or liquidity or any change therein or
in the interpretation thereof, or compliance by such Lender (or its Lending
Office) therewith, has the effect of reducing the rate of return on the capital
of such Lender or any corporation controlling such Lender as a consequence of
such Lender’s obligations hereunder (taking into consideration its policies with
respect to capital adequacy and such Lender’s desired return on capital), then
from time to time upon demand of such Lender (with a copy of such demand to the
Paying Agent), Timken shall pay (or cause the applicable Designated Borrower to
pay) to such Lender such additional amounts as will compensate such Lender for
such reduction; provided, that such Lender shall be generally

 

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seeking, or intending generally to seek, comparable compensation from similarly
situated borrowers under similar credit facilities (to the extent such Lender
has the right under such credit facilities to do so) in similar circumstances.

(c)        Timken shall pay (or cause the applicable Designated Borrower to pay)
to each Lender, as long as such Lender shall be required to maintain reserves
with respect to liabilities or assets consisting of or including Eurocurrency
funds or deposits (currently known as “Eurocurrency liabilities”), additional
interest on the unpaid principal amount of each Eurocurrency Rate Loan equal to
the actual costs of such reserves allocated to such Loan by such Lender (as
determined by such Lender in good faith, which determination shall be
conclusive), which shall be due and payable on each date on which interest is
payable on such Loan, provided Timken shall have received at least 15 days’
prior notice (with a copy to the Paying Agent) of such additional interest from
such Lender. If a Lender fails to give notice 15 days prior to the relevant
Interest Payment Date, such additional interest shall be due and payable 15 days
from receipt of such notice.

 

  3.05

Funding Losses.

(a)        Upon demand of any Lender (with a copy to the Paying Agent) from time
to time, Timken shall promptly compensate (or cause the applicable Designated
Borrower to compensate) such Lender for and hold such Lender harmless from any
loss, cost or expense incurred by it as a result of:

(i)        any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);

(ii)        any failure by any Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by Timken; or

(iii)        any assignment of a Eurocurrency Rate Loan on a day other than the
last day of the Interest Period therefor as a result of a request by Timken
pursuant to Section 11.16;

excluding any loss of anticipated profits but including any loss or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan or from fees payable to terminate the deposits from which such funds
were obtained. Timken shall also pay (or cause the applicable Designated
Borrower to pay) any customary administrative fees charged by such Lender in
connection with the foregoing.

(b)        In addition to the rights of the Lenders set forth in
Section 3.05(a), at any time on or prior to the 180th day following the Closing
Date, upon demand of the Paying Agent, from time to time, Timken shall promptly
compensate (or cause the applicable Designated Borrower to compensate) the
Paying Agent for and hold the Paying Agent harmless from any loss, cost or
expense incurred by it as a result of any assignment of a Eurocurrency Rate Loan
on a day other than the last day of the Interest Period therefor as a result of
the syndication of the Revolving Credit Facility.

(c)        For purposes of calculating amounts payable by Timken (or the
applicable Designated Borrower) to the Lenders or the Paying Agent under this
Section 3.05, each Lender

 

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shall be deemed to have funded each Eurocurrency Rate Loan made by it at the
Eurocurrency Rate for such Loan by a matching deposit or other borrowing in the
London interbank Eurocurrency market for a comparable amount and for a
comparable period, whether or not such Eurocurrency Rate Loan was in fact so
funded.

 

  3.06

Matters Applicable to All Requests for Compensation.

(a)        A certificate of any Agent or any Lender claiming compensation under
this Article III and setting forth a statement of reasons for such demand and
the calculation of such additional amount or amounts to be paid to it hereunder
in reasonable detail, and shall be conclusive in the absence of manifest error;
provided, however, that no Agent or Lender may seek compensation under this
Article III more than 60 days after such Agent or Lender had actual knowledge
that such amount or amounts were payable under this Article III. In determining
such amount, such Agent or such Lender may use any reasonable averaging and
attribution methods.

(b)        Upon any Lender’s making a claim for compensation under Section 3.01
or 3.04, Timken may replace such Lender in accordance with Section 11.16.

 

  3.07

Survival.

All of the Borrowers’ obligations under this Article III shall survive
termination of the Aggregate Commitments and repayment of all other Obligations
hereunder.

ARTICLE IV

[RESERVED]

ARTICLE V

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

  5.01

Conditions of Initial Credit Extension.

The obligation of the L/C Issuer and each Lender to make its initial Credit
Extension hereunder is subject to satisfaction of the following conditions
precedent:

(a)        The Co-Administrative Agents’ receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of Timken,
if applicable, each dated such date (or, in the case of certificates of
governmental officials, a recent date before such date) and each in form and
substance satisfactory to the Co-Administrative Agents and the Lenders:

(i)        executed counterparts of this Agreement, sufficient in number for
distribution to each Agent, each Lender and Timken;

(ii)        a Note executed by Timken in favor of each Lender requesting a Note;

(iii)        such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of Timken as the
Co-Administrative Agents and the Lenders may reasonably require evidencing the
identity, authority and capacity of each Responsible Officer thereof authorized
to act as a Responsible Officer in

 

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connection with this Agreement and the other Loan Documents to which Timken is a
party or is to be a party;

(iv)    such documents and certifications as the Co-Administrative Agents and
the Lenders may reasonably require to evidence that Timken is duly organized or
formed, and that Timken is validly existing and in good standing in its
jurisdiction of organization;

(v)    a favorable opinion of (i) Cleary Gottlieb Steen & Hamilton LLP, New York
counsel to Timken, and (ii) in-house counsel of Timken, in each case, addressed
to the Co-Administrative Agents and each Lender, in form and substance
reasonably satisfactory to the Co-Administrative Agents;

(vi)    a certificate of a Responsible Officer of Timken either (A) attaching
copies of all consents, licenses and approvals required in connection with the
execution, delivery and performance by Timken and the validity against Timken of
the Loan Documents to which it is a party, and such consents, licenses and
approvals shall be in full force and effect, or (B) stating that no such
consents, licenses or approvals are so required;

(vii)    a certificate signed by a Responsible Officer of Timken certifying
(A) that the conditions specified in Sections 5.02(a) and (b) have been
satisfied and (B) that there has been no event or circumstance since the date of
the Audited Financial Statements that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect;

(viii)   a certificate attesting to the Solvency of Timken and its Subsidiaries
on a consolidated basis, after giving effect to the consummation of the
transaction contemplated hereby, from Timken’s Chief Financial Officer; and

(ix)    such other assurances, certificates, documents, consents or opinions as
the Co-Administrative Agents may reasonably require.

(b)        All fees required to be paid by Timken in connection with the Loan
Documents on or before the Closing Date shall have been paid in full.

(c)        All accrued reasonable expenses of the Co-Administrative Agents and
the Lenders, including, without limitation, Attorney Costs for which Timken has
received a reasonably detailed invoice at least 5 days prior to the Closing
Date, shall have been paid in full.

(d)        The absence of any action, suit, investigation or proceeding pending
or, to the knowledge of Timken, threatened in any court or before any arbitrator
or Governmental Authority that (i) could reasonably be expected to materially
and adversely affect Timken and its Subsidiaries, (ii) purports to adversely
affect the ability of Timken to perform its obligations under the Loan
Documents, or (iii) purports to affect the legality, validity or enforceability
of any Loan Document.

(e)        There shall not have occurred a material adverse change in the
business, assets, liabilities (actual or contingent), operations or condition
(financial or otherwise) of Timken and its Subsidiaries taken as a whole since
December 31, 2014.

 

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Without limiting the generality of the provisions of the last paragraph of
Section 10.03, for purposes of determining compliance with the conditions
specified in this Section 5.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Co-Administrative Agents
shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

  5.02

Conditions to all Credit Extensions.

The obligation of each Lender to honor any Request for Credit Extension (other
than a Committed Loan Notice requesting only a conversion of Loans to the other
Type, or a continuation of Eurocurrency Rate Loans) is subject to the following
conditions precedent:

(a)        The representations and warranties of Timken contained in Article VI
(other than Sections 6.05(c), 6.06 and 6.09) or any other Loan Document, or
which are contained in any document furnished by Timken at any time under or in
connection herewith or therewith, shall be true and correct in all material
respects (except for any representation and warranty that is qualified by
materiality or reference to Material Adverse Effect, which such representation
and warranty shall be true and correct in all respects as qualified thereby) on
and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier
date, and except that for purposes of this Section 5.02, the representations and
warranties contained in subsections (a) and (b) of Section 6.05 shall be deemed
to refer to the most recent statements furnished pursuant to subsections (a) and
(b), respectively, of Section 7.01.

(b)        No Default shall exist, or would result from such proposed Credit
Extension or from the application of the proceeds thereof.

(c)        The Paying Agent and, if applicable, the Appropriate L/C Issuer or
the Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.

(d)        If the Request for Credit Extension is made by or on behalf of any
Designated Borrower, then the conditions of Section 2.17 to the designation of
such Designated Borrower shall have been met to the satisfaction of the
Co-Administrative Agents.

Each Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Loans to the other Type or a continuation of Eurocurrency
Rate Loans) submitted by Timken shall be deemed to be a representation and
warranty that the conditions specified in Sections 5.02(a) and 5.02(b) have been
satisfied on and as of the date of the applicable Credit Extension.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

Timken represents and warrants to the Agents and the Lenders that:

 

  6.01

Existence, Qualification and Power; Compliance with Laws.

 

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Each Loan Party (a) is a corporation, partnership or limited liability company
duly organized or formed, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation or organization, (b) has all requisite
power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own or lease its assets and carry on its business
and (ii) execute, deliver and perform its obligations under the Loan Documents
to which it is a party and (c) is duly qualified and is licensed and in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (b)(i) or
(c), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.

 

  6.02

Authorization; No Contravention.

The execution, delivery and performance by each Loan Party of each Loan Document
to which such Person is a party are within such Loan Party’s corporate or other
powers, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien (except for any Liens
that may arise under the Loan Documents) under, or require any payment to be
made under (i) any material Contractual Obligation to which such Person is a
party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) except as would not be reasonably likely to have a Material
Adverse Effect, any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) except as would not be reasonably likely to have a Material Adverse
Effect, violate any Law.

 

  6.03

Governmental Authorization; Other Consents.

No approval, consent, exemption, authorization, or other action by, or notice
to, or filing with, any Governmental Authority or any other Person (other than
filings under the Securities Exchange Act of 1934 and the rules and regulations
of the SEC promulgated thereunder) by any Loan Party is necessary or required in
connection with the execution, delivery or performance by, or enforcement or
exercise of rights or remedies against, any Loan Party of this Agreement or any
other Loan Document, except for those that have already been obtained.

 

  6.04

Binding Effect.

This Agreement has been, and each other Loan Document, when delivered hereunder,
will have been, duly executed and delivered by each Loan Party that is party
thereto. This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its terms, except
as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar or laws of general applicability affecting
the enforcement of creditors’ rights and (b) the application of general
principles of equity.

 

  6.05

Financial Statements; No Material Adverse Effect.

(a)        The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present, in all material
respects, the financial condition of Timken and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and (iii) show all material
indebtedness and other liabilities,

 

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direct or contingent, of Timken and its Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness, to the
extent required by GAAP.

(b)        The unaudited consolidated financial statements of Timken and its
Subsidiaries dated March 31, 2015, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for the fiscal quarter
ended on that date (i) have been prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present, in all material respects, the financial
condition of Timken and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.

(c)        Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.

 

  6.06

Litigation.

There are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of Timken, threatened at law, in equity, in arbitration or before any
Governmental Authority, by or against Timken or any of its Subsidiaries or
against any of their properties or revenues that (a) purport to affect or
pertain to this Agreement or any other Loan Document, or (b) either individually
or in the aggregate could reasonably be expected to have a Material Adverse
Effect.

 

  6.07

No Default.

Neither Timken nor any Subsidiary is in default under or with respect to any
Contractual Obligation where such default, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

 

  6.08

Ownership of Property.

Each Loan Party and each of its Subsidiaries has good record and marketable
title in fee simple to, or valid leasehold interests in, all real property
necessary and used in the ordinary conduct of its business, except for such
defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

  6.09

Environmental Compliance.

Except as otherwise set forth on Schedule 6.09, Timken and its Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and known Environmental Liabilities on their respective
businesses, operations and properties, and as a result thereof Timken has
reasonably concluded that such Environmental Laws and known Environmental
Liabilities, could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

  6.10

Taxes.

Timken and its Subsidiaries have filed all Federal and material state income tax
returns and other material tax returns and reports required to be filed, and
have paid all Federal, material state and other material taxes, assessments,
fees and other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which are
being contested in good

 

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faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against Timken or any Subsidiary that would, if made, have a Material
Adverse Effect. As of the Closing Date, neither any Loan Party nor any of its
Subsidiaries is party to any tax sharing agreement, except for (i) tax sharing
agreements solely among any of the Loan Parties and (ii) the tax sharing
agreement by and between Timken and TimkenSteel Corporation dated June 30, 2014.

 

  6.11

Pension Plans.

(a)        Except as set forth on Schedule 6.11 hereto, (i) neither Timken nor
any Loan Party has incurred any withdrawal liability (within the meaning of Part
1 of Subtitle E of Title IV of ERISA) with respect to any Multiemployer Plan,
(ii) no Loan Party has incurred any liability under Section 502(i) of ERISA or
Section 4975 of the Code with respect to the Plans, (iii) no ERISA Event has
occurred and neither Timken nor any ERISA Affiliate is aware of any fact, event
or circumstance that could reasonably be expected to constitute or result in an
ERISA Event, (iv) neither Timken nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 of ERISA with respect to a Multiemployer Plan,
(v) neither Timken nor any ERISA Affiliate has engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA, (vi) each Plan is in
material compliance with the applicable provisions of ERISA, the Code and other
Federal or state Laws, (vii) each Plan that is intended to be a qualified plan
under Section 401(a) of the Code has received a favorable determination letter
from the IRS to the effect that the form of such Plan is qualified under
Section 401(a) of the Code and the trust related thereto has been determined by
the IRS to be exempt from federal income tax under Section 501(a) of the Code or
an application for such a letter is currently being processed by the IRS,
(viii) Timken and each ERISA Affiliate has met all applicable requirements under
the Pension Funding Rules in respect of each Pension Plan, and no waiver of the
minimum funding standards under the Pension Funding Rules has been applied for
or obtained, except, with respect to subsections (i) through (viii) above, as
would not, in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

(b)        There are no pending or, to the knowledge of Timken, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect.

 

  6.12

Margin Regulations; Investment Company Act.

(a)        Timken is not engaged and will not engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock.

(b)        None of Timken, any Person Controlling Timken, or, after the
Springing Guaranty Date, any Guarantor is or is required to be registered as an
“investment company” under the Investment Company Act of 1940.

 

  6.13

Disclosure.

As of the Closing Date, no written report, financial statement, certificate or
other information furnished by or on behalf of any Loan Party to any Agent or
any Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under

 

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any other Loan Document (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information provided by Timken or that is
otherwise described on Schedule 6.13, Timken represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.

 

  6.14

Compliance with Laws.

Each Loan Party and each Subsidiary is in compliance in all material respects
with the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which
(a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or
(b) the failure to comply therewith, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

 

  6.15

OFAC.

Neither Timken, nor any of its Subsidiaries, nor, to the knowledge of Timken and
its Subsidiaries, any director, officer, controlled affiliate or representative
thereof, is an individual or entity that is, or is owned or controlled by any
individual or entity that is (i) currently an individual or entity with whom
dealings are prohibited under any Sanctions, (ii) included on OFAC’s List of
Specially Designated Nationals or any other replacement official publication of
such list or (iii) located, organized or resident in a Designated Jurisdiction.

 

  6.16

Anti-Corruption Laws.

Timken and its Subsidiaries have conducted their businesses in material
compliance with the United States Foreign Corrupt Practices Act of 1977, the UK
Bribery Act 2010 and other similar anti-corruption legislation in other
jurisdictions and have instituted and maintained policies and procedures
designed to promote compliance with such laws.

ARTICLE VII

AFFIRMATIVE COVENANTS

Until such time as the Obligations have been Fully Satisfied, Timken shall, and
shall (except in the case of the covenants set forth in Sections 7.01, 7.02,
7.03 and 7.11) cause each Subsidiary to:

 

  7.01

Financial Statements.

Deliver to each Agent and each Lender, in form and detail satisfactory to the
Co-Administrative Agents:

(a)        as soon as available, but in any event within 90 days after the end
of each fiscal year of Timken, a consolidated balance sheet of Timken and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, audited and accompanied by a report and opinion of either a Pre-Approved
Accounting Firm or another

 

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independent certified public accountant of nationally recognized standing
selected by Timken and reasonably acceptable to the Required Lenders, which
report and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of
such audit; and

(b)        as soon as available, but in any event within 45 days after the end
of each of the first three fiscal quarters of each fiscal year of Timken, a
consolidated balance sheet of Timken and its Subsidiaries as at the end of such
fiscal quarter, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal quarter and for the portion
of Timken’s fiscal year then ended, all in reasonable detail and certified by a
Responsible Officer of Timken as fairly presenting the financial condition,
results of operations, shareholders’ equity and cash flows of Timken and its
Subsidiaries, which shall have been prepared in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes.

In lieu of furnishing to the Paying Agent paper or electronic copies of the
documents required to be delivered pursuant to Sections 7.01(a) and 7.01(b), to
the extent such documents are filed with the SEC, the documents shall be deemed
to have been delivered on the date on which Timken posts such documents on its
website or on the SEC’s EDGAR system. Notwithstanding the foregoing, Timken
shall deliver paper or electronic copies of such documents to any Lender that
requests Timken to deliver such paper or electronic copies.

 

  7.02

Certificates; Other Information.

Deliver to the Paying Agent (who will make available to the Lenders), in form
and detail satisfactory to the Co-Administrative Agents:

(a)        concurrently with the delivery of the financial statements referred
to in Sections 7.01(a) and 7.01(b), a duly completed Compliance Certificate
signed by a Responsible Officer of Timken;

(b)        copies of all annual, regular, periodic and special reports and
registration statements which Timken have filed with the SEC under Section 13 or
15(d) of the Securities Exchange Act of 1934, or with any Governmental Authority
that may be substituted therefor; and

(c)        promptly, such additional information regarding the business,
financial or corporate affairs of any Loan Party or any Subsidiary, or
compliance with the terms of the Loan Documents, as any Agent or any Lender may
from time to time reasonably request.

In lieu of furnishing to the Paying Agent paper or electronic copies of the
documents required to be delivered pursuant to Section 7.02(b), to the extent
such documents are filed with the SEC or posted on Timken’s website, the
documents shall be deemed to have been delivered on the date on which Timken
posts such documents on its website or on the SEC’s EDGAR system.
Notwithstanding the foregoing, Timken shall deliver paper or electronic copies
of such documents to any Lender that requests Timken to deliver such paper or
electronic copies.

Notwithstanding anything contained herein, in every instance Timken shall be
required to provide electronic copies of the Compliance Certificates required by
Section 7.02(a) to the Paying Agent (who will make such copies available to the
Lenders). Except for such Compliance Certificates, the Co-Administrative Agents
shall have no obligation to request the delivery or to maintain copies of the

 

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documents referred to above, and in any event shall have no responsibility to
monitor compliance by Timken with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.

Timken hereby acknowledges that (a) the Agents and/or the Arrangers will make
available to the Lenders and the L/C Issuer materials and/or information
provided by or on behalf of Timken hereunder (collectively, the “Borrower
Materials”) by posting Timken Materials on IntraLinks, Syndtrak, ClearPar, or a
substantially similar electronic transmission system (the “Platform”) and
(b) certain of the Lenders (each, a “Public Lender”) may have personnel who do
not wish to receive material non-public information with respect to Timken or
its Affiliates, or the respective securities of any of the foregoing, and who
may be engaged in investment and other market-related activities with respect to
such Person’s securities. Timken hereby agrees that (w) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, means that the word “PUBLIC”
shall appear prominently on the first page thereof; (x) by marking Borrower
Materials “PUBLIC,” Timken shall be deemed to have authorized the Agents, the
Arrangers and the Lenders to treat such Borrower Materials as not containing any
material non-public information (although the parties acknowledge that such
information may still be sensitive and/or proprietary) with respect to Timken or
its securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 11.08); (y) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated as “Public Side Information;” and (z) the
Agents and the Arrangers shall be entitled to treat any Borrower Materials that
are not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform that is not designated as “Public Side Information.” For purposes of
clarification, (i) any materials not marked “PUBLIC” shall be deemed to be
material non-public information and (ii) notwithstanding the foregoing, Timken
shall be under no obligation to mark any particular Borrower Materials “PUBLIC.”

 

  7.03

Notices.

Promptly after a Responsible Officer has knowledge thereof, notify each Agent
and each Lender:

(a)        of the occurrence of any Default or Event of Default; and

(b)        of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect.

Each notice pursuant to subparts (a) and (b) of this Section 7.03 shall be
accompanied by a statement of a Responsible Officer of Timken setting forth
details of the occurrence referred to therein and stating what action Timken has
taken and proposes to take with respect thereto.

 

  7.04

[Reserved]

 

  7.05

Preservation of Existence, Etc.

(a)        Preserve, renew and maintain in full force and effect its legal
existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 8.04 or 8.05; and
(b) take all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary or desirable in the normal conduct of its
business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.

 

  7.06

Maintenance of Properties.

 

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(a)        Maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear and casualty and condemnation events excepted,
except to the extent that the continued maintenance of such property is no
longer economically desirable as determined in good faith by Timken; and

(b)        make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.

 

  7.07

Maintenance of Insurance.

Maintain insurance with reputable insurance companies or maintain a
self-insurance program, with respect to its properties and business against loss
or damage of the kinds customarily insured against by Persons engaged in the
same or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.

 

  7.08

Compliance with Laws.

Comply in all material respects with the requirements of all Laws (including
Environmental Laws) and all orders, writs, injunctions and decrees applicable to
it or to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (b) the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.

 

  7.09

Books and Records.

Maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of Timken
or such Subsidiary, as the case may be.

 

  7.10

Inspection Rights.

Within ten Business Days of delivery of the notice referred to below, permit
representatives and independent contractors of each Agent and each Lender to
visit and inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and
independent public accountants, all at such reasonable times during normal
business hours, upon reasonable advance notice to Timken; provided, however,
that unless an Event of Default has occurred and is continuing at the time such
inspection commences, (a) only the Co-Administrative Agents on behalf of the
Lenders may exercise such inspection rights and (b) the Co-Administrative Agents
shall not exercise such rights more often than one time during any calendar
year.

 

  7.11

Use of Proceeds.

Use the proceeds of the Credit Extensions for working capital, capital
expenditures, Permitted Acquisitions and other lawful corporate purposes, in
each case, not in contravention of any Law or of any Loan Document.

 

  7.12

Covenant to Guarantee Obligations.

At any time following the Springing Guaranty Date, Timken shall, at Timken’s
expense:

 

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(i)      cause all Material Subsidiaries (other than (x) a special purpose
entity established to facilitate a securitization or other financing of accounts
receivable or other assets of any Loan Party otherwise permitted hereunder (each
a “Receivables Subsidiary” or (y) any Excluded Subsidiary) within 60 days after
the Springing Guaranty Date, to duly execute and deliver to the
Co-Administrative Agents a Subsidiary Guaranty Agreement in substantially the
same form as Exhibit G, guaranteeing the other Loan Parties’ obligations under
the Loan Documents,

(ii)     upon (x) the formation or acquisition of any new direct or indirect
Domestic Subsidiary by any Loan Party that is a Material Subsidiary or (y) any
existing direct or indirect Domestic Subsidiary of any Loan Party becoming a
Material Subsidiary (for purposes of this clause (ii) as determined by the
financial statements delivered pursuant to Section 7.01(a) and (b)), cause such
Material Subsidiary (other than (x) a Receivables Subsidiary or (y) any Excluded
Subsidiary) within 30 days after such formation or acquisition or becoming a
Material Subsidiary, and cause each direct and indirect parent of such Material
Subsidiary (if it has not already done so), to duly execute and deliver to the
Co-Administrative Agents a Joinder Agreement in substantially the same form as
Exhibit F, guaranteeing the other Loan Parties’ obligations under the Loan
Documents, and

(iii)    within 60 days after such formation or acquisition or becoming a
Material Subsidiary, deliver to the Co-Administrative Agents, upon the request
of the Co-Administrative Agents in their sole discretion, a signed copy of a
favorable opinion, addressed to the Co-Administrative Agents and the Lenders, of
counsel for the Loan Parties reasonably acceptable to the Co-Administrative
Agents relating to the matters described in clause (a) above, including any such
Subsidiary Guaranty Agreement or Joinder Agreement, as applicable, being legal,
valid and binding obligations of each Loan Party party thereto enforceable in
accordance with its terms;

provided, however, that, notwithstanding anything in any Loan Document to the
contrary, in no event will any Excluded Subsidiary or Receivables Subsidiary be
required to provide a Subsidiary Guaranty Agreement or Joinder Agreement under
any Loan Document.

 

  7.13

[Reserved]

 

  7.14

Further Assurances.

Promptly upon request by any Co-Administrative Agent, or any Lender through any
Co-Administrative Agent, (i) correct any material defect or error that may be
discovered in any Loan Document or in the execution, acknowledgment, filing or
recordation thereof, and (ii) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such further
acts, deeds, certificates, assurances and other instruments as any Agent, or any
Lender through any Co-Administrative Agent, may reasonably require from time to
time in order to carry out more effectively the purposes of the Loan Documents.

 

  7.15

Anti-Corruption Laws.

Conduct its businesses in material compliance with the United States Foreign
Corrupt Practices Act of 1977, the UK Bribery Act 2010 any other similar
anti-corruption legislation in other jurisdictions and maintain policies and
procedures designed to promote compliance with such laws.

 

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ARTICLE VIII

NEGATIVE COVENANTS

Until such time as the Obligations have been Fully Satisfied, Timken shall not,
nor shall it permit any Subsidiary to, directly or indirectly:

 

  8.01

Liens.

Create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned (but not leased) or hereafter acquired
(but not leased), other than the following:

(a)        Liens existing as of the Closing Date, that are listed on Schedule
8.01 and any renewals or extensions thereof, provided that the property covered
thereby is not changed and the amount not increased or the direct or any
contingent obligor changed and if such Lien is a Lien securing Priority Debt,
any renewal or extension of the obligations secured or benefited thereby is not
prohibited by Section 8.03;

(b)        Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

(c)        carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlord’s or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or which are being contested
in good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person;

(d)        pledges or deposits in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

(e)        deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other
obligations of a like nature incurred in the ordinary course of business;

(f)        easements, rights-of-way, zoning restrictions, other restrictions and
other similar encumbrances affecting real property which, in the aggregate, are
not substantial in amount, and which do not in any case materially detract from
the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the applicable Person;

(g)        Liens securing judgments for the payment of money not constituting an
Event of Default under Section 9.01(h) or securing appeal or other surety bonds
related to such judgments;

(h)        Liens on or transfers of accounts receivable and contracts, and
instruments and other assets related thereto arising in connection with the sale
of such accounts receivable pursuant to Section 8.05(g);

(i)        Liens securing any Indebtedness of Timken and its Subsidiaries that
is not prohibited by Section 8.03;

 

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(j)        Liens, if any, in favor of the L/C Issuer and/or the Swing Line
Lender to Cash Collateralize or otherwise secure the obligations of a Defaulting
Lender to fund risk participations hereunder;

(k)       Liens securing Indebtedness of a Subsidiary owing to any Loan Party;

(l)        Liens on any property owned by Timken or any Subsidiary, in favor of
the United States of America or any state thereof, or any department, agency or
instrumentality or political subdivision of the United States of America or any
State thereof, or in favor of any other country, or any political subdivision
thereof, to secure partial, progress, advance or other payments pursuant to any
contract or statute or to secure any Indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of construction of
the property subject to the Lien;

(m)      Liens incidental to the conduct of Timken’s or any Subsidiary’s
business or the ownership of such entity’s assets which (i) do not secure
Indebtedness and (ii) do not in the aggregate materially detract from the value
of the assets of Timken and its Subsidiaries, taken as a whole, or materially
impact the use thereof in the operation of such entity’s business; and

(n)        pledges or deposits to secure public or statutory obligations or to
secure performance in connection with tenders, leases of real property, or bids
of contracts and pledges or deposits made in the ordinary course of business for
similar purposes.

 

  8.02

Acquisitions and Joint Ventures.

(a)        Purchase or acquire all of the Equity Interests in, or all or
substantially all of the property and assets of, any Person (other than any
Subsidiary of Timken) that, upon the consummation thereof, will be wholly owned
directly by Timken or one or more of its wholly owned Subsidiaries (including,
without limitation, as a result of a merger or consolidation) except any such
purchase or acquisition made pursuant to this Section 8.02(a) so long as:

(i)      the lines of business of the Person to be (or the property and assets
of which are to be) so purchased or otherwise acquired shall not be
substantially different than the lines of business currently conducted by Timken
and its Subsidiaries or any business reasonably related or incidental thereto;
and

(ii)     (A) immediately before and immediately after giving pro forma effect to
any such purchase or other acquisition, no Default or Event of Default shall
have occurred and be continuing, (B) Timken shall be in compliance with the
covenants set forth in Section 8.11 on a Pro Forma Basis after giving effect to
such purchase or acquisition and (C) if the total cash and non-cash
consideration (including earn-outs, hold-backs and other deferred payment of
consideration) paid or to be paid for any such purchase or acquisition exceeds
$200,000,000, Timken shall provide to the Co-Administrative Agents a certificate
signed by a Responsible Officer of Timken demonstrating such compliance required
pursuant to clause (B) herein.

(b)        Make Investments in joint ventures (other than any Subsidiaries)
except (i) such Investments existing as of the Closing Date and (ii) such
Investments by Timken and its Subsidiaries not otherwise permitted under this
Section 8.02(b); provided that, in the case of Investments described in clause
(b)(ii), (1) the aggregate amount of such Investments made during any fiscal
year in such joint ventures pursuant to this clause (b)(ii) shall not exceed

 

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$150,000,000 for such fiscal year and (2) no Default or Event of Default shall
have occurred and be continuing before and immediately after giving effect to
any such Investment.

 

  8.03

Indebtedness.

Create, incur, assume or suffer to exist any Priority Debt except:

(a)        Priority Debt at any one time outstanding not to exceed seventeen
percent (17%) of total assets of Timken and its Subsidiaries on a consolidated
basis;

(b)        Indebtedness of Foreign Subsidiaries in respect of working capital
facilities in an aggregate principal amount not to exceed $25,000,000;

(c)        (i) Indebtedness of the Receivables Subsidiaries incurred in
connection with the sale of accounts receivable and related assets pursuant to
Section 8.05(g) so long as the aggregate principal amount of Indebtedness of all
Receivables Subsidiaries relating thereto (exclusive of Indebtedness incurred
pursuant to clause (ii) below) does not exceed $150,000,000 at any time and
(ii) Indebtedness of the Receivables Subsidiaries to any Subsidiary incurred in
connection with the Receivables Facility for the purchase of accounts receivable
and related assets; and

(d)        obligations (contingent or otherwise) of Timken or any Subsidiary
existing or arising under any Swap Contract designed to hedge against
fluctuations in interest rates or foreign exchange rates incurred in the
ordinary course of business and consistent with prudent business practice.

 

  8.04

Fundamental Changes.

Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of the assets of any Loan Party or any Subsidiary (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:

(a)        any Subsidiary may merge with (i) Timken, provided that Timken shall
be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries, provided that, after the Springing Guaranty Date, when any
Guarantor is merging with another Subsidiary that is not a Guarantor, the
Guarantor shall be the continuing or surviving Person or the continuing or
surviving Person shall promptly thereafter become a Guarantor;

(b)        any Subsidiary may Dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise) to Timken or to another Subsidiary;
provided that, after the Springing Guaranty Date, if the transferor in such a
transaction is a Guarantor, then the transferee must either be Timken or a
Guarantor or the transferee shall promptly thereafter become a Guarantor;

(c)        in connection with any acquisition permitted under Section 8.02, any
Subsidiary of Timken may merge into or consolidate with any other Person or
permit any other Person to merge into or consolidate with it; provided that the
Person surviving such merger shall be a wholly owned Subsidiary of Timken;

(d)        any Disposition permitted by Section 8.05; and

 

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(e)        any Subsidiary that is not a Material Subsidiary may dissolve or
liquidate;

provided, however, that in each case, immediately after giving effect thereto,
in the case of any such merger to which Timken is a party, Timken is the
surviving corporation.

 

  8.05

Dispositions.

Make any Disposition or enter into any agreement to make any Disposition,
except:

(a)        Dispositions of surplus, obsolete or worn out property, whether now
owned or hereafter acquired, in the ordinary course of business;

(b)        Dispositions of inventory in the ordinary course of business;

(c)        Dispositions of equipment or real property to the extent that
(i) such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

(d)        Dispositions of property by any Subsidiary to Timken or to a
wholly-owned Subsidiary;

(e)        Dispositions permitted by Section 8.04;

(f)        Dispositions by Timken and its Subsidiaries not otherwise permitted
under this Section 8.05; provided that (i) at the time of such Disposition, no
Default or Event of Default shall exist or would result from such Disposition,
(ii) Timken shall be in compliance with the covenant set forth in
Section 8.11(a) on a Pro Forma Basis after giving effect to any such Disposition
and (iii) if the net book value of the assets sold, leased or otherwise disposed
of in any such Disposition exceeds $200,000,000, Timken shall provide to the
Co-Administrative Agents a certificate signed by a Responsible Officer of Timken
demonstrating such compliance required pursuant to clause (ii) herein;

(g)        the limited recourse sale of accounts receivable and related assets
in connection a transaction permitted by Section 8.03(c) (the “Receivables
Facility”);

(h)        Dispositions of cash or Cash Equivalents for purposes not otherwise
prohibited under this Agreement or under any other Loan Document; and

(i)        so long as no Default or Event of Default shall occur and be
continuing, the grant of any option or other right to purchase any asset in a
transaction that would be permitted under the provisions of Section 8.05(f);

provided, however, that any Disposition pursuant to Section 8.05(a) through
Section 8.05(h) shall be for fair value as determined by Timken or the
applicable Subsidiary in its reasonable business judgment.

 

  8.06

[Reserved]

 

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  8.07

Change in Nature of Business.

Engage in any material line of business that is not of the same general type as
those lines of business conducted by Timken and its Subsidiaries on the Closing
Date or any business reasonably related, complementary or incidental thereto.

 

  8.08

Transactions with Affiliates.

Except as otherwise specifically permitted in this Agreement, enter into any
material transaction with any Affiliate of Timken, whether or not in the
ordinary course of business, other than on fair and reasonable terms
substantially as favorable to Timken or such Subsidiary as would be obtainable
by Timken or such Subsidiary at the time in a comparable arm’s length
transaction with a Person other than an Affiliate, except (i) transactions
between or among Timken and its Subsidiaries or any entity that becomes a
Subsidiary as a result of such transaction, (ii) the transactions identified on
Schedule 8.08 (iii) transactions relating to the Receivables Facility
(iv) issuances of Equity Interests of Timken to the extent otherwise permitted
by this Agreement, (v) employment and severance arrangements between Timken and
its Subsidiaries and their respective officers and employees in the ordinary
course of business, (vi) payment of customary fees and reasonable out-of-pocket
costs to, and indemnities provided on behalf of, members of the Board of
Directors, officers and employees of Timken and its Subsidiaries in the ordinary
course of business, and (vii) any payments to or from, and transactions with any
joint venture in the ordinary course of business (including, without limitation,
any cash management activities related thereto).

 

  8.09

[Reserved]

 

  8.10

Use of Proceeds.

Use the proceeds of any Credit Extension, whether directly or indirectly, and
whether immediately, incidentally or ultimately, to purchase or carry margin
stock (within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
Indebtedness originally incurred for such purpose, in each case of the
foregoing, in any manner that would violate Regulation U, or X of the FRB.

 

  8.11

Financial Covenants.

(a)        Consolidated Leverage Ratio.    Permit the Consolidated Leverage
Ratio at any time to be greater than 3.50 to 1.0; provided that, at any time
during any Leverage Increase Period, the Consolidated Leverage Ratio shall not
be greater than 3.75 to 1.0; provided further that, after the occurrence of any
Leverage Increase Period, the Consolidated Leverage Ratio shall be no greater
than 3.50 to 1.0 as of the end of at least one fiscal quarter before a
subsequent Leverage Increase Period may be permitted to commence.

(b)        Consolidated Interest Coverage Ratio.      Permit the Consolidated
Interest Coverage Ratio at any time to be less than or equal to 3.50 to 1.0.

 

  8.12

Sanctions.

Directly or indirectly, use the proceeds of any Credit Extension, or lend,
contribute or otherwise make available such proceeds to any Subsidiary, joint
venture partner or other individual or entity, to fund any activities of or
business with any individual or entity, or in any Designated Jurisdiction, that,
at the time of such funding, is the subject of Sanctions, or in any other
manner, in each case as would result in a

 

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violation by any individual or entity (including any individual or entity
participating in the transaction, whether as Lender, Arranger, Agent, L/C
Issuer, Swing Line Lender, or otherwise) of Sanctions.

 

  8.13

Anti-Corruption Laws.

Directly or indirectly use the proceeds of any Credit Extension for any purpose
which would breach the United States Foreign Corrupt Practices Act of 1977 or
cause a material breach of any other similar anti-corruption legislation in
other jurisdictions, including the UK Bribery Act 2010.

ARTICLE IX

EVENTS OF DEFAULT AND REMEDIES

 

  9.01

Events of Default.

Any of the following shall constitute an Event of Default:

(a)        Non-Payment.  Any Borrower, as applicable, fails to pay (i) when and
as required to be paid herein, any amount of principal of any Loan or any L/C
Obligation, (ii) within five Business Days after the same becomes due, any
interest on any Loan or on any L/C Obligation, or any commitment or other fee
due hereunder or (iii) within ten days after written notice thereof, any other
amount due hereunder; or

(b)        Specific Covenants.  Timken fails to perform or observe any term,
covenant or agreement contained in (i) any of Section 7.03, 7.05, 7.11 or 7.12,
or Article VIII or (ii) any of Section 7.01(a) or (b) or 7.02(a) and such
failure continues for 10 days after the earlier of the date on which (i) a
Responsible Officer of Timken has knowledge of such failure or (ii) notice is
given from the Paying Agent to Timken at the request of the Required Lenders
that Timken is to remedy the same; or

(c)        Other Defaults.  Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 9.01(a) or 9.01(b)) contained in
any Loan Document on its part to be performed or observed and such failure
continues for 30 days after the earlier of the date on which (i) a Responsible
Officer of Timken has knowledge of such failure or (ii) notice is given from the
Paying Agent to Timken at the request of the Required Lenders that Timken is to
remedy the same; or

(d)        Representations and Warranties.  Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of Timken
or any other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
in any material respect when made or deemed made; or

(e)        Cross-Default.    (i) Any Loan Party or any Subsidiary (A) fails to
make any payment when due and payable after giving effect to any applicable
grace period (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) in respect of any Indebtedness having an aggregate
principal amount (including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than the Threshold Amount, or (B) fails
to observe or perform any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
to cause, with the giving of notice if required,

 

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such Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity; or (ii) there occurs under any Swap Contract an Early Termination Date
(as defined in such Swap Contract) resulting from any event of default under
such Swap Contract as to which Timken or any Subsidiary is the Defaulting Party
(as defined in such Swap Contract) and the Swap Termination Value owed by the
Loan Party or such Subsidiary as a result thereof is greater than the Threshold
Amount; or

(f)        Insolvency Proceedings, Etc.  Any Loan Party or any of its Material
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

(g)        Inability to Pay Debts; Attachment.  (i) Any Loan Party or any of its
Material Subsidiaries becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and is not released,
vacated or fully bonded within 30 days after its issue or levy; or

(h)        Judgments.  There is entered against any Loan Party or any Material
Subsidiary (i) a final and non-appealable judgment or order of any court for the
payment of money in an aggregate amount exceeding the Threshold Amount, (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage); or

(i)        ERISA.  Except as is not reasonably expected to result in a Material
Adverse Effect: (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or is reasonably expected to result in
liability of Timken under Title IV of ERISA to the Pension Plan, Multiemployer
Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or
(ii) Timken or any ERISA Affiliate fails to pay when due, after the expiration
of any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of the Threshold Amount; or

(j)        Invalidity of Loan Documents.  Any provision of any Loan Document, at
any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document; or

(k)        Change of Control.  There occurs any Change of Control.

 

  9.02

Remedies upon Event of Default.

 

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If any Event of Default occurs and is continuing, the Co-Administrative Agents
shall, at the request of, or may, with the consent of, the Required Lenders,
take any or all of the following actions:

(a)        declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;

(b)        declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by Timken;

(c)        require that Timken Cash Collateralize the L/C Obligations (in an
amount equal to the Minimum Collateral Amount with respect thereto); and

(d)        exercise on behalf of themselves, the other Agents and the Lenders
all rights and remedies available to them, the other Agents and the Lenders
under the Loan Documents or applicable Law;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of Timken to Cash Collateralize the L/C Obligations as aforesaid
shall automatically become effective, in each case without further act of any
Agent or any Lender.

 

  9.03

Application of Funds.

After the exercise of remedies provided for in Section 9.02 (or after the Loans
have automatically become immediately due and payable and the L/C Obligations
have automatically been required to be Cash Collateralized as set forth in the
proviso to Section 9.02), any amounts received on account of the Obligations
shall, subject to the provisions of Sections 2.15 and 2.16, be applied by the
Paying Agent in the following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (other than principal and interest but
including Attorney Costs and amounts payable under Article III) payable to the
Agents in their capacities as such ratably among them in proportion to the
amounts described in this clause First payable to them;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and L/C Borrowings and fees, premiums and scheduled
periodic payments, and any interest accrued thereon, due under any Swap Contract
between any Loan Party and any Swap Bank, ratably among the Lenders (and, in the
case of such Swap Contracts, Swap Banks) and the L/C Issuer in proportion to the
respective amounts described in this clause Third payable to them;

 

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Fourth, to (a) payment of that portion of the Obligations constituting accrued
and unpaid principal of the Loans and L/C Borrowings, (b) payment of breakage,
termination or other payments, and any interest accrued thereon, due under any
Swap Contract between any Loan Party and any Swap Bank, (c) payments of amounts
due under any Treasury Management Agreement between any Loan Party and any
Treasury Management Bank and (d) the Paying Agent for the account of the L/C
Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the
aggregate undrawn amount of Letters of Credit, ratably among the Lenders (and,
in the case of such Swap Contracts and Treasury Management Agreements, Swap
Banks or Treasury Management Banks, as applicable) and the L/C Issuer in
proportion to the respective amounts described in this clause Fourth held by
them;

Fifth, to the payment of all other Obligations of the Loan Parties owing under
or in respect of the Loan Documents that are due and payable to the Agents and
the Lenders on such date, ratably based upon the respective aggregate amounts of
all such Obligations owing to the Agents and the Lenders on such date; and

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to Timken or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fourth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

Excluded Swap Obligations with respect to any Guarantor shall not be paid with
amounts received from such Guarantor or such Guarantor’s assets, but appropriate
adjustments shall be made with respect to payments from other Loan Parties to
preserve the allocation to Obligations otherwise set forth above in this
Section.

ARTICLE X

AGENTS

 

  10.01

Appointment and Authority.

Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of
America and KeyBank to act on its behalf as the Agents hereunder and under the
other Loan Documents and authorizes each Agent to take such actions on its
behalf and to exercise such powers as are delegated to such Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Article are solely for the benefit of
the Agents, the Lenders and the L/C Issuer, and neither Timken nor any other
Loan Party shall have rights as a third party beneficiary of any of such
provisions. It is understood and agreed that the use of the term “agent” herein
or in any other Loan Documents (or any other similar term) with reference to the
Co-Administrative Agents is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable
Law. Instead such term is used as a matter of market custom, and is intended to
create or reflect only an administrative relationship between contracting
parties.

 

  10.02

Rights as a Lender.

The Persons serving as an Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as
though it were not an Agent and the term

 

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“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Persons serving as an Agent hereunder in
its individual capacity. Such Person and its Affiliates may accept deposits
from, lend money to, own securities of, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
any Loan Party or any Subsidiary or other Affiliate thereof as if such Person
were not an Agent hereunder and without any duty to account therefor to the
Lenders.

 

  10.03

Exculpatory Provisions.

No Agent shall have any duties or obligations except those expressly set forth
herein and in the other Loan Documents, and their duties hereunder shall be
administrative in nature. Without limiting the generality of the foregoing, each
Agent:

(a)        shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;

(b)        shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that such Agent is required
to exercise as directed in writing by the Required Lenders (or such other number
or percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents), provided that such Agent shall not be required to take
any action that, in its opinion or the opinion of its counsel, may expose such
Agent to liability or that is contrary to any Loan Document or applicable Law;
and

(c)        shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Loan Party or any of its Affiliates
that is communicated to or obtained by the Person serving as such Agent or any
of its Affiliates in any capacity.

No Agent shall be liable for any action taken or not taken by it (i) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as such Agent shall believe
in good faith shall be necessary, under the circumstances as provided in
Sections 11.01 and 9.02) or (ii) in the absence of its own gross negligence or
willful misconduct. No Agent shall be deemed to have knowledge of any Default
unless and until notice in writing describing such Default is given to such
Agent by Timken, a Lender, the L/C Issuer or another Agent.

No Agent shall be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article V or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to such Agent.

 

  10.04

Reliance by Agents.

The Agents shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, Internet or
intranet website posting or other distribution) believed by it to be genuine and
to have been signed, sent or otherwise authenticated by the proper Person. The
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upon any statement made to it orally or by telephone and believed by it to have
been made by the proper Person, and shall not incur any liability for relying
thereon. In determining compliance with any condition hereunder to the making of
a Loan, or the issuance of a Letter of Credit, that by its terms must be
fulfilled to the satisfaction of a Lender or the L/C Issuer, each Agent may
presume that such condition is satisfactory to such Lender or the L/C Issuer
unless such Agent shall have received notice to the contrary from such Lender or
the L/C Issuer prior to the making of such Loan or the issuance of such Letter
of Credit. Each Agent may consult with legal counsel (who may be counsel for the
Loan Parties), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.

 

  10.05

Delegation of Duties.

Each Agent may perform any and all of its duties and exercise its rights and
powers hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by such Agent. Any Agent and any such sub-agent may perform
any and all of its duties and exercise its rights and powers by or through their
respective Related Parties. The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of each Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as an Agent.

 

  10.06

Removal and Resignation of Agents.

(a)         Any Agent may at any time give notice of its resignation to the
Lenders, the L/C Issuer and Timken. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right (with, so long as no
Default or Event of Default exists, the consent of Timken, which shall not be
unreasonably withheld or delayed) to appoint a successor, which shall be a bank
with an office in the United States, or an Affiliate of any such bank with an
office in the United States or another entity a material business of which is or
will be providing administrative agency services. If no such successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation (the “Resignation Effective Date”) , then the retiring Agent may on
behalf of the Lenders and the L/C Issuer (with, so long as no Default or Event
of Default exists, the consent of Timken, which shall not be unreasonably
withheld or delayed), appoint a successor Agent meeting the qualifications set
forth above. Whether or not a successor has been appointed, such resignation
shall become effective in accordance with such notice on the Resignation
Effective Date.

(b)        If at any time the Person serving as an Agent is a Defaulting Lender,
the Required Lenders may, to the extent permitted by applicable Law, by notice
in writing to Timken and such Person, remove such Person as an Agent and appoint
(with, so long as no Default or Event of Default exists, the consent of Timken,
which shall not be unreasonably withheld or delayed) a successor.

If no such successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment, within 30 days (or such earlier day as
shall be agreed by the Required Lenders) (the “Removal Effective Date”), then
such removal shall nonetheless become effective in accordance with such notice
on the Removal Effective Date.

(c)        With effect from the Resignation Effective Date or the Removal
Effective Date (as applicable) (1) the retiring or removed Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents and (2) except for any indemnity payments or other amounts then owed
to the retiring or removed Agent, all payments, communications and
determinations provided to be made by, to or through such Agent shall instead be
made by or to each Lender and the L/C

 

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Issuer directly, until such time, if any, as the Required Lenders appoint a
successor Agent as provided for above. Upon the acceptance of a successor’s
appointment as an Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
removed) Agent (other than any rights to indemnity payments or other amounts
owed to the retiring or removed Agent as of the Resignation Effective Date or
the Removal Effective Date, as applicable), and the retiring or removed Agent
shall be discharged from all of its duties and obligations hereunder or under
the other Loan Documents (if not already discharged therefrom as provided above
in this Section) . The fees payable by Timken to a successor Agent shall be the
same as those payable to its predecessor unless otherwise agreed between Timken
and such successor. After the retiring or removed Agent’s resignation or removal
hereunder and under the other Loan Documents, the provisions of this Article and
Sections 11.04 and 11.05 shall continue in effect for the benefit of such
retiring or removed Agent, its sub-agents and their respective Related Parties
in respect of any actions taken or omitted to be taken by any of them while the
retiring or removed Agent was acting as an Agent.

(d)        Any resignation by KeyBank as a Paying Agent pursuant to this Section
shall also constitute its resignation as L/C Issuer and Swing Line Lender. Upon
the acceptance of a successor’s appointment as the Paying Agent hereunder,
(a) such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender,
(b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all
of their respective duties and obligations hereunder or under the other Loan
Documents, and (c) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to the retiring L/C Issuer to
effectively assume the obligations of the retiring L/C Issuer with respect to
such Letters of Credit.

 

  10.07

Non-Reliance on Agents and Other Lenders.

Each Lender and the L/C Issuer acknowledges that it has, independently and
without reliance upon any Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon any Agent or any other Lender or any of
their Related Parties and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own decisions in taking
or not taking action under or based upon this Agreement, any other Loan Document
or any related agreement or any document furnished hereunder or thereunder.

 

  10.08

No Other Duties; Etc.

Anything herein to the contrary notwithstanding, none of the bookrunners,
arrangers, syndication agents, documentation agents or co-agents shall have any
powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the applicable Agent, a
Lender or the L/C Issuer hereunder.

 

  10.09

Agents May File Proofs of Claim.

In case of the pendency of any proceeding under any Debtor Relief Law or any
other judicial proceeding relative to any Loan Party, the Co-Administrative
Agents (irrespective of whether the principal of any Loan or L/C Obligation
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Co-Administrative Agents shall have made any
demand on Timken) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

 

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(a)        to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuer and the Agents (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the L/C Issuer and the
Agents and their respective agents and counsel and all other amounts due the
Lenders, the L/C Issuer and the Agents under Sections 2.03(h) and (i), 2.09,
11.04 and 11.05) allowed in such judicial proceeding; and

(b)        to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Paying Agent and, in
the event that the Paying Agent shall consent to the making of such payments
directly to the Lenders and the L/C Issuer, to pay to the Paying Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of the Agents and their respective agents and counsel, and any other amounts due
the Agents under Sections 2.09, 11.04 and 11.05.

Nothing contained herein shall be deemed to authorize the Co-Administrative
Agents to authorize or consent to or accept or adopt on behalf of any Lender or
the L/C Issuer any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to
authorize the Co-Administrative Agents to vote in respect of the claim of any
Lender in any such proceeding.

 

  10.10

Guaranty Matters.

At any time following the Springing Guaranty Date, if any Guarantor ceases to be
a Subsidiary as a result of a transaction permitted hereunder, such Person shall
be automatically released from its obligations under the Subsidiary Guaranty
Agreement, pursuant to this Section 10.10. The Co-Administrative Agents will, at
Timken’s reasonable expense, execute and deliver to the applicable Loan Party
such documents as such Loan Party may reasonably request to release such
Guarantor from its obligations under the Subsidiary Guaranty Agreement in
accordance with the terms of the Loan Documents and this Section 10.10.

ARTICLE XI

MISCELLANEOUS

 

  11.01

Amendments, Etc.

No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by Timken or any other Loan Party
therefrom, shall be effective unless in writing signed by the Required Lenders
and Timken or the applicable Loan Party, as the case may be, and acknowledged by
the Co-Administrative Agents, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such amendment, waiver or consent shall:

(a)        extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 9.02) without the written consent of
such Lender;

 

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(b)        postpone any date scheduled for any payment of principal or interest
under Section 2.07 or 2.08, or any date fixed for the payment of fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;

(c)        reduce the principal of, or the rate of interest specified herein on,
any Loan or L/C Borrowing, or (subject to clause (v) of the second proviso to
this Section 11.01) any fees or other amounts payable hereunder or under any
other Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of the Borrowers to pay interest or Letter of Credit Fees at the
Default Rate or (ii) to amend any financial covenant hereunder (or any defined
term used therein) even if the effect of such amendment would be to reduce the
rate of interest on any Loan or L/C Borrowing or to reduce any fee payable
hereunder;

(d)        change any provision of this Section 11.01 or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender;

(e)        at any time following the Springing Guaranty Date, release all or
substantially all the Guarantors, from its or their obligations under the Loan
Documents without the written consent of each Lender, except to the extent the
release of any such Guarantor is permitted pursuant to Section 10.10 (in which
case such release may be made by the Co-Administrative Agents alone);

(f)        at any time there exists a Designated Borrower, release Timken from
its obligations as a Guarantor under the Loan Documents with respect to the
Designated Borrower Obligations without the written consent of each Lender,

(g)        amend Section 2.13 or 9.03, without the written consent of each
Lender directly affected thereby; provided, however, that Section 2.13 may be
amended solely with the consent of the Required Lenders to provide for ratable
sharing of payments within the same tranche of Loans rather than across all
Loans in the event that one or more additional borrowing tranches is added
hereunder; or

(h)        amend the definition of “Committed Currencies” without the written
consent of each Lender;

and provided further that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued, deemed issued, or
to be issued by the L/C Issuer; (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Swing Line Lender in addition to the Lenders
required above, affect the rights or duties of the Swing Line Lender under this
Agreement; (iii) no amendment, waiver or consent shall, unless in writing and
signed by an Agent in addition to the Lenders required above, affect the rights
or duties of, or any fees or other amounts payable to, such Agent under this
Agreement or any other Loan Document; (iv) Section 11.07(h) may not be amended,
waived or otherwise modified without the consent of each Granting Lender all or
any part of whose Loans are being funded by an SPC at the time of such
amendment, waiver or other modification; and (v) the Bank of America Fee Letter,
the KeyBank Fee Letter and the Wells Fargo Fee Letter may be amended, or rights
or privileges thereunder waived, in a

 

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writing executed only by the parties thereto. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder (and any amendment, waiver
or consent which by its terms requires the consent of all Lenders or each
affected Lender may be effected with the consent of the applicable Lenders other
than Defaulting Lenders), except that (i) the Commitment of any Defaulting
Lender may not be increased or extended without the consent of such Lender and
(ii) any waiver, amendment or modification requiring the consent of all Lenders
or each affected Lender that by its terms affects any Defaulting Lender
disproportionately adversely relative to other affected Lenders shall require
the consent of such Defaulting Lender.

 

  11.02

Notices and Other Communications; Facsimile Copies.

(a)        General.    Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

(i)       if to Timken, any Agent, the L/C Issuer or the Swing Line Lender, to
the address, facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 11.02; and

(ii)     if to any other Lender, to the address, facsimile number, electronic
mail address or telephone number specified in its Administrative Questionnaire
(including, as appropriate, notices delivered solely to the Person designated by
a Lender on its Administrative Questionnaire then in effect for the delivery of
notices that may contain material non-public information relating to Timken).

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by facsimile shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b)        Electronic Communications.  Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail, FpML messaging and Internet or intranet
websites) pursuant to procedures approved by the Co-Administrative Agents (which
include those set forth in the penultimate paragraph of Section 7.02), provided
that the foregoing shall not apply to notices to any Lender or the L/C Issuer
pursuant to Article II if such Lender or the L/C Issuer, as applicable, has
notified the Co-Administrative Agents that it is incapable of receiving notices
under such Article by electronic communication; provided, further, that Lenders
and the L/C Issuer agree that all notices and other communications to the
Lenders and the L/C Issuer may be delivered by e-mail. The Co-Administrative
Agents or Timken may, in their discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

 

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Subject to the penultimate paragraph of Section 7.02, unless the
Co-Administrative Agents otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement) and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses
(i) and (ii), if such notice, email or other communication is not sent during
the normal business hours of the recipient, such notice, email or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.

(c)        The Platform.    THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”
THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS
OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY
DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO
WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Co-Administrative Agents or any of its Related Parties (collectively,
the “Agent Parties”) have any liability to any Borrower, any Lender, the L/C
Issuer or any other Person for losses, claims, damages, liabilities or expenses
of any kind (whether in tort, contract or otherwise) arising out of Timken’s or
the Co-Administrative Agent’s transmission of Borrower Materials or notices
through the Platform, any other electronic platform or electronic messaging
service, or through the Internet, except to the extent that such losses, claims,
damages, liabilities or expenses are determined by a court of competent
jurisdiction by a final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Agent Party; provided, however,
that in no event shall any Agent Party have any liability to any Borrower, any
Lender, the L/C Issuer or any other Person for indirect, special, incidental,
consequential or punitive damages (as opposed to direct or actual damages).

(d)        Change of Address, Etc.  Each of Timken, each Agent, the L/C Issuer
and the Swing Line Lender may change its address, facsimile or telephone number
for notices and other communications hereunder by notice to the other parties
hereto (or, in the case of Timken, to the Co-Administrative Agents). Each other
Lender may change its address, facsimile or telephone number for notices and
other communications hereunder by notice to Timken, the Agents, the L/C Issuer
and the Swing Line Lender. In addition, each Lender agrees to notify the Agents
from time to time to ensure that the Agents have on record (i) an effective
address, contact name, telephone number, facsimile number and electronic mail
address to which notices and other communications may be sent and (ii) accurate
wire instructions for such Lender. Furthermore, each Public Lender agrees to
cause at least one individual at or on behalf of such Public Lender to at all
times have selected the “Private Side Information” or similar designation on the
content declaration screen of the Platform in order to enable such Public Lender
or its delegate, in accordance with such Public Lender’s compliance procedures
and applicable Law, including United States Federal and state securities Laws,
to make reference to Borrower Materials that are not made available through the
“Public Side Information” portion of the Platform and that may contain material
non-public information with respect to Timken or its securities for purposes of
United States Federal or state securities laws.

 

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(e)        Reliance by Agents, L/C Issuer and Lenders.  The Agents, the L/C
Issuer and the Lenders shall be entitled to rely and act upon any notices
(including telephonic notices, Committed Loan Notices, Letter of Credit
Applications and Swing Line Loan Notices) purportedly given by or on behalf of
Timken even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein and (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Loan Parties shall indemnify each
Agent, the L/C Issuer, each Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of a Loan Party. All
telephonic notices to and other telephonic communications with any Agent may be
recorded by such Agent, and each of the parties hereto hereby consents to such
recording.

 

  11.03

No Waiver; Cumulative Remedies; Enforcement.

No failure by any Lender, the L/C Issuer or any Agent to exercise, and no delay
by any such Person in exercising, any right, remedy, power or privilege
hereunder or under any other Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided, and as provided under each other Loan
Document, are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Loan Parties or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, each Agent in
accordance with Section 10.01 for the benefit of all the Lenders and the L/C
Issuer; provided, however, that the foregoing shall not prohibit (a) any Agent
from exercising on its own behalf the rights and remedies that inure to its
benefit (solely in its capacity as an Agent) hereunder and under the other Loan
Documents, (b) the L/C Issuer or the Swing Line Lender from exercising the
rights and remedies that inure to its benefit (solely in its capacity as L/C
Issuer or Swing Line Lender, as the case may be) hereunder and under the other
Loan Documents, (c) any Lender from exercising setoff rights in accordance with
Section 11.09 (subject to the terms of Section 2.13), or (d) any Lender from
filing proofs of claim or appearing and filing pleadings on its own behalf
during the pendency of a proceeding relative to any Loan Party under any Debtor
Relief Law; and provided, further, that if at any time there is no Person acting
as the applicable Agent hereunder and under the other Loan Documents, then
(i) the Required Lenders shall have the rights otherwise ascribed to such Agent
pursuant to Section 10.01 and (ii) in addition to the matters set forth in
clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13,
any Lender may, with the consent of the Required Lenders, enforce any rights and
remedies available to it and as authorized by the Required Lenders.

 

  11.04

Attorney Costs and Expenses.

Timken shall pay (i) all reasonable out-of-pocket expenses incurred by the
Agents and their Affiliates (including Attorney Costs for the Agents), in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the L/C Issuer in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by the
Co-Administrative Agents, any Lender or the L/C Issuer

 

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(including the fees, charges and disbursements of any counsel for the Agents,
any Lender or the L/C Issuer), in connection with the enforcement or protection
of its rights (A) in connection with this Agreement and the other Loan
Documents, including its rights under this Section, or (B) in connection with
the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

 

  11.05

Indemnification by Timken.

(a)        Timken shall indemnify each Agent (and any sub-agent thereof), each
Lender and the L/C Issuer, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the reasonable and documented fees, charges and
disbursements of any counsel for any Indemnitee (limited to one counsel for all
Indemnitees taken as a whole and, if reasonably necessary, a single local
counsel for all Indemnitees taken as a whole in each relevant jurisdiction and,
solely in the case of a conflict of interest, one additional counsel in each
relevant jurisdiction to each group of affected Indemnitees similarly situated
taken as a whole)), incurred by any Indemnitee or asserted against any
Indemnitee by any Person (including Timken or any other Loan Party) other than
such Indemnitee and its Related Parties arising out of, in connection with, or
as a result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder, the consummation of the transactions contemplated hereby or thereby,
or, in the case of the Co-Administrative Agents (and any sub-agent thereof) and
its Related Parties only, the administration of this Agreement and the other
Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of
the proceeds therefrom (including any refusal by the L/C Issuer to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by Timken or any of its
Subsidiaries, giving rise to any Environmental Liability related in any way to
Timken or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by Timken or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from (x) the
gross negligence, bad faith or willful misconduct of such Indemnitee, (y) a
material breach of the obligations of such Indemnitee under this Agreement and
(z) any proceeding that does not involve an act or omission by Timken or any of
its Affiliates and that is brought by an Indemnitee against any other Indemnitee
(other than an Arranger, the Agents, L/C Issuer, Swing Line Lender or any other
agent hereunder, in each case, in its capacity as such). Without limiting the
provisions of Section 3.01, this Section 11.05(a) shall not apply with respect
to taxes other than any taxes that represent losses, claims, damages, etc.
arising from any non-tax claim.

(b)        Reimbursement by Lenders.  To the extent that Timken for any reason
fail to indefeasibly pay any amount required under subsection (a) of this
Section to be paid by them to any Agent (or any sub-agent thereof), the L/C
Issuer, the Swing Line Lender or any Related Party of any of the foregoing (and
without limiting the obligation of any of them), each Lender severally agrees to
pay to such Agent (or any such sub-agent), the L/C Issuer, the Swing Line Lender
or such Related Party, as the case may be, such Lender’s Pro Rata Share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such

 

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unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against any Agent (or any such subagent) or the L/C Issuer or Swing
Line Lender in its capacity as such, or against any Related Party of any of the
foregoing acting for such Agent (or any such sub-agent), L/C Issuer or Swing
Line Lender in connection with such capacity. The obligations of the Lenders
under this subsection (b) are subject to the provisions of Section 2.12(e).

(c)        Waiver of Consequential Damages, Etc.    To the fullest extent
permitted by applicable law, Timken and each Indemnitee shall not assert, and
hereby waive, and acknowledge that no other Person shall have, any claim against
(x) any Indemnitee or (y) Timken or any of its Subsidiaries or Affiliates (other
than in respect to any such damages incurred or paid by an Indemnitee to a third
party), as applicable, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed to such unintended recipients by
such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby, other than for
direct or actual damages resulting from the gross negligence, bad faith or
willful misconduct of such Indemnitee as determined by a final and
non-appealable judgment of a court of competent jurisdiction.

(d)        Payments.  All amounts due under this Section shall be payable not
later than ten Business Days after demand therefor.

(e)        Survival.  The agreements in this Section and the indemnity
provisions of Section 11.02(e) shall survive the resignation of any Agent, the
L/C Issuer and the Swing Line Lender, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

 

  11.06

Payments Set Aside.

To the extent that any payment by or on behalf of any Borrower is made to any
Agent, the L/C Issuer or any Lender, or any Agent, the L/C Issuer or any Lender
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by such Agent, the L/C Issuer or such Lender in its discretion) to
be repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
and the L/C Issuer severally agrees to pay to the Paying Agent upon demand its
applicable share (without duplication) of any amount so recovered from or repaid
by any Agent, plus interest thereon from the date of such demand to the date
such payment is made at a rate per annum equal to the Federal Funds Rate from
time to time in effect. The obligations of the Lenders and the L/C Issuer under
clause (b) of the preceding sentence shall survive the payment in full of the
Obligations and the termination of this Agreement.

 

  11.07

Successors and Assigns.

 

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(a)        Successors and Assigns Generally.  The provisions of this Agreement
and the other Loan Documents shall be binding upon and inure to the benefit of
the parties hereto and thereto and their respective successors and assigns
permitted hereby, except that no Borrower may assign or otherwise transfer any
of its rights or obligations hereunder or thereunder without the prior written
consent of the Paying Agent and each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of subsection (b) of this
Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section, (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) of this Section
or (iv) to an SPC in accordance with the provisions of subsection (h) of this
Section (and any other attempted assignment or transfer by any party hereto
shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Paying Agent, the L/C
Issuer and the Lenders) any legal or equitable right, remedy or claim under or
by reason of this Agreement.

(b)        Assignments by Lenders.  Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including all or a portion of its
Commitment and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations and Swing Line Loans) at the time owing to
it); provided that any such assignment shall be subject to the following
conditions:

(i)        Minimum Amounts.

(A)        in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or
contemporaneous assignments to related Approved Funds (determined after giving
effect to such assignments) that equal at least the amount specified in
paragraph (b)(i)(B) of this Section in the aggregate or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

(B)        in any case not described in subsection (b)(i)(A) of this Section,
the aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Paying Agent or, if “Trade
Date” is specified in the Assignment and Assumption, as of the Trade Date, shall
not be less than $10,000,000 unless each of the Paying Agent and, so long as no
Event of Default has occurred and is continuing, Timken otherwise consents (each
such consent not to be unreasonably withheld or delayed);

(ii)        Proportionate Amounts.  Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to the Swing Line
Lender’s rights and obligations in respect of Swing Line Loans;

 

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(iii)      Required Consents.  No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section and, in
addition:

(A)        the consent of Timken (such consent not to be unreasonably withheld
or delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund;

(B)        the consent of the Paying Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of any
Commitment if such assignment is to a Person that is not a Lender with a
Commitment in respect of the Commitment subject to such assignment, an Affiliate
of such Lender or an Approved Fund with respect to such Lender;

(C)        the consent of the L/C Issuer (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding); and

(D)        the consent of the Swing Line Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment in
respect of any Commitment if such assignment is to a Person that is not a Lender
with a Commitment, an Affiliate of such Lender or an Approved Fund with respect
to such Lender.

(iv)      Assignment and Assumption.    The parties to each assignment shall
execute and deliver to the Paying Agent an Assignment and Assumption, together
with a processing and recordation fee in the amount of $3,500; provided,
however, that the Paying Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment. The assignee, if
it is not a Lender, shall deliver to the Paying Agent an Administrative
Questionnaire.

(v)       No Assignment to Certain Persons.  No such assignment shall be made to
Timken or any of Timken’s Affiliates or Subsidiaries, (B) to any Defaulting
Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender
hereunder, would constitute any of the foregoing Persons described in this
clause (B), or (C) to a natural Person (or a holding company, investment vehicle
or trust for, or owned and operated for the primary benefit of a natural
Person).

(vi)      Certain Additional Payments.    In connection with any assignment of
rights and obligations of any Defaulting Lender hereunder, no such assignment
shall be effective unless and until, in addition to the other conditions thereto
set forth herein, the parties to the assignment shall make such additional
payments to the Paying Agent in an aggregate amount sufficient, upon
distribution thereof as appropriate (which may be outright payment, purchases by
the assignee of participations or subparticipations, or other compensating
actions, including funding, with the consent of Timken and the Co-Administrative
Agents, the applicable pro rata share of Loans previously requested but not
funded by the Defaulting Lender, to each of which the applicable assignee and
assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment
liabilities then owed by such Defaulting Lender to the Agents, the L/C Issuer or
any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as
appropriate) its full

 

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pro rata share of all Loans and participations in Letters of Credit and Swing
Line Loans in accordance with its Pro Rata Share. Notwithstanding the foregoing,
in the event that any assignment of rights and obligations of any Defaulting
Lender hereunder shall become effective under applicable Law without compliance
with the provisions of this paragraph, then the assignee of such interest shall
be deemed to be a Defaulting Lender for all purposes of this Agreement until
such compliance occurs.

Subject to acceptance and recording thereof by the Paying Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 3.01, 3.04, 3.05, 11.04 and 11.05 with respect to facts
and circumstances occurring prior to the effective date of such assignment;
provided, that except to the extent otherwise expressly agreed by the affected
parties, no assignment by a Defaulting Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender. Upon request, each Borrower (at its expense) shall
execute and deliver a Note to the assignee Lender. Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

(c)        Register.   The Paying Agent, acting solely for this purpose as an
agent of the Borrowers (and such agency being solely for tax purposes), shall
maintain at the Paying Agent’s Office a copy of each Assignment and Assumption
delivered to it (or the equivalent thereof in electronic form) and a register
for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts (and stated interest) of the Loans and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”). The entries in the Register shall be conclusive absent
manifest error, and the Borrowers, the Agents and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. In addition, the Paying Agent shall maintain on the Register
information regarding the designation, and revocation of designation, of any
Lender as a Defaulting Lender which it has received notice. The Register shall
be available for inspection by Timken, any Agent and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

(d)        Participations.  Any Lender may at any time, without the consent of,
or notice to, any Borrower or the Co-Administrative Agents, sell participations
to any Person (other than a natural Person, or a holding company, investment
vehicle or trust for, or owned and operated for the primary benefit of a natural
Person, a Defaulting Lender or Timken or any of Timken’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender’s participations in L/C
Obligations and/or Swing Line Loans) owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) Timken, the Agents, the other Lenders
and the L/C Issuer shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and

 

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obligations under this Agreement. For the avoidance of doubt, each Lender shall
be responsible for the indemnity under Section 11.05(b) without regard to the
existence of any participation.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso of
Section 11.01(a) that affects such Participant. Subject to subsection (e) of
this Section, Timken agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.13 as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of Timken, maintain a register on which it
enters the name and address of each Participant and the principal amounts (and
stated interest) of each Participant’s interest in the Loans or other
obligations under this Agreement (the “Participant Register”); provided,
however, that no Lender shall have any obligation to disclose all or any portion
of the Participant Register to any Person (including the identity of any
Participant or any information relating to a Participant’s interest in any
Commitments, Loans, Letters of Credit or its other Obligations under the Loan
Documents) except to the extent that such disclosure is necessary to establish
that such Commitment, Loan, Letter of Credit or other Obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary.

(e)        Limitations on Participant Rights.  A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, except to the extent such entitlement to
receive a greater payment results from a Change in Law that occurs after the
Participant acquired the applicable participation. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 3.01 unless such Participant complies with Section 11.15 as though it
were a Lender.

(f)        Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.

(g)        Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time
KeyBank assigns all of its Commitment and Loans pursuant to subsection
(b) above, KeyBank may, (i) upon thirty days’ notice to Timken and the Lenders,
resign as L/C Issuer and/or (ii) upon thirty days’ notice to Timken, resign as
Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing
Line Lender, Timken shall be entitled to appoint from among the Lenders a
successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no
failure by Timken to appoint any such successor shall affect the resignation of
KeyBank as L/C Issuer or Swing Line Lender,

 

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as the case may be. If KeyBank resigns as L/C Issuer, it shall retain all the
rights, powers, privileges and duties of the L/C Issuer hereunder with respect
to all Letters of Credit outstanding as of the effective date of its resignation
as L/C Issuer and all L/C Obligations with respect thereto (including the right
to require the Lenders to make Base Rate Loans or fund risk participations in
Unreimbursed Amounts pursuant to Section 2.03(c)). If KeyBank resigns as Swing
Line Lender, it shall retain all the rights, powers, privileges and duties of
the Swing Line Lender provided for hereunder with respect to Swing Line Loans
made by it and outstanding as of the effective date of such resignation,
including the right to require the Lenders to make Base Rate Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon
the appointment of a successor L/C Issuer and/or Swing Line Lender, (1) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the
case may be, and (2) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to KeyBank to effectively
assume the obligations of KeyBank with respect to such Letters of Credit.

(h)        Notwithstanding anything to the contrary contained herein, any Lender
(a “Granting Lender”) may grant to a special purpose funding vehicle identified
as such in writing from time to time by the Granting Lender to the Paying Agent
and Timken (an “SPC”) the option to provide all or any part of any Loan that
such Granting Lender would otherwise be obligated to make pursuant to this
Agreement; provided that (i) nothing herein shall constitute a commitment by any
SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to make all or any part of such Loan, the Granting Lender shall
be obligated to make such Loan pursuant to the terms hereof. Each party hereto
hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC
of such option shall increase the costs or expenses or otherwise increase or
change the obligations of Timken under this Agreement (including its obligations
under Section 3.04), (ii) no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would be liable, and
(iii) the Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder. The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Loan were made by such Granting Lender. In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior debt of any SPC, it will not institute against, or join any other Person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding under the Laws of the United States or any
State thereof. Notwithstanding anything to the contrary contained herein, any
SPC may (i) with notice to, but without prior consent of Timken and the Paying
Agent and with the payment of a processing fee of $3,500, assign all or any
portion of its right to receive payment with respect to any Loan to the Granting
Lender and (ii) disclose on a confidential basis any non-public information
relating to its funding of Loans to any rating agency, commercial paper dealer
or provider of any surety or Guarantee or credit or liquidity enhancement to
such SPC.

 

  11.08

Confidentiality.

Each of the Agents, the L/C Issuer and the Lenders agrees to maintain the
confidentiality of the Information, except that Information may be disclosed
(a) to its and its Affiliates’ directors, officers, employees and agents,
including accountants, legal counsel and other advisors who need to know such
Information (and provided that such Information is only used by such Affiliates’
directors, officers, employees, agents, accountants, legal counsel and other
advisors in connection with the services for

 

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which such Information is necessary) (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to the
extent required or requested by any regulatory authority purporting to have
jurisdiction over such Person or its Related Parties; (c) to the extent required
by applicable Laws or regulations or by any subpoena or similar legal process;
(d) to any other party to this Agreement; (e) in connection with the exercise of
any remedies hereunder or any suit, action or proceeding relating to this
Agreement or the enforcement of rights hereunder; (f) to (i) any Eligible
Assignee of or Participant in, or any prospective Eligible Assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any direct or indirect contractual counterparty or prospective counterparty
(or such contractual counterparty’s or prospective counterparty’s professional
advisor) to any credit derivative transaction relating to obligations of the
Loan Parties; (g) with the consent of Timken; (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section 11.08 or (ii) becomes available to any Agent or any Lender on a
nonconfidential basis from a source other than Timken; (i) to any state, Federal
or foreign authority or examiner (including the National Association of
Insurance Commissioners or any other similar organization) regulating, or any
self-regulatory body having or claiming authority to regulate or oversee, any
Lender or any Affiliate of a Lender; or (j) to any rating agency when required
by it (it being understood that, prior to any such disclosure, such rating
agency shall undertake to preserve the confidentiality of any Information
relating to the Loan Parties received by it from such Lender). In addition, the
Agents and the Lenders may disclose the existence of this Agreement and
information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to the Agents and the
Lenders in connection with the administration and management of this Agreement,
the other Loan Documents, the Commitments, and the Credit Extensions. For the
purposes of this Section 11.08, “Information” means all information received
from any Loan Party from time to time provided during the term of this Agreement
(including, without limitation at bank meetings) relating to any Loan Party or
its business, other than any such information that is available to any Agent or
any Lender on a nonconfidential basis prior to disclosure by any Loan Party. Any
Person required to maintain the confidentiality of Information as provided in
this Section 11.08 shall be considered to have complied with its obligation to
do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. Without limiting the generality of the foregoing, it
is Timken’s intent that this Section 11.08 comply with the requirements of
Regulation FD promulgated by the Securities and Exchange Commission and Rule
100(b)(2) thereunder.

Each of the Agents, the Lenders and the L/C Issuer acknowledges that (a) the
Information may include material non-public information concerning Timken or a
Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including
United States Federal and state securities Laws.

 

  11.09

Setoff.

In addition to any rights and remedies of the Lenders provided by law, upon the
occurrence and during the continuance of any Event of Default, each Lender, the
L/C Issuer and each of their respective Affiliates is authorized at any time and
from time to time, without prior notice to Timken or any other Loan Party, any
such notice being waived by Timken (on its own behalf and on behalf of each Loan
Party) to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other Indebtedness at any time owing by, such Lender, the L/C
Issuer or any such Affiliate to or for the credit or the account of the
respective Loan Parties against any and all Obligations owing to such Lender
hereunder or under any other Loan Document, now or hereafter existing,
irrespective of whether or not such Agent or such Lender, L/C Issuer or
Affiliate shall have made demand under this Agreement or any other Loan Document
and

 

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although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or Indebtedness;
provided, that in the event that any Defaulting Lender shall exercise any such
right of setoff, (x) all amounts so set off shall be paid over immediately to
the Agents for further application in accordance with the provisions of
Section 2.16 and, pending such payment, shall be segregated by such Defaulting
Lender from its other funds and deemed held in trust for the benefit of the
Agents, the L/C Issuer and the Lenders, and (y) the Defaulting Lender shall
provide promptly to the Agents a statement describing in reasonable detail the
Obligations owing to such Defaulting Lender as to which it exercised such right
of setoff. The rights of each Lender, the L/C Issuer and their respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender, the L/C Issuer or their
respective Affiliates may have. Each Lender and the L/C Issuer agrees promptly
to notify Timken and the Paying Agent after any such setoff and application made
by such Lender; provided, however, that the failure to give such notice shall
not affect the validity of such setoff and application. The rights of each Agent
and each Lender and their respective Affiliates under this Section 11.09 are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) that such Agent, such Lender and their respective Affiliates
may have.

 

  11.10

Interest Rate Limitation.

Notwithstanding anything to the contrary contained in any Loan Document, the
interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable Law (the “Maximum
Rate”). If any Agent or any Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the applicable
Borrower. In determining whether the interest contracted for, charged, or
received by an Agent or a Lender exceeds the Maximum Rate, such Person may, to
the extent permitted by applicable Law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.

 

  11.11

Counterparts.

This Agreement and each other Loan Document may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery by telecopier of
an executed counterpart of a signature page to this Agreement and each other
Loan Document shall be effective as delivery of an original executed counterpart
of this Agreement and such other Loan Document. The Co-Administrative Agents may
also require that any such documents and signatures delivered by telecopier be
confirmed by a manually-signed original thereof; provided that the failure to
request or deliver the same shall not limit the effectiveness of any document or
signature delivered by telecopier.

 

  11.12

Integration.

This Agreement, together with the other Loan Documents, comprises the complete
and integrated agreement of the parties on the subject matter hereof and thereof
and supersedes all prior agreements, written or oral, on such subject matter. In
the event of any conflict between the provisions of this Agreement and those of
any other Loan Document, the provisions of this Agreement shall control;
provided that the inclusion of supplemental rights or remedies in favor of the
Agents or the Lenders in any other Loan Document shall not be deemed a conflict
with this Agreement. Each Loan Document was drafted with the joint participation
of the respective parties thereto and shall be construed neither against nor in
favor of any party, but rather in accordance with the fair meaning thereof.

 

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  11.13

Survival of Representations and Warranties.

All representations and warranties made hereunder and in any other Loan Document
or other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by each Agent
and each Lender, regardless of any investigation made by any Agent or any Lender
or on their behalf and notwithstanding that any Agent or any Lender may have had
notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect until such time as the Obligations have
been Fully Satisfied.

 

  11.14

Severability.

If any provision of this Agreement or the other Loan Documents is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement and the other Loan Documents shall
not be affected or impaired thereby and (b) the parties shall endeavor in good
faith negotiations to replace the illegal, invalid or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without limiting the
foregoing provisions of this Section 11.14, if and to the extent that the
enforceability of any provisions in this Agreement relating to Defaulting
Lenders shall be limited by Debtor Relief Laws, as determined in good faith by
the Co-Administrative Agents, the L/C Issuer or the Swing Line Lender, as
applicable, then such provisions shall be deemed to be in effect only to the
extent not so limited.

 

  11.15

Tax Forms.

(a)        (i) Each Lender that is not a U.S. Person (a “Foreign Lender”) shall
deliver to the Paying Agent, prior to receipt of any payment subject to
withholding under the Code (or upon accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or W-8BEN-E,
as applicable, or any successor thereto (relating to such Foreign Lender and
entitling it to an exemption from, or reduction of, withholding tax on all
payments to be made to such Foreign Lender by the Borrowers pursuant to this
Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments
to be made to such Foreign Lender by the Borrowers pursuant to this Agreement)
or such other evidence satisfactory to Timken and the Paying Agent that such
Foreign Lender is entitled to a full exemption from U.S. withholding tax,
including any exemption pursuant to Section 881(c) of the Code. Thereafter and
from time to time, each such Foreign Lender shall (A) promptly submit to the
Paying Agent such additional duly completed and signed copies of one of such
forms (or such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may then be available under then
current United States laws and regulations to avoid, or such evidence as is
satisfactory to Timken and the Paying Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by the Borrowers pursuant to this Agreement,
(B) promptly notify the Paying Agent of any change in circumstances which would
modify or render invalid any claimed exemption or reduction, and (C) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws that the Borrowers make any deduction or withholding for taxes from amounts
payable to such Foreign Lender.

(ii)      Each Foreign Lender, to the extent it does not act or ceases to act
for its own account with respect to any portion of any sums paid or payable to
such Lender

 

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under any of the Loan Documents, shall deliver to the Paying Agent on the date
when such Foreign Lender ceases to act for its own account with respect to any
portion of any such sums paid or payable, and from time to time thereafter upon
the reasonable request of the Paying Agent (A) two duly signed completed copies
of the forms or statements required to be provided by such Lender as set forth
above, to establish that the portion of any such sums paid or payable with
respect to which such Lender acts for its own account is not subject to U.S.
withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or
any successor thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that (x) such Lender is not acting for its
own account with respect to a portion of any such sums payable to such Lender
and (y) such portion of the sums payable to such Lender is not subject to U.S.
withholding tax.

(b)        Upon the request of the Paying Agent, each Lender that is a U.S.
Person shall deliver to the Paying Agent two duly signed completed copies of IRS
Form W-9 certifying that such Lender is exempt from U.S. Federal backup
withholding. If such Lender fails to deliver such forms, then the Paying Agent
may withhold from any interest payment to such Lender an amount equivalent to
the applicable backup withholding tax imposed by the Code, without reduction.

(c)        Each Lender that is entitled to any exemption or reduction of
non-U.S. withholding tax with respect to any payment under this Agreement shall,
at the time or times reasonably requested by Timken or the Paying Agent, deliver
to the Timken and the Paying Agent such certificates, documents or other
evidence reasonably be requested by Timken or the Paying Agent, establishing
that such payment is not subject to, or is subject to a reduced rate of,
withholding.

(d)        The Borrowers shall not be required to pay any additional amount to
any Lender under Section 3.01 if such Lender shall have failed to satisfy the
requirements of Sections 11.15(a), (b) and (c); provided that if such Lender
shall have satisfied the requirements of Sections 11.15(a), (b) and (c) on the
date such Lender became a Lender or ceased to act for its own account with
respect to any payment under any of the Loan Documents, nothing in this
Section 11.15(d) shall relieve such Borrower of its obligation to pay any
amounts pursuant to Section 3.01 in the event that, as a result of any Change in
Law, such Lender is no longer properly entitled to deliver forms, certificates
or other evidence at a subsequent date establishing the fact that such Lender or
other Person for the account of which such Lender receives any sums payable
under any of the Loan Documents is not subject to withholding or is subject to
withholding at a reduced rate. The Paying Agent may, without reduction, withhold
any taxes required to be deducted and withheld from any payment under any of the
Loan Documents with respect to which such Borrower is not required to pay
additional amounts under this Section 11.15(d).

(e)        If a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding tax imposed by FATCA if such Lender (or the
beneficial owners of such payment) were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender shall deliver to Timken and the
Paying Agent at the time or times prescribed by Law and at such time or times
reasonably requested by Timken or the Paying Agent such documentation prescribed
by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the
Code) and such additional documentation reasonably requested by Timken or the
Paying Agent as may be necessary for Timken and the Paying Agent to comply with
their obligations under FATCA and

 

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to determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of this clause (D), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

(f)        If any Governmental Authority asserts that the Paying Agent did not
properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender shall
indemnify the Paying Agent therefor, including all penalties and interest, any
taxes imposed by any jurisdiction on the amounts payable to the Paying Agent
under this Section 11.15, and costs and expenses (including Attorney Costs) of
the Paying Agent. The obligation of the Lenders under this Section 11.15 shall
survive the termination of the Aggregate Commitments, repayment of all other
Obligations hereunder and the resignation of the Paying Agent.

 

  11.16

Replacement of Lenders.

If Timken is entitled to replace a Lender pursuant to the provisions of
Section 3.06, or if any Lender is a Defaulting Lender or a Non-Consenting
Lender, then Timken may, at its sole expense and effort, upon notice to such
Lender and the Co-Administrative Agents, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 11.07), all of its interests,
rights (other than its existing rights to payments pursuant to Sections 3.01 and
3.04) and obligations under this Agreement and the related Loan Documents to an
Eligible Assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment), provided that:

(a)        Timken shall have paid to the Paying Agent the assignment fee (if
any) specified in Section 11.07(b);

(b)        such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or
Timken (in the case of all other amounts);

(c)        in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter;

(d)        such assignment does not conflict with applicable Laws; and

(e)        in the case of an assignment resulting from a Lender becoming a
Non-Consenting Lender, the applicable assignee shall have consented to the
applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling Timken to require such assignment and delegation cease
to apply.

 

  11.17

Judgment.

 

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(a)        If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures Bank of America could purchase Dollars with such other
currency at Bank of America’s principal office in London at 5:00 p.m. on the
Business Day preceding that on which final judgment is given.

(b)        If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in a Committed Currency into Dollars,
the parties agree to the fullest extent that they may effectively do so, that
the rate of exchange used shall be that at which in accordance with normal
banking procedures Bank of America could purchase such Committed Currency with
Dollars at Bank of America’s principal office in London at 5:00 p.m. on the
Business Day preceding that on which final judgment is given.

(c)        The obligation of the Borrowers in respect of any sum due from it in
any currency (the “Primary Currency”) to any Lender or any Agent hereunder
shall, notwithstanding any judgment in any other currency, be discharged only to
the extent that on the Business Day following receipt by such Lender or such
Agent (as the case may be), of any sum adjudged to be so due in such other
currency, such Lender or such Agent (as the case may be) may in accordance with
normal banking procedures purchase the applicable Primary Currency with such
other currency. If the amount of the applicable Primary Currency so purchased is
less than such sum due to such Lender or such Agent (as the case may be) in the
applicable Primary Currency, each Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or such Agent (as
the case may be) against such loss, and if the amount of the applicable Primary
Currency so purchased exceeds such sum due to any Lender or any Agent (as the
case may be) in the applicable Primary Currency, such Lender or such Agent (as
the case may be) agrees to remit to such Borrower such excess.

 

  11.18

Substitution of Currency.

If a change in any Committed Currency occurs pursuant to any applicable Law,
rule or regulation of any governmental, monetary or multi-national authority,
this Agreement (including, clauses (a) and (c) of the definition of Eurocurrency
Rate) will be amended to the extent determined by the Paying Agent (acting
reasonably and in consultation with Timken) to be necessary to reflect the
change in currency and to put the Lenders and the Borrowers in the same
position, so far as possible, that they would have been in if no change in such
Committed Currency had occurred.

 

  11.19

Governing Law; Jurisdiction, Etc..

(a)        GOVERNING LAW. THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT AND ANY
CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR
OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH
THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b)        SUBMISSION TO JURISDICTION. TIMKEN AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION,
LITIGATION OR PROCEEDING OF ANY KIND OR

 

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DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR
OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, THE L/C ISSUER, OR ANY
RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM
OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF
THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN
DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE
L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST TIMKEN OR ANY OTHER LOAN PARTY OR
ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c)        WAIVER OF VENUE. TIMKEN, EACH OTHER LOAN PARTY, EACH AGENT AND EACH
LENDER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B)
OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d)        SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

  11.20

Waiver of Trial by Jury.

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,

 

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SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

 

  11.21

No Advisory or Fiduciary Responsibility.

In connection with all aspects of each transaction contemplated hereby
(including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document), Timken acknowledges and agrees, and acknowledges
its Affiliates’ understanding, that: (i) (A) the arranging and other services
regarding this Agreement provided by the Agents, the Arrangers, and the Lenders
are arm’s-length commercial transactions between Timken and its Affiliates, on
the one hand, and the Agents, the Arrangers, and the Lenders, on the other hand,
(B) Timken has consulted its own legal, accounting, regulatory and tax advisors
to the extent it has deemed appropriate, and (C) Timken is capable of
evaluating, and understands and accepts, the terms, risks and conditions of the
transactions contemplated hereby and by the other Loan Documents; (ii) (A) the
Agents, the Arrangers and each Lender is and has been acting solely as a
principal and, except as expressly agreed in writing by the relevant parties,
has not been, is not, and will not be acting as an advisor, agent or fiduciary
for Timken or any of its Affiliates, or any other Person and (B) neither the
Agents, the Arrangers nor any Lender has any obligation to Timken or any of its
Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Loan Documents; and
(iii) the Agents, the Arrangers and the Lenders and their respective Affiliates
may be engaged in a broad range of transactions that involve interests that
differ from those of Timken and its Affiliates, and neither the Agents, the
Arrangers, nor any Lender has any obligation to disclose any of such interests
to Timken or its Affiliates. To the fullest extent permitted by law, Timken
hereby waives and releases any claims that it may have against the Agents, the
Arrangers or any Lender with respect to any breach or alleged breach of agency
or fiduciary duty in connection with any aspect of any transaction contemplated
hereby.

 

  11.22

USA Patriot Act Notice.

Each Lender that is subject to the USA Patriot Act and each Co-Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies Timken that
pursuant to the requirements of the USA Patriot Act, it is required to obtain,
verify and record information that identifies the Borrowers, which information
includes the name and address of such Borrower and other information that will
allow such Lender or such Co-Administrative Agent, as applicable, to identify
such Borrower in accordance with the USA Patriot Act. Each Borrower shall,
promptly following a request by the Co-Administrative Agents or any Lender,
provide all documentation and other information that the Co-Administrative
Agents or such Lender requests in order to comply with its ongoing obligations
under applicable “know your customer” and anti-money laundering rules and
regulations, including the USA Patriot Act.

 

  11.23

Electronic Execution of Assignments and Certain Other Documents.

The words “execute,” “execution,” “signed,” “signature,” and words of like
import in or related to any document to be signed in connection with this
Agreement and the transactions contemplated hereby (including without limitation
Assignment and Assumptions, amendments or other modifications, Committed Loan
Notices, Swing Line Loan Notices, waivers and consents) shall be deemed to
include electronic signatures, the electronic matching of assignment terms and
contract formations on electronic platforms approved by the Co-Administrative
Agents, or the keeping of records in electronic form, each of which shall be of
the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act,

 

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the New York State Electronic Signatures and Records Act, or any other similar
state laws based on the Uniform Electronic Transactions Act; provided that
notwithstanding anything contained herein to the contrary the Co-Administrative
Agents is under no obligation to agree to accept electronic signatures in any
form or in any format unless expressly agreed to by the Co-Administrative Agents
pursuant to procedures approved by it.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

BORROWER:

THE TIMKEN COMPANY,

an Ohio corporation

By:

/s/ Philip D. Fracassa

Name:  Philip D. Fracassa Title:    Executive Vice President, Chief Financial
Officer

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

CO-ADMINISTRATIVE AGENTS: KEYBANK NATIONAL ASSOCIATION, as Co-Administrative
Agent and Paying Agent By:

/s/ Brian P. Fox

Name:  Brian P. Fox Title: Vice President BANK OF AMERICA, N.A., as
Co-Administrative Agent By:

/s/ Christopher Wozniak

Name:  Christopher Wozniak Title: Vice President

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

LENDERS: KEYBANK NATIONAL ASSOCIATION, as L/C Issuer, Swing Line Lender and a
Lender By:

/s/ Brian P. Fox

Name: Brian P. Fox Title: Vice President

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A., as a Lender By:

/s/ Christopher Wozniak

Name: Christopher Wozniak Title: Vice President

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender By:

/s/ Keith Luettel

Name: Keith Luettel Title: Vice President

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as a Lender By:

/s/ Victor Pierzchalski

Name: Victor Pierzchalski Title: Authorized Signatory

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A.,

as a Lender

By:

/s/ Olivier Lopez

Name: Olivier Lopez Title: Vice President

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

PNC BANK, NATIONAL ASSOCIATION, as a Lender By:

/s/ Joseph G. Moran

Name: Joseph G. Moran Title: Senior Vice President

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender By:

/s/ Christopher S. Helmeci

Name: Christopher S. Helmeci Title: SVP

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

U.S. BANK NATIONAL ASSOCIATION,

as a Lender

By:

/s/ Ken Gorski

Name: Ken Gorski Title: Vice President

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

BARCLAYS BANK PLC, as a Lender By:

/s/ Christopher Lee

Name: Christopher Lee Title: Vice President

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender By:

/s/ Ming K. Chu

Name: Ming K. Chu Title: Vice President By:

/s/ Virginia Cosenza

Name: Virginia Cosenza Title: Vice President

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

GOLDMAN SACHS BANK USA, as a Lender By:

/s/ Rebecca Kratz

Name: Rebecca Kratz Title: Authorized Signatory

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

MORGAN STANLEY BANK, N.A., as a Lender By:

/s/ Michael King

Name: Michael King Title: Authorized Signatory

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

SOCIETY GENERALE, as a Lender By:

/s/ Kimberly Metzger

Name: Kimberly Metzger Title: Director

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

THE BANK OF NEW YORK MELLON, as a Lender By:

/s/ William M. Feathers

Name: William M. Feathers Title: Vice President

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

THE NORTHERN TRUST COMPANY, as a Lender By:

/s/ John Dilegge

Name: John Dilegge Title: Vice President

 

THE TIMKEN COMPANY

CREDIT AGREEMENT

--------------------------------------------------------------------------------

Schedule I

Certain Timken Stockholders

 

1. Members of the Timken family, including, without limitation, those
individuals listed in the Proxy Statement of The Timken Company dated March 27,
2015.

 

2. The Timken Foundation of Canton.

 

3. The Timken Company Savings and Investment Pension Plan.

--------------------------------------------------------------------------------

Schedule II

Existing Letters of Credit

None.

--------------------------------------------------------------------------------

Schedule 2.01

Commitments and Pro Rata Shares

 

Lender

   Commitment      Pro Rata Share  

Bank of America, N.A.

   $ 60,000,000         12.000000000 % 

KeyBank National Association

   $ 60,000,000         12.000000000 % 

Wells Fargo Bank, National Association

   $ 60,000,000         12.000000000 % 

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

   $ 40,000,000         8.000000000 % 

JPMorgan Chase Bank, N.A.

   $ 40,000,000         8.000000000 % 

PNC Bank, National Association

   $ 40,000,000         8.000000000 % 

HSBC Bank USA, National Association

   $ 30,000,000         6.000000000 % 

U.S. Bank National Association

   $ 30,000,000         6.000000000 % 

Barclays Bank PLC

   $ 20,000,000         4.000000000 % 

Deutsche Bank AG New York Branch

   $ 20,000,000         4.000000000 % 

Goldman Sachs Bank USA

   $ 20,000,000         4.000000000 % 

Morgan Stanley Bank, N.A.

   $ 20,000,000         4.000000000 % 

Société Générale

   $ 20,000,000         4.000000000 % 

The Bank of New York Mellon

   $ 20,000,000         4.000000000 % 

The Northern Trust Company

   $ 20,000,000         4.000000000 %    

 

 

    

 

 

 

Total

$ 500,000,000      100.000000000 %    

 

 

    

 

 

 

--------------------------------------------------------------------------------

Schedule 6.09

Environmental Matters

None.

--------------------------------------------------------------------------------

Schedule 6.11

Pension Plans

None.

--------------------------------------------------------------------------------

Schedule 6.13

Projected Financial Information

None.

--------------------------------------------------------------------------------

Schedule 8.01

Existing Liens

 

Debtor

 

State

 

Jurisdiction

 

Secured Party

 

UCC Filing No./Filing Date

 

Collateral

MPB Corporation   DE   State   General Electric Capital Corporation  

UCC: 2007 1131308

File Date: 3/27/2007

 

Continuation: 2011 4758671

File Date: 12/12/2011

 

Amendment: 2012 3973320

File Date: 2012 3973320

 

All accounts in which Honeywell International Inc. is the account debtor now or
hereafter purchased by Secured Party from Debtor pursuant to that certain
Agreement dated 5/5/1998.

 

Collateral Description Amended.

Timken Alcor Aerospace Technologies, Inc.   DE   State   US Bancorp  

UCC: 2010 3509472

File Date: 10/7/2010

  For informational purposes only: 1 255 CNH038393; 1 255 CNH038393; 1
255CNH038376; 1 3530C CZHO18702 Timken Motor & Crane Services LLC   DE   State  
Les Schwab Tire Centers of Colorado, Inc.  

UCC: 2014 2833176

File Date: 7/16/2014

  Debtor hereby grants Secured Party a contractual Security Agreement in all
present and future products and goods and proceeds thereof, purchased by Debtor
from Secured Party including but not limited to: all new, used and recapped
tires; all new and used wheels; and all batteries and all related products.

--------------------------------------------------------------------------------

The Timken Company OH State SunTrust Leasing Corporation

UCC: OH00100816626

File Date: 4/13/2006

 

Continuation: 20110890381

File Date : 3/30/2011

 

Amendment : 20111640256

File Date : 6/13/2011 (Secured Party Amended)

All right, title and interest of Debtor in, to and under certain Invoice No.
1834 to and part of Purchase Order No.     between Corporate Express and Debtor.
The office furniture described in the above invoice and purchase order, and all
replacements, substitutions and alternatives therefor and thereof and accessions
thereto; and all proceeds (cash and non-cash), including the proceeds of all
insurance policies, thereof. The Timken Company OH State SunTrust Leasing
Corporation

UCC: OH00108035527

File Date: 10/26/2006

 

Continuation: 20112840357

File Date : 10/11/2011

All right, title and interest of Debtor in, to and under certain Invoice No.
72898974 to and part of Purchase Order No. MC001834-001 between Corporate
Express and Debtor. The office furniture described in the above invoice and
purchase order, and all replacements, substitutions and alternatives therefor
and thereof and accessions thereto; and all proceeds (cash and non-cash),
including the proceeds of all insurance policies, thereof. The Timken Company OH
State Applied Industrial Technologies-Die, Inc.

UCC: OH00112114117

File Date: 2/20/2007

 

Continuation: 20120480148

File Date: 2/17/2012

Purchase Money Security Interest in and to all Consignee’s now held or hereafter
acquired equipment consigned or shipped to Consignee by or on behalf of
Consignor pursuant to that certain

--------------------------------------------------------------------------------

Consignment Agreement between parties dated January 11, 2007. The Timken Company
OH State SunTrust Bank

UCC: OH00116043271

File Date: 6/8/2007

 

Amendment : 20071660068

File Date : 6/15/2007

 

Continuation: 2011355022

File Date: 12/21/2011

All accounts, chattel paper, general intangibles, documents and instruments (as
such terms as defined in the Uniform Commercial Code enacted in the State of
Georgia (“UCC)) of the Debtor that arise out of the sale of products and/or
service

to Advance Auto Parts, Inc.. and that are transferred or assigned to Secured
Party pursuant to that certain Supplier Agreement between Debtor and

Secured Party.

 

Collateral Description Amended.

The Timken Company OH State General Electric Capital Corporation

UCC: OH00160870571

File Date: 8/29/2012

 

Amendment: 20122820114

File Date : 10/8/2012

All accounts in which Honeywell International Inc. is the account debtor that
are purchased by Secured Party from Debtor pursuant to that certain Agreement
between Secured Party and Debtor dated August 27, 2012

 

Collateral Description Amended

The Timken Corporation OH State SunTrust Bank

UCC: OH00118329158

File Date: 8/17/2007

 

Continuation: 201220580145

File Date: 2/27/2012

All accounts, chattel paper, general intangibles, documents and instruments (as
such terms defined in the Uniform Commercial Code enacted in the State of
Georgia (“UCC”)) of the

--------------------------------------------------------------------------------

Debtor that arise out of the sale of products and/or service to AutoZone, Inc.
and that are transferred or assigned to Secured Party pursuant to that certain
Supplier Agreement between Debtor and Secured Party. The Timken Corporation OH
State SunTrust Bank

UCC: OH00118614234

File Date: 8/29/2007

 

Continuation: 20120730075

File Date: 3/12/2012

All accounts, chattel paper, general intangibles, documents and instruments (as
such terms defined in the Uniform Commercial Code enacted in the State of
Georgia (“UCC”)) of the Debtor that arise out of the sale of products and/or
service to AutoZone, Inc. and that are transferred or assigned to Secured Party
pursuant to that certain Supplier Agreement between Debtor and Secured Party.
The Timken Corporation OH State General Electric Capital Corporation

UCC: OH00160870682

File Date: 8/29/2012

 

Amendment: 20122820113

File Date : 10/8/2012

All accounts in which Honeywell International Inc. is the account debtor that
are purchased by Secured Party from Debtor pursuant to that certain Agreement
between Secured Party and Debtor dated August 27, 2012

 

Collateral Description Amended

--------------------------------------------------------------------------------

Schedule 8.08

Transactions with Affiliates

None.

--------------------------------------------------------------------------------

Schedule 11.02

Paying Agent’s Office, Certain Addresses for Notices

1. Address for Loan Parties:

The Timken Company

4500 Mount Pleasant St., N.W.

North Canton, OH 44720

Attention:

William R. Burkhart Executive Vice President, General Counsel and Secretary

Telephone:    

(234) 262-3002

Facsimile:

(234) 262-4249

Electronic Mail: William.burkhart@timken.com

2. Addresses for Paying Agent, Co-Administrative Agents, L/C Issuer and Swing
Line Lender:

Paying Agent’s Office:

(for Payments of Requests for Credit Extensions)

KeyBank National Association

4900 Tiedeman Road

Mail Code: OH-01-49-0114

Brooklyn, Ohio 44144

Attn:

Lauren Radford

Telephone:    

(216) 813-4868

Electronic Mail: kas_servicing@keybank.com

Other Notices to Co-Administrative Agents:

KeyBank National Association

127 Public Square

Mail Code: OH-01-27-0628

Cleveland, Ohio 44114

Attn:

Brian Fox

Telephone:    

(216) 689-4599

Facsimile:

(216) 689-4649

Electronic Mail: Brian_Fox@KeyBank.com

Bank of America, N.A.

540 W Madison Street

IL4—540-22-23

Chicago, IL 60661

Attn:

Christopher Wozniak

Telephone:    

(312) 828-8340

Facsimile:

(415) 796-1396

Electronic Mail: christopher.m.wozniak@baml.com

--------------------------------------------------------------------------------

For Notices as Swing Line Lender:

KeyBank National Association

4900 Tiedeman Road

Mail Code: OH-01-49-0114

Brooklyn, Ohio 44144

Attn:

Lauren Radford

Telephone:    

(216) 813-4868

Electronic Mail: kas_servicing@keybank.com

For Notices as L/C Issuer:

KeyBank National Association

4910 Tiedeman Road

Mail Code: OH-01-51-0531

Brooklyn, OH 44144

Attn:

Standby Letter of Credit Origination

Telephone:    

(216) 813-1486

Facsimile:

(216) 813-3719

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF COMMITTED LOAN NOTICE

Date:             ,             

 

To: KeyBank National Association, as Paying Agent

Ladies and Gentlemen:

Reference is made to that certain Third Amended and Restated Credit Agreement,
dated as of June 19, 2015 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement”; the terms
defined therein being used herein as therein defined), among The Timken Company,
an Ohio corporation (“Timken”), any Subsidiary of Timken that becomes party
thereto pursuant to Section 2.17 of the Agreement (each such Subsidiary, a
“Designated Borrower” and, together with Timken, the “Borrowers” and each a
“Borrower”), Bank of America, N.A. and KeyBank National Association, as
Co-Administrative Agents, KeyBank National Association, as Paying Agent, each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”), and KeyBank National Association, as L/C Issuer and
Swing Line Lender.

The undersigned hereby requests, on behalf of itself or, if applicable, such
Designated Borrower referenced in item 6 below (select one):

 

¨ A Borrowing of Revolving Credit Loans

¨ A conversion or continuation of Revolving Credit Loans

 

1. On                     (a Business Day).

 

2. In the amount of                    .

 

3. Comprised of                    .

[Type of Loan requested]

 

4. Currency:                     (Dollars or a Committed Currency).

 

5. For Eurocurrency Rate Loans: with an Interest Period of         months.

 

6. [For Timken.] or [On behalf of [name of applicable Designated Borrower].]

The Committed Borrowing requested herein complies with the proviso in
Section 2.01 of the Agreement. [Timken hereby represents and warrants that the
conditions set forth in Section 5.02(a) and (b) of the Credit Agreement will
have been satisfied on and as of the date of the requested Credit Extension.]

THE TIMKEN COMPANY

 

By:

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF SWING LINE LOAN NOTICE

Date:                     

 

To: KeyBank National Association, as Paying Agent and Swing Line Lender

Ladies and Gentlemen:

Reference is made to that certain Third Amended and Restated Credit Agreement,
dated as of June 19, 2015 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement”; the terms
defined therein being used herein as therein defined), among The Timken Company,
an Ohio corporation (“Timken”), any Subsidiary of Timken that becomes party
thereto pursuant to Section 2.17 of the Agreement (each such Subsidiary, a
“Designated Borrower” and, together with Timken, the “Borrowers” and each a
“Borrower”), Bank of America, N.A. and KeyBank National Association, as
Co-Administrative Agents, KeyBank National Association, as Paying Agent, each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”), and KeyBank National Association, as L/C Issuer and
Swing Line Lender.

The undersigned hereby requests a Swing Line Loan:

 

1. On                     (a Business Day).

 

2. In the amount of $                    .

The Swing Line Borrowing requested herein complies with the requirements of the
provisos to the first sentence of Section 2.04(a) of the Agreement.

THE TIMKEN COMPANY

 

By:

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

EXHIBIT C

FORM OF REVOLVING CREDIT NOTE

            ,        

FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to
            or registered assigns (the “Lender”), in accordance with the
provisions of the Agreement (as hereinafter defined), the unpaid principal
amount of each Revolving Credit Loan from time to time made by the Lender to the
Borrower under that certain Third Amended and Restated Credit Agreement, dated
as of June 19, 2015 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement”; the terms defined
therein being used herein as therein defined), among Timken, the Designated
Borrowers from time to time party thereto, the Lender, Bank of America, N.A. and
KeyBank National Association, as Co-Administrative Agents, KeyBank National
Association, as Paying Agent, each other lender from time to time party thereto,
and KeyBank National Association, as L/C Issuer and Swing Line Lender.

The Borrower promises to pay interest on the unpaid principal amount of each
Revolving Credit Loan from the date of such Loan until such principal amount is
paid in full, at such interest rates and at such times as provided in the
Agreement. Except as otherwise provided in Section 2.04(f) of the Agreement with
respect to Swing Line Loans, all payments of principal and interest shall be
made to the Paying Agent for the account of the Lender in Dollars or the
Committed Currency, as applicable, in which such Revolving Credit Loan is
denominated in immediately available funds at the Paying Agent’s Office. If any
amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum
rate set forth in the Agreement.

This Revolving Credit Note is one of the Revolving Credit Notes referred to in
the Agreement, is entitled to the benefits thereof and may be prepaid in whole
or in part subject to the terms and conditions provided therein. This Revolving
Credit Note is also entitled to the benefits of the Subsidiary Guaranty
Agreement, if applicable [and the Timken Guaranty Agreement]. Upon the
occurrence and continuation of one or more of the Events of Default specified in
the Agreement, all amounts then remaining unpaid on this Revolving Credit Note
shall become, or may be declared to be, immediately due and payable all as
provided in the Agreement. Revolving Credit Loans made by the Lender shall be
evidenced by one or more loan accounts or records maintained by the Lender in
the ordinary course of business. The Lender may also attach schedules to this
Revolving Credit Note and endorse thereon the date, amount and maturity of its
Revolving Credit Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Revolving Credit Note.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

[THE TIMKEN COMPANY][DESIGNATED BORROWER]

 

By:

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:             

 

To: Each Agent and each Lender as defined in the Agreement referred to below

Ladies and Gentlemen:

Reference is made to that certain Third Amended and Restated Credit Agreement,
dated as of June 19, 2015 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement”; the terms
defined therein being used herein as therein defined), among The Timken Company,
an Ohio corporation (“Timken”), any Subsidiary of Timken that becomes party
thereto pursuant to Section 2.17 of the Agreement (each such Subsidiary, a
“Designated Borrower” and, together with Timken, the “Borrowers” and each a
“Borrower”), Bank of America, N.A. and KeyBank National Association, as
Co-Administrative Agents, KeyBank National Association, as Paying Agent, each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”), and KeyBank National Association, as L/C Issuer and
Swing Line Lender.

The undersigned Responsible Officer hereby certifies, in his/her capacity as a
Responsible Officer and not in his/her individual capacity, as of the date
hereof that he/she is the             of Timken, and that, as such, he/she is
authorized to execute and deliver this Compliance Certificate to the Agents and
the Lenders on the behalf of Timken, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. Attached hereto as Schedule 1 are the year-end audited financial statements
required by Section 7.01(a) of the Agreement for the fiscal year of Timken ended
as of the above date, together with the report and opinion of an independent
certified public accountant required by such Section. In lieu of attaching such
year-end audited financial statements, to the extent such documents are filed
with the SEC, the documents shall be deemed to have been delivered on the date
on which Timken posts such documents on its website or on the SEC’s EDGAR
system. Notwithstanding the foregoing, Timken shall deliver electronic copies of
such documents to any Lender that requests Timken to deliver such electronic
copies.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. Attached hereto as Schedule 1 are the unaudited financial statements required
by Section 7.01(b) of the Agreement for the fiscal quarter of Timken ended as of
the above date. Such financial statements fairly present the financial
condition, results of operations, shareholders’ equity and cash flows of Timken
and its Subsidiaries in accordance with GAAP, subject only to normal year-end
audit adjustments and the absence of footnotes. In lieu of attaching such
unaudited financial statements, to the extent such documents are filed with the
SEC, the documents shall be deemed to have been delivered on the date on which
Timken posts such documents on its website or on the SEC’s EDGAR
system. Notwithstanding the foregoing, Timken shall deliver electronic copies of
such documents to any Lender that requests Timken to deliver such electronic
copies.

--------------------------------------------------------------------------------

2. The undersigned has reviewed and is familiar with the terms of the Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of Timken
during the accounting period covered by the attached financial statements.

3. A review of the activities of Timken during such fiscal period has been made
under the supervision of the undersigned with a view to determining whether
during such fiscal period Timken performed and observed all its Obligations
under the Loan Documents, and

[select one.]

[to the best knowledge of the undersigned during such fiscal period, Timken
performed and observed each covenant and condition of the Loan Documents
applicable to it, and no Default or Event of Default has occurred and is
continuing.]

—or—

[the following covenants or conditions have not been performed or observed and
the following is a list of each such Default or Event of Default and its nature
and status:]

4. The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this Compliance
Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of             ,         .

THE TIMKEN COMPANY

 

By:

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

SCHEDULE 1

to the Compliance Certificate

Please see attached.

--------------------------------------------------------------------------------

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

For the Quarter/Year ended                     (“Statement Date”)

 

I. Section 8.11(a) — Consolidated Leverage Ratio.

 

  A. Consolidated EBITDA for such period.

 

1.

Consolidated Net Income: $                    

2.

Consolidated Interest Charges (from Line II.B.1): $     

3.

federal, state, local and foreign income taxes (provision for income taxes): $  
  

4.

depreciation and amortization expense: $     

5.

other non-recurring charges and expenses reducing Consolidated Net Income which
do not represent a cash item in such period or any future period: $     

6.

losses realized upon Disposition of assets outside the ordinary course of
business: $     

7.

non-cash impairment, restructuring, reorganization, implementation,
manufacturing rationalization and other special charges: $     

8.

non-cash stock-based compensation expense: $     

9.

non-recurring material non-cash items increasing Consolidated Net Income: $     

10.

gains realized upon Disposition of assets outside the ordinary course of
business: $     

11.

payments (net of expenses) received with respect to United States – Continued
Dumping and Subsidy Offset Act of 2000: $     

12.

Consolidated EBITDA (Line I.A.1 plus Line I.A.2 plus Line I.A.3 plus Line I.A.4
plus Line I.A.5 plus Line I.A.6 plus Line I.A.7 plus Line I.A.8 minus Line I.A.9
minus Line I.A.10 minus Line.I.A.11: $     

 

--------------------------------------------------------------------------------

  B. Consolidated Funded Indebtedness.

 

1. the outstanding principal amount of all obligations, whether current or
long-term, for borrowed money including obligations for borrowed money and
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments (which amount, for the avoidance of doubt, includes only the
drawn portion of any line of credit or revolving credit facility):

$                    

2. Purchase money Indebtedness:

$                    

3. Direct letters of credit obligations (standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments (which
amount, for the avoidance of doubt, includes only the drawn portion of any line
of credit or revolving credit facility):

$                    

4. Obligations for deferred purchase price of property or services (other than
(i) trade accounts payable in the ordinary course of business and (ii)
earn-outs, hold-backs and other deferred payment of consideration in connection
with Permitted Acquisitions to the extent not required to be reflected as
liabilities on the balance sheet of Timken and its Subsidiaries in accordance
with GAAP):

$     

5. Attributable Indebtedness (in respect of capital leases and Synthetic Lease
Obligations):

$                    

6. Off-Balance Sheet Liabilities:

$                    

7. Guarantees with respect to outstanding Indebtedness (other than Indebtedness
that is contingent in nature) of the types specified in Lines I.B.1 through
I.B.6 of Persons other than Timken or any Subsidiary:

$     

8. Indebtedness of the types referred to in Lines I.B.1 through I.B.7 of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which Timken or a Subsidiary is a
general partner or joint venturer, unless such Indebtedness is expressly made
non-recourse to Timken or such Subsidiary:        $

9. Consolidated Funded Indebtedness (Line I.B.1 plus Line I.B.2 plus Line I.B.3
plus Line I.B.4 plus Line I.B.5 plus Line I.B.6 plus Line I.B.7 plus Line
I.B.8):        $

 

  C. Consolidated Leverage Ratio (Line I.B.9 divided by Line I.A.12):
            to 1.0

Maximum permitted: 3.50 to 1.0; provided that, at any time during any Leverage
Increase Period, the Consolidated Leverage Ratio shall not be greater than 3.75
to 1.0; provided further that, after the occurrence of any Leverage Increase
Period, the Consolidated Leverage Ratio shall be no greater than 3.50 to 1.0 as
of the end of at least one fiscal quarter before a subsequent Leverage Increase
Period may be permitted to commence.

 

II. Section 8.11(b) — Consolidated Interest Coverage Ratio.

--------------------------------------------------------------------------------

            A.         Consolidated EBITDA for such period (from Line I.A.12):
$                         B.         Consolidated Interest Charges

        Interest, premium payments, debt discount, fees, charges and related
expenses for borrowed money (including capitalized interest) or for the deferred
purchase price of assets, in each case to the extent treated as interest in
accordance with GAAP, net of interest income in accordance with GAAP:

$                         C.         Consolidated Interest Coverage Ratio (Line
II.A divided by Line II.B.):             to 1.0         Minimum required: 3.50
to 1.0

 

--------------------------------------------------------------------------------

EXHIBIT E

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Paying Agent as contemplated below (i) all of the Assignor’s rights and
obligations as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, Letters of Credit, Guaranty and Swing Line Loans
included in such facilities) and (ii) to the extent permitted to be assigned
under applicable law, all claims, suits, causes of action and any other rights
of the Assignor (in its capacity as a Lender) against any Person, whether known
or unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as, the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

1. Assignor:                     

2. Assignee:                     [and is an Affiliate/Approved Fund of [identify
Lender]1]

3. Borrowers: The Timken Company (“Timken”) and the Designated Borrowers from
time to time party to the Credit Agreement (together with Timken, the
“Borrowers” and each a “Borrower”)

4. Paying Agent: KeyBank National Association, as the paying agent under the
Credit Agreement

5. Credit Agreement: The Third Amended and Restated Credit Agreement, dated as
of June 19, 2015, among the Borrowers, the Paying Agent, Bank of America, N.A.
and KeyBank National Association, as Co-Administrative Agents, each lender from
time to time party thereto, and KeyBank National Association, as L/C Issuer and
Swing Line Lender.

6. Assigned Interest:

 

 

1  Select as applicable.

--------------------------------------------------------------------------------

Aggregate
Amount of
Commitment/Loans
for all Lenders

 

Amount of
Commitment/Loans
Assigned

 

Percentage
Assigned of
Commitment/Loans2

$

  $                               %

$

  $                               %

$

  $                               %

 

[7. Trade Date:                     ]3

Effective Date:             , 20     [TO BE INSERTED BY THE PAYING AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR] By:  

 

Title:   ASSIGNEE [NAME OF ASSIGNEE] By:  

 

Title:   [Consented to and]4 Accepted:

KEYBANK NATIONAL ASSOCIATION,

as Paying Agent

By:  

 

Title:   [Consented to:]5 By:  

 

Title:  

 

 

2  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

3  To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

4  To be added only if the consent of the Paying Agent is required by the terms
of the Credit Agreement.

5  To be added only if the consent of Timken and/or other parties (e.g. Swing
Line Lender, L/C Issuer) is required by the terms of the Credit Agreement.

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ANNEX I TO ASSIGNMENT AND ASSUMPT1ON

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

  1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents, (iii) the financial condition of Timken, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Loan Document or
(iv) the performance or observance by Timken, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it meets the
requirements to be an assignee under Section 11.07(b)(v) of the Credit Agreement
(subject to such consents, if any, as may be required under
Section 11.07(b)(iii) of the Credit Agreement), (iii) from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement as a
Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it is sophisticated with respect to
decisions to acquire assets of the type represented by the Assigned Interest and
either it, or the Person exercising discretion in making its decision to acquire
the Assigned Interest, is experienced in acquiring assets of such type, (v) it
has received a copy of the Credit Agreement, and has received or has been
accorded the opportunity to receive copies of the most recent financial
statements delivered pursuant to Section 7.01 thereof, as applicable, and such
other documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest, (vi) it has, independently and without reliance
upon any Agent or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Assignment and Assumption and to purchase the Assigned Interest, and
(vii) if it is a Foreign Lender, attached hereto is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on any Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Paying Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such amounts have
accrued prior to or on or after the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the Paying Agent
for periods prior to the Effective Date or with respect to the making of this
assignment directly between themselves.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and

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Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature
page of this Assignment and Assumption by telecopy shall be effective as
delivery of a manually executed counterpart of this Assignment and Assumption.
This Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York.

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EXHIBIT F

FORM OF JOINDER AGREEMENT

THIS JOINDER AGREEMENT (the “Agreement”) dated as of             , 20    is by
and among             , a             (the “New Subsidiary”), and KeyBank
National Association and Bank of America, N.A., as Co-Administrative Agents
under that certain Third Amended and Restated Credit Agreement (as amended,
modified, supplemented and extended from time to time, the “Credit Agreement”)
dated as of June 19, 2015 among The Timken Company, an Ohio corporation
(“Timken”), any Subsidiary of Timken that becomes party thereto pursuant to
Section 2.17 of the Credit Agreement (each such Subsidiary, a “Designated
Borrower” and, together with Timken, the “Borrowers” and each a “Borrower”), the
Co-Administrative Agents, KeyBank National Association, as Paying Agent, each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”) and KeyBank National Association, as L/C Issuer and
Swing Line Lender. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.

The Loan Parties are required by Section 7.12 of the Credit Agreement to cause
the New Subsidiary to become a “Guarantor” under the Subsidiary Guaranty
Agreement. Accordingly, the New Subsidiary hereby agrees as follows with the
Co-Administrative Agents, for the benefit of the Lenders:

1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the New Subsidiary will be deemed to be a party to
the Subsidiary Guaranty Agreement and a “Guarantor” for all purposes of the
Subsidiary Guaranty Agreement, and shall have all of the obligations of a
Guarantor thereunder as if it had executed the Subsidiary Guaranty Agreement.
The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be
bound by, all of the terms, provisions and conditions applicable to the
Guarantors contained in the Subsidiary Guaranty Agreement. Without limiting the
generality of the foregoing terms of this paragraph 1, the New Subsidiary hereby
jointly and severally together with the other Guarantors under the Subsidiary
Guaranty Agreement, guarantees to each Lender and the Co-Administrative Agents,
as provided in the Subsidiary Guaranty Agreement, the prompt payment and
performance of the Obligations in full when due (whether at stated maturity, as
a mandatory prepayment, by acceleration or otherwise) strictly in accordance
with the terms thereof.

2. The Subsidiary hereby represents and warrants to the Agent that, as of the
date hereof:

(a) The New Subsidiary’s exact legal name and state of formation are as set
forth on the signature pages hereto.

(b) Schedule 1 hereto includes all Subsidiaries of the New Subsidiary, including
the number of shares of outstanding Equity Interests and the percentage of such
Equity Interests owned by the New Subsidiary.

3. The address of the New Subsidiary for purposes of all notices and other
communications is the address designated for all Loan Parties on Schedule 11.02
to the Credit Agreement or such other address as the New Subsidiary may from
time to time notify the Co-Administrative Agents in writing.

4. This Agreement may be executed in multiple counterparts, each of which shall
constitute an original but all of which when taken together shall constitute one
contract. Delivery by telecopier or other electronic transmission (including
.pdf) of an executed counterpart of a signature page to this Agreement shall be
effective as delivery of an original counterpart of this Agreement.

5. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

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Schedule 1

Subsidiaries

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IN WITNESS WHEREOF, the New Subsidiary has caused this Joinder Agreement to be
duly executed by its authorized officer, and each Co-Administrative Agent, for
the benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.

 

[NEW SUBSIDIARY], a[n] [            ] [            ] By:

 

Name: Title:

 

Acknowledged and accepted:

KEYBANK NATIONAL ASSOCIATION,

as Co-Administrative Agent

By:

 

Name: Title:

BANK OF AMERICA, N.A.,

as Co-Administrative Agent

By:

 

Name: Title:

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EXHIBIT G

FORM OF SUBSIDIARY GUARANTY AGREEMENT

THIS SUBSIDIARY GUARANTY AGREEMENT (this “Guaranty”) dated as of [            ,
20    ] is given by the Material Subsidiaries of The Timken Company, an Ohio
corporation (“Timken”), from time to time party hereto (each a “Guarantor” and
collectively, the “Guarantors”), in favor of BANK OF AMERICA, N.A and KEYBANK
NATIONAL ASSOCIATION, in their capacities as co-administrative agents under the
Credit Agreement (as defined below) (in such capacities, the “Co-Administrative
Agents”), the Lenders and the holders of the Obligations.

W I T N E S S E T H

WHEREAS, pursuant to that certain Third Amended and Restated Credit Agreement,
dated as of June 19, 2015 (as amended, amended and restated, modified,
supplemented, increased, extended, restated, renewed, refinanced or replaced
from time to time, the “Credit Agreement”) among Timken, any Subsidiary of
Timken that becomes party thereto pursuant to Section 2.17 of the Agreement
(each such Subsidiary, a “Designated Borrower” and, together with Timken, the
“Borrowers” and each a “Borrower”), the Lenders identified therein and the
Co-Administrative Agents, the Lenders have agreed to make Loans and issue
Letters of Credit upon the terms and subject to the conditions set forth
therein; and

WHEREAS, this Guaranty is required pursuant to Section 7.12 of the Credit
Agreement.

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

1. Definitions. Capitalized terms used herein but not otherwise defined herein
shall have the meanings provided to such terms in the Credit Agreement.

2. Guaranty. Each of the Guarantors hereby jointly and severally guarantees to
each Lender, each Swap Bank, each Treasury Management Bank, and the
Co-Administrative Agents as hereinafter provided, the prompt payment of the
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Guarantors hereby further
agree that if any of the Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension
or renewal.

Notwithstanding any provision to the contrary contained herein or in any other
of the Loan Documents, Swap Contracts or Treasury Management Agreements, the
obligations of each Guarantor under this Guaranty and the other Loan Documents
shall be limited to an aggregate amount equal to the largest amount that would
not render such obligations subject to avoidance under the Debtor Relief Laws or
any comparable provisions of any applicable state law.

3. Obligations Unconditional. The obligations of the Guarantors under this
Guaranty are

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joint and several, absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Loan
Documents, Swap Contracts or Treasury Management Agreements or any other
agreement or instrument referred to therein, or any substitution, release,
impairment or exchange of any other guarantee of or security for any of the
Obligations, and, to the fullest extent permitted by applicable Law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 3 that the obligations of the Guarantors
hereunder shall be absolute and unconditional under any and all circumstances.
Each Guarantor agrees that such Guarantor shall have no right of subrogation,
indemnity, reimbursement or contribution against the Borrowers or any other
Guarantor for amounts paid under this Guaranty until such time as the
Obligations have been Fully Satisfied. Without limiting the generality of the
foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:

(a) at any time or from time to time, without notice to any Guarantor, the time
for any performance of or compliance with any of the Obligations shall be
extended, or such performance or compliance shall be waived;

(b) any of the acts mentioned in any of the provisions of any of the Loan
Documents, any Swap Contract between any Loan Party and any Swap Bank, or any
Treasury Management Agreement between any Loan Party and any Treasury Management
Bank, or any other agreement or instrument referred to in the Loan Documents,
such Swap Contracts or such Treasury Management Agreements shall be done or
omitted;

(c) the maturity of any of the Obligations shall be accelerated, or any of the
Obligations shall be modified, supplemented or amended in any respect, or any
right under any of the Loan Documents, any Swap Contract between any Loan Party
and any Swap Bank or any Treasury Management Agreement between any Loan Party
and any Treasury Management Bank, or any other agreement or instrument referred
to in the Loan Documents, such Swap Contracts or such Treasury Management
Agreements shall be waived or any other guarantee of any of the Obligations or
any security therefor shall be released, impaired or exchanged in whole or in
part or otherwise dealt with;

(d) any Lien granted to, or in favor of, the Co-Administrative Agents or any
Lender or Lenders as security for any of the Obligations shall fail to attach or
be perfected; or

(e) any of the Obligations shall be determined to be void or voidable
(including, without limitation, for the benefit of any creditor of any
Guarantor) or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of any Guarantor).

With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Co-Administrative Agents or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Loan Documents, any Swap Contract between any Loan Party and any Swap Bank
or any Treasury Management Agreement between any Loan Party and any Treasury
Management Bank, or any other agreement or instrument referred to in the Loan
Documents, such Swap Contracts or such Treasury Management Agreements, or
against any other Person under any other guarantee of, or security for, any of
the Obligations.

 

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4. Reinstatement. The obligations of the Guarantors under this Guaranty shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Obligations is rescinded or must be
otherwise restored by any holder of any of the Obligations, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise, and each
Guarantor agrees that it will indemnify the Co-Administrative Agents and each
Lender on demand for all reasonable costs and expenses (including, without
limitation, reasonable fees and expenses of counsel) incurred by the
Co-Administrative Agents or such Lender in connection with such rescission or
restoration, including any such reasonable costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.

ARTICLE I 5. Certain Additional Waivers. Each Guarantor agrees that such
Guarantor shall have no right of recourse to security for the Obligations,
except through the exercise of rights of subrogation pursuant to Section 3 and
through the exercise of rights of contribution pursuant to Section 7.

6. Remedies. The Guarantors agree that, to the fullest extent permitted by law,
as between the Guarantors, on the one hand, and the Co-Administrative Agents and
the Lenders, on the other hand, the Obligations may be declared to be forthwith
due and payable as provided in Section 9.02 of the Credit Agreement (and shall
be deemed to have become automatically due and payable in the circumstances
provided in said Section 9.02 of the Credit Agreement) for purposes of Section 2
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Obligations from becoming automatically due and
payable) as against any other Person and that, in the event of such declaration
(or the Obligations being deemed to have become automatically due and payable),
the Obligations (whether or not due and payable by any other Person) shall
forthwith become due and payable by the Guarantors for purposes of Section 2.

7. Rights of Contribution. The Guarantors hereby agree as among themselves that,
in connection with payments made hereunder, each Guarantor shall have a right of
contribution from each other Guarantor in accordance with applicable Law. Such
contribution rights shall be subordinate and subject in right of payment to the
Obligations until such time as the Obligations have been Fully Satisfied, and
none of the Guarantors shall exercise any such contribution rights until the
Obligations have been Fully Satisfied.

8. Guaranty of Payment: Continuing Guaranty. The guarantee in this Guaranty is a
guaranty of payment and not of collection, is a continuing guarantee, and shall
apply to the Obligations whenever arising.

9. Keepwell. Each Loan Party that is a Qualified ECP Guarantor (as defined
below) at the time this Guaranty becomes effective with respect to any Swap
Obligation, hereby jointly and severally, absolutely, unconditionally and
irrevocably undertakes to provide such funds or other support to any Loan Party
that is not then an “eligible contract participant” under the Commodity Exchange
Act (each such Loan Party, a “Specified Loan Party”) with respect to such Swap
Obligation as may be needed by such Specified Loan Party from time to time to
honor all of its obligations under this Guaranty in respect of such Swap
Obligation (but, in each case, only up to the maximum amount of such liability
that can be hereby incurred without rendering such Qualified ECP Guarantor’s
obligations and undertakings under this Guaranty voidable under applicable
Debtor Relief Laws, and not for any greater amount). The obligations and
undertakings of each Qualified ECP Guarantor under this Section 9 shall remain
in full force and effect until the Obligations (other than contingent
obligations for which no claim has been asserted) have been paid in full. Each
Loan Party intends this Section 9 to constitute, and this Section 9 shall be
deemed to constitute, a “keepwell, support, or other agreement” for the benefit
of each Specified

 

32

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Loan Party for all purposes of the Commodity Exchange Act.

For the purposes of this Guaranty, “Qualified ECP Guarantor” means at any time
each Loan Party with total assets exceeding $10,000,000 or that qualifies at
such time as an “eligible contract participant” under the Commodity Exchange Act
and can cause another Person to qualify as an “eligible contract participant” at
such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

10. Costs and Expenses. The terms of Section 11.04 of the Credit Agreement with
respect to costs and expenses are incorporated herein by reference, mutatis
mutandis, and the parties hereto agree to such terms. The obligations of the
Guarantors under the preceding sentence shall survive termination of this
Guaranty.

11. Representations and Warrantees. Each Guarantor hereby represents and
warrants to the Co-Administrative Agent and the Lenders that each of the
representations and warranties set forth in Article VI (other than Sections
6.05(c), 6.06 and 6.09) of the Credit Agreement that are applicable to such
Guarantor are true and correct in all material respects (or, if such
representation or warranty is qualified by materiality or material adverse
effect, it shall be true and correct in all respects as drafted) as of the date
hereof and as of the date of each Credit Extension under the Credit Agreement.

12. Covenants. So long as (i) any Lender shall have any Commitment under the
Credit Agreement, (ii) any Loan or other Obligation under the Credit Agreement
shall remain unpaid or unsatisfied, or (iii) any Letter of Credit shall remain
outstanding, each Guarantor hereby agrees that it shall comply with the
agreements and covenants set forth in the Credit Agreement (including Articles
VII and VIII of the Credit Agreement) that are applicable to such Guarantor.

13. Term of Guaranty. This Guaranty shall continue in full force and effect
until the Obligations are paid in full (other than contingent indemnification
obligations). This Guaranty covers the Obligations whether presently outstanding
or arising subsequent to the date hereof including all amounts advanced by the
Lenders in stages or installments.

14. Further Agreements. The Guarantors agree that neither any of the
Co-Administrative Agents nor any other holder of the Obligations will have any
obligation to investigate the financial condition or affairs of the Borrowers
for the benefit of the Guarantors nor to advise the Guarantors of any fact
respecting, or any change in, the financial condition or affairs of the
Borrowers which might come to the knowledge of the Co-Administrative Agents or
any holder of the Obligations at any time, whether or not such Co-Administrative
Agent or such holder of the Obligations knows or believes or has reason to know
or believe that any such fact or change is unknown to the Guarantors or might
(or does) materially increase the risk of such Guarantor as Guarantor or might
(or would) affect the willingness of such Guarantor to continue as the guarantor
with respect to the Obligations.

15. Additional Liability of Guarantors. If any Guarantor is or becomes liable
for any indebtedness owing by the Borrowers to the Co-Administrative Agents or
any holder of the Obligations by endorsement or otherwise other than under this
Guaranty, such liability shall not be in any manner impaired or reduced hereby
but shall have all and the same force and effect it would have had if this
Guaranty had not existed and such Guarantor’s liability hereunder shall not be
in any manner impaired or reduced thereby.

16. Cumulative Rights. All rights of the Co-Administrative Agents and the
holders of the Obligations hereunder are separate and cumulative and may be
pursued separately, successively or concurrently, or not pursued, without
affecting or limiting any other right of the Co-Administrative

 

33

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Agents and without affecting or impairing the liability of the Guarantors.

17. Successors and Assigns. This Guaranty shall be binding on and enforceable
against the Guarantors and its successors and assigns; provided that the
Guarantors may not assign or transfer any of its obligations hereunder except to
the extent permitted by the Credit Agreement. This Guaranty is intended for and
shall inure to the benefit of the Co-Administrative Agents and each holder of
the Obligations, and each and every reference herein to “Co-Administrative
Agent” shall include and refer to each and every successor or permitted assignee
of the Co-Administrative Agents at any time holding or owning any part of or
interest in any part of the Obligations. Each Guarantor expressly waives notice
of transfer or assignment of all or any part of the Obligations or of the rights
of the Co-Administrative Agents hereunder.

18. Application of Payments. Payments received pursuant to this Guaranty shall
be applied to the Obligations in the order set forth in Section 9.03 of the
Credit Agreement.

19. Modifications. Subject to Section 11.01 of the Credit Agreement, this
Guaranty and the provisions hereof may be amended, modified, waived, discharged
or terminated only by an instrument in writing signed by the Guarantors and the
Co-Administrative Agents.

20. Notices. All notices required or permitted to be given under this Guaranty
shall be in conformance with Section 11.02 of the Credit Agreement.

21. Governing Law; Submission to Jurisdiction; Venue; Waiver of Trial by Jury.

(a) THIS GUARANTY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION
(WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR
RELATING TO THIS GUARANTY AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) EACH GUARANTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT
COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION,
WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST
ANY CO-ADMINISTRATIVE AGENT, ANY LENDER, THE L/C ISSUER, OR ANY RELATED PARTY OF
THE FOREGOING IN ANY WAY RELATING TO THIS GUARANTY OR THE TRANSACTIONS RELATING
HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS GUARANTY OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT ANY CO-ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS GUARANTY
AGAINST ANY GUARANTOR OR ANY

 

34

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OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

ARTICLE II (c) EACH GUARANTOR, EACH AGENT AND EACH LENDER IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY IN ANY COURT REFERRED
TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

(d) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER
PROVIDED FOR NOTICES IN SECTION 11.02 OF THE CREDIT AGREEMENT. NOTHING IN THIS
GUARANTY WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY APPLICABLE LAW.

(e) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

22. Severability. If any provision of this Guaranty is determined to be illegal,
invalid or unenforceable, such provision shall be fully severable and the
remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

23. Counterparts. This Guaranty may be executed in any number of counterparts
and by different parties hereto on separate counterparts, each constituting an
original, but all together one and the same instrument. Delivery of executed
counterparts of this Guaranty by facsimile or other electronic means shall be
effective as an original.

[Signature Pages Follow]

 

35

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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed
and delivered as of the day and year first above written.

GUARANTORS:

[                    ]

[                    ]

 

By:

 

Name: Title:

[                    ]

[                    ]

 

By:

 

Name: Title:

[                    ]

[                    ]

 

By:

 

Name: Title:

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Accepted and Agreed:

CO-ADMINISTRATIVE AGENTS:

KEYBANK NATIONAL ASSOCIATION,

as Co-Administrative Agent

 

By:

 

Name: Title:

BANK OF AMERICA, N.A.,

as Co-Administrative Agent

 

By:

 

Name:

Title:

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EXHIBIT H

FORM OF TIMKEN GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (this “Guaranty”) dated as of [            , 20    ] is
given by The Timken Company, an Ohio corporation (the “Guarantor”), in favor of
BANK OF AMERICA, N.A and KEYBANK NATIONAL ASSOCIATION, in their capacities as
co-administrative agents under the Credit Agreement (as defined below) (in such
capacities, the “Co-Administrative Agents”), the Lenders and the holders of the
Designated Borrower Obligations.

W I T N E S S E T H

WHEREAS, pursuant to that certain Third Amended and Restated Credit Agreement,
dated as of June 19, 2015 (as amended, amended and restated, modified,
supplemented, increased, extended, restated, renewed, refinanced or replaced
from time to time, the “Credit Agreement”) among the Guarantor, any Subsidiary
of Timken that becomes party thereto pursuant to Section 2.17 of the Agreement
(each such Subsidiary, a “Designated Borrower”), the Lenders identified therein
and the Co-Administrative Agents, the Lenders have agreed to make Loans and
issue Letters of Credit upon the terms and subject to the conditions set forth
therein; and

WHEREAS, this Guaranty is required pursuant to Section 2.17 of the Credit
Agreement, whereby the Guarantor shall guarantee the payment when due of all
Designated Borrower Obligations; and

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

1. Definitions. Capitalized terms used herein but not otherwise defined herein
shall have the meanings provided to such terms in the Credit Agreement.

2. Guaranty. The Guarantor hereby guarantees to each Lender, each Swap Bank,
each Treasury Management Bank, and the Co-Administrative Agents as hereinafter
provided, the prompt payment of the Designated Borrower Obligations in full when
due (whether at stated maturity, as a mandatory prepayment, by acceleration, as
a mandatory cash collateralization or otherwise) strictly in accordance with the
terms thereof. The Guarantor hereby further agrees that if any of the Designated
Borrower Obligations are not paid in full when due (whether at stated maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Guarantor will promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Designated Borrower Obligations, the
same will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.

Notwithstanding any provision to the contrary contained herein or in any other
of the Loan Documents, Swap Contracts or Treasury Management Agreements, the
obligations of the Guarantor under this Guaranty shall be limited to an
aggregate amount equal to the largest amount that would not render such
obligations subject to avoidance under the Debtor Relief Laws or any comparable
provisions of any applicable state law.

3. Obligations Unconditional. The obligations of the Guarantor under this
Guaranty are absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of

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any of the Loan Documents, Swap Contracts or Treasury Management Agreements or
any other agreement or instrument referred to therein, or any substitution,
release, impairment or exchange of any other guarantee of or security for any of
the Designated Borrower Obligations, and, to the fullest extent permitted by
applicable Law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances. The Guarantor agrees that it shall have no right of subrogation,
indemnity, reimbursement or contribution against any Designated Borrower or any
other Loan Party for amounts paid under this Guaranty until such time as the
Designated Borrower Obligations have been Fully Satisfied. Without limiting the
generality of the foregoing, it is agreed that, to the fullest extent permitted
by law, the occurrence of any one or more of the following shall not alter or
impair the liability of the Guarantor hereunder which shall remain absolute and
unconditional as described above:

(a) at any time or from time to time, without notice to the Guarantor, the time
for any performance of or compliance with any of the Designated Borrower
Obligations shall be extended, or such performance or compliance shall be
waived;

(b) any of the acts mentioned in any of the provisions of any of the Loan
Documents, any Swap Contract between any Loan Party and any Swap Bank, or any
Treasury Management Agreement between any Loan Party and any Treasury Management
Bank, or any other agreement or instrument referred to in the Loan Documents,
such Swap Contracts or such Treasury Management Agreements shall be done or
omitted;

(c) the maturity of any of the Designated Borrower Obligations shall be
accelerated, or any of the Designated Borrower Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the Loan
Documents, any Swap Contract between any Loan Party and any Swap Bank or any
Treasury Management Agreement between any Loan Party and any Treasury Management
Bank, or any other agreement or instrument referred to in the Loan Documents,
such Swap Contracts or such Treasury Management Agreements shall be waived or
any other guarantee of any of the Designated Borrower Obligations or any
security therefor shall be released, impaired or exchanged in whole or in part
or otherwise dealt with;

(d) any Lien granted to, or in favor of, the Co-Administrative Agents or any
Lender or Lenders as security for any of the Designated Borrower Obligations
shall fail to attach or be perfected; or

(e) any of the Designated Borrower Obligations shall be determined to be void or
voidable (including, without limitation, for the benefit of any creditor of the
Guarantor) or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of the Guarantor).

With respect to its obligations hereunder, the Guarantor hereby expressly waives
diligence, presentment, demand of payment, protest and all notices whatsoever,
and any requirement that the Co-Administrative Agents or any Lender exhaust any
right, power or remedy or proceed against any Person under any of the Loan
Documents, any Swap Contract between any Loan Party and any Swap Bank or any
Treasury Management Agreement between any Loan Party and any Treasury Management
Bank, or any other agreement or instrument referred to in the Loan Documents,
such Swap Contracts or such Treasury Management Agreements, or against any other
Person under any other guarantee of, or security for, any of the Designated
Borrower Obligations.

 

3

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4. Reinstatement. The obligations of the Guarantor under this Guaranty shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Designated Borrower Obligations is
rescinded or must be otherwise restored by any holder of any of the Designated
Borrower Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Guarantor agrees that it will indemnify the
Co-Administrative Agents and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Co-Administrative Agents or such Lender in connection
with such rescission or restoration, including any such reasonable costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.

ARTICLE III 5. Certain Additional Waivers. The Guarantor agrees that it shall
have no right of recourse to security for the Designated Borrower Obligations,
except through the exercise of rights of subrogation pursuant to Section 3.

6. Remedies. The Guarantor agrees that, to the fullest extent permitted by law,
as between the Guarantor, on the one hand, and the Co-Administrative Agents and
the Lenders, on the other hand, the Designated Borrower Obligations may be
declared to be forthwith due and payable as provided in Section 9.02 of the
Credit Agreement (and shall be deemed to have become automatically due and
payable in the circumstances provided in said Section 9.02 of the Credit
Agreement) for purposes of Section 2 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Designated
Borrower Obligations from becoming automatically due and payable) as against any
other Person and that, in the event of such declaration (or the Designated
Borrower Obligations being deemed to have become automatically due and payable),
the Designated Borrower Obligations (whether or not due and payable by any other
Person) shall forthwith become due and payable by the Guarantor for purposes of
Section 2.

7. Guaranty of Payment: Continuing Guaranty. The guarantee in this Guaranty is a
guaranty of payment and not of collection, is a continuing guarantee, and shall
apply to the Designated Borrower Obligations whenever arising.

8. Costs and Expenses. The terms of Section 11.04 of the Credit Agreement with
respect to costs and expenses are incorporated herein by reference, mutatis
mutandis, and the parties hereto agree to such terms. The obligations of the
Guarantor under the preceding sentence shall survive termination of this
Guaranty.

9. Covenants. So long as any Lender shall have any Commitment under the Credit
Agreement or any Designated Borrower Obligations shall remain unpaid or
unsatisfied, the Guarantor hereby agrees that it shall comply with the
agreements and covenants set forth in the Credit Agreement (including Articles
VII and VIII of the Credit Agreement) that are applicable to the Guarantor.

10. Term of Guaranty. This Guaranty shall continue in full force and effect
until the Designated Borrower Obligations are paid in full (other than
contingent indemnification obligations). This Guaranty covers the Designated
Borrower Obligations whether presently outstanding or arising subsequent to the
date hereof including all amounts advanced by the Lenders in stages or
installments.

11. Further Agreements. The Guarantor agrees that neither any of the
Co-Administrative Agents nor any other holder of the Designated Borrower
Obligations will have any obligation to investigate the financial condition or
affairs of any Designated Borrower for the benefit of the Guarantor nor to
advise the Guarantor of any fact respecting, or any change in, the financial
condition or affairs of

 

4

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any Designated Borrower which might come to the knowledge of the
Co-Administrative Agents or any holder of the Designated Borrower Obligations at
any time, whether or not such Co-Administrative Agent or such holder of the
Designated Borrower Obligations knows or believes or has reason to know or
believe that any such fact or change is unknown to the Guarantor or might (or
does) materially increase the risk of the Guarantor as Guarantor or might (or
would) affect the willingness of the Guarantor to continue as the guarantor with
respect to the Designated Borrower Obligations.

12. Additional Liability of Guarantor. If the Guarantor is or becomes liable for
any indebtedness owing by any Designated Borrower to the Co-Administrative
Agents or any holder of the Designated Borrower Obligations by endorsement or
otherwise other than under this Guaranty, such liability shall not be in any
manner impaired or reduced hereby but shall have all and the same force and
effect it would have had if this Guaranty had not existed and the Guarantor’s
liability hereunder shall not be in any manner impaired or reduced thereby.

13. Cumulative Rights. All rights of the Co-Administrative Agents and the
holders of the Designated Borrower Obligations hereunder are separate and
cumulative and may be pursued separately, successively or concurrently, or not
pursued, without affecting or limiting any other right of the Co-Administrative
Agents and without affecting or impairing the liability of the Guarantor.

14. Successors and Assigns. This Guaranty shall be binding on and enforceable
against the Guarantor and its successors and assigns; provided that the
Guarantor may not assign or transfer any of its obligations hereunder except to
the extent permitted by the Credit Agreement. This Guaranty is intended for and
shall inure to the benefit of the Co-Administrative Agents and each holder of
the Designated Borrower Obligations, and each and every reference herein to
“Co-Administrative Agent” shall include and refer to each and every successor or
permitted assignee of the Co-Administrative Agents at any time holding or owning
any part of or interest in any part of the Designated Borrower Obligations. The
Guarantor expressly waives notice of transfer or assignment of all or any part
of the Designated Borrower Obligations or of the rights of the Co-Administrative
Agents hereunder.

15. Application of Payments. Payments received pursuant to this Guaranty shall
be applied to the Designated Borrower Obligations in the order set forth in
Section 9.03 of the Credit Agreement.

16. Modifications. Subject to Section 11.01 of the Credit Agreement, this
Guaranty and the provisions hereof may be amended, modified, waived, discharged
or terminated only by an instrument in writing signed by the Guarantor and the
Co-Administrative Agents.

17. Notices. All notices required or permitted to be given under this Guaranty
shall be in conformance with Section 11.02 of the Credit Agreement.

18. Governing Law; Submission to Jurisdiction; Venue; Waiver of Trial by Jury.

(a) THIS GUARANTY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION
(WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR
RELATING TO THIS GUARANTY AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT
COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION,
WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR

 

5

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OTHERWISE, AGAINST ANY CO-ADMINISTRATIVE AGENT, ANY LENDER, THE L/C ISSUER, OR
ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS GUARANTY OR THE
TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF
THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES
DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT
FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN
SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS GUARANTY OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT ANY CO-ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS GUARANTY
AGAINST THE GUARANTOR OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

ARTICLE IV (c) THE GUARANTOR, EACH AGENT AND EACH LENDER IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY IN ANY COURT REFERRED
TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

(d) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER
PROVIDED FOR NOTICES IN SECTION 11.02 OF THE CREDIT AGREEMENT. NOTHING IN THIS
GUARANTY WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY APPLICABLE LAW.

(e) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

19. Severability. If any provision of this Guaranty is determined to be illegal,
invalid or unenforceable, such provision shall be fully severable and the
remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

 

6

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20. Counterparts. This Guaranty may be executed in any number of counterparts
and by different parties hereto on separate counterparts, each constituting an
original, but all together one and the same instrument. Delivery of executed
counterparts of this Guaranty by facsimile or other electronic means shall be
effective as an original.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed
and delivered as of the day and year first above written.

 

GUARANTOR:

THE TIMKEN COMPANY,

an Ohio corporation

By:

 

Name: Title:

 

1

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EXHIBIT I

FORM OF DESIGNATED BORROWER

REQUEST AND ASSUMPTION AGREEMENT

Date:             ,             

 

To: KeyBank National Association and Bank of America, N.A., as Co-Administrative
Agents

Ladies and Gentlemen:

This Designated Borrower Request and Assumption Agreement is made and delivered
pursuant to Section 2.17 of that certain Third Amended and Restated Credit
Agreement, dated as of June 19, 2015 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Credit
Agreement”; the terms defined therein being used herein as therein defined),
among The Timken Company, an Ohio corporation (“Timken”), any Subsidiary of
Timken that becomes party thereto pursuant to Section 2.17 of the Credit
Agreement (each such Subsidiary, a “Designated Borrower” and, together with
Timken, the “Borrowers” and each a “Borrower”), Bank of America, N.A. and
KeyBank National Association, as Co-Administrative Agents, KeyBank National
Association, as Paying Agent, each lender from time to time party thereto
(collectively, the “Lenders” and individually, a “Lender”), and KeyBank National
Association, as L/C Issuer and Swing Line Lender, and reference is made thereto
for full particulars of the matters described therein. All capitalized terms
used in this Designated Borrower Request and Assumption Agreement and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement.

                    (the “Designated Borrower”) and Timken hereby confirms,
represents and warrants to the Co-Administrative Agents and the Lenders that the
Designated Borrower is a Subsidiary of the Company.

The documents required to be delivered to the Co-Administrative Agents under
Section 2.17 of the Credit Agreement will be furnished to the Co-Administrative
Agents in accordance with the requirements of the Credit Agreement.

The true and correct unique identification number that has been issued to the
Designated Borrower by its jurisdiction of organization and the name of such
jurisdiction are set forth below:

 

Identification Number

 

Jurisdiction of Organization

   

The parties hereto hereby confirm that with effect from the date of the
Designated Borrower Notice for the Designated Borrower, the Designated Borrower
shall have obligations, duties and liabilities toward each of the other parties
to the Credit Agreement identical to those which the Designated Borrower would
have had if the Designated Borrower had executed the Credit Agreement as a
Designated Borrower. Effective as of the date of the Designated Borrower Notice
for the Designated Borrower, the Designated Borrower confirms its acceptance of,
and consents to, all representations and warranties, covenants, and other terms
and provisions of the Credit Agreement.

The parties hereto hereby request that the Designated Borrower be entitled to
receive Loans under the Credit Agreement, and understand, acknowledge and agree
that neither the Designated Borrower nor Timken on its behalf shall have any
right to request any Loans for its account unless and until (i) the
Co-Administrative Agents and Lenders agree in writing to the Designated Borrower
becoming a Borrower under the Credit Agreement and (ii) the date five Business
Days after the effective date designated by the

 

1

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Co-Administrative Agents in a Designated Borrower Notice delivered to Timken and
the Lenders pursuant to Section 2.17 of the Credit Agreement.

This Designated Borrower Request and Assumption Agreement shall constitute a
Loan Document under the Credit Agreement.

THIS DESIGNATED BORROWER REQUEST AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the parties hereto have caused this Designated Borrower
Request and Assumption Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year first above written.

 

[DESIGNATED BORROWER] By:

 

Title:

 

 

THE TIMKEN COMPANY By:

 

Title:

 

 

2

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EXHIBIT J

FORM OF DESIGNATED BORROWER NOTICE

Date:             ,         

 

To: The Timken Company

The Lenders party to the Credit Agreement referred to below

Ladies and Gentlemen:

This Designated Borrower Notice is made and delivered pursuant to Section 2.17
of that that certain Third Amended and Restated Credit Agreement, dated as of
June 19, 2015 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”; the terms defined
therein being used herein as therein defined), among The Timken Company, an Ohio
corporation (“Timken”), any Subsidiary of Timken that becomes party thereto
pursuant to Section 2.17 of the Credit Agreement (each such Subsidiary, a
“Designated Borrower” and, together with Timken, the “Borrowers” and each a
“Borrower”), Bank of America, N.A. and KeyBank National Association, as
Co-Administrative Agents, KeyBank National Association, as Paying Agent, each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”), and KeyBank National Association, as L/C Issuer and
Swing Line Lender, and reference is made thereto for full particulars of the
matters described therein. All capitalized terms used in this Designated
Borrower Notice and not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement.

The Co-Administrative Agents hereby notify Timken and the Lenders that effective
as of the date hereof [                    ] shall be a Designated Borrower and
may receive Loans for its account on the terms and conditions set forth in the
Credit Agreement.

 

KEYBANK NATIONAL ASSOCIATION, as Co-Administrative Agent By:

 

Title:

 

BANK OF AMERICA, N.A.,

as Co-Administrative Agent

By:

 

Title:

 

 

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