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Exhibit 1.1
THE TIMKEN COMPANY
$300,000,000
Medium-Term Notes, Series A
Due from 9 Months to 30 Years from Date of Issue
DISTRIBUTION AGREEMENT
February , 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Key Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
The Timken Company, an Ohio corporation (the "Company"),
confirms its agreement with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇
▇▇▇▇▇▇▇"), Key Capital Markets, Inc. ("Key Capital"), ▇.▇. ▇▇▇▇▇▇ Securities
Inc. ("▇.▇. ▇▇▇▇▇▇") and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC ("NationsBanc")
(each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Key Capital, ▇.▇. ▇▇▇▇▇▇ and NationsBanc, an "Agent"
and collectively, the "Agents") with respect to the issue and sale from time to
time by the Company of up to U.S.$300,000,000 aggregate principal amount of its
medium-term notes, Series A (or the equivalent thereof in one or more foreign
currencies or composite currencies due from 9 months to 30 years from date of
issue (the "Notes"). The Notes will be issued under an Indenture, dated as of
February , 1998 (the "Indenture"), between the Company and The Bank of New York,
as Trustee (the "Trustee"), and will have the maturities,
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interest rates, redemption provisions, if any, and other terms as set forth in
supplements to the Base Prospectus referred to below.
Subject to the reservation by the Company of the right to
appoint additional Agents who will agree to be subject to the terms hereof and
to sell Notes directly on its own behalf in those jurisdictions where such
offering by the Company is authorized, the Company hereby appoints the Agents as
its exclusive agents for the purpose of soliciting and receiving offers to
purchase Notes from the Company by others and, on the basis of the
representations and warranties herein contained, but subject to terms and
conditions herein set forth, each of the Agents agrees to use reasonable efforts
to solicit and receive offers to purchase Notes upon terms acceptable to the
Company at such times and in such amounts as the Company shall from time to time
specify. In addition, either Agent may also purchase Notes as principal and, if
requested by such Agent, the Company will enter into a Terms Agreement relating
to such sale (a "Terms Agreement") in accordance with the provisions of Section
2(b) hereof. In acting under this Agreement and in connection with the sale of
any Notes by the Company (other than Notes sold to such Agent as principal),
such Agent is acting solely as agent of the Company and does not assume any
obligation towards or relationship of agency or trust with any purchaser of
Notes.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, including a prospectus,
relating to the Notes, which has been declared effective. Such registration
statement, including the exhibits thereto, as amended at the Commencement Date
(as hereinafter defined), is hereinafter referred to as the "Registration
Statement". The Company proposes to file with the Commission from time to time,
pursuant to Rule 424 under the Securities Act of 1933, as amended (the
"Securities Act"), supplements to the prospectus included in the Registration
Statement that will describe certain terms of the Notes. The prospectus in the
form in which it appears in the Registration Statement is hereinafter referred
to as the "Base Prospectus". The term "Prospectus" means the Base Prospectus
together with the prospectus supplement or supplements (each a "Prospectus
Supplement") specifically relating to Notes, as filed with, or transmitted for
filing to, the Commission pursuant to Rule 424. As used herein, the terms "Base
Prospectus" and "Prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement" and "amendment" or
"amend" as used in this Agreement shall include all documents that are deemed to
be incorporated by reference in the Prospectus that are filed subsequent to the
date of the Base Prospectus by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Agents as of the Commencement Date, as
of each date on which the Company accepts an offer to purchase Notes (including
any purchase by an Agent as principal, pursuant to a Terms Agreement or
otherwise), as of each date the Company issues and sells Notes and as of each
date the Registration Statement or the Base Prospectus is amended or
supplemented, as follows (it being understood that such representations,
warranties and agreements shall be deemed to relate to the Registration
Statement, the Base Prospectus and the Prospectus, each as amended or
supplemented to each such date):
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(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each document incorporated by reference in the
Prospectus complied or will comply when filed with the Commission in all
material respects with the Exchange Act and the rules and regulations of the
Commission thereunder, (ii) each part of the Registration Statement, when such
part became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (iii) the Registration Statement
and the Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the rules and
regulations of the Commission thereunder and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this Section l(b) do not apply (i) to statements or omissions in
the Registration Statement or the Prospectus based upon information relating to
the Agents furnished to the Company in writing by the Agents expressly for use
therein or (ii) to that part of the Registration Statement that constitutes the
Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), of the Trustee.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(e) Each of this Agreement and any applicable Terms Agreement
has been duly authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, in each case enforceable in accordance
with its terms except as (i) rights to indemnity and contribution hereunder or
thereunder may be limited under applicable law, (ii) the enforceability hereof
and thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (iii) the availability of equitable remedies may
be limited by equitable principles of general applicability.
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(f) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable in
accordance with its terms except (i) as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally, (ii) as the enforceability thereof
is subject to general principles of equity, including the possible
unavailability of specific performance or injunctive relief, regardless of
whether such enforceability is considered in a proceeding in equity or at law,
and without limiting the generality of (ii) above, (iii) as the enforceability
thereof may be limited by governmental authority to limit, delay or prohibit the
making of payments in foreign currency or currency units or payments outside the
United States and (iv) U.S. courts may not give effect to rates of exchange in
effect at the time any judgment payable in a foreign currency may be rendered
against the Company by any foreign court.
(g) The Notes have been duly authorized and, when executed and
authenticated in accordance with the Indenture and delivered to and duly paid
for by the purchasers thereof as contemplated herein, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of the
Company, enforceable in accordance with their respective terms except (i) as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally, (ii) as
the enforceability thereof is subject to general principles of equity, including
the possible unavailability of specific performance or injunctive relief,
regardless of whether such enforceability is considered in a proceeding in
equity or at law, and without limiting the generality of (ii) above, (iii) as
the enforceability thereof may be limited by governmental authority to limit,
delay or prohibit the making of payments in foreign currency or currency units
or payments outside the United States and (iv) U.S. courts may not give effect
to rates of exchange in effect at the time any judgment payable in a foreign
currency may be rendered against the Company by any foreign court.
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under this Agreement, the Notes,
the Indenture and any applicable Terms Agreement will not contravene any
provision of applicable law or the certificate of incorporation or by-laws of
the Company or any agreement or other instrument binding upon the Company or any
of its subsidiaries that is material to the Company and its subsidiaries, taken
as a whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of or qualification with any governmental body
or agency is required for the performance by the Company of its obligations
under this Agreement, the Notes, the Indenture and any applicable Terms
Agreement, except such as have been obtained and such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Notes.
(i) There has not been any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.
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(j) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration Statement
that are not described or filed as required.
(k) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the Prospectus,
except to the extent that the failure to obtain or file would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
2. Solicitations as Agent; Purchases as Principal.
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(a) SOLICITATIONS AS AGENT. In connection with the actions of
each Agent as agent hereunder, such Agent severally agrees, as agent of the
Company, to use reasonable efforts to solicit offers to purchase Notes upon the
terms and conditions set forth in the Prospectus as then amended or
supplemented.
The Company reserves the right, in its sole discretion, to
instruct each Agent to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase Notes. Upon receipt of at
least one business day's prior notice from the Company, such Agent will
forthwith suspend solicitations of offers to purchase Notes from the Company
until such time as the Company has advised such Agent that such solicitation may
be resumed. While such solicitation is suspended, the Company shall not be
required to deliver any certificates, opinions or letters in accordance with
Sections 5(a), 5(b) and 5(c); PROVIDED, HOWEVER, that if the Registration
Statement or Prospectus is amended or supplemented during the period of
suspension (other than by an amendment or supplement providing solely for a
change in the interest rates, redemption provisions, amortization schedules or
maturities offered on the Notes or for a change such Agent deems to be
immaterial), such Agent shall not be required to resume soliciting offers to
purchase Notes until the Company has delivered such certificates, opinions and
letters as such Agent may request.
The Company agrees to pay to each Agent, as consideration for
the sale of each Note resulting from a solicitation made or an offer to purchase
received by such Agent, a commission in the form of a discount from the purchase
price of such Note equal to the following percentage of the purchase price of
such Note:
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Term Commission Rate
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From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to and including 30 years .750%
Each Agent shall communicate to the Company, orally or in
writing, each offer to purchase Notes received by such Agent as agent that in
such Agent's judgment should be considered by the Company. The Company shall
have the sole right to accept offers to purchase Notes and may reject any offer
in whole or in part and may accept offers to purchase Notes solicited by one and
not the other Agent or offers solicited by each Agent. Each Agent shall have the
right to reject any offer to purchase Notes that such Agent considers to be
unacceptable, and any such rejection shall not be deemed a breach of such
Agent's agreements contained herein.
(b) PURCHASES AS PRINCIPAL. Each sale of Notes to an Agent as
principal shall be made in accordance with the terms of this Agreement and, if
requested by such Agent, the Company will enter into a Terms Agreement that will
provide for the sale of such Notes to and the purchase thereof by such Agent.
Each Terms Agreement will be substantially in the form of Exhibit A hereto but
may take the form of an exchange of any form of written telecommunication
between an Agent and the Company.
Each Agent's commitment to purchase Notes as principal,
whether pursuant to a Terms Agreement or otherwise, shall be deemed to have been
made on the basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set forth.
Each agreement by an Agent to purchase Notes as principal (whether or not set
forth in a Terms Agreement) shall specify the principal amount of Notes to be
purchased by such Agent pursuant thereto, the Settlement Date (as hereinafter
defined), the maturity date of such Notes, the price to be paid to the Company
for such Notes, the interest rate and interest rate formula, if any, applicable
to such Notes and any other terms of such Notes. Each such agreement shall also
specify any requirements for officers' certificates, opinions of counsel and
letters from the independent public accountants of the Company pursuant to
Section 4 hereof. A Terms Agreement may also specify certain provisions relating
to the reoffering of such Notes by an Agent.
Each Terms Agreement shall specify the time and place of
delivery of and payment for such Notes. With respect to each sale of Notes to an
Agent as principal that is not made pursuant to a Terms Agreement, the
procedural details relating to the issue and delivery of such
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Notes and the payment therefor shall be as set forth in the Administrative
Procedures (as hereinafter defined). Each date of delivery of and payment for
Notes to be purchased by an Agent as principal, whether pursuant to a Terms
Agreement or otherwise, is referred to herein as a "Settlement Date".
(c) ADMINISTRATIVE PROCEDURES. Each Agent and the Company
agree to perform the respective duties and obligations specifically provided to
be performed in the Medium-Term Notes Administrative Procedures (attached hereto
as Exhibit B) (the "Administrative Procedures"), as amended from time to time.
The Administrative Procedures may be amended only by written agreement of the
Company and each Agent.
(d) DELIVERY. The documents required to be delivered by
Section 4 of this Agreement as a condition precedent to the Agents' obligation
to begin soliciting offers to purchase Notes as agents of the Company shall be
delivered at the office of ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Agents, not later
than 9:00 a.m., New York City time, on the date hereof, or at such other time
and/or place as the Agents and the Company may agree upon in writing, but in no
event later than the day prior to the date on which the Agents begin soliciting
offers to purchase Notes or the first date on which the Company accepts any
offer by an Agent to purchase Notes as principal (the "Commencement Date").
3. AGREEMENTS. The Company agrees with each Agent that:
(a) Prior to the termination of the offering of the Notes
pursuant to this Agreement or any Terms Agreement, the Company will not file any
Prospectus Supplement relating to the Notes or any amendment to the Registration
Statement unless the Company has previously furnished to each Agent a copy
thereof for such Agent's review and will not file any such proposed supplement
or amendment to which any Agent reasonably objects; PROVIDED, HOWEVER, that the
foregoing requirement shall not apply to any of the Company's periodic filings
with the Commission required to be filed pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act, copies of which filings the Company will cause to be
delivered to each Agent, upon written request by such Agent, promptly after
being mailed for filing with the Commission. Subject to the foregoing sentence,
the Company will promptly cause each Prospectus Supplement to be filed with or
transmitted for filing to the Commission in accordance with Rule 424(b). The
Company will promptly advise each Agent (i) of the filing of any amendment or
supplement to the Base Prospectus, (ii) of the filing and effectiveness of any
amendment to the Registration Statement, (iii) of any request by the Commission
for any amendment to the Registration Statement or any additional information,
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening of
any proceeding for that purpose and (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Notes
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company will use its best efforts to prevent the issuance
of any such stop order or notice of suspension of qualification and, if issued,
to obtain as soon as possible the withdrawal thereof. If the Base Prospectus is
amended or supplemented as a result of the filing under the Exchange Act of any
document incorporated by reference in the Prospectus, the Agents shall not be
obligated to solicit offers to purchase Notes so long as they are not reasonably
satisfied with such document.
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(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Securities Act, any event occurs or condition
exists as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
when the Prospectus, as then amended or supplemented, is delivered to a
purchaser, not misleading, or if, in the opinion of any Agent delivered to the
Company or in the opinion of the Company, it is necessary at any time to amend
or supplement the Prospectus, as then amended or supplemented, to comply with
applicable law, the Company will immediately notify each Agent by telephone
(with confirmation in writing) to suspend solicitation of offers to purchase
Notes and, if so notified by the Company, each Agent shall forthwith suspend
such solicitation and cease using the Prospectus as then amended or
supplemented. If the Company shall decide to amend or supplement the
Registration Statement or Prospectus as then amended or supplemented, it shall
so advise each Agent promptly by telephone (with confirmation in writing) and,
at its expense, shall prepare and cause to be filed promptly with the Commission
an amendment or supplement to the Registration Statement or Prospectus as then
amended or supplemented that will correct such statement or omission or effect
such compliance and will supply such amended or supplemented Prospectus to each
Agent in such quantities as such Agent may reasonably request. If such amendment
or supplement and any documents, certificates, opinions and letters furnished to
the Agents pursuant to paragraph (f) below and Section 5(a), 5(b) and 5(c) in
connection with the preparation and filing of such amendment or supplement are
satisfactory in all respects to such Agents, upon filing of such amendment or
supplement with the Commission or upon the effectiveness of an amendment to the
Registration Statement, such Agents will resume the solicitation of offers to
purchase Notes hereunder. Notwithstanding any other provision of this Section
3(b), until the distribution of any Notes an Agent may own as principal has been
completed, if any event described above in this paragraph (b) occurs, the
Company will, at its own expense, forthwith prepare and cause to be filed
promptly with the Commission an amendment or supplement to the Registration
Statement or Prospectus as then amended or supplemented, satisfactory in all
respects to such Agent, and will supply such amended or supplemented Prospectus
to such Agent in such quantities as such Agent may reasonably request. If such
amendment or supplement and any documents, certificates, opinions and letters
furnished to such Agent pursuant to paragraph (f) below and Sections 5(a), 5(b)
and 5(c) in connection with the preparation and filing of such amendment or
supplement are satisfactory in all respects to such Agent, upon the filing of
such amendment or supplement with the Commission or upon the effectiveness of an
amendment to the Registration Statement, such Agent may resume its resale of
Notes as principal.
(c) The Company will make generally available to its security
holders and to each Agent as soon as practicable earning statements that satisfy
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder covering twelve month periods
beginning, in each case, not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in Rule 158 under the
Securities Act) of the Registration Statement with respect to each sale of
Notes. If such fiscal quarter is the last fiscal quarter of the Company's fiscal
year, such earning statement shall be made available not later than 90 days
after the close of the period covered thereby and in all other cases shall be
made available not later than 45 days after the close of the period covered
thereby.
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(d) The Company will furnish to each Agent, without charge,
two signed copies of the Registration Statement, including exhibits and all
amendments thereto, and during the period mentioned in Section 3(b) above, as
many copies of the Prospectus, any documents incorporated by reference therein
and any supplements and amendments thereto as each Agent may reasonably request.
(e) The Company will endeavor to qualify the Notes for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Agents shall reasonably request and to maintain such qualifications for as long
as the Agents shall reasonably request; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified.
(f) During the term of this Agreement, the Company shall
furnish to each Agent such relevant documents and certificates of officers of
the Company relating to the business, operations and affairs of the Company, the
Registration Statement, the Base Prospectus, any amendments or supplements
thereto, the Indenture, the Notes, this Agreement, the Administrative
Procedures, any Terms Agreement and the performance by the Company of its
obligations hereunder or thereunder as such Agent may from time to time
reasonably request and shall notify each Agent promptly in writing of any
downgrading, or of its receipt of any notice of any intended or potential
downgrading or of a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization", as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
(g) The Company will, whether or not any sale of Notes is
consummated, pay all expenses incident to the performance of its obligations
under this Agreement and any Terms Agreement, including: (i) the preparation and
filing of the Registration Statement and the Prospectus and all amendments and
supplements thereto, (ii) the preparation, issuance and delivery of the Notes,
(iii) the fees and disbursements of the Company's counsel and accountants and of
the Trustee and its counsel, (iv) the qualification of the Notes under
securities or Blue Sky laws in accordance with the provisions of Section 3(e),
including filing fees and the fees and disbursements of counsel for the Agents
in connection therewith and in connection with the preparation of any Blue Sky
or Legal Investment Memoranda, (v) the printing and delivery to the Agents in
quantities as hereinabove stated of copies of the Registration Statement and all
amendments thereto and of the Base Prospectus and any amendments or supplements
thereto, (vi) the reproduction and delivery to the Agents of copies of the
Indenture and any Blue Sky or Legal Investment Memoranda, (vii) any fees charged
by rating agencies for the rating of the Notes, (viii) the fees and expenses, if
any, incurred with respect to any filing with the National Association of
Securities Dealers, Inc., (ix) the fees and disbursements of counsel for the
Agents incurred in connection with the offering and sale of the Notes, including
any opinions to be rendered by such counsel hereunder, and (x) any out-of-pocket
expenses incurred by the Agents, including any advertising expenses incurred by
the Agents with the approval of the Company.
(h) Between the date of any agreement by an Agent to purchase
Notes as principal and the Settlement Date with respect to such agreement, the
Company will not, without such Agent's prior consent, offer, sell, contract to
sell or otherwise dispose of any debt securities
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of the Company substantially similar to the Notes (other than (i) the Notes that
are to be sold pursuant to such agreement and (ii) commercial paper issued in
the ordinary course of business), except as may otherwise be provided in such
agreement.
4. CONDITIONS OF THE OBLIGATIONS OF THE AGENTS. Each Agent's
obligation to solicit offers to purchase Notes as agent of the Company, each
Agent's obligation to purchase Notes as principal pursuant to any Terms
Agreement or otherwise and the obligation of any other purchaser to purchase
Notes will be subject to the accuracy of the representations and warranties on
the part of the Company herein, to the accuracy of the statements of the
Company's officers made in each certificate furnished pursuant to the provisions
hereof and to the performance and observance by the Company of all covenants and
agreements herein contained on its part to be performed and observed (in the
case of any Agent's obligation to solicit offers to purchase Notes, at the time
of such solicitation, and, in the case of any Agent's or any other purchaser's
obligation to purchase Notes, at the time the Company accepts the offer to
purchase such Notes and at the time of purchase) and (in each case) to the
following additional conditions precedent:
(a) At the time of such solicitation or the time of such
purchase, as the case may be:
(i) There shall not have occurred any change, or
any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings,
business or operations, of the Company and its subsidiaries,
taken as a whole, from that set forth in the Registration
Statement that, in the judgment of any Agent, is material and
adverse and that makes it, in the judgment of any Agent,
impracticable to market the Notes on the terms and in the
manner contemplated in the Prospectus except, in the case of
any purchase of Notes, as disclosed to the Agents in writing
by the Company before the Company accepted the offer to
purchase such Notes.
(ii) There shall not have occurred any (A)
suspension or material limitation of trading generally on or
by, as the case may be, the New York Stock Exchange, the
American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade,
(B) suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market, (C)
declaration of a general moratorium on commercial banking
activities in New York by either Federal or New York State
authorities or (D) any outbreak or escalation of hostilities
or any change in financial markets or any calamity or crisis
that, in the judgment of any Agent, is material and adverse
and, in the case of any of the events described in clauses
(ii)(A) through (D), such event, singly or together with any
other such event, makes it, in the judgment of any Agent,
impracticable to market the Notes on the terms and in the
manner contemplated by the Prospectus, as amended or
supplemented, except, in the case of any purchase of Notes,
for any such event occurring before the Company accepted the
offer to purchase such Notes.
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(iii) There shall not have been any downgrading,
nor any notice given of any intended or potential downgrading
or of a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical
rating organization", as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act, except, in the case
of any purchase of Notes, as disclosed to the Agents in
writing by the Company before the Company accepted the offer
to purchase such Notes.
(b) On the Commencement Date and, if called for by any
agreement by an Agent to purchase Notes as principal, on the corresponding
Settlement Date, each Agent shall have received:
(i) The opinion, dated as of such date, of
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, independent counsel for the
Company, to the effect set forth in Exhibit C hereto.
(ii) The opinion, dated as of such date, of
▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President and General Counsel of
the Company, to the effect set forth in Exhibit D hereto.
(iii) The opinion, dated as of such date, of
▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel for the Agents, in form and
substance satisfactory to the Agents.
(c) On the Commencement Date and, if called for by any
agreement by an Agent to purchase Notes as principal, on the corresponding
Settlement Date, each Agent shall have received a certificate, dated such
Commencement Date or Settlement Date, as the case may be, signed by an executive
officer of the Company to the effect that the representations and warranties of
the Company contained herein are true and correct as of such date and the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied on or before such date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(d) On the Commencement Date and, if called for by any
agreement by an Agent to purchase Notes as principal, on the corresponding
Settlement Date, the Company's independent public accountants shall have
furnished to each Agent a letter or letters, dated as of the Commencement Date
or such Settlement Date, as the case may be, in form and substance satisfactory
to such Agent containing statements and information of the type ordinarily
included in accountant's "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Registration Statement and the Prospectus, as
amended or supplemented.
(e) On the Commencement Date and on each Settlement Date, the
Company shall have furnished to each Agent such appropriate further information,
certificates and documents as such Agent may reasonably request.
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5. ADDITIONAL AGREEMENTS OF THE COMPANY. (a) Each time the
Registration Statement or Prospectus is amended or supplemented (other than by
an amendment or supplement providing solely for a change in the interest rates,
redemption provisions, amortization schedules or maturities offered on the Notes
or for a change an Agent deems to be immaterial), the Company will deliver or
cause to be delivered forthwith to each Agent a certificate signed by an
executive officer of the Company, dated the date of such amendment or
supplement, as the case may be, in form reasonably satisfactory to such Agent,
of the same tenor as the certificate referred to in Section 4(c) relating to the
Registration Statement or the Prospectus as amended and supplemented to the time
of delivery of such certificate.
(b) Each time the Company furnishes a certificate pursuant to
Section 5(a), the Company shall furnish or cause to be furnished forthwith to
each Agent a written opinion of independent counsel for the Company and the
General Counsel of the Company. Any such opinions shall be dated the date of
such amendment or supplement, as the case may be, shall be in a form
satisfactory to each Agent and shall be of the same tenor as the opinions
referred to in Sections 4(b)(i) and 4(b)(ii), but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion. In lieu of such opinions, counsel last
furnishing such opinions to an Agent may furnish to such Agent a letter to the
effect that such Agent may rely on such last opinion to the same extent as
though it were dated the date of such letter (except that statements in such
last opinion will be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such letter.)
(c) Each time the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Registration Statement or the Prospectus, the Company shall
cause its independent public accountants forthwith to furnish each Agent with a
letter, dated the date of such amendment or supplement, as the case may be, in
form satisfactory to such Agent, of the same tenor as the letter referred to in
Section 4(d), with regard to the amended or supplemental financial information
included or incorporated by reference in the Registration Statement or the
Prospectus as amended or supplemented to the date of such letter.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Agent and each person, if any, who controls
such Agent within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages or liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or in any
amendment thereof or the Prospectus (as amended if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to such Agent furnished to the Company in writing by such
Agent expressly for use therein.
12
13
(b) Each Agent agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
the Agents, but only with reference to information relating to such Agent
furnished to the Company in writing by such Agent expressly for use in the
Registration Statement or the Prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceedings
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred; in such case such firm shall be designated in writing by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ if more than one Agent is indemnified pursuant to paragraph (a)
above. In the case that the Agent other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is the indemnified
party pursuant to paragraph (a) above, such firm shall be designated in writing
by such Agent. In the case of parties indemnified pursuant to paragraph (b)
above, such firm shall be designated in writing by the Company. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the third
sentence of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement unless there is a good faith dispute as to
the reasonableness of such fees. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
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14
(d) If the indemnification provided for in paragraph (a) or
(b) of this Section 6 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein in
connection with any offering of Notes, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and each
Agent participating in the offering of the Notes that gave rise to such losses,
claims, damages or liabilities (a "Relevant Agent") from the offering of such
Notes or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and each Relevant Agent in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and each Relevant Agent in connection with the offering of such
Notes shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of such Notes (before deducting expenses) received by
the Company bear to the total discounts and commissions received by each
Relevant Agent in respect thereof. The relative fault of the Company and of each
Relevant Agent shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or by such Relevant Agent and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. If more than one Agent is a Relevant Agent in respect to a proceeding,
each Relevant Agent's obligation to contribute pursuant to this Section 6 shall
be several, in the proportion that the principal amount of the Notes that are
the subject of such proceeding and that were offered and sold through such
Relevant Agent bears to the aggregate principal amount of the Notes that are the
subject of such proceeding, and not joint.
(e) The Company and each Agent agree that it would not be just
or equitable if contribution pursuant to this Section 6 were determined by PRO
RATA allocation or by other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, the Agents shall not be required to contribute any amount in excess
of the amount by which the total price at which the Notes referred to in
paragraph (d) above that were offered and sold to the public through the Agents
exceeds the amount of any damages that the Agents have otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
7. POSITION OF THE AGENTS. In soliciting offers to purchase
the Notes, each Agent is acting solely as an agent for the Company, and not as a
principal, and does not assume
14
15
any obligation towards or relationship of agency or trust with any purchaser of
Notes. Each Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Notes has been
solicited by such Agent and accepted by the Company, but such Agent shall not
have any liability to the Company in the event any such purchase is not
consummated for any reason. If the Company shall default in its obligations to
deliver Notes to a purchaser whose offer it has accepted, the Company shall hold
such Agent harmless against any loss, claim, damage or liability arising from or
as a result of such default and shall, in particular, pay to such Agent the
commission such Agent would have received had such sale been consummated.
8. TERMINATION. This Agreement may be terminated at any time
either by the Company or by an Agent upon the giving of written notice of such
termination to the other party hereto. Any Terms Agreement shall be subject to
termination in the absolute discretion of the parties thereto on the terms set
forth or incorporated by reference therein. The termination of this Agreement
shall not require termination of any agreement by an Agent to purchase Notes as
principal, and the termination of any such agreement shall not require
termination of this Agreement. If this Agreement is terminated, the provisions
of the third paragraph of Section 2(a), the last two sentences of Section 3(b)
and Sections 3(c), 3(g), 6, 7, 9 and 13 shall survive; PROVIDED that if at the
time of termination an offer to purchase Notes has been accepted by the Company
but the time of delivery to the purchaser or its agent of such Notes has not
occurred, the provisions of Sections 2(c), 3(a), 3(b), 3(e), 3(f), 3(h) and 4
shall also survive. If any Terms Agreement is terminated, the provisions of
Sections 2(c), 3, 4, 6, 9 and 13 (which shall have been incorporated by
reference in such Terms Agreement) shall survive.
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
indemnity and contribution agreements, representations, warranties and other
statements of the Company, its officers and the Agents set forth in or made
pursuant to this Agreement or any agreement by the Agents to purchase Notes as
principal will remain in full force and effect, regardless of any termination of
this Agreement or any such agreement, any investigation made by or on behalf of
the Agents or the Company or any of the officers, directors or controlling
persons referred to in Section 6 and delivery of and payment for the Notes.
10. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, will be mailed,
delivered or telefaxed and confirmed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager, Continuously Offered Products (telefax
number: 212-761-0780), with a copy to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Investment Banking Information Center
(telefax number: 212-761-0260); if sent to Key Capital, will be mailed,
delivered or telefaxed and confirmed to it at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Medium-Term Note Desk (telefax number:
216-737-4629); if sent to ▇.▇. ▇▇▇▇▇▇, will be mailed, delivered or telefaxed
and confirmed to it at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Manager, Credit Department (telefax number: 212-761-0687); if sent to
NationsBanc, will be mailed, delivered or telefaxed and confirmed to it at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Medium-Term
Note Desk (telefax number: 704-388-9939) or, if sent to the Company, will be
mailed, delivered
15
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or telefaxed and confirmed to it at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇.
11. SUCCESSORS. This Agreement and any Terms Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers, directors and controlling persons
referred to in Section 6 and the purchasers of Notes (to the extent expressly
provided in Section 4), and no other person will have any right or obligation
hereunder.
12. COUNTERPARTS. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the internal laws of the State of New York.
14. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
16
17
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and each of you.
Very truly yours,
THE TIMKEN COMPANY
By:
----------------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
--------------------------------
Name:
Title:
KEY CAPITAL MARKETS, INC.
By:
--------------------------------
Name:
Title:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By:
--------------------------------
Name:
Title:
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
By:
--------------------------------
Name:
Title:
17
18
EXHIBIT A
THE TIMKEN COMPANY
MEDIUM-TERM NOTES
TERMS AGREEMENT
____________________________, 19__
The Timken Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Re: Distribution Agreement dated February ,
1998 (The "Distribution Agreement")
----------------------------------------
The undersigned agrees to purchase the following principal amount of
your Medium-Term Notes: $
Fixed Rate Floating Rate
All Notes: Notes: Notes:
---------- ------ ------
Purchase Interest Base rate:
price: Rate:
Applicability
of modified
payment upon
acceleration:
Price to public:
Index
Settlement Amortization maturity:
date and time: schedule:
Spread (plus or
Place of minus):
delivery:
Spread
multiplier:
A-1
19
Initial accrual period OID:
Original yield
to maturity:
Alternate rate
event spread:
Maturity Initial interest
date: rate:
Optional Redemption
Dates:
Specified Currency: Interest reset
dates:
Maximum interest
rate:
Initial redemption Minimum interest
date: rate:
Initial redemption Interest payment
percentage: period:
Interest payment
dates:
Interest reset
Annual redemption period:
percentage decrease:
Other terms:
Calculation agent:
The provisions of Sections 1, 2(b) and 2(c) and 3 through 6 and 8
through 13 of the Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.
A-2
20
The following information, opinions, certificates, letters and
documents referred to in Section 4 of the Distribution Agreement will be
required: _______________________________
[NAME OF AGENT]
By:
---------------------------------
Name:
Title:
Accepted:
The TIMKEN COMPANY
By:
----------------------------
Name:
Title:
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
THE TIMKEN COMPANY
$300,000,000
MEDIUM-TERM NOTES
ADMINISTRATIVE PROCEDURES
---------------------------------
Explained below are the administrative procedures and specific terms
of the offering of Medium-Term Notes (the "Notes"), from time to time by The
Timken Company (the "Company") pursuant to the Distribution Agreement, dated as
of February , 1998 (the "Distribution Agreement") among the Company and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, Key Capital Markets, Inc., ▇.▇. ▇▇▇▇▇▇ Securities
Inc., and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC (the "Agents"). The Notes will
be issued under an Indenture dated as of February , 1998 (the "Indenture")
between the Company and The Bank of New York, as trustee (the "Trustee"). In the
Distribution Agreement, the Agents have agreed to use reasonable efforts to
solicit purchases of the Notes, and the administrative procedures explained
below will govern the issuance and settlement of any Notes sold through an
Agent, as agent of the Company. An Agent, as principal, may also purchase Notes
for its own account, and if requested by such Agent, the Company and such Agent
will enter into a terms agreement (a "Terms Agreement"), as contemplated by the
Distribution Agreement. The administrative procedures explained below will
govern the issuance and settlement of any Notes purchased by an Agent, as
principal, unless otherwise specified in the applicable Terms Agreement.
The Trustee will be the Registrar, Calculation Agent, Authenticating
Agent and Paying Agent for the Notes and will perform the duties specified
herein. Each Note will be represented by either a Global Security (as defined
below) delivered to the Trustee, as agent for The Depository Trust Company
("DTC"), and recorded in the book-entry system maintained by DTC (a "Book-Entry
Note") or a certificate delivered to the holder thereof or a person designated
by
B-1
22
such holder (a "Certificated Note"). Except as set forth in the Indenture, an
owner of a Book-Entry Note will not be entitled to receive a Certificated Note.
Book-Entry Notes, which may be payable only in U.S. dollars, will be
issued in accordance with the administrative procedures set forth in Part I
hereof as they may subsequently be amended as the result of changes in DTC's
operating procedures. Certificated Notes will be issued in accordance with the
administrative procedures set forth in Part II hereof. Unless otherwise defined
herein, terms defined in the Indenture, the Notes or any prospectus supplement
relating to the Notes shall be used herein as therein defined.
The Company will advise the Agents in writing of the employees of the
Company with whom the Agents are to communicate regarding offers to purchase
Notes and the related settlement details.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representation from
the Company and the Trustee to DTC, dated as of February , 1998, and a
Medium-Term Note Certificate Agreement between the Trustee and DTC, dated as of
August 17, 1989 (the "MTN Certificate Agreement"), and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more
Book-Entry Notes, the Company will issue a
single global security in fully registered
form without coupons (a "Global Security")
representing up to U.S. $200,000,000
principal amount of all such Notes that have
the same Original Issue Date, Maturity Date
and other terms. Each Global Security will
be dated and issued as of the date of its
authentication by the Trustee. Each Global
Security will bear an "Interest Accrual
Date," which will be (i) with respect to an
original Global Security (or any portion
thereof), its original issuance date and
(ii) with respect to any Global Security (or
any portion thereof) issued subsequently
upon exchange of a Global Security, or in
lieu of a destroyed, lost or stolen Global
Security, the most recent Interest Payment
Date to which interest has been paid or duly
provided for on the predecessor Global
Security (or if no such payment or provision
has been made, the original issuance date of
the predecessor Global Security), regardless
of the date of authentication of such
subsequently issued Global Security.
Book-Entry Notes
B-2
23
may be payable only in U.S. dollars. No
Global Security will represent any
Certificated Note.
Denominations: Book-Entry Notes will be issued in principal
amounts of U.S. $1,000 or any amount in
excess thereof that is an integral multiple
of U.S. $1,000. Global Securities will be
denominated in principal amounts not in
excess of U.S. $200,000,000. If one or more
Book-Entry Notes having an aggregate
principal amount in excess of $200,000,000
would, but for the preceding sentence, be
represented by a single Global Security,
then one Global Security will be issued to
represent each U.S. $200,000,000 principal
amount of such Book-Entry Note or Notes and
an additional Global Security will be issued
to represent any remaining principal amount
of such Book-Entry Note or Notes. In such a
case, each of the Global Securities
representing such Book-Entry Note or Notes
shall be assigned the same CUSIP number.
Preparation of If any offer to purchase a Book-Entry
Pricing Supplement: Note is accepted by or on behalf of the
Company, the Company will prepare a pricing
supplement (a "Pricing Supplement")
reflecting the terms of such Note. The
Company (i) will arrange to file 1 copy of
such Pricing Supplement with the Commission
in accordance with the applicable paragraph
of Rule 424(b) under the Securities Act and
(ii) will, as soon as possible and in any
event not later than the date on which such
Pricing Supplement is filed with the
Commission, deliver the number of copies of
such Pricing Supplement to the relevant
Agent as such Agent shall request.
In each instance that a Pricing Supplement
is prepared, the relevant Agent will affix
the Pricing Supplement to Prospectuses prior
to their use. Outdated Pricing Supplements,
and the Prospectuses to which they are
attached (other than those retained for
files), will be destroyed.
Settlement: The receipt by the Company of immediately
available funds in payment for a Book-Entry
Note and the authentication and issuance of
the Global Security representing such Note
shall constitute "settlement" with respect
to such Note. All offers accepted by the
Company will be settled on the third
Business Day next succeeding the date of
acceptance
B-3
24
pursuant to the timetable for settlement set
forth below, unless the Company, the Trustee
and the purchaser agree to settlement on
another day, which shall be no earlier than
the next Business Day.
Settlement Settlement Procedures with regard to each
Procedures: Book-Entry Note sold by the Company to or
through an Agent (unless otherwise specified
pursuant to a Terms Agreement) shall be as
follows:
A. The relevant Agent will advise
the Company by telephone that such
Note is a Book-Entry Note and of the
following settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate
Book-Entry Note, the Interest
Rate, whether such Note will
pay interest annually or
semiannually and whether such
Note is an Amortizing Note,
and, if so, the amortization
schedule, or, in the case of a
Floating Rate Book-Entry Note,
the Initial Interest Rate (if
known at such time), Interest
Payment Date(s), Interest
Payment Period, Calculation
Agent, Base Rate, Index
Maturity, Interest Reset
Period, Initial Interest Reset
Date, Interest Reset Dates,
Spread or Spread Multiplier (if
any), Minimum Interest Rate (if
any), Maximum Interest Rate (if
any) and the Alternate Rate
Event Spread (if any).
4. Redemption or repayment
provisions (if any).
5. Settlement date (Original
Issue Date).
6. Interest Accrual Date.
7. Price.
8. Agent's commission (if any)
determined as provided in the
Distribution Agreement.
B-4
25
9. Whether the Note is an
Original Issue Discount Note
(an "OID Note"), and if it is
an OID Note, the total amount
of OID, the yield to maturity,
the initial accrual period OID
and the applicability of
Modified Payment upon
Acceleration (and, if so, the
Issue Price).
10. Any other applicable terms.
B. The Company will advise the
Trustee by telephone or electronic
transmission (confirmed in writing
at any time on the same date) of the
information set forth in Settlement
Procedure "A" above. The Company
will then assign a CUSIP number to
the Global Security representing
such Note and will notify the
Trustee and the relevant Agent of
such CUSIP number by telephone as
soon as practicable.
C. The Trustee will enter a pending
deposit message through DTC's
Participant Terminal System,
providing the following settlement
information to DTC, the relevant
Agent:
1. The information set forth in
Settlement Procedure "A".
2. The Initial Interest Payment
Date for such Note, the number
of days by which such date
succeeds the related DTC Record
Date (which in the case of
Floating Rate Notes which reset
daily or weekly, shall be the
date five calendar days
immediately preceding the
applicable Interest Payment
Date and, in the case of all
other Notes, shall be the
Record Date as defined in the
Note) and, if known, the amount
of interest payable on such
Initial Interest Payment Date.
3. The CUSIP number of the
Global Security representing
such Note.
4. Whether such Global Security
will represent any other
Book-Entry Note (to the extent
known at such time).
B-5
26
5. Whether such Note is an
Amortizing Note (by an
appropriate notation in the
comments field of DTC's
Participant Terminal System).
6. The number of participant
accounts to be maintained by
DTC on behalf of the relevant
Agent and the Trustee.
D. The Trustee will complete and
authenticate the Global Security
representing such Note.
E. DTC will credit such Note to the
Trustee's participant account at
DTC.
F. The Trustee will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC to (i) debit such
Note to the Trustee's participant
account and credit such Note to the
relevant Agent's participant account
and (ii) debit such Agent's
settlement account and credit the
Trustee's settlement account for an
amount equal to the price of such
Note less such Agent's commission
(if any). The entry of such a
deliver order shall constitute a
representation and warranty by the
Trustee to DTC that (a) the Global
Security representing such
Book-Entry Note has been issued and
authenticated and (b) the Trustee is
holding such Global Security
pursuant to the MTN Certificate
Agreement.
G. Unless the relevant Agent is the
end purchaser of such Note, such
Agent will enter an SDFS deliver
order through DTC's Participant
Terminal System instructing DTC (i)
to debit such Note to such Agent's
participant account and credit such
Note to the participant accounts of
the Participants with respect to
such Note and (ii) to debit the
settlement accounts of such
Participants and credit the
settlement account of such Agent for
an amount equal to the price of such
Note.
H. Transfers of funds in accordance
with SDFS deliver orders described
in Settlement Procedures "F" and "G"
will be settled in accordance with
SDFS
B-6
27
operating procedures in effect on
the settlement date.
I. The Trustee will credit to the
account of the Company maintained at
Mellon Bank N.A., ABA 04030 0026-1,
Account #171-9666, in immediately
available funds the amount
transferred to the Trustee in
accordance with Settlement Procedure
"F".
J. Unless the relevant Agent is the
end purchaser of such Note, such
Agent will confirm the purchase of
such Note to the purchaser either by
transmitting to the Participants
with respect to such Note a
confirmation order or orders through
DTC's institutional delivery system
or by mailing a written confirmation
to such purchaser.
K. Monthly, the Trustee will send to
the Company a statement setting
forth the principal amount of Notes
outstanding as of that date under
the Indenture.
Settlement For sales by the Company of Book-Entry Notes
Procedures to or through an Agent (unless otherwise
Timetable: specified pursuant to a Terms Agreement) for
settlement on the first Business Day after
the sale date, Settlement Procedures "A"
through "J" set forth above shall be
completed as soon as possible but not later
than the respective times in New York City
set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 A.M. on sale date
B 12:00 Noon on sale date
C 2:00 P.M. on sale date
D 9:00 A.M. on settlement date
E 10:00 A.M. on settlement date
F-G 2:00 P.M. on settlement date
H 4:45 P.M. on settlement date
I-J 5:00 P.M. on settlement date
If a sale is to be settled more than one
Business Day after the sale date, Settlement
procedures "A", "B" and "C" shall be
completed as soon as practicable but no
later than 11:00 A.M., 12:00 Noon and 2:00
P.M., respectively, on
B-7
28
the first Business Day after the sale date.
If the Initial Interest Rate for a Floating
Rate Book-Entry Note has not been determined
at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has
been determined but no later than 12:00 Noon
and 2:00 P.M., respectively, on the first
Business Day before the settlement date.
Settlement Procedure "H" is subject to
extension in accordance with any extension
of Fedwire closing deadlines and in the
other events specified in the SDFS operating
procedures in effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or cancelled, the Trustee, after
receiving notice from the Company or the
relevant Agent, will deliver to DTC, through
DTC's Participant Terminal System, a
cancellation message to such effect by no
later than 2:00 P.M. on the Business Day
immediately preceding the scheduled
settlement date.
Failure If the Trustee fails to enter an SDFS
to Settle: deliver order with respect to a Book-Entry
Note pursuant to Settlement Procedure "F",
the Trustee may deliver to DTC, through
DTC's Participant Terminal System, as soon
as practicable a withdrawal message
instructing DTC to debit such Note to the
Trustee's participant account, provided that
the Trustee's participant account contains a
principal amount of the Global Security
representing such Note that is at least
equal to the principal amount to be debited.
If a withdrawal message is processed with
respect to all the Book-Entry Notes
represented by a Global Security, the
Trustee will ▇▇▇▇ such Global Security
"cancelled," make appropriate entries in the
Trustee's records and send such cancelled
Global Security to the Company. The CUSIP
number assigned to such Global Security
shall, in accordance with the procedures of
the CUSIP Service Bureau of Standard &
Poor's Rating Services, be cancelled and not
immediately reassigned. If a withdrawal
message is processed with respect to one or
more, but not all, of the Book-Entry Notes
represented by a Global Security, the
Trustee will exchange such Global Security
for two Global Securities, one of which
shall represent such Book-Entry Note or
Notes and shall be cancelled immediately
after issuance and the other of which shall
represent the remaining Book-Entry Notes
previously represented by the
B-8
29
surrendered Global Security and shall bear
the CUSIP number of the surrendered Global
Security.
If the purchase price for any Book-Entry
Note is not timely paid to the Participants
with respect to such Note by the beneficial
purchaser thereof (or a person, including an
indirect participant in DTC, acting on
behalf of such purchaser), such Participants
and, in turn, the relevant Agent may enter
SDFS deliver orders through DTC's
Participant Terminal System reversing the
orders entered pursuant to Settlement
Procedures "F" and "G", respectively.
Thereafter, the Trustee will deliver the
withdrawal message and take the related
actions described in the preceding
paragraph.
Notwithstanding the foregoing, upon any
failure to settle with respect to a
Book-Entry Note, DTC may take any actions in
accordance with its SDFS operating
procedures then in effect.
In the event of a failure to settle with
respect to one or more, but not all, of the
Book-Entry Notes to have been represented by
a Global Security, the Trustee will provide,
in accordance with Settlement Procedures "D"
and "F", for the authentication and issuance
of a Global Security representing the
Book-Entry Notes to be represented by such
Global Security and will make appropriate
entries in its records.
Nothing herein shall be deemed to require
the Trustee to risk or expend its own funds
in connection with any payments to the
Company, the Agents or DTC or any
Noteholder, it being understood by all
parties that payments made by the Trustee to
the Company or the Agents or DTC, or any
Noteholder shall be made only to the extent
that funds are provided to the Trustee for
such purpose.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee will serve as Registrar in connection with the Certificated
Notes.
Issuance: Each Certificated Note will be dated and
issued as of the date of its authentication
by the Trustee. Each Certificated Note will
bear an Original Issue Date, which will be
(i) with
B-9
30
respect to an original Certificated Note (or
any portion thereof), its original issuance
date (which will be the settlement date) and
(ii) with respect to any Certificated Note
(or portion thereof) issued subsequently
upon transfer or exchange of a Certificated
Note or in lieu of a destroyed, lost or
stolen Certificated Note, the original
issuance date of the predecessor
Certificated Note, regardless of the date of
authentication of such subsequently issued
Certificated Note.
Preparation If any offer to purchase a Certificated Note
of Pricing is accepted by or on behalf of the Company,
Supplement: the Company will prepare a Pricing
Supplement reflecting the terms of such
Note. The Company (i) will arrange to file
10 copies of such Pricing Supplement with
the Commission in accordance with the
applicable paragraph of Rule 424(b) under
the Securities Act and (ii) will, as soon as
possible and in any event not later than the
date on which such Pricing Supplement is
filed with the Commission, deliver the
number of copies of such Pricing Supplement
to the relevant Agent as such Agent shall
request.
In each instance that a Pricing Supplement
is prepared, the relevant Agent will affix
the Pricing Supplement to Prospectuses prior
to their use. Outdated Pricing Supplements,
and the Prospectuses to which they are
attached (other than those retained for
files), will be destroyed.
Settlement: The receipt by the Company of immediately
available funds in exchange for an
authenticated Certificated Note delivered to
the relevant Agent and such Agent's delivery
of such Note against receipt of immediately
available funds shall constitute
"settlement" with respect to such Note. All
offers accepted by the Company will be
settled on the third Business Day next
succeeding the date of acceptance pursuant
to the timetable for settlement set forth
below, unless the Company and the purchaser
agree to settlement on another date, which
date shall be no earlier than the next
Business Day.
Settlement Settlement Procedures with regard to each
Procedures: Certificated Note sold by the Company to or
through an Agent (unless otherwise specified
pursuant to a Terms Agreement) shall be as
follows:
B-10
31
A. The relevant Agent will advise the
Company by telephone that such Note is a
Certificated Note and of the following
settlement information:
1. Name in which such Note is to be
registered ("Registered Owner").
2. Address of the Registered Owner and
address for payment of principal and
interest.
3. Taxpayer identification number of the
Registered Owner (if available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate Certificated
Note, the Interest Rate, whether such Note
will pay interest annually or semiannually
and whether such Note is an Amortizing Note
and, if so, the amortization schedule, or,
in the case of a Floating Rate Certificated
Note, the Initial Interest Rate (if known at
such time), Interest Payment Date(s),
Interest Payment Period, Calculation Agent,
Base Rate, Index Maturity, Interest Reset
Period, Initial Interest Reset Date,
Interest Reset Dates, Spread or Spread
Multiplier (if any), Minimum Interest Rate
(if any), Maximum Interest Rate (if any) and
the Alternate Rate Event Spread (if any).
7. Redemption or repayment provisions (if
any).
8. Settlement date (Original Issue Date).
9. Interest Accrual Date.
10. Price.
11. Agent's commission (if any) determined
as provided in the Distribution Agreement.
12. Denominations.
13. Specified Currency.
14. Whether the Note is an OID Note, and if
it is an OID Note, the total amount of OID,
the yield to maturity,
B-11
32
the initial accrual period OID and the
applicability of Modified Payment upon
Acceleration (and if so, the Issue Price).
15. Any other applicable terms.
B. The Company will advise the Trustee by
telephone or electronic transmission
(confirmed in writing at any time on the
same date) of the information set forth in
Settlement Procedure "A" above.
C. The Company will have delivered to the
Trustee a pre-printed four-ply packet for
such Note, which packet will contain the
following documents in forms that have been
approved by the Company, the relevant Agent
and the Trustee:
1. Note with customer confirmation.
2. Stub One - For the Trustee.
3. Stub Two - For the relevant Agent.
4. Stub Three - For the Company.
D. The Trustee will complete such Note and
authenticate such Note and deliver it (with
the confirmation) and Stubs One and Two to
the relevant Agent, and such Agent will
acknowledge receipt of the Note by stamping
or otherwise marking Stub One and returning
it to the Trustee. Such delivery will be
made only against such acknowledgment of
receipt and evidence that instructions have
been given by such Agent for payment to the
account of the Company at Mellon Bank N.A.,
ABA 04030 0026-1, Account #171- 9666, or to
such other account as the Company shall have
specified to such Agent and the Trustee, in
immediately available funds, of an amount
equal to the price of such Note less such
Agent's commission (if any). In the event
that the instructions given by such Agent
for payment to the account of the Company
are revoked, the Company will as promptly as
possible wire transfer to the account of
such Agent an amount of immediately
available funds equal to the amount of such
payment made.
E. Unless the relevant Agent is the end
purchaser of such Note, such Agent will
deliver such Note (with confirmation)
B-12
33
to the customer against payment in
immediately available funds. Such Agent will
obtain the acknowledgment of receipt of such
Note by retaining Stub Two.
F. The Trustee will send Stub Three to the
Company by first-class mail. Monthly, the
Trustee will also send to the Company a
statement setting forth the principal amount
of the Notes outstanding as of that date
under the Indenture and setting forth a
brief description of any sales of which the
Company has advised the Trustee that have
not yet been settled.
Settlement For sales by the Company of Certificated to
Notes Procedures or through an Agent (unless otherwise
Timetable: specified pursuant to a Terms Agreement),
Settlement Procedures "A" through "F" set
forth above shall be completed on or before
the respective times in New York City set
forth below:
Settlement
Procedure Time
--------- ----
A 2:00 P.M. on day before
settlement date
B 3:00 P.M. on day before
settlement date
C-D 2:15 P.M. on settlement date
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
Failure If a purchaser fails to accept delivery of
to Settle: and make payment for any Certificated Note,
the relevant Agent will notify the Company
and the Trustee by telephone and return such
Note to the Trustee. Upon receipt of such
notice, the Company will immediately wire
transfer to the account of such Agent an
amount equal to the price of such Note less
such Agent's commission in respect of such
Note (if any). Such wire transfer will be
made on the settlement date, if possible,
and in any event not later than the Business
Day following the settlement date. If the
failure shall have occurred for any reason
other than a default by such Agent in the
performance of its obligations hereunder and
under the Distribution Agreement, then the
Company will reimburse such Agent or the
Trustee, as appropriate, on an equitable
basis for its loss of the use of the funds
during the period when they were credited to
the account of the
B-13
34
Company. Immediately upon receipt of the
Certificated Note in respect of which such
failure occurred, the Trustee will ▇▇▇▇ such
Note "cancelled," make appropriate entries
in the Trustee's records and send such Note
to the Company.
Nothing herein shall be deemed to require
the Trustee to risk or expend its own funds
in connection with any payments to the
Company, the Agents or any Noteholder, it
being understood by all parties that
payments made by the Trustee to the Company
or the Agents, or any Noteholder shall be
made only to the extent that funds are
provided to the Trustee for such purpose.
B-14
35
EXHIBIT C
---------
February , 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Key Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: The Timken Company Medium-Term Notes Due From 9 Months to
30 Years From Date of Issue
---------------------------------------------------------
Gentlemen:
We have acted as counsel to The Timken Company (the "Company")
in connection with the issue and sale by the Company of up to $300,000,000
aggregate principal amount of its medium-term notes (or the equivalent thereof
in one or more foreign currencies or composite currencies) due from 9 months to
30 years from date of issue (the "Notes"), which may be issued from time to time
pursuant to an Indenture (the "Indenture") dated as of February , 1998 between
the Company and The Bank of New York, as trustee, and which may be sold pursuant
to the Distribution Agreement (the "Distribution Agreement") dated February ,
1998 between the Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Key Capital
Markets, Inc., ▇.▇. ▇▇▇▇▇▇ Securities Inc. and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities
LLC (the "Agents"). This opinion is furnished to you pursuant to Section 4(b)(i)
of the Distribution Agreement. Terms used in this opinion that are defined in
the Distribution Agreement are used as so defined unless otherwise indicated
herein.
C-1
36
In our capacity as counsel to the Company, we have examined
such documents, records and matters of law as we have deemed necessary for
purposes of this opinion, and based thereupon we are of the opinion that:
(1) The Company has been duly formed, is validly existing as a
corporation in good standing under the laws of the State of Ohio, and
has the necessary corporate power and authority to own its property and
to conduct its business as described in the Prospectus.
(2) Each of the Distribution Agreement and any applicable
Terms Agreement has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, in each
case enforceable in accordance with its terms except as (i) rights to
indemnity and contribution thereunder may be limited under applicable
securities law, (ii) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and (iii) the enforceability
thereof is subject to general principles of equity, including the
possible unavailability of specific performance or injunctive relief,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(3) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except (i) as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally, (ii) as the enforceability thereof is subject to
general principles of equity, including the possible unavailability of
specific performance or injunctive relief, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and
without limiting the generality of (ii) above, (iii) as the
enforceability thereof may be limited by governmental authority to
limit, delay or prohibit the making of payments in foreign currency or
currency units or payments outside the United States and (iv) U.S.
courts may not give effect to rates of exchange in effect at the time
any judgment payable in a foreign currency may be rendered against the
Company by any foreign court.
(4) The Notes have been duly authorized and when executed and
authenticated in accordance with the Indenture and delivered to and
duly paid for by the purchasers thereof as contemplated by the
Distribution Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their respective terms except as the
enforceability thereof (i) may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally, (ii) is subject to general principles of equity,
including the possible unavailability of specific performance or
injunctive relief, regardless of whether such enforceability is
considered in a proceeding in equity, or at law, and without limiting
the generality of (ii) above, (iii) may be limited by governmental
authority to limit, delay or prohibit the making of payments in foreign
currency or currency units or
C-2
37
payments outside the United States and (iv) U.S. courts may not give
effect to rates of exchange in effect at the time any judgment payable
in a foreign currency may be rendered against the Company by any
foreign court.
(5) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Distribution
Agreement, the Notes, the Indenture and any applicable Terms Agreement
will not contravene any provision of applicable law or the Amended
Articles of Incorporation or the Amended Code of Regulations of the
Company or any agreement or other instrument known to us which is
binding upon the Company or any of its subsidiaries and which is
material to the Company and its subsidiaries, taken as a whole, or, to
the best of our knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company
or any of its subsidiaries, and no consent, approval, authorization or
order of or qualification with any governmental body or agency is
required for the performance by the Company of its obligations under
the Distribution Agreement, the Notes, the indenture and any applicable
Terms Agreement, except such as have been obtained and such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Notes.
We have participated in the preparation of the Registration
Statement and Prospectus (the documents incorporated into the Prospectus by
reference having previously been prepared and filed by the Company with only
very limited review by us). From time to time we have had discussions with
officers and employees of the Company, Ernst & Young LLP, the independent
accountants who examined certain of the financial statements of the Company and
its consolidated subsidiaries included in the Registration Statement and
Prospectus, and your representatives concerning the information contained in the
Registration Statement and Prospectus and the proposed responses to various
items in Form S-3. Based thereupon we are of the opinion that the Registration
Statement and the Prospectus (except for the financial statements and financial
schedules included therein, as to which we express no opinion) at the time the
Registration Statement became effective under the Securities Act complied as to
form in all material respects with the Securities Act and the rules and
regulations thereunder. In passing upon the form of such documents, we
necessarily have assumed, and have not checked or otherwise verified, the
correctness and completeness of the statements made therein and take no
responsibility therefor.
We are of the opinion that the statements contained in the
Registration Statement under the captions "Description of Securities," "Plan of
Distribution" and under Item 15, insofar as they purport to summarize the
provisions of documents referred to therein, present fair summaries of such
provisions, and are of the opinion ascribed to us in the Prospectus under thee
caption "United States Federal Taxation."
We have not independently verified and are not passing upon,
and do not assume any responsibility for, the accuracy, completeness, or
fairness (except as set forth in the immediately preceding paragraph above) of
the information contained in the Registration Statement and Prospectus,
including any document incorporated or deemed to be incorporated
C-3
38
therein by reference. Based upon the participation and discussions described
above, however, no facts have come to our attention that cause us to believe
that the Registration Statement (except for the financial statements end
financial schedules included therein and that part of the Registration Statement
that constitutes the Form T-1, In each case, as to which we express no view), at
the time it became effective contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or that the Prospectus
(except for the financial statements and financial schedules included therein as
to which we express no view) contains any untrue statement of a material tact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
The opinions expressed herein are limited to matters governed
by the laws of the States of Ohio and New York (other than the securities or
Blue Sky laws of such States) and the federal laws of the United States of
America. This opinion is rendered to you as of the date hereof, and we undertake
no responsibility to advise you of any changes in facts or law subsequent to the
date hereof.
This opinion is furnished by us, as counsel to the Company, to
you solely for your benefit pursuant to Section 4(b)(i) of the Distribution
Agreement, upon the understanding that we are not hereby assuming any
professional responsibility to any other person whatsoever.
Very truly yours,
▇▇▇▇▇, DAY, ▇▇▇▇▇▇ & ▇▇▇▇▇
C-4
39
EXHIBIT D
---------
February , 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Key Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: The Timken Company Medium-Term Notes Due From 9 Months to
30 Years From Date of Issue
---------------------------------------------------------
Gentlemen:
I am the Senior Vice President and General Counsel of The
Timken Company (the "Company") and have acted as counsel to the Company in
connection with the issue and sale by the Company of up to $300,000,000 or the
equivalent thereof in one or more foreign or composite currencies) aggregate
principal amount of its medium-term notes due from 9 months to 30 years from
date of issue (the "Notes"), which may be issued from time to time pursuant to
an Indenture (the "Indenture") dated as of February , 1998 between the Company
and The Bank of New York, as trustee, and which may be sold pursuant to the
Distribution Agreement (the Distribution Agreements) dated February , 1998
between the Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Key Capital Markets,
Inc., ▇.▇. ▇▇▇▇▇▇ Securities Inc. and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC (the
"Agents"). This opinion is furnished to you pursuant to Section 4(b)(ii) of the
Distribution Agreement. Terms used in this opinion that are defined in the
Distribution Agreement are used as so defined unless otherwise indicated herein.
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In my capacity as counsel to the Company, I have examined such
documents, records and matters of law as I have deemed necessary for purposes of
this opinion, and based thereupon I am of the opinion that:
(1) The Company is in good standing as a foreign corporation
in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(2) Each of the Company's Significant Subsidiaries (as defined
in Rule 405 under the Securities Act of 1933) has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its respective jurisdiction of incorporation, has the
necessary corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is in good
standing as a foreign corporation in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company And its subsidiaries, taken as a whole.
(3) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(4) The statements contained in the Registration Statement
under "Item 3 of Part I of the Company's most recent annual report on
Form 10-K incorporated by reference in the Prospectus and Item 1 of
Part II of the Company's quarterly reports on Form 10-Q filed since the
most recent annual report on Form 10-K incorporated by reference in the
Prospectus, in each case insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to such
legal matters, documents and proceedings and, insofar as they purport
to summarize matters referred to therein, present fair summaries of
such matters.
(5) After due inquiry, I do not know of any legal or
governmental proceeding pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries is subject that is required to
be described in the Registration Statement or the Prospectus, and is
not so described, or of any statute, regulation, contract or other
document that is required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to such Registration
Statement that is not described or filed as required.
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(6) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Distribution
Agreement, the Notes, the Indenture and any applicable Terms Agreement
will not contravene any provision of applicable law or the Amended
Articles of Incorporation or the Amended Code of Regulations of the
Company or any agreement or other instrument known to me which is
binding upon the Company or any of is subsidiaries and which is
material to the Company and its subsidiaries, taken as a whole, or, to
the best of my knowledge, any Judgment, order or decree of any
governmental body, agency or court having Jurisdiction over the Company
or any of its subsidiaries, and no consent, approval, authorization or
order of or qualification with any governmental body or agency is
required for the performance by the Company of its obligations under
the Distribution Agreement, the Notes, the Indenture and any applicable
Terms Agreement, except such as have been obtained and such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Notes.
(7) Each document incorporated by reference in the Prospectus
(except for the financial statements and financial schedules included
therein as to which I express no opinion) complied as to form when
filed with the Commission in all material respects with the Exchange
Act and the rules and regulations of the Commission thereunder.
(8) In my capacity as Senior Vice President And General
Counsel to the Company, no facts have come to my attention that cause
me to believe that the Registration Statement (except for the
financial statements and financial schedules included therein and that
part of the Registration Statement that constitutes the Form T-1, in
each case, as to which I express no view), at the time it became
effective contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or that the
Prospectus (except for the financial statements and financial
schedules included therein as to which I express no view) contains any
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
The opinions expressed herein are limited to matters governed
by the laws of the State of Ohio (other than matters governed by the securities
or Blue Sky laws of ouch state) and the federal laws of the United States of
America.
This opinion is furnished by me, as counsel to the Company, to
you solely for your benefit pursuant to Section (b)(ii) of the Distribution
Agreement, upon the understanding that I am not hereby assuming any professional
responsibility to any other person whatsoever.
Very truly yours,
▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President and General Counsel
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