Exhibit 10(k)(xviii)

Execution Version

FOURTH AMENDMENT TO AMENDED AND RESTATED NOTE AGREEMENT AND GUARANTY

FOURTH AMENDMENT TO AMENDED AND RESTATED NOTE AGREEMENT AND GUARANTY, dated as
of April 8, 2016 (this “Amendment”), among ALBANY INTERNATIONAL CORP., a
Delaware corporation (the “Company”), the Guarantors (as defined in the Note
Agreement referred to below), and the holders of Notes (as defined in the Note
Agreement referred to below) on the date hereof (each individually, a
“Noteholder”, and collectively, the “Noteholders”).

W I T N E S S E T H:

WHEREAS, the Company and Guarantors party thereto (each an “Obligor”, and
collectively, the “Obligors”) and the Noteholders are parties to that certain
Amended and Restated Note Agreement and Guaranty, dated as of July 16, 2010, as
amended by (1) that certain First Amendment to Amended and Restated Note
Agreement and Guaranty, dated as of February 17, 2012, (2) that certain Second
Amendment to Amended and Restated Note Agreement and Guaranty, dated as of March
26, 2013, and (3) that certain Third Amendment to Amended and Restated Note
Agreement and Guaranty, as of June 18, 2015 (as the same may be amended,
supplemented, waived or otherwise modified from time to time, the “Note
Agreement”); and

WHEREAS, in connection with the recent amendment and restatement of the
Five-Year Revolving Credit Facility Agreement, dated as of June 18, 2015, and
amended and restated as of April 8, 2016, among the Company, various
subsidiaries of the Company, JPMorgan Chase Bank, N.A. and the other parties
thereto (the “New Bank Credit Agreement”), the Company has requested amendments
of certain provisions of the Note Agreement, and the Noteholders have indicated
willingness to agree to such amendments subject to certain limitations and
conditions, as provided for herein;

NOW THEREFORE, in consideration of the premises, the mutual covenants and the
agreements hereinafter set forth and other good and valuable consideration, the
parties hereto hereby agree that on the Fourth Amendment Effective Date, as
defined herein, the Note Agreement will be amended as follows:

1. Definitions. Unless otherwise defined herein, terms defined in the Note
Agreement are used herein as therein defined.

2. Effectiveness of this Amendment. Subject to the occurrence of the Fourth
Amendment Effective Date, (a) the Note Agreement (without giving effect to this
Amendment) will apply in connection with the Notes up to (but excluding) the
Fourth Amendment Effective Date, and (b) the Note Agreement as amended by this
Amendment will apply in connection with the Notes from and after the Fourth
Amendment Effective Date.

3. Amendments. Subject to the satisfaction of the conditions set forth in
Section 6 hereof, the Note Agreement is hereby amended, as of the Fourth
Amendment Effective Date, in the manner specified in Schedule 1 to this
Amendment and made a part hereof.

4. Representations and Warranties.

(a) Each Obligor hereby (i) repeats (and confirms as true and correct) as of the
Fourth Amendment Effective Date to the Noteholders each of the representations
and warranties made by such Obligor pursuant to the Note Agreement (other than
such representations expressly given as of a specific date); provided that the
representation and warranty in the last sentence of Paragraph 8B of the Note
Agreement is further qualified by an exception for anything disclosed in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2015; and
(ii) incorporates such representations and warranties herein (as though set
forth herein) in their entirety.

(b) Each Obligor hereby further represents and warrants as of the Fourth
Amendment Effective Date that:

  1 

   

(i) No Default. No Default or Event of Default shall have occurred and be
continuing on such date after giving effect to this Amendment;

(ii) Power and Authority. Each such Person has the corporate or equivalent power
to execute and deliver this Amendment, and to perform the provisions hereof, and
this Amendment has been duly authorized by all necessary corporate or equivalent
action on the part of each such Person;

(iii) Due Execution. This Amendment has been duly executed and delivered by such
Person and constitutes such Person’s legal, valid and binding obligation,
enforceable in accordance with its terms, except as such enforceability may be
limited (x) by general principals of equity and conflicts of laws or (y) by
bankruptcy, reorganization, insolvency, moratorium or other laws of general
application relating to or affecting the enforcement of creditors’ rights;

(iv) No Consents Required. No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or Governmental Authority
or third party is required in connection with the execution, delivery or
performance by such Person of this Amendment;

(v) Acknowledgment of Obligation: Waiver of Claims. It has no defenses, offsets
or counterclaims against any of its obligations under and in respect to the
Notes or the AI Guaranty Agreement and that all amounts outstanding under and in
respect of the Notes and the Note Agreement are owing to holders of the Notes
without defense, offset or counterclaim;

(vi) New Bank Credit Agreement. The Company has furnished to the Noteholders a
true and complete copy of the New Bank Credit Agreement, and except as so
furnished to the Noteholders, there have been no amendments to the New Bank
Credit Agreement; and

(vii) Foreign Assets Control Regulations, Etc.

(a) Neither the Company nor any Controlled Entity (i) is a Blocked Person, (ii)
has been notified that its name appears or may in the future appear on a State
Sanctions List or (iii) to the Company’s knowledge, is a target of sanctions
that have been imposed by the United Nations or the European Union.

(b) Neither the Company, any Subsidiary or, to the Company’s knowledge, any
other Controlled Entity (i) is in material violation of, or been charged or
convicted under, any applicable U.S. Economic Sanctions Laws, Anti-Money
Laundering Laws or Anti-Corruption Laws or (ii) to the Company’s knowledge, is
under investigation by any Governmental Authority for possible violation of any
U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption
Laws.

(c) The Company will use (and has used) the proceeds of the Notes only for the
purposes specified in the Note Agreement. The Company will not use, and will
procure that its Subsidiaries and its or their respective Controlled Entities
will not use (and such Persons have not used), proceeds of the Notes:

(i) for the purpose of funding, financing or facilitating any activities,
business or transaction with any Blocked Person, to the extent that such
activities, business or transaction would cause a violation of U.S. Economic
Sanctions Laws by any Obligor or Noteholder, or in any other manner that could
result in a violation of any U.S. Economic Sanctions Laws by any Obligor or
Noteholder;

(ii) in violation of, or in such manner as would cause any Noteholder to be in
violation of, any applicable Anti-Money Laundering Laws; or

  2 

   

(iii) in furtherance of an offer, payment, promise to pay, or authorization of
the payment or giving of money, or anything else of value, to any Person in
violation of the U.S. Foreign Corrupt Practices Act or in violation of any other
Anti-Corruption Laws.

(d) The Company has implemented and maintains in effect policies and procedures
designed to promote compliance by the Company, the Subsidiaries and their
respective directors, officers, employees and agents with Anti-Corruption Laws
and U.S. Economic Sanctions Laws, and the Company and the Subsidiaries and, to
the knowledge of the Company and in connection with their activities for the
Company and the Subsidiaries, their respective officers, employees, directors
and agents, are in compliance with Anti-Corruption Laws and U.S. Economic
Sanctions Laws in all material respects and are not engaged in any activity that
would reasonably be expected to result in the Company or any Subsidiary being
designated as a Blocked Person.

(c) The Company hereby represents and warrants that, immediately after the
Fourth Amendment Effective Date, after giving pro forma effect to the Blue
Falcon Acquisition (as defined in Schedule 1) and any related incurrence of
Indebtedness, (i) the Leverage Ratio does not exceed 3.50 to 1.00 and (ii) no
Default shall have occurred and be continuing.

5. Acknowledgements and Consent of Guarantors. Each Guarantor hereby
acknowledges that it has reviewed the terms and provisions of the Note
Agreement, the Notes, the AI Guaranty Agreement and this Amendment and consents
to the amendments to the Note Agreement effected pursuant to this Amendment.
Each Guarantor confirms that it will continue to guarantee the obligations to
the fullest extent in accordance with the AI Guaranty Agreement and acknowledges
and agrees that: (a) the AI Guaranty Agreement shall continue in full force and
effect and that its obligations thereunder shall be valid and enforceable and
shall not be impaired or limited by the execution or effectiveness of this
Amendment; and (b)(i) notwithstanding the conditions to effectiveness hereof,
such Guarantor is not required by the terms of the Note Agreement, the Notes or
the AI Guaranty Agreement to consent to the amendments to the Note Agreement
effected pursuant to this Amendment; and (ii) nothing in the Note Agreement, the
Notes or the AI Guaranty Agreement shall be deemed to require the consent of any
such Guarantor to any future amendments to the Note Agreement.

6. Conditions Precedent. This Amendment shall become effective as of the first
date on which the conditions precedent set forth below shall have been fulfilled
(the “Fourth Amendment Effective Date”), and Prudential agrees to promptly
confirm the occurrence of the Fourth Amendment Effective Date after such
conditions have been fulfilled:

(a) the Noteholders shall have received counterparts of this Amendment, executed
and delivered by a duly authorized officer of each of the Obligors;

(b) the Company shall have paid all outstanding costs, expenses and fees of the
Noteholders (including reasonable attorney’s fees and expenses of Morgan, Lewis
& Bockius, LLP) incurred in connection with the documentation of this Amendment
(including a reasonable estimate of post-closing fees and expenses) to the
extent invoiced (this provision shall not be construed to limit the obligations
of the Company under Paragraph 12B of the Note Agreement);

(c) the Company shall have paid to the Noteholders a non-refundable amendment
fee in the amount of $25,000 by federal funds wire transfer in immediately
available funds as set forth on Exhibit A;

(d) the New Bank Credit Agreement shall be in full force and effect and the
Restatement Effective Date (defined therein) shall have occurred concurrently
herewith, and a true and complete copy thereof shall have been delivered to the
Noteholders, and shall be in form and substance satisfactory to them; and

(e) the Noteholders shall have received such additional documents or
certificates with

  3 

   

respect to legal matters or corporate or other proceedings related to the
transactions contemplated hereby as may be reasonable requested by the
Noteholders.

7. Release. In consideration of the agreements of the Noteholders contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Obligor, on behalf of itself
and its successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably releases, remises and forever discharges each
Noteholder and their respective successors and assigns, and their respective
present and former shareholders, affiliates, subsidiaries, divisions,
predecessors, directors, officers, attorneys, employees, agents and other
representatives (the Noteholders and all such other Persons being hereinafter
referred to collectively as the “Releasees” and individually as a “Releasee”),
of and from all demands, actions, causes of action, suits, covenants, contracts,
controversies, agreements, promises, sums of money, accounts, bills, reckonings,
damages and any and all other claims, counterclaims, defenses, rights of set
off, demands and liabilities whatsoever (individually, a “Claim” and
collectively, “Claims”) of every name and nature, known or unknown, suspected or
unsuspected, both at law and in equity, which such Obligor or any of its
successors, assigns, or other legal representatives may now or hereafter own,
hold, have or claim to have against the Releasees or any of them for, upon, or
by reason of any circumstance, action, cause or thing whatsoever which arises at
any time on or prior to the day and date of this Amendment for or on account of,
or in relation to, or in any way in connection with the Note Agreement or any of
the other Transaction Documents or transactions thereunder or related thereto.

Each Obligor understands, acknowledges and agrees that the release set forth
above may be pleaded as a full and complete defense and may be used as a basis
for an injunction against any action, suit or other proceeding which may be
instituted, prosecuted or attempted in breach of the provisions of such release.

Each Obligor agrees that no fact, event, circumstance, evidence or transaction
which could now be asserted or which may hereafter be discovered shall affect in
any manner the final, absolute and unconditional nature of the release set forth
above. Each Obligor acknowledges and agrees that the Releasees have fully
performed all obligations and undertakings owed to such Obligor under or in any
way in connection with the Note Agreement or any of the other Transaction
Documents or transactions thereunder or related thereto as of the date hereof.

For the avoidance of doubt, this Section 7 will not apply to any claims against
the Noteholders or their affiliates under the asset purchase agreement with
respect to the purchase, by an entity in which any of the Noteholders and/or
their affiliates held an ownership interest, of the Primaloft business of the
Company and its Subsidiaries.

8. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAW OF
THE STATE OF NEW YORK.

9. No Other Amendments; Confirmation. Except as expressly amended, modified and
supplemented hereby, the terms, provisions and conditions of the Note Agreement,
the Notes, the AI Guaranty Agreement and the agreements and instruments relating
thereto are and shall remain unchanged and in full force and effect and are
hereby ratified and confirmed in all respects.

10. Headings. The headings of sections of this Amendment are inserted for
convenience only and shall not be deemed to constitute a part of this Amendment.

11. Counterparts. This Amendment may be executed in any number of counterparts
by the parties hereto, each of which counterparts when so executed shall be an
original, but all counterparts taken together shall constitute one and the same
instrument.

[Remainder of page intentionally left blank. Signature pages follow.]

  4 

   

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
and delivered by their respective proper and duly authorized officers as of the
day and year first above written.

  ALBANY INTERNATIONAL CORP.       By: /s/ Joseph G. Morone   Name: Joseph G.
Morone   Title: President & CEO       ALBANY INTERNATIONAL HOLDINGS TWO, INC.,
as a Guarantor       By: /s/ Charles J. Silva, Jr.   Name: Charles J. Silva, Jr.
  Title: Vice President & Secretary       ALBANY ENGINEERED COMPOSITES, INC., as
a Guarantor       By: /s/ Charles J. Silva, Jr.   Name: Charles J. Silva, Jr.  
Title: Vice President & Secretary       ALBANY INTERNATIONAL RESEARCH CO., as a
Guarantor       By: /s/ Robert A. Hansen     Name: Robert A. Hansen   Title:
President       GESCHMAY CORP. as a Guarantor       By: /s/ John B. Cozzolino  
Name: John B. Cozzolino   Title: President       BRANDON DRYING FABRICS, INC.,
as a Guarantor       By: /s/ John B. Cozzolino   Name: John B. Cozzolino  
Title: President       GESCHMAY WET FELTS, INC., as a Guarantor       By: /s/
John B. Cozzolino   Name: John B. Cozzolino   Title: President       GESCHMAY
FORMING FABRICS CORP., as a Guarantor       By: /s/ John B. Cozzolino   Name:
John B. Cozzolino   Title: President       BLUE FALCON II LLC, as a Guarantor  
    By: /s/ Diane M. Loudon   Name: Diane M. Loudon   Title: President

 

 

Signature Page to Fourth Amendment to Amended and Restated Note Agreement and
Guaranty

 

 

 

The foregoing Amendment is hereby accepted as of the date first above written.

 

THE PRUDENTIAL INSURANCE COMPANY

OF AMERICA

 

By: /s/ Eric Seward   Name: Eric Seward Title: Vice President    

THE PRUDENTIAL LIFE INSURANCE COMPANY, LTD. By: Prudential Investment Management
(Japan),   Inc., as Investment Manager   By:    Prudential Investment
Management, Inc.,        as Sub-Adviser         By: /s/ Eric Seward     Name:
Eric Seward     Title: Vice President               THE GIBRALTAR LIFE INSURANCE
CO., LTD. By: Prudential Investment Management Japan Co.,   Ltd., as Investment
Manager   By:    Prudential Investment Management, Inc.,        as Sub-Adviser  
      By: /s/ Eric Seward     Name: Eric Seward     Title: Vice President      
  SECURITY BENEFIT LIFE INSURANCE COMPANY, INC. By: Prudential Private Placement
Investors, L.P.   (as Investment Advisor)   By:    Prudential Private Placement
Investors, Inc.        (as its General Partner)         By: /s/ Eric Seward    
Name: Eric Seward     Title: Vice President          

Signature Page to Fourth Amendment to Amended and Restated Note Agreement and
Guaranty

 

 

Schedule 1

Amendments to Note Agreement
(All paragraph references are to paragraphs of the Note Agreement)

1. Sub-clause (i) in the parenthetical in clause (a) of Paragraph 6A is hereby
amended and restated in its entirety to read as follows: “(ii) Indebtedness
outstanding on the Fourth Amendment Effective Date and set forth on Schedule
6A)|”.

2. Clause (b) of Paragraph 6B is hereby amended and restated in its entirety to
read as follows: “Liens existing on the Fourth Amendment Effective Date securing
Indebtedness outstanding on the Fourth Amendment Effective Date and set forth on
Schedule 6B”.

3. Clause (k) of Paragraph 6B is hereby amended by deleting the phrase “June 18,
2015” and inserting the phrase “the Fourth Amendment Effective Date” in lieu
thereof.

4. Paragraph 6F is hereby amended by deleting the phrase “the date hereof” and
inserting the phrase “the Fourth Amendment Effective Date” in lieu thereof.

5. Paragraph 6G is hereby amended and restated to delete the stricken text
(indicated textually in the same manner as the following example: stricken text)
and to add the underlined text (indicated textually in the same manner as the
following example: underlined text)::

“6G. Investments, Loans, Advances, Guarantees and Acquisitions. The Company will
not, and will not permit any Subsidiary to, purchase, hold or acquire (including
pursuant to any merger with any Person that was not a Subsidiary prior to such
merger) any Equity Interests, evidences of Indebtedness or other securities
(other than any Hedging Agreement entered into in the ordinary course of
business) of, make or permit to exist any loans or advances (excluding accounts
receivable arising out of the sale of goods and services reflected on the
Company’s consolidated balance sheet as current assets) to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business
unit, except:

(a) Permitted Investments;

(b) (i) investments existing on the date hereof Fourth Amendment Effective Date
in the capital stock of Subsidiaries or in Indebtedness of Subsidiaries and (ii)
other investments existing on the date hereof Fourth Amendment Effective Date
and set forth on Schedule 6G;

(c) acquisitions of assets of or Equity Interests in other Persons for
consideration consisting solely of common stock of the Company;

(d) acquisitions of assets of or Equity Interests in other Persons that are not
Affiliates of the Company and loans or advances to Subsidiaries to provide funds
required to effect such acquisitions, if, at the time of and after giving pro
forma effect to each such acquisition and any related incurrence of
Indebtedness, (i) the Leverage Ratio does not exceed 3.50 to 1.00 and (ii) no
Default shall have occurred and be continuing;

(e) (i) any investment, loan or advance by the Company or a Guarantor in or to
the Company or another Guarantor, (ii) any investment, loan or advance by a
Subsidiary that is not a Guarantor in or to the Company or a Guarantor; provided
that each such loan or advance referred to in this preceding clause (ii) shall
be subordinated to the obligations hereunder (it being understood that any such
subordination shall not be

 

 

construed to create a Lien), (iii) any investment, loan or advance by any
Subsidiary that is not a Guarantor in or to any other Subsidiary that is not a
Guarantor, (iv) any investment, loan or advance by the Company or any Guarantor
in or to any Subsidiary that is not a Guarantor; provided that each investment,
loan or advance referred to in this clause (iv) made after the Fourth Amendment
Effective Date must be in an outstanding principal amount that, together with
the aggregate outstanding principal amount of all other investments, loans and
advances permitted by this clause (iv) and made after the Fourth Amendment
Effective Date, but net of all amounts paid by such non-Guarantor in or to the
Company and/or any of the Guarantors after the Closing Date Fourth Amendment
Effective Date that constitute repayments of loans or advances made by the
company and/or such Guarantors or returns of capital (as opposed to returns on
capital) invested by the Company and/or such Guarantors, shall not exceed
$100,000,000; and (v) in addition to investments, loans and advances permitted
under the preceding clauses (i) through (iv), (A) any Permitted AEC Transaction
and (B) any investment, loan or advance by the Company or a Guarantor (whether
directly or indirectly through one or more intervening Subsidiaries that is not
a Guarantor) in or to an AEC Joint Venture Entity; provided that each
investment, loan or advance referred to in this clause (v)(B) made after the
Fourth Amendment Effective Date must be in an outstanding principal amount that,
together with the aggregate outstanding principal amount of all other
investments, loans and advances permitted by this clause (v)(B) and made after
the Fourth Amendment Effective Date, but net of all amounts paid by such AEC
Joint Venture Entity to the Company and/or any of the Guarantors after the
Fourth Amendment Effective Date that constitute repayments of loans or advances
made by the Company and/or such Guarantors or returns of capital (as opposed to
returns on capital) invested by the Company and/or such Guarantors, shall not
exceed $100,000,000;

(f) Guarantees by a Subsidiary constituting Indebtedness permitted by Paragraph
6A (provided that a Subsidiary shall not Guarantee any obligation of the Company
unless such Subsidiary also becomes a Guarantor in respect of the Guarantied
Obligations) and Guarantees by the Company of Indebtedness or other obligations
of a Subsidiary permitted not prohibited by Paragraph 6A;

(g) Guarantees by the Company of obligations to Bank of America, N.A., (i) of
Albany International Holding (Switzerland) AG under the Amended and Restated
Limited Guaranty and Indemnity Agreement dated as of May 1, 2015 (as amended
from time to time) between the Company and Bank of America, N.A., in respect of
overdrafts or currency hedging transactions in an aggregate amount not to exceed
$20,000,000 at any time, and (ii) of other Subsidiaries under the Limited
Guaranty and Indemnity Agreement dated as of May 1, 2015 (as amended from time
to time) between the Company and Bank of America, N.A., in respect of credit
card exposure in an aggregate amount not to exceed US$1,000,000 at any time;

(h) investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in the ordinary course of business;

(i) loans or other advances to employees consistent with past practice; and

(j) other investments not permitted under clauses (a) through (i) above in an
aggregate amount not exceeding $75,000,000 at any time.”

 2 

 

6. Paragraph 6J is hereby amended by deleting the phrase “the date hereof” and
inserting the phrase “the Fourth Amendment Effective Date” in lieu thereof.

7. The definition of “Revolving Credit Agreement” in Paragraph 11B is hereby
amended by adding the phrase “and as amended and restated on April 8, 2016”
immediately after the phrase “June 18, 2015” therein.

8. The following definitions in Paragraph 11B are hereby amended and restated to
delete the stricken text (indicated textually in the same manner as the
following example: stricken text) and to add the underlined text (indicated
textually in the same manner as the following example: underlined text):

“Change in Control” means (a) the ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof June 18, 2015) other than
Permitted Shareholders, of shares representing 35% or more of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
the Company at a time when Permitted Shareholders together (i) do not have the
unrestricted power directly or indirectly to vote or direct the vote of shares
representing a percentage of such aggregate ordinary voting power that is
greater than the percentage so owned by any such Person or group or (ii) do not
Control the Company; (b) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Company by Persons who were
neither (i) nominated or approved prior to their election by the board of
directors of the Company nor (ii) appointed by directors so nominated; or (c)
the occurrence of any “change in control” or similar event, however denominated,
resulting in an obligation on the part of the Company or any Subsidiary to
repay, redeem or repurchase, or to offer to repay, redeem or repurchase,
Material Indebtedness.

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period plus, without duplication and to the extent deducted from revenues
in determining Consolidated Net Income, the sum of (a) Consolidated Interest
Expense for such period, (b) income tax expense for such period, (c)
depreciation and amortization for such period, (d) all non-cash charges
(including any non-cash expenses relating to stock option exercises or other
non-cash, stock-based compensation such as restricted stock units) during such
period (provided that any cash payment made with respect to any such non-cash
charge shall be subtracted in computing Consolidated EBITDA for the period in
which such cash payment is made), (e) all charges related to the early
retirement of Indebtedness during such period, (f) restructuring charges not in
excess of (A) $20,000,000 in any period of four fiscal quarters or (B)
$60,000,000 in the aggregate for all periods, in the case of each of such
clauses (A) and (B), commencing with the fiscal quarter during which the Third
Fourth Amendment Effective Date shall have occurred, (g) transaction expenses
incurred in connection with the Blue Falcon Acquisition, provided that the
aggregate amount added back for all periods with respect to such transaction
expenses pursuant to this clause (g) shall not exceed US$7,000,000, (h) the
amount of any pension settlement or curtailment expense (including (i) any such
expenses, incurred in prior periods, the recognition of which has been deferred
in accordance with GAAP, and (ii) any such expenses in the form of premium
payments or other obligations or amounts paid or payable to third parties as
consideration for the assumption or defeasance of such obligations) required or
permitted to be recognized during such period as the result of the permanent
settlement or defeasance of any pension obligation of the Company or any
Subsidiary, provided that the aggregate amount to be added back with respect to
all such pension settlement or curtailment expense pursuant to this clause (g h)
for all periods commencing with the fiscal quarter during which the Third Fourth
Amendment Effective Date shall have occurred shall not exceed $100,000,000 (of
which not more than $40,000,000 may represent add-backs of cash expenses), and
(h i) any losses attributable to sales of business operations not in the

 3 

 

ordinary course of business during such period and minus, without duplication,
(i) all non-cash gains and income for such period, (ii) any gains related to the
early retirement of Indebtedness for such period and (iii) any gains
attributable to sales of business operations not in the ordinary course of
business for such period, all determined on a consolidated basis for the Company
and its Subsidiaries in accordance with GAAP. Notwithstanding the foregoing
Consolidated EBITDA for the fiscal quarters of the Company ended September 30,
2014, December 31, 2014 and March 31, 2015 will be deemed for all purposes of
this Agreement to be $38,889,000, $42,452,000 and $48,900,000, respectively.

“Guaranty Requirement” shall mean, at any time, that (a) the AI Guaranty
Agreement shall have been executed by (i) each Domestic Subsidiary that is or
becomes either a Borrowing Subsidiary (as defined in the Revolving Credit
Agreement) or a Subsidiary Guarantor (as defined in the Revolving Credit
Agreement), and (ii) each other Domestic Subsidiary (other than (A) any Domestic
Subsidiary that is a subsidiary of a Foreign Subsidiary, (B) any Domestic
Subsidiary that (x) does not conduct any business operations, (y) has assets
with a total book value not in excess of $1,000 and (z) does not have any
Indebtedness outstanding and (C) any Subsidiary that is created as a result of a
Permitted AEC Transaction), in each case existing at such time, shall have been
delivered to the Required Holders and shall be in full force and effect, (b) the
Indemnity, Subrogation and Contribution Agreement (or a supplement thereto)
shall have been executed by the Company and each Domestic Subsidiary party to
the AI Guaranty Agreement, shall have been delivered to the Required Holders and
shall be in full force and effect, and (c) as to each Subsidiary that shall
become a party to the AI Guaranty Agreement after the Date of Closing, each
holder of Notes shall have received documents comparable to those delivered
under paragraph 3A with respect to Subsidiaries party to such AI Guaranty
Agreement on the Date of Closing (other than in connection with the Blue Falcon
Acquisition an opinion under paragraph 3A(ii)(a)).

“Leverage Ratio” means, on any date, the ratio of (i) Total Debt at such date to
(ii) Consolidated EBITDA for the period of four consecutive fiscal quarters of
the Company ended on or most recently prior to such date (and solely for the
purposes of this definition, if any Person (including the Acquired Company)
shall have been acquired or divested by the Company or its Consolidated
Subsidiaries or if the Company shall have merged with any Person during such
period, Consolidated EBITDA shall be determined on a pro forma basis as if such
acquisition, divestiture or merger, and any related incurrence or repayment of
Indebtedness, had occurred at the beginning of such period).

9. The following definitions are hereby added to Paragraph 11B in their
appropriate alphabetical places, as follows:

“Acquired Company” means Blue Falcon I Inc., a Delaware corporation.

“Blue Falcon Acquisition” means the Company’s acquisition of all of the issued
and outstanding capital stock of the Acquired Company pursuant to the Stock
Purchase Agreement.

“Fourth Amendment Effective Date” shall mean the Restatement Effective Date (as
defined in the Revolving Credit Agreement (as in effect on April 8, 2016).

“Seller” means Harris Corporation, a Delaware corporation.

“Stock Purchase Agreement” means the Stock Purchase Agreement dated as of
February 27, 2016, among the Company, the Seller and the Acquired Company.

 4 

 

10. The Note Agreement is hereby amended by deleting Schedules 1A, 6A, 6B, 6D,
6G, 8C and 8G thereto and inserting Schedules 1A, 6A, 6B, 6D, 6G, 8C and 8G,
respectively, attached hereto in lieu thereof.

 5 

 

SCHEDULE 1A

Albany International Holdings Two, Inc.

Albany Engineered Composites, Inc.

Albany International Research Co.

Geschmay Corp.

Brandon Drying Fabrics, Inc.

Geschmay Welt Felts, Inc.

Geschmay Forming Fabrics Corp.

Blue Falcon I, Inc.1

Blue Falcon II LLC

 

1 To be merged into Albany Engineered Composites, Inc. on the Fourth Amendment
Effective Date.

 

 

SCHEDULE 6A

Existing Indebtedness

  Amount   (US$)2   Amounts outstanding under the Revolving Credit Facility and
related Hedging   Agreements which are owed by various borrowers party thereto
from time   to time     Albany International Tecidos Tecnicos Ltda.   Short and
Medium-Term Borrowings from Local Banks $656,000   Albany International AB  
Credit Lines from Local Banks $1,000,000   Albany International Canada Corp.  
Credit Lines from Local Banks $1,400, 000 Albany International Corp.  
Obligations under that certain Industrial Lease, dated as of August 15, 2011,  
with Reef Bonneville, LLC $23,000,000

 

 

2Dollar amounts are converted from local currencies.

 2 

 

SCHEDULE 6B

Existing Liens

Albany International Tecidos Tecnicos Ltda. Cash deposits by Albany
International Corp.   restricted to support guaranty with Nova Energia  
Comercializadora Ltda. for BRL 400,000 (approx.   US$100,000)

 

 

 

SCHEDULE 6D

Certain Transactions with Affiliates

Nevo Cloth Ltd.

Albany Nordiskafilt AB, the Company’s principal Swedish subsidiary, which merged
with Albany International AB in 2015, established a 50/50 equity joint venture
with a local Russian partner to gain a manufacturing presence in Russia in the
Company’s core paper machine clothing business. Albany Nordiskafilt supplies
paper machine clothing and related products to this entity for resale to
customers in Russia. The other shareholder is not, to the Company’s best
knowledge, an Affiliate of the Company.

 

 

Schedule 6G

Existing Investments and Subsidiaries

i. Investments

Nevo Cloth Ltd. (Russia) 50% equity ownership Ichikawa Ltd. (Japan) 300,000
shares Common Stock (approx. 1.0%) Parco Scientifico Technlogico di Venezia s.
c.a.r.l. 176 quotas valued at EUR 8,625(approx. US$9,300)

 

 

 

ii. Subsidiaries

        Affiliate Direct Subsidiary of

Country of

Incorporation

Jurisdiction of

Incorporation

AI (Switzerland) GmbH Albany International Switzerland Switzerland   Europe GmbH
    Albany International (China) Co., Ltd. Albany International China Panyu,  
Holding (Switzerland) AG   Guangdong,       China Albany International AB Albany
International Sweden Halmstad,   Holding AB   Sweden Albany International B.V.
Albany International Netherlands The Hague,   Holding (Switzerland) AG  
Netherlands Albany International Canada Corp. AI (Switzerland) GmbH Canada Nova
Scotia Albany International Corp.   United States Delaware Albany International
de Mexico S.A. de Albany International Mexico Mexico C.V. Corp.     Albany
International Engineered Textiles Albany International China Hangzhou,
(Hangzhou) Co., Ltd. Holding (Switzerland) AG   China Albany International
Europe GmbH Albany International Switzerland Switzerland   Holding (Switzerland)
AG     Albany International France, S.A.S. Albany International France Selestat,
France   Canada Corp.     Albany International Germany Holding Albany
International Germany Germany GmbH Holdings Two, Inc.     Albany International
GmbH Albany International Germany Germany   Germany Holding GmbH     Albany
International Holding Albany International Switzerland Switzerland (Switzerland)
AG Holdings Two, Inc.     Albany International Holding AB Albany International
Sweden Sweden   Holding (Switzerland) AG     Albany International Holdings Two,
Inc. Albany International Corp. United States Delaware   Albany International
Italia S.r.l. Albany International Italy Italy   Holding (Switzerland) AG    
Albany International Korea, Inc. Albany International Korea Chungju-shi,  
Holdings Two, Inc.   Korea Albany International Ltd. Albany International United
Kingdom United   Holding (Switzerland) AG   Kingdom Albany International Oy
Albany International AB Finland Helsinki,       Finland Albany International
Pty. Ltd. Albany International Australia Australian   HoldingsTwo, Inc.  
Capital       Territory Albany International Research Co. - Albany International
Corp. United States Delaware Inactive       Albany International S.A. Pty. Ltd.
Albany International AB South Africa Durban Albany Engineered Composites, Inc.
Albany International Corp. United States New       Hampshire

 

 

 

Albany Safran Composites, LLC Albany Engineered United States New   Composites,
Inc.   Hampshire Albany Safran Composites, S. A.S. Albany Safran France France  
Composites, LLC     Albany International Tecidos Tecnicos Albany International
Brazil Santa Catarina Ltda. Canada Corp.     Albany International Japan
Kabushiki Albany International AB Japan Tokyo Kaisha       Brandon Drying
Fabrics, Inc. - Inactive Geschmay Corp. United States Delaware   Geschmay Corp.
– Inactive Albany International Corp. United States Delaware Geschmay Forming
Fabrics Corp. - Geschmay Corp. United States Delaware Inactive       Geschmay
Wet Felts, Inc. - Inactive Geschmay Corp. United States Delaware Transglobal
Enterprises Inc. – Namesaver Albany International Corp. United States Delaware –
Inactive       Wurttembergische Filztuchfabrik D. Albany International Germany
Germany Geschmay GmbH Germany Holding GmbH     Albany Safran Composites Mexico,
S. de Albany Safran Mexico Mexico R.L. de C.V. Composites, LLC     Albany Mexico
Services, S. de R. L. de Albany International Corp. Mexico Mexico C.V.      
Blue Falcon I Inc. Albany Engineered United States Delaware3   Composites, Inc.
    Blue Falcon II LLC 4 Blue Falcon I Inc. 5 United States Delaware

 

 

3 To be merged into Albany Engineered Composites, Inc. on the Fourth Amendment
Effective Date.

4 To be re-named as Albany Aerostructures Composites LLC on the Fourth Amendment
Effective Date.

5 To be direct subsidiary of Albany Engineered Composites, Inc., following
merger of Blue Falcon I, Inc.

into Albany Engineered Composites, Inc.

 

 

SCHEDULE 8C

The discussion of various matters set forth in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2015 (a) in “Item 1A. Risk Factors”
under the heading “The Company is subject to legal proceedings and legal
compliance risks, and has been named as defendant in a large number of suits
relating to the actual or alleged exposure to asbestos-containing products” and
(b) in “Item 3. Legal Proceedings” is hereby incorporated by reference.

 

 

SCHEDULE 8G

Revolving Credit Agreement

 

 

EXHIBIT A

AMENDMENT FEE WIRING INSTRUCTIONS

The Prudential Insurance Company of America $14,000   Account Name: Prudential
Managed Portfolio   Account No.: P86188 (please do not include spaces)   Bank:
  JPMorgan Chase Bank   Address: New York, NY   ABA No.: 021-000-021  
Reference: Albany International Amendment Fee       The Prudential Insurance
Company of America $2833.33   Account Name: The Prudential - Privest Portfolio  
Account No.: P86189 (please do not include spaces)   Bank:   JPMorgan Chase Bank
  Address: New York, NY   ABA No.: 021-000-021   Reference: Albany International
Amendment Fee       The Prudential Life Insurance Company, Ltd. $2,500   Account
Name:   Prudential International Insurance   Service Co.   Account No.:
304199036 (please do not include spaces)   Bank:   JPMorgan Chase Bank  
Address: New York, NY   ABA No.: 021-000-021   Reference: Albany International
Amendment Fee       The Gibraltar Life Insurance Co., Ltd. $5,000   Account
Name: Prudential International Insurance   Service Company   Account No.:
304199036 (please do not include spaces)   Bank:   JPMorgan Chase Bank  
Address: New York, NY   ABA No.: 021-000-021   Reference: Albany International
Amendment Fee         Security Benefit Life Insurance Company, Inc. $666.67    
State Street Bank & Trust   ABA No.: 011000028   DDA # 10549319   Reference:
SECURITY BENEFIT LIFE - PRUD / 43ZW   Further Reference:   Albany International
Amendment Fee