Exhibit 10(k)(xvi) 

Execution Copy

THIRD AMENDMENT to AMENDED AND RESTATED Note Agreement AND GUARANTY

THIRD AMENDMENT TO AMENDED AND RESTATED NOTE AGREEMENT AND GUARANTY, dated as of
June 18, 2015 (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) from time to time party thereto (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, and (2) that certain
Second Amendment to Amended and Restated Note Agreement and Guaranty, dated as
of March 26, 2013 (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 execution and delivery of the Five-Year
Revolving Credit Facility Agreement, dated as of June 18, 2015, 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 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 Amendment Effective Date, (a) the Note Agreement (without giving effect
to this Amendment) will apply in connection with the Notes up to (but excluding)
June 18, 2015, and (b) the Note Agreement as amended by this Amendment will
apply in connection with the Notes from and after June 18, 2015.

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

4.                  Representations and Warranties. Each Obligor hereby:

(a)                 (i) repeats (and confirms as true and correct) as of the
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, 2014; and
(ii) incorporates such representations and warranties herein (as though set
forth herein) in their entirety; and

(b)                 further represents and warrants as of the Amendment
Effective Date that:

(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; and

(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.

(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

(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.

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 “Amendment Effective Date”), and Prudential agrees to
promptly confirm the occurrence of the 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 $100,000 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 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 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.]

 

 

 

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/ John Cozzolino

__________________

Name: John Cozzolino

Title: Chief Financial Officer (Principal Financial Officer)

 

ALBANY INTERNATIONAL HOLDINGS TWO, INC., as a Guarantor

 

By: /s/ John Cozzolino

__________________

Name: John Cozzolino

Title: Chief Financial Officer (Principal Financial Officer)

 

ALBANY ENGINEERED COMPOSITES, INC. (formerly known as ALBANY INTERNATIONAL
TECHNIWEAVE, INC.), as a Guarantor

 

By: /s/ Joseph M. Gaug

__________________

Name: Joseph M. Gaug

Title: Assistant 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 Cozzolino

__________________

Name: John Cozzolino

Title: President

 

BRANDON DRYING FABRICS, INC., as a Guarantor

 

By: /s/ John Cozzolino

__________________

Name: John Cozzolino

Title: President

 

GESCHMAY WET FELTS, INC., as a Guarantor

 

By: /s/ John Cozzolino

__________________

Name: John Cozzolino

Title: President

 

GESCHMAY FORMING FABRICS CORP., as a Guarantor

 

By: /s/ John Cozzolino

__________________

Name: John Cozzolino

Title: President

 

 

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        

 

 

Schedule 1

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

1.                   Paragraph 6A is hereby amended by adding the word “and”
immediately preceding subclause (v) of clause (a) and deleting subclause (vi).

2.                   Clause (k) of Paragraph 6B is hereby amended by deleting
the phrase “March 26, 2013” and inserting the phrase “June 18, 2015” in lieu
thereof.

3.                   Paragraph 6G is hereby amended and restated in its entirety
to read as follows:

“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 in the capital stock of
Subsidiaries or in Indebtedness of Subsidiaries and (ii) other investments
existing on the date hereof 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)
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), 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 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) 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),
but net of all amounts paid by such AEC Joint Venture Entity to the Company
and/or any of the Guarantors 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 of a Subsidiary
permitted 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.”

4.                   Paragraph 6K is hereby amended and restated in its entirety
to read as follows:

“6K. Economic Sanctions, Etc. The Company will not and will not permit any
Controlled Entity (a) to become (including by virtue of being owned or
controlled by a Blocked Person), own or control a Blocked Person or any Person
that is the target of sanctions imposed by the United Nations or by the European
Union, or (b) to have any investment in or engage in any dealing or transaction
(including, without limitation, any investment, dealing or transaction involving
the proceeds of the Notes) with any Blocked Person if such investment, dealing
or transaction would cause the Company, any Guarantor or any holder of a Note to
be in violation of any U.S. Economic Sanctions Laws, or (c) to engage, nor shall
any Affiliate of either engage, in any activity that would subject the Company,
any Guarantor or any holder of a Note to sanctions under the Comprehensive Iran
Sanctions, Accountability and Divestment Act or any similar law or regulation
with respect to Iran or any other country that is subject to sanctions under
U.S. Economic Sanctions Laws.”

 

 

 

5.                   The definition of “Reinvestment Yield” in Paragraph 11A of
the Note Agreement is hereby amended and restated in its entirety to read as
follows:

“Reinvestment Yield” means, with respect to the Called Principal of any Note,
the sum of (x) 0.50% plus (y) the yield to maturity implied by the “Ask
Yield(s)” reported as of 10:00 a.m. (New York City time) on the second Business
Day preceding the Settlement Date with respect to such Called Principal, on the
display designated as “Page PX1” on Bloomberg Financial Markets (or such other
display as may replace Page PX1 on Bloomberg Financial Markets (“Bloomberg”),
or, if Bloomberg shall cease to report such yields or shall cease to be
Prudential Capital Group's customary source of information for calculating
yield-maintenance amounts on privately placed notes, then such source as is then
Prudential Capital Group's customary source of such information) for the most
recently issued actively traded on-the-run U.S. Treasury securities (“Reported”)
having a maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date. If there are no such U.S. Treasury securities
Reported having a maturity equal to such Remaining Average Life, then such
implied yield to maturity will be determined by (a) converting U.S. Treasury
bill quotations to bond equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between the “Ask Yields” Reported for
the applicable most recently issued actively traded on-the-run U.S. Treasury
securities with the maturities (1) closest to and greater than such Remaining
Average Life and (2) closest to and less than such Remaining Average Life. If
such yields are not Reported or the yields Reported as of such time are not
ascertainable (including by way of interpolation), then “Reinvestment Yield”
means, with respect to the Called Principal of any Note, the sum of (x) 0.50%
plus (y) the yield to maturity implied by the U.S. Treasury constant maturity
yields reported, for the latest day for which such yields have been so reported
as of the second Business Day preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable
successor publication) for the U.S. Treasury constant maturity having a term
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. If there is no such U.S. Treasury constant maturity having a
term equal to such Remaining Average Life, such implied yield to maturity will
be determined by interpolating linearly between (1) the U.S. Treasury constant
maturity so reported with the term closest to and greater than such Remaining
Average Life and (2) the U.S. Treasury constant maturity so reported with the
term closest to and less than such Remaining Average Life. The Reinvestment
Yield shall be rounded to the number of decimal places as appears in the
interest rate of the applicable Note.

6.                   Paragraph 11B is hereby amended by deleting the defined
terms “Chinese Subsidiary” and “Closing Date” therefrom.

7.                   The definition of “Revolving Credit Agreement” in Paragraph
11B is hereby amended by deleting the phrase “March 26, 2013” therefrom and
inserting the phrase “June 18, 2015” in lieu thereof.

8.                   The following definitions in Paragraph 11B are hereby
amended and restated in their entirety to read as follows:

“Capitalized Lease Obligations” shall mean, for any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are or would have been required to be
classified and accounted for as capital leases on a balance sheet of such Person
under GAAP as in effect on December 31, 2014, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP as in
effect on December 31, 2014. For avoidance of doubt, (a) leases entered into
before December 31, 2014, which did not constitute capitalized leases under GAAP
as in effect on such date and (b) leases entered into after December 31, 2014,
which would not have been required to be capitalized and accounted for as
capital leases under GAAP as in effect on such date are excluded from the
definition of Capitalized Lease Obligations.

 

 

“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
Amendment Effective Date shall have occurred, (g) 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) for all periods
commencing with the fiscal quarter during which the Third 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) any losses
attributable to sales of business operations not in the 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.

“Permitted AEC Transaction” shall mean (i) the sale of Equity Interests in AEC
to a third party for fair value, (ii) the contribution of all or a portion of
the assets of AEC (and any related technology and assets of the Company as the
Company may determine) to an entity newly-formed for the purpose of establishing
joint ownership with one or more third parties in exchange for Equity Interests
in such newly-formed entity, (iii) any sale for fair value of Equity Interests
in such newly-formed entity (in one or more transactions) to any third parties
pursuant to the terms of the shareholders’ agreement, joint ownership agreement
or other constitutive or operative document relating to such newly-formed entity
(as such agreements or documents may be amended from time to time), and/or (iv)
provision of additional services by the Company or a Subsidiary to such joint
ownership entity (and/or a Wholly-Owned Subsidiary thereof) on a basis at least
sufficient to compensate the Company or such Subsidiary for its cost in
providing such services (as such cost is determined in good faith by the Company
or such Subsidiary); provided that after giving effect to any such sale of
Equity Interests in AEC, contribution of assets of AEC or sale of Equity
Interests in any such newly-formed entity, the Company shall own, directly or
indirectly, not less than 70% of the equity of AEC or such newly-formed entity,
as the case may be, and shall Control AEC or such newly-formed entity. For
purposes of subclause (iii) of this definition, “fair value” at any time shall
include a formula price theretofore agreed or accepted by the Company on the
basis of the Company’s good faith estimate of future fair value.

“Third Amendment Effective Date” shall mean June 18, 2015.

 

 

“Total Debt” shall mean, at any time, the sum of (a) all Indebtedness that is or
should be reflected as a liability on a consolidated balance sheet of the
Company and the Subsidiaries in accordance with GAAP and (b) the consideration
(other than any note of a Subsidiary that serves as a conduit in a sale or
financing transaction with respect to Receivables) received by the Company or
any Consolidated Subsidiary from any Person (other than the Company or a
Subsidiary) for Receivables sold, which Receivables remain uncollected at such
time (other than delinquent Receivables sold for collection in the ordinary
course of business and not as part of a financing transaction); less (x) the sum
of all cash and cash equivalents (as determined in accordance with GAAP) and (y)
the fair market value of any Marketable Securities held by the Company and the
Consolidated Subsidiaries, with such excluded items under clauses (x) and (y)
above not to exceed $65,000,000 in the aggregate at any time; provided, however,
that, with respect to any Non-Wholly Owned Subsidiary, the Indebtedness (other
than any Indebtedness that is Guaranteed by the Company or a Wholly-Owned
Subsidiary) and assets thereof referred to in the foregoing clauses shall be
disregarded in the calculation of “Total Debt” to the extent of any economic
interest in such Non-Wholly Owned Subsidiary that is directly or indirectly
owned by any Person other than the Company or a Subsidiary.

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

“Anti-Corruption Laws” means any law or regulation in a U.S. or any non-U.S.
jurisdiction regarding bribery or any other corrupt activity, including the U.S.
Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.

“Anti-Money Laundering Laws” means any law or regulation in a U.S. or any
non-U.S. jurisdiction regarding money laundering, drug trafficking,
terrorist-related activities or other money laundering predicate crimes,
including the Currency and Foreign Transactions Reporting Act of 1970 (otherwise
known as the Bank Secrecy Act) and the USA PATRIOT Act.

“Blocked Person” means (i) a Person whose name appears on the list of Specially
Designated Nationals and Blocked Persons published by OFAC, (ii) a Person,
entity, organization, country or regime that is blocked or a target of sanctions
that have been imposed under U.S. Economic Sanctions Laws or (iii) a Person that
is an agent, department or instrumentality of, or is otherwise beneficially
owned by, controlled by or acting on behalf of, directly or indirectly, any
Person, entity, organization, country or regime described in clause (i) or (ii).

“Controlled Entity” means (i) any of the Subsidiaries of the Company and any of
their or the Company’s respective Controlled Affiliates and (ii) if the Company
has a parent company, such parent company and its Controlled Affiliates.

“Governmental Official” means any governmental official or employee, employee of
any government-owned or government-controlled entity, political party, any
official of a political party, candidate for political office, official of any
public international organization or anyone else acting in an official capacity.

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

“OFAC Sanctions Program” means any economic or trade sanction that OFAC is
responsible for administering and enforcing. A list of OFAC Sanctions Programs
may be found at
http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

“State Sanctions List” means a list that is adopted by any state Governmental
Authority

 

 

within the United States of America pertaining to Persons that engage in
investment or other commercial activities in Iran or any other country that is a
target of economic sanctions imposed under U.S. Economic Sanctions Laws.

“U.S. Economic Sanctions Laws” means those laws, executive orders, enabling
legislation or regulations administered and enforced by the United States
pursuant to which economic sanctions have been imposed on any Person, entity,
organization, country or regime, including the Trading with the Enemy Act, the
International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan
Accountability and Divestment Act and any other OFAC Sanctions Program.

 

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

 

 

SCHEDULE 6A

 

Existing Subsidiary Indebtedness1

 

 

Amount
(US$)2

Amounts outstanding under the Revolving Credit Facility
which are owed by various Subsidiaries from time
to time

 

 

  Albany International Tecidos Tecnicos Ltda.
Short and Medium-Term Borrowings from Local Banks $618,000 Albany Engineered
Composites
Short and Medium-Term Borrowings from Local Banks $105,000

 

 

2Dollar amounts are converted from local currencies.

 

 

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$ 125,000)

 

 

SCHEDULE 6D

Certain Transactions with Affiliates

Nevo Cloth Ltd. (“Nevo Cloth”)

Albany Nordiskafilt AB (“Albany Nordiskafilt”), the Company’s principal Swedish
Subsidiary, established Nevo Cloth as 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 Nevo Cloth for resale to customers in Russia.
The other shareholder of Nevo Cloth is not, to the Company’s 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)

        Various European entities Guaranty by Albany International Corp. in
favor of JPMorgan for credit cards in various countries in Europe for US$500,000
Albany International Canada Corp. Guaranty by Albany International Corp. in
favor of the Bank of Nova Scotia for a credit card line and credit cards with
Albany International Canada Corp. for CAD 2,050,000 (approx. US$1,600,000)      
  Albany International AB Guaranty by Albany International Corp. in favor of
Nordea for a credit line with Albany International AB for SEK 15,000,000
(approx. US$1,739,000) Albany International AB Guaranty by Albany International
Corp. in favor of Nordea for customs guarantees with Albany International AB for
SEK 200,000 (approx. US$23,000) Albany International Europe GmbH Guaranty by
Albany International Corp. in favor of Cassa di Risparmio di Venzia for VAT
refund for EUR 72,928 (approx. US$ 78,000) Albany International Italia S.u.r.l.
Guaranty by Albany International Corp. in favor of Cosive S.r.l. for six months’
rent for EUR 289,750 (approx. US$311,000)

 

 

 

ii. Subsidiaries3

Affiliate

Direct Subsidiary of

 

Country of Incorporation

Jurisdiction of Incorporation

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

 

 

 

 

 

Affiliate

Direct Subsidiary of

 

Country of Incorporation

Jurisdiction of Incorporation

Albany International Pty. Ltd. Albany International Holdings Two, Inc.  
Australia Australian Capital Territory Albany International Research Co. Albany
International Corp.   United States Delaware Albany International S.A. Pty. Ltd.
Albany International AB   South Africa Durban           Albany Engineered
Composites, Inc. Albany International Corp.   United States New Hampshire Albany
Engineered Composites, Ltd. Albany Engineered Composites, Inc.   United Kingdom
United Kingdom Albany Safran Composites, S.A.S. Albany Engineered Composites,
Inc.   France France Albany Safran Composites, LLC Albany Engineered Composites,
Inc.   United States

New Hampshire

 

Albany International Tecidos Tecnicos Ltda. Albany International Canada Corp.  
Brazil Santa Catarina Albany International Japan Kabushiki Kaisha [formerly
named “Albany Nordiskafilt Kabushiki Kaisha”] Albany International AB   Japan
Tokyo           Brandon Drying Fabrics, Inc. - Inactive Geschmay Corp.   United
States Delaware Dewa Consulting AB - Namesaver Albany International AB   Sweden
Sweden Geschmay Corp. Albany International Corp.   United States Delaware
Geschmay Forming Fabrics Corp. - Inactive Geschmay Corp.   United States
Delaware Geschmay Wet Felts, Inc. - Inactive Geschmay Corp.   United States
Delaware           Nordiska Maskinfilt Aktiebolag - Namesaver Albany
International AB   Sweden Sweden Nevo-Cloth Ltd. Albany International AB  
Russia St. Petersburg           Transglobal Enterprises Inc. - Namesaver Albany
International Corp.   United States Delaware Wurttembergische Filztuchfabrik  D.
Geschmay GmbH Albany International Germany Holding GmbH   Germany Germany

 

 

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, 2014 (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 $56,000

 

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 $11,333.33

 

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. $10,000

 

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. $20,000

 

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. $2,666.67

 

 

State Street Bank & Trust

ABA No.: 011000028

DDA # 10549319

Reference: SECURITY BENEFIT LIFE - PRUD / 43ZW

Further Reference: Albany International Amendment Fee