EXHIBIT 10(k)(ii)


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                           ALBANY INTERNATIONAL CORP.
                      AND CERTAIN SUBSIDIARIES PARTY HERETO
                                       AS
                                   GUARANTORS

                                  $150,000,000

                     5.34% SENIOR NOTES DUE OCTOBER 25, 2017

                                   ----------

                                 NOTE AGREEMENT
                                       AND
                                    GUARANTY

                                   ----------

                          Dated as of October 25, 2005

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<PAGE>

                                TABLE OF CONTENTS
                             (Not Part of Agreement)

                                                                            Page

1.   AUTHORIZATION OF ISSUE OF NOTES                                          1

2.   PURCHASE AND SALE OF NOTES                                               1

3.   CONDITIONS OF CLOSING                                                    2

     3A.  Execution and Delivery of Documents                                 2
     3B.  Opinion of Purchaser's Special Counsel                              3
     3C.  Purchase Permitted By Applicable Laws                               3
     3D.  Payment of Fees                                                     4

4.   PREPAYMENTS                                                              4
     4A.  Required Prepayments                                                4
     4B.  Optional Prepayment With Yield-Maintenance Amount                   4
     4C.  Notice of Optional Prepayment                                       4
     4D.  Prepayment in Connection with a Pro Rata Prepayment Event           5
     4E.  Partial Payments Pro Rata                                           6
     4F.  Retirement of Notes                                                 6

5.   AFFIRMATIVE COVENANTS                                                    6
     5A.  Financial Statements                                                6
     5B.  Information Required by Rule 144A                                   8
     5C.  Notices of Material Events                                          8
     5D.  Inspection of Property; Books and Records                           9
     5E.  [Intentionally Omitted]                                             9
     5F   Covenant to Secure Note Equally                                     9
     5G.  Maintenance of Properties; Compliance with Laws                    10
     5H.  Insurance                                                          10
     5I.  ERISA                                                              10
     5J.  Payment of Notes and Maintenance of Office                         10
     5K.  Environmental Laws                                                 10
     5L.  Use of Proceeds                                                    11
     5M.  Further Assurances                                                 11
     5N.  Existence; Conduct of Business                                     11
     5O.  Payment of Obligations                                             11

6.   NEGATIVE COVENANTS                                                      12
     6A.  Subsidiary Indebtedness                                            11
     6B.  Negative Pledge                                                    12
     6C.  Consolidations, Mergers and Sales of Assets                        12


                                       i
<PAGE>

     6D.  Transactions with Affiliates                                       15
     6E.  Restricted Payments                                                15
     6F.  Limitations on Sale-Leasebacks                                     15
     6G.  Investments, Loans, Advances, Guarantees and Acquisitions          16
     6H.  Leverage Ratio                                                     17
     6I.  Interest Coverage Ratio                                            17
     6J.  Lines of Business                                                  17
     6K.  Terrorism Sanctions Regulations                                    17

7.   EVENTS OF DEFAULT                                                       17
     7A.  Acceleration                                                       17
     7B.  Rescission of Acceleration                                         20
     7C.  Notice of Acceleration or Rescission                               21
     7D.  Other Remedies                                                     21

8.   REPRESENTATIONS, COVENANTS AND WARRANTIES                               21
     8A.  Organization; Authorization; Enforceability                        21
     8B.  Financial Statements                                               21
     8C.  Actions Pending                                                    22
     8D.  Outstanding Indebtedness                                           22
     8E.  Title to Properties                                                22
     8F.  Taxes                                                              22
     8G.  Conflicting Agreements and Other Matters                           22
     8H.  Offering of Notes                                                  23
     8I.  Use of Proceeds                                                    23
     8J.  ERISA                                                              24
     8K.  Governmental Consent                                               24
     8L.  Compliance with Laws                                               24
     8M.  Environmental Compliance                                           24
     8N.  Utility Company Status                                             24
     8O.  Investment Company Status                                          25
     8P.  Rule 144A                                                          25
     8Q.  Disclosure                                                         25
     8R.  Foreign Assets Control Regulations, Etc.                           25
     8S.  Subsidiaries                                                       26
     8T.  Solvency                                                           26

9.   REPRESENTATIONS OF THE PURCHASER 26
     9A.  Nature of Purchase                                                 26
     9B.  Source of Funds                                                    26

10.  AI GUARANTY AGREEMENT                                                   28
     10A. Guarantied Obligations                                             28


                                       ii
<PAGE>

     10B. Payments and Performance                                           28
     10C. Releases                                                           28
     10D. Waivers                                                            29
     10E. Marshaling                                                         30
     10F. Immediate Liability                                                31
     10G. Primary Obligations                                                31
     10H. No Reduction or Defense                                            31
     10I. Subordination                                                      33
     10J. No Election                                                        33
     10K. Severability                                                       34
     10L. Appropriations                                                     34
     10M. Other Enforcement Rights                                           34
     10N. Invalid Payments                                                   34
     10O. No Waivers or Election of Remedies; Expenses; etc.                 34
     10P. Restoration of Rights and Remedies                                 35
     10Q. No Setoff or Counterclaim                                          35
     10R. Further Assurances                                                 35
     10S. Survival                                                           35
     10T. Acknowledgment of Common Interests; etc.                           35
     10U. Conversion of Currencies                                           35

11. DEFINITIONS; ACCOUNTING MATTERS                                          35

     11A. Yield-Maintenance Terms                                            36
     11B. Other Terms                                                        37

     11C. Accounting and Legal Principles, Terms and Determinations          47

12. MISCELLANEOUS                                                            47
     12A. Note Payments                                                      47
     12B. Expenses                                                           48
     12C. Consent to Amendments                                              48
     12D. Form, Registration, Transfer and Exchange of Notes; Lost Notes     49
     12E. Persons Deemed Owners; Participations                              49
     12F. Survival of Representations and Warranties; Entire Agreement       49
     12G. Successors and Assigns                                             50
     12H. Notices                                                            50
     12I. Payments Due on Non-Business Days                                  50
     12J. Governing Law                                                      50
     12K. Consent to Jurisdiction; Waiver of Immunities                      50
     12L. Severability                                                       51
     12M. Descriptive Headings                                               51
     12N. Counterparts                                                       51
     12O. Independence of Covenants                                          51
     12P. Waiver Of Jury Trial                                               51
     12Q. Independent Investigation                                          52


                                      iii
<PAGE>

EXHIBITS

A     Form Of Note
B     Form Of Guarantor Joinder
C     Form Of Opinion
D     Form Of Indemnification, Subrogation and Contribution Agreement

SCHEDULES

1A    Guarantors
6A    Debt
6B    Liens
6D    Certain Affiliate Matters
6G    Subsidiary Information and Ownership
8C    Litigation
8G    Contractual Restrictions


                                       iv
<PAGE>

                           ALBANY INTERNATIONAL CORP.
                                  1373 Broadway
                                Albany, NY 12204

                                                          As of October 25, 2005

TO EACH OF THE PURCHASERS NAMED ON
THE ATTACHED PURCHASER SCHEDULE

Ladies and Gentlemen:

      The undersigned,  ALBANY  INTERNATIONAL CORP., a Delaware corporation (the
"Company") hereby agrees with each Purchaser as follows:

      1. AUTHORIZATION OF ISSUE OF NOTES.

      (a) The Company has authorized the issue of its senior promissory notes in
the aggregate  principal amount of  $150,000,000,  to be dated the date of issue
thereof,  to mature  October 25, 2017,  to bear  interest on the unpaid  balance
thereof from the date thereof until the principal  thereof shall have become due
and  payable at the rate of 5.34% per annum and on overdue  payments at the rate
specified  therein,  and to be  substantially  in the form of Exhibit A attached
hereto.  The  term  "Notes"  as used  herein  shall  include  each  such  senior
promissory  note delivered  pursuant to any provision of this Agreement and each
such senior  promissory note delivered in substitution or exchange for any other
Note pursuant to any such provision.

      (b) To induce the Purchasers to enter into this  Agreement,  and to induce
them to purchase the Notes from the Company in accordance with the terms hereof,
the  obligations  of the  Company  hereunder  and  under the Notes are fully and
unconditionally  guaranteed  by the  Guarantors,  as provided in the AI Guaranty
Agreement.  As of the  Date of  Closing,  the  Company  owns the  percentage  of
outstanding  shares of each  Guarantor  as set forth on  Schedule  6G, and, as a
result, each Guarantor will receive a direct financial and economic benefit from
the indebtedness to be incurred by the Company.

      2. PURCHASE AND SALE OF NOTES.  The Company  hereby agrees to sell to each
Purchaser  and,  subject to the terms and  conditions  herein  set  forth,  each
Purchaser agrees to purchase from the Company,  Notes in the aggregate principal
amount set forth opposite such Purchaser's name on the Purchaser Schedule hereto
at 100% of such  aggregate  principal  amount.  The Company will deliver to each
Purchaser, at the offices of Prudential Capital Group at 1114


<PAGE>

Avenue of the  Americas,  30th  Floor,  New York,  NY 10036,  one or more  Notes
registered in its name, evidencing the aggregate principal amount of Notes to be
purchased by such Purchaser and in the denomination or  denominations  specified
in the Purchaser Schedule attached hereto, against payment of the purchase price
thereof by transfer of immediately  available  funds for credit to the Company's
account established at such bank as shall be identified in a written instruction
of the Company, delivered to each Purchaser not later than 1 Business Days prior
to the Date of Closing,  which shall be October 25, 2005 or any other date on or
before October 31, 2005 upon which the parties hereto may mutually agree (herein
called the "Closing" or the "Date of Closing").

      3. CONDITIONS OF CLOSING. The obligation of each Purchaser to purchase and
pay  for  the  Notes  to  be  purchased  by  it  hereunder  is  subject  to  the
satisfaction, on or before the Date of Closing, of the following conditions:

      3A.  Execution  and  Delivery  of  Documents.  Such  Purchaser  shall have
received the following,  each to be dated the Date of Closing  unless  otherwise
indicated:

      (i) the Note(s) to be purchased by such Purchaser.

      (ii) a  favorable  opinion of (a) Cleary  Gottlieb  Steen & Hamilton  LLP,
      special  counsel  to the  Company  and  Guarantors,  satisfactory  to each
      Purchaser and substantially in the form of Exhibit C-1 attached hereto and
      as to such other  matters as a Purchaser  may  reasonably  request and (b)
      Charles  Silva,  General  Counsel  of the  Company,  satisfactory  to each
      Purchaser and substantially in the form of Exhibit C-2 attached hereto and
      as to such other  matters  as a  Purchaser  may  reasonably  request.  The
      Company and  Guarantors  hereby  direct each such  counsel to deliver such
      opinion,  agree that the issuance and sale of any Notes will  constitute a
      reconfirmation  of such  direction,  and  understands and agrees that each
      Purchaser will and hereby is authorized to rely on such opinion.

      (iii) the Certificate of  Incorporation of the Company and each Guarantor,
      each  certified  as of a  recent  date  by  the  Secretary  of  State  (or
      equivalent   official)  of  the   jurisdiction   of  each  such   Person's
      organization or incorporation.

      (iv) the  Bylaws of the  Company  and each  Guarantor  certified  by their
      respective Secretaries.

      (v) an  incumbency  certificate  signed by the  Secretary  or an Assistant
      Secretary  and  one  other  officer  of the  Company  and  each  Guarantor
      certifying as to the names,  titles and true signatures of the officers of
      the Company or each  Guarantor  authorized to sign this  Agreement and the
      Notes,  or the AI Guaranty  Agreement and the Indemnity,  Subrogation  and
      Contribution Agreement (as the case may be), and the other documents to be
      delivered hereunder.

      (vi) a certificate  of the Secretary of the Company and each Guarantor (A)
      attaching  resolutions of the Board of Directors of such Person evidencing
      approval of the transactions


                                       2
<PAGE>

      contemplated  by this  Agreement and the issuance of the Notes,  or the AI
      Guaranty  Agreement  and  the  Indemnity,   Subrogation  and  Contribution
      Agreement  (as  the  case  may  be),  and  the  execution,   delivery  and
      performance  thereof,  and  authorizing  certain  officers  to execute and
      deliver  the same,  and  certifying  that such  resolutions  were duly and
      validly adopted and have not since been amended, revoked or rescinded, and
      (B) certifying  that no  dissolution or liquidation  proceedings as to the
      Company or such Guarantor have been commenced or are contemplated.

      (vii) an Officer's Certificate on behalf of the Company and each Guarantor
      certifying  that  (A) the  representations  and  warranties  contained  in
      Paragraph 8 shall be true on and as of the Date of Closing,  except to the
      extent of changes caused by the transactions  herein  contemplated and (B)
      there shall exist on the Date of Closing no Event of Default or Default.

      (viii) corporate and tax good standing  certificates as to the Company and
      each  Guarantor,  from their  respective  jurisdiction  of organization or
      incorporation.

      (ix) Certified  copies of Requests for Information or Copies (Form UCC 11)
      or equivalent  reports listing all effective  financing  statements  which
      name the Company or any  Guarantor  (under its present  name and  previous
      names) as debtor and which are filed in the offices of the  Secretaries of
      State  (or  equivalent  official)  of  their  respective  jurisdiction  of
      organization  or  incorporation,  together  with copies of such  financing
      statements.

      (x) such additional  documents or certificates  with respect to such legal
      matters or  corporate  or other  proceedings  related to the  transactions
      contemplated hereby as may be reasonably requested by such Purchaser.

      3B.  Opinion of Purchaser's  Special  Counsel.  Such Purchaser  shall have
received from special  counsel for it in  connection  with this  transaction,  a
favorable opinion  satisfactory to such Purchaser as to such matters incident to
the matters herein contemplated, as it may reasonably request.

      3C. Purchase Permitted By Applicable Laws. The purchase of and payment for
the Notes to be purchased by such  Purchaser on the Date of Closing on the terms
and conditions herein provided  (including the use of the proceeds of such Notes
by the Company) shall not violate any applicable law or governmental  regulation
(including, without limitation, Section 5 of the Securities Act or Regulation T,
U or X of the Board of  Governors of the Federal  Reserve  System) and shall not
subject such Purchaser to any tax, penalty or liability under or pursuant to any
applicable law or regulation.

      3D. Payment of Fees.  The Company shall have paid to the Purchasers  their
pro rata shares of a structuring fee in the aggregate amount of $30,000.


                                       3
<PAGE>

      4.  PREPAYMENTS.  The Notes shall be subject to prepayment with respect to
the required prepayments  specified in Paragraph 4A and the optional prepayments
permitted by Paragraph 4B.

      4A.  Required  Prepayments.  Until  the Notes  shall be paid in full,  the
Company shall apply to the  prepayment of the Notes,  without  Yield-Maintenance
Amount, the sum of $50,000,000 on October 25 in each of the years 2013 and 2015,
inclusive,  and such  principal  amounts of the Notes,  together  with  interest
thereon to the  prepayment  dates,  shall become due on such  prepayment  dates;
provided that upon any partial  prepayment of the Notes pursuant to Paragraph 4B
or purchase of the Notes pursuant to Paragraph 4E, the principal  amount of each
required  prepayment  of the Notes  becoming due under this  Paragraph 4A on and
after the date of such  prepayment  or  purchase  shall be  reduced  in the same
proportion as the aggregate unpaid principal amount of the Notes is reduced as a
result of such  prepayment or purchase.  The remaining  principal  amount of the
Notes, together with interest accrued thereon,  shall become due on the maturity
date of the Notes.

      4B. Optional Prepayment With Yield-Maintenance  Amount. The Notes shall be
subject  to  prepayment,  in whole at any time or from  time to time in part (in
multiples of $1,000,000 and integral multiples of $100,000 in excess thereof) at
the option of the  Company,  at 100% of the  principal  amount so  prepaid  plus
interest  thereon to the prepayment date and the  Yield-Maintenance  Amount,  if
any, with respect to each Note. Any partial  prepayment of the Notes pursuant to
this  Paragraph  4B shall be applied in  satisfaction  of  required  payments of
principal on a pro rata basis.

      4C.  Notice of Optional  Prepayment.  The Company shall give the holder of
each Note irrevocable  written notice of any prepayment pursuant to Paragraph 4B
not less than 5 Business  Days prior to the  prepayment  date,  specifying  such
prepayment date and the principal  amount of the Notes, and of the Notes held by
such holder,  to be prepaid on such date and stating that such  prepayment is to
be made  pursuant to Paragraph  4B.  Notice of  prepayment  having been given as
aforesaid,  the principal amount of the Notes specified in such notice, together
with   interest   thereon  to  the   prepayment   date  and  together  with  the
Yield-Maintenance  Amount,  if any, with respect  thereto,  shall become due and
payable by the Company on such prepayment  date. The Company shall, on or before
the day on which it gives written notice of any prepayment pursuant to Paragraph
4B, give  telephonic  notice of the principal  amount of the Notes to be prepaid
and the prepayment  date to each holder which shall have  designated a recipient
of such  notices  in the  Purchaser  Schedule  attached  hereto  or by notice in
writing to the Company.

      4D.  Prepayment in Connection  with a Pro Rata Prepayment  Event.  (a) The
Company will, at least 10 Business Days prior to any Pro Rata Prepayment  Event,
give written notice of such Pro Rata  Prepayment  Event to each holder of Notes.
Such notice shall contain and constitute an offer to make a Pro Rata Prepayment,
as described in clause (b) below.

      (b) The offer  contemplated  by clause (a) above  shall be an  irrevocable
offer to make a Pro Rata  Prepayment  on a date  specified  in such  offer  (the
"Proposed  Prepayment  Date") not less than  thirty  (30) days and not more than
sixty (60) days after the date of the applicable Pro


                                       4
<PAGE>

Rata Prepayment  Event.  Each such notice shall specify such date, the aggregate
principal  amount of the Notes to be prepaid on such date, the principal  amount
of each Note held by such holder to be prepaid,  and the  interest to be paid on
the prepayment date with respect to such principal amount being prepaid.

      (c) A holder of Notes may accept the offer to prepay made pursuant to this
Paragraph 4D by causing a notice of such  acceptance  with respect thereto to be
delivered to the Company not later than the 5th Business Day  following the date
of such holder's  receipt of the applicable  offer. A failure by a holder of the
Notes to timely  respond to an offer to prepay made  pursuant to this  paragraph
shall be deemed to  constitute  an  irrevocable  rejection of such offer by such
holder.

      (d)  Prepayment of the Notes to be prepaid  pursuant to this  Paragraph 4D
shall be at 100% of the principal  amount of such Notes,  together with interest
on  such  Notes   accrued  to  the  date  of   prepayment   (and   without   any
Yield-Maintenance  Amount).  The  prepayment  shall  be  made  on  the  Proposed
Prepayment Date.

      (e) Each offer to prepay the Notes  pursuant  to this  paragraph  shall be
accompanied  by an  Officer's  Certificate  and  dated  the date of such  offer,
specifying:

            (i) in  reasonable  detail,  the nature and date or proposed date of
      the Pro Rata Prepayment Event to which it relates;

            (ii) the Proposed Prepayment Date;

            (ii) that such offer is made pursuant to this paragraph;

            (iii) the principal amount of each Note offered to be prepaid;

            (iv) the last date upon which the offer can be accepted or rejected,
      and setting forth the  consequences of failing to provide an acceptance or
      rejection, as provided in clause (c) of this paragraph; and

            (v) the  interest  that  would  be due on each  Note  offered  to be
      prepaid, accrued to the Proposed Prepayment Date.

      (f) Notwithstanding the foregoing,  if the Company gives advance notice of
a Pro Rata  Prepayment  Event which does not  actually  occur for any reason and
such non-occurrence is not in violation of the applicable terms of the Revolving
Credit Agreement (including,  without limitation, the abandonment by the Company
or a  Subsidiary  of the  applicable  sale,  transfer  or other  disposition  of
property,   or  abandonment  of  the  incurrence  of  Indebtedness,   which  was
anticipated to trigger such Pro Rata Prepayment Event),  then, the Company shall
deliver  to each  Significant  Holder a notice to such  effect not later than 10
Business  Days  prior  to  applicable  Proposed  Prepayment  Date,  including  a
certification  from a Financial Officer that such Pro Rata Prepayment Event will
not occur and that such  non-occurrence  is not in violation of the terms of the
Revolving Credit Agreement and has not been postponed or re-scheduled,  and upon
timely


                                       5
<PAGE>

receipt  of such  notice  and  certification,  no Pro Rata  Prepayment  shall be
required in respect of such cancelled Pro Rata Prepayment Event pursuant to this
Paragraph 4D.

      (g) Any partial prepayment of the Notes pursuant to this Paragraph 4D will
be applied in  satisfaction  of  required  payments of  principal  on a pro rata
basis.

      4E. Partial  Payments Pro Rata.  Upon any partial  prepayment of the Notes
pursuant to Paragraph  4A, 4B or 4D, the  principal  amount so prepaid  shall be
allocated to all Notes at the time  outstanding  in proportion to the respective
outstanding principal amounts thereof.

      4F.  Retirement of Notes.  The Company shall not, and shall not permit the
Subsidiaries or their  Affiliates to, prepay or otherwise  retire in whole or in
part prior to their stated final maturity (other than by prepayment  pursuant to
Paragraph 4A, 4B or 4D or upon  acceleration of such final maturity  pursuant to
Paragraph 7A), or purchase or otherwise acquire,  directly or indirectly,  Notes
held by any holder unless the Company,  its Subsidiaries or its Affiliates shall
have offered to prepay or otherwise retire or purchase or otherwise acquire,  as
the case may be, the same proportion of the aggregate  principal amount of Notes
held by each other holder of Notes at the time  outstanding  upon the same terms
and  conditions.  Any Notes so prepaid or  otherwise  retired  or  purchased  or
otherwise acquired by the Company or any Subsidiaries or Affiliates shall not be
deemed to be outstanding for any purpose under this Agreement.

      5. AFFIRMATIVE  COVENANTS.  So long as any Note or amount owing under this
Agreement shall remain unpaid, the Company covenants and agrees that:

      5A.  Financial  Statements.  The Company will deliver to each  Significant
Holder in duplicate:

            (i) no later than the earlier of (i) 10 days after the date that the
      Company is required to file a report on Form 10-Q with the  Securities and
      Exchange  Commission in  compliance  with the  reporting  requirements  of
      Section 13 or 15(d) of the  Securities  Exchange  Act of 1934,  as amended
      (whether or not the Company is so subject to such reporting requirements),
      and (ii) 45 days after the end of each of the first three fiscal  quarters
      of each fiscal year of the Company,  its  consolidated  balance  sheet and
      related  statements of income,  retained earnings and cash flows as of the
      end of and for such  fiscal  quarter and the then  elapsed  portion of the
      fiscal year,  setting forth in each case in  comparative  form the figures
      for the corresponding period or periods of (or, in the case of the balance
      sheet, as of the end of) the previous fiscal year, all certified by one of
      its Financial  Officers as presenting  fairly in all material respects the
      financial  condition  and  results of  operations  of the  Company and its
      Consolidated Subsidiaries on a consolidated basis in accordance with GAAP,
      subject to normal year-end audit adjustments and the absence of footnotes;

            (ii) no later  than the  earlier  of (i) 10 days after the date that
      the Company is required to file a report on Form 10-K with the  Securities
      and Exchange Commission in


                                       6
<PAGE>

      compliance  with the reporting  requirements of Section 13 or 15(d) of the
      Securities Exchange Act of 1934, as amended (whether or not the Company is
      so subject to such reporting requirements), and (ii) 90 days after the end
      of each fiscal year of the Company, its audited consolidated balance sheet
      and related  statements of income,  retained earnings and cash flows as of
      the end of and for such year,  setting  forth in each case in  comparative
      form  the  figures  for the  previous  fiscal  year,  all  reported  on by
      PricewaterhouseCoopers  LLP or other  independent  public  accountants  of
      recognized   national   standing   (without  a  "going  concern"  or  like
      qualification  or exception and without any  qualification or exception as
      to the scope of such audit) to the effect that such consolidated financial
      statements present fairly in all material respects the financial condition
      and results of operations of the Company and its Consolidated Subsidiaries
      on a consolidated basis in accordance with GAAP;

            (iii) promptly after the same become publicly  available,  copies of
      all periodic and other reports, proxy statements and other materials filed
      by  the  Company  or any  Subsidiary  with  the  Securities  and  Exchange
      Commission,  or any Governmental Authority succeeding to any or all of the
      functions of said Securities and Exchange Commission, or with any national
      securities  exchange,  or distributed  by the Company to its  shareholders
      generally, as the case may be;

            (iv)  concurrently  with any delivery of financial  statements under
      clause (i) or (ii) above,  a  certificate  of a  Financial  Officer of the
      Company  (a)  certifying  as to whether a Default has  occurred  and, if a
      Default has occurred,  specifying the details thereof and any action taken
      or proposed to be taken with respect thereto, (b) setting forth reasonably
      detailed calculations  demonstrating compliance with Paragraphs 6A, 6E, 6H
      and 6I  hereof  and  (c)  stating  whether  any  change  in GAAP or in the
      application  thereof has occurred since the date of the Company's  audited
      financial  statements  referred to in Paragraph 8B and, if any such change
      has  occurred,  specifying  the  effect of such  change  on the  financial
      statements accompanying such certificate;

            (v)  concurrently  with any delivery of financial  statements  under
      clause (ii) above, a certificate  of the accounting  firm that reported on
      such financial  statements  stating whether they obtained knowledge during
      the  course  of their  examination  of such  financial  statements  of any
      Default  or Event of  Default  (which  certificate  may be  limited to the
      extent required by accounting rules or guidelines);

            (vi) promptly after the same become  publicly  available,  copies of
      all periodic and other reports, proxy statements and other materials filed
      by  the  Company  or any  Subsidiary  with  the  Securities  and  Exchange
      Commission,  or any Governmental Authority succeeding to any or all of the
      functions of said Commission, or with any national securities exchange, or
      distributed by the Company to its shareholders  generally, as the case may
      be;


                                       7
<PAGE>

            (vii) promptly upon receipt thereof,  a copy of the report submitted
      to the Company by independent  accountants in connection  with the regular
      annual  audit  made by  them of the  annual  financial  statements  of the
      Company; and

            (viii)  promptly   following  any  request   therefor,   such  other
      information  regarding  the  operations,  business  affairs and  financial
      condition of the Company or any  Subsidiary,  or compliance with the terms
      of any  Transaction  Document,  as any  Significant  Holder may reasonably
      request.

      5B. Information  Required by Rule 144A. The Company will, upon the request
of the holder of any Note, provide such holder, and any qualified  institutional
buyer  designated by such holder,  such financial and other  information as such
holder may  reasonably  determine to be necessary in order to permit  compliance
with the  information  requirements  of Rule 144A  under the  Securities  Act in
connection  with the  resale of Notes,  except at such  times as the  Company is
subject to the  reporting  requirements  of section 13 or 15(d) of the  Exchange
Act. For the purpose of this  Paragraph  5B, the term  "qualified  institutional
buyer" shall have the meaning specified in Rule 144A under the Securities Act.

      5C.  Notices of Material  Events.  If, to the  knowledge of any  Financial
Officer or other executive  officer of Company,  any of the following events has
occurred:

      (a) any Default or Event of Default;

      (b) the filing or  commencement  of any action,  suit or  proceeding by or
      before any arbitrator or Governmental  Authority  against or affecting the
      Company or any  Affiliate  thereof that,  if adversely  determined,  could
      reasonably be expected to result in a Material Adverse Effect;

      (c) any ERISA Event (as defined in the Revolving  Credit  Agreement) that,
      alone or together with any other ERISA Events (as defined in the Revolving
      Credit  Agreement)  that have  occurred,  could  reasonably be expected to
      result in  liability  of the Company or its  Subsidiaries  in an aggregate
      amount exceeding $10,000,000; or

      (d) any other development that results in, or could reasonably be expected
      to result in, a Material Adverse Effect;

then the Company will furnish to each holder of the Notes prompt  written notice
of such  occurrence.  Each  notice  delivered  under  this  paragraph  shall  be
accompanied by a statement of a Financial  Officer  setting forth the details of
the event or development  requiring such notice and any action taken or proposed
to be taken with respect thereto.

      5D.  Inspection  of  Property;  Books and  Records.  (a) The Company  will
maintain  or cause to be  maintained  the books of  record  and  account  of the
Company and each Guarantor and other Consolidated  Subsidiary,  in good order in
accordance with sound business


                                       8
<PAGE>

practice so as to permit its  financial  statements to be prepared in accordance
with generally accepted accounting principles.

      (b) The Company will permit any Person  designated  by any holder of Notes
in writing,  at such holder's expense (or, if an Event of Default does exist, at
the  Company's  expense),  to visit and inspect any of the  properties of and to
examine the corporate books and financial records of the Company and make copies
thereof or extracts therefrom and to discuss the affairs,  finances and accounts
of  the  Company  with  its  principal   officers  and  its  independent  public
accountants,  all at such  reasonable  times  and as  often as such  holder  may
reasonably  request;  provided that nothing in this paragraph  shall require the
Company or any Guarantor to disclose any confidential or proprietary information
constituting trade secrets.

      (c)  With  the  consent  of  the  Company   (which  consent  will  not  be
unreasonably  withheld)  or,  if  an  Event  of  Default  has  occurred  and  is
continuing, without the requirement of any such consent, the Company will permit
any  Person  designated  by any  holder of Notes in  writing,  at such  holder's
expense (or, if an Event of Default does exist,  at the Company's  expense),  to
visit and inspect any of the  properties of and to examine the  corporate  books
and financial records of any Guarantor or other Consolidated Subsidiary and make
copies  thereof or extracts  therefrom and to discuss the affairs,  finances and
accounts of such  Guarantor or other  Consolidated  Subsidiary  with its and the
Company's  principal officers and the Company's  independent public accountants,
all at such reasonable times and as often as such holder may reasonably request;
provided  that  nothing  in this  paragraph  shall  require  the  Company or any
Guarantor to disclose any confidential or proprietary  information  constituting
trade secrets.

      5E. [INTENTIONALLY OMITTED]

      5F Covenant to Secure Note Equally.  The Company  covenants that, if it or
any  Subsidiary  shall  create or assume any Lien upon any of their  property or
assets,  whether now owned or hereafter acquired,  other than Liens permitted by
the provisions of Paragraph 6B (unless prior written  consent to the creation or
assumption  thereof shall have been  obtained  pursuant to Paragraph  12C),  the
Company will make or cause to be made effective provision whereby the Notes will
be secured by such Lien equally and ratably with any and all other  Indebtedness
thereby  secured so long as any such  other  Indebtedness  shall be so  secured;
provided that the creation and  maintenance of such equal and ratable Lien shall
not in any way limit or modify the right of the  holders of the Notes to enforce
the provisions of Paragraph 6B. Notwithstanding the foregoing,  at no time shall
the Company,  any  Guarantor or any other  Subsidiary  create or assume any Lien
upon any of their property or assets,  whether now owned or hereafter  acquired,
securing any  obligations in respect of the Revolving  Credit  Agreement  (other
than those permitted by the provisions of clause (k) of Paragraph 6B).

      5G. Maintenance of Properties; Compliance with Laws. The Company will, and
will cause each  Subsidiary  to, (i) keep and maintain all property  material to
the conduct of its business in good working order and  condition,  ordinary wear
and tear excepted; except for such cases of non-compliance that, individually or
in the  aggregate,  could not  reasonably  be  expected  to result in a Material
Adverse Effect; and (ii) comply with all laws, rules, regulations and orders


                                       9
<PAGE>

of any Governmental  Authority applicable to it, its operations or its property,
except where the failure to do so,  individually or in the aggregate,  could not
reasonably be expected to result in a Material Adverse Effect.

      5H.  Insurance.  The  Company  will,  and will cause each  Subsidiary  to,
maintain,  with financially sound and reputable insurance  companies,  insurance
(a)  against  such  casualties,  contingencies  and  risks  (and  with such risk
retentions),  (b) of such types,  and (c) in such  amounts as shall be customary
for  companies  of  established  reputation  engaged  in  the  same  or  similar
businesses,  and will  furnish,  and cause each  Subsidiary  to furnish,  to the
Required  Holders (upon  request),  information  in reasonable  detail as to the
insurance carried by it.

      5I. ERISA.  (i)  Compliance.  The Company will,  and will cause each ERISA
Affiliate  to, at all times with respect to each Plan,  make timely  payments of
contributions  required to meet not less than the minimum  funding  standard set
forth in ERISA or the Code  with  respect  thereto  and,  with  respect  to each
Multiemployer  Plan,  make timely payment of  contributions  required to be paid
thereto as provided by Section 515 of ERISA and comply with all other provisions
of ERISA,  except for such failures to make contributions and failures to comply
as would not have Material Adverse Effect.

            (ii) Non-US  Pension  Plans.  The Company will,  and will cause each
      Subsidiary to, make all required payments in respect of funding any non-US
      pension Plan applicable to such Person and otherwise fully comply with all
      applicable laws,  statutes,  rules and regulations  governing or affecting
      such non-US pension Plan if the failure to make such payments or so comply
      could reasonably be expected to have a Material Adverse Effect.

      5J.  Payment  of  Notes  and  Maintenance  of  Office.  The  Company  will
punctually pay, or cause to be paid, the principal and interest (and premium, if
any) to become due in respect of Notes  according to the terms  thereof and will
maintain  an office at the address of the  Company  set forth in  Paragraph  12H
hereof where notices,  presentations  and demands in respect hereof or the Notes
may be made upon it. Such office will be  maintained  at such address until such
time as the  Company  will  notify  the  holders  of the Notes of any  change of
location of such office.

      5K.  Environmental  Laws.  (i) The  Company  will,  and  will  cause  each
Subsidiary to, (a) comply with  Environmental Laws applicable to it, and obtain,
comply with and maintain any and all  Environmental  Permits  necessary  for its
operation as conducted and as planned;  and (b) take all  reasonable  efforts to
ensure that all tenants,  subtenants,  contractors,  subcontractors and invitees
comply with all Environmental Laws, and obtain, comply with and maintain any and
all Environmental Permits applicable to any of them insofar as any failure to so
comply,  obtain or maintain reasonably could be expected to adversely affect the
Company  or any  of  its  Subsidiaries.  For  purposes  of  this  Paragraph  5K,
non-compliance  shall be deemed  not to  constitute  a breach  of this  covenant
provided  that,  upon  learning of any actual or  suspected  noncompliance,  the
Company shall promptly undertake or cause to be undertaken reasonable efforts to
achieve compliance, and provided further, that, in any case, such noncompliance,
and any other  noncompliance with any Environmental Law,  individually or in the
aggregate,  could not  reasonably  be expected  to result in a Material  Adverse
Effect.


                                       10
<PAGE>

            (ii) The Company will, and will cause each  Subsidiary to,  promptly
      comply  with all orders and  directives  of all  Governmental  Authorities
      regarding  Environmental  Laws, other than such orders or directives as to
      which an appeal has been timely and promptly taken in good faith, provided
      that no Default  will arise under this clause to the extent the failure to
      comply  with any or all such  appealed  orders  or  directives  could  not
      reasonably be expected to result in a Material Adverse Effect.

      5L. Use of Proceeds.  The Company will use the proceeds of the sale of the
Notes only to refinance  Indebtedness  under the Revolving  Credit Agreement and
for general corporate purposes.

      5M. Further  Assurances.  The Company will, and will cause each Subsidiary
to, execute any and all further documents,  agreements and instruments, and take
all  further  action  that may be  required  under  applicable  law, or that the
Required Holders may reasonably request, in order that the Guaranty  Requirement
shall be satisfied at all times.

      5N. Existence;  Conduct of Business. The Company will, and will cause each
Subsidiary  to, do or cause to be done all things  necessary to preserve,  renew
and keep in full force and effect its legal existence and the rights,  licenses,
permits, privileges,  franchises, patents, copyrights, trademarks and tradenames
material to the conduct of the business of the Company and  Subsidiaries,  taken
as a  whole;  provided  that  the  foregoing  shall  not  prohibit  any  merger,
consolidation,  liquidation,  dissolution or other  transaction  permitted under
Paragraph 6C.

      5O.  Payment  of  Obligations.  The  Company  will,  and will  cause  each
Subsidiary to, pay its Indebtedness and other obligations (including liabilities
in respect of any and all  present or future  taxes,  levies,  imposts,  duties,
deductions,  charges or  withholdings  imposed by any  Governmental  Authority),
before the same shall  become  delinquent  or in default,  except  where (a) the
validity  or amount  thereof is being  contested  in good  faith by  appropriate
proceedings  and the  Company  or such  Subsidiary  has set  aside on its  books
adequate reserves with respect thereto in accordance with GAAP or (b) failure to
pay could not reasonably be expected to result in a Material Adverse Effect.

      6.  NEGATIVE  COVENANTS.  So long as any Note or amount  owing  under this
Agreement shall remain unpaid, the Company covenants and agrees that:

      6A. Subsidiary Indebtedness.  The sum of (a) the total Indebtedness of all
Consolidated Subsidiaries (excluding (i) Indebtedness under this Agreement, (ii)
Indebtedness  existing  on January 8, 2004 and set forth on Schedule  6A,  (iii)
Indebtedness  owed  to  the  Company  or  to a  Subsidiary,  (iv)  reimbursement
obligations  in respect of undrawn  letters of credit  incurred in the  ordinary
course  of  business  and  (v)  Indebtedness  of any  Guarantor)  plus  (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)  directly  or
indirectly  received by any Consolidated  Subsidiary from any Person (other than
the Company or a Consolidated Subsidiary)


                                       11
<PAGE>

for Receivables sold, which Receivables remain uncollected at such time, will at
no time exceed $100,000,000.

      6B. Negative Pledge.  Neither the Company nor any Consolidated  Subsidiary
will create, incur, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:

      (a) any Lien created under the Transaction Documents;

      (b) Liens existing on the date hereof,  securing Indebtedness  outstanding
      on the Date of Closing, and set forth on Schedule 6B;

      (c) any Lien on any asset  securing  Indebtedness  incurred or assumed for
      the purpose of  financing  all or any part of the cost of  acquiring  such
      asset, provided that such Lien attaches to such asset concurrently with or
      within 180 days after the acquisition thereof;

      (d) any Lien  existing  on any asset of any  corporation  at the time such
      corporation becomes a Consolidated Subsidiary, provided that (i) such Lien
      is not created in  contemplation of or in connection with such corporation
      becoming a Consolidated Subsidiary,  (ii) such Lien shall not apply to any
      other  property or assets of the Company or any  Subsidiary and (iii) such
      Lien shall secure only those obligations which it secures on the date such
      corporation becomes a Consolidated Subsidiary and extensions, renewals and
      replacements thereof that do not increase the outstanding principal amount
      thereof;

      (e) any Lien on any  asset of any  corporation  existing  at the time such
      corporation  is  merged  or  consolidated  with  or  into  a  Consolidated
      Subsidiary and not created in contemplation  of such event;  provided that
      such Lien shall not extend to other assets of such Consolidated Subsidiary
      and shall  secure only those  obligations  which it secures on the date of
      such merger or  consolidation  and extensions,  renewals and  replacements
      thereof that do not increase the outstanding principal amount thereof;

      (f) any Lien existing on any asset prior to the acquisition thereof by the
      Company or any Consolidated Subsidiary and not created in contemplation of
      such acquisition;

      (g)  any  Lien  arising  out of the  refinancing,  extension,  renewal  or
      refunding of any Indebtedness  secured by any Lien permitted by any of the
      foregoing  clauses of this paragraph;  provided that such  Indebtedness is
      not increased and is not secured by any additional assets;

      (h) Liens for taxes that are not yet subject to penalties for  non-payment
      or are being contested in good faith, or minor survey  exceptions or minor
      encumbrances,  easements  or other  rights of others  with  respect to, or
      zoning or other governmental  restrictions as to the use of, real property
      that do not, in the aggregate,  materially impair the use of such property
      in the operation of the businesses of the Company and the Subsidiaries;


                                       12
<PAGE>

      (i) (i) Liens  arising out of judgments  or awards  against the Company or
      any  Subsidiary  with  respect  to which such  Person  is, in good  faith,
      prosecuting an appeal or proceedings for review and (ii) Liens incurred by
      the  Company or any  Subsidiary  for the  purpose of  obtaining  a stay or
      discharge in any legal  proceeding to which the Company or any  Subsidiary
      is a party; provided that the Liens permitted by the foregoing clause (ii)
      shall not secure obligations in an aggregate  principal amount outstanding
      in excess of 5.0% of Consolidated Tangible Net Worth;

      (j) (i) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
      landlord's or other like Liens arising in the ordinary  course of business
      for sums which are not  overdue for a period of more than 60 days or which
      are being contested in good faith by appropriate proceedings, (ii) pledges
      or  deposits  in  connection  with  workers'  compensation,   unemployment
      insurance  and other social  security  legislation  and deposits  securing
      liability  to  insurance   carriers  under  insurance  or   self-insurance
      arrangements,  and (iii) deposits to secure the performance of bids, trade
      contracts  (other than for  Indebtedness),  leases (other than Capitalized
      Lease  Obligations),  statutory  obligations,  surety  and  appeal  bonds,
      performance  bonds and other  obligations of a like nature incurred in the
      ordinary course of business;

      (k)  Liens  (if any)  arising  pursuant  to  Section  5 of the  Subsidiary
      Guarantee  Agreement  or  Section  3 of  the  Indemnity,  Subrogation  and
      Contribution  Agreement  (each  used  in this  clause  as  defined  in the
      Revolving  Credit  Agreement) as in effect on the Closing Date,  and Liens
      that constitute  rights of set-off in connection with the Revolving Credit
      Agreement;  provided  that the  Company and  Guarantors  shall not, at any
      time,  maintain  aggregate cash balances in excess of  $100,000,000 in all
      accounts  with the  lenders  under  the  Revolving  Credit  Agreement  (or
      Affiliate thereof) that are subject to such set-off or similar rights; and

      (l)  Liens  not  otherwise  permitted  by the  foregoing  clauses  of this
      paragraph securing Indebtedness (other than Indebtedness in respect of the
      Revolving Credit Agreement) in an aggregate  principal amount  outstanding
      not to exceed 5.0% of Consolidated Tangible Net Worth.

      6C. Consolidations, Mergers and Sales of Assets. The Company will not, and
will not permit any Subsidiary to,  consolidate or merge with, or sell, lease or
otherwise  dispose of any of its  assets  to,  or, in the case of a  Subsidiary,
issue or sell any Equity Interests in such Subsidiary to, any Person (other than
the Company or a  Subsidiary),  except that,  so long as no Default would result
under any other provision of this Agreement:

      (a) any  Person  may merge  with and into the  Company  or any  Subsidiary
      Guarantor;  provided that the Company or such Subsidiary Guarantor, as the
      case may be, is the surviving Person;

      (b) any Person other than the Company or a Subsidiary  Guarantor may merge
      with and into any Subsidiary that is not a Subsidiary Guarantor;  provided
      that such Subsidiary


                                       13
<PAGE>

      is the surviving Person;

      (c) subject to Paragraph 6G, the Company or any Subsidiary may sell, lease
      or  otherwise  dispose  of any of its  assets to the  Company or any other
      Subsidiary;

      (d) the Company or any Subsidiary may sell, lease or otherwise  dispose of
      any of its  inventory  in the  ordinary  course of business and any of its
      assets which are obsolete, excess or unserviceable;

      (e)  any  Foreign   Subsidiary  may  sell   Receivables  in  one  or  more
      transactions  in the ordinary  course of business and consistent with past
      practice, the proceeds of which transactions are used for working capital;

      (f) the  Company  and the  Subsidiaries  may carry out sale and  leaseback
      transactions permitted under Paragraph 6F;

      (g) the Company or any Subsidiary may sell or otherwise  dispose of Equity
      Interests in any  Subsidiary,  and any  Subsidiary  may issue and sell its
      Equity  Interests,  to one or more Persons  other than the Company and the
      Subsidiaries in an aggregate  amount for all such  transactions  that will
      not result in Subsidiaries in which Persons other than the Company and the
      Subsidiaries  hold  minority  interests  representing  more  than  7.5% of
      Consolidated Tangible Net Worth; and

      (h) the Company or any Subsidiary may sell, lease or otherwise  dispose of
      any of its assets for fair value  (other than as  permitted by clauses (a)
      through  (g) above);  provided  that (i) no such  transaction,  when taken
      together  with all  previous  such  transactions,  shall  result in all or
      substantially all of the assets of the Company and the Subsidiaries having
      been sold or otherwise  disposed of, (ii) no such transaction shall result
      in a reduction in the percentage of the Equity Interests of any Subsidiary
      owned  directly  or  indirectly  by the  Company  unless  all  the  Equity
      Interests in such  Subsidiary  owned directly or indirectly by the Company
      are disposed of and (iii) when applicable, the Net Proceeds (as defined in
      the Revolving Credit Agreement) from any such transaction shall be used in
      in such a manner as to comply with the  provisions of (y) Section  2.10(c)
      of  the  Revolving  Credit  Agreement  (or  any  successor  or  equivalent
      provision) and (z) Paragraphs 4D and 5E of this Agreement.

      6D.  Transactions  with  Affiliates.  The Company  will not,  and will not
permit any  Subsidiary to,  directly or indirectly,  pay any funds to or for the
account  of,  make any  investment  in or  engage  in any  transaction  with any
Affiliate  (other than the Company or a Subsidiary none of the Equity  Interests
in which are owned directly or indirectly by an Affiliate of the Company that is
not a Subsidiary), except that:

      (a) the  Company may declare and pay a  Restricted  Payment  permitted  by
      Paragraph 6E;


                                       14
<PAGE>

      (b)  the  Company  or  any   Subsidiary   may  make  payments  or  provide
      compensation, and reimburse related expenses, for services rendered by (i)
      any  Affiliate  who is an officer,  director or employee of the Company or
      any Subsidiary and (ii) J. Spencer Standish;

      (c) the Company or any  Subsidiary  may make any  investment  permitted by
      Paragraph 6G;

      (d) the Company or any  Subsidiary may make sales to or purchases from any
      Affiliate and, in connection  therewith,  extend credit, may make payments
      or provide  compensation for services  rendered by any Affiliate,  and may
      engage in any other  transaction  with any Affiliate,  in each case in the
      ordinary course of business and consistent with past practice and on terms
      and conditions at least as favorable to the Company or such  Subsidiary as
      the  terms  and  conditions  that  would  apply  (i)  in an  arm's  length
      transaction  with a  Person  not an  Affiliate  or (ii)  in the  case of a
      transaction relating to pension, deferred compensation, insurance or other
      benefit plans with an Affiliate employee,  in a similar transaction with a
      non-Affiliate employee; and

      (e) the  Company or any  Subsidiary  may engage in  transactions  with the
      entities  listed  on  Schedule  6D to  the  extent  consistent  with  past
      practice.

      6E.  Restricted  Payments.  The  Company  will  not  declare  or make  any
Restricted  Payment unless,  immediately  after giving effect to such Restricted
Payment,  (a) the Leverage Ratio does not exceed 2.25 to 1.00 and (b) no Default
shall have occurred and be continuing.

      6F.  Limitations  on  Sale-Leasebacks.  The Company will not, and will not
permit any  Subsidiary to, enter into any  arrangement,  directly or indirectly,
with any Person  whereby  the  Company or a  Subsidiary  shall sell or  transfer
property,  whether now owned or hereafter acquired,  and then or thereafter rent
or lease as lessee such property or any part thereof or any other property which
the Company or any Subsidiary  intends to use for substantially the same purpose
or  purposes  as the  property  being  sold  or  transferred,  unless  (a)  such
transaction is effected  within 180 days of the property being placed in service
by the Company or such Subsidiary and results in a lease obligation  incurred or
assumed for the purpose of  financing  all or any part of the cost of  acquiring
such  property,  (b)  when  applicable,  the Net  Proceeds  (as  defined  in the
Revolving Credit  Agreement) from any such  transaction  shall be used in such a
manner as to comply with the provisions of (i) Section  2.10(c) of the Revolving
Credit Agreement (or any successor or equivalent  provision) and (ii) Paragraphs
4D and 5E of this  Agreement,  or (c)  after  giving  effect to any such sale or
transfer, the aggregate fair market value of all property of the Company and its
Subsidiaries  so sold or  transferred  after the date hereof,  and not permitted
under clauses (a) or (b) above, does not exceed $75,000,000.

      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


                                       15
<PAGE>

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 with an
      aggregate  fair  market  value  for all such  acquisitions  not to  exceed
      $250,000,000 for  consideration  consisting  solely of common stock of the
      Company;

      (d)  acquisitions of assets of or Equity Interests in other Persons if, at
      the time of and after giving pro forma effect to each such acquisition and
      any related  incurrence of  Indebtedness,  the Leverage Ratio is less than
      2.50 to 1.00;

      (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, (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 and
      (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 the  preceding  clause (iv) must be in an
      outstanding   principal   amount   which,   together  with  the  aggregate
      outstanding principal amount of all other investments,  loans and advances
      permitted by such clause (iv), shall not exceed $75,000,000 at any time;

      (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)   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;

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

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


                                       16
<PAGE>

      6H. Leverage Ratio.  The Company will not permit the Leverage Ratio on any
date to exceed 3.00 to 1.00.

      6I.  Interest  Coverage  Ratio.  The Company  will not permit the ratio of
Consolidated  EBITDA to  Consolidated  Interest  Expense  for any period of four
consecutive  fiscal  quarters,  commencing with the period ending  September 30,
2004, to be less than 3.00 to 1.00.

      6J.  Lines of  Business.  The  Company  will not,  and will not permit any
Subsidiary  to,  engage at any time in any business or business  activity  other
than a business conducted by the Company and its Subsidiaries on the date hereof
and business activities reasonably related thereto.

      6K. Terrorism  Sanctions  Regulations.  The Company will not, and will not
permit  any  Guarantor  or  other  Material  Subsidiary  to (a)  become a Person
described  or  designated  in the  Specially  Designated  Nationals  and Blocked
Persons  List of the  Office  of  Foreign  Assets  Control  or in  Section  1 of
Executive  Order  No.  13,224 of  September  24,  2001,  Blocking  Property  and
Prohibiting  Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism,  66 U.S. Fed. Reg. 49, 079 (2001),  as amended,  or (b) engage in any
dealings or  transactions  with any such Person in violation of applicable  law,
rule or regulation.

      7. EVENTS OF DEFAULT.

      7A.  Acceleration.  If any of the  following  events  shall  occur  and be
continuing  for any reason  whatsoever  (and  whether such  occurrence  shall be
voluntary  or  involuntary  or come about or be effected by  operation of law or
otherwise):

            (i) default in the payment of any principal of, or Yield-Maintenance
      Amount  payable  with respect to, any Note when the same shall become due,
      either by the terms thereof or otherwise as herein provided; or

            (ii)  default in the  payment of any  interest  on any Note for more
      than five (5) days after the same becomes due and payable; or

            (iii) The  Company  or any  Subsidiary  (a)  shall  fail to make any
      payment (whether of principal,  premium, fee or interest and regardless of
      amount)  in  respect of any  Material  Indebtedness,  when and as the same
      shall  become due and payable,  or (b) any event or condition  occurs that
      results in any Material  Indebtedness  becoming due prior to its scheduled
      maturity or that enables or permits (with or without the giving of notice,
      the  lapse  of time  or  both)  the  holder  or  holders  of any  Material
      Indebtedness  or any trustee or agent on its or their  behalf to cause any
      Material  Indebtedness  to  become  due,  or to  require  the  prepayment,
      repurchase,  redemption  or  defeasance  thereof,  prior to its  scheduled
      maturity;  provided  that,  this  clause  (b) shall  not apply to  secured
      Indebtedness  that  becomes  due as a  result  of the  voluntary  sale  or
      transfer of the property or assets securing such Indebtedness; or


                                       17
<PAGE>

            (iv) any  representation  or  warranty  made or deemed made by or on
      behalf of the  Company  or any  Subsidiary  in or in  connection  with any
      Transaction  Document (or any amendment or modification  thereof or waiver
      thereunder) or in any report,  certificate,  financial  statement or other
      document  furnished  pursuant  to or in  connection  with any  Transaction
      Document or any amendment or  modification  thereof or waiver  thereunder,
      shall prove to have been  incorrect in any  material  respect when made or
      deemed made; or

            (v) the Company fails to perform or observe any agreement  contained
      in Paragraphs  5C, 5L, 5N (with respect to the Company's  existence) or 6,
      or in the last sentence of Paragraph 5F; or

            (vi) [INTENTIONALLY OMITTED]

            (vii) the Company or any  Guarantor  fails to perform or observe any
      other agreement,  term or condition contained herein or in any Transaction
      Document and such failure  shall  continue  unremedied  for a period of 30
      days after notice thereof from the Required  Holders to the Company (which
      notice will be given at the request of any holder of Notes); or

            (viii) the Company or any  Guarantor  or Material  Subsidiary  shall
      become unable (or admit in writing its inability) to pay its debts as such
      debts  become  due,  or is  generally  not  paying its debts as such debts
      become due; or

            (ix) the Company or any Guarantor or Material  Subsidiary  shall (i)
      voluntarily   commence  any  proceeding  or  file  any  petition   seeking
      liquidation,  reorganization  or other relief under any Federal,  state or
      foreign bankruptcy, receivership, reorganization, compromise, arrangement,
      insolvency,  readjustment  of debt,  dissolution or liquidation or similar
      law,  whether now or hereafter in effect  (herein  called the  "Bankruptcy
      Law"),  (ii) consent to the institution of, or fail to contest in a timely
      and appropriate manner, any proceeding or petition described in clause (x)
      of this  paragraph,  (iii)  apply for or consent to the  appointment  of a
      receiver,  trustee,  custodian,   sequestrator,   conservator  or  similar
      official for the Company or any Guarantor or Material  Subsidiary or for a
      substantial part of its assets, (iv) file an answer admitting the material
      allegations  of a petition  filed against it in any such  proceeding,  (v)
      make a general  assignment  for the benefit of  creditors or (vi) take any
      action for the purpose of effecting any of the foregoing; or

            (x) an involuntary  proceeding  shall be commenced or an involuntary
      petition shall be filed seeking (i) liquidation,  reorganization  or other
      relief in respect of the Company, any Guarantor or any Material Subsidiary
      or its debts, or of a substantial part of its assets, under any Bankruptcy
      Law  or  (ii)  the   appointment  of  a  receiver,   trustee,   custodian,
      sequestrator,  conservator  or  similar  official  for  the  Company,  any
      Guarantor  or any Material  Subsidiary  or for a  substantial  part of its
      assets,  and, in any such case, such proceeding or petition shall continue
      undismissed for 60 days or an order or decree approving or ordering any of
      the foregoing shall be entered; or


                                       18
<PAGE>

            (xi) any order,  judgment  or decree is  entered in any  proceedings
      against the Company or any Guarantor or Material Subsidiary  decreeing the
      dissolution,  split-up  or  divestiture  of assets of the  Company  or any
      Guarantor  or  Material  Subsidiary,  and such  order,  judgment or decree
      remains unstayed and in effect for more than 60 days; or

            (xii)  one or more  judgments  in an  aggregate  amount in excess of
      $10,000,000  is rendered  against the Company or any of the  Guarantors or
      Subsidiaries,  or any  combination  thereof,  and the  same  shall  remain
      undischarged  for a period of 30 consecutive  days during which  execution
      shall not be effectively stayed, or any action shall be legally taken by a
      judgment  creditor to attach or levy upon any assets of the Company or any
      of the Guarantors or Subsidiaries to enforce any such judgment; or

            (xiii)  (A) any Plan  shall  fail to  satisfy  the  minimum  funding
      standards  of ERISA or the Code  for any plan  year or part  thereof  or a
      waiver of such standards or extension of any amortization period is sought
      or  granted  under  section  412 of the  Code,  (B) a notice  of intent to
      terminate any Plan shall have been or is  reasonably  expected to be filed
      with the PBGC or the PBGC shall have  instituted  proceedings  under ERISA
      section 4042 to terminate or appoint a trustee to  administer  any Plan or
      the PBGC shall have  notified  the Company or any ERISA  Affiliate  that a
      Plan may become a subject of such  proceedings,  (C) the aggregate "amount
      of  unfunded   benefit   liabilities"   (within  the  meaning  of  section
      4001(a)(18) of ERISA) under all Plans, determined in accordance with Title
      IV of ERISA, shall exceed $10,000,000 in respect of any single fiscal year
      or $25,000,000 in the aggregate, (D) the Company, a Guarantor or any ERISA
      Affiliate  shall have  incurred  or is  reasonably  expected  to incur any
      liability  pursuant to Title I or IV of ERISA or the penalty or excise tax
      provisions  of the  Code  relating  to  employee  benefit  plans,  (E) the
      Company,   a  Guarantor  or  any  ERISA   Affiliate   withdraws  from  any
      Multiemployer  Plan,  or (F) the Company,  a Guarantor  or any  Subsidiary
      establishes  or amends any employee  welfare  benefit  plan that  provides
      post-employment  welfare  benefits  in a manner  that would  increase  the
      liability of the Company,  a Guarantor or any Subsidiary  thereunder;  and
      any  such  event or  events  described  in the  foregoing  clauses  either
      individually  or  together  with any other  such  event or  events,  could
      reasonably be expected to result in liability of the Company,  a Guarantor
      and  any  of  the  Subsidiaries  in  an  aggregate  amount  exceeding  (y)
      $10,000,000 in any fiscal year or (z) $25,000,000 in the aggregate; or

            (xiv)  the AI  Guaranty  Agreement  shall  cease to be,  or shall be
      asserted by the  Company or any  Guarantor  not to be, a legal,  valid and
      binding obligation of each Guarantor; or

            (xv) a Change in Control shall occur;

then (a) if such event is an Event of Default specified in clause (ix) or (x) of
this  Paragraph 7A with  respect to the  Guarantors  or the Company,  all of the
Notes at the time outstanding  shall  automatically  become  immediately due and
payable,  together  with  interest  accrued  thereon  and the  Yield-Maintenance
Amount, if any, with respect to each Note, without presentment, demand,


                                       19
<PAGE>

protest or notice of any kind,  all of which are hereby  waived by the  Company,
and (b) with respect to any other event  constituting  an Event of Default,  the
Required  Holder(s)  may at its or their  option,  by notice in  writing  to the
Company, declare all of the Notes to be, and all of the Notes shall thereupon be
and become,  immediately due and payable  together with interest accrued thereon
and together  with the  Yield-Maintenance  Amount,  if any, with respect to each
Note, without presentment,  demand,  protest or other notice of any kind, all of
which are hereby waived by the Company.

The Company  acknowledges,  and the parties hereto agree,  that each holder of a
Note has the right to maintain its  investment in the Notes free from  repayment
by the  Company  (except  as  herein  specifically  provided  for)  and that the
provision  for  payment of the  Yield-Maintenance  Amount by the  Company in the
event that the Notes are prepaid or are  accelerated  as a result of an Event of
Default,  is intended to provide  compensation for the deprivation of such right
under such circumstances.

      7B. Rescission of Acceleration.  At any time after any or all of the Notes
shall have been declared  immediately due and payable  pursuant to Paragraph 7A,
the Required  Holder(s)  may, by notice in writing to the  Company,  rescind and
annul such  declaration and its  consequences if (i) the Company shall have paid
all  overdue  interest  on the Notes,  the  principal  of and  Yield-Maintenance
Amount,  if any,  payable  with  respect  to any Notes  which  have  become  due
otherwise  than by reason of such  declaration,  and  interest  on such  overdue
interest  and  overdue  principal  and  Yield-Maintenance  Amount  at  the  rate
specified in the Notes,  (ii) the Company  shall not have paid any amounts which
have  become  due  solely  by reason of such  declaration,  (iii) all  Events of
Default and Defaults,  other than  non-payment  of amounts which have become due
solely by reason of such  declaration,  shall have been cured or waived pursuant
to Paragraph 12C, and (iv) no judgment or decree shall have been entered for the
payment of any amounts  due  pursuant  to the Notes or this  Agreement.  No such
rescission  or  annulment  shall  extend to or affect  any  subsequent  Event of
Default or Default or impair any right arising therefrom.

      7C.  Notice of  Acceleration  or  Rescission.  Whenever  any Note shall be
declared  immediately  due and  payable  pursuant  to  Paragraph  7A or any such
declaration  shall be  rescinded  and  annulled  pursuant to  Paragraph  7B, the
Company shall  forthwith  give written notice thereof to the holder of each Note
at the time outstanding.

      7D. Other Remedies.  If any Event of Default or Default shall occur and be
continuing, the holder of any Note may proceed to protect and enforce its rights
under this Agreement and such Note by exercising  such remedies as are available
to such holder in respect thereof under applicable law, either by suit in equity
or by action at law, or both,  whether for specific  performance of any covenant
or other agreement  contained in this Agreement or in aid of the exercise of any
power granted in this Agreement.  No remedy conferred in this Agreement upon the
holder of any Note is intended to be exclusive of any other remedy, and each and
every such remedy  shall be  cumulative  and shall be in addition to every other
remedy conferred  herein or now or hereafter  existing at law or in equity or by
statute or otherwise.


                                       20
<PAGE>

      8. REPRESENTATIONS,  COVENANTS AND WARRANTIES.  The Company and Guarantors
represent, covenant and warrant as follows:

      8A. Organization;  Authorization;  Enforceability. The Company and each of
the Subsidiaries is duly organized,  validly existing and in good standing under
the laws of the  jurisdiction of its  organization,  has all requisite power and
authority  to carry on its  business  as now  conducted  and,  except  where the
failure to do so,  individually  or in the  aggregate,  could not  reasonably be
expected to result in a Material  Adverse  Effect,  is qualified to do business,
and is in good  standing,  in every  jurisdiction  where such  qualification  is
required.  The Transactions to be entered into by the Company and the Guarantors
and are within their  respective  corporate powers and have been duly authorized
by all necessary corporate and, if required,  stockholder action. This Agreement
has been duly  executed  and  delivered  by the Company and the  Guarantors  and
constitutes,  and each other  Transaction  Document  to which the Company or any
Guarantor is to be a party,  when  executed and  delivered by such Person,  will
constitute,  a legal,  valid  and  binding  obligation  of the  Company  or such
Guarantor, as the case may be, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency,  reorganization,  moratorium or other laws
affecting  creditors'  rights  generally  and subject to general  principles  of
equity, regardless of whether considered in a proceeding in equity or at law.

      8B.  Financial  Statements.  The Company has  heretofore  furnished to the
Purchasers its  consolidated  balance sheet and  statements of income,  retained
earnings  and cash flows (i) as of and for the fiscal  year ended  December  31,
2004, reported on by PricewaterhouseCoopers LLP, independent public accountants,
and (ii) as of and for the fiscal  quarters  and the portions of the fiscal year
ended  March  31,  2005 and June 30,  2005,  certified  by its  chief  financial
officer. Such financial statements present fairly, in all material respects, the
financial  position and results of operations  and cash flows of the Company and
its  Consolidated  Subsidiaries  as of  such  dates  and  for  such  periods  in
accordance with GAAP,  subject to year-end audit  adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii) above. Except
as described in the  Company's  Quarterly  Reports on Form 10-Q for the quarters
ended March 31, 2005 and June 30, 2005, there has been no event,  development or
circumstance  that has had or could  reasonably  be  expected to have a Material
Adverse Effect since December 31, 2004.

      8C.  Actions  Pending.  Except as  disclosed  on Schedule 8C, there are no
actions,  suits or  proceedings  by or before  any  arbitrator  or  Governmental
Authority  pending  against  or, to the  knowledge  of the  Company,  threatened
against or  affecting  the  Company or any of the  Subsidiaries  (i) as to which
there is a  reasonable  possibility  of an adverse  determination  and that,  if
adversely  determined,  could  reasonably  be expected,  individually  or in the
aggregate,  to result in a Material  Adverse  Effect or (ii) that involve any of
the Transaction Documents or the transactions contemplated thereby.

      8D. Outstanding Indebtedness. Neither the Company, nor any Subsidiary, has
outstanding any Material  Indebtedness except as set forth in Schedule 6A. There
exists no  default  under  the  provisions  of any  instrument  evidencing  such
Material Indebtedness or of any agreement relating thereto.


                                       21
<PAGE>

      8E. Title to  Properties.  (a) The Company and each  Subsidiary,  has good
title to, or valid leasehold  interests in, all its real and personal properties
and assets  material to its business,  except for minor defects in title that do
not interfere with its ability to conduct its business as currently conducted or
to utilize its properties and assets for their intended purposes. All such owned
properties and assets, and all such leasehold  interests,  are free and clear of
Liens, other than Liens expressly permitted under Paragraph 6B.

      (b) The  Company and each  Subsidiary,  owns,  or is licensed to use,  all
trademarks,  tradenames,  copyrights,  patents and other  intellectual  property
material to its business,  and the use thereof by the Company and  Subsidiaries,
does not  infringe  upon the  rights of any other  Person,  except  for any such
infringements  that,  individually or in the aggregate,  could not reasonably be
expected to result in a Material Adverse Effect.

      8F. Taxes.  The Company and each  Subsidiary has timely filed or caused to
be filed all Tax returns and reports required to have been filed and has paid or
caused to be paid all Taxes  required  to have been paid by it,  except  (a) any
Taxes that are being contested in good faith by appropriate  proceedings and for
which the Company or such Subsidiary, as applicable,  has set aside on its books
adequate  reserves  or (b) to the  extent  that the  failure  to do so could not
reasonably be expected to result in a Material Adverse Effect.

      8G. Conflicting Agreements and Other Matters. Neither the Company, nor any
Subsidiary, is a party to any contract or agreement or subject to any charter or
other corporate restriction which materially and adversely affects its business,
property or assets, or financial  condition.  Neither the execution nor delivery
of this Agreement or any other Transaction Document, nor the offering,  issuance
and sale of the Notes,  nor  fulfillment  of nor  compliance  with the terms and
provisions hereof and of the Notes and other Transaction Documents will conflict
with,  or result in a breach  of the  terms,  conditions  or  provisions  of, or
constitute  a default  under,  or result in any  violation  of, or result in the
creation of any Lien upon any of the  properties  or assets of the Company,  any
Guarantor  or any other  Subsidiary,  pursuant to, the charter or by-laws of the
Company,  any Guarantor or any other Subsidiary,  any award of any arbitrator or
any agreement  (including any agreement with stockholders),  instrument,  order,
judgment, decree, statute, law, rule or regulation to which any the Company, any
Guarantor  or any other  Subsidiary  is subject.  Neither the  Company,  nor any
Subsidiary,  is a party to, or otherwise subject to any provision  contained in,
any  instrument  evidencing  Indebtedness  of the Company,  any Guarantor or any
other  Subsidiary,  any  agreement  relating  thereto or any other  contract  or
agreement  (including  its  charter)  which  limits the amount of, or  otherwise
imposes  restrictions  on the incurring of,  Indebtedness  of the Company or any
Guarantor of the type to be  evidenced by the Notes,  except as set forth in the
agreements listed in Schedule 8G attached hereto.

      8H. Offering of Notes. None of the Company, or any Guarantor, or any agent
acting on any of their behalf has, directly or indirectly,  offered the Notes or
any similar  security of the Company or any  Guarantor for sale to, or solicited
any  offers to buy the  Notes or any  similar  security  of the  Company  or any
Guarantor from, or otherwise approached or negotiated with respect thereto with,
any Person other than the Purchaser(s), and none of the Company or any Guarantor
or any agent  acting on any of their  behalf  has taken or will take any  action
which


                                       22
<PAGE>

would  subject the issuance or sale of the Notes to the  provisions of Section 5
of the  Securities Act or to the provisions of any securities or Blue Sky law of
any applicable jurisdiction.

      8I. Use of Proceeds.  The proceeds from the sale of the Notes will be used
by the Company to refinance outstanding  indebtedness under the Revolving Credit
Agreement and for general corporate  purposes.  No part of the proceeds from the
sale of the  Notes  hereunder  will be used,  directly  or  indirectly,  for the
purpose of buying or carrying any margin stock,  except in  compliance  with the
provisions  of  applicable  law,  or for the  purpose of buying or  carrying  or
trading in any securities under such  circumstances as to involve the Company in
a violation of  Regulation  X of said Board (12 CFR 224).  Margin stock does not
and  will  not at any  time  constitute  more  than  25%  of  the  value  of the
consolidated  assets  of the  Company  and  its  Subsidiaries.  As  used in this
Section, the terms "margin stock" and "purpose of buying or carrying" shall have
the meanings assigned to them in said Regulation U.

      8J. ERISA. No accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code),  whether or not waived,  exists with respect
to any Plan (other than a Multiemployer Plan). No liability to the PBGC has been
or is expected by the Company or any ERISA Affiliate to be incurred with respect
to any Plan (other than a Multiemployer Plan) by the Company,  any Subsidiary or
any ERISA  Affiliate  which is or would be  materially  adverse to the business,
condition (financial or otherwise) or operations of the Company and Subsidiaries
taken as a whole.  None of the Company,  any Subsidiary,  or any ERISA Affiliate
has incurred or presently expects to incur any withdrawal  liability under Title
IV of  ERISA  with  respect  to any  Multiemployer  Plan  which  is or  would be
materially  adverse to the  business,  condition  (financial  or  otherwise)  or
operations of the Company and  Subsidiaries  taken as a whole. The execution and
delivery of this Agreement and the issuance and sale of the Notes will be exempt
from, or will not involve any transaction  which is subject to, the prohibitions
of section 406 of ERISA and will not involve any  transaction in connection with
which a penalty could be imposed under section 502(i) of ERISA or a tax could be
imposed pursuant to section 4975 of the Code. The  representation by the Company
and  Guarantors  in the next  preceding  sentence is made in  reliance  upon and
subject to the accuracy of the representation in Paragraph 9B.

      8K.   Governmental   Consent.   Neither  the  nature  of  the  Company  or
Subsidiaries,  nor any of their  respective  businesses or  properties,  nor any
relationship between the Company or Subsidiaries,  and any other Person, nor any
circumstance in connection with the offering,  issuance, sale or delivery of the
Notes is such as to require any authorization,  consent, approval,  exemption or
other  action  by or notice to or  filing  with any court or  administrative  or
governmental body (other than routine filings after the Date of Closing with the
Securities  and  Exchange  Commission  and/or  state  Blue Sky  authorities)  in
connection  with the  execution  and delivery of this  Agreement,  the offering,
issuance, sale or delivery of the Notes or fulfillment of or compliance with the
terms and provisions hereof or of the Notes.

      8L. Compliance with Laws. The Company and each Subsidiary is in compliance
with all laws,  regulations and orders of any Governmental  Authority applicable
to  it  or  its  property,  except  where  the  failure  to  be  in  compliance,
individually or in the aggregate,  could not reasonably be expected to result in
a Material Adverse Effect.


                                       23
<PAGE>

      8M. Environmental  Compliance.  Neither the Company nor any Subsidiary (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has  become  subject to any  Environmental  Liability,  (iii) has  received
notice of any claim with respect to any Environmental  Liability,  or (iv) knows
of any basis for any Environmental Liability, except, in each case, for failures
and liabilities that, individually or in the aggregate,  could not reasonably be
expected to result in a Material Adverse Effect.

      8N. Utility Company Status.  None of the Company or the  Subsidiaries is a
(i)  "holding  company," a  "subsidiary  company"  of a "holding  company" or an
"affiliate"  of a "holding  company" or of a "subsidiary  company" of a "holding
company," as such terms are defined in the Public Utility Holding Company Act of
1935, as amended or (ii) public  utility within the meaning of the Federal Power
Act, as amended.

      8O. Investment Company Status.  None of the Company or the Subsidiaries is
an "investment  company" or a company  "controlled"  by an "investment  company"
within the  meaning of the  Investment  Company Act of 1940,  as amended,  or an
"investment  adviser" within the meaning of the Investment Advisers Act of 1940,
as amended.

      8P. Rule 144A.  The Notes are not of the same class as  securities  of the
Company,  if any, listed on a national  securities  exchange,  registered  under
Section  6 of the  Exchange  Act or  quoted  in a  U.S.  automated  inter-dealer
quotation system.

      8Q. Disclosure. Neither this Agreement nor any other document, certificate
or  statement  furnished  to any  Purchaser  by or on behalf of the  Company  or
Guarantors  in  connection  herewith  (as  modified  or  supplemented  by  other
information so furnished to the Purchasers)  contains any untrue  statement of a
material fact or omits to state a material  fact  necessary in order to make the
statements  contained herein and therein,  in light of the  circumstances  under
which they were made, not misleading;  provided, that, with respect to projected
financial  information,  the foregoing shall be limited to a representation  and
warranty  that such  information  was  prepared  in good  faith,  subject to the
express  qualifications  set forth in such  projections,  based upon assumptions
believed by it to be reasonable at the time.

      8R. Foreign Assets Control Regulations, Etc.

      (a) Neither the sale of the Notes by the Company  hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign  assets  control  regulations  of the United States  Treasury
Department  (31  CFR,  Subtitle  B,  Chapter  V,  as  amended)  or any  enabling
legislation or executive order relating thereto.

      (b) None of the Company or  Guarantors,  or any other  Subsidiary (i) is a
Person described or designated in the Specially Designated Nationals and Blocked
Persons  List of the  Office of  Foreign  Assets  Control or in Section 1 of the
Anti-Terrorism Order or (ii) engages in


                                       24
<PAGE>

any dealings or transactions with any such Person.  The Company,  Guarantors and
other  Subsidiaries are in compliance,  in all material  respects,  with the USA
Patriot Act.

      (c) No part of the proceeds from the sale of the Notes  hereunder  will be
used, directly or indirectly,  for any payments to any governmental  official or
employee,  political  party,  official  of  a  political  party,  candidate  for
political  office,  or anyone else acting in an official  capacity,  in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming
in all cases that such Act applies to the Company.

      8S.  Subsidiaries.  Schedule  6G sets forth the name and  jurisdiction  of
organization  of,  and the  ownership  of the  Company  and  Guarantors  in each
Subsidiary,  identifying each such Subsidiary that is a Guarantor,  in each case
as of the Date of Closing.

      8T.  Solvency.  After giving effect to the issuance of the Notes,  (a) the
fair value of the assets of the Company and each Guarantor will exceed its debts
and  liabilities,  subordinated,  contingent or otherwise;  (b) the present fair
saleable value of the property of the Company and each Guarantor will be greater
than the amount that will be required to pay the probable liability of its debts
and other liabilities,  subordinated, contingent or otherwise, as such debts and
other  liabilities  become  absolute  and  matured;  (c) the  Company  and  each
Guarantor  will  be  able  to  pay  its  debts  and  liabilities,  subordinated,
contingent  or  otherwise,  as such debts and  liabilities  become  absolute and
matured; and (d) the Company and each Guarantor will not have unreasonably small
capital  with  which to  conduct  the  business  in which it is  engaged as such
business is now conducted and is proposed to be conducted  following the Date of
Closing.

      9. REPRESENTATIONS OF THE PURCHASER. Each Purchaser represents as follows:

      9A.  Nature of Purchase.  Such  Purchaser is not acquiring the Notes to be
purchased  by it  hereunder  with a view to or for sale in  connection  with any
distribution thereof within the meaning of the Securities Act, provided that the
disposition of its property shall at all times be and remain within its control.
Such Purchaser  acknowledges  that the Notes have not been registered  under the
Securities  Act and may not be offered or sold in the  absence of an  applicable
exemption from the registration requirements of the Securities Act.

      9B.  Source  of  Funds.  At least one of the  following  statements  is an
accurate  representation  as to each source of funds (a  "Source") to be used by
such  Purchaser to pay the  purchase  price of the Notes to be purchased by such
Purchaser hereunder:

            (i) the Source is an  "insurance  company  general  account" (as the
      term is defined  in the United  States  Department  of Labor's  Prohibited
      Transaction  Exemption ("PTE") 95-60) in respect of which the reserves and
      liabilities  (as  defined  by the  annual  statement  for  life  insurance
      companies approved by the National Association of Insurance  Commissioners
      (the "NAIC Annual Statement")) for the general account contract(s) held by
      or on behalf of any employee benefit plan together with the amount of the


                                       25
<PAGE>

      reserves and liabilities for the general account contract(s) held by or on
      behalf of any other employee benefit plans maintained by the same employer
      (or  affiliate  thereof as  defined in PTE 95-60) or by the same  employee
      organization  in the  general  account  do  not  exceed  10% of the  total
      reserves and  liabilities  of the general  account  (exclusive of separate
      account  liabilities)  plus  surplus  as  set  forth  in the  NAIC  Annual
      Statement filed with such Purchaser's state of domicile; or

            (ii) the Source is a separate  account that is maintained  solely in
      connection with such Purchaser's fixed contractual obligations under which
      the amounts  payable,  or credited,  to any employee  benefit plan (or its
      related  trust) that has any interest in such separate  account (or to any
      participant or beneficiary of such plan (including any annuitant)) are not
      affected  in any  manner by the  investment  performance  of the  separate
      account; or

            (iii) the Source is either (a) an insurance  company pooled separate
      account,  within  the  meaning  of  PTE  90-1  or  (b) a  bank  collective
      investment  fund,  within  the  meaning  of the PTE 91-38  and,  except as
      disclosed  by such  Purchaser  to the Company in writing  pursuant to this
      clause (iii), no employee benefit plan or group of plans maintained by the
      same employer or employee organization  beneficially owns more than 10% of
      all  assets  allocated  to such  pooled  separate  account  or  collective
      investment fund; or

            (iv) the Source  constitutes  assets of an "investment fund" (within
      the  meaning of Part V of PTE 84-14 (the "QPAM  Exemption"))  managed by a
      "qualified  professional  asset  manager" or "QPAM" (within the meaning of
      Part V of the QPAM Exemption),  no employee benefit plan's assets that are
      included in such  investment  fund,  when  combined with the assets of all
      other  employee  benefit  plans  established  or  maintained  by the  same
      employer or by an affiliate  (within the meaning of Section V(c)(1) of the
      QPAM Exemption) of such employer or by the same employee  organization and
      managed by such QPAM,  exceed 20% of the total  client  assets  managed by
      such QPAM,  the  conditions of Part I(c) and (g) of the QPAM Exemption are
      satisfied,  neither the QPAM nor a person controlling or controlled by the
      QPAM  (applying  the  definition  of "control" in Section V(e) of the QPAM
      Exemption)  owns a 5% or more interest in the Company and (a) the identity
      of such QPAM and (b) the names of all employee  benefit plans whose assets
      are included in such investment fund have been disclosed to the Company in
      writing pursuant to this clause (iv); or

            (v) the Source constitutes assets of a "plan(s)" (within the meaning
      of  Section  IV of  PTE  96-23  (the  "INHAM  Exemption"))  managed  by an
      "in-house  asset manager" or "INHAM" (within the meaning of Part IV of the
      INHAM  exemption),  the  conditions of Part I(a), (g) and (h) of the INHAM
      Exemption are  satisfied,  neither the INHAM nor a person  controlling  or
      controlled by the INHAM  (applying the  definition of "control" in Section
      IV(h) of the INHAM  Exemption)  owns a 5% or more  interest in the Company
      and (a) the  identity  of such INHAM and (b) the  name(s) of the  employee
      benefit plan(s)


                                       26
<PAGE>

      whose assets  constitute  the Source have been disclosed to the Company in
      writing pursuant to this clause (v); or

            (vi) the Source is a governmental plan; or

            (vii)  the  Source  is one or  more  employee  benefit  plans,  or a
      separate  account or trust fund comprised of one or more employee  benefit
      plans,  each of which  has  been  identified  to the  Company  in  writing
      pursuant to this clause (vii); or

            (viii) the Source does not include  assets of any  employee  benefit
      plan, other than a plan exempt from the coverage of ERISA.

As used in this Paragraph 9B, the terms "employee  benefit plan,"  "governmental
plan," and "separate  account"  shall have the respective  meanings  assigned to
such terms in Section 3 of ERISA.

      10. AI GUARANTY AGREEMENT

      10A. Guarantied  Obligations.  The Guarantors party to this Agreement,  in
consideration  of the execution and delivery of this  Agreement and the purchase
of the Notes by the Purchasers, hereby irrevocably, unconditionally, absolutely,
jointly and severally guarantee,  on a continuing basis, to each holder of Notes
as and for such Guarantor's own debt,  until final and  indefeasible  payment in
cash has been made, the due and punctual payment by the Company of the principal
of, and interest, and the Yield-Maintenance Amount (if any) on, the Notes at any
time  outstanding and the due and punctual payment of all other amounts payable,
and all other  indebtedness  owing,  by the  Company to the holders of the Notes
under  this  Agreement  and the  Notes,  in each case when and as the same shall
become due and payable,  whether at maturity,  pursuant to mandatory or optional
prepayment,  by acceleration or otherwise,  all in accordance with the terms and
provisions  hereof and thereof;  it being the intent of the Guarantors  that the
obligations  guaranteed  by the  guaranty  set forth in this  Paragraph  10A are
referred  to in  this  Paragraph  10 as the  "Guarantied  Obligations"  and  the
guaranty  thereof  set  forth  in  this  Paragraph  10A is  referred  to in this
Agreement, together with any AI Guarantor Joinder Agreement, as the "AI Guaranty
Agreement".

      10B.  Payments  and  Performance.  In the event that the Company  fails to
make, on or before the due date thereof, any payment to be made of any principal
amount of, or  interest  or  Yield-Maintenance  Amount on, or in respect of, the
Notes or of any other amounts due to any holder of Notes under the Notes or this
Agreement,  after  giving  effect  to  any  applicable  grace  periods  or  cure
provisions or waivers or amendments,  each Guarantor shall cause forthwith to be
paid the moneys in respect of which such failure has occurred in accordance with
the terms and provisions of this Agreement and the Notes.  In furtherance of the
foregoing,  if any or all  the  Notes  have  been  accelerated  as  provided  in
Paragraph  7A (and such  acceleration  has not been  rescinded  by action of the
Required  Holders),  the  Guarantied  Obligations in respect of such Notes shall
forthwith  become due and  payable  without  notice,  regardless  of whether the
acceleration  of such  Notes  shall  be  stayed,  enjoined,  delayed  or  deemed
ineffective. Nothing


                                       27
<PAGE>

shall  discharge  or satisfy  the  obligations  of the  Guarantors  under the AI
Guaranty  Agreement except the full,  final and indefeasible  payment in cash of
the Guarantied Obligations.

      10C. Releases.  Each of the Guarantors consent and agree that, without any
notice  whatsoever  to or by the  Guarantors,  except with respect to any action
(but not any failure to act) referred to in clauses (i), (ii) and (iv) below (it
being  understood  that the  Guarantors  shall be deemed  to have  notice of any
matter as to which the Company has knowledge), and without impairing, releasing,
abating, deferring, suspending, reducing, terminating or otherwise affecting the
obligations  of the  Guarantors  hereunder,  each holder of Notes,  by action or
inaction, may:

            (i) compromise or settle,  renew or extend the period of duration or
the time for the payment,  or discharge the performance of, or may refuse to, or
otherwise not, enforce, or may, be action or inaction, release all or any one or
more  parties  to, any one or more of the Notes,  this  Agreement,  or any other
guaranty or agreement or instrument related thereto or hereto;

            (ii) assign,  sell or transfer,  or otherwise dispose of, any one or
more of the Notes;

            (iii) grant waivers,  extensions,  consents and other indulgences of
any kind  whatsoever  to the Company or any Guarantor or any other Person liable
in any manner in respect of all or any part of the Guarantied Obligations;

            (iv) amend, modify or supplement in any manner whatsoever and at any
time (or from time to time) any one or more of the Notes, this Agreement, or any
other guaranty or any agreement or instrument related thereto or hereto;

            (v)  release  or  substitute  any one or more  of the  endorsers  or
guarantors of the Guarantied Obligations whether parties hereto or not; and

            (vi) sell, exchange,  release,  accept,  surrender or enforce rights
in, or fail to obtain  or  perfect  or to  maintain,  or caused to be  obtained,
perfected or maintained,  the perfection of any security  interest or other Lien
on, by action or  inaction,  any  property  at any time  pledged  or  granted as
security in respect of the Guarantied Obligations, whether so pledged or granted
by the Company, a Guarantor or any other Person.

The  Guarantors  hereby  ratify and confirm any such  action  specified  in this
Paragraph 10C and agree that the same shall be binding upon each Guarantor.  The
Guarantors hereby waive any and all defenses, counterclaims or offsets which the
Guarantors might or could have by reason thereof.

      10D.  Waivers.  To the  fullest  extent  permitted  by  law,  each  of the
Guarantors hereby waives:

            (i) notice of acceptance of this Agreement;


                                       28
<PAGE>

            (ii) notice of any  purchase or  acceptance  of the Notes under this
Agreement,  or the creation,  existence or  acquisition of any of the Guarantied
Obligations,  subject  to any such  Guarantor's  right to make  inquiry  of each
holder of Notes to ascertain  the amount of the  Guarantied  Obligations  at any
reasonable time;

            (iii) notice of the amount of the Guarantied Obligations, subject to
any  Guarantor's  right to make inquiry of each holder of Notes to ascertain the
amount of the Guarantied Obligations at any reasonable time;

            (iv)  notice of adverse  change in the  financial  condition  of the
Company or any Guarantor or any other fact that might  increase the Company's or
such Guarantor's risk hereunder;

            (v) notice of presentment for payment,  demand,  protest, and notice
thereof as to the Notes or any other instrument;

            (vi) all other  notices  and  demands  to which the  Company  or any
Guarantor  might  otherwise  be  entitled  (except  if such  notice or demand is
specifically  otherwise  required to be given to the  Company or such  Guarantor
under this Agreement);

            (vii) the right by  statute  or  otherwise  to  require  any or each
holder of Notes to  institute  suit  against the Company or any  Guarantor or to
exhaust  the rights and  remedies  of any or each  holder of Notes  against  the
Company or any Guarantor,  such Guarantor being bound to the payment of each and
all Guarantied Obligations, whether now existing or hereafter accruing, as fully
as if such Guarantied Obligations were directly owing to each holder of Notes by
such Guarantor;

            (ix) any  defense  arising  by  reason  of any  disability  or other
defense (other than the defense that the Guarantied  Obligations shall have been
fully,  finally and  indefeasibly  paid) of the Company or any  Guarantor  or by
reason  of the  cessation  from any cause  whatsoever  of the  liability  of the
Company or any Guarantor in respect thereof;

            (x)  any  stay  (except  in  connection  with  a  pending   appeal),
valuation,  appraisal,  redemption or extension law now or at any time hereafter
in force that, but for this waiver,  might be applicable to any sale of Property
of the Company or any Guarantor  made under any judgment,  order or decree based
on this Agreement,  and the Company or such Guarantor covenants that it will not
ant any time insist upon or plead, or in any manner claim or take the benefit or
advantage of any such law; and

            (xi) at all times prior to full, final and  indefeasible  payment of
the Guarantied Obligations,  any claim of any nature arising out of any right of
indemnity, contribution, reimbursement,  indemnification or any similar right or
any claim of  subrogation  (whether  such right or claim arises under  contract,
common law or statutory or civil law (including, without limitation, Section 509
of the United  States  Bankruptcy  Code)  arising in respect of any payment made
under this Agreement or in connection with this  Agreement,  against the Company
or any


                                       29
<PAGE>

Guarantor (including Liens on the property of the Company or any Guarantor),  in
each case whether or not the Company or such  Guarantor at any time shall be the
subject of any proceeding  brought under any Bankruptcy  Law, and the Company or
such  Guarantor  further  agrees that it will not file any claims against either
Company or the estate of either Company in the course of any such  proceeding or
otherwise, and further agrees that each holder of Notes may specifically enforce
the provisions of this clause (xi).

      10E. Marshaling. Each of the Guarantors hereby consent and agree:

            (i) that each  holder  of  Notes,  and each  Person  acting  for the
benefit of one or more of the holders of Notes,  shall be under no obligation to
marshal any assets in favor of the Guarantors or against or in payment of any or
all of the Guarantied Obligations; and

            (ii)  that,  to the  extent  that any  Guarantor  makes a payment or
payments  to any holder of the Notes,  which  payment  or  payments  or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required, for any of the foregoing reasons or for any other reason,
to be repaid or paid over to a custodian,  trustee,  receiver or any other party
under any Bankruptcy Law, other common or civil law, or equitable  cause,  then,
to the extent of such  payment or  repayment,  the  obligation  or part  thereof
intended to be satisfied  thereby  shall be revived and  continued in full force
and effect as if such  payment or payments  had not been made and the  Guarantor
shall be primarily liable for such obligation.

      10F. Immediate  Liability.  The Guarantors agree that the liability of the
Guarantors  in respect of this  Guarantee  shall be  immediate  and shall not be
contingent  upon the exercise or enforcement by any holder of Notes or any other
Person  of  whatever  remedies  such  holder of Notes or other  Person  may have
against  the  Company  or any  Guarantor  or the  enforcement  of  any  Lien  or
realization  upon any  security  such holder of Notes or other Person may at any
time possess.

      10G.  Primary  Obligations.  The AI  Guaranty  Agreement  is a primary and
original  obligation  of  the  Guarantors  and  is an  absolute,  unconditional,
continuing  and  irrevocable  guaranty of payment and shall remain in full force
and effect  without  respect to any action by any holder of Notes  specified  in
Paragraph 10C hereof or any future  changes in  conditions,  including,  without
limitation,  change of law or any invalidity or irregularity with respect to the
issuance or assumption of any obligations  (including,  without limitation,  the
Notes) of or by the Company or any  Guarantor,  or with respect to the execution
and delivery of any agreement (including, without limitation, the Notes and this
Agreement) by the Company or any other Person.

      10H. No Reduction or Defense. The obligations of the Guarantors under this
Agreement,  and the rights of any holder of Notes to enforce such obligations by
any  proceedings,  whether by action at law, suit in equity or otherwise,  shall
not be subject to any reduction, limitation,  impairment or termination, whether
by reason of any claim of any  character  whatsoever  or  otherwise  (other than
payment in full of all amounts owing  hereunder or under the Notes),  including,
with limitation, claims of waiver, release, surrender, alteration or compromise,
and shall not be subject to any defense  (other than any defense  based upon the
irrevocable


                                       30
<PAGE>

payment in full of the obligations of the Company and the Guarantors  under this
Agreement  and the Notes),  set-off,  counterclaim,  recoupment  or  termination
whatsoever.

      Without  limiting the generality of the foregoing,  the obligations of the
Guarantors shall not be discharged or impaired by:

            (i) any default (including, without limitation, any Default or Event
of Default),  failure or delay, willful or otherwise,  in the performance of any
obligations  by the  Company  or any  Guarantor,  or  any  of  their  respective
Subsidiaries or Affiliates;

            (ii) any proceeding of, or involving,  the Company or any Guarantor,
or any of their respective  Subsidiaries or Affiliates under any Bankruptcy Law,
or any merger, consolidation,  reorganization, dissolution, liquidation, sale of
assets or winding up or change in corporate  constitution or corporate  identity
or loss of  corporate  identity  of the Company or any  Guarantor,  or any other
Subsidiary or Affiliate;

            (iii)  any   incapacity  or  lack  of  power,   authority  or  legal
personality  of, or  dissolution  or change in the  directors,  stockholders  or
status of, the Company or any Guarantor, or any other Subsidiary or Affiliate or
any other Person;

            (iv)  impossibility  or illegality of performance on the part of the
Company or any Guarantor under this Agreement or the Notes;

            (v) the invalidity,  irregularity or  unenforceability of the Notes,
this Agreement or any documents referred to therein or herein;

            (vi) in respect of the Company or any  Guarantor,  or any Subsidiary
or  Affiliate,  any  change  of  circumstances,   whether  or  not  foreseen  or
foreseeable,  whether or not imputable to the Company or any  Guarantor,  or any
Subsidiary  or  Affiliate,   or  impossibility  of  performance   through  fire,
explosion,  accident,  labor  disturbance,  floods,  droughts,  embargoes,  wars
(whether or not declared),  terrorist activities,  civil commotions, acts of God
or the public  enemy,  delays or failure of suppliers or carriers,  inability to
obtain materials or any other causes affecting  performance,  or any other force
majeure,  whether or not beyond the control of the Company or any Guarantor,  or
any  Subsidiary  or  Affiliate  and  whether  or not of  the  kind  hereinbefore
specified;

            (vii) any attachment,  claim, demand,  charge, Lien, order, process,
encumbrance or any other happening or event or reason,  similar or dissimilar to
the foregoing,  or any withholding or diminution at the source, by reason of any
taxes, assessments,  expenses,  indebtedness,  obligations or liabilities of any
character,  foreseen or  unforeseen,  and  whether or not valid,  incurred by or
against any Person,  corporation  or entity,  or any claims,  demands,  charges,
Liens or  encumbrances  of any nature,  foreseen or unforeseen,  incurred by any
Person,  or against any sums payable under this Agreement or the Notes,  so that
such sums  would be  rendered  inadequate  or would be  unavailable  to make the
payments herein provided; or


                                       31
<PAGE>

            (viii) any order, judgment, decree, ruling or regulation (whether or
not valid) of any court of any government  authority or agency  thereof,  or any
other action, happening, event or reason whatsoever which shall delay, interfere
with, hinder or prevent,  or in any way adversely affect, the performance by the
Company  or any  Guarantor  of any of their  respective  obligations  under this
Agreement or the Notes, as the case may be.

      10I.  Subordination.  In the event that,  for any reason  whatsoever,  the
Company  now or  hereafter  becomes  indebted or  obligated  to any of the other
Guarantors  in any  manner,  the  Guarantors  agree  that (a) the amount of such
obligation,  interest  thereon if any,  and all other  amounts due with  respect
thereto (collectively,  "Intercompany Obligations"),  shall, at all times during
the existence of an Event of Default,  be  subordinate as to time of payment and
in all other respects to all the Guarantied Obligations; provided however, that,
to the extent such  Intercompany  Obligations  are also  governed by  provisions
under the  "Subsidiary  Guarantee  Agreement"  or  "Indemnity,  Subrogation  and
Contribution  Agreement"  (each,  used  in  this  paragraph  as  defined  in the
Revolving Credit Agreement) they shall be deemed to be excluded from this clause
(a) to the  extent  necessary  to avoid  characterization  of this  clause  as a
prohibited Lien under the terms of the Revolving  Credit  Agreement (but only to
the extent not otherwise permitted thereunder), and (b) the Guarantors shall not
be entitled to enforce or receive  payment  thereof  until all sums then due and
owing to the holders of the Notes in respect of the Guarantied Obligations shall
have been fully,  finally and indefeasibly paid in full in cash, except that the
Guarantors  may  enforce  (and shall  enforce,  at the  request of the  Required
Holders,  and at the Guarantors' expense) any obligations in respect of any such
obligation  owing to the Guarantors  from the Company so long as all proceeds in
respect of any recovery of from such enforcement shall be held by the Guarantors
for its senior  lenders as their  interests  may appear,  to be paid  thereto as
promptly as reasonably  possible.  If any other payment,  other than pursuant to
the immediately  preceding  sentence,  shall have been made to the Guarantors by
the Company in respect of any such  obligation  during any time that an Event of
Default exists and there are Guarantied Obligations outstanding,  the Guarantors
shall hold all such  payments for its senior  lenders as  aforesaid,  to be paid
thereto as promptly as reasonably possible.

      10J.  No   Election.   Each  holder  of  Notes  shall,   individually   or
collectively,  have  the  right  to  seek  recourse  against  any  or all of the
Guarantors to the fullest extent provided for herein for its  obligations  under
this Agreement.  No election to proceed in one form of action or proceeding,  or
against  any party,  or on any  obligation,  shall  constitute  a waiver of such
holder's  right to proceed in any other form of action or  proceeding or against
other  parties  unless such holder of Notes has  expressly  waived such right in
writing.  Specifically, but without limiting the generality of the foregoing, no
action or  proceeding by or on behalf of any holder of Notes against the Company
or any other Person under any document or instrument  evidencing  obligations of
the  Company or any such other  Person to or for the  benefit of such  holder of
Notes  shall  serve to  diminish  the  liability  of the  Guarantors  under this
Agreement except to the extent that such holder of Notes  unconditionally  shall
have realized payment by such action or proceeding.


                                       32
<PAGE>

      10K.  Severability.  Each of the rights and  remedies  granted  under this
Paragraph 10 to each holder of Notes in respect of the Notes held by such holder
may be exercised by such holder without  notice,  or the consent of or any other
action by, any other holder of the Notes.

      10L.  Appropriations.  Until all amounts which may be or become payable by
the the Company  under or in connection  with this  Agreement or the Notes or by
the  Guarantors,  any holder of Notes (on its own behalf or under any trustee or
agent on its behalf) may refrain from applying or enforcing any moneys, security
or rights  held or  received by such holder of Notes (or any trustee or agent on
its behalf) in respect of those  amounts,  or apply and enforce the same in such
manner and order as it sees fit (whether against those amounts or otherwise) and
the  Guarantors  shall not be  entitled  to the  benefit of the same;  provided,
however,  that any payments  received  from the Company,  or the  Guarantors  on
behalf of the Company, will be applied to amounts owing by the Company hereunder
or in respect of the Notes.

      10M. Other Enforcement Rights. Each holder of Notes may proceed to protect
and enforce this Agreement by suit or suits or proceedings in equity,  at law or
in bankruptcy or  insolvency,  and whether for the specific  performance  of any
covenant  or  agreement  contained  herein or in  execution  or aid of any power
herein  granted,  or for the  recovery of judgment  for the  obligations  hereby
guarantied or for the enforcement of any other proper, legal or equitable remedy
available under applicable law.

      10N.  Invalid  Payments.  To the  extent  that any  payment is made to any
holder of Notes in respect of the Guarantied  Obligations  by any Person,  which
payment  or  any  part  thereof  is  subsequently  invalidated,  declared  to be
fraudulent  or  preferential,  set aside or required,  for any of the  foregoing
reasons  or for any other  reason,  to be  repaid  or paid over to a  custodian,
trustee, receiver,  administrative receiver, administrator or any other party or
officer under any Bankruptcy  Law, or any other common or civil law or equitable
cause,  then to the extent of such payment or repayment,  the obligation or part
thereof  intended to be satisfied  shall be revived and  continued in full force
and  effect as if said  payment  had not been made and the  Guarantors  shall be
primarily liable for such obligation.

      10O.  No Waivers or  Election  of  Remedies;  Expenses;  etc. No course of
dealing  and no delay on the part of any  holder of any Note in  exercising  any
right, power or remedy shall operate as a waiver thereof or otherwise  prejudice
such holder's rights, powers or remedies. No right, power or remedy conferred by
this  Agreement  upon any holder of Notes shall be exclusive of any other right,
power or remedy  referred to herein or therein or now or hereafter  available at
law, in equity, by statute or otherwise. Without limiting the obligations of the
Company under this Agreement, the Guarantors will pay to the holder of each Note
on demand all amounts  specified in this  Agreement  and such further  amount as
shall be sufficient to cover all reasonable costs and expenses of such holder of
Notes incurred in any enforcement or collection under this Agreement, including,
without limitation, reasonable attorney's fees, expenses and disbursements.

      10P. Restoration of Rights and Remedies. If any holder of Notes shall have
instituted any proceeding to enforce any right or remedy under this Agreement or
any Note held


                                       33
<PAGE>

by such holder and such proceeding shall have been discontinued or abandoned for
any reason, or shall have been determined  adversely to such holder, then and in
every such case each such holder of Notes, the Company and each Guarantor shall,
except as may be limited or affected by any determination in such proceeding, be
restored  severally and respectively to its respective former position hereunder
and  thereunder,  and thereafter the rights and remedies of such holder of Notes
shall continue as though no such proceeding had been instituted.

      10Q. No Setoff or Counterclaim.  Except as otherwise required by law, each
payment by the Guarantors shall be made without setoff or counterclaim.

      10R. Further Assurances. The Guarantors will cooperate with the holders of
the Notes and execute such  further  instruments  and  documents as the Required
Holders shall reasonably request to carry out, to the reasonable satisfaction of
the Required Holders, the transactions contemplated by this Agreement, the Notes
and the documents and instruments related hereto and thereto.

      10S. Survival.  So long as the Guarantied  Obligations shall not have been
fully  and  finally  performed  and  indefeasibly  paid  in full  in  cash,  the
obligations of the Guarantors under the AI Guaranty  Agreement shall survive the
transfer and payment of any Note and the payment in full of all the Notes.

      10T.  Acknowledgment  of Common  Interests;  etc.  Each of the  Guarantors
acknowledges  and  confirms  that:  they are members of an  affiliated  group of
companies  that includes the Company and other  Guarantors;  the proceeds of the
issue and sale of Notes will be used in part to benefit  the  Guarantors  in the
operation of their  respective  businesses;  and the Company and  Guarantors are
engaged in related  businesses,  and the Company and each  Guarantor will derive
substantial direct and indirect benefits from the issue and sale of Notes.

      10U.  Conversion  of  Currencies.  (a) If, for the  purpose  of  obtaining
judgment  in any court,  it is  necessary  to  convert a sum owing  under the AI
Guaranty Agreement in one currency into another currency, each Guarantor agrees,
to the fullest  extent that it may  effectively do so, that the rate of exchange
used shall be that at which in accordance  with normal  financial  procedures in
the relevant  jurisdiction the first currency could be purchased with such other
currency  on the  Business  Day  immediately  preceding  the day on which  final
judgment is given.

      (b) The  obligations of each Guarantor in respect of any sum due under the
AI  Guaranty  Agreement  or any holder of the  Guarantied  Obligations  or other
obligations owing thereunder (the "Applicable Creditor") shall,  notwithstanding
any judgment in a currency (the "Judgment  Currency") other than the currency in
which such sum is stated to be due  hereunder  (the  "Agreement  Currency"),  be
discharged only to the extent that, on the Business Day following receipt by the
Applicable  Creditor of any sum adjudged to be so due in the Judgment  Currency,
the Applicable  Creditor may in accordance with normal  financial  procedures in
the relevant  jurisdiction  purchase the  Agreement  Currency  with the Judgment
Currency;  if the amount of the Agreement Currency so purchased is less than the
sum originally due to the Applicable  Creditor in the Agreement  Currency,  such
Guarantor agrees, as a separate obligation


                                       34
<PAGE>

and notwithstanding  any judgment,  to indemnify the Applicable Creditor against
such loss.  The  obligations  of the  Guarantors  contained in the Paragraph 10U
shall survive  termination  of the AI Guaranty  Agreement and the payment of all
amounts owing hereunder and thereunder

      11. DEFINITIONS;  ACCOUNTING  MATTERS.  For the purpose of this Agreement,
the terms  defined  in  Paragraphs  11A and 11B (or within the text of any other
paragraph)  shall  have  the  respective  meanings  specified  therein  and  all
accounting  matters shall be subject to  determination  as provided in Paragraph
11C.

      11A. Yield-Maintenance Terms.

      "Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which  commercial  banks in New York City are  required or  authorized  to be
closed.

      "Called  Principal" shall mean, with respect to any Note, the principal of
such Note that is to be prepaid  pursuant  to  Paragraph  4B or has become or is
declared to be  immediately  due and payable  pursuant to  Paragraph  7A, as the
context requires.

      "Discounted Value" shall mean, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining  Scheduled  Payments with
respect to such Called  Principal from their  respective  scheduled due dates to
the Settlement  Date with respect to such Called  Principal,  in accordance with
accepted  financial  practice and at a discount  factor (as converted to reflect
the  periodic  basis on which  interest on the Notes is payable,  if interest is
payable other than on a semi-annual  basis) equal to the Reinvestment Yield with
respect to such Called Principal.

      "Reinvestment  Yield" shall mean, with respect to the Called  Principal of
any Note, 0.50% over the yield to maturity implied by (i) the yields reported as
of 10:00 a.m. (New York City local time) on the Business Day next  preceding the
Settlement  Date with respect to such Called  Principal for actively traded U.S.
Treasury  securities  having a maturity  equal to the Remaining  Average Life of
such Called  Principal as of such Settlement  Date on the display  designated as
"Page PX1" (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),  or if such  yields  shall not be  reported as of such time or the
yields  reported as of such time shall not be  ascertainable,  (ii) the Treasury
Constant  Maturity  Series  yields  reported,  for the latest day for which such
yields  shall have been so reported as of the Business  Day next  preceding  the
Settlement  Date with  respect to such  Called  Principal,  in  Federal  Reserve
Statistical  Release  H.15(519) (or any comparable  successor  publication)  for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond equivalent yields in accordance with accepted  financial
practice and (b) interpolating linearly


                                       35
<PAGE>

between yields reported for various maturities.  The Reinvestment Yield shall be
rounded  to that  number of  decimal  places  as  appears  in the  coupon of the
applicable Note.

      "Remaining  Average Life" shall mean, with respect to the Called Principal
of any Note, the number of years  (calculated to the nearest  one-twelfth  year)
obtained by dividing (i) such Called Principal into (ii) the sum of the products
obtained by  multiplying  (a) each  Remaining  Scheduled  Payment of such Called
Principal (but not of interest  thereon) by (b) the number of years  (calculated
to the nearest  one-twelfth  year) which will elapse between the Settlement Date
with  respect  to such  Called  Principal  and the  scheduled  due  date of such
Remaining Scheduled Payment.

      "Remaining  Scheduled  Payments"  shall mean,  with  respect to the Called
Principal  of any Note,  all  payments of such  Called  Principal  and  interest
thereon that would be due on or after the  Settlement  Date with respect to such
Called  Principal if no payment of such Called  Principal were made prior to its
scheduled due date.

      "Settlement  Date" shall mean, with respect to the Called Principal of any
Note,  the date on which such  Called  Principal  is to be prepaid  pursuant  to
Paragraph  4B or has become or is  declared  to be  immediately  due and payable
pursuant to Paragraph 7A, as the context requires.

      "Yield-Maintenance Amount" shall mean, with respect to any Note, an amount
equal to the excess,  if any, of the Discounted Value of the Called Principal of
such Note over the sum of (i) such Called  Principal plus (ii) interest  accrued
thereon as of (including  interest due on) the  Settlement  Date with respect to
such Called Principal.  The  Yield-Maintenance  Amount shall in no event be less
than zero.

      11B. Other Terms.

      "Adjusted Net Proceeds" in respect of any Pro Rata Prepayment  Event means
the  Net  Proceeds  (as  defined  in  the  Revolving  Credit  Agreement)  of the
associated  Prepayment  Event (as defined in the  Revolving  Credit  Agreement),
actually  required to be applied to a prepayment of  outstanding  Borrowings (as
defined in the Revolving Credit  Agreement) under the Revolving Credit Agreement
pursuant to Section 2.10(c) thereof.

      "Affiliate"  shall mean any Person  directly  or  indirectly  controlling,
controlled  by, or under direct or indirect  common control with, a the Company,
except a Subsidiary.  A Person shall be deemed to control a corporation  if such
Person  possesses,  directly  or  indirectly,  the  power to direct or cause the
direction of the management and policies of such  corporation,  whether  through
the ownership of voting securities,  by contract or otherwise. The status of any
individual  as an officer or director of any Person shall not, in and of itself,
be deemed to make such individual an Affiliate of such Person.

      "Agreement"  shall mean this Note  Agreement  and  Guaranty,  as  amended,
supplemented and in effect from time to time.


                                       36
<PAGE>

      "AI  Guarantor  Joinder   Agreement"  shall  mean  shall  mean  a  Joinder
Agreement,  in the form of Exhibit B hereto,  to be executed by Guarantors added
pursuant to Paragraph 5M hereof.

      "AI Guaranty Agreement" shall have the meaning specified in Paragraph 10A.

      "Bankruptcy  Law" shall have the  meaning  specified  in clause  (viii) of
Paragraph 7A.

      "Capitalized Lease Obligation" 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  required  to be  classified  and
accounted  for as capital  leases on a balance  sheet of such Person under GAAP,
and the  amount of such  obligations  shall be the  capitalized  amount  thereof
determined in accordance with GAAP.

      "Change in Control" shall mean (a) the ownership,  directly or indirectly,
beneficially  or of record,  by any Person or group  (within  the meaning of the
Exchange Act and the rules of the Securities and Exchange Commission  thereunder
as in effect on January 8, 2004) 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 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.

      "Code" shall mean the Internal Revenue Code of 1986, as amended.

      "Competitor"  shall mean any Person which is  primarily  or  substantially
engaged in the paper machine  clothing or high  performance  door  manufacturing
sectors; provided, that a Person which is an Institutional Investor shall not be
deemed to be engaged in such  business  solely by reason of the  ownership  of a
passive  investment  (including  but not limited to the  ownership  of nonvoting
equity  securities)  in any Person  engaged in such  business or the exercise of
rights or  influence  in  connection  with a  workout  of any  troubled  passive
investment in any Person engaged in any such business.

      "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 and (d) all  non-cash  charges
(including any non-cash expenses relating to stock option exercises) during such
period  (provided  that any cash payment made with respect to any such  non-cash
charge


                                       37
<PAGE>

shall be  subtracted  in computing  Consolidated  EBITDA for the period in which
such cash payment is made), and minus, without  duplication,  all non-cash gains
and income for such  period,  all  determined  on a  consolidated  basis for the
Company and its  Subsidiaries in accordance with GAAP;  provided that charges in
connection with  cost-cutting  measures,  which charges are (x) certified to the
Required  Holders by a Financial  Officer of the Company and (y) approved by the
Board of Directors of the Company, to the extent such charges would otherwise be
deducted in determining  Consolidated  EBITDA under this  definition,  shall not
reduce Consolidated EBITDA.

      "Consolidated  Interest  Expense"  shall mean,  for any period,  the gross
interest  expense,  whether  expensed or  capitalized  (including  the  interest
component  in  respect  of Capital  Lease  Obligations),  accrued or paid by the
Company and its  Subsidiaries  during such period,  determined on a consolidated
basis in accordance  with GAAP.  For purposes of the  foregoing,  gross interest
expense shall be determined after giving effect to any net payments  received by
the Company or its Subsidiaries under interest rate protection  agreements,  the
effect of which is required to be reflected in the  Company's  income  statement
under "Interest Expense".

      "Consolidated Net Income" means, for any period, net income or loss of the
Company and its Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP.

      "Consolidated  Subsidiary"  shall mean at any date any Subsidiary or other
entity the accounts of which would be consolidated  with those of the Company in
its consolidated financial statements if such financial statements were prepared
on such date.

      "Consolidated  Tangible Net Worth" shall mean at any date the consolidated
common  shareholders'  equity of the Company and its  Consolidated  Subsidiaries
less their  consolidated  Intangible Assets, all determined as of such date. For
purposes of this definition, "Intangible Assets" means the amount (to the extent
reflected in determining such consolidated common  shareholders'  equity) of (i)
all write-ups (other than write-ups resulting from foreign currency transactions
and  write-ups of assets of a going  concern  business made within twelve months
after the acquisition of such business)  subsequent to September 30, 2003 in the
book value of any asset owned by the Company or a Consolidated Subsidiary,  (ii)
all investments in  unconsolidated  Subsidiaries  and all equity  investments in
Persons which are not Subsidiaries, in each case to the extent that the carrying
value of such  investment on any Company's books exceeds its historical cost and
(iii) all unamortized  debt discount and expense,  unamortized  deferred charges
(but only to the extent that the aggregate amount thereof exceeds  $15,000,000),
goodwill,   patents,   trademarks,   service  marks,  trade  names,  copyrights,
organization or developmental expenses and other intangible assets.

      "Control" shall mean the possession,  directly or indirectly, of the power
to direct or cause the  direction  of the  management  or  policies of a Person,
whether  through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.


                                       38
<PAGE>

      "Default" shall mean any of the events  specified in Paragraph 7A, whether
or not any  requirement  for such event to become an Event of  Default  has been
satisfied.

      "Domestic Subsidiary" means a Subsidiary that is incorporated or organized
in the United  States of America  or any state or other  political  subdivision,
territory or possession thereof.

      "Environmental  Laws"  shall  mean all laws,  rules,  regulations,  codes,
ordinances, permits, licenses, orders, decrees, judgments,  injunctions, notices
or binding  agreements  issued,  promulgated or entered into by any Governmental
Authority,  relating in any way to the environment,  preservation or reclamation
of natural resources, the presence, management, release or threatened release of
any Hazardous Material or to health and safety matters.

      "Environmental   Liability"  shall  mean  any  liability,   contingent  or
otherwise   (including  any  liability  for  damages,   costs  of  environmental
remediation,  fines, penalties or indemnities), of the Company or any Subsidiary
directly  or  indirectly  resulting  from or  based  upon (a)  violation  of any
Environmental Laws, (b) the generation, use, handling, transportation,  storage,
treatment or disposal of any Hazardous Materials,  (c) exposure to any Hazardous
Materials,  (d) the  presence,  release or  threatened  release of any Hazardous
Materials  into  the  environment  or  (e)  any  contract,  agreement  or  other
consensual  arrangement  pursuant to which  liability is assumed or imposed with
respect to any of the foregoing.

      "Environmental  Permits" means any and all permits,  licenses,  approvals,
registrations,  notifications,  exemptions, and any other authorization required
under any Environmental Law.

      "Equity  Interests"  means  any  shares  of  capital  stock,   partnership
interests,  membership  interests  in a limited  liability  company,  beneficial
interests in a trust or other equity  ownership  interests in a Person,  and any
warrants,  options  or  other  rights  to  acquire  any  such  equity  ownership
interests.

      "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

      "ERISA Affiliate" shall mean any corporation which is a member of the same
controlled  group of  corporations  as the Company within the meaning of section
414(b) of the Code, or any trade or business  which is under common control with
the Company within the meaning of section 414(c) of the Code.

      "Event of Default" shall mean any of the events specified in Paragraph 7A,
provided that there has been satisfied any  requirement in connection  with such
event for the giving of notice,  or the lapse of time,  or the  happening of any
further condition, event or act.

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.


                                       39
<PAGE>

      "Financial  Officer"  shall mean,  as to any Person,  the chief  financial
officer, principal accounting officer, treasurer or controller of such Person.

      "Foreign   Subsidiary"   means  any  Subsidiary   other  than  a  Domestic
Subsidiary.

      "GAAP" shall have the meaning set forth in Paragraph 11C.

      "Governmental Authority" shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local,  and any agency,  authority,  instrumentality,  regulatory  body,  court,
central  bank or  other  entity  exercising  executive,  legislative,  judicial,
taxing,  regulatory  or  administrative  powers or functions of or pertaining to
government.

      "Guarantee"  shall  mean,  with  respect to any  Person,  any  obligation,
contingent  or  otherwise,  of such Person  guaranteeing  or having the economic
effect of guaranteeing  any Indebtedness or other obligation of any other Person
(the "primary  Co-Issuer") in any manner,  whether  directly or indirectly,  and
including any obligation of the guarantor,  direct or indirect,  (a) to purchase
or pay (or  advance  or  supply  funds  for the  purchase  or  payment  of) such
Indebtedness  or other  obligation or to purchase (or to advance or supply funds
for the purchase of) any  security for the payment  thereof,  (b) to purchase or
lease property,  securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, or (c) to maintain
working capital,  equity capital or any other financial  statement  condition or
liquidity of the primary  Co-Issuer so as to enable the primary Co-Issuer to pay
such Indebtedness or other obligation;  provided,  that the term Guarantee shall
not include  endorsements  for  collection or deposit in the ordinary  course of
business.

      "Guarantied  Obligations"  shall have the meaning  specified  in Paragraph
10A.

      "Guarantor"  shall  mean  each  of  the  Subsidiaries  party  hereto  as a
guarantor,  and each other  Subsidiary  that  becomes a  Guarantor  pursuant  to
Paragraph 5M.

      "Guaranty  Requirement"  shall mean, at any time, that (a) the AI Guaranty
Agreement  shall have been executed by (i) each  Subsidiary that is or becomes 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 and (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) existing
at such time,  shall have been delivered to the Required Holders and shall be in
full  force and  effect  and (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.


                                       40
<PAGE>

      "Hazardous  Materials" shall mean (i) any material or substance defined as
or included in the  definition of "hazardous  substances,"  "hazardous  wastes,"
"hazardous  material," "toxic substances" or any other formulations  intended to
define, list or classify  substances by reason of their deleterious  properties,
(ii) any oil,  petroleum or petroleum  derived  substance,  (iii) any  flammable
substances or explosives,  (iv) any radioactive  materials,  (v) asbestos in any
form,  (vi)  electrical  equipment  that  contains any oil or  dielectric  fluid
containing  levels  of  polychlorinated  biphenyls  in  excess  of 50 parts  per
million,  (vii) pesticides or (viii) any other chemical,  material or substance,
exposure to which is prohibited, limited or regulated by any governmental agency
or  authority  or which may or could  pose a hazard to the  health and safety of
persons in the vicinity thereof.

      "Hedging Agreement" means any interest rate protection agreement,  foreign
currency  exchange  agreement,  commodity  price  protection  agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

      "Immaterial  Subsidiary" means any Subsidiary (other than any Guarantor or
any Subsidiary  that directly or indirectly owns capital stock of the Company or
any Guarantor)  with respect to which both: (a) the sum of (i) the  consolidated
book value of the assets of such Subsidiary and (ii) the aggregate  consolidated
book value of the assets of each other Subsidiary that has a lower  consolidated
book value than the assets of the Subsidiary  specified in subclause (i) of this
clause  (a) is less than 3.0% of the  aggregate  consolidated  book value of the
total assets of the Company and all the Subsidiaries, in each case determined as
of the last day of the most  recently  ended  fiscal  year for  which  financial
statements are available; and (b) the sum of (i) such Subsidiary's  consolidated
net  income  and  (ii) the  aggregate  consolidated  net  income  of each  other
Subsidiary that has a lower  consolidated net income than that of the Subsidiary
specified in subclause (i) of this clause (b) is less than 3.0% of  Consolidated
Net  Income,  in each case for the most  recently  ended  fiscal  year for which
financial statements are available.

      "Including"  shall mean,  unless the context clearly  requires  otherwise,
"including without limitation".

      "Indebtedness"   shall  mean,   with   respect  to  any  Person,   without
duplication,  (a) all  obligations  of such  Person for  borrowed  money or with
respect to deposits or advances of any kind, (b) all  obligations of such Person
evidenced  by  bonds,  debentures,   notes  or  similar  instruments,   (c)  all
obligations  of such Person  under  conditional  sale or other  title  retention
agreements  relating to property acquired by such Person, (d) all obligations of
such Person in respect of the  deferred  purchase  price of property or services
(excluding current accounts payable and obligations under Hedging Agreements, in
each case incurred in the ordinary course of business),  (e) all Indebtedness of
others secured by (or for which the holder of such  Indebtedness has an existing
right,  contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person,  whether or not the  Indebtedness  secured  thereby has
been assumed,  (f) all Guarantees by such Person of Indebtedness of others,  (g)
all Capitalized  Lease  Obligations of such Person,  (h) all obligations of such
Person as an account  party in  respect  of  letters  of credit  and  letters of
guaranty  and  (i) all  obligations  of  such  Person  in  respect  of  bankers'
acceptances.  The  Indebtedness of any Person shall include the  Indebtedness of
any other entity (including any


                                       41
<PAGE>

partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's  ownership  interest in or other
relationship  with  such  entity,  except  to  the  extent  the  terms  of  such
Indebtedness provide that such Person is not liable therefor.

      "Indemnity,   Subrogation  and  Contribution   Agreement"  shall  mean  an
Indemnity,  Subrogation and Contribution Agreement  substantially in the form of
Exhibit D hereto.

      "Institutional  Investor"  shall mean any insurance  company,  commercial,
investment or merchant bank, finance company,  mutual fund,  registered money or
asset manager, savings and loan association, credit union, registered investment
advisor, pension fund, investment company, licensed broker or dealer, "qualified
institutional  buyer" (as such term is defined under Rule 144A promulgated under
the  Securities  Act, or any successor  law, rule or  regulation) or "accredited
investor"  (as such term is defined  under  Regulation D  promulgated  under the
Securities Act, or any successor law, rule or regulation).

      "Leverage  Ratio" shall mean, 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  purposes  of this  definition,  if any Person  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
had occurred at the beginning of such period).

      "Lien" shall mean,  with respect to any asset,  (a) any mortgage,  deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such  asset,  (b) the  interest  of a  vendor  or a  lessor  under  any
conditional sale agreement,  capital lease or title retention agreement relating
to such asset, and (c) in the case of securities,  any purchase option,  call or
similar right of a third party with respect to such securities.

      "Material  Adverse Effect" shall mean a material adverse effect on (a) the
business, operations,  property, condition, financial or otherwise, or prospects
of the Company and the  Subsidiaries  taken as a whole,  or (b) the  validity or
enforceability of any of the Transaction Documents or the rights and remedies of
the holders of the Notes thereunder.

      "Material  Indebtedness"  means  Indebtedness  (other than the obligations
under this Agreement,  the Notes or the Guaranty  Agreement),  or obligations in
respect of one or more Hedging Agreements,  of any one or more of the Company or
Subsidiaries  in  an  aggregate  principal  amount  exceeding  $10,000,000.  For
purposes of determining  Material  Indebtedness,  the "principal  amount" of the
obligations of the Company or any Subsidiary in respect of any Hedging Agreement
at any time shall be the maximum  aggregate amount (giving effect to any netting
agreements  provided  for in such  Hedging  Agreement)  that the Company or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.

      "Material Subsidiary" shall mean each Subsidiary that is not an Immaterial
Subsidiary.


                                       42
<PAGE>

      "Multiemployer  Plan" shall mean any Plan which is a "multiemployer  plan"
(as such term is defined in section 4001(a)(3) of ERISA).

      "Officer's Certificate" shall mean a certificate signed in the name of the
Company  or the  applicable  Guarantor,  in each  case by its  respective  Chief
Executive Officer, President, Chief Financial Officer or Treasurer.

      "PBGC"  shall  mean  the  Pension  Benefit  Guaranty  Corporation,  or any
successor or replacement entity thereto under ERISA.

      "Permitted Investments" shall mean:

      (a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such  obligations  are backed by the full faith and
credit of the United States of America),  in each case maturing  within one year
from the date of acquisition thereof;

      (b) investments in commercial paper maturing within 270 days from the date
of  acquisition  thereof and having,  at such date of  acquisition,  the highest
credit  rating  obtainable  from  Standard  & Poor's or from  Moody's  Investors
Service, Inc.;

      (c) investments in certificates of deposit,  banker's acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed  by or placed  with,  and money  market  deposit  accounts  issued or
offered by, any domestic  office of any commercial bank organized under the laws
of the  United  States of  America  or any State  thereof  which has a  combined
capital and surplus and undivided profits of not less than $500,000,000;

      (d) fully  collateralized  repurchase  agreements  with a term of not more
than 30 days for securities  described in clause (a) above and entered into with
a financial  institution  satisfying the criteria described in clause (c) above;
and

      (e) shares of money market mutual or similar funds that invest exclusively
in assets satisfying the requirements of clauses (a) through (d) above;

provided that, in the case of any investment by a Foreign Subsidiary, "Permitted
Investments" shall also include:  (i) direct obligations of the sovereign nation
(or any agency  thereof) in which such Foreign  Subsidiary  is organized  and is
conducting business or obligations fully and unconditionally  guaranteed by such
sovereign  nation  (or any agency  thereof),  (ii)  investments  of the type and
maturity  described in clauses (a) through (d) above of foreign obligors,  which
investments or obligors (or the parents of such obligors) have ratings described
in such clauses or equivalent  ratings from  comparable  foreign rating agencies
and  (iii)  shares  of  money  market  mutual  or  similar  funds  which  invest
exclusively in assets  otherwise  satisfying the requirements of this definition
(including this proviso).


                                       43
<PAGE>

      "Permitted  Shareholders"  means (a) J.  Spencer  Standish,  (b) any of J.
Spencer  Standish's  descendants  or  legatees,   (c)  any  executor,   personal
representative  or spouse of J. Spencer Standish or any of his descendants,  (d)
any corporation, trust or other entity holding voting stock of the Company as to
which one or more of the Persons identified in the foregoing clauses (a) through
(c) have Control, (e) any trust as to which Persons so identified in clauses (a)
through (c) above hold at least 85.0% of the  beneficial  interest in the income
and  principal  of the  trust  disregarding  the  interests  of  the  contingent
remaindermen  and (f) any  employee  stock  ownership  plan for the  benefit  of
employees of the Company.

      "Person"  shall mean and include an  individual,  a  partnership,  a joint
venture, a corporation,  a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.

      "Plan" shall mean any  "employee  pension  benefit  plan" (as such term is
defined in section 3 of ERISA) which is or has been  established  or maintained,
or to which  contributions are or have been made, by the Company, a Guarantor or
any ERISA Affiliate.

      "Preferred  Stock" shall mean any class of capital  stock of a corporation
that is preferred  over any other class of capital stock of such  corporation as
to the payment of  dividends  or the payment of any amount upon  liquidation  or
dissolution of such corporation.

      "Pro Rata Prepayment" shall mean a prepayment of the Notes in an aggregate
amount  equal to the  product of the  Adjusted  Net  Proceeds  in respect of the
applicable  Pro  Rata  Prepayment  Event,  multiplied  by a  fraction,  (x)  the
numerator of which is the aggregate  outstanding  principal balance of the Notes
on the date of such Pro Rata  Prepayment  Event and (y) the denominator of which
is such  numerator plus the aggregate  Commitments  (as defined in the Revolving
Credit  Agreement) of the Lenders under the Revolving  Credit  Agreement on such
date immediately prior to giving effect to such Pro Rata Prepayment Event.

      "Pro Rata Prepayment Event" shall mean the making of all or any portion of
a prepayment  pursuant to the terms of Section  2.10(c) of the Revolving  Credit
Agreement (or any successor or equivalent provision).

      "Proposed  Prepayment Date" shall have the meaning  specified in Paragraph
4D.

      "Purchaser"  shall  mean  each  Person  named  on the  Purchaser  Schedule
attached hereto.

      "Receivables"  means  all  accounts,   contract  rights,   chattel  paper,
instruments,  general  intangibles  and  other  assets  arising  out  of  or  in
connection with the sale or lease of goods or the rendering of services.

      "Required  Holder(s)" shall mean the holder or holders of more than 50% of
the aggregate principal amount of the Notes from time to time outstanding.


                                       44
<PAGE>

      "Restricted  Payment"  shall  mean  any  dividend  or  other  distribution
(whether  in cash,  securities  or other  property)  with  respect to any Equity
Interests of the Company,  or any payment (whether in cash,  securities or other
property),  including  any sinking  fund or similar  deposit,  on account of the
purchase, redemption,  retirement,  acquisition,  cancellation or termination of
any such Equity  Interests or any option,  warrant or other right to acquire any
such Equity  Interests;  provided that none of (a) any dividend or  distribution
consisting  solely of common  stock of the  Company,  (b) the payment of cash in
lieu of fractional  shares in connection  with any such common stock dividend or
distribution  or (c) the  acceptance of shares of common stock of the Company in
payment of the exercise price of any option to acquire any such shares of common
stock of the Company shall constitute a Restricted Payment.

      "Revolving Credit  Agreement" shall mean that certain Five-Year  Revolving
Credit  Facility  Agreement  dated as of January 8, 2004 among the Company,  the
Borrowing  Subsidiaries,  the lenders party thereto and JP Morgan Chase Bank, as
administrative agent (and any replacement or successor revolving credit facility
permitting  aggregate borrowings or other credit extensions in an amount of $100
million or more,  in each case, as the same may be amended or modified from time
to time).

      "Securities Act" shall mean the Securities Act of 1933, as amended.

      "Significant  Holder" shall mean (i) each  Purchaser,  so long as it shall
hold (or be committed  under this  Agreement to purchase)  any Note, or (ii) any
other holder of at least 10% of the aggregate principal amount of the Notes from
time to time outstanding.

      "subsidiary"  shall mean, with respect to any Person (the "parent") at any
date, any corporation,  limited liability company,  partnership,  association or
other  entity the  accounts  of which  would be  consolidated  with those of the
parent in the  parent's  consolidated  financial  statements  if such  financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership,  association or other
entity (a) of which securities or other ownership  interests  representing  more
than 50% of the equity or more than 50% of the ordinary  voting power or, in the
case of a partnership,  more than 50% of the general partnership  interests are,
as of such date,  owned,  controlled  or held,  or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.

      "Subsidiary" shall mean any subsidiary of the Company.

      "Subsidiary  Guarantor"  shall mean any  subsidiary of the Company that is
also a Guarantor.

      "Taxes" shall mean any and all present or future taxes,  levies,  imposts,
duties,  deductions,   charges  or  withholdings  imposed  by  any  Governmental
Authority.

      "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


                                       45
<PAGE>

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  Consolidated  Subsidiary)  for
Receivables  sold, which Receivables  remain  uncollected at such time; less (x)
the sum of all cash and cash  equivalents  (as  determined  in  accordance  with
GAAP),  (y) the cash  surrender  value of life  insurance  policies  naming  the
Company as beneficiary  (as determined in accordance with GAAP) and (z) the fair
market  value  of  any  Marketable  Securities  held  by  the  Company  and  the
Consolidated  Subsidiaries.  For the  purposes of this  definition,  "Marketable
Securities"  means any debt or  equity  securities  for which an active  trading
market exists and price quotations are available.

      "Transaction  Documents" means this Agreement,  the AI Guaranty Agreement,
the Notes, and the Indemnity, Subrogation and Contribution Agreement.

      "Transferee"  shall mean any direct or indirect  transferee  of all or any
part of any Note purchased under this Agreement.

      "USA Patriot Act" shall mean United States Public Law 107-56,  Uniting and
Strengthening  America by Providing  Appropriate Tools Required to Intercept and
Obstruct  Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the  rules  and  regulations  promulgated  thereunder  from  time to time in
effect.

      "Voting Stock" shall mean, with respect to any corporation,  any shares of
stock  of  such   corporation   whose  holders  are  entitled   under   ordinary
circumstances  to vote  for  the  election  of  directors  of  such  corporation
(irrespective  of whether at the time stock of any other class or classes  shall
have or might have voting power by reason of the happening of any contingency).

      11C.  Accounting  and  Legal  Principles,  Terms and  Determinations.  All
references in this Agreement to "GAAP" shall mean generally accepted  accounting
principles,  as in effect in the United States from time to time;  provided that
if the Company  notifies  the  Required  Holders  that the  Company  requests an
amendment  to any  provision  hereof  to  eliminate  the  effect  of any  change
occurring  after the date  hereof in GAAP or in the  application  thereof on the
operation of such provision (or if the Required  Holders notify the Company that
the  Required  Holders  request an amendment  to any  provision  hereof for such
purpose),  regardless  of whether any such notice is given  before or after such
change  in GAAP or in the  application  thereof,  then such  provision  shall be
interpreted  on the basis of GAAP as in effect and  applied  immediately  before
such  change  shall have  become  effective  until such  notice  shall have been
withdrawn or such provision  amended in accordance  herewith.  Unless  otherwise
specified  herein,  all accounting  terms used herein shall be interpreted,  all
determinations  with respect to accounting  matters hereunder shall be made, and
all unaudited financial  statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance with
GAAP,  applied on a basis  consistent with the most recent audited  consolidated
financial  statements of the Company and its Subsidiaries  delivered pursuant to
Paragraph 5A(i) or (ii) or, if no such  statements  have been so delivered,  the
most recent audited financial  statements referred to in clause (i) of Paragraph
8B. Any reference herein to any specific citation, section or


                                       46
<PAGE>

form of law, statute, rule or regulation shall refer to such new, replacement or
analogous  citation,  section  or  form  should  citation,  section  or  form be
modified, amended or replaced.

      12. MISCELLANEOUS.

      12A.  Note  Payments.  So long as any Purchaser  shall hold any Note,  the
Company   will  make   payments   of   principal   of,   interest   on  and  any
Yield-Maintenance  Amount  payable with respect to such Note,  which comply with
the terms of this Agreement, by wire transfer of immediately available funds for
credit (not later than 12:00 noon,  New York City time, on the date due) to such
Purchaser's  account or accounts as specified in the Purchaser Schedule attached
hereto, or such other account or accounts in the United States as such Purchaser
may designate in writing,  notwithstanding  any contrary  provision herein or in
any Note with  respect to the place of  payment.  Each  Purchaser  agrees  that,
before  disposing of any Note, it will make a notation thereon (or on a schedule
attached thereto) of all principal  payments  previously made thereon and of the
date to which  interest  thereon has been paid. The Company agrees to afford the
benefits of this Paragraph 12A to any Transferee  which shall have made the same
agreement as the Purchasers have made in this Paragraph 12A.

      12B. Expenses.  The Company agrees to pay, and save you and any Transferee
harmless  against  liability  for the payment of, all  reasonable  out-of-pocket
expenses arising in connection with (i) all document  production and duplication
charges and the fees and expenses of one special counsel (and any local counsel)
engaged in connection with any subsequent proposed  modification of, or proposed
consent  under,  this  Agreement  or the  Notes,  whether  or not such  proposed
modification  shall be effected or proposed consent granted (but in either event
only if requested by the Company),  and (ii) the costs and  expenses,  including
attorneys' fees, incurred by you or any Transferee in enforcing any rights under
this Agreement or the Notes. In addition,  with respect to you only, the Company
agrees to pay, and save you harmless  against  liability for the payment of, all
reasonable  out-of-pocket  expenses  incurred  by you in  connection  with  your
responding  to any  subpoena  or other legal  process or informal  investigative
demand issued in connection  with and arising  pursuant to this Agreement or the
transactions  contemplated  hereby or by reason of your having acquired any Note
(but not  including  any general  investigation  or  proceeding  involving  your
investments or activities  generally),  including without limitation  reasonable
costs and expenses  incurred in any  bankruptcy  case.  The  obligations  of the
Company  under this  Paragraph  12B shall  survive  the  transfer of any Note or
portion thereof or interest therein and the payment of any Note.

      12C. Consent to Amendments. This Agreement may be amended, and the Company
may take  any  action  herein  prohibited,  or omit to  perform  any act  herein
required  to be  performed  by them,  if the  Company  shall  obtain the written
consent to such amendment,  action or omission to act, of the Required Holder(s)
except that,  without the written  consent of the holder or holders of all Notes
at the time outstanding,  no amendment to this Agreement shall change the stated
maturity  of any  Note,  or change  the  principal  of,  or the rate,  method of
computation  or time of payment of interest on or any  Yield-Maintenance  Amount
payable with respect to any Note,  or affect the time,  amount or  allocation of
any  prepayments,  or change the proportion of the principal amount of the Notes
required with respect to any consent,  amendment,  waiver or  declaration.  Each
holder of any Note at the time or thereafter outstanding shall be bound by any


                                       47
<PAGE>

consent  authorized by this Paragraph  12C,  whether or not such Note shall have
been marked to indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing between the Company
and the holder of any Note nor any delay in exercising  any rights  hereunder or
under any Note  shall  operate  as a waiver of any  rights of any holder of such
Note. As used herein and in the Notes,  the term "this Agreement" and references
thereto  shall  mean this  Agreement  as it may from time to time be  amended or
supplemented.

      12D. Form,  Registration,  Transfer and Exchange of Notes; Lost Notes. The
Notes are issuable as registered  notes without coupons in  denominations  of at
least  $10,000,000 (and increments of $1,000,000 in excess  thereof),  except as
may be necessary  to (i) reflect any  principal  amount not evenly  divisible by
$1,000,000 or (ii) enable the registration of transfer by a holder of its entire
holding of Notes. The Company shall keep, at the Company's  principal  office, a
register in which the Company shall provide for the registration of Notes and of
transfers of Notes.  Upon surrender for  registration of transfer of any Note at
the principal office of the Company, the Company shall, at its expense,  execute
and  deliver  one or more  new  Notes  of  like  tenor  and of a like  aggregate
principal  amount,  registered in the name of such  transferee  or  transferees;
provided,  however, that Notes shall not be transferred to a Competitor, and the
Company  shall  not be  required  to  re-register  any  transfer  of  Notes to a
Competitor.  At the option of the holder of any Note, such Note may be exchanged
for other  Notes of like tenor and of any  authorized  denominations,  of a like
aggregate  principal  amount,  upon surrender of the Note to be exchanged at the
principal  office of the  Company.  Whenever  any Notes are so  surrendered  for
exchange, the Company shall, at its expense, execute and deliver the Notes which
the holder  making the exchange is entitled to receive.  Every Note  surrendered
for  registration  of  transfer  or  exchange  shall  be  duly  endorsed,  or be
accompanied by a written instrument of transfer duly executed,  by the holder of
such Note or such  holder's  attorney duly  authorized  in writing.  Any Note or
Notes issued in exchange for any Note or upon  transfer  thereof shall carry the
rights to unpaid  interest and interest to accrue which were carried by the Note
so exchanged  or  transferred,  so that neither gain nor loss of interest  shall
result from any such transfer or exchange.  Upon receipt of written  notice from
the holder of any Note of the loss,  theft,  destruction  or  mutilation of such
Note and, in the case of any such loss,  theft or  destruction,  upon receipt of
such  holder's  unsecured  indemnity  agreement,  or in the  case  of  any  such
mutilation  upon surrender and  cancellation of such Note, the Company will make
and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated  Note.  The  Company  shall  give to any  holder  of a Note that is an
Institutional  Investor promptly upon request  therefor,  a complete and correct
copy of the names and addresses of all registered holders of Notes.

      12E. Persons Deemed Owners;  Participations.  Prior to due presentment for
registration of transfers permitted hereunder,  the Company may treat the Person
in whose  name any Note is  registered  as the owner and holder of such Note for
the  purpose  of  receiving  payment  of  principal  of,  interest  on  and  any
Yield-Maintenance  Amount  payable  with  respect to such Note and for all other
purposes whatsoever,  whether or not such Note shall be overdue, and the Company
shall not be  affected  by  notice to the  contrary.  Subject  to the  preceding
sentence,  the holder of any Note may from time to time grant  participations in
such Note to any Person (other than a Competitor)  on such terms and  conditions
as may be determined by such holder in its sole and absolute discretion.


                                       48
<PAGE>

      12F. Survival of  Representations  and Warranties;  Entire Agreement.  All
representations  and  warranties  contained  herein or made in  writing by or on
behalf of the Company in  connection  herewith  shall  survive the execution and
delivery of this  Agreement  and the Notes,  the  transfer by a Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee,  regardless of any  investigation  made at any
time  by or on  behalf  of any  Purchaser  or  any  Transferee.  Subject  to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding  between the  Purchasers  and the Company and  supersede all prior
agreements and understandings relating to the subject matter hereof.

      12G.  Successors and Assigns.  All covenants and other  agreements in this
Agreement  contained by or on behalf of the parties  hereto shall bind and inure
to the benefit of the  respective  successors  and assigns of the parties hereto
(including, without limitation, any Transferee) whether so expressed or not.

      12H. Notices. All written  communications  provided for hereunder shall be
sent by first class mail or nationwide  overnight delivery service (with charges
prepaid) and (i) if to a Purchaser, addressed to it at the address specified for
such  communications in the Purchaser Schedule attached hereto, or at such other
address as such Purchaser  shall have specified to the Company in writing,  (ii)
if to any other  holder  of any Note,  addressed  to such  other  holder at such
address as such other holder shall have  specified to the Company in writing or,
if any such other  holder shall not have so specified an address to the Company,
then  addressed  to such  other  holder in care of the last  holder of such Note
which shall have so  specified  an address to the  Company,  and (iii) if to the
Company,  addressed  to it at c/o Albany  International  Corp.,  1373  Broadway,
Albany, New York 12204,  Attention:  Chief Financial  Officer,  Fax number (518)
447-6575,  or at such other address as the Company  shall have  specified to the
holder of each Note in writing.  Notices under this Paragraph 12H will be deemed
given only when actually received or refused.

      12I. Payments Due on Non-Business Days.  Anything in this Agreement or the
Notes to the contrary  notwithstanding,  any payment of principal of or interest
on any Note that is due on a date other than a Business Day shall be made on the
next  succeeding  Business  Day.  If the date for any payment is extended to the
next succeeding Business Day by reason of the preceding sentence,  the period of
such extension shall not be included in the computation of the interest  payable
on such Business Day.

      12J.  GOVERNING  LAW.  THIS  AGREEMENT  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.

      12K. Consent to Jurisdiction;  Waiver of Immunities.  The Company and each
of the Guarantors  irrevocably submits to the jurisdiction of any New York state
or Federal court sitting in New York in any action or proceeding  arising out of
or relating to this Agreement, and the Company and each of the Guarantors hereby
irrevocably agrees that all claims in respect of such


                                       49
<PAGE>

action or  proceeding  may be heard and  determined in New York state or Federal
Court. The Company and Guarantors each consents to process being served by or on
behalf of any holder of Notes in any suit,  action or  proceeding  of the nature
referred to in this  Paragraph  12K by mailing a copy thereof by  registered  or
certified mail (or any  substantially  similar form of mail),  postage  prepaid,
return receipt requested,  to it at its address specified in Paragraph 12H or at
such other address of which such holder shall then have been  notified  pursuant
to said  paragraph.  The Company and each Guarantor agree that such service upon
receipt (i) shall be deemed in every respect  effective  service of process upon
it in any such suit,  action or proceeding and (ii) shall, to the fullest extent
permitted by applicable law, be taken and held to be valid personal service upon
and personal  delivery to it. Notices  hereunder shall be conclusively  presumed
received as  evidenced  by a delivery  receipt  furnished  by the United  States
Postal Service or any reputable  commercial  delivery  service.  The Company and
each of the  Guarantors  agrees  that a final  judgment  in any such  action  or
proceeding  shall be conclusive  and may be enforced in other  jurisdictions  by
suit on the  judgment or in any other  manner  provided by law.  Nothing in this
Paragraph  12K shall  affect the right of any holder of the Notes to serve legal
process in any other  manner  permitted by law or affect the right of any holder
of the Notes to bring any action or proceeding against the Company or any of the
Guarantors  or its  property  in the  courts of any other  jurisdiction.  To the
extent that the Company or any Guarantor  has or hereafter may acquire  immunity
from  jurisdiction  of any  court or from any  legal  process  (whether  through
service of notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property,  the Company and
each  Guarantor  hereby  irrevocably  waives  such  immunity  in  respect of its
obligations under this agreement.

      12L. Severability.  Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

      12M.  Descriptive  Headings.  The  descriptive  headings  of  the  several
paragraphs  of this  Agreement  are  inserted  for  convenience  only and do not
constitute a part of this Agreement.

      12N.  Counterparts.  This  Agreement  may be  executed  in any  number  of
counterparts (or counterpart  signature pages), each of which counterparts shall
be an original but all of which together shall constitute one instrument.

      12O.  Independence  of Covenants.  All covenants  hereunder shall be given
independent  effect so that if a particular action or condition is prohibited by
any one of such  covenants,  the fact that it would be permitted by an exception
to, or otherwise be in compliance  within the limitations  of, another  covenant
shall not (i) avoid the  occurrence  of an Event of  Default  or Default if such
action is taken or such condition exists or (ii) in any way prejudice an attempt
by the holders to prohibit (through equitable action or otherwise) the taking of
any action by the Company or any Subsidiaries  which would result in an Event of
Default or Default.


                                       50
<PAGE>

      12P. WAIVER OF JURY TRIAL.  THE COMPANY AND THE GUARANTORS AND THE HOLDERS
OF THE NOTES AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT,  THE NOTES,  ANY
OTHER TRANSACTION  DOCUMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS TRANSACTION AND THE  LENDER/BORROWER  RELATIONSHIP  THAT IS BEING
ESTABLISHED.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY
AND ALL  DISPUTES  THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION,  INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS,  BREACH OF DUTY CLAIMS,  AND ALL OTHER COMMON LAW AND STATUTORY  CLAIMS.
THE HOLDERS OF THE NOTES,  THE COMPANY AND GUARANTORS EACH ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THIS BUSINESS  RELATIONSHIP,  THAT
EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT,  AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE  DEALINGS.  THE
HOLDERS OF THE NOTES,  THE COMPANY AND GUARANTORS  FURTHER WARRANT AND REPRESENT
THAT  EACH HAS  REVIEWED  THIS  WAIVER  WITH ITS  LEGAL  COUNSEL,  AND THAT EACH
KNOWINGLY AND VOLUNTARILY  WAIVES ITS JURY TRIAL RIGHTS  FOLLOWING  CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

      12Q.   Independent   Investigation.   Each  Purchaser  has  made  its  own
independent investigation of the condition (financial and otherwise),  prospects
and affairs of the Company and its  Subsidiaries in connection with its purchase
of the Notes hereunder and has made and shall continue to make its own appraisal
of the  creditworthiness  of the Company. No holder of Notes shall have any duty
or  responsibility  to any  other  holder  of Notes,  either  initially  or on a
continuing basis, to make any such  investigation or appraisal or to provide any
credit or other  information with respect thereto.  No holder of Notes is acting
as agent or in any other  fiduciary  capacity  on behalf of any other  holder of
Notes.


                                       51
<PAGE>

      Please sign the form of  acceptance  on the enclosed  counterpart  of this
letter and return the same to the Company,  whereupon this letter shall become a
binding  agreement  between the Company,  the  Guarantors  party hereto and each
Purchaser.

                                    Very truly yours,

                                    ALBANY INTERNATIONAL CORP.

                                    By: /s/ Michael C. Nahl
                                        ----------------------------------------
                                        Title: Executive Vice President & CFO

                                    ALBANY INTERNATIONAL HOLDINGS
                                    TWO, INC., as a Guarantor

                                    By: /s/ David C. Michaels
                                        ----------------------------------------
                                        Title: Vice President & Assistant
                                               Secretary

                                    ALBANY INTERNATIONAL TECHNIWEAVE, INC.,
                                    as a Guarantor

                                    By: /s/ Michael C. Nahl
                                        ----------------------------------------
                                        Title: Vice President & Assistant
                                               Secretary

                                    ALBANY INTERNATIONAL RESEARCH CO.,
                                    as a Guarantor

                                    By: /s/ Charles J. Silva, Jr.
                                        ----------------------------------------
                                        Title: Vice President, Asst. Treasurer &
                                               Asst. Secretary

                                    GESCHMAY CORP., as a Guarantor

                                    By: /s/ David C. Michaels
                                        ----------------------------------------
                                         Title: Vice President & Assistant
                                                Secretary


                                       52
<PAGE>

                                    BRANDON DRYING FABRICS, INC., as a Guarantor

                                    By: /s/ David C. Michaels
                                        ----------------------------------------
                                        Title: Vice President & Assistant
                                               Secretary

                                    GESCHMAY WET FELTS, INC., as a Guarantor

                                    By: /s/ David C. Michaels
                                        ----------------------------------------
                                        Title: Vice President & Assistant
                                               Secretary

                                    GESCHMAY FORMING FABRICS CORP.,
                                    as a Guarantor

                                    By: /s/ David C. Michaels
                                        ----------------------------------------
                                        Title: Vice President & Assistant
                                               Secretary

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

THE PRUDENTIAL INSURANCE COMPANY
  OF AMERICA

By: /s/ Christopher Carey
-------------------------
    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/ Christopher Carey
        ---------------------
            Vice President


                                       53
<PAGE>

GIBRALTAR LIFE INSURANCE CO., LTD.

By: Prudential Investment Management (Japan),
    Inc., as Investment Manager
    By: Prudential Investment Management, Inc.,
        as Sub-Adviser

    By: /s/ Christopher Carey
        ---------------------
            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/ Christopher Carey
        ---------------------
            Vice President


                                       54
<PAGE>

                               PURCHASER SCHEDULES

<TABLE>
<CAPTION>
                                                                                     Aggregate
                                                                                     Principal
                                                                                     Amount of
                                                                                     Notes to be                   Note
                                                                                     Purchased                 Denomination(s)
                                                                                     ---------                 ---------------
<S>                                                                                 <C>                          <C>
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA                                                                             $101,000,000                 $84,000,000
                                                                                                                 $17,000,000

Pro Rata Share
of Structuring Fee: $16,800.00 in respect of the First Note
                    $3,400.00 in respect of the Second Note


(1)   All payments on account of Notes held by such
      purchaser shall be made by wire transfer of
      immediately available funds for credit to:

      Account No.: P86188 (please do not include spaces)
      Account Name: Prudential Managed Portfolio (in the
      case of payments on account of the Note originally
      issued in the principal amount of $84,000,000) (the
      "First Note")

      Account No.: P86189 (please do not include spaces)
      Account Name: The Prudential - Privest Portfolio (in
      the case of payments on account of the Note originally
      issued in the principal amount of $17,000,000) (the
      "Second Note")

      JPMorgan Chase Bank
      New York, NY
      ABA No.: 021-000-021

      Each such wire transfer shall set forth the name of
      the Company, a reference to "5.34% Senior Notes due
      October 25, 2017, PPN ____, INV ___", and the due date
      and application (as among principal, interest and
      Yield-Maintenance Amount) of the payment being made.

(2)   Address for all notices relating to payments:

      The Prudential Insurance Company of America
      c/o Investment Operations Group
      Gateway Center Two, 10th Floor
      100 Mulberry Street
      Newark, NJ 07102-4077
      Attention:  Manager, Billings and Collections
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
<S>   <C>
(3)   Address for all other communications and notices:

      The Prudential Insurance Company of America
      c/o Prudential Capital Group
      1114 Avenue of the Americas, 30th Floor
      New York, New York  10036
      Attention:  Managing Director
      Tel:     212-626-2060
      Fax:     212-626-2077

(4)   Recipient of telephonic prepayment notices:

      Manager, Trade Management Group
      Telephone:   (973) 367-3141
      Facsimile:    (800) 224-2278

(5)   Address for Delivery of Notes:

      The Prudential Insurance Company of America
      c/o Prudential Capital Group
      Three Gateway Center, 18th Floor
      100 Mulberry Street
      Newark, NJ  07102
      Attention:  Philip Corsello, Esq.

(6)   Tax Identification No.: 22-1211670
</TABLE>


                                        2
<PAGE>

<TABLE>
<CAPTION>
                                                                                Aggregate Principal
                                                                                  Amount of Notes                 Note
                                                                                   to be Purchased            Denomination(s)
                                                                                -------------------           ---------------

<S>                                                                                  <C>                         <C>
      THE PRUDENTIAL LIFE INSURANCE COMPANY, LTD.                                    $15,000,000                 $15,000,000

      Pro Rata Share of Structuring Fee: $3,000.00

(1)   All principal, interest and Yield-Maintenance Amount
      payments on account of Notes held by such purchaser
      shall be made by wire transfer of immediately
      available funds for credit to:

      JPMorgan Chase Bank
      New York, NY
      ABA No.:  021-000-021
      Account No.:  304243809
      Account Name:  The Prudential Life Insurance Company, Ltd.

      Each such wire transfer shall set forth the name of
      the Company, a reference to "5.34% Senior Notes due
      October 25, 2017, Security No. INV_____, PPN _____"
      and the due date and application (as among principal,
      interest and Yield-Maintenance Amount) of the payment
      being made.

(2)   All payments, other than principal, interest or
      Yield-Maintenance Amount (e.g., the Structuring Fee),
      on account of Notes held by such purchaser shall be
      made by wire transfer of immediately available funds
      for credit to:

      JPMorgan Chase Bank
      New York, NY
      ABA No. 021-000-021
      Account No. 304199036
      Account Name:  Prudential International Insurance Service Co.

      Each such wire transfer shall set forth the name of
      the Company, a reference to "5.34% Senior Notes due
      October 25, 2017, Security No. INV_____, PPN _____"
      and the due date and application (e.g., type of fee)
      of the payment being made.

(3)   Address for all notices relating to payments:

      The Prudential Life Insurance Company, Ltd.
      2-13-10, Nagatacho
      Chiyoda-ku, Tokyo 100-0014, Japan
      Telephone:  81-3-5501-5190
      Facsimile:   81-03-5501-5037
      E-mail:  osamu.egi@prudential.com
      Attention:  Osamu Egi, Team Leader of Financial Reporting
                  Team
</TABLE>


                                        3
<PAGE>

<TABLE>
<CAPTION>
<S>   <C>
(4)   Address for all other communications and notices:

      Prudential Capital Group
      Gateway Center 3, 18th Floor
      100 Mulberry Street
      Newark, NJ 07102
      Attention:  Albert Trank, Managing Director
      Telephone:  (973) 802-8608
      Facsimile:   (973) 367-3234
      E-mail:  albert.trank@prudential.com

(5)   Address for Delivery of Notes:

      Send physical security by nationwide overnight delivery service to:

      c/o Prudential Capital Group
      Three Gateway Center, 18th Floor
      100 Mulberry Street
      Newark, NJ  07102
      Attention:  Philip Corsello, Esq.

(6)   Tax Identification No.: 00544574
</TABLE>


                                       4
<PAGE>

<TABLE>
<CAPTION>
                                                                                Aggregate Principal
                                                                                  Amount of Notes                  Note
                                                                                  to be Purchased              Denomination(s)
                                                                                -------------------            ---------------
<S>                                                                                  <C>                         <C>
      GIBRALTAR LIFE INSURANCE CO., LTD.                                             $30,000,000                 $30,000,000

      Pro Rata Share of Structuring Fee:  $6,000.00

(1)   All principal, interest and Yield-Maintenance Amount
      payments on account of Notes held by such purchaser
      shall be made by wire transfer of immediately
      available funds for credit to:

      JPMorgan Chase Bank
      New York, NY
      ABA No.:  021-000-021
      Account No.:  P86246 (please do not include spaces)
      Account Name:  Gibraltar Private

      Each such wire transfer shall set forth the name of
      the Company, a reference to "5.34% Senior Notes due
      October 25, 2017, Security No. INV_____, PPN _____"
      and the due date and application (as among principal,
      interest and Yield-Maintenance Amount) of the payment
      being made.

(2)   All payments, other than principal, interest or
      Yield-Maintenance Amount (e.g., Structuring Fee) , on
      account of Notes held by such purchaser shall be made
      by wire transfer of immediately available funds for
      credit to:

      JPMorgan Chase Bank
      New York, NY
      ABA No. 021-000-021
      Account No. 304199036
      Account Name: Prudential International Insurance Service
                    Company

      Each such wire transfer shall set forth the name of
      the Company, a reference to "5.34% Senior Notes due
      October 25, 2017, Security No. INV_____, PPN _____"
      and the due date and application (e.g., type of fee)
      of the payment being made.

(3)   Address for all notices relating to payments:

      The Gibraltar Life Insurance Co., Ltd.
      2-13-10, Nagatacho
      Chiyoda-ku, Tokyo 100-8953, Japan
      Telephone: 81-3-5501-6680
      Facsimile: 81-3-5501-6432
      E-mail:  yoshiki.saito@gib-life.co.jp
      Attention: Yoshiki Saito, Vice President of Investment
                 Operations Team
</TABLE>


                                       5
<PAGE>

<TABLE>
<CAPTION>
<S>   <C>
(4)   Address for all other communications and notices:

      Prudential Capital Group
      Gateway Center 3, 18th Floor
      100 Mulberry Street
      Newark, NJ 07102
      Attention: Albert Trank, Managing Director
      Telephone: (973) 802-8608
      Facsimile: (973) 367-3234
      E-mail: albert.trank@prudential.com

(5)   Address for Delivery of Notes:

      Send physical security by nationwide overnight delivery service to:
      c/o Prudential Capital Group
      Three Gateway Center, 18th Floor
      100 Mulberry Street
      Newark, NJ 07102
      Attention: Philip Corsello, Esq.

(6)   Tax Identification No.: 98-0408643
</TABLE>


                                        6
<PAGE>

<TABLE>
<CAPTION>
                                                                                Aggregate Principal
                                                                                   Amount of Notes                  Note
                                                                                   to be Purchased              Denomination(s)
                                                                                -------------------             ---------------
<S>                                                                                   <C>                          <C>
      SECURITY BENEFIT LIFE INSURANCE COMPANY, INC.                                   $4,000,000                   $4,000,000

      Notes/Certificates to be registered in the name of:
      UMBTRU&CO

      Pro Rata Share of Structuring Fee: $800.00

(1)   All payments on account of Notes held by such
      purchaser shall be made by wire transfer of
      immediately available funds for credit to:

      UMB Bank N.A.
      ABA No.: 101000695
      Account Name: Trust Operations
      Account No.:  9870161974
      Reference: Security Benefit Life Ins. Co. Acct. #126139.1

      Each such wire transfer shall set forth the name of
      the Company, a reference to "5.34% Senior Notes due
      October 25, 2017, PPN ____" and the due date and
      application (as among principal, interest and
      Yield-Maintenance Amount) of the payment being made.

(2)   All notices of payments and written confirmations of
      such wire transfers:

      UMB Bank
      928 Grand Blvd., 10th Floor
      Kansas City, MO 64106
      Attention:  Mike Ortiz

(3)   Address for all other communications and notices:

      Prudential Private Placement Investors, L.P.
      Gateway Center 3, 18th Floor
      100 Mulberry Street
      Newark, NJ 07102
      Attention:  Albert Trank, Managing Director
      Telephone:  (973) 802-8608
      Facsimile:   (973) 367-3234
</TABLE>


                                       7
<PAGE>

<TABLE>
<CAPTION>
<S>   <C>
(4)   Address for Delivery of Notes:

      (a)   Send physical security by nationwide overnight
            delivery service to:

            Bingham McCutchen LLP
            One State Street
            Hartford, CT  06103
            Attention:  Nicole M. Pappa
            Phone:  860-240-2834

      (b)   Send copy by nationwide overnight delivery
            service to:

            Prudential Capital Group
            Three Gateway Center, 18th Floor
            100 Mulberry Street
            Newark, NJ  07102
            Attention:  Philip Corsello, Esq.

(5)   Tax Identification No.: 43-6295832
</TABLE>


                                       8
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

THIS NOTE WAS ORIGINALLY ISSUED IN A TRANSACTION  EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND THIS NOTE
MAY NOT BE  OFFERED,  SOLD  OR  OTHERWISE  TRANSFERRED  IN THE  ABSENCE  OF SUCH
REGISTRATION OR AN APPLICABLE  EXEMPTION THEREFROM AND FROM ANY APPLICABLE STATE
SECURITIES LAWS.

                                 [FORM OF NOTE]

                           ALBANY INTERNATIONAL CORP.

                     5.34% SENIOR NOTE DUE OCTOBER 25, 2017

No. R-__                                                        October __, 2005
$ _________

      FOR  VALUE  RECEIVED,  the  undersigned,  ALBANY  INTERNATIONAL  CORP.,  a
corporation  organized  and  existing  under the laws of the  State of  Delaware
(herein the "Company"), hereby promises to pay to _____________________________,
or  registered  assigns,  the  principal  sum of  ______________________________
DOLLARS on __________________,  _________,  with interest (computed on the basis
of a 360-day  year--30-day  month) (a) on the unpaid balance thereof at the rate
of 5.34% per annum from the date  hereof,  payable  quarterly on the 25th day of
January,  April, July and October in each year, commencing with the January 25th
, next succeeding the date hereof,  until the principal hereof shall have become
due  and  payable,  and  (b) on  any  overdue  payment  (including  any  overdue
prepayment)  of  principal,  any  overdue  payment of  interest  and any overdue
payment  of any  Yield-Maintenance  Amount  (as  defined  in the Note  Agreement
referred to below),  payable  quarterly as  aforesaid  (or, at the option of the
registered  holder  hereof,  on  demand),  at a rate per annum from time to time
equal to 7.34%.

      Payments of principal  of,  interest on and any  Yield-Maintenance  Amount
payable  with respect to this Note are to be made at the main office of the Bank
of New York in New York City or at such other place as the holder  hereof  shall
designate  to the Company in writing,  in lawful  money of the United  States of
America.

      This Note is one of a series of Senior Notes  (herein  called the "Notes")
issued  pursuant to a Note Agreement and Guaranty,  dated as of October 25, 2005
(herein called the "Agreement"), among the Company, the Guarantors party thereto
and the  original  purchasers  of the  Notes  named  in the  Purchaser  Schedule
attached thereto and is entitled to the benefits thereof.


<PAGE>

      This Note is a  registered  Note and, as provided in the  Agreement,  upon
surrender  of  this  Note  for  registration  of  transfer,  duly  endorsed,  or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's  attorney duly authorized in writing,  a new Note
for a like  principal  amount will be issued to, and  registered in the name of,
the  transferee.  Prior to due presentment  for  registration  of transfer,  the
Company may treat the person in whose name this Note is  registered as the owner
hereof for the purpose of receiving payment and for all other purposes,  and the
Company shall not be affected by any notice to the contrary.

      The Company agrees to make required  prepayments of principal on the dates
and in the amounts  specified  in the  Agreement.  This Note is also  subject to
optional  prepayment,  in  whole  or from  time to time in  part,  on the  terms
specified in the Agreement.

      In case an Event of Default, as defined in the Agreement,  shall occur and
be  continuing,  the principal of this Note may be declared or otherwise  become
due and payable in the manner and with the effect provided in the Agreement.

      This Note is intended to be  performed  in the State of New York and shall
be construed and enforced in accordance with the internal law of such State.

                                                      ALBANY INTERNATIONAL CORP.

                                                      By:  _____________________
                                                      Its: _____________________


                                       2
<PAGE>

                                                                       EXHIBIT B
                                                                       ---------

                      [FORM OF GUARANTOR JOINDER AGREEMENT]

GUARANTOR JOINDER AGREEMENT,  dated as of  ___________________,  ______, made by
[Name and Jurisdiction of New Guarantor] (the "New Guarantor"),  in favor of THE
PRUDENTIAL  INSURANCE  COMPANY OF AMERICA and the other Purchasers party to, and
holders and Transferees of Notes issued pursuant to, the Note Agreement referred
to below  (collectively  with  their  respective  successors  and  assigns,  the
"Holders").  All capitalized  terms used herein and not otherwise  defined shall
have the respective  meanings ascribed thereto in the Note Agreement referred to
below.

      WHEREAS,   Albany   International   Corp.,  a  Delaware  corporation  (the
"Company"),  and certain  Guarantors  described therein on the one hand, and the
Holders,  on the other hand,  are parties to that  certain  Note  Agreement  and
Guaranty,  dated as of October __, 2005 (herein,  as amended,  supplemented  and
modified from time to time, called the "Note Agreement");

      WHEREAS,  pursuant  to  Paragraph  5M of the Note  Agreement,  the Company
covenants  that the  Guaranty  Requirement  shall be  satisfied at all times by,
inter  alia,  executing  and  delivering  to the  Holders  a  Guarantor  Joinder
Agreement

      WHEREAS, the New Guarantor is a member of an affiliated group of companies
that includes the Company and Guarantors under the Note Agreement;  the proceeds
of the issue and sale of Notes under the Note Agreement will in part benefit the
Company and  Guarantors  (including the New Guarantor) in the operation of their
respective  businesses;  and  the  Company  and  Guarantors  (including  the New
Guarantor)  are  engaged in related  businesses,  and the  Company and each such
Guarantor  (including  the New  Guarantor)  derived and will derive  substantial
direct and  indirect  benefits  from the issue and sale of Notes  under the Note
Agreement; and

      WHEREAS,  the New Guarantor has agreed to execute this  Guarantor  Joinder
Agreement to become a party to, and Guarantor under, the AI Guaranty Agreement;

      NOW, THEREFORE, IT IS AGREED:

1. Note Agreement. By executing and delivering this Guarantor Joinder Agreement,
the New Guarantor, as provided in the Note Agreement,  hereby becomes a party to
the AI  Guaranty  Agreement  as a Guarantor  thereunder  with the same force and
effect as if originally  named therein as a Guarantor and,  without limiting the
generality  of the  foregoing,  hereby  expressly  assumes all  obligations  and
liabilities of a Guarantor  thereunder and under the AI Guaranty Agreement.  The
New Guarantor  hereby  represents and warrants that each of the  representations
and warranties of the Guarantors  contained in Paragraph 8 of the Note Agreement
is true and correct  with  respect to such New  Guarantor  on and as of the date
hereof (after giving effect to this Guarantor  Joinder  Agreement) as if made on
and as of such date.


<PAGE>

2.  GOVERNING  LAW.  THIS  GUARANTOR  JOINDER  AGREEMENT  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.

      IN WITNESS  WHEREOF,  the  undersigned  has caused this Guarantor  Joinder
Agreement to be duly  executed and delivered to the Holders as of the date first
above written.

                                                     [NAME OF NEW GUARANTOR]

                                                     By: _______________________
                                                         Name:
                                                         Title:


                                       2
<PAGE>

                                                                     EXHIBIT C-1
                                                                     -----------

                          [FORM OF OPINION OF COMPANY'S
                        AND GUARANTORS' SPECIAL COUNSEL]

                        [Letterhead of ________________]

                                                               [Date of Closing]

[Names and addresses
 of Purchasers]

Ladies and Gentlemen:

      We have  acted as  counsel  for  Albany  International  Corp.,  a Delaware
corporation  (the  "Company")  and  [List  of  Guarantors]  (collectively,   the
"Guarantors;" and together with the Company  hereinafter  referred to as the "AI
Parties")) in  connection  with the Note  Agreement  and  Guaranty,  dated as of
October __, 2005,  among the Company,  the Guarantors party thereto and you (the
"Note  Agreement"),  pursuant  to which the Company has have issued to you today
its 5.34% Senior Notes due October __, 2017 in the aggregate principal amount of
$150,000,000. Capitalized terms used and not otherwise defined herein shall have
the respective  meanings  specified in the Note Agreement.  This letter is being
delivered  to you in  satisfaction  of the  condition  set  forth  in  Paragraph
[3A(ii)]  of the  Note  Agreement  and  with  the  understanding  that  you  are
purchasing the Notes in reliance on the opinions expressed herein.

      In  this  connection,   we  have  examined  such  certificates  of  public
officials,  certificates  of officers of the AI Parties and copies  certified to
our  satisfaction  of corporate  documents  and records of the AI Parties and of
other  papers,  and have  made  such  other  investigations,  as we have  deemed
relevant and necessary as a basis for our opinion hereinafter set forth. We have
relied  upon such  certificates  of public  officials  and of officers of the AI
Parties  with  respect to the  accuracy of material  factual  matters  contained
therein which were not  independently  established.  With respect to the opinion
expressed in paragraph 3 below, we have also relied upon the representation made
by each of you in Paragraph 9A of the Note Agreement.

      Based on the foregoing, it is our opinion that:

      1. The Note  Agreement  constitutes  valid  obligations of the AI Parties,
legally binding upon and  enforceable  against the AI Parties in accordance with
its  respective  terms,  except as such  enforceability  may be  limited  by (a)
bankruptcy,  insolvency,  reorganization  or other  similar laws  affecting  the
enforcement of creditors' rights generally and (b) general  principles of equity
(regardless  of whether such  enforceability  is  considered  in a proceeding in
equity or at law).


<PAGE>

      2. The Notes are valid  obligations of the Company,  legally  binding upon
and enforceable  against the Company in accordance with their respective  terms,
except as such  enforceability  may be  limited by (a)  bankruptcy,  insolvency,
reorganization  or other similar laws  affecting the  enforcement  of creditors'
rights  generally and (b) general  principles of equity  (regardless  of whether
such enforceability is considered in a proceeding in equity or at law).

      3. It is not necessary in connection with the offering, issuance, sale and
delivery of the Notes under the circumstances contemplated by the Note Agreement
to register  the Notes under the  Securities  Act or to qualify an  indenture in
respect of the Notes under the Trust Indenture Act of 1939, as amended.

      4. The extension, arranging and obtaining of the credit represented by the
Notes do not result in any  violation  of  Regulation  T, U or X of the Board of
Governors of the Federal Reserve System.

      5. The  offering,  issuance  and the sale of the  Notes to the  Purchasers
pursuant to the Note  Agreement do not, and the  performance by each AI Party of
its respective  obligations in the Note Agreement will not, require any consent,
approval,   authorization,   registration  or   qualification  of  or  with  any
governmental authority of the United States of America or the States of New York
or Delaware [Other  jurisdictions of organization]  that in our experience would
be  normally  applicable  to  general  business  entities  with  respect to such
offering,  issuance,  sale  and  performance  pursuant  to  any  applicable  law
(including any securities or Blue Sky law), statute, rule or regulation,  order,
judgment  or decree to which the AI  Parties or any of their  Subsidiaries  is a
party or otherwise subject.

                                                 Very truly yours,


<PAGE>

                                                                     EXHIBIT C-2
                                                                     -----------

                          [FORM OF OPINION OF COMPANY'S
                        AND GUARANTORS' IN-HOUSE COUNSEL]

                        [Letterhead of ________________]

                                                        [Date of Closing]

[Names and addresses
 of Purchasers]

Ladies and Gentlemen:

      We have  acted as  counsel  for  Albany  International  Corp.,  a Delaware
corporation  (the  "Company")  and  [List  of  Guarantors]  (collectively,   the
"Guarantors;" and together with the Company  hereinafter  referred to as the "AI
Parties")) in  connection  with the Note  Agreement  and  Guaranty,  dated as of
October __, 2005,  among the Company,  the Guarantors party thereto and you (the
"Note  Agreement"),  pursuant  to which the Company has have issued to you today
its 5.34% Senior Notes due October __, 2017 in the aggregate principal amount of
$150,000,000. Capitalized terms used and not otherwise defined herein shall have
the respective  meanings  specified in the Note Agreement.  This letter is being
delivered  to you in  satisfaction  of the  condition  set  forth  in  Paragraph
[3A(ii)]  of the  Note  Agreement  and  with  the  understanding  that  you  are
purchasing the Notes in reliance on the opinions expressed herein.

      In  this  connection,   we  have  examined  such  certificates  of  public
officials,  certificates  of officers of the AI Parties and copies  certified to
our  satisfaction  of corporate  documents  and records of the AI Parties and of
other  papers,  and have  made  such  other  investigations,  as we have  deemed
relevant and necessary as a basis for our opinion hereinafter set forth. We have
relied  upon such  certificates  of public  officials  and of officers of the AI
Parties  with  respect to the  accuracy of material  factual  matters  contained
therein which were not  independently  established.  With respect to the opinion
expressed in paragraph 3 below, we have also relied upon the representation made
by each of you in Paragraph 9A of the Note Agreement.

      Based on the foregoing, it is our opinion that:

      1. Each AI Parties is a corporation duly organized and validly existing in
good standing under the laws of the State of its incorporation.


<PAGE>

      2. The Note Agreement has been duly authorized by all requisite  corporate
action and duly executed and delivered by authorized officers of the AI Parties.

      3. The Notes have been duly authorized by all requisite  corporate  action
and duly executed and delivered by authorized officers of the Company.

      4. The  execution and delivery of the Note  Agreement  and the Notes,  the
offering,  issuance and the sale of the Notes and  fulfillment  of an compliance
with the respective  provisions of the Note Agreement and the Notes will not (a)
conflict  with,  result in a breach  of or  constitute  a default  under (i) the
organizational  documents  or  by-laws  of any AI  Party  or,  to the best of my
knowledge,  the provisions of any material  agreement or material  instrument to
which any AI Party is a party or by which any of them or any of their respective
assets is or may be bound,  or (ii) to my knowledge,  any order or decree of any
court or government agency or instrumentality, or (b) to my knowledge, result in
the creation of an imposition of any Lien upon, or with respect to, any property
or assets now owned by any AI Party.

                                                   Very truly yours,


<PAGE>

                                                                       EXHIBIT D
                                                                       ---------

                      [FORM OF INDEMNIFICATION, SUBROGATION
                           AND CONTRIBUTION AGREEMENT]

INDEMNITY,  SUBROGATION AND CONTRIBUTION AGREEMENT dated as of October __, 2005,
among ALBANY INTERNATIONAL  CORP., a Delaware corporation (the "Company"),  each
Subsidiary of the Company listed on Schedule I hereto or becoming a party hereto
as provided in Section 12 (the "Subsidiary Guarantors") and each Purchaser party
to the Note  Agreement  referred to below  (together  with their  successors and
assigns, the "Purchasers").

      Reference is made to the Note Agreement and Guaranty,  dated as of October
__,  2005,  among  the  Company,  the  Subsidiary  Guarantors  and the  original
Purchasers named in the Purchaser  Schedule attached thereto (as the same may be
amended,  modified and supplemented  from time to time, the ("Note  Agreement").
Capitalized terms used herein and not otherwise defined herein have the meanings
specified in the Note Agreement.

      The Company has agreed to sell the Notes to each original  Purchaser  and,
subject to the terms and  conditions in the Note  Agreement,  each Purchaser has
agreed to purchase  its portion of the Notes from the  Company.  The  Guarantors
have  guaranteed  the  Notes  and other  Guarantied  Obligations  under the Note
Agreement and other Transaction Documents pursuant to the AI Guaranty Agreement.
The obligations of the original  Purchasers to purchase the Notes is conditioned
on,  among  other  things,  the  execution  and  delivery by the Company and the
Guarantors of an agreement in the form hereof.

      Accordingly,  the Company,  each  Guarantor  and each  Purchaser  agree as
follows:

      SECTION 1.  Indemnity and  Subrogation.  In addition to all such rights of
indemnity and  subrogation as the Guarantors may have under  applicable law (but
subject  to Section 3 below),  the  Company  agrees  that in the event a payment
shall be made by any  Guarantor  under the AI  Guaranty  Agreement,  the Company
shall  indemnify  such  Guarantor for the full amount of such  payment,  and the
Company  shall be subrogated to the rights of the Guarantor to whom such payment
shall have been made to the extent of such payment.

      SECTION 2.  Contribution and Subrogation.  Each Guarantor (a "Contributing
Guarantor")  agrees  (subject to Section 3 below)  that,  in the event a payment
shall be made by any other  Guarantor  under the AI Guaranty  Agreement and such
other Guarantor (the "Claiming Guarantor") shall not have been fully indemnified
by the  Company,  as provided in Section 1 above,  each  Contributing  Guarantor
shall indemnify the Claiming  Guarantor in an amount equal to the amount of such
payment  multiplied by a fraction of which the numerator  shall be the net worth
of the  Contributing  Guarantor  on the  date  hereof  or on the  date on  which
enforcement is being sought,  whichever is greater, and the denominator shall be
the  aggregate  net worth of all the  Guarantors  on the date hereof (or, in the
case of any Guarantor  becoming a party hereto pursuant to Section 12 below, the
date of the Supplement  hereto  executed and delivered by such  Guarantor) or on
the date on which  enforcement is being sought,  whichever is greater;  provided
that,  notwithstanding the foregoing, any Guarantor that is a Foreign Subsidiary
shall  indemnify  the  Claiming  Guarantor  only to the extent that the Claiming
Guarantor  made a payment with respect to an  obligation of a direct or indirect
subsidiary of such Foreign  Subsidiary  (and such Foreign  Subsidiary  shall not
have any  liability  whatsoever  with  respect to any payment made by a Claiming
Guarantor  which  is  either  the  Company  or  any  Domestic  Subsidiary).  Any
Contributing  Guarantor making any payment to a Claiming  Guarantor  pursuant to
this Section shall be subrogated to the rights of such Claiming  Guarantor under
Section 1 above to the extent of such payment.


<PAGE>

      SECTION 3. Subordination.  Notwithstanding any provision of this Agreement
to the  contrary,  effective  upon any payment made by a Guarantor  under the AI
Guaranty, all rights of the Guarantors under Sections 1 and 2 hereof in relation
to such payment, and all other rights of indemnity,  contribution or subrogation
under   applicable  law  or  otherwise   relating  thereto  shall  become  fully
subordinated  to the  indefeasible  payment  in full  in cash of the  Guarantied
Obligations;  provided however,  that, such  subordination  shall only arise and
apply while an Event of Default is continuing;  and provided  further,  that, to
the extent such rights are also  governed by  provisions  under the  "Subsidiary
Guarantee  Agreement" or "Indemnity,  Subrogation  and  Contribution  Agreement"
(each,  used in this  paragraph as defined in the Revolving  Credit  Agreement),
they shall be deemed to be excluded  from this first  sentence of this Section 3
to the extent necessary to avoid characterization of this clause as a prohibited
Lien under the terms of the Revolving  Credit  Agreement (but only to the extent
not otherwise  permitted  thereunder).  No failure on the part of the Company or
any  Guarantor to make the payments  required by Sections 1 and 2 hereof (or any
other payments  required under applicable law or otherwise) shall in any respect
limit the  obligations  and  liabilities  of any  Guarantor  with respect to its
obligations  under the AI Guaranty  Agreement,  and each Guarantor  shall remain
liable for the full amount of the  obligations  of such  Guarantor  under the AI
Guaranty Agreement.

      SECTION 4.  Termination.  This Agreement (a) shall,  subject to clause (b)
below, terminate when all the Guarantied Obligations have been indefeasibly paid
in full in cash and (b) shall continue to be effective or be reinstated,  as the
case may be, if at any time  payment,  or any part  thereof,  of any  Guarantied
Obligation  is rescinded or must  otherwise be restored by any  Purchaser or any
Guarantor upon the bankruptcy or reorganization of the Company, any Guarantor or
otherwise.  Notwithstanding the foregoing, at the time any Guarantor is released
from its obligations under the AI Guaranty  Agreement in accordance with such AI
Guaranty Agreement and the Note Agreement, such Guarantor will cease to have any
rights or obligations under this Agreement.

      SECTION 5. GOVERNING LAW. THIS AGREEEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

      SECTION 6. Waivers: Amendment. (a) No failure or delay of any Purchaser in
exercising any right or power hereunder or under any other Transaction  Document
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such  right or  power,  or any  abandonment  or  discontinuance  of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. All rights and remedies  hereunder are
cumulative and are not exclusive of any rights or remedies otherwise provided by
law. No waiver of any provision of this Agreement or consent to any departure by
any party hereto therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this  Section,  and then such waiver or consent
shall be effective  only in the  specific  instance and for the purpose of which
given.

      (b) Neither this Agreement nor any provision hereof may be waived, amended
or modified  except  pursuant to an agreement or agreements  in writing  entered
into by the Required  Holders,  the Company and the  Guarantors  with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with the Note Agreement.

      SECTION 7. Notices.  All  communications and notices hereunder shall be in
writing and given as provided in the Note  Agreement  and addressed as specified
therein.

      SECTION 8. Binding Agreement;  Assignments. Whenever in this Agreement any
of the parties hereto is referred to, such reference  shall be deemed to include
the successors and assigns of such party  permitted  hereby;  and all covenants,
promises and  agreements  by or on behalf of the parties  that are  contained in
this  Agreement  shall  bind  and  inure  to the  benefit  of  their  respective
successors  and  assigns.  None of the Company or the  Guarantors  may assign or
otherwise transfer any of its rights or obligations

<PAGE>

hereunder or any interest  herein  (except in  connection  with any  transaction
permitted by the Note Agreement),  and any such attempted assignment or transfer
shall be null and void.

      SECTION 9.  Survival of  Agreement;  Severability.  (a) All  covenants and
agreements made by the Company and each Guarantor herein and in the certificates
or other  instruments  prepared or delivered in connection  with this  Agreement
shall be  considered to have been relied upon by the  Purchasers  and each other
Guarantor and shall survive the  execution and delivery of this  Agreement,  and
the purchase and sale of the Notes,  and shall continue in full force and effect
as long as the  principal of or any accrued  interest on any Notes or any fee or
any other amount payable under the Note  Agreement,  this Agreement or any other
Transaction Document is outstanding and unpaid.

      (b) In the event that any one or more of the provisions  contained in this
Agreement should be held invalid,  illegal or unenforceable in any respect,  the
validity,  legality and  enforceability  of the remaining  provisions  contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of  itself  affect  the  validity  of  such  provision  in any  other
jurisdiction).  The parties shall endeavor in good-faith negotiations to replace
the invalid,  illegal or  unenforceable  provisions  with valid  provisions  the
economic  effect of which  comes as close as  possible  to that of the  invalid,
illegal or unenforceable provisions.

      SECTION 10. Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different  counterparts),  each
of which shall  constitute an original,  but all of which taken  together  shall
constitute a single contract. This Agreement shall become effective with respect
to any  Guarantor  when a  counterpart  hereof  bearing  the  signature  of such
Guarantor  shall have been  delivered to the Required  Holders and a counterpart
hereof shall have been  executed by the Required  Holders and the Company.  This
Agreement shall become effective with respect to the Company upon  effectiveness
of the Note Agreement.  Delivery of an executed signature page to this Agreement
by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.

      SECTION 11. Rules of Interpretation. The rules of interpretation specified
in paragraphs 11A, 11B and 11C of the Note Agreement shall be applicable to this
Agreement.

      SECTION 12.  Additional  Guarantors.  Pursuant to Paragraph 5M of the Note
Agreement,  certain  additional  Subsidiaries may be required under the terms of
the Note Agreement from time to time to enter into this Agreement as Guarantors.
Upon  execution  and  delivery by the Required  Holders and a  Subsidiary  of an
instrument  in the  form of  Annex I  hereto,  such  Subsidiary  shall  become a
Guarantor  hereunder with the same force and effect as if originally  named as a
Guarantor  herein.  The  execution  and  delivery of such  instrument  shall not
require the consent of the Company or any  Guarantor  hereunder.  The rights and
obligations  of the Company and each  Guarantor  hereunder  shall remain in full
force and effect notwithstanding the addition of any new Guarantor as a party to
this Agreement.

      SECTION  13.  Jurisdiction;  Consent  to  Service  of  Process.  (a)  Each
Guarantor hereby  irrevocably and  unconditionally  submits,  for itself and its
property, to the nonexclusive  jurisdiction of the Supreme Court of the State of
New York and sitting in New York County and of the United States  District Court
of the Southern  District of New York, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement, or for
recognition  or  enforcement  of any  judgment,  and each of the parties  hereto
hereby irrevocably and unconditionally  agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent  permitted  by law,  in such  Federal  court.  Each of the parties
hereto agrees that a final  judgment in any such action or  proceeding  shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Agreement shall affect any
right that any Purchaser  may  otherwise  have to bring any action or proceeding
relating  to this  Agreement  or any  other  Transaction  Document  against  any
Guarantor or its properties in the courts of any jurisdiction.


<PAGE>

      (b) Each Guarantor hereby irrevocably and  unconditionally  waives, to the
fullest  extent it may legally and  effectively do so, any objection that it may
now or hereafter  have to the laying of venue of any suit,  action or proceeding
arising  out of or  relating  to this  Agreement  in any  court  referred  to in
paragraph (a) of this  Section.  Each of the parties  hereto hereby  irrevocably
waives,  to the fullest extent permitted by law, the defense of any inconvenient
forum to the maintenance of such action or proceeding in any such court.

      (c) Each  party to this  Agreement  irrevocably  consents  to  service  of
process in the manner provided for notices in Section 7 hereof.  Nothing in this
Agreement  will affect the right of any party to this Agreement to serve process
in any other manner permitted to law.

      SECTION 14. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT  PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LEGAL PROCEEDING  DIRECTLY OR INDIRECTLY  ARISING OUT OF,
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS  CONTEMPLATED  HEREBY (WHETHER
BASED ON CONTRACT,  TORT OR ANY OTHER  THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO  REPRESENTATIVE,  AGENT OR ATTORNEY OF ANY OTHER PARTY HAS  REPRESENTED,
EXPRESSLY  OR  OTHERWISE,  THAT SUCH  OTHER  PARTY  WOULD  NOT,  IN THE EVENT OF
LITIGATION,  SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)  ACKNOWLEDGES  THAT IT
AND THE OTHER PARTIES  HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

      IN WITNESS  WHEREOF,  the parties  hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first appearing above.

                                         ALBANY INTERNATIONAL CORP.

                                         By: ___________________________________
                                             Title:

                                         ALBANY INTERNATIONAL HOLDINGS TWO, INC.

                                         By: ___________________________________
                                             Title:

                                         ALBANY INTERNATIONAL TECHNIWEAVE, INC.

                                         By: ___________________________________
                                             Title:

                                         ALBANY INTERNATIONAL RESEARCH CO.

                                         By: ___________________________________
                                             Title:

                                         GESCHMAY CORP.


<PAGE>

                                         By: ___________________________________
                                             Title:

                                         BRANDON DRYING FABRICS, INC.

                                         By: ___________________________________
                                             Title:

                                         GESCHMAY WELT FELTS, INC.

                                         By: ___________________________________
                                             Title:

                                         GESCHMAY FORMING FABRICS CORP.

                                         By: ___________________________________
                                             Title:

                                         THE PRUDENTIAL INSURANCE COMPANY OF
                                         AMERICA

                                         By: ___________________________________
                                             Vice President


<PAGE>

                                    THE PRUDENTIAL LIFE INSURANCE
                                      COMPANY, LTD.
                                    By: Prudential Investment Management
                                        (Japan), Inc., as Investment Manager
                                        By: Prudential  Investment  Management,
                                            Inc.,
                                            as Sub-Adviser

                                        By: ________________________
                                                 Vice President

                                    GIBRALTAR LIFE INSURANCE CO., LTD.
                                    By: Prudential  Investment  Management
                                        (Japan), Inc., as Investment Manager
                                         By: Prudential  Investment  Management,
                                             Inc.,
                                             as Sub-Adviser

                                        By: _________________________
                                                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: ___________________________
                                                Vice President


<PAGE>

                                                                 SCHEDULE I
                                      TO EXHIBIT D - INDEMNITY, SUBROGATION
                                                 AND CONTRIBUTION AGREEMENT

       SUBSIDIARY GUARANTORS
       ---------------------

Albany International Holdings Two, Inc.
Albany International Techniweave, Inc.
Albany International Research Co.
Geschmay Corp.
Brandon Drying Fabrics, Inc.
Geschmay Welt Felts, Inc.
Geschmay Forming Fabrics Corp.


<PAGE>

                                                                      ANNEX I TO
                                              EXHIBIT D - INDEMNITY, SUBROGATION
                                                      AND CONTRIBUTION AGREEMENT

      SUPPLEMENT NO. [ ] dated as of [ ], 200[ ] to the  INDEMNITY,  SUBROGATION
AND  CONTRIBUTION  AGREEMENT  dated as of October  __,  2005 (as the same may be
amended,  supplemented or otherwise  modified from time to time, the "Indemnity,
Subrogation and Contribution  Agreement"),  among ALBANY  INTERNATIONAL CORP., a
Delaware  corporation (the "Company"),  each Subsidiary of the Company listed on
Schedule I thereto or becoming a party thereto as provided in Section 12 thereof
(the  "Subsidiary  Guarantors")  and each Purchaser  party to the Note Agreement
referred to below (together with their successors and assigns the "Purchasers").

      Reference is made to Note Agreement and Guaranty,  dated as of October __,
2005,  among  the  Company,  the  Guarantors  party  thereto  and  the  original
Purchasers named in the Purchaser  Schedule attached thereto (as the same may be
amended,  modified and supplemented  from time to time, the ("Note  Agreement").
Capitalized  terms  used  herein  and not  otherwise  defined  herein  have  the
respective   meanings  specified  in  the  Note  Agreement  and  the  Indemnity,
Subrogation and Contribution Agreement.

      The  Company,  the  Guarantors  and the  Purchasers  have entered into the
Indemnity,  Subrogation  and  Contribution  Agreement  in  order to  induce  the
original Purchasers to purchase the Notes.  Pursuant to paragraph 5M of the Note
Agreement,  certain  additional  Subsidiaries may be required under the terms of
the Note Agreement  from time to time to enter into the  Indemnity,  Subrogation
and  Contribution  Agreement  as  Guarantors.   Section  12  of  the  Indemnity,
Subrogation and Contribution Agreement provides that additional Subsidiaries may
become Guarantors under the Indemnity, Subrogation and Contribution by execution
and delivery of an instrument in the form of this  Supplement.  The  undersigned
Subsidiary of the Company (the "New  Guarantor") is executing this Supplement in
accordance  with the  requirements  of the Note  Agreement to become a Guarantor
under the Indemnity, Subrogation and Contribution Agreement as consideration for
the prior purchase and sale of the Notes previously issued.

      Accordingly, the Required Holders and the New Guarantor agree as follows:

      SECTION 1. In accordance with Section 12 of the Indemnity, Subrogation and
Contribution  Agreement,  the New  Guarantor by its  signature  below  becomes a
Guarantor under the Indemnity,  Subrogation and Contribution  Agreement with the
same force and effect as if originally  named therein as a Guarantor and the New
Guarantor  hereby  agrees  to all the  terms and  provisions  of the  Indemnity,
Subrogation  and  Contribution   Agreement  applicable  to  it  as  a  Guarantor
thereunder.  Each reference to a "Guarantor" in the Indemnity,  Subrogation  and
Contribution  Agreement  shall be  deemed  to  include  the New  Guarantor.  The
Indemnity,  Subrogation and Contribution Agreement is hereby incorporated herein
by reference.

      SECTION 2. The New  Guarantor  represents  and  warrants  to the  Required
Holders  and the other  beneficiaries  of the AI  Guaranty  Agreement  that this
Supplement  has  been  duly  authorized,   executed  and  delivered  by  it  and
constitutes its legal, valid and binding  obligation,  enforceable against it in
accordance  with  its  terms,  subject  to  applicable  bankruptcy,  insolvency,
reorganization,  moratorium or other laws affecting  creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

      SECTION  3.  This  Supplement  may be  executed  in  counterparts  (and by
different  parties  hereto  on  different  counterparts),  each of  which  shall
constitute an original,  but all of which when taken together shall constitute a
single  contract.  This  Supplement  shall  become  effective  when the Required
Holders  shall have  received a counterpart  of this  Supplement  that bears the
signature  of the New  Guarantor  and  the  Required  Holders  have  executed  a
counterpart hereof. Delivery of an executed signature page to this Supplement by
facsimile  transmission  shall be as effective as delivery of a manually  signed
counterpart of this Supplement.

<PAGE>

      SECTION  4.  Except  as  expressly  supplemented  hereby,  the  Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.

      SECTION 5. THIS  SUPPLEMENT  SHALL BE  CONSTRUED  IN  ACCORDANCE  WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

      SECTION 6. In the event that any one or more of the  provisions  contained
in this  Supplement  should be held  invalid,  illegal or  unenforceable  in any
respect,  the validity,  legality and enforceability of the remaining provisions
contained herein and in the Indemnity,  Subrogation and  Contribution  Agreement
shall not in any way be affected or impaired  thereby (it being  understood that
the invalidity of a particular provision in a particular  jurisdiction shall not
in  and  of  itself  affect  the  validity  of  such   provision  in  any  other
jurisdiction).  The parties hereto shall endeavor in good-faith  negotiations to
replace the invalid,  illegal or unenforceable  provisions with valid provisions
the economic  effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

      SECTION 7. All  communications  and notices  hereunder shall be in writing
and  given  as  provided  in  Section  7  of  the  Indemnity,   Subrogation  and
Contribution Agreement.

      SECTION 8. The New Guarantor  agrees to reimburse the Required Holders for
their out-of-pocket  expenses in connection with this Supplement,  including the
fees, other charges and disbursements of counsel for the Required Holders.

      IN WITNESS  WHEREOF,  the New Guarantor and the Required Holders have duly
executed  this  Supplement  to  the  Indemnity,   Subrogation  and  Contribution
Agreement as of the day and year first above written.

                                                     [NAME OF NEW GUARANTOR]

                                                 By: ___________________________
                                                              Name:
                                                              Title:

                                                     [REQUIRED HOLDERS]

                                                 By: ___________________________
                                                              Name:
                                                              Title:


<PAGE>

                                   SCHEDULE 1A
                                   -----------

                     Albany International Holdings Two, Inc.
                     Albany International Techniweave, Inc.
                        Albany International Research Co.
                                 Geschmay Corp.
                          Brandon Drying Fabrics, Inc.
                            Geschmay Wet Felts, Inc.
                         Geschmay Forming Fabrics Corp.


<PAGE>

                                   SCHEDULE 6A
                                   -----------

Subsidiary Indebtedness existing as of January 8, 2004                 Amount(1)
------------------------------------------------------                 ---------

Wurttembergische Filztuchfabrik D. Geschmay GmbH

         Short and Medium-Term Borrowings from Local Banks            $1,300,000

Albany Door Systems AB (including Subsidiaries)

         Short- and Medium-Term Borrowings from Local Banks             $200,000

Albany Nordiskafilt Kabushiki Kaisha

         Short- and Medium-Term Borrowings from Local Banks           $5,600,000

Albany International Pty. Ltd.

         Short- and Medium-Term Borrowings from Local Banks              $37,000

Albany International Canada Corp.

         Short- and Medium-Term Borrowings from Local Banks              $38,000

Albany International France S.A.S.

         Finance Lease of premises in Gond Pontouvre w/Batimap        $5,025,000

----------
(1)   Dollar amounts are converted from local currencies.


<PAGE>

                                   SCHEDULE 6B
                                   -----------

Existing Liens
--------------

Wurttembergische Filztuchfabrik D. Geschmay GmbH

Mortgage on real property to secure borrowings disclosed in Schedule 6.01, in an
amount not to exceed Euro 5,133,000.


<PAGE>

                                   SCHEDULE 6D
                                   -----------

Beier Albany & Co.

The Company has a 50% interest in a South  African  business  enterprise  in the
Company's core business of papermachine  clothing and industrial  fabrics.  This
enterprise  was  originally  organized  in  1978  as a  partnership,  and is now
conducted through a corporation with 50/50 ownership.  The Company's decision to
conduct  business  in South  Africa in this way arose due to the  advantages  of
having an established local business with experience  operating in South Africa.
The Company and its other  subsidiaries  engage in intercompany  sales and other
transactions with Beier Albany to the same extent as they would any wholly-owned
subsidiary.  The other 50% interest is owned by an entity  controlled by members
of the Beier family who, apart from their  ownership of this interest,  are not,
to the Company's best knowledge, Affiliates of the Company.

Spectra Systems Corporation (SSC)

The  Company  made an  investment  of  approximately  $4 million in 1997 in this
entity,  which is engaged in the  development of textiles using  dispersed laser
technology.  At the same time,  the Company  entered  into an  exclusive  supply
arrangement  pursuant  to  which  SSC  is  obligated  to  purchase  all  of  its
monofilament or textile products from the Company,  and to pay certain royalties
to the Company on sales of SSC products that incorporate  materials  supplied by
the Company.  SSC also  granted to the Company an  exclusive  license to use SSC
products  in  papermachine  clothing  and related  products.  In  addition,  the
Company's subsidiary,  Albany International  Research Co., provides research and
technical  support  to SSC.  The  remaining  interests  of SSC are  not,  to the
Company's best knowledge, held by Affiliates of the Company.

Nevo Cloth Ltd.

Albany Nordiskafilt AB, the Company's principal Swedish subsidiary,  established
a  50/50  equity  joint  venture  with  a  local  Russian   partner  to  gain  a
manufacturing  presence in Russia in the Company's  core  papermachine  clothing
business.   Albany  Nordiskafilt  supplies  papermachine  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.

Loading Bay Specialists Limited

The Company made an  investment of  approximately  $2,025,000 to acquire a 49.9%
interest in a distributor of high-performance industrial doors in England, where
the  Company's  door products did not have the same level of  penetration  as in
other European  markets.  The Company sells  high-performance  doors and related
products to this entity for resale in the U.K. The other  shareholder is not, to
the Company's best knowledge, an Affiliate of the Company.

Albany International Receivables Corp. (AIRC)

During 2001,  the Company  entered into a program to sell a portion of its North
American accounts receivable to AIRC, with no recourse.  The accounts receivable
are sold on an ongoing basis to AIRC, a qualified  special purpose entity which,
in  accordance  with  GAAP,  is  not  consolidated  in the  Company's  financial
statements.  The  agreements  pursuant to which  receivables  are sold have been
filed with the SEC as exhibits to the Company's Exchange Act reports.


<PAGE>

                                   SCHEDULE 6G
                                   -----------

Existing Investments

i.    Albany International Corp. and Subsidiaries

<TABLE>
<CAPTION>
<S>                                                          <C>
 Beier Albany & Co. Ltd.                                     50% ownership of ordinary shares

 Spectra Systems Corporation                                 1,777,778 shares Series C Preferred, $0.01
 (Delaware)                                                  par value (<20%)

 Loading Bay Specialists Limited                             4,999 ordinary shares
 (England and Wales)

 Nevo Cloth Ltd. (Russia)                                    50% equity ownership

 Ichikawa Ltd. (Japan)                                       300,000 shares Common Stock

 Parco Scientifico Technlogico di Venezia s.c.a.r.l.         176 quotas valued at ITL 17,600,000
                                                             (approx. US$ 9,800)

 Albany International Receivables Corp.                      100% ownership of equity; loan from Albany
                                                             International Canada Corp. of CAD 5,300,000

 Albany International AB(2)                                  Surety Bond, dated May 25, 1994, by Albany
                                                             International Corp. for the benefit of
                                                             Forsakringsbolaget Pensionsgaranti, securing the
                                                             obligations of Albany International AB under certain
                                                             insurance policies relating to the pension obligations
                                                             of Albany International AB to employees in Sweden
                                                             (approximately 168,000,000 Swedish kroner)

 Albany International Germany Holding(1)                     Guaranty by Albany International Corp. in favor of
                                                             Deutsche Bank of borrowings by Albany International
                                                             Germany Holding of Euro 714,889 (approximately US$
                                                             860,000)
</TABLE>

----------
(2)   Wholly-owned subsidiaries of Albany International Corp.


<PAGE>

ii.   Subsidiaries

<TABLE>
<CAPTION>
             Affiliate                Direct Subsidiary of        Guarantors     Country of                  Jurisdiction of
                                                                                Incorporation                 Incorporation
----------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                           <C>                       <C>
          47 Albany Troy Road       Albany International Corp.                  United States                     New York
                  Corporation
        AI (Switzerland) GmbH     Albany International Holding                    Switzerland                  Switzerland
                                              (Switzerland) AG
      Albany Door Systems A/S         Albany Door Systems GmbH                        Denmark                      Denmark
       Albany Door Systems AB     Albany International Holding                         Sweden                   Norrkoping
                                                            AB
       Albany Door Systems AG           Albany Door Systems AB                    Switzerland                       Zurich
     Albany Door Systems B.V.           Albany Door Systems AB                    Netherlands                       Dieren
     Albany Door Systems GmbH          Albany International BV                        Germany                      Germany
     Albany Door Systems GmbH           Albany Door Systems AB                        Austria                     Sierning
                    (Austria)
 Albany Door Systems S.A.R.L.           Albany Door Systems AB                         France                     Selestat
Albany Door Systems Sp. zo.o.       Albany International Corp.                         Poland                       Poland
          Albany Dritek Corp.       Albany International Corp.                  United States                     New York
     Albany Felt Company Inc.       Albany International Corp.                  United States                     New York
 Albany International (China)       Albany International Corp.                          China             Panyu, Guangdong
                    Co., Ltd.
      Albany International AB     Albany International Holding                         Sweden                     Halmstad
                                                            AB
      Albany International AS          Albany International AB                         Norway                         Oslo
    Albany International B.V.     Albany International Holding                    Netherlands                    The Hague
                                              (Switzerland) AG
  Albany International Canada            AI (Switzerland) GmbH                         Canada                  Nova Scotia
                        Corp.
   Albany International Corp.                                                   United States                     Delaware
      Albany International de             Albany International                         Mexico                       Mexico
          Mexico S.A. de C.V.             Holding  S.A de C.V.
 Albany International France,      Albany International Canada                         France                     Selestat
                       S.A.S.                            Corp.
 Albany International Germany             Albany International                        Germany                      Germany
                 Holding 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     Albany International Holding                         Sweden                       Sweden
                   Holding AB                 (Switzerland) AG
 Albany International Holding       Albany International Corp.                         Mexico                       Mexico
                 S.A. de C.V.
         Albany International       Albany International Corp.       x          United States                     Delaware
           Holdings Two, Inc.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
             Affiliate                Direct Subsidiary of        Guarantors     Country of                  Jurisdiction of
                                                                                Incorporation                 Incorporation
----------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                                           <C>                <C>
  Albany International Italia     Albany International Holding                          Italy                        Italy
                     S.a.r.l.                 (Switzerland) AG
  Albany International Korea,             Albany International                          Korea                 Chungjoo-shi
                         Inc.               Holdings Two, Inc.
    Albany International Ltd.     Albany International Holding                 United Kingdom               United Kingdom
                                              (Switzerland) AG
      Albany International Oy          Albany International AB                        Finland                     Helsinki
   Albany International Pty.,             Albany International                      Australia      Australian Capital Terr
                         Ltd.    HoldingsTwo, Inc.
         Albany International             Albany International                 Cayman Islands               Cayman Islands
      Receivables Corporation               Holdings Two, Inc.
         Albany International       Albany International Corp.       X          United States                     Delaware
                 Research Co.
  Albany International S.p.A.      Albany International Italia                          Italy                        Italy
                                                      S.a.r.l.
 Albany International Service     Albany International Holding                         Mexico                       Mexico
         Company S.A. de C.V.                     S.A. de C.V.
         Albany International       Albany International Corp.       X          United States                New Hampshire
            Techniweave, Inc.
 Albany International Tecidos      Albany International Canada                         Brazil              JUCESC - Public
               Tecnicos Ltda.                            Corp.                                                  Department
          Albany Nordiskafilt          Albany International AB                          Japan                        Tokyo
             Kabushiki Kaisha
     Beier Albany and Company       Albany International Corp.                   South Africa     Republic of South Africa
        (Proprietary Limited)
 Brandon Drying Fabrics, Inc.                   Geschmay Corp.       X          United States                     Delaware
Foretagshalsan Tre Hjartan AB          Albany International AB                         Sweden                     Halmstad
               Geschmay Corp.       Albany International Corp.       X          United States                     Delaware
     Geschmay Forming Fabrics                   Geschmay Corp.       X          United States                     Delaware
                        Corp.
     Geschmay Wet Felts, Inc.                   Geschmay Corp.       X          United States                     Delaware
      Loading Bay Specialists         Albany Door Systems GmbH                 United Kingdom                      Cardiff
                      Limited
     Martel Wire S.A. de C.V.     Albany International Holding                         Mexico                       Mexico
                                                  S.A. de C.V.
              Nevo-Cloth Ltd.          Albany International AB                         Russia               St. Petersburg
    Albany International S.A.          Albany International AB                   South Africa                       Durban
                   Pty., Ltd.
               SA Alfadoor NV           Albany Door Systems AB                        Belgium                      Belgium
  Transamerican Manufacturing       Albany International Corp.                  United States                     Delaware
                         Inc.
 Transglobal Enterprises Inc.       Albany International Corp.                  United States                     Delaware
             Wurttembergische     Albany International Holding                        Germany                      Germany
   Filztuchfabrik D. Geschmay                             GmbH
                GmbH & Co. KG
  Albany International (Asia)             Albany International                      Australia      Australian Capital Terr
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
             Affiliate                Direct Subsidiary of        Guarantors     Country of                  Jurisdiction of
                                                                                Incorporation                 Incorporation
----------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                  <C>                    <C>
                   Pty., Ltd.               Holdings Two, Inc.                                                Suzhou City,
 Albany International Applied     Albany International Holding                          China                 Zhangjiagang
 Technology (Suzhou) Company,              (Switzerland) AG
                         Ltd.
</TABLE>


<PAGE>

                                   SCHEDULE 8C
                                   -----------

Albany International Corp. ("Albany") is a defendant in suits brought in various
courts in the United  States by  plaintiffs  who allege that they have  suffered
personal  injury  as  a  result  of  exposure  to  asbestos-containing  products
previously  manufactured by Albany.  Albany's production of  asbestos-containing
paper machine clothing  products was limited to certain  synthetic dryer fabrics
marketed  during the period from 1967 to 1976 and used in certain  paper  mills.
Such fabrics generally had a useful life of three to twelve months.

Albany was defending  against  24,452 claims as of July 22, 2005.  This compares
with 25,679 such claims as of April 22, 2005,  29,411  claims as of December 31,
2004,  28,838  claims as of December 31, 2003,  22,593 claims as of December 31,
2002,  7,347  claims as of December  31,  2001,  1,997 claims as of December 31,
2000, and 2,276 claims as of December 31, 1999.  These suits allege a variety of
lung and  other  diseases  based on  alleged  exposure  to  products  previously
manufactured by Albany.

Albany  anticipates  that  additional  claims  will be filed  against it and the
related  companies  in the future but is unable to predict the number and timing
of such future claims.  These suits typically involve claims against from twenty
to over two hundred defendants,  and the complaints usually fail to identify the
plaintiffs'  work history or the nature of the plaintiffs'  alleged  exposure to
Albany's  products.  In  cases in  which  work  histories  have  been  provided,
approximately  one-third  of the  claimants  have  alleged time spent in a paper
mill,  and only a portion of those  claimants have alleged time spent in a paper
mill to which Albany is believed to have supplied asbestos-containing products.

Approximately  19,166 of the claims pending  against Albany are filed in various
counties in  Mississippi,  of which 10,424 such claims are included in only five
proceedings.

Recent changes in the application of procedural rules regarding the mass joinder
of numerous asbestos claims in a single proceeding  against numerous  defendants
resulted  in the  dismissal  during the  quarter  of a number of claims  pending
against Albany in that State.  As the result of a 2004 ruling of the Mississippi
Supreme  Court,  courts in counties  throughout  the State began to issue orders
severing the  individual  claims of plaintiffs in mass joinder  asbestos  cases.
Once severed, the courts are requiring the plaintiffs to file amended complaints
which include more detailed information  regarding their allegations of asbestos
exposure,  and have begun to dismiss or transfer  improperly  filed cases.  As a
consequence,  a number of plaintiffs  have already  voluntarily  dismissed their
claims.  As to the plaintiffs filing amended  complaints,  these cases are being
transferred to the proper counties within Mississippi, or, in limited instances,
are being removed to federal  court.  The Company  expects more of the remaining
claims pending in Mississippi to be dismissed,  amended or transferred; and that
the only  claimants  remaining in  Mississippi at the conclusion of this process
will be those who are residents of, or who allege  exposure to asbestos in, that
State,  and whose  amended  complaints  satisfy  the  requirement  for  specific
information regarding their exposure claims.

The Company  expects that only a portion of these  remaining  claimants  will be
able to  demonstrate  time  spent  in a  paper  mill to  which  Albany  supplied
asbestos-containing    products    during   a   period    in   which    Albany's
asbestos-containing   products   were  in  use.   Based   on  past   experience,
communications  from certain plaintiffs' counsel and the advice of the Company's
Mississippi  counsel, the Company expects the percentage of claimants with paper
mill exposure in the Mississippi  proceedings to be considerably  lower than the
total number of claims previously  asserted.  However,  due to the fact that the
effects of the mandate of the Mississippi Supreme Court may take some time to be
fully realized,  the Company does not believe a meaningful  estimate can be made
regarding  the expected  reduction in claims or the range of possible  loss with
respect to the remaining claims.

It is the  position of Albany and the other paper  machine  clothing  defendants
that there was insufficient exposure to asbestos from any paper machine clothing
products to cause asbestos-related injury to any plaintiff. Furthermore,

<PAGE>

asbestos  contained  in  Albany's  synthetic  products  was  encapsulated  in  a
resin-coated  yarn woven into the interior of the fabric,  further  reducing the
likelihood  of fiber  release.  While the Company  believes  it has  meritorious
defenses to these claims,  it has settled  certain of these cases for amounts it
considers  reasonable  given the  facts  and  circumstances  of each  case.  The
Company's  insurer,  Liberty  Mutual,  has  defended  each case under a standard
reservation of rights.  As of July 22, 2005, the Company had resolved,  by means
of settlement or dismissal,  13,491 claims, and had reached tentative  agreement
to resolve an additional 4,563 claims reported above as pending.  The total cost
of resolving all 18,054 such claims was $6,081,000. Of this amount,  $6,046,000,
or 99%, was paid by the Company's  insurance carrier.  The Company has more than
$130  million in confirmed  insurance  coverage  that should be  available  with
respect to current and future asbestos claims,  as well as additional  insurance
coverage that it should be able to access.

Brandon Drying Fabrics, Inc.

Brandon Drying  Fabrics,  Inc.  ("Brandon"),  a subsidiary of Geschmay Corp., is
also a separate defendant in most of these cases.  Brandon was defending against
9,549 claims as of July 22,  2005.  This  compares  with 9,670 such claims as of
April 22,  2005,  9,985  claims as of December  31,  2004,  10,242  claims as of
December 31,  2003,  11,802  claims as of December 31, 2002,  8,759 claims as of
December 31, 2001,  3,598 claims as of December 31, 2000, and 1,887 claims as of
December  31, 1999.  The Company  acquired  Geschmay  Corp.,  formerly  known as
Wangner Systems  Corporation,  in 1999. Brandon is a wholly-owned  subsidiary of
Geschmay  Corp.  In 1978,  Brandon  acquired  certain  assets  from Abney  Mills
("Abney"),  a South Carolina textile manufacturer.  Among the assets acquired by
Brandon  from Abney  were  assets of Abney's  wholly-owned  subsidiary,  Brandon
Sales,  Inc.  which,  among  other  things,  had sold dryer  fabrics  containing
asbestos made by its parent,  Abney. It is believed that Abney ceased production
of asbestos-containing  fabrics prior to the 1978 transaction.  Although Brandon
manufactured  and sold dryer fabrics under its own name  subsequent to the asset
purchase, none of such fabrics contained asbestos. Under the terms of the Assets
Purchase Agreement between Brandon and Abney, Abney agreed to indemnify, defend,
and hold  Brandon  harmless  from any  actions or claims on account of  products
manufactured  by Abney  and its  related  corporations  prior to the date of the
sale, whether or not the product was sold subsequent to the date of the sale. It
appears that Abney has since been dissolved.  Nevertheless,  a representative of
Abney has been  notified of the  pendency  of these  actions and demand has been
made that it assume  the  defense  of these  actions.  Because  Brandon  did not
manufacture  asbestos-containing  products, and because it does not believe that
it was the legal  successor to, or otherwise  responsible  for  obligations  of,
Abney with respect to products  manufactured by Abney, it believes it has strong
defenses to the claims that have been  asserted  against it. In some  instances,
plaintiffs have voluntarily  dismissed claims against it, while in others it has
entered  into what it  considers to be  reasonable  settlements.  As of July 22,
2005,  Brandon has resolved,  by means of settlement or dismissal,  7,077 claims
for a total of $152,499.  Brandon's  insurance  carriers initially agreed to pay
88.2%  of  the  total   indemnification  and  defense  costs  related  to  these
proceedings,  subject to the standard reservation of rights. The remaining 11.8%
of the  costs  had been  borne  directly  by  Brandon.  During  2004,  Brandon's
insurance  carriers agreed to cover 100% of  indemnification  and defense costs,
subject  to  policy  limits  and the  standard  reservation  of  rights,  and to
reimburse  Brandon for all  indemnity and defense costs paid directly by Brandon
related to these proceedings.

Mount Vernon

In some of these cases,  the Company is named both as a direct  defendant and as
the "successor in interest" to Mount Vernon Mills ("Mount Vernon").  The Company
acquired  certain assets from Mount Vernon in 1993.  Certain  plaintiffs  allege
injury caused by asbestos-containing products alleged to have been sold by Mount
Vernon  many years  prior to this  acquisition.  Mount  Vernon is  contractually
obligated to indemnify  the Company  against any  liability  arising out of such
products.  The Company  denies any  liability  for products sold by Mount Vernon
prior to the acquisition of the Mount Vernon assets. Pursuant to its contractual
indemnification  obligations,  Mount  Vernon has  assumed  the  defense of these
claims.  On this basis,  the Company has  successfully  moved for dismissal in a
number of actions.

                                   ----------


<PAGE>

While the Company does not believe, based on currently available information and
for the reasons stated above, that a meaningful  estimate of a range of possible
loss can be made with respect to such claims,  based on its understanding of the
insurance  policies  available,  how  settlement  amounts have been allocated to
various policies, its recent settlement experience, the absence of any judgments
against the Company or Brandon,  the ratio of paper mill claims to total  claims
filed, and the defenses available, the Company currently does not anticipate any
material  liability  relating to the  resolution of the  aforementioned  pending
proceedings in excess of existing  insurance limits.  Consequently,  the Company
currently does not anticipate,  based on currently available  information,  that
the ultimate  resolution of the aforementioned  proceedings will have a material
adverse effect on the financial position, results of operations or cash flows of
the Company. Although the Company cannot predict the number and timing of future
claims,  based on the foregoing  factors and the trends in claims  against it to
date, the Company does not anticipate that additional  claims likely to be filed
against it in the future will have a material  adverse  effect on its  financial
position,  results of  operations or cash flows.  However,  the Company is aware
that  litigation  is  inherently  uncertain,  especially  when  the  outcome  is
dependent  primarily on  determinations of factual matters to be made by juries.
The Company is also aware that numerous other  defendants in asbestos  cases, as
well as others who claim to have  knowledge and  expertise on the subject,  have
found it difficult to anticipate the outcome of asbestos litigation,  the volume
of future asbestos claims and the anticipated settlement values of those claims.
For these reasons, there can be no assurance that the foregoing conclusions will
not change.

Legislation  has been introduced in the United States Senate that is intended to
address  asbestos  litigation  by creating a privately  funded  trust to provide
compensation  to persons  injured as the result of  exposure  to  asbestos.  The
FAIRNESS IN ASBESTOS  INJURY  RESOLUTION ACT OF 2005 was introduced on April 19,
2005 and  approved by the  Senate's  Judiciary  Committee  on May 26,  2005.  If
enacted  into law,  the  Company  would be  required  to make  payments of up to
$500,000  per  year  for  up to 30  years  to  the  privately  funded,  publicly
administered  trust  fund.  The  payments  would  not be  covered  by any of the
Company's  insurance  policies.  The  proposed  legislation  remains  subject to
negotiation  and  modification  in the full Senate.  The Company  cannot predict
whether the proposed legislation will ultimately be enacted into law.


<PAGE>

                                   SCHEDULE 8G
                                   -----------

1.    Five-Year  Revolving Credit Agreement,  dated as of January 8, 2004, among
      Albany  International Corp., certain banks listed therein, JP Morgan Chase
      Bank as the Administrative Agent, J.P. Morgan Europe Limited as the London
      Agent,  J.P. Morgan  Securities Inc. as Lead Arranger and Sole Bookrunner,
      Fleet National Bank and ABN AMRO Bank N.V. as Co-Syndication  Agents,  and
      Sumitomo  Mitsui  Banking Corp.,  New York,  and Wachovia  Bank,  N.A., as
      Co-Documentation Agents.

2.    Receivables  Sale Agreement,  dated as of September 28, 2001, among Albany
      International  Corp.  as  the  Collection  Agent,   Albany   International
      Receivables  Corporation  as the Seller,  ABN AMRO Bank N.V., as the Agent
      the Committed Purchasers party thereto, and Amsterdam Funding Corporation,
      including all Amendments thereto.

3.    Purchase and Sale Agreement,  dated as of September 28, 2001, among Albany
      International Corp.,  Geschmay Corp., Albany  International  Research Co.,
      Albany International Techniweave,  Inc., Albany International Canada Inc.,
      M&I  Door  Systems  Ltd.,  as   Originators,   and  Albany   International
      Receivables Corporation as Buyer, including all Amendments thereto.

4.    Letter  of  Credit  Agreement  dated as of July 1,  1987,  between  Albany
      International Corp. and Norstar Bank of Upstate NY, in connection with the
      Rensselaer County Industrial  Development Agency $10,000,000 Flexible Rate
      Demand Industrial  Development  Revenue Bonds,  Series 1987, as amended by
      amendment dated December 1987.