Document:

Exhibit 10.1

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                                                          Bank of America [LOGO]

                                                 EQUITY FINANCIAL PRODUCTS GROUP
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Bank of America, N.A.
c/o Banc of America Securities LLC
9 West 57th Street, 40th Floor
New York, NY 10019

                                                          March 7, 2006
To: Albany International Corp.
1373 Broadway
Albany, New York 12204
Attention: Christopher J. Connally, Corporate Treasurer
Telephone No.: (518) 445-2235
Facsimile No.: (518) 447-6305

Re: Call Option Transaction
Ref. No.: NY-21551

      The  purpose  of  this  letter  agreement  is to  confirm  the  terms  and
conditions  of the  Transaction  entered  into  between  Bank of  America,  N.A.
("BofA"),   and  Albany   International   Corp.,  a  Delaware  corporation  (the
"Counterparty"),  on the Trade Date specified  below (the  "Transaction").  This
letter agreement  constitutes a "Confirmation" as referred to in the ISDA Master
Agreement   specified  below.  This  Confirmation  shall  replace  any  previous
agreements and serve as the final documentation for this Transaction.

      The  definitions  and  provisions   contained  in  the  1996  ISDA  Equity
Derivatives  Definitions  (the  "Equity  Definitions"),   as  published  by  the
International  Swaps and Derivatives  Association,  Inc., are incorporated  into
this  Confirmation.  In  the  event  of any  inconsistency  between  the  Equity
Definitions  and this  Confirmation,  this  Confirmation  shall govern.  Certain
defined  terms used herein have the  meanings  assigned to them in the  Offering
Memorandum dated March 7, 2006 (the "Offering  Memorandum")  relating to the USD
150,000,000  principal amount of 2.25%  Convertible  Senior Notes due 2026, (the
"Convertible  Notes" and each USD 1,000 principal amount of Convertible Notes, a
"Convertible  Note") issued by the  Counterparty  pursuant to an Indenture to be
dated on or about March 13, 2006 between the  Counterparty  and  JPMorgan  Chase
Bank,  N.A.,  as trustee (the  "Indenture").  In the event of any  inconsistency
between the terms defined in the Offering Memorandum and this Confirmation, this
Confirmation shall govern.

      Each party is hereby advised,  and each such party acknowledges,  that the
other party has engaged in, or refrained from engaging in, substantial financial
transactions  and has taken other material actions in reliance upon the parties'
entry into the Transaction to which this  Confirmation  relates on the terms and
conditions set forth below.

1. This Confirmation evidences a complete and binding agreement between BofA and
the  Counterparty as to the terms of the Transaction to which this  Confirmation
relates.  This Confirmation shall supplement,  form a part of, and be subject to
an agreement in the form of the 2002 ISDA Master Agreement (the  "Agreement") as
if BofA and the Counterparty had executed an agreement in such form (but without
any Schedule except for the election of the laws of the State of New York as the
governing  law) on the Trade  Date.  In the event of any  inconsistency  between
provisions  of that  Agreement and this  Confirmation,  this  Confirmation  will
prevail for the purpose of the Transaction to which this  Confirmation  relates.
The parties hereby agree that no Transaction other than the Transaction to which
this Confirmation relates shall be governed by the Agreement.

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2. The terms of the particular  Transaction to which this  Confirmation  relates
are as follows:

General Terms:

      Trade Date:                      March 7, 2006

      Option Style:                    "Modified  American",  as described under
                                       "Exercise and Valuation" below

      Option Type:                     Call

      Buyer:                           Counterparty

      Seller:                          BofA

      Shares:                          The   Class  A   common   stock   of  the
                                       Counterparty,  par  value  USD  0.001 per
                                       Share (Exchange symbol "AIN")

      Number of Options:               60,000

      Option Entitlement:              As of any  date,  a  number  equal to the
                                       Conversion  Rate  as  of  such  date  (as
                                       defined  in the  Indenture,  but  without
                                       regard   to   any   adjustments   to  the
                                       Conversion   Rate   pursuant  to  Section
                                       15.04(i),  Section  15.03(a)  or  Section
                                       15.03(d)  of  the  Indenture),  for  each
                                       Convertible Note.

      Strike Price:                    USD 44.52

      Premium:                         USD 15,939,541.64

      Premium Payment Date:            March 13, 2006

      Exchange:                        The New York Stock Exchange

      Related Exchange(s):             None

Exercise and Valuation:

      Exercise Period(s):              Notwithstanding  the Equity  Definitions,
                                       in   respect   of   Exercisable   Options
                                       relating  to  Convertible  Notes  with  a
                                       particular   Conversion   Date  (each  as
                                       defined below), the Exercise Period shall
                                       be the period commencing on and including
                                       the Conversion  Date for the  Convertible
                                       Notes  corresponding  to such Exercisable
                                       Options and ending at 7:30 a.m.  New York
                                       City   time  on  the  first  day  of  the
                                       relevant   Cash   Settlement    Averaging
                                       Period; provided that if the Counterparty
                                       has validly  designated March 15, 2013 as
                                       a  redemption  date  for the  Convertible
                                       Notes   pursuant  to  the  terms  of  the
                                       Indenture,   there   shall  be  a  single
                                       Exercise Period for  Exercisable  Options
                                       relating to the Convertible

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                                       Notes with a  Conversion  Date  following
                                       the day on which the  Counterparty  gives
                                       notice  of  such   redemption   and  that
                                       Exercise  Period shall  terminate at 7:30
                                       a.m. New York City time on the redemption
                                       date;   provided   further  that  if  the
                                       Counterparty  has not validly  designated
                                       March 15, 2013 as a  redemption  date for
                                       the  Convertible  Notes  pursuant  to the
                                       terms of the Indenture,  Conversion Dates
                                       occurring   after   the   date   that  is
                                       twenty-seven  (27) Scheduled Trading Days
                                       prior to March 15,  2013 shall not result
                                       in the commencement of an Exercise Period
                                       and  no   Exercisable   Options  will  be
                                       exercised or deemed  exercised in respect
                                       thereof.

                                       "Scheduled  Trading Day" means any day on
                                       which the  Exchange  is  scheduled  to be
                                       open for trading for its regular  trading
                                       session.

      Exercisable  Options:            In  respect of any date on which a holder
                                       of Convertible Notes properly surrenders,
                                       or  is  deemed  to   surrender,   to  the
                                       Counterparty   a  Convertible   Note  for
                                       conversion  (a  "Conversion   Date"),   a
                                       number  of  Options  equal  to 40% of the
                                       number  of  Convertible   Notes  properly
                                       surrendered,  or deemed surrendered,  for
                                       conversion   on  such   Conversion   Date
                                       (which,  for the avoidance of doubt,  may
                                       be rounded  up or down by the  Company to
                                       account  for any  conversions  which  may
                                       result in fractional  Exercisable Options
                                       and  may  not   exceed   the   Number  of
                                       Options).

      Expiration Date:                 For any Exercisable  Option,  the earlier
                                       of (i)  the  final  day  of the  Exercise
                                       Period for such Exercisable  Option,  and
                                       (ii) the Final Expiration Date.

      Final Expiration Date:           March 15, 2013

      Multiple Exercise:               Applicable,     as    described     under
                                       Exercisable Options above.

      Automatic Exercise:              Applicable,  subject to the provisions of
                                       "Notice of Exercise" below.

      Notice of Exercise:              Notwithstanding  anything to the contrary
                                       in the  Equity  Definitions,  in order to
                                       exercise  any  Exercisable   Option,  the
                                       Counterparty   must  notify  BofA,  which
                                       notification  shall be irrevocable  after
                                       7:30 a.m. New York City time on the first
                                       day  of  the  relevant  Cash   Settlement
                                       Averaging Period and shall not be subject
                                       to subsequent  amendments,  in writing or
                                       orally  (and,  if such Notice of Exercise
                                       is  delivered by the  Counterparty  after
                                       the close of business in New York City on
                                       the  Scheduled  Trading  Day  immediately
                                       preceding the Expiration Date, via e-mail
                                       to: dg.efp_doc_group@bofasecurities.com),
                                       by 7:30  a.m.  New York  City time on the
                                       first day of the

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                                       relevant Cash Settlement Averaging Period
                                       for such  Exercisable  Option  of (i) the
                                       number  of  Convertible   Notes  properly
                                       submitted for  conversion on the relevant
                                       Conversion   Date  and  the   number   of
                                       Exercisable Options corresponding to such
                                       Convertible  Notes, (ii) the first day of
                                       the applicable Cash Settlement  Averaging
                                       Period and (iii) the scheduled Settlement
                                       Date;  provided that if the  Counterparty
                                       has validly  designated March 15, 2013 as
                                       a  redemption  date  for the  Convertible
                                       Notes   pursuant  to  the  terms  of  the
                                       Indenture, such notice may be given on or
                                       prior  to the  Expiration  Date  for such
                                       Exercisable Options and need only specify
                                       the number of Convertible Notes submitted
                                       for conversion  during the final Exercise
                                       Period  and  the  number  of  Exercisable
                                       Options corresponding to such Convertible
                                       Notes.

      Exchange Business Day:           Section 1.20 of the Equity Definitions is
                                       hereby  replaced  in its  entirety by the
                                       following:

                                       "'Exchange  Business  Day'  means  a  day
                                       during  which (i)  trading  in the Shares
                                       generally  occurs  and  (ii)  there is no
                                       Market  Disruption  Event  and  (iii) the
                                       Last  Reported  Sale Price (as defined in
                                       the   Indenture)   for  the   Shares   is
                                       available for such day."

      Market Disruption Event:         Section 4.3(a) of the Equity  Definitions
                                       is hereby replaced in its entirety by the
                                       following:

                                       "'Market   Disruption  Event'  means,  in
                                       respect of the  Shares,  (i) a failure by
                                       the  Exchange to open for trading  during
                                       its regular  trading  session or (ii) the
                                       occurrence  or  existence  prior  to 1:00
                                       p.m.  New York City time on any  Exchange
                                       Business   Day  for  the  Shares  for  an
                                       aggregate  one  half-hour  period  of any
                                       suspension  or   limitation   imposed  on
                                       trading (by reason of  movements in price
                                       exceeding   limits   permitted   by   the
                                       Exchange or  otherwise)  in the Shares or
                                       in  any  options,   contracts  or  future
                                       contracts relating to the Shares."

Settlement Terms:

      Settlement Method:               Net Share Settlement

      Net                              Share  Settlement:  For each  Exercisable
                                       Option  that  is   exercised   or  deemed
                                       exercised,   BofA  will  deliver  to  the
                                       Counterparty,  on the related  Settlement
                                       Date, a number of Shares equal to the Net
                                       Shares  in  respect  of such  Exercisable
                                       Option.  In no event  will the Net Shares
                                       be less than zero.

      Net Shares:                      In  respect  of each  Exercisable  Option
                                       exercised or deemed  exercised,  a number
                                       of Shares equal to (i) the

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                                       Option Entitlement multiplied by (ii) the
                                       sum,  for  each  Exchange   Business  Day
                                       during  the  relevant   Cash   Settlement
                                       Averaging  Period,  of (A)  the  Relevant
                                       Price on such Exchange Business Day, less
                                       the  Strike  Price,  divided  by (B)  the
                                       Relevant Price on such Exchange  Business
                                       Day, divided by (iii)  twenty-five  (25);
                                       provided,    however,    that    if   the
                                       calculation contained in clause (A) above
                                       results in a negative number, such number
                                       shall be replaced with the number "zero".

                                       BofA  will  deliver  cash  in lieu of any
                                       fractional  Share with respect to any Net
                                       Shares to be  delivered  with  respect to
                                       all  Exercisable  Options having the same
                                       Settlement   Date   based   on  the  Last
                                       Reported  Sale  Price (as  defined in the
                                       Indenture)  for the  Shares  on the final
                                       Exchange  Business  Day of  the  relevant
                                       Cash Settlement Averaging Period.

      Relevant Price:                  For each  Exchange  Business Day during a
                                       Cash Settlement Averaging Period, the per
                                       Share  volume-weighted  average price for
                                       such day as  displayed  under the heading
                                       "Bloomberg  VWAP" on  Bloomberg  page AIN
                                       [equity] AQR (or any  successor  thereto)
                                       in respect  of the period  from 9:30 a.m.
                                       to 4:00 p.m. (New York City time) on such
                                       Exchange   Business   Day   (or  if  such
                                       volume-weighted    average    price    is
                                       unavailable,  the  market  value  of  one
                                       Share on such  Exchange  Business Day, as
                                       determined  by  the  Calculation   Agent,
                                       using a volume-weighted method).

      Cash Settlement                  For   each   Exercisable    Option,   the
      Averaging Period:                twenty-five  (25)  consecutive   Exchange
                                       Business Days commencing on and including
                                       the   second   Exchange    Business   Day
                                       following  the  Conversion  Date  for the
                                       Convertible   Note   relating   to   such
                                       Exercisable Option;  provided that if the
                                       Counterparty has validly designated March
                                       15,  2013 as a  redemption  date  for the
                                       Convertible  Notes  pursuant to the terms
                                       of the  Indenture,  the  Cash  Settlement
                                       Averaging   Period  for  any  Exercisable
                                       Options relating to the Convertible Notes
                                       with a Conversion Date following the date
                                       on which the Counterparty gives notice of
                                       such  redemption,  the  twenty-five  (25)
                                       consecutive    Exchange   Business   Days
                                       commencing    on   and    including   the
                                       twenty-eighth  (28th)  Scheduled  Trading
                                       Day preceding such redemption date.

      Settlement Date:                 For   each   Exercisable    Option,   the
                                       settlement   date   for   Shares   to  be
                                       delivered  with  respect  to the  related
                                       Convertible  Notes under the terms of the
                                       Indenture.

      Other Applicable Provisions:     The provisions of Sections 6.6, 6.7, 6.8,
                                       6.9 and  6.10 of the  Equity  Definitions
                                       will be applicable, except that all

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                                       references   in   such    provisions   to
                                       "Physically-Settled"  shall  be  read  as
                                       references to "Net Share  Settled".  "Net
                                       Share  Settled" in relation to any Option
                                       means  that  Net  Share   Settlement   is
                                       applicable to that Option.

      Failure to Deliver:              Applicable

3.    Additional Terms applicable to the Transaction:

      Adjustments applicable to the Transaction:

      Potential Adjustment Events:     Notwithstanding  Section  9.1(e)  of  the
                                       Equity    Definitions,    a    "Potential
                                       Adjustment Event" means any occurrence of
                                       any event or  condition,  as set forth in
                                       Section 15.04 of the Indenture  resulting
                                       in an adjustment to the  Conversion  Rate
                                       of  the  Convertible   Notes,   excluding
                                       adjustments  or  conditions  that  result
                                       from an adjustment to the Conversion Rate
                                       pursuant  to Section  15.04(i) or Section
                                       15.03(a) of the Indenture.

      Method of Adjustment:            Calculation Agent  Adjustment,  and means
                                       that,  notwithstanding  Section 9.1(c) of
                                       the   Equity   Definitions,    upon   any
                                       adjustment to the Conversion  Rate of the
                                       Convertible   Notes   pursuant   to   the
                                       Indenture  (other than  Section  15.04(i)
                                       and Section  15.03(a)  of the  Indenture)
                                       and  an  equivalent   adjustment  to  the
                                       Option   Entitlement    hereunder,    the
                                       Calculation  Agent,  in order to  reflect
                                       the  effect  of the  event  or  condition
                                       relating  to  such   adjustment  on  this
                                       Transaction,  will  make a  corresponding
                                       adjustment  to  any  one or  more  of the
                                       Strike  Price,  Number of Options and any
                                       other variable  relevant to the exercise,
                                       settlement    or    payment    for    the
                                       Transaction.

      Extraordinary Events applicable to the Transaction:

      Merger Events:                   Notwithstanding  Section  9.2(a)  of  the
                                       Equity  Definitions,   a  "Merger  Event"
                                       means  the  occurrence  of any  event  or
                                       condition  set forth in Section  15.06 of
                                       the Indenture.

      Consequence of Merger Events:    Notwithstanding Section 9.3 of the Equity
                                       Definitions,  upon  the  occurrence  of a
                                       Merger Event, the Calculation Agent shall
                                       make  a   corresponding   adjustment   in
                                       respect  of  any  adjustment   under  the
                                       Indenture  to  any  one  or  more  of the
                                       nature  of  the  Shares,   Strike  Price,
                                       Number of Options, Option Entitlement and
                                       any  other   variable   relevant  to  the
                                       exercise,  settlement  or payment for the
                                       Transaction; provided, however, that such
                                       adjustment  (i)  shall  be  made  without
                                       regard   to   any   adjustment   to   the
                                       Conversion   Rate  for  the  issuance  of
                                       additional shares as set forth in Section
                                       15.03(a) of the Indenture, and (ii) shall
                                       assume  that,  in the  case of a  "Public
                                       Acquirer Change of Control" (as defined

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                                       in the Indenture),  the Counterparty does
                                       not make an election  provided in Section
                                       15.03(d) of the Indenture.

      Additional Termination Events:   If an event of  default  with  respect to
                                       the  Counterparty  shall  occur under the
                                       terms  of the  Convertible  Notes  as set
                                       forth in  Section  7.01 of the  Indenture
                                       and such event of default  results in the
                                       declaration  of  principal  and  interest
                                       immediately  due and payable  pursuant to
                                       the terms of the  Indenture,  such  event
                                       shall     constitute     an    Additional
                                       Termination   Event  applicable  to  this
                                       Transaction,  with  respect  to which the
                                       Counterparty  shall be  deemed  to be the
                                       sole Affected Party and this  Transaction
                                       shall be the sole  Affected  Transaction;
                                       provided  that,  notwithstanding  Section
                                       6(b)(iv)(1) of the  Agreement,  BofA will
                                       be required,  if the  Counterparty  makes
                                       itself  promptly  available upon request,
                                       to consult with the  Counterparty  and to
                                       reasonably   consider   whether   it   is
                                       advisable    to    designate   an   Early
                                       Termination Date pursuant to Section 6(b)
                                       of the Agreement.

                                       Whenever the  Counterparty is required to
                                       deliver  to  the  Trustee  an   officer's
                                       certificate  with respect to a default or
                                       an event of default  pursuant  to Section
                                       5.08 of the Indenture,  the  Counterparty
                                       shall also be  required to deliver a copy
                                       of such certificate to BofA hereunder.

      4. Calculation Agent:            BofA.  Whenever the Calculation  Agent is
                                       required to act or to  exercise  judgment
                                       in any way,  it will do so in good  faith
                                       and in a commercially  reasonable  manner
                                       to  achieve  a  commercially   reasonable
                                       result.

                                       The  Calculation  Agent shall,  not later
                                       than  the  third  Currency  Business  Day
                                       following receipt of a written request of
                                       the     Counterparty,     provide     the
                                       Counterparty  with a written  explanation
                                       of  the   basis  of  any   determination,
                                       adjustment or calculation made hereunder;
                                       provided  that if, after  reviewing  such
                                       written  explanation,   the  Counterparty
                                       objects to such determination, adjustment
                                       or  calculation,  then the  Counterparty,
                                       BofA and the Calculation Agent shall make
                                       reasonable  good  faith  efforts to agree
                                       upon   an   appropriate    determination,
                                       adjustment or calculation.

      5. Account Details:

            (a) Account for payments from the Counterparty:

                  JPMorgan, New York
                  ABA: 021-000-021
                  Acct: CHASUS33
                  Acct No.: 910-1010-693

                Account for delivery of Shares to the Counterparty:

                  DTC 50108 (Computershare)

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                  Note: the shares cannot be sent  electronically.  They must be
                  DWACed.

            (b) Account for payments to BofA:

                  Bank of America, N.A.
                  San Francisco, CA
                  SWIFT: BOFAUS65
                  Bank Routing: 121-000-358
                  Account Name: Bank of America
                  Account No.: 12333-34172

                  Account for delivery of Shares from BofA:

                  DTC 0733
                  Acct Name: Bank of America NA
                  Acct #: 116-0077

6. Offices:

The  Office  of the  Counterparty  for the  Transaction  is:  Inapplicable,  the
Counterparty is not a Multibranch Party.

The Office of BofA for the Transaction is: New York

                   Bank of America, N.A.
                   c/o Banc of America Securities LLC
                   9 West 57th Street, 40th Floor
                   New York, NY  10019

7. Notices: For purposes of this Confirmation:

      (a)   Address for notices or communications to the Counterparty:

                   Albany International Corp. 1373 Broadway
                   Albany, New York 12204
                   Attention: Christopher J. Connally
                   Telephone No.:   (518) 445-2235
                   Facsimile No.:   (518) 447-6305

                   With a copy to:

                   Albany International Corp.
                   1373 Broadway
                   Albany, New York 12204
                   Attention: Charles J. Silva, Jr.
                   Telephone No.:   (518) 445-2277
                   Facsimile No.:   (518) 447-6575

      (b)   Address for notices or communications to BofA:

                   Bank of America, N.A.
                   c/o Banc of America Securities LLC
                   Equity Financial Products

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                   Attention: Legal Department
                   9 West 57th
                   Street, 40th Floor
                   New York, NY 10019
                   Facsimile No.: (212) 326-8610

8. Representations and Warranties of the Counterparty

The representations and warranties of the Counterparty set forth in Section 4 of
the Purchase  Agreement  (the "Purchase  Agreement")  dated as of the Trade Date
between the  Counterparty  and J.P.  Morgan  Securities Inc. and Banc of America
Securities  LLC,  as Initial  Purchasers,  are true and  correct  and are hereby
deemed to be repeated to BofA as if set forth herein.  The  Counterparty  hereby
further represents and warrants to BofA that:

      (a)   The Counterparty has all necessary  corporate power and authority to
            execute,  deliver  and perform  its  obligations  in respect of this
            Transaction; such execution, delivery and performance have been duly
            authorized by all necessary  corporate action on the  Counterparty's
            part; and this  Confirmation  has been duly and validly executed and
            delivered by the  Counterparty and constitutes its valid and binding
            obligation,  enforceable against the Counterparty in accordance with
            its terms, subject to applicable bankruptcy,  insolvency, fraudulent
            conveyance,  reorganization,  moratorium  and similar laws affecting
            creditors'  rights  and  remedies  generally,  and  subject,  as  to
            enforceability,   to  general   principles   of  equity,   including
            principles of commercial reasonableness, good faith and fair dealing
            (regardless of whether  enforcement is sought in a proceeding at law
            or  in  equity)  and  except  that  rights  to  indemnification  and
            contribution hereunder may be limited by federal or state securities
            laws or public policy relating thereto.

      (b)   Neither the  execution  and  delivery of this  Confirmation  nor the
            incurrence  or  performance  of  obligations  of  the   Counterparty
            hereunder   will  conflict  with  or  result  in  a  breach  of  the
            certificate   of   incorporation   or  by-laws  (or  any  equivalent
            documents) of the Counterparty, or any applicable law or regulation,
            or  any  order,   writ,   injunction  or  decree  of  any  court  or
            governmental  authority or agency, or any agreement or instrument to
            which the  Counterparty or any of its Significant  Subsidiaries is a
            party  or by  which  the  Counterparty  or any  of  its  Significant
            Subsidiaries  is bound or to which  the  Counterparty  or any of its
            Significant  Subsidiaries is subject, or constitute a default under,
            or result in the creation of any lien under,  any such  agreement or
            instrument,  or breach or constitute a default under any  agreements
            and contracts of the Counterparty  and its Significant  Subsidiaries
            filed as exhibits to the  Counterparty's  Annual Report on Form 10-K
            for the year ended December 31, 2004,  incorporated  by reference in
            the Offering Memorandum.

      (c)   No consent,  approval,  authorization,  or order of, or filing with,
            any  governmental  agency  or  body  or any  court  is  required  in
            connection  with  the  execution,  delivery  or  performance  by the
            Counterparty of this Confirmation, except such as have been obtained
            or made and such as may be  required  under  the  Securities  Act of
            1933, as amended (the "Securities Act") or state securities laws.

      (d)   The Counterparty is an "eligible contract participant" (as such term
            is defined in  Section  1a(12) of the  Commodity  Exchange  Act,  as
            amended (the "CEA") because one or more of the following is true:

            The  Counterparty  is a  corporation,  partnership,  proprietorship,
            organization, trust or other entity and:

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            (A)   the Counterparty has total assets in excess of USD 10,000,000;

            (B)   the obligations of the Counterparty  hereunder are guaranteed,
                  or  otherwise  supported  by a letter of  credit or  keepwell,
                  support or other agreement, by an entity of the type described
                  in  Section   1a(12)(A)(i)   through  (iv),   1a(12)(A)(v)(I),
                  1a(12)(A)(vii) or 1a(12)(C) of the CEA; or

            (C)   the  Counterparty  has a net worth in excess of USD  1,000,000
                  and has entered  into this  Agreement in  connection  with the
                  conduct  of  Counterparty's  business  or to  manage  the risk
                  associated  with an asset or  liability  owned or  incurred or
                  reasonably  likely to be owned or incurred by the Counterparty
                  in the conduct of the Counterparty's business.

      (e)   The  Counterparty  is not, on the date hereof,  in possession of any
            material non-public information with respect to the Counterparty.

9. Other Provisions:

      (a)   Opinions.  The  Counterparty  shall  deliver  to BofA an  opinion of
            counsel,  dated as of the Trade Date,  substantially in the form set
            forth in Exhibit A hereto.

      (b)   Amendment. If the Initial Purchasers party to the Purchase Agreement
            exercise their right to purchase additional Convertible Notes as set
            forth therein, then, at the discretion of the Counterparty, BofA and
            the  Counterparty  will amend this  Confirmation to provide for such
            increase in  Convertible  Notes (but on pricing terms  acceptable to
            BofA  and the  Counterparty)  (such  amendment  to  provide  for the
            payment  by the  Counterparty  to  BofA  of the  additional  premium
            related thereto).

      (c)   No Reliance, etc. Each party represents that (i) it is entering into
            the Transaction  evidenced  hereby as principal (and not as agent or
            in any other capacity);  (ii) neither the other party nor any of its
            agents are acting as a  fiduciary  for it;  (iii) it is not  relying
            upon any  representations  except those  expressly  set forth in the
            Agreement or this Confirmation;  (iv) it has not relied on the other
            party  for  any  legal,  regulatory,   tax,  business,   investment,
            financial,   and  accounting   advice,  and  it  has  made  its  own
            investment,  hedging,  and  trading  decisions  based  upon  its own
            judgment  and not upon any view  expressed by the other party or any
            of its agents;  and (v) it is entering into this  Transaction with a
            full understanding of the terms, conditions and risks thereof and it
            is capable of and willing to assume those risks.

      (d)   Share  De-listing  Event.  If at any time during the period from and
            including  the Trade Date,  to and  including  the Final  Expiration
            Date,  the Shares  cease to be listed or quoted on the  Exchange for
            any  reason  (other  than a Merger  Event as a result  of which  the
            shares of common stock  underlying  the Options are listed or quoted
            on The New York Stock  Exchange,  The American Stock Exchange or the
            NASDAQ  National  Market  (or  their  respective   successors)  (the
            "Successor  Exchange")) and are not immediately  re-listed or quoted
            as of the  date of such  de-listing  on the  Successor  Exchange  (a
            "Share  De-listing"),  then  Cancellation and Payment (as defined in
            Section 9.6 of the Equity  Definitions,  treating the  "Announcement
            Date" as the  date of  first  public  announcement  that  the  Share
            De-listing,  will  occur  and the  "Merger  Date" as the date of the
            Share  De-listing) shall apply, and the date of the de-listing shall
            be deemed the date of termination  for purposes of  calculating  any
            payment  due from  one  party to the  other in  connection  with the
            cancellation  of this  Transaction.  If the Shares  are  immediately
            re-listed on a

                                       10
<PAGE>

            Successor  Exchange upon their  de-listing  from the Exchange,  this
            Transaction  shall continue in full force and effect,  provided that
            the  Successor  Exchange  shall be deemed to be the Exchange for all
            purposes  hereunder;  provided that the  Calculation  Agent may make
            appropriate  adjustments to the terms of this Transaction to reflect
            the effect of such  re-listing.  For the  avoidance of doubt,  in no
            event  will  a  Share  De-listing  result  in an  obligation  of the
            Counterparty under this Confirmation to make a payment to BofA.

      (e)   Repurchase Notices.  The Counterparty shall, on any day on which the
            Counterparty effects any repurchase of Shares,  promptly give BofA a
            written notice of such  repurchase (a  "Repurchase  Notice") on such
            day if following such repurchase,  the number of outstanding  Shares
            on such day, subject to any adjustments provided herein, is (i) less
            than 25  million  (in the case of the  first  such  notice)  or (ii)
            thereafter,  more  than  125,000  less  than the  number  of  Shares
            included  in  the  immediately   preceding  Repurchase  Notice.  The
            Counterparty  agrees to  indemnify  and hold  harmless  BofA and its
            affiliates  and their  respective  officers,  directors,  employees,
            affiliates,  advisors,  agents and  controlling  persons  (each,  an
            "Indemnified Person") from and against any and all losses (including
            losses  relating  to  BofA's  reasonable  hedging  activities  as  a
            consequence  of becoming,  or of the risk of becoming,  a Section 16
            "insider",   including  without  limitation,  any  forbearance  from
            reasonable   hedging   activities   or  cessation  of  such  hedging
            activities  and any losses in connection  therewith  with respect to
            this  Transaction),  claims,  damages,  judgments,  liabilities  and
            expenses (including  reasonable  attorney's fees), joint or several,
            which an  Indemnified  Person  actually may become  subject to, as a
            result  of  the  Counterparty's  failure  to  provide  BofA  with  a
            Repurchase  Notice on the day and in the  manner  specified  in this
            Section  9(e),  and to  reimburse,  within  30  days,  upon  written
            request,  each of such Indemnified  Persons for any reasonable legal
            or  other  expenses  incurred  in  connection  with   investigating,
            preparing for,  providing  testimony or other evidence in connection
            with  or  defending  any of the  foregoing.  If  any  suit,  action,
            proceeding (including any governmental or regulatory investigation),
            claim or demand shall be brought or asserted against the Indemnified
            Person,   such   Indemnified   Person  shall  promptly   notify  the
            Counterparty in writing,  and the Counterparty,  upon request of the
            Indemnified Person, shall retain counsel reasonably  satisfactory to
            the Indemnified  Person to represent the Indemnified  Person and any
            others the  Counterparty  may designate in such proceeding and shall
            pay  the  fees  and  expenses  of  such  counsel   related  to  such
            proceeding.  The Counterparty shall not be liable for any settlement
            of any  proceeding  effected  without  its written  consent,  but if
            settled  with such  consent or if there be a final  judgment for the
            plaintiff,  the  Counterparty  agrees to indemnify  any  Indemnified
            Person  from and  against  any loss or  liability  by reason of such
            settlement  or judgment.  The  Counterparty  shall not,  without the
            prior  written  consent  of  the  Indemnified  Person,   effect  any
            settlement  of any pending or  threatened  proceeding  in respect of
            which  any  Indemnified  Person  is or could  have  been a party and
            indemnity  could  have been  sought  hereunder  by such  Indemnified
            Person,  unless such settlement includes an unconditional release of
            such  Indemnified  Person from all  liability on claims that are the
            subject matter of such proceeding on terms  reasonably  satisfactory
            to such Indemnified Person. If the  indemnification  provided for in
            this  paragraph  (e) is  unavailable  to an  Indemnified  Person  or
            insufficient   in  respect  of  any  losses,   claims,   damages  or
            liabilities  referred to therein,  then the Counterparty  under such
            paragraph,   in  lieu  of  indemnifying   such  Indemnified   Person
            thereunder,  shall  contribute to the amount paid or payable by such
            Indemnified  Person as a result of such losses,  claims,  damages or
            liabilities. The remedies provided for in this paragraph (e) are not
            exclusive  and  shall not limit  any  rights or  remedies  which may
            otherwise  be  available  to  any  Indemnified  Person  at law or in
            equity. The indemnity and contribution agreements contained in this

                                       11
<PAGE>

            paragraph  (e) shall remain  operative  and in full force and effect
            regardless of the termination of this Transaction.

      (f)   Regulation M. The  Counterparty was not on the Trade Date and is not
            on the date hereof engaged in a  distribution,  as such term is used
            in  Regulation  M under  the  Securities  Exchange  Act of 1934,  as
            amended (the "Exchange Act"), of any securities of the Counterparty,
            other than a distribution  meeting the requirements of the exception
            set forth in Rules  101(b)(10)  and  102(b)(7) of  Regulation M. The
            Counterparty  shall not,  until the  second  Exchange  Business  Day
            immediately   following   the  Trade   Date,   engage  in  any  such
            distribution.

      (g)   No  Manipulation.   The  Counterparty  is  not  entering  into  this
            Transaction  to create  actual or apparent  trading  activity in the
            Shares (or any security  convertible  into or  exchangeable  for the
            Shares) or to raise or depress or otherwise  manipulate the price of
            the Shares (or any security convertible into or exchangeable for the
            Shares).

      (h)   Number of Repurchased  Shares.  The Counterparty  represents that it
            could have  purchased  Shares,  in an amount equal to the product of
            the Number of Options and the Option Entitlement, on the Exchange or
            otherwise,  in compliance with  applicable  law, its  organizational
            documents and any orders,  decrees,  contractual  agreements binding
            upon the Counterparty, on the Trade Date.

      (i)   Board  Authorization.  Each of this  Transaction and the issuance of
            the  Convertible  Notes was approved by its board of  directors  and
            publicly  announced,  solely for the  purposes  stated in such board
            resolution  and public  disclosure and the  Counterparty's  board of
            directors has duly  authorized any repurchase of Shares  pursuant to
            this Transaction.  The Counterparty further represents that there is
            no internal  policy,  whether  written or oral, of the  Counterparty
            that would prohibit the  Counterparty  from entering into any aspect
            of this Transaction, including, but not limited to, the purchases of
            Shares to be made pursuant hereto.

      (j)   Transfer or Assignment. (i) The Counterparty shall have the right to
            assign its  rights and  obligations  hereunder  with  respect to any
            Options hereunder (such Options, the "Transfer Options"), subject to
            BofA's  consent,  such  consent not to be  unreasonably  withheld or
            delayed; provided that such assignment or transfer shall be effected
            on terms satisfactory to BofA and shall be subject, but not limited,
            to the following conditions:

                  (A) With respect to any  Transfer  Options,  the  Counterparty
                  shall not be  released  from its  notice  and  indemnification
                  obligations  pursuant to Section 9(c) or any obligations under
                  Section 9(s) of this Confirmation;

                  (B) Any Transfer Options shall only be transferred or assigned
                  to a third party  reasonably  acceptable to BofA and on terms,
                  including any reasonable  undertakings by such third party and
                  execution of any  documentation and delivery of legal opinions
                  with  respect  to  securities  laws and other  matters by such
                  third  party  and  the  Counterparty,  as  are  requested  and
                  reasonably satisfactory to BofA; and

                  (C) The  Counterparty  shall be responsible for all reasonable
                  costs  and  expenses,   including   reasonable  counsel  fees,
                  incurred  by  BofA  in   connection   with  such  transfer  or
                  assignment.

            (ii) BofA may not  transfer  or  assign  all or any  portion  of its
            rights or obligations under this Transaction  without consent of the
            Counterparty;  provided,  however,  that if BofA, in its  reasonable
            discretion,  determines that, (x) its "beneficial ownership" (within
            the

                                       12
<PAGE>

            meaning  of  Section 16 of the  Exchange  Act and rules  promulgated
            thereunder)  exceeds  8% or more of the  Counterparty's  outstanding
            Shares or (y) the  product of the  Number of Options  and the Option
            Entitlement  divided  by the  total  number  of  the  Counterparty's
            outstanding  Shares (the "Options Equity  Percentage")  exceeds 15%,
            then:

                  (A) BofA may transfer or assign a number of Options sufficient
                  to reduce such "beneficial  ownership" to 7.5% or such Options
                  Equity  Percentage  to 14.5% to any third  party with a rating
                  for its long term,  unsecured and unsubordinated  indebtedness
                  of A- or better by  Standard & Poor's  Ratings  Service or its
                  successor  ("S&P"),  or  A3 or  better  by  Moody's  Investors
                  Service  ("Moody's")  or, if either S&P or  Moody's  ceases to
                  rate such debt, at least an  equivalent  rating or better by a
                  substitute  rating agency mutually agreed by the  Counterparty
                  and BofA; and

                  (B) If such "beneficial  ownership" exceeds 8% or such Options
                  Equity Percentage exceeds 15%,

                        (1)  at  a  time  when  the  number  of   Counterparty's
                        outstanding Shares,  subject to any adjustments provided
                        herein, is less than 22 million;

                        (2) as a result of any breach by the Counterparty of its
                        notice obligations under Section 9(e); or

                        (3) and if, in the good  faith  reasonable  judgment  of
                        BofA,  based upon  advice of counsel  and as a result of
                        events  occurring  after the Trade Date, BofA reasonably
                        determines that it would be inadvisable to engage in any
                        alternative hedging transactions,  which would enable it
                        to reduce  its  "beneficial"  ownership  or its  Options
                        Equity Percentage, other than by transfer, assignment or
                        termination,   and  in  either   case  BofA   reasonably
                        determines  that it is  unable  after  its  commercially
                        reasonable  efforts to effect  transfer or assignment on
                        pricing terms and in a time period reasonably acceptable
                        to BofA that would reduce its "beneficial  ownership" to
                        7.5% or such Options Equity Percentage to 14.5%;

                  BofA  may  designate  any  Exchange  Business  Day as an Early
                  Termination  Date with respect to a portion  (the  "Terminated
                  Portion")  of this  Transaction,  such  that  its  "beneficial
                  ownership"   following  such  partial   termination  would  be
                  approximately  equal to 7.5% or the Options Equity  Percentage
                  approximately  equal  to  14.5%,  as  applicable.  If  BofA so
                  designates an Early Termination Date with respect to a portion
                  of this  Transaction,  a  payment  shall be made  pursuant  to
                  Section 6 of the Agreement as if an Early Termination Date had
                  occurred in respect of a Transaction having terms identical to
                  this Transaction  except with a Number of Options equal to the
                  Terminated  Portion,  with  respect to which the  Counterparty
                  shall be the sole Affected Party and such Transaction shall be
                  the only Affected Transaction.

            (iii)  Notwithstanding  any other provision in this  Confirmation to
            the contrary  requiring or allowing BofA to purchase,  sell, receive
            or  deliver  any  Shares  or  other   securities   to  or  from  the
            Counterparty,  BofA may designate any of its affiliates to purchase,
            sell,  receive  or  deliver  such  shares  or other  securities  and
            otherwise  to  perform   BofA's   obligations  in  respect  of  this
            Transaction and any such designee may assume such obligations.  BofA
            shall be discharged of its obligations to the  Counterparty  only to
            the extent of any such performance.

                                       13
<PAGE>

      (k)   Modified  Settlement.  If, upon advice of counsel,  BofA  reasonably
            determines,   with  respect  to  applicable   legal  and  regulatory
            requirements,  including any requirements relating to BofA's hedging
            activities  hereunder,  or due to a lack of sufficient  liquidity in
            the borrow market for the Shares,  that it would not be  practicable
            or advisable to deliver, or to acquire to deliver, any or all of the
            Shares  to be  delivered  by BofA on the  Settlement  Date  for this
            Transaction,  BofA may, by notice to the Counterparty on or prior to
            any anticipated Settlement Date (a "Nominal Settlement Date"), elect
            to deliver  the  Shares on a  different  date or two or more  dates,
            whether  immediately  preceding or following  such  Settlement  Date
            (each, a "Staggered Settlement Date"), as follows:

            (i)   in such  notice,  BofA will  specify to the  Counterparty  the
                  related Staggered  Settlement Date or Dates (the last of which
                  may be no later than the twenty-fifth (25th) Scheduled Trading
                  Day following the Nominal  Settlement  Date) and the number of
                  Shares that it will deliver on each Staggered Settlement Date;
                  and

            (ii)  the  aggregate  number of Shares that BofA will deliver to the
                  Counterparty  hereunder on all such Staggered Settlement Dates
                  will equal the number of Shares that BofA would  otherwise  be
                  required to deliver on such Nominal Settlement Date.

            BofA shall effect such  delivery as promptly as is  practicable  and
            shall  compensate  the  Counterparty  for any  delayed  delivery  by
            paying, in addition to delivering any Shares  hereunder,  an amount,
            as determined by the  Calculation  Agent,  equal to the sum for each
            day of such  delay of the  product  of (i) the  Federal  Funds  Rate
            divided by 360 and (ii) the value of the Shares not  delivered as of
            such  day;  provided  that if  BofA  fails  to  deliver  any  Shares
            hereunder  by  the  twenty-fifth   (25th)   Scheduled   Trading  Day
            immediately  following the Nominal Settlement Date, such event shall
            constitute  an  Additional  Termination  Event  with  respect to the
            portion of this  Transaction  corresponding  to the number of Shares
            not delivered by BofA by such date, with respect to which BofA shall
            be the sole Affected  Party and this  Transaction  the sole Affected
            Transaction.

            "Federal Funds Rate" means, for any day, the rate set forth for such
            day opposite the caption "Federal funds",  as such rate is displayed
            on the  page  FedsOpen  [Index][GO]  on the  Bloomberg  Professional
            Service or any successor page;  provided that if no rate appears for
            any day on such page, the rate for the immediately preceding day for
            which a rate does so appear shall be used for such day.

      (l)   Damages.  Neither  party shall be liable  under  Section 6.10 of the
            Equity Definitions for special,  indirect or consequential  damages,
            even if informed of the possibility thereof.

      (m)   Early  Unwind.  In the  event the sale of  Convertible  Notes is not
            consummated with the initial  purchasers for any reason by the close
            of  business  in New York on March 13,  2006 (or such  later date as
            agreed  upon by the  parties)  (March 13, 2006 or such later date as
            agreed upon, being the "Early Unwind Date"),  this Transaction shall
            automatically  terminate (the "Early  Unwind"),  on the Early Unwind
            Date and (i) the  Transaction  and all of the respective  rights and
            obligations of BofA and the Counterparty under the Transaction shall
            be cancelled  and  terminated  and (ii) each party shall be released
            and  discharged  by the other  party from and agrees not to make any
            claim  against the other party with  respect to any  obligations  or
            liabilities of the other party arising out of and to be performed in
            connection with the  Transaction  either prior to or after the Early
            Unwind Date; provided that, if the failure to consummate the sale of
            the Convertible  Notes results from a breach by the  Counterparty of
            any  representation  of  or  any  undertaking  by  the  Counterparty
            contained in the Purchase Agreement, the Counterparty shall purchase
            from

                                       14
<PAGE>

            BofA on the Early Unwind Date any Shares purchased by BofA or one or
            more of its  affiliates  in  connection  with this  Transaction  and
            reimburse BofA for any costs or expenses  (including  market losses)
            relating to the unwinding of its  reasonable  hedging  activities in
            connection  with the  Transaction  (including  any  losses  or costs
            incurred as a result of its terminating,  liquidating,  obtaining or
            reestablishing  any reasonable  hedge or related trading  position).
            The amount of any such reimbursement  shall be determined by BofA in
            its  reasonable  good  faith  discretion.   BofA  shall  notify  the
            Counterparty  of such  amount,  including,  upon the  Counterparty's
            request,  an  explanation  of the  basis  of  determination  of such
            amount,  and the  Counterparty  shall pay such amount in immediately
            available funds on the Early Unwind Date. BofA and the  Counterparty
            represent and acknowledge to the other that,  subject to the proviso
            included in this Section, upon an Early Unwind, all obligations with
            respect  to the  Transaction  shall  be  deemed  fully  and  finally
            discharged.

      (n)   Role of Agent.  Each party agrees and acknowledges  that (i) Banc of
            America  Securities LLC ("BASL"),  has acted solely as agent and not
            as principal with respect to this  Transaction  and (ii) BASL has no
            obligation  or  liability,  by  way  of  guaranty,   endorsement  or
            otherwise,  in any manner in respect of this Transaction (including,
            if  applicable,  in respect of the settlement  thereof).  Each party
            agrees it will look solely to the other party (or any  guarantor  in
            respect  thereof) for performance of such other party's  obligations
            under this Transaction.

      (o)   Additional Provisions.

            (i)   Notwithstanding   Section  9.7  of  the  Equity   Definitions,
            everything  in the first  paragraph of Section  9.7(b) of the Equity
            Definitions  after the words  "Calculation  Agent" in the third line
            through  the  remainder  of such  Section  9.7 shall be deleted  and
            replaced with the following:

            "based   on  an  amount   representing   the   Calculation   Agent's
            determination  of the fair  value to Buyer of an option  with  terms
            that would preserve for Buyer the economic equivalent of any payment
            or delivery  (assuming  satisfaction  of each  applicable  condition
            precedent,  including, for the avoidance of doubt, the occurrence of
            a  Conversion  Date with  respect to each  Option) by the parties in
            respect of the relevant  Transaction  that would have been  required
            after that date but for the occurrence of the Share De-listing."

            (ii) Notwithstanding anything to the contrary in the Agreement, this
            Confirmation  or the  Equity  Definitions,  (A) in  determining  any
            amount  payable  in  respect  of  an  Early  Termination  Date  or a
            Cancellation  and Payment,  the value of this  Transaction  shall be
            determined as if all Options  outstanding  at such time would become
            Exercisable  Options during the Final Exercise Period and, (B) in no
            event shall the  calculation  of the amount  under  Section 6 of the
            Agreement in respect of an  Additional  Termination  Event result in
            any amount being payable by the Counterparty.

      (p)   Alternative  Calculations  and Payment on Early  Termination  and on
            Certain Extraordinary Events. If, in respect of this Transaction, an
            amount  is  payable  by BofA to the  Counterparty  (i)  pursuant  to
            Section 9.7 of the Equity  Definitions or this Confirmation  (except
            in the event of a Merger Event in which the consideration to be paid
            to holders of Shares  consists  solely of cash) or (ii)  pursuant to
            Section  6(d)(ii) of the Agreement  (except in the event of an Event
            of Default in which the  Counterparty  is the Defaulting  Party or a
            Termination  Event in which the  Counterparty is the Affected Party,
            other  than an Event of  Default  of the type  described  in Section
            5(a)(iii), (v), (vi), (vii) or

                                       15
<PAGE>

            (viii) of the  Agreement or in this  Confirmation  or a  Termination
            Event of the type described in Section 5(b)(i),  (ii), (iii),  (iv),
            (v) or (vi) of the Agreement or in this  Confirmation,  in each case
            resulting  from  an  event  or  events  outside  the  Counterparty's
            control) (a "Payment Obligation"), the Counterparty may, in its sole
            -- discretion,  request that BofA satisfy such Payment Obligation by
            the Share Termination  Alternative (as defined below) and shall give
            irrevocable  telephonic notice to BofA,  confirmed in writing within
            one  Currency  Business  Day, no later than 12:00 p.m. New York City
            time on the Merger  Date,  the date of the Share  De-listing  or the
            Early  Termination  Date,  as  applicable;   provided  that  if  the
            Counterparty  does not validly request that BofA satisfy its Payment
            Obligation by the Share Termination Alternative, BofA shall have the
            right, in its sole discretion,  to satisfy its Payment Obligation by
            the Share Termination  Alternative,  notwithstanding  Counterparty's
            lack of election or election to the  contrary.  In  calculating  any
            amounts  under  Section  6(e)  of  the  Agreement,   notwithstanding
            anything to the  contrary in the  Agreement,  (1)  separate  amounts
            shall be calculated as set forth in Section 6(e) with respect to (a)
            this  Transaction  and  (b) all  other  Transactions,  and (2)  such
            separate  amounts shall be payable  pursuant to Section  6(d)(ii) of
            the Agreement,  subject to, in the case of clause (1)(a),  the Share
            Termination Alternative right hereunder.

            Share Termination Alternative:      If   applicable,    BofA   shall
                                                deliver to the  Counterparty the
                                                Share    Termination    Delivery
                                                Property  on the  date  when the
                                                Payment     Obligation     would
                                                otherwise  be  due  pursuant  to
                                                Section   9.7  of   the   Equity
                                                Definitions,  this  Confirmation
                                                or Section  6(d)(ii) and 6(e) of
                                                the  Agreement,   as  applicable
                                                (the "Share Termination  Payment
                                                Date"),  in  satisfaction of the
                                                Payment Obligation in the manner
                                                reasonably   requested   by  the
                                                Counterparty free of payment.

            Share Termination                   A number  of  Share  Termination
            Delivery Property:                  Delivery Units, as calculated by
                                                the Calculation  Agent, equal to
                                                the Payment  Obligation  divided
                                                by the  Share  Termination  Unit
                                                Price.  The  Calculation   Agent
                                                shall     adjust    the    Share
                                                Termination Delivery Property by
                                                replacing any fractional portion
                                                of a  security  therein  with an
                                                amount  of  cash  equal  to  the
                                                value    of   such    fractional
                                                security  based  on  the  values
                                                used  to  calculate   the  Share
                                                Termination Unit Price.

            Share Termination Unit Price:       The  value  to BofA of  property
                                                contained     in    one    Share
                                                Termination Delivery Unit on the
                                                date  such   Share   Termination
                                                Delivery   Units   are   to   be
                                                delivered  as Share  Termination
                                                Delivery Property, as determined
                                                by the Calculation  Agent in its
                                                discretion    by    commercially
                                                reasonable means and notified

                                       16
<PAGE>

                                                by the Calculation Agent to BofA
                                                at the time of  notification  of
                                                the Payment Obligation.

            Share Termination Delivery Unit:    One Share or, if a Merger  Event
                                                has occurred and a corresponding
                                                adjustment  to this  Transaction
                                                has been made, a unit consisting
                                                of the  number or amount of each
                                                type of  property  received by a
                                                holder  of  one  Share  (without
                                                consideration of any requirement
                                                to    pay    cash    or    other
                                                consideration    in    lieu   of
                                                fractional    amounts   of   any
                                                securities)   in   such   Merger
                                                Event,   as  determined  by  the
                                                Calculation Agent.

            Failure to Deliver:                 Applicable

            Other applicable provisions:        If   the    Share    Termination
                                                Alternative is  applicable,  the
                                                provisions of Sections 6.6, 6.7,
                                                6.8,  6.9 and 6.10 (as  modified
                                                above) of the Equity Definitions
                                                will be applicable,  except that
                                                all     references    in    such
                                                provisions                    to
                                                "Physically-Settled"   shall  be
                                                read  as  references  to  "Share
                                                Termination   Settled"  and  all
                                                references to "Shares"  shall be
                                                read  as  references  to  "Share
                                                Termination   Delivery   Units".
                                                "Share  Termination  Settled" in
                                                relation  to  this   Transaction
                                                means that the Share Termination
                                                Alternative   is  applicable  to
                                                this Transaction.

      (q)   Governing  Law.  New York law  (without  reference  to choice of law
            doctrine).

      (r)   Waiver of Jury  Trial.  Each party  waives,  to the  fullest  extent
            permitted  by  applicable  law,  any right it may have to a trial by
            jury in respect of any suit,  action or proceeding  relating to this
            Transaction. Each party (i) certifies that no representative,  agent
            or  attorney  of the  other  party  has  represented,  expressly  or
            otherwise,  that such other  party would not, in the event of such a
            suit, action or proceeding, seek to enforce the foregoing waiver and
            (ii)  acknowledges  that it and the other party have been induced to
            enter into this Transaction,  as applicable, by, among other things,
            the mutual waivers and certifications provided herein.

      (s)   Registration.  The  Counterparty  hereby agrees that if, in the good
            faith reasonable judgment of BofA, based upon the advice of counsel,
            the Shares  ("Hedge  Shares")  acquired  by BofA for the  purpose of
            hedging its obligations  pursuant to this Transaction cannot be sold
            in the U.S.  public  market by BofA without  registration  under the
            Securities Act, the Counterparty shall, at its election,  either (i)
            in order to allow  BofA to sell the  Hedge  Shares  in a  registered
            offering, make available to BofA an effective registration statement
            under the  Securities  Act to cover the resale of such Hedge  Shares
            and  enter  into an  agreement,  in form  and  substance  reasonably
            satisfactory to BofA,  substantially  in the form of an underwriting
            agreement  for a registered  offering;  provided,  however,  that if
            BofA, in its reasonable discretion,  is not satisfied with access to
            due   diligence   materials,   the  results  of  its  due  diligence
            investigation, or the procedures and

                                       17
<PAGE>

            documentation  for the registered  offering  referred to above, then
            clause (ii) or clause  (iii) of this Section 9(s) shall apply at the
            election  of the  Counterparty,  (ii) in order to allow BofA to sell
            the  Hedge  Shares  in a  private  placement,  enter  into a private
            placement  agreement  substantially  similar  to  private  placement
            purchase  agreements  customary  for  private  placements  of equity
            securities,  in form and substance  reasonably  satisfactory to BofA
            (in which case, the Calculation  Agent shall make any adjustments to
            the terms of this Transaction that are necessary,  in its reasonable
            judgment, to compensate BofA for any discount from the public market
            price  of the  Shares  incurred  on the sale of  Hedge  Shares  in a
            private placement),  or (iii) purchase the Hedge Shares from BofA at
            the Last Reported Sale Price on such Exchange  Business Days, and in
            the amounts, requested by BofA.

      (t)   Tax  Advice.  BofA and its  affiliates  do not  provide  tax advice.
            Accordingly,  any statements contained herein as to tax matters were
            neither  written nor  intended by BofA to be used and cannot be used
            by any taxpayer for the purpose of avoiding tax  penalties  that may
            be imposed  on such  taxpayer.  If any person  uses or refers to any
            such  tax  statement  in  promoting,  marketing  or  recommending  a
            partnership or other entity,  investment  plan or arrangement to any
            taxpayer,  then the statement  expressed above is being delivered to
            support the  promotion  or marketing  of the  transaction  or matter
            addressed  and  the  recipient  should  seek  advice  based  on  its
            particular   circumstances   from  an   independent   tax   advisor.
            Notwithstanding  anything herein to the contrary, the sender and any
            intended  recipient of this communication (and any of its employees,
            representatives  and  other  agents)  may  disclose  to any  and all
            persons,  without  limitation of any kind,  the tax treatment or tax
            structure of this transaction.

      (u)   No Setoff.  Notwithstanding  any  provision of the  Agreement or any
            other  agreement  between the parties to the  contrary,  obligations
            under this Transaction shall not be set off by BofA (including,  for
            the avoidance of doubt,  pursuant to Section 6(f) of the  Agreement)
            against any other obligations of the parties,  whether arising under
            the Agreement, this Confirmation,  under any other agreement between
            the parties hereto, by operation of law or otherwise.

                                       18
<PAGE>

      Please  confirm that the foregoing  correctly  sets forth the terms of our
agreement  by  executing  this  Confirmation  and  returning  it in  the  manner
indicated in the attached cover letter.

                                                     Very truly yours,

                                                     Bank of America, N.A.

                                                     By: /s/ Eric P. Hambleton
                                                         -----------------------
                                                         Authorized Signatory
                                                         Name: Eric P. Hambleton

Accepted and confirmed
as of the Trade Date:

ALBANY INTERNATIONAL CORP.

By: /s/ David C. Michaels
    -----------------------
    Authorized Signatory
    Name: David C. Michaels

                                       19
<PAGE>

                                                                         Annex A

                              Form of Legal Opinion

                                       20
<PAGE>

                                                                 JPMorgan [LOGO]

JPMorgan Chase Bank, N. A.
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England

                                                          March 7, 2006

To: Albany International Corp.
1373 Broadway
Albany, New York 12204
Attention: Christopher J. Connally, Corporate Treasurer
Telephone No.: (518) 445-2235
Facsimile No.: (518) 447-6305

Re: Call Option Transaction

      The  purpose  of  this  letter  agreement  is to  confirm  the  terms  and
conditions of the Transaction entered into between JPMorgan Chase Bank, National
Association,  London Branch  ("JPMorgan"),  and Albany  International  Corp.,  a
Delaware  corporation  (the  "Counterparty"),  on the Trade Date specified below
(the  "Transaction").  This letter  agreement  constitutes a  "Confirmation"  as
referred to in the ISDA Master  Agreement  specified  below.  This  Confirmation
shall replace any previous  agreements and serve as the final  documentation for
this Transaction.

      The  definitions  and  provisions   contained  in  the  1996  ISDA  Equity
Derivatives  Definitions  (the  "Equity  Definitions"),   as  published  by  the
International  Swaps and Derivatives  Association,  Inc., are incorporated  into
this  Confirmation.  In  the  event  of any  inconsistency  between  the  Equity
Definitions  and this  Confirmation,  this  Confirmation  shall govern.  Certain
defined  terms used herein have the  meanings  assigned to them in the  Offering
Memorandum dated March 7, 2006 (the "Offering  Memorandum")  relating to the USD
150,000,000  principal amount of 2.25%  Convertible  Senior Notes due 2026, (the
"Convertible  Notes" and each USD 1,000 principal amount of Convertible Notes, a
"Convertible  Note") issued by the  Counterparty  pursuant to an Indenture to be
dated on or about March 13, 2006 between the  Counterparty  and  JPMorgan  Chase
Bank,  N.A.,  as trustee (the  "Indenture").  In the event of any  inconsistency
between the terms defined in the Offering Memorandum and this Confirmation, this
Confirmation shall govern.

      Each party is hereby advised,  and each such party acknowledges,  that the
other party has engaged in, or refrained from engaging in, substantial financial
transactions  and has taken other material actions in reliance upon the parties'
entry into the Transaction to which this  Confirmation  relates on the terms and
conditions set forth below.

1. This Confirmation evidences a complete and binding agreement between JPMorgan
and  the  Counterparty  as to  the  terms  of  the  Transaction  to  which  this
Confirmation relates. This Confirmation shall supplement, form a part of, and be
subject  to an  agreement  in the form of the 2002 ISDA  Master  Agreement  (the
"Agreement")  as if JPMorgan and the  Counterparty  had executed an agreement in
such form (but without any  Schedule  except for the election of the laws of the
State of New York as the  governing  law) on the Trade Date. In the event of any
inconsistency  between provisions of that Agreement and this Confirmation,  this
Confirmation  will  prevail  for the  purpose of the  Transaction  to which this
Confirmation  relates.  The parties hereby agree that no Transaction  other than
the  Transaction  to which this  Confirmation  relates  shall be governed by the
Agreement.

                    JPMorgan Chase Bank, National Association
 Organised under the laws of the United States as a National Banking Association
             Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
          Registered as a branch in England & Wales branch No. BR000746
            Registered Branch Office 125 London Wall, London EC2Y 5AJ
          Authorised and regulated by the Financial Services Authority

<PAGE>

2. The terms of the particular  Transaction to which this  Confirmation  relates
are as follows:

General Terms:

      Trade Date:                      March 7, 2006

      Option Style:                    "Modified  American",  as described under
                                       "Exercise and Valuation" below

      Option Type:                     Call

      Buyer:                           Counterparty

      Seller:                          JPMorgan

      Shares:                          The   Class  A   common   stock   of  the
                                       Counterparty,  par  value  USD  0.001 per
                                       Share (Exchange symbol "AIN")

      Number of Options:               90,000

      Option Entitlement:              As of any  date,  a  number  equal to the
                                       Conversion  Rate  as  of  such  date  (as
                                       defined  in the  Indenture,  but  without
                                       regard   to   any   adjustments   to  the
                                       Conversion   Rate   pursuant  to  Section
                                       15.04(i),  Section  15.03(a)  or  Section
                                       15.03(d)  of  the  Indenture),  for  each
                                       Convertible Note.

      Strike Price:                    USD 44.52

      Premium:                         USD 23,909,312.47

      Premium Payment Date:            March 13, 2006

      Exchange:                        The New York Stock Exchange

      Related Exchange(s):             None

Exercise and Valuation:

      Exercise Period(s):              Notwithstanding  the Equity  Definitions,
                                       in   respect   of   Exercisable   Options
                                       relating  to  Convertible  Notes  with  a
                                       particular   Conversion   Date  (each  as
                                       defined below), the Exercise Period shall
                                       be the period commencing on and including
                                       the Conversion  Date for the  Convertible
                                       Notes  corresponding  to such Exercisable
                                       Options and ending at 7:30 a.m.  New York
                                       City   time  on  the  first  day  of  the
                                       relevant   Cash   Settlement    Averaging
                                       Period; provided that if the Counterparty
                                       has validly  designated March 15, 2013 as
                                       a  redemption  date  for the  Convertible
                                       Notes   pursuant  to  the  terms  of  the
                                       Indenture,   there   shall  be  a  single
                                       Exercise Period for  Exercisable  Options
                                       relating to the Convertible  Notes with a
                                       Conversion  Date  following  the  day  on
                                       which the  Counterparty  gives  notice of
                                       such  redemption and that Exercise Period
                                       shall  terminate  at 7:30  a.m.  New York
                                       City   time  on  the   redemption   date;
                                       provided further that if the Counterparty
                                       has not validly designated March 15, 2013
                                       as

                                        2
<PAGE>

                                       a  redemption  date  for the  Convertible
                                       Notes   pursuant  to  the  terms  of  the
                                       Indenture,   Conversion  Dates  occurring
                                       after the date that is twenty-seven  (27)
                                       Scheduled Trading Days prior to March 15,
                                       2013 shall not result in the commencement
                                       of an Exercise  Period and no Exercisable
                                       Options   will  be  exercised  or  deemed
                                       exercised in respect thereof.

                                       "Scheduled  Trading Day" means any day on
                                       which the  Exchange  is  scheduled  to be
                                       open for trading for its regular  trading
                                       session.

      Exercisable Options:             In  respect of any date on which a holder
                                       of Convertible Notes properly surrenders,
                                       or  is  deemed  to   surrender,   to  the
                                       Counterparty   a  Convertible   Note  for
                                       conversion  (a  "Conversion   Date"),   a
                                       number  of  Options  equal  to 60% of the
                                       number  of  Convertible   Notes  properly
                                       surrendered,  or deemed surrendered,  for
                                       conversion   on  such   Conversion   Date
                                       (which,  for the avoidance of doubt,  may
                                       be rounded  up or down by the  Company to
                                       account  for any  conversions  which  may
                                       result in fractional  Exercisable Options
                                       and  may  not   exceed   the   Number  of
                                       Options).

      Expiration Date:                 For any Exercisable  Option,  the earlier
                                       of (i)  the  final  day  of the  Exercise
                                       Period for such Exercisable  Option,  and
                                       (ii) the Final Expiration Date.

      Final Expiration Date:           March 15, 2013

      Multiple Exercise:               Applicable,     as    described     under
                                       Exercisable Options above.

      Automatic Exercise:              Applicable,  subject to the provisions of
                                       "Notice of Exercise" below.

      Notice of Exercise:              Notwithstanding  anything to the contrary
                                       in the  Equity  Definitions,  in order to
                                       exercise  any  Exercisable   Option,  the
                                       Counterparty must notify JPMorgan,  which
                                       notification  shall be irrevocable  after
                                       7:30 a.m. New York City time on the first
                                       day  of  the  relevant  Cash   Settlement
                                       Averaging Period and shall not be subject
                                       to subsequent  amendments,  in writing or
                                       orally  (and,  if such Notice of Exercise
                                       is  delivered by the  Counterparty  after
                                       the close of business in New York City on
                                       the  Scheduled  Trading  Day  immediately
                                       preceding the Expiration Date, via e-mail
                                       to the address  specified by JPMorgan and
                                       delivered  to  the  Counterparty  by  the
                                       Premium  Payment Date),  by 7:30 a.m. New
                                       York  City  time on the  first day of the
                                       relevant Cash Settlement Averaging Period
                                       for such  Exercisable  Option  of (i) the
                                       number  of  Convertible   Notes  properly
                                       submitted for  conversion on the relevant
                                       Conversion   Date  and  the   number   of
                                       Exercisable Options corresponding to such
                                       Convertible  Notes, (ii) the first day of
                                       the applicable Cash Settlement  Averaging
                                       Period and (iii) the scheduled Settlement
                                       Date;  provided that if the

                                        3
<PAGE>

                                       Counterparty has validly designated March
                                       15,  2013 as a  redemption  date  for the
                                       Convertible  Notes  pursuant to the terms
                                       of  the  Indenture,  such  notice  may be
                                       given on or prior to the Expiration  Date
                                       for  such  Exercisable  Options  and need
                                       only  specify  the number of  Convertible
                                       Notes submitted for conversion during the
                                       final  Exercise  Period and the number of
                                       Exercisable Options corresponding to such
                                       Convertible Notes.

      Exchange Business Day:           Section 1.20 of the Equity Definitions is
                                       hereby  replaced  in its  entirety by the
                                       following:

                                       "'Exchange  Business  Day'  means  a  day
                                       during  which (i)  trading  in the Shares
                                       generally  occurs  and  (ii)  there is no
                                       Market  Disruption  Event  and  (iii) the
                                       Last  Reported  Sale Price (as defined in
                                       the   Indenture)   for  the   Shares   is
                                       available for such day."

      Market Disruption Event:         Section 4.3(a) of the Equity  Definitions
                                       is hereby replaced in its entirety by the
                                       following:

                                       "'Market   Disruption  Event'  means,  in
                                       respect of the  Shares,  (i) a failure by
                                       the  Exchange to open for trading  during
                                       its regular  trading  session or (ii) the
                                       occurrence  or  existence  prior  to 1:00
                                       p.m.  New York City time on any  Exchange
                                       Business   Day  for  the  Shares  for  an
                                       aggregate  one  half-hour  period  of any
                                       suspension  or   limitation   imposed  on
                                       trading (by reason of  movements in price
                                       exceeding   limits   permitted   by   the
                                       Exchange or  otherwise)  in the Shares or
                                       in  any  options,   contracts  or  future
                                       contracts relating to the Shares."

Settlement Terms:

      Settlement Method:               Net Share Settlement

      Net Share Settlement:            For  each  Exercisable   Option  that  is
                                       exercised or deemed  exercised,  JPMorgan
                                       will deliver to the Counterparty,  on the
                                       related  Settlement  Date,  a  number  of
                                       Shares equal to the Net Shares in respect
                                       of such Exercisable  Option.  In no event
                                       will the Net Shares be less than zero.

      Net Shares:                      In  respect  of each  Exercisable  Option
                                       exercised or deemed  exercised,  a number
                                       of  Shares   equal  to  (i)  the   Option
                                       Entitlement  multiplied  by (ii) the sum,
                                       for each Exchange Business Day during the
                                       relevant   Cash   Settlement    Averaging
                                       Period, of (A) the Relevant Price on such
                                       Exchange  Business  Day,  less the Strike
                                       Price,  divided by (B) the Relevant Price
                                       on such Exchange Business Day, divided by
                                       (iii)   twenty-five    (25);    provided,
                                       however,    that   if   the   calculation
                                       contained in clause (A) above  results in
                                       a negative  number,  such number shall be
                                       replaced with the number "zero".

                                       JPMorgan will deliver cash in lieu of any
                                       fractional  Share with respect to any Net
                                       Shares to be  delivered

                                        4
<PAGE>

                                       with respect to all  Exercisable  Options
                                       having the same  Settlement Date based on
                                       the Last  Reported Sale Price (as defined
                                       in the  Indenture)  for the Shares on the
                                       final   Exchange   Business  Day  of  the
                                       relevant   Cash   Settlement    Averaging
                                       Period.

      Relevant Price:                  For each  Exchange  Business Day during a
                                       Cash Settlement Averaging Period, the per
                                       Share  volume-weighted  average price for
                                       such day as  displayed  under the heading
                                       "Bloomberg  VWAP" on  Bloomberg  page AIN
                                       {equity} AQR (or any  successor  thereto)
                                       in respect  of the period  from 9:30 a.m.
                                       to 4:00 p.m. (New York City time) on such
                                       Exchange   Business   Day   (or  if  such
                                       volume-weighted    average    price    is
                                       unavailable,  the  market  value  of  one
                                       Share on such  Exchange  Business Day, as
                                       determined  by  the  Calculation   Agent,
                                       using a volume-weighted method).

      Cash Settlement                  For   each   Exercisable    Option,   the
        Averaging Period:              twenty-five  (25)  consecutive   Exchange
                                       Business Days commencing on and including
                                       the   second   Exchange    Business   Day
                                       following  the  Conversion  Date  for the
                                       Convertible   Note   relating   to   such
                                       Exercisable Option;  provided that if the
                                       Counterparty has validly designated March
                                       15,  2013 as a  redemption  date  for the
                                       Convertible  Notes  pursuant to the terms
                                       of the  Indenture,  the  Cash  Settlement
                                       Averaging   Period  for  any  Exercisable
                                       Options relating to the Convertible Notes
                                       with a Conversion Date following the date
                                       on which the Counterparty gives notice of
                                       such  redemption,  the  twenty-five  (25)
                                       consecutive    Exchange   Business   Days
                                       commencing    on   and    including   the
                                       twenty-eighth  (28th)  Scheduled  Trading
                                       Day preceding such redemption date.

      Settlement Date:                 For   each   Exercisable    Option,   the
                                       settlement   date   for   Shares   to  be
                                       delivered  with  respect  to the  related
                                       Convertible  Notes under the terms of the
                                       Indenture.

      Other Applicable Provisions:     The provisions of Sections 6.6, 6.7, 6.8,
                                       6.9 and  6.10 of the  Equity  Definitions
                                       will  be  applicable,   except  that  all
                                       references   in   such    provisions   to
                                       "Physically-Settled"  shall  be  read  as
                                       references to "Net Share  Settled".  "Net
                                       Share  Settled" in relation to any Option
                                       means  that  Net  Share   Settlement   is
                                       applicable to that Option.

      Failure to Deliver:              Applicable

3. Additional Terms applicable to the Transaction:

      Adjustments applicable to
        the Transaction:

      Potential Adjustment Events:     Notwithstanding  Section  9.1(e)  of  the
                                       Equity    Definitions,    a    "Potential
                                       Adjustment Event" means any occurrence of
                                       any event or  condition,  as set forth in
                                       Section 15.04 of the Indenture  resulting
                                       in an adjustment to the  Conversion

                                        5
<PAGE>

                                       Rate of the Convertible Notes,  excluding
                                       adjustments  or  conditions  that  result
                                       from an adjustment to the Conversion Rate
                                       pursuant  to Section  15.04(i) or Section
                                       15.03(a) of the Indenture.

      Method of Adjustment:            Calculation Agent  Adjustment,  and means
                                       that,  notwithstanding  Section 9.1(c) of
                                       the   Equity   Definitions,    upon   any
                                       adjustment to the Conversion  Rate of the
                                       Convertible   Notes   pursuant   to   the
                                       Indenture  (other than  Section  15.04(i)
                                       and Section  15.03(a)  of the  Indenture)
                                       and  an  equivalent   adjustment  to  the
                                       Option   Entitlement    hereunder,    the
                                       Calculation  Agent,  in order to  reflect
                                       the  effect  of the  event  or  condition
                                       relating  to  such   adjustment  on  this
                                       Transaction,  will  make a  corresponding
                                       adjustment  to  any  one or  more  of the
                                       Strike  Price,  Number of Options and any
                                       other variable  relevant to the exercise,
                                       settlement    or    payment    for    the
                                       Transaction.

Extraordinary Events applicable to the Transaction:

      Merger Events:                   Notwithstanding  Section  9.2(a)  of  the
                                       Equity  Definitions,   a  "Merger  Event"
                                       means  the  occurrence  of any  event  or
                                       condition  set forth in Section  15.06 of
                                       the Indenture.

      Consequence of Merger Events:    Notwithstanding Section 9.3 of the Equity
                                       Definitions,  upon  the  occurrence  of a
                                       Merger Event, the Calculation Agent shall
                                       make  a   corresponding   adjustment   in
                                       respect  of  any  adjustment   under  the
                                       Indenture  to  any  one  or  more  of the
                                       nature  of  the  Shares,   Strike  Price,
                                       Number of Options, Option Entitlement and
                                       any  other   variable   relevant  to  the
                                       exercise,  settlement  or payment for the
                                       Transaction; provided, however, that such
                                       adjustment  (i)  shall  be  made  without
                                       regard   to   any   adjustment   to   the
                                       Conversion   Rate  for  the  issuance  of
                                       additional shares as set forth in Section
                                       15.03(a) of the Indenture, and (ii) shall
                                       assume  that,  in the  case of a  "Public
                                       Acquirer  Change of Control"  (as defined
                                       in the Indenture),  the Counterparty does
                                       not make an election  provided in Section
                                       15.03(d) of the Indenture.

Additional Termination Events:         If an event of  default  with  respect to
                                       the  Counterparty  shall  occur under the
                                       terms  of the  Convertible  Notes  as set
                                       forth in  Section  7.01 of the  Indenture
                                       and such event of default  results in the
                                       declaration  of  principal  and  interest
                                       immediately  due and payable  pursuant to
                                       the terms of the  Indenture,  such  event
                                       shall     constitute     an    Additional
                                       Termination   Event  applicable  to  this
                                       Transaction,  with  respect  to which the
                                       Counterparty  shall be  deemed  to be the
                                       sole Affected Party and this  Transaction
                                       shall be the sole  Affected  Transaction;
                                       provided  that,  notwithstanding  Section
                                       6(b)(iv)(1)  of the  Agreement,  JPMorgan
                                       will  be  required,  if the  Counterparty
                                       makes  itself  promptly   available  upon
                                       request, to consult with the Counterparty
                                       and to reasonably  consider whether it is
                                       advisable    to    designate   an   Early
                                       Termination Date pursuant to Section 6(b)
                                       of the Agreement.

                                       Whenever the  Counterparty is required to
                                       deliver  to  the  Trustee  an   officer's
                                       certificate  with respect to a default or
                                       an event of default  pursuant  to Section
                                       5.08 of the Indenture,  the  Counterparty
                                       shall also be  required to deliver a copy
                                       of   such    certificate    to   JPMorgan
                                       hereunder.

                                        6
<PAGE>

4. Calculation Agent:                  JPMorgan.  Whenever the Calculation Agent
                                       is   required   to  act  or  to  exercise
                                       judgment  in any  way,  it  will do so in
                                       good   faith   and   in  a   commercially
                                       reasonable    manner    to    achieve   a
                                       commercially reasonable result.

                                       The  Calculation  Agent shall,  not later
                                       than  the  third  Currency  Business  Day
                                       following receipt of a written request of
                                       the     Counterparty,     provide     the
                                       Counterparty  with a written  explanation
                                       of  the   basis  of  any   determination,
                                       adjustment or calculation made hereunder;
                                       provided  that if, after  reviewing  such
                                       written  explanation,   the  Counterparty
                                       objects to such determination, adjustment
                                       or  calculation,  then the  Counterparty,
                                       JPMorgan and the Calculation  Agent shall
                                       make  reasonable  good  faith  efforts to
                                       agree upon an appropriate  determination,
                                       adjustment or calculation.

5. Account Details:

      (a) Account for payments from the Counterparty:

            JPMorgan, New York
            ABA: 021-000-021
            Acct: CHASUS33
            Acct No.: 910-1010-693

          Account for delivery of Shares to the Counterparty:

            DTC 50108   (Computershare)
            Note: the shares cannot be sent electronically. They must be DWACed.

      (b) Account for payments to JPMorgan:

            JPMorgan Chase Bank, N.A., New York
            ABA:  021 000 021
            Favour: JPMorgan Chase Bank, N.A. - London
            A/C:  0010962009 CHASUS33

          Account for delivery of Shares from JPMorgan:

            DTC 060

6. Offices:

The  Office  of the  Counterparty  for the  Transaction  is:  Inapplicable,  the
Counterparty is not a Multibranch Party.

The Office of JPMorgan for the Transaction is: New York

            JPMorgan Chase Bank, N.A.
            London Branch
            P.O. Box 161
            60 Victoria Embankment
            London EC4Y 0JP
            England

                                       7
<PAGE>

7. Notices: For purposes of this Confirmation:

      (a) Address for notices or communications to the Counterparty:

          Albany International Corp. 1373 Broadway
          Albany, New York 12204
          Attention: Christopher J. Connally
          Telephone No.:  (518) 445-2235
          Facsimile No.:  (518) 447-6305

          With a copy to:

          Albany International Corp.
          1373 Broadway
          Albany, New York 12204
          Attention: Charles J. Silva, Jr.
          Telephone No.: (518) 445-2277
          Facsimile No.: (518) 447-6575

      (b) Address for notices or communications to JPMorgan:
          JPMorgan Chase Bank, National Association
          277 Park Avenue, 11th Floor
          New York, NY  10172
          Attention:  Nathan Lulek
          EDG Corporate Marketing
          Telephone No.: (212) 622-2262
          Facsimile No.: (212) 622-8091

8. Representations and Warranties of the Counterparty

The representations and warranties of the Counterparty set forth in Section 4 of
the Purchase  Agreement  (the "Purchase  Agreement")  dated as of the Trade Date
between the  Counterparty  and J.P.  Morgan  Securities Inc. and Banc of America
Securities  LLC,  as Initial  Purchasers,  are true and  correct  and are hereby
deemed to be  repeated  to JPMorgan  as if set forth  herein.  The  Counterparty
hereby further represents and warrants to JPMorgan that:

      (a)   The Counterparty has all necessary  corporate power and authority to
            execute,  deliver  and perform  its  obligations  in respect of this
            Transaction; such execution, delivery and performance have been duly
            authorized by all necessary  corporate action on the  Counterparty's
            part; and this  Confirmation  has been duly and validly executed and
            delivered by the  Counterparty and constitutes its valid and binding
            obligation,  enforceable against the Counterparty in accordance with
            its terms, subject to applicable bankruptcy,  insolvency, fraudulent
            conveyance,  reorganization,  moratorium  and similar laws affecting
            creditors'  rights  and  remedies  generally,  and  subject,  as  to
            enforceability,   to  general   principles   of  equity,   including
            principles of commercial reasonableness, good faith and fair dealing
            (regardless of whether  enforcement is sought in a proceeding at law
            or  in  equity)  and  except  that  rights  to  indemnification  and
            contribution hereunder may be limited by federal or state securities
            laws or public policy relating thereto.

      (b)   Neither the  execution  and  delivery of this  Confirmation  nor the
            incurrence  or  performance  of  obligations  of  the   Counterparty
            hereunder   will  conflict  with  or  result  in  a  breach  of  the
            certificate   of   incorporation   or  by-laws  (or  any  equivalent
            documents) of the Counterparty, or any applicable law or regulation,
            or  any  order,   writ,   injunction  or  decree  of  any  court  or
            governmental  authority or agency, or any agreement or instrument to
            which the  Counterparty or any of its Significant  Subsidiaries is a
            party  or by  which  the  Counterparty  or any  of  its  Significant
            Subsidiaries  is bound or to which  the  Counterparty

                                       8
<PAGE>

            or any of its Significant  Subsidiaries is subject,  or constitute a
            default under, or result in the creation of any lien under, any such
            agreement or instrument, or breach or constitute a default under any
            agreements  and contracts of the  Counterparty  and its  Significant
            Subsidiaries filed as exhibits to the  Counterparty's  Annual Report
            on Form 10-K for the year ended December 31, 2004,  incorporated  by
            reference in the Offering Memorandum.

      (c)   No consent,  approval,  authorization,  or order of, or filing with,
            any  governmental  agency  or  body  or any  court  is  required  in
            connection  with  the  execution,  delivery  or  performance  by the
            Counterparty of this Confirmation, except such as have been obtained
            or made and such as may be  required  under  the  Securities  Act of
            1933, as amended (the "Securities Act") or state securities laws.

      (d)   The Counterparty is an "eligible contract participant" (as such term
            is defined in  Section  1a(12) of the  Commodity  Exchange  Act,  as
            amended (the "CEA") because one or more of the following is true:

            The  Counterparty  is a  corporation,  partnership,  proprietorship,
            organization, trust or other entity and:

            (A)   the Counterparty has total assets in excess of USD 10,000,000;

            (B)   the obligations of the Counterparty  hereunder are guaranteed,
                  or  otherwise  supported  by a letter of  credit or  keepwell,
                  support or other agreement, by an entity of the type described
                  in  Section   1a(12)(A)(i)   through  (iv),   1a(12)(A)(v)(I),
                  1a(12)(A)(vii) or 1a(12)(C) of the CEA; or

            (C)   the  Counterparty  has a net worth in excess of USD  1,000,000
                  and has entered  into this  Agreement in  connection  with the
                  conduct  of  Counterparty's  business  or to  manage  the risk
                  associated  with an asset or  liability  owned or  incurred or
                  reasonably  likely to be owned or incurred by the Counterparty
                  in the conduct of the Counterparty's business.

      (e)   The  Counterparty  is not, on the date hereof,  in possession of any
            material non-public information with respect to the Counterparty.

9. Other Provisions:

      (a)   Opinions.  The Counterparty  shall deliver to JPMorgan an opinion of
            counsel,  dated as of the Trade Date,  substantially in the form set
            forth in Exhibit A hereto.

      (b)   Amendment. If the Initial Purchasers party to the Purchase Agreement
            exercise their right to purchase additional Convertible Notes as set
            forth therein, then, at the discretion of the Counterparty, JPMorgan
            and the  Counterparty  will amend this  Confirmation  to provide for
            such increase in Convertible  Notes (but on pricing terms acceptable
            to JPMorgan and the Counterparty) (such amendment to provide for the
            payment by the  Counterparty  to JPMorgan of the additional  premium
            related thereto).

      (c)   No Reliance, etc. Each party represents that (i) it is entering into
            the Transaction  evidenced  hereby as principal (and not as agent or
            in any other capacity);  (ii) neither the other party nor any of its
            agents are acting as a  fiduciary  for it;  (iii) it is not  relying
            upon any  representations  except those  expressly  set forth in the
            Agreement or this Confirmation;  (iv) it has not relied on the other
            party  for  any  legal,  regulatory,   tax,  business,   investment,
            financial,   and  accounting   advice,  and  it  has  made  its  own
            investment,  hedging,  and  trading  decisions  based  upon  its own
            judgment  and not upon any view  expressed by the other party or any
            of its agents;  and (v) it is entering into this  Transaction with a
            full understanding of the terms, conditions and risks thereof and it
            is capable of and willing to assume those risks.

                                       9
<PAGE>

      (d)   Share  De-listing  Event.  If at any time during the period from and
            including  the Trade Date,  to and  including  the Final  Expiration
            Date,  the Shares  cease to be listed or quoted on the  Exchange for
            any  reason  (other  than a Merger  Event as a result  of which  the
            shares of common stock  underlying  the Options are listed or quoted
            on The New York Stock  Exchange,  The American Stock Exchange or the
            NASDAQ  National  Market  (or  their  respective   successors)  (the
            "Successor  Exchange")) and are not immediately  re-listed or quoted
            as of the  date of such  de-listing  on the  Successor  Exchange  (a
            "Share  De-listing"),  then  Cancellation and Payment (as defined in
            Section 9.6 of the Equity  Definitions,  treating the  "Announcement
            Date" as the  date of  first  public  announcement  that  the  Share
            De-listing,  will  occur  and the  "Merger  Date" as the date of the
            Share  De-listing) shall apply, and the date of the de-listing shall
            be deemed the date of termination  for purposes of  calculating  any
            payment  due from  one  party to the  other in  connection  with the
            cancellation  of this  Transaction.  If the Shares  are  immediately
            re-listed on a Successor  Exchange  upon their  de-listing  from the
            Exchange,  this Transaction shall continue in full force and effect,
            provided  that the  Successor  Exchange  shall be  deemed  to be the
            Exchange for all purposes  hereunder;  provided that the Calculation
            Agent  may  make  appropriate  adjustments  to  the  terms  of  this
            Transaction  to  reflect  the  effect  of such  re-listing.  For the
            avoidance of doubt, in no event will a Share De-listing result in an
            obligation of the  Counterparty  under this  Confirmation  to make a
            payment to JPMorgan.

      (e)   Repurchase Notices.  The Counterparty shall, on any day on which the
            Counterparty  effects  any  repurchase  of  Shares,   promptly  give
            JPMorgan a written notice of such repurchase (a "Repurchase Notice")
            on such day if following such repurchase,  the number of outstanding
            Shares on such day, subject to any adjustments  provided herein,  is
            (i) less than 25 million  (in the case of the first such  notice) or
            (ii)  thereafter,  more than  125,000 less than the number of Shares
            included  in  the  immediately   preceding  Repurchase  Notice.  The
            Counterparty  agrees to indemnify and hold harmless JPMorgan and its
            affiliates  and their  respective  officers,  directors,  employees,
            affiliates,  advisors,  agents and  controlling  persons  (each,  an
            "Indemnified Person") from and against any and all losses (including
            losses  relating to JPMorgan's  reasonable  hedging  activities as a
            consequence  of becoming,  or of the risk of becoming,  a Section 16
            "insider",   including  without  limitation,  any  forbearance  from
            reasonable   hedging   activities   or  cessation  of  such  hedging
            activities  and any losses in connection  therewith  with respect to
            this  Transaction),  claims,  damages,  judgments,  liabilities  and
            expenses (including  reasonable  attorney's fees), joint or several,
            which an  Indemnified  Person  actually may become  subject to, as a
            result of the  Counterparty's  failure  to provide  JPMorgan  with a
            Repurchase  Notice on the day and in the  manner  specified  in this
            Section  9(e),  and to  reimburse,  within  30  days,  upon  written
            request,  each of such Indemnified  Persons for any reasonable legal
            or  other  expenses  incurred  in  connection  with   investigating,
            preparing for,  providing  testimony or other evidence in connection
            with  or  defending  any of the  foregoing.  If  any  suit,  action,
            proceeding (including any governmental or regulatory investigation),
            claim or demand shall be brought or asserted against the Indemnified
            Person,   such   Indemnified   Person  shall  promptly   notify  the
            Counterparty in writing,  and the Counterparty,  upon request of the
            Indemnified Person, shall retain counsel reasonably  satisfactory to
            the Indemnified  Person to represent the Indemnified  Person and any
            others the  Counterparty  may designate in such proceeding and shall
            pay  the  fees  and  expenses  of  such  counsel   related  to  such
            proceeding.  The Counterparty shall not be liable for any settlement
            of any  proceeding  effected  without  its written  consent,  but if
            settled  with such  consent or if there be a final  judgment for the
            plaintiff,  the  Counterparty  agrees to indemnify  any  Indemnified
            Person  from and  against  any loss or  liability  by reason of such
            settlement  or judgment.  The  Counterparty  shall not,  without the
            prior  written  consent  of  the  Indemnified  Person,   effect  any
            settlement  of any pending or  threatened  proceeding  in respect of
            which  any  Indemnified  Person  is or could  have  been a party and
            indemnity  could  have been  sought  hereunder  by such  Indemnified
            Person,  unless such settlement includes an unconditional release of
            such  Indemnified  Person from all  liability on claims that are the
            subject matter of such proceeding on terms  reasonably  satisfactory
            to such Indemnified Person. If the  indemnification  provided for in

                                       10
<PAGE>

            this  paragraph  (e) is  unavailable  to an  Indemnified  Person  or
            insufficient   in  respect  of  any  losses,   claims,   damages  or
            liabilities  referred to therein,  then the Counterparty  under such
            paragraph,   in  lieu  of  indemnifying   such  Indemnified   Person
            thereunder,  shall  contribute to the amount paid or payable by such
            Indemnified  Person as a result of such losses,  claims,  damages or
            liabilities. The remedies provided for in this paragraph (e) are not
            exclusive  and  shall not limit  any  rights or  remedies  which may
            otherwise  be  available  to  any  Indemnified  Person  at law or in
            equity. The indemnity and contribution  agreements contained in this
            paragraph  (e) shall remain  operative  and in full force and effect
            regardless of the termination of this Transaction.

      (f)   Regulation M. The  Counterparty was not on the Trade Date and is not
            on the date hereof engaged in a  distribution,  as such term is used
            in  Regulation  M under  the  Securities  Exchange  Act of 1934,  as
            amended (the "Exchange Act"), of any securities of the Counterparty,
            other than a distribution  meeting the requirements of the exception
            set forth in Rules  101(b)(10)  and  102(b)(7) of  Regulation M. The
            Counterparty  shall not,  until the  second  Exchange  Business  Day
            immediately   following   the  Trade   Date,   engage  in  any  such
            distribution.

      (g)   No  Manipulation.   The  Counterparty  is  not  entering  into  this
            Transaction  to create  actual or apparent  trading  activity in the
            Shares (or any security  convertible  into or  exchangeable  for the
            Shares) or to raise or depress or otherwise  manipulate the price of
            the Shares (or any security convertible into or exchangeable for the
            Shares).

      (h)   Number of Repurchased  Shares.  The Counterparty  represents that it
            could have  purchased  Shares,  in an amount equal to the product of
            the Number of Options and the Option Entitlement, on the Exchange or
            otherwise,  in compliance with  applicable  law, its  organizational
            documents and any orders,  decrees,  contractual  agreements binding
            upon the Counterparty, on the Trade Date.

      (i)   Board  Authorization.  Each of this  Transaction and the issuance of
            the  Convertible  Notes was approved by its board of  directors  and
            publicly  announced,  solely for the  purposes  stated in such board
            resolution  and public  disclosure and the  Counterparty's  board of
            directors has duly  authorized any repurchase of Shares  pursuant to
            this Transaction.  The Counterparty further represents that there is
            no internal  policy,  whether  written or oral, of the  Counterparty
            that would prohibit the  Counterparty  from entering into any aspect
            of this Transaction, including, but not limited to, the purchases of
            Shares to be made pursuant hereto.

      (j)   Transfer or Assignment. (i) The Counterparty shall have the right to
            assign its  rights and  obligations  hereunder  with  respect to any
            Options hereunder (such Options, the "Transfer Options"), subject to
            JPMorgan's consent,  such consent not to be unreasonably withheld or
            delayed; provided that such assignment or transfer shall be effected
            on terms  satisfactory  to JPMorgan  and shall be  subject,  but not
            limited, to the following conditions:

                  (A) With respect to any  Transfer  Options,  the  Counterparty
                  shall not be  released  from its  notice  and  indemnification
                  obligations  pursuant to Section 9(c) or any obligations under
                  Section 9(s) of this Confirmation;

                  (B) Any Transfer Options shall only be transferred or assigned
                  to a third party  reasonably  acceptable  to  JPMorgan  and on
                  terms,  including any  reasonable  undertakings  by such third
                  party and execution of any documentation and delivery of legal
                  opinions with respect to securities  laws and other matters by
                  such third party and the  Counterparty,  as are  requested and
                  reasonably satisfactory to JPMorgan; and

                  (C) The  Counterparty  shall be responsible for all reasonable
                  costs  and  expenses,   including   reasonable  counsel  fees,
                  incurred  by  JPMorgan  in  connection  with such  transfer or
                  assignment.

                                       11
<PAGE>

            (ii)  JPMorgan  may not transfer or assign all or any portion of its
            rights or obligations under this Transaction  without consent of the
            Counterparty; provided, however, that if JPMorgan, in its reasonable
            discretion,  determines that, (x) its "beneficial ownership" (within
            the meaning of Section 16 of the Exchange Act and rules  promulgated
            thereunder)  exceeds  8% or more of the  Counterparty's  outstanding
            Shares or (y) the  product of the  Number of Options  and the Option
            Entitlement  divided  by the  total  number  of  the  Counterparty's
            outstanding  Shares (the "Options Equity  Percentage")  exceeds 15%,
            then:

                  (A)  JPMorgan  may  transfer  or  assign a number  of  Options
                  sufficient  to reduce such  "beneficial  ownership" to 7.5% or
                  such  Options  Equity  Percentage  to 14.5% to any third party
                  with a rating for its long term,  unsecured and unsubordinated
                  indebtedness  of A- or better  by  Standard  & Poor's  Ratings
                  Service or its successor  ("S&P"),  or A3 or better by Moody's
                  Investors  Service  ("Moody's")  or, if either  S&P or Moody's
                  ceases to rate such  debt,  at least an  equivalent  rating or
                  better by a substitute  rating agency  mutually  agreed by the
                  Counterparty and JPMorgan; and

                  (B) If such "beneficial  ownership" exceeds 8% or such Options
                  Equity Percentage exceeds 15%,

                        (1)  at  a  time  when  the  number  of   Counterparty's
                        outstanding Shares,  subject to any adjustments provided
                        herein, is less than 22 million;

                        (2) as a result of any breach by the Counterparty of its
                        notice obligations under Section 9(e); or

                        (3) and if, in the good  faith  reasonable  judgment  of
                        JPMorgan,  based upon  advice of counsel and as a result
                        of  events  occurring  after the  Trade  Date,  JPMorgan
                        reasonably  determines  that it would be  inadvisable to
                        engage in any alternative  hedging  transactions,  which
                        would enable it to reduce its "beneficial"  ownership or
                        its Options Equity  Percentage,  other than by transfer,
                        assignment or  termination,  and in either case JPMorgan
                        reasonably  determines  that  it  is  unable  after  its
                        commercially  reasonable  efforts to effect  transfer or
                        assignment  on  pricing  terms  and  in  a  time  period
                        reasonably  acceptable to JPMorgan that would reduce its
                        "beneficial  ownership"  to 7.5% or such Options  Equity
                        Percentage to 14.5%;

                  JPMorgan may designate  any Exchange  Business Day as an Early
                  Termination  Date with respect to a portion  (the  "Terminated
                  Portion")  of this  Transaction,  such  that  its  "beneficial
                  ownership"   following  such  partial   termination  would  be
                  approximately  equal to 7.5% or the Options Equity  Percentage
                  approximately  equal to 14.5%,  as applicable.  If JPMorgan so
                  designates an Early Termination Date with respect to a portion
                  of this  Transaction,  a  payment  shall be made  pursuant  to
                  Section 6 of the Agreement as if an Early Termination Date had
                  occurred in respect of a Transaction having terms identical to
                  this Transaction  except with a Number of Options equal to the
                  Terminated  Portion,  with  respect to which the  Counterparty
                  shall be the sole Affected Party and such Transaction shall be
                  the only Affected Transaction.

            (iii)  Notwithstanding  any other provision in this  Confirmation to
            the  contrary  requiring  or allowing  JPMorgan to  purchase,  sell,
            receive or deliver  any  Shares or other  securities  to or from the
            Counterparty,  JPMorgan  may  designate  any  of its  affiliates  to
            purchase,  sell,  receive or deliver such shares or other securities
            and otherwise to perform  JPMorgan's  obligations in respect of this
            Transaction  and any such  designee  may  assume  such  obligations.
            JPMorgan shall be discharged of its obligations to the  Counterparty
            only to the extent of any such performance.

                                       12
<PAGE>

      (k)   Modified Settlement. If, upon advice of counsel, JPMorgan reasonably
            determines,   with  respect  to  applicable   legal  and  regulatory
            requirements,  including  any  requirements  relating to  JPMorgan's
            hedging  activities  hereunder,  or  due  to a  lack  of  sufficient
            liquidity in the borrow market for the Shares,  that it would not be
            practicable or advisable to deliver,  or to acquire to deliver,  any
            or all of the Shares to be delivered  by JPMorgan on the  Settlement
            Date  for  this   Transaction,   JPMorgan  may,  by  notice  to  the
            Counterparty  on or  prior  to any  anticipated  Settlement  Date (a
            "Nominal  Settlement  Date"),  elect  to  deliver  the  Shares  on a
            different date or two or more dates,  whether immediately  preceding
            or following such  Settlement  Date (each,  a "Staggered  Settlement
            Date"), as follows:

            (i)   in such notice,  JPMorgan will specify to the Counterparty the
                  related Staggered  Settlement Date or Dates (the last of which
                  may be no later than the twenty-fifth (25th) Scheduled Trading
                  Day following the Nominal  Settlement  Date) and the number of
                  Shares that it will deliver on each Staggered Settlement Date;
                  and

            (ii)  the  aggregate  number of Shares that JPMorgan will deliver to
                  the  Counterparty  hereunder on all such Staggered  Settlement
                  Dates  will  equal the number of Shares  that  JPMorgan  would
                  otherwise  be required to deliver on such  Nominal  Settlement
                  Date.

            JPMorgan  shall effect such  delivery as promptly as is  practicable
            and shall  compensate the  Counterparty  for any delayed delivery by
            paying, in addition to delivering any Shares  hereunder,  an amount,
            as determined by the  Calculation  Agent,  equal to the sum for each
            day of such  delay of the  product  of (i) the  Federal  Funds  Rate
            divided by 360 and (ii) the value of the Shares not  delivered as of
            such day;  provided  that if  JPMorgan  fails to deliver  any Shares
            hereunder  by  the  twenty-fifth   (25th)   Scheduled   Trading  Day
            immediately  following the Nominal Settlement Date, such event shall
            constitute  an  Additional  Termination  Event  with  respect to the
            portion of this  Transaction  corresponding  to the number of Shares
            not  delivered  by  JPMorgan  by such  date,  with  respect to which
            JPMorgan shall be the sole Affected Party and this  Transaction  the
            sole Affected Transaction.

            "Federal Funds Rate" means, for any day, the rate set forth for such
            day opposite the caption "Federal funds",  as such rate is displayed
            on the  page  FedsOpen  {Index}{GO}  on the  Bloomberg  Professional
            Service or any successor page;  provided that if no rate appears for
            any day on such page, the rate for the immediately preceding day for
            which a rate does so appear shall be used for such day.

            (l)   Damages.  Neither  party shall be liable under Section 6.10 of
                  the Equity Definitions for special,  indirect or consequential
                  damages, even if informed of the possibility thereof.

            (m)   Early Unwind.  In the event the sale of  Convertible  Notes is
                  not consummated with the initial  purchasers for any reason by
                  the close of  business  in New York on March 13, 2006 (or such
                  later date as agreed upon by the  parties)  (March 13, 2006 or
                  such  later  date as  agreed  upon,  being the  "Early  Unwind
                  Date"),  this Transaction shall  automatically  terminate (the
                  "Early  Unwind"),  on  the  Early  Unwind  Date  and  (i)  the
                  Transaction  and all of the respective  rights and obligations
                  of JPMorgan and the Counterparty  under the Transaction  shall
                  be  cancelled  and  terminated  and (ii) each  party  shall be
                  released and discharged by the other party from and agrees not
                  to make any claim  against the other party with respect to any
                  obligations  or  liabilities of the other party arising out of
                  and to be performed in connection with the Transaction  either
                  prior to or after the Early Unwind Date; provided that, if the
                  failure  to  consummate  the  sale  of the  Convertible  Notes
                  results   from   a   breach   by  the   Counterparty   of  any
                  representation  of or  any  undertaking  by  the  Counterparty
                  contained in the Purchase  Agreement,  the Counterparty  shall
                  purchase  from  JPMorgan  on the Early  Unwind Date any Shares
                  purchased  by  JPMorgan  or one or more of its  affiliates  in
                  connection with this  Transaction  and reimburse  JPMorgan for
                  any costs

                                       13
<PAGE>

                  or  expenses   (including   market  losses)  relating  to  the
                  unwinding of its reasonable  hedging  activities in connection
                  with the  Transaction  (including any losses or costs incurred
                  as a result  of its  terminating,  liquidating,  obtaining  or
                  reestablishing   any  reasonable   hedge  or  related  trading
                  position).  The  amount  of any  such  reimbursement  shall be
                  determined   by   JPMorgan  in  its   reasonable   good  faith
                  discretion.  JPMorgan  shall notify the  Counterparty  of such
                  amount,   including,   upon  the  Counterparty's  request,  an
                  explanation of the basis of determination of such amount,  and
                  the   Counterparty   shall  pay  such  amount  in  immediately
                  available  funds on the Early  Unwind  Date.  JPMorgan and the
                  Counterparty  represent  and  acknowledge  to the other  that,
                  subject to the proviso included in this Section, upon an Early
                  Unwind,  all obligations with respect to the Transaction shall
                  be deemed fully and finally discharged.

            (n)   Role of Agent.  Each party  agrees and  acknowledges  that (i)
                  J.P.  Morgan   Securities   Inc.,  an  affiliate  of  JPMorgan
                  ("JPMSI"), has acted solely as agent and not as principal with
                  respect to this  Transaction  and (ii) JPMSI has no obligation
                  or liability, by way of guaranty, endorsement or otherwise, in
                  any  manner in  respect  of this  Transaction  (including,  if
                  applicable,  in respect of the settlement thereof). Each party
                  agrees  it  will  look  solely  to the  other  party  (or  any
                  guarantor in respect  thereof) for  performance  of such other
                  party's obligations under this Transaction.

            (o)   Additional Provisions.

                  (i)  Notwithstanding  Section  9.7 of the Equity  Definitions,
                  everything  in the first  paragraph  of Section  9.7(b) of the
                  Equity Definitions after the words "Calculation  Agent" in the
                  third line through the  remainder of such Section 9.7 shall be
                  deleted and replaced with the following:

                  "based  on an  amount  representing  the  Calculation  Agent's
                  determination  of the fair  value to Buyer of an  option  with
                  terms that would preserve for Buyer the economic equivalent of
                  any  payment  or  delivery  (assuming   satisfaction  of  each
                  applicable condition precedent,  including,  for the avoidance
                  of doubt,  the occurrence of a Conversion Date with respect to
                  each  Option)  by the  parties  in  respect  of  the  relevant
                  Transaction  that would have been required after that date but
                  for the occurrence of the Share De-listing."

                  (ii)   Notwithstanding   anything  to  the   contrary  in  the
                  Agreement, this Confirmation or the Equity Definitions, (A) in
                  determining   any  amount  payable  in  respect  of  an  Early
                  Termination Date or a Cancellation  and Payment,  the value of
                  this  Transaction  shall  be  determined  as  if  all  Options
                  outstanding  at such time  would  become  Exercisable  Options
                  during the Final  Exercise  Period and,  (B) in no event shall
                  the calculation of the amount under Section 6 of the Agreement
                  in respect of an  Additional  Termination  Event result in any
                  amount being payable by the Counterparty.

            (p)   Alternative  Calculations and Payment on Early Termination and
                  on  Certain  Extraordinary  Events.  If,  in  respect  of this
                  Transaction,   an  amount  is  payable  by   JPMorgan  to  the
                  Counterparty  (i)  pursuant  to  Section  9.7  of  the  Equity
                  Definitions  or this  Confirmation  (except  in the event of a
                  Merger Event in which the  consideration to be paid to holders
                  of Shares consists solely of cash) or (ii) pursuant to Section
                  6(d)(ii) of the Agreement  (except in the event of an Event of
                  Default in which the Counterparty is the Defaulting Party or a
                  Termination  Event in which the  Counterparty  is the Affected
                  Party, other than an Event of Default of the type described in
                  Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement
                  or in this  Confirmation  or a  Termination  Event of the type
                  described in Section 5(b)(i),  (ii), (iii),  (iv), (v) or (vi)
                  of  the  Agreement  or in  this  Confirmation,  in  each  case
                  resulting from an event or events  outside the  Counterparty's
                  control) (a "Payment  Obligation"),  the Counterparty  may, in
                  its sole --  discretion,  request that  JPMorgan  satisfy such
                  Payment  Obligation by the Share  Termination  Alternative (as
                  defined below) and shall give irrevocable telephonic notice to
                  JPMorgan,  confirmed in writing  within one Currency  Business
                  Day, no later than 12:00 p.m. New York City time

                                       14
<PAGE>

                  on the Merger Date,  the date of the Share  De-listing  or the
                  Early  Termination  Date, as applicable;  provided that if the
                  Counterparty  does not validly  request that JPMorgan  satisfy
                  its Payment  Obligation by the Share Termination  Alternative,
                  JPMorgan  shall have the  right,  in its sole  discretion,  to
                  satisfy  its  Payment  Obligation  by  the  Share  Termination
                  Alternative,  notwithstanding  Counterparty's lack of election
                  or election to the contrary.  In calculating any amounts under
                  Section 6(e) of the Agreement, notwithstanding anything to the
                  contrary  in the  Agreement,  (1)  separate  amounts  shall be
                  calculated  as set forth in Section  6(e) with  respect to (a)
                  this Transaction and (b) all other Transactions,  and (2) such
                  separate amounts shall be payable pursuant to Section 6(d)(ii)
                  of the  Agreement,  subject to, in the case of clause  (1)(a),
                  the Share Termination Alternative right hereunder.

            Share Termination Alternative:        If applicable,  JPMorgan shall
                                                  deliver  to  the  Counterparty
                                                  the Share Termination Delivery
                                                  Property  on the date when the
                                                  Payment    Obligation    would
                                                  otherwise  be due  pursuant to
                                                  Section   9.7  of  the  Equity
                                                  Definitions, this Confirmation
                                                  or Section  6(d)(ii)  and 6(e)
                                                  of    the    Agreement,     as
                                                  applicable     (the     "Share
                                                  Termination Payment Date"), in
                                                  satisfaction  of  the  Payment
                                                  Obligation   in   the   manner
                                                  reasonably  requested  by  the
                                                  Counterparty free of payment.

            Share Termination Delivery Property:  A number of Share  Termination
                                                  Delivery  Units, as calculated
                                                  by  the   Calculation   Agent,
                                                  equal    to    the     Payment
                                                  Obligation   divided   by  the
                                                  Share  Termination Unit Price.
                                                  The  Calculation  Agent  shall
                                                  adjust  the Share  Termination
                                                  Delivery Property by replacing
                                                  any  fractional  portion  of a
                                                  security   therein   with   an
                                                  amount  of cash  equal  to the
                                                  value   of   such   fractional
                                                  security  based on the  values
                                                  used to  calculate  the  Share
                                                  Termination Unit Price.

            Share Termination Unit Price:         The  value  to   JPMorgan   of
                                                  property   contained   in  one
                                                  Share   Termination   Delivery
                                                  Unit on the  date  such  Share
                                                  Termination Delivery Units are
                                                  to  be   delivered   as  Share
                                                  Termination Delivery Property,
                                                  as     determined    by    the
                                                  Calculation   Agent   in   its
                                                  discretion   by   commercially
                                                  reasonable  means and notified
                                                  by the  Calculation  Agent  to
                                                  JPMorgan   at  the   time   of
                                                  notification  of  the  Payment
                                                  Obligation.

            Share Termination Delivery Unit:      One  Share  or,  if  a  Merger
                                                  Event  has   occurred   and  a
                                                  corresponding   adjustment  to
                                                  this   Transaction   has  been
                                                  made, a unit consisting of the
                                                  number  or amount of each type
                                                  of  property   received  by  a
                                                  holder of one  Share  (without
                                                  consideration      of      any
                                                  requirement  to  pay  cash  or
                                                  other consideration in lieu of
                                                  fractional   amounts

                                       15
<PAGE>

                                                  of  any  securities)  in  such
                                                  Merger Event, as determined by
                                                  the Calculation Agent.

            Failure to Deliver:                   Applicable

            Other applicable provisions:          If   the   Share   Termination
                                                  Alternative is applicable, the
                                                  provisions  of  Sections  6.6,
                                                  6.7,  6.8,  6.9 and  6.10  (as
                                                  modified  above) of the Equity
                                                  Definitions       will      be
                                                  applicable,  except  that  all
                                                  references in such  provisions
                                                  to "Physically-Settled"  shall
                                                  be  read  as   references   to
                                                  "Share  Termination   Settled"
                                                  and all references to "Shares"
                                                  shall be read as references to
                                                  "Share  Termination   Delivery
                                                  Units".   "Share   Termination
                                                  Settled"  in  relation to this
                                                  Transaction   means  that  the
                                                  Share Termination  Alternative
                                                  is    applicable    to    this
                                                  Transaction.

            (q)   Governing  Law. New York law  (without  reference to choice of
                  law doctrine).

            (r)   Waiver of Jury Trial. Each party waives, to the fullest extent
                  permitted by applicable  law, any right it may have to a trial
                  by jury in respect of any suit, action or proceeding  relating
                  to  this  Transaction.   Each  party  (i)  certifies  that  no
                  representative,  agent or  attorney  of the  other  party  has
                  represented,  expressly  or  otherwise,  that such other party
                  would not, in the event of such a suit,  action or proceeding,
                  seek to enforce  the  foregoing  waiver and (ii)  acknowledges
                  that it and the other  party  have been  induced to enter into
                  this Transaction,  as applicable,  by, among other things, the
                  mutual waivers and certifications provided herein.

            (s)   Registration.  The Counterparty  hereby agrees that if, in the
                  good faith  reasonable  judgment of  JPMorgan,  based upon the
                  advice of counsel,  the Shares  ("Hedge  Shares")  acquired by
                  JPMorgan for the purpose of hedging its  obligations  pursuant
                  to this  Transaction  cannot be sold in the U.S. public market
                  by JPMorgan without registration under the Securities Act, the
                  Counterparty  shall,  at its election,  either (i) in order to
                  allow  JPMorgan  to sell  the  Hedge  Shares  in a  registered
                  offering, make available to JPMorgan an effective registration
                  statement under the Securities Act to cover the resale of such
                  Hedge  Shares  and  enter  into  an  agreement,  in  form  and
                  substance reasonably  satisfactory to JPMorgan,  substantially
                  in the  form of an  underwriting  agreement  for a  registered
                  offering;   provided,   however,  that  if  JPMorgan,  in  its
                  reasonable  discretion,  is not  satisfied  with access to due
                  diligence   materials,   the  results  of  its  due  diligence
                  investigation,  or the  procedures and  documentation  for the
                  registered  offering  referred  to above,  then clause (ii) or
                  clause  (iii) of this Section 9(s) shall apply at the election
                  of the  Counterparty,  (ii) in order to allow JPMorgan to sell
                  the Hedge Shares in a private placement,  enter into a private
                  placement agreement substantially similar to private placement
                  purchase agreements customary for private placements of equity
                  securities,  in form and substance reasonably  satisfactory to
                  JPMorgan (in which case, the Calculation  Agent shall make any
                  adjustments  to  the  terms  of  this   Transaction  that  are
                  necessary,  in its reasonable judgment, to compensate JPMorgan
                  for any  discount  from the public  market price of the Shares
                  incurred on the sale of Hedge Shares in a private  placement),
                  or (iii)  purchase the Hedge Shares from  JPMorgan at the Last
                  Reported Sale Price on such Exchange Business Days, and in the
                  amounts, requested by JPMorgan.

            (t)   Tax Advice.  JPMorgan  and its  affiliates  do not provide tax
                  advice. Accordingly, any statements contained herein as to tax
                  matters  were  neither  written nor intended by JPMorgan to be
                  used and  cannot be used by any  taxpayer  for the  purpose of
                  avoiding tax

                                       16
<PAGE>

                  penalties that may be imposed on such taxpayer.  If any person
                  uses  or  refers  to any  such  tax  statement  in  promoting,
                  marketing  or  recommending  a  partnership  or other  entity,
                  investment  plan or  arrangement  to any  taxpayer,  then  the
                  statement  expressed  above is being  delivered to support the
                  promotion or marketing of the transaction or matter  addressed
                  and the recipient  should seek advice based on its  particular
                  circumstances from an independent tax advisor. Notwithstanding
                  anything  herein to the contrary,  the sender and any intended
                  recipient  of this  communication  (and any of its  employees,
                  representatives  and other agents) may disclose to any and all
                  persons,  without limitation of any kind, the tax treatment or
                  tax structure of this transaction.

            (u)   No Setoff.  Notwithstanding  any provision of the Agreement or
                  any other  agreement  between  the  parties  to the  contrary,
                  obligations  under  this  Transaction  shall not be set off by
                  JPMorgan (including,  for the avoidance of doubt,  pursuant to
                  Section 6(f) of the Agreement)  against any other  obligations
                  of the parties,  whether  arising  under the  Agreement,  this
                  Confirmation,  under any other  agreement  between the parties
                  hereto, by operation of law or otherwise.

                                       17
<PAGE>

      Please  confirm that the foregoing  correctly  sets forth the terms of our
agreement  by  executing  this  Confirmation  and  returning  it in  the  manner
indicated in the attached cover letter.

                                     Very truly yours,

                                       J.P. Morgan Securities Inc., as agent for
                                       JPMorgan Chase Bank, National
                                       Association

                                       By: /s/ Sudheer Tegulapelle
                                           ------------------------------------
                                       Authorized Signatory
                                       Name: Sudheer Tegulapelle

Accepted and confirmed
as of the Trade Date:

ALBANY INTERNATIONAL CORP.

By: /s/ David C. Michaels
    -------------------------------
Authorized Signatory
Name: David C. Michaels

                    JPMorgan Chase Bank, National Association
 Organised under the laws of the United States as a National Banking Association
             Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
          Registered as a branch in England & Wales branch No. BR000746
            Registered Branch Office 125 London Wall, London EC2Y 5AJ
          Authorised and regulated by the Financial Services Authority

<PAGE>

                                                                         Annex A

                              Form of Legal OpinionExhibit 10.2

--------------------------------------------------------------------------------
                                                          Bank of America [LOGO]

                                                 EQUITY FINANCIAL PRODUCTS GROUP
--------------------------------------------------------------------------------

Bank of America, N.A.
c/o Banc of America Securities LLC
9 West 57th Street, 40th Floor
New York, NY 10019

                                                  March 7, 2006

To: Albany International Corp.
1373 Broadway
Albany, New York 12204
Attention: Christopher J. Connally, Corporate Treasurer
Telephone No.:  (518) 445-2212
Facsimile No.:  (518) 447-6305

Re: Warrants
Ref. No.: NY-21552

      The  purpose  of  this  letter  agreement  is to  confirm  the  terms  and
conditions  of the Warrants  issued by Albany  International  Corp.,  a Delaware
corporation (the "Company"),  to Bank of America,  N.A.  ("BofA"),  on the Trade
Date specified below (the  "Transaction").  This letter agreement  constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below. This
Confirmation  shall  replace  any  previous  agreements  and  serve as the final
documentation for this Transaction.

      The  definitions  and  provisions   contained  in  the  1996  ISDA  Equity
Derivatives  Definitions  (the  "Equity  Definitions"),   as  published  by  the
International  Swaps and Derivatives  Association,  Inc., are incorporated  into
this  Confirmation.  In  the  event  of any  inconsistency  between  the  Equity
Definitions  and  this  Confirmation,   this  Confirmation  shall  govern.  This
Transaction shall be deemed to be a Share Option  Transaction within the meaning
set forth in the Equity Definitions.

      Each party is hereby advised,  and each such party acknowledges,  that the
other party has engaged in, or refrained from engaging in, substantial financial
transactions  and has taken other material actions in reliance upon the parties'
entry into the Transaction to which this  Confirmation  relates on the terms and
conditions set forth below.

1. This Confirmation evidences a complete and binding agreement between BofA and
the  Company  as to the  terms of the  Transaction  to which  this  Confirmation
relates.  This Confirmation shall supplement,  form a part of, and be subject to
an agreement in the form of the 2002 ISDA Master Agreement (the  "Agreement") as
if BofA and the Company had  executed an agreement in such form (but without any
Schedule  except  for the  election  of the laws of the State of New York as the
governing  law) on the Trade  Date.  In the event of any  inconsistency  between
provisions  of that  Agreement and this  Confirmation,  this  Confirmation  will
prevail for the purpose of the Transaction to which this  Confirmation  relates.
The parties hereby agree that no Transaction other than the Transaction to which
this Confirmation relates shall be governed by the Agreement.

2. The terms of the particular  Transaction to which this  Confirmation  relates
are as follows:

General Terms:

       Trade Date:                                March 7, 2006

                                       1
<PAGE>

    Warrants:                           Equity  call  warrants,  each giving the
                                        holder the right to  purchase  one Share
                                        at  the  Strike  Price,  subject  to the
                                        Settlement  Terms set forth  below.  For
                                        the purposes of the Equity  Definitions,
                                        each reference to a Warrant herein shall
                                        be  deemed to be a  reference  to a Call
                                        Option.

    Warrant Style:                      American

    Buyer:                              BofA

    Seller:                             Company

    Shares:                             The Class A common stock of the Company,
                                        par value USD 0.001 per Share  (Exchange
                                        symbol "AIN")

    Number of Warrants:                 1,374,662,   subject  to  adjustment  as
                                        provided herein

    Daily Number of Warrants:           Subject to "Expiration Dates" below, for
                                        any day,  the  Number of  Warrants  that
                                        have not expired or been exercised as of
                                        such  day,   divided  by  the  remaining
                                        number of  Expiration  Dates  (including
                                        such  day)  and  rounded   down  to  the
                                        nearest  whole number to account for any
                                        fractional Daily Number of Warrants.

    Warrant Entitlement:                One Share per Warrant

    Multiple Exercise:                  Applicable

    Minimum Number of Warrants:         1

    Maximum Number of Warrants:         1,374,662

    Strike Price:                       USD 52.25

    Premium:                            USD 11,079,541.64

    Premium Payment Date:               March 13, 2006

    Exchange:                           The New York Stock Exchange

    Related Exchange(s):                The  principal  exchange(s)  for options
                                        contracts or futures contracts,  if any,
                                        with respect to the Shares.

Exercise and Valuation:

    Expiration Time:                    The Valuation Time

    Expiration Dates:                   Each  Exchange  Business  Day during the
                                        period  beginning on and  including  the
                                        First  Expiration Date and ending on and
                                        including the 59th Exchange Business Day
                                        following  the  First   Expiration  Date
                                        shall  be  an  "Expiration  Date"  for a
                                        number  of  Warrants  equal to the Daily
                                        Number of Warrants on such day.

                                       2
<PAGE>

                                        Notwithstanding    the   foregoing   and
                                        anything  to the  contrary in the Equity
                                        Definitions,   if  a  Market  Disruption
                                        Event  occurs  on  any  Expiration  Date
                                        (including the First  Expiration  Date),
                                        the   Calculation   Agent   shall   make
                                        adjustments   to  the  Daily  Number  of
                                        Warrants  for which such day shall be an
                                        Expiration  Date and shall  designate  a
                                        scheduled  Exchange  Business  Day  or a
                                        number of  scheduled  Exchange  Business
                                        Days as the  Expiration  Date(s) for the
                                        remaining  Daily Number of Warrants or a
                                        portion   thereof  for  the   originally
                                        scheduled  Expiration  Date,  with  such
                                        adjustments   based  on,   among   other
                                        factors,  the  duration  of  any  Market
                                        Disruption   Event   and   the   volume,
                                        historical trading patterns and price of
                                        the  Shares;   provided   that  if  such
                                        Expiration   Date   has   not   occurred
                                        pursuant  to  this  sentence  as of  the
                                        eighth  (8th)   Exchange   Business  Day
                                        following the last scheduled  Expiration
                                        Date under this Transaction, such eighth
                                        (8th) Exchange Business Day shall be the
                                        final    Expiration    Date    and   the
                                        Calculation  Agent shall  determine  its
                                        good faith  estimate  of the fair market
                                        value for the Shares as of the Valuation
                                        Time on that  eighth  Exchange  Business
                                        Day.

    First Expiration Date:              June 15, 2013 (or, if such day is not an
                                        Exchange    Business   Day,   the   next
                                        following    Exchange   Business   Day),
                                        subject  to  Market   Disruption   Event
                                        below.

    Automatic Exercise:                 Applicable;  and means  that a number of
                                        Warrants for each  Expiration Date equal
                                        to the  Daily  Number  of  Warrants  (as
                                        adjusted  pursuant to the terms  hereof)
                                        for such  Expiration Date will be deemed
                                        to be automatically exercised.

    Market Disruption Event:            Section  4.3(a)(ii) is hereby amended by
                                        adding  after the words "or Share Basket
                                        Transaction"  in the first line  thereof
                                        the phrase "a failure by the Exchange or
                                        Related  Exchange  to open  for  trading
                                        during its regular  trading  session or"
                                        and  replacing  the phrase  "during  the
                                        one-half  hour  period  that ends at the
                                        relevant Valuation Time" with the phrase
                                        "at any time during the regular  trading
                                        session on the  Exchange  or any Related
                                        Exchange,  without regard to after hours
                                        or  any  other  trading  outside  of the
                                        regular trading session hours".

Valuation applicable to each Warrant:

    Valuation Time:                     At the close of trading  of the  regular
                                        trading session on the Exchange.

    Valuation Date:                     Each Exercise Date.

Settlement Terms applicable to the Transaction:

Method of   Settlement:                 Net  Share  Settlement;  provided  that,
                                        with  respect  to  all  Warrants  to  be
                                        exercised on the Expiration  Dates, Cash
                                        Settlement  shall

                                       3
<PAGE>

                                        apply if the Company validly elects Cash
                                        Settlement pursuant to the provisions of
                                        "Cash Settlement Election" below.

Net Share Settlement:                   On each  Settlement  Date,  the  Company
                                        shall   deliver   to  BofA,   the  Share
                                        Delivery  Quantity  for such  Settlement
                                        Date  to the  account  specified  herein
                                        free of payment  through  the  Clearance
                                        System.

Share Delivery Quantity:                For each  Settlement  Date, (i) a number
                                        of Shares  (rounded  down to the nearest
                                        whole  Share),   as  calculated  by  the
                                        Calculation  Agent, equal to the sum of,
                                        for each Valuation Date that occurred in
                                        the calendar week immediately  preceding
                                        such  Settlement  Date,  the  Settlement
                                        Amount for such  Valuation  Date divided
                                        by  the   Settlement   Price   on   such
                                        Valuation Date, and (ii) cash in lieu of
                                        any  fractional   Share  (based  on  the
                                        Settlement  Price on the last  Valuation
                                        Date during such week).

Settlement Amount:                      For each Valuation Date, an amount equal
                                        to the  product  of (i)  the  number  of
                                        Warrants  exercised or deemed  exercised
                                        on the relevant  Exercise Date, (ii) the
                                        Strike  Price   Differential   for  such
                                        Valuation  Date and  (iii)  the  Warrant
                                        Entitlement.

Strike Price Differential:              (a)  If the  Settlement  Price  for  any
                                        Valuation   Date  is  greater  than  the
                                        Strike  Price,  an  amount  equal to the
                                        excess of such Settlement Price over the
                                        Strike Price; or

                                        (b) If  such  Settlement  Price  is less
                                        than or equal to the Strike Price, zero.

Settlement Price:                       For any  Valuation  Date,  the per Share
                                        volume-weighted    average    price   as
                                        displayed  under the heading  "Bloomberg
                                        VWAP" on Bloomberg page AIN <equity> AQR
                                        (or any successor thereto) in respect of
                                        the period  from 9:30 a.m.  to 4:00 p.m.
                                        (New York City  time) on such  Valuation
                                        Date (or if such volume-weighted average
                                        price is  unavailable,  the market value
                                        of one Share on such Valuation  Date, as
                                        determined  by  the  Calculation   Agent
                                        using a volume-weighted method).

Settlement Date:                        The first Exchange  Business Day of each
                                        calendar  week  shall be the  Settlement
                                        Date in respect of each  Valuation  Date
                                        that occurred  during the prior calendar
                                        week.

Cash Settlement Election:               Notwithstanding  "Method of  Settlement"
                                        above,  with  respect to all Warrants to
                                        be  exercised on the  Expiration  Dates,
                                        the Company can elect Cash Settlement by
                                        delivering a written notice to BofA (the
                                        "Cash Settlement Notice") on or prior to
                                        the fifteenth (15th) scheduled  Exchange
                                        Business Day  immediately  preceding the
                                        First   Expiration   Date,   which  Cash
                                        Settlement Notice shall contain:

                                        (i) a  representation  that  (x)  on the
                                        date of such Cash Settlement Notice, the
                                        Company  is  not  in  possession  of any
                                        material non-

                                       4
<PAGE>

                                        public  information  with respect to the
                                        Company or its  Shares,  (y) the Company
                                        is  electing  Cash  Settlement  in  good
                                        faith  and  not as  part  of a  plan  or
                                        scheme to evade the prohibitions of Rule
                                        10b-5 under the Securities  Exchange Act
                                        of 1934, as amended (the "Exchange Act")
                                        and (z) the Company has not entered into
                                        or  altered  any   hedging   transaction
                                        relating to the Shares  corresponding to
                                        or offsetting the Transaction;

                                        (ii) a  representation  that the Company
                                        is  not,   on  the  date  of  such  Cash
                                        Settlement  Notice,  and will not be, on
                                        any day during the period  commencing on
                                        such  day  and   ending  on  the  second
                                        Exchange Business Day following the last
                                        Settlement     Date    hereunder    (the
                                        "Settlement   Period"),   engaged  in  a
                                        distribution,  as  such  term is used in
                                        Regulation  M under  the  Exchange  Act,
                                        other than a  distribution  meeting  the
                                        requirements  of the exception set forth
                                        in Rules  101(b)(10)  and  102(b)(7)  of
                                        Regulation M;

                                        (iii) a representation  that the Company
                                        is  not  electing  Cash   Settlement  to
                                        create   actual  or   apparent   trading
                                        activity in the Shares (or any  security
                                        convertible into or exchangeable for the
                                        Shares)   or  to  raise  or  depress  or
                                        otherwise  manipulate  the  price of the
                                        Shares (or any security convertible into
                                        or exchangeable for the Shares);

                                        (iv) an  acknowledgment  by the  Company
                                        that (A) any  transaction  in  Shares by
                                        BofA following the Company's election of
                                        Cash Settlement  shall be made at BofA's
                                        sole   discretion  and  for  BofA's  own
                                        account  and (B) the  Company  does  not
                                        have, and shall not attempt to exercise,
                                        any influence over how, when, whether or
                                        at   what    price   to   effect    such
                                        transactions,     or    whether     such
                                        transactions  are made on any securities
                                        exchange or privately; and

                                        (v) an  agreement  by the Company  that,
                                        during the  Settlement  Period,  without
                                        the prior written  consent of BofA,  the
                                        Company  shall not,  and shall cause its
                                        affiliated  purchasers  (each as defined
                                        in Rule 10b-18 under the  Exchange  Act)
                                        not   to,    directly   or    indirectly
                                        (including, without limitation, by means
                                        of a derivative  instrument),  purchase,
                                        offer  to  purchase,  place  any  bid or
                                        limit order that would effect a purchase
                                        of,  or   commence   any  tender   offer
                                        relating  to, any Shares or any security
                                        convertible into or exchangeable for the
                                        Shares in the public markets.

Cash Settlement:                        If Cash  Settlement  is  applicable,  on
                                        each Settlement  Date, the Company shall
                                        deliver to BofA (to an account specified
                                        by  BofA)  the  sum  of  the  Settlement
                                        Amounts  for each  Valuation  Date  that
                                        occurred    in   the    calendar    week
                                        immediately  preceding  such  Settlement
                                        Date.

                                        The  Company  agrees  that it shall  not
                                        have the right to elect Cash  Settlement
                                        if BofA  notifies the Company  that,  it
                                        has determined

                                       5
<PAGE>

                                        that  in  the  good   faith   reasonable
                                        judgment  of BofA,  based upon advice of
                                        counsel   and  as  a  result  of  events
                                        occurring  after  the  Trade  Date,  the
                                        election  of  Cash   Settlement  or  any
                                        purchases  of  Shares  that BofA (or its
                                        affiliates)  might  make  in  connection
                                        therewith  would  raise  material  risks
                                        under applicable securities laws.

Failure to Deliver:                     Inapplicable

Other Applicable Provisions:            If Net  Share  Settlement  applies,  the
                                        provisions  of Sections  6.6,  6.7, 6.8,
                                        6.9 and 6.10 of the  Equity  Definitions
                                        will  be  applicable,  except  that  all
                                        references   in   such   provisions   to
                                        "Physically-Settled"  shall  be  read as
                                        references to "Net Share Settled".  "Net
                                        Share   Settled"   in  relation  to  any
                                        Warrant means that Net Share  Settlement
                                        is applicable to that Warrant.

3. Additional Terms applicable to the Transaction:

   Adjustments applicable to the Warrants:

    Method of Adjustment:               Calculation   Agent   Adjustment.    For
                                        avoidance   of  doubt,   in  making  any
                                        adjustments     under     the     Equity
                                        Definitions,  the Calculation  Agent may
                                        adjust the Strike  Price,  the Number of
                                        Warrants,  the Daily  Number of Warrants
                                        and     the     Warrant     Entitlement.
                                        Notwithstanding the foregoing,  any cash
                                        dividends or  distributions,  whether or
                                        not extraordinary,  shall be governed by
                                        Section  9(l) of this  Confirmation  and
                                        not by  Section  9.1(c)  of  the  Equity
                                        Definitions.

Extraordinary Events applicable to the Transaction:

       Consequence of Merger Events

       (a)  Share-for-Share:            Alternative  Obligation;  provided  that
                                        the Calculation  Agent will determine if
                                        the Merger Event affects the theoretical
                                        value of the Transaction and, if so, the
                                        Calculation Agent shall make adjustments
                                        to  the  Strike  Price,  the  Number  of
                                        Warrants,  the Daily  Number of Warrants
                                        and  the  Warrant  Entitlement  and  any
                                        other  term  necessary  to  reflect  the
                                        characteristics  (including  volatility,
                                        dividend  practice,  borrow cost, policy
                                        and   liquidity)   of  the  New  Shares.
                                        Notwithstanding      the      foregoing,
                                        Cancellation  and Payment shall apply in
                                        the  event  the  New   Shares   are  not
                                        publicly   traded  on  a  United  States
                                        national  securities  exchange or quoted
                                        on the  NASDAQ  National  Market (or any
                                        successor thereto).

       (b) Share-for-Other:             Cancellation and Payment

       (c)  Share-for-Combined:         Alternative Obligation in respect of the
                                        portion  of the  consideration  for  the
                                        relevant  Shares  that  consists  of New
                                        Shares  and  subject  to any  adjustment
                                        described  in the proviso  contained  in
                                        Share-for-Share  above, and Cancellation
                                        and

                                       6
<PAGE>

                                        Payment in respect of the portion of the
                                        consideration  for the  relevant  Shares
                                        that  consists  of Other  Consideration.
                                        Notwithstanding      the      foregoing,
                                        Cancellation  and Payment shall apply in
                                        the  event  the  New   Shares   are  not
                                        publicly   traded  on  a  United  States
                                        national  securities  exchange or quoted
                                        on the  NASDAQ  National  Market (or any
                                        successor thereto).

       Nationalization or Insolvency:   Cancellation and Payment

4. Calculation Agent:                   BofA.  Whenever the Calculation Agent is
                                        required to act or to exercise  judgment
                                        in any way,  it will do so in good faith
                                        and in a commercially  reasonable manner
                                        to  achieve  a  commercially  reasonable
                                        result.

                                        The Calculation  Agent shall,  not later
                                        than the  third  Currency  Business  Day
                                        following  receipt of a written  request
                                        of the Company, provide the Company with
                                        a  written  explanation  of the basis of
                                        any    determination,    adjustment   or
                                        calculation  made  hereunder;   provided
                                        that if,  after  reviewing  such written
                                        explanation, the Company objects to such
                                        determination,       adjustment       or
                                        calculation,  then the Company, BofA and
                                        the   Calculation   Agent   shall   make
                                        reasonable  good faith  efforts to agree
                                        upon   an   appropriate   determination,
                                        adjustment or calculation.

5. Account Details:

         (a) Account for payments to the Company:

               JPMorgan, New York
               ABA: 021-000-021
               Acct: CHASUS33
               Acct No.: 910-1010-693

             Account for delivery of Shares from the Company:

               DTC 50108   (Computershare)
               Note: the shares cannot be sent electronically.
                     They must be DWACed.

         (b) Account for payments from/to BofA:

             Bank of America, N.A.
             San Francisco, CA
             SWIFT: BOFAUS65
             Bank Routing: 121-000-358
             Account Name: Bank of America
             Account No.: 12333-34172

             Account for delivery of Shares to BofA:

               DTC 0733
               Acct Name: Bank of America NA
               Acct #: 116-0077

6. Offices:

                                       7
<PAGE>

The Office of the Company for the Transaction is:  Inapplicable,  the Company is
not a Multibranch Party.

The Office of BofA for the Transaction is: New York

             Bank of America, N.A.
             c/o Banc of America Securities LLC
             9 West 57th Street, 40th Floor
             New York, NY  10019

7. Notices: For purposes of this Confirmation:

(a)          Address for notices or communications to the Company:

             Albany International Corp.
             1373 Broadway
             Albany, New York 12204
             Attention: Christopher J. Connally
             Telephone No.:   (518) 445-2235
             Facsimile No.:   (518) 447-6305

             With a copy to:

             Albany International Corp.
             1373 Broadway
             Albany, New York 12204
             Attention: Charles J. Silva, Jr.
             Telephone No.:   (518) 445-2277
             Facsimile No.:  (518) 447-6575

         (b) Address for notices or communications to BofA:

             Bank of America, N.A.
             c/o Banc of America Securities LLC
             Equity Financial Products
             Attention: Legal Department
             9 West 57th Street, 40th Floor
             New York, NY 10019
             Facsimile No.: (212) 326-8610

8. Representations and Warranties of the Company

The  representations and warranties of the Company set forth in Section 4 of the
Purchase  Agreement  (the "Purchase  Agreement")  dated as of the Trade Date and
relating  to  the  issuance  of  USD  150,000,000   principal  amount  of  2.25%
Convertible Senior Notes due 2026, (the "Convertible Notes") between the Company
and J.P. Morgan  Securities  Inc. and Banc of America  Securities LLC as Initial
Purchasers  are true and correct and are hereby deemed to be repeated to BofA as
if set forth herein.  The Company hereby further represents and warrants to BofA
that:

      (a)   The Company  has all  necessary  corporate  power and  authority  to
            execute,  deliver  and perform  its  obligations  in respect of this
            Transaction; such execution, delivery and performance have been duly
            authorized by all necessary  corporate action on the Company's part;
            and  this  Confirmation  has  been  duly and  validly  executed  and
            delivered  by the  Company  and  constitutes  its valid and  binding
            obligation,  enforceable  against the Company in accordance with its
            terms,  subject to

                                       8
<PAGE>

            applicable    bankruptcy,    insolvency,    fraudulent   conveyance,
            reorganization,  moratorium  and similar laws  affecting  creditors'
            rights and remedies generally, and subject, as to enforceability, to
            general  principles  of equity,  including  principles of commercial
            reasonableness,  good faith and fair dealing  (regardless of whether
            enforcement  is  sought in a  proceeding  at law or in  equity)  and
            except that rights to indemnification and contribution hereunder may
            be  limited by federal  or state  securities  laws or public  policy
            relating thereto.

      (b)   Neither the  execution  and  delivery of this  Confirmation  nor the
            incurrence or performance  of  obligations of the Company  hereunder
            will  conflict  with or  result in a breach  of the  certificate  of
            incorporation  or  by-laws  (or  any  equivalent  documents)  of the
            Company,  or any applicable law or regulation,  or any order,  writ,
            injunction  or  decree  of any court or  governmental  authority  or
            agency,  or any  agreement or instrument to which the Company or any
            of its  Significant  Subsidiaries is a party or by which the Company
            or any of its  Significant  Subsidiaries  is bound  or to which  the
            Company  or any of  its  Significant  Subsidiaries  is  subject,  or
            constitute  a default  under,  or result in the creation of any lien
            under,  any such agreement or instrument,  or breach or constitute a
            default  under any  agreements  and contracts of the Company and its
            Significant  Subsidiaries  filed as exhibits to the Company's Annual
            Report on Form 10-K for the year ended December 31, 2004, as updated
            by any subsequent filings.

      (c)   No consent,  approval,  authorization,  or order of, or filing with,
            any  governmental  agency  or  body  or any  court  is  required  in
            connection  with  the  execution,  delivery  or  performance  by the
            Company of this  Confirmation,  except such as have been obtained or
            made and such as may be required  under the  Securities Act of 1933,
            as amended (the "Securities Act") or state securities laws.

      (d)   The Shares of the Company  initially  issuable  upon exercise of the
            Warrant by the net share  settlement  method (the "Warrant  Shares")
            have been reserved for issuance by all required  corporate action of
            the Company.  The Warrant Shares have been duly authorized and, when
            delivered  against  payment  therefor  (which may  include Net Share
            Settlement  in lieu of cash) and  otherwise as  contemplated  by the
            terms of the  Warrant  following  the  exercise  of the  Warrant  in
            accordance  with the terms and  conditions  of the Warrant,  will be
            validly issued,  fully-paid and non-assessable,  and the issuance of
            the Warrant  Shares will not be subject to any preemptive or similar
            rights.

      (e)   The Company is an "eligible  contract  participant" (as such term is
            defined in Section 1a(12) of the Commodity  Exchange Act, as amended
            (the "CEA") because one or more of the following is true:

            The   Company  is  a   corporation,   partnership,   proprietorship,
            organization, trust or other entity and:

            (A)   the Company has total assets in excess of USD 10,000,000;

            (B)   the obligations of the Company  hereunder are  guaranteed,  or
                  otherwise supported by a letter of credit or keepwell, support
                  or other  agreement,  by an  entity of the type  described  in
                  Section    1a(12)(A)(i)    through   (iv),    1a(12)(A)(v)(I),
                  1a(12)(A)(vii) or 1a(12)(C) of the CEA; or

            (C)   the Company has a net worth in excess of USD 1,000,000 and has
                  entered into this Agreement in connection  with the conduct of
                  the Company's  business or to manage the risk  associated with
                  an asset or liability  owned or incurred or reasonably  likely
                  to be owned or  incurred  by the Company in the conduct of the
                  Company's business.

                                       9
<PAGE>

      (f)   The  Company  is not,  on the  date  hereof,  in  possession  of any
            material non-public information with respect to the Company.

9. Other Provisions:

      (a)   Opinions.  The Company  shall deliver to BofA an opinion of counsel,
            dated as of the Trade Date,  substantially  in the form set forth in
            Exhibit A hereto.

      (b)   Amendment. If the Initial Purchasers party to the Purchase Agreement
            exercise their right to purchase additional Convertible Notes as set
            forth therein,  then, at the discretion of the Company, BofA and the
            Company will amend this Confirmation to provide for such increase in
            Convertible  Notes (but on pricing terms  acceptable to BofA and the
            Company)  (such  amendment to provide for the payment by BofA to the
            Company of the additional premium related thereto).

      (c)   No Reliance, etc. Each party represents that (i) it is entering into
            the Transaction  evidenced  hereby as principal (and not as agent or
            in any other capacity);  (ii) neither the other party nor any of its
            agents are acting as a  fiduciary  for it;  (iii) it is not  relying
            upon any  representations  except those  expressly  set forth in the
            Agreement or this Confirmation;  (iv) it has not relied on the other
            party  for  any  legal,  regulatory,   tax,  business,   investment,
            financial,   and  accounting   advice,  and  it  has  made  its  own
            investment,  hedging,  and  trading  decisions  based  upon  its own
            judgment  and not upon any view  expressed by the other party or any
            of its agents;  and (v) it is entering into this  Transaction with a
            full understanding of the terms, conditions and risks thereof and it
            is capable of and willing to assume those risks.

      (d)   Share  De-listing  Event.  If at any time during the period from and
            including  the Trade Date,  to and  including  the final  Expiration
            Date,  the Shares  cease to be listed or quoted on the  Exchange for
            any  reason  (other  than a Merger  Event as a result  of which  the
            shares of common stock  underlying the Warrants are listed or quoted
            on The New York Stock  Exchange,  The American Stock Exchange or the
            NASDAQ  National  Market  (or  their  respective   successors)  (the
            "Successor  Exchange")) and are not immediately  re-listed or quoted
            as of the  date of such  de-listing  on the  Successor  Exchange  (a
            "Share  De-listing"),  then  Cancellation and Payment (as defined in
            Section 9.6 of the Equity  Definitions,  treating the  "Announcement
            Date" as the  date of  first  public  announcement  that  the  Share
            De-listing will occur and the "Merger Date" as the date of the Share
            De-listing)  shall apply,  and the date of the  de-listing  shall be
            deemed the date of  termination  for  purposes  of  calculating  any
            payment  due from  one  party to the  other in  connection  with the
            cancellation  of this  Transaction.  If the Shares  are  immediately
            re-listed on a Successor  Exchange  upon their  de-listing  from the
            Exchange,  this Transaction shall continue in full force and effect,
            provided  that the  Successor  Exchange  shall be  deemed  to be the
            Exchange for all purposes  hereunder,  provided that the Calculation
            Agent  may  make  appropriate  adjustments  to  the  terms  of  this
            Transaction  to  reflect  the  effect  of such  re-listing.  For the
            avoidance of doubt, in no event will a Share De-listing result in an
            obligation of BofA under this  Confirmation to make a payment to the
            Company.

      (e)   Repurchase  Notices.  The  Company  shall,  on any day on which  the
            Company  effects  any  repurchase  of Shares,  promptly  give BofA a
            written notice of such  repurchase (a  "Repurchase  Notice") on such
            day if following such repurchase,  the number of outstanding  Shares
            on such day, subject to any adjustments provided herein, is (i) less
            than 25  million  (in the case of the  first  such  notice)  or (ii)
            thereafter,  more  than  125,000  less  than the  number  of  Shares
            included in the immediately preceding Repurchase Notice. The Company
            agrees to indemnify and hold harmless  BofA and its  affiliates  and
            their  respective  officers,   directors,   employees,   affiliates,
            advisors,  agents and  controlling  persons (each,  an  "Indemnified
            Person")  from and  against  any and all  losses  (including  losses
            relating to BofA's reasonable hedging activities as a consequence of

                                       10
<PAGE>

            becoming,  or of the  risk of  becoming,  a  Section  16  "insider",
            including  without  limitation,   any  forbearance  from  reasonable
            hedging  activities or cessation of such hedging  activities and any
            losses in connection  therewith  with respect to this  Transaction),
            claims,  damages,  judgments,  liabilities  and expenses  (including
            reasonable attorney's fees), joint or several,  which an Indemnified
            Person  actually may become subject to, as a result of the Company's
            failure to provide BofA with a  Repurchase  Notice on the day and in
            the manner specified in this Section 9(e), and to reimburse,  within
            30 days, upon written request,  each of such Indemnified Persons for
            any reasonable  legal or other expenses  incurred in connection with
            investigating,  preparing for, providing testimony or other evidence
            in connection  with or defending any of the foregoing.  If any suit,
            action,   proceeding   (including  any  governmental  or  regulatory
            investigation), claim or demand shall be brought or asserted against
            the  Indemnified  Person,  such  Indemnified  Person shall  promptly
            notify the Company in writing, and the Company,  upon request of the
            Indemnified Person, shall retain counsel reasonably  satisfactory to
            the Indemnified  Person to represent the Indemnified  Person and any
            others the Company may  designate in such  proceeding  and shall pay
            the fees and  expenses of such counsel  related to such  proceeding.
            The Company shall not be liable for any settlement of any proceeding
            effected  without  its  written  consent,  but if settled  with such
            consent  or if  there be a final  judgment  for the  plaintiff,  the
            Company agrees to indemnify any Indemnified  Person from and against
            any loss or liability by reason of such settlement or judgment.  The
            Company  shall  not,  without  the  prior  written  consent  of  the
            Indemnified  Person,   effect  any  settlement  of  any  pending  or
            threatened  proceeding in respect of which any Indemnified Person is
            or could  have been a party and  indemnity  could  have been  sought
            hereunder  by  such  Indemnified  Person,   unless  such  settlement
            includes an unconditional  release of such  Indemnified  Person from
            all  liability  on  claims  that  are  the  subject  matter  of such
            proceeding  on terms  reasonably  satisfactory  to such  Indemnified
            Person. If the indemnification provided for in this paragraph (e) is
            unavailable to an Indemnified  Person or  insufficient in respect of
            any losses, claims, damages or liabilities referred to therein, then
            the  Company  under such  paragraph,  in lieu of  indemnifying  such
            Indemnified Person  thereunder,  shall contribute to the amount paid
            or payable by such  Indemnified  Person as a result of such  losses,
            claims,  damages or liabilities.  The remedies  provided for in this
            paragraph  (e) are not  exclusive  and shall not limit any rights or
            remedies which may otherwise be available to any Indemnified  Person
            at law or in  equity.  The  indemnity  and  contribution  agreements
            contained in this  paragraph (e) shall remain  operative and in full
            force and effect regardless of the termination of this Transaction.

      (f)   Regulation  M. The  Company  was not on the Trade Date and is not on
            the date hereof engaged in a  distribution,  as such term is used in
            Regulation  M under  the  Exchange  Act,  of any  securities  of the
            Company,  other than a distribution  meeting the requirements of the
            exception set forth in Rules  101(b)(10) and 102(b)(7) of Regulation
            M. The Company  shall not,  until the second  Exchange  Business Day
            immediately   following   the  Trade   Date,   engage  in  any  such
            distribution.

      (g)   No  Manipulation.  The Company is not entering into this Transaction
            to create actual or apparent  trading activity in the Shares (or any
            security  convertible  into or  exchangeable  for the  Shares) or to
            raise or depress or otherwise manipulate the price of the Shares (or
            any security convertible into or exchangeable for the Shares).

      (h)   Board Authorization. The Company represents that it is entering into
            the  Transaction,  solely  for  the  purposes  stated  in the  board
            resolution   authorizing   this   Transaction   and  in  its  public
            disclosure. The Company further represents that there is no internal
            policy,  whether written or oral, of the Company that would prohibit
            the  Company  from  entering  into any  aspect of this  Transaction,
            including,  but not  limited  to, the  issuance  of Shares  pursuant
            hereto.

      (i)   Transfer or Assignment.  (i) The Company may not transfer any of its
            rights or  obligations  under  this  Transaction  without  the prior
            written consent of BofA. BofA may transfer or assign all or any

                                       11
<PAGE>

            portion  of its rights or  obligations  under  this  Transaction  in
            compliance with  applicable laws without consent of the Company.  In
            addition,  if BofA's  "beneficial  ownership" (within the meaning of
            Section 16 of the  Exchange  Act and rules  promulgated  thereunder)
            exceeds 8% of the Company's  outstanding  shares,  or the product of
            the Number of Warrants  and the Warrant  Entitlement  divided by the
            total  number of the  Company's  outstanding  Shares  (the  "Warrant
            Equity  Percentage")   exceeds  15%  and  if,  in  the  good  faith,
            reasonable  judgment  of BofA based upon  advice of counsel and as a
            result of events  occurring  after the Trade Date,  BofA  reasonably
            determines  that it would be  inadvisable  to engage in  alternative
            hedging transactions which would enable it to reduce its "beneficial
            ownership" or the Warrants Equity Percentage other than by transfer,
            assignment or termination, and BofA reasonably determines that it is
            unable  after  making  commercially  reasonable  efforts  to  effect
            transfer  or  assignment  on  pricing  terms  and in a  time  period
            reasonably  acceptable  to BofA that would  reduce  its  "beneficial
            ownership"  to 7.5% or such  Warrant  Equity  Percentage  to  14.5%,
            respectively,  BofA may  designate  any Exchange  Business Day as an
            Early  Termination  Date with respect to a portion (the  "Terminated
            Portion") of this Transaction,  such that its "beneficial ownership"
            following such partial  termination would be approximately  equal to
            but less than 7.5% or the Warrant  Equity  Percentage  approximately
            equal to 14.5%, as applicable.

            (ii) If BofA so designates an Early Termination Date with respect to
            a portion of this Transaction,  (i) a payment shall be made pursuant
            to  Section  6 of the  Agreement  as if an  Early  Termination  Date
            occurred in respect of a Transaction  having terms identical to this
            Transaction  and a  Number  of  Warrants  equal  to  the  Terminated
            Portion,  (ii) the  Company  shall be the sole  Affected  Party with
            respect to such partial termination and (iii) such Transaction shall
            be the only Terminated  Transaction.  For the avoidance of doubt, if
            BofA assigns or terminates any Warrants hereunder, each Daily Number
            of  Warrants  not  previously  settled  hereunder  shall be  reduced
            proportionately, as calculated by the Calculation Agent.

            (iii)  Notwithstanding  any other provision in this  Confirmation to
            the contrary  requiring or allowing BofA to purchase,  sell, receive
            or deliver any Shares or other  securities  to or from the  Company,
            BofA may designate any of its affiliates to purchase,  sell, receive
            or deliver such Shares or other  securities and otherwise to perform
            BofA's  obligations  in  respect  of this  Transaction  and any such
            designee may assume such  obligations.  BofA shall be  discharged of
            its  obligations  to the  Company  only to the  extent  of any  such
            performance.

      (j)   Damages.  Neither  party shall be liable  under  Section 6.10 of the
            Equity Definitions for special,  indirect or consequential  damages,
            even if informed of the possibility thereof.

      (k)   Early  Unwind.  In the  event the sale of  Convertible  Notes is not
            consummated with the initial  purchasers for any reason by the close
            of  business  in New York on March 13,  2006 (or such  later date as
            agreed  upon by the  parties)  (March 13, 2006 or such later date as
            agreed upon being the "Early Unwind Date"),  this Transaction  shall
            automatically  terminate (the "Early  Unwind"),  on the Early Unwind
            Date and (i) the  Transaction  and all of the respective  rights and
            obligations of BofA and the Company under the  Transaction  shall be
            cancelled and  terminated  and (ii) each party shall be released and
            discharged  by the other party from and agrees not to make any claim
            against  the  other  party  with  respect  to  any   obligations  or
            liabilities of the other party arising out of and to be performed in
            connection with the  Transaction  either prior to or after the Early
            Unwind Date; provided that, if the failure to consummate the sale of
            the  Convertible  Notes  results from a breach by the Company of any
            representation of or any undertaking by the Company contained in the
            Purchase  Agreement,  the Company  shall  purchase  from BofA on the
            Early Unwind Date any Shares purchased by BofA or one or more of its
            affiliates in connection  with this  Transaction  and reimburse BofA
            for any costs or expenses  (including market losses) relating to the
            unwinding of its reasonable  hedging  activities in connection  with
            the Transaction (including any losses or costs

                                       12
<PAGE>

            incurred as a result of its terminating,  liquidating,  obtaining or
            reestablishing  any reasonable  hedge or related trading  position).
            The amount of any such reimbursement  shall be determined by BofA in
            its reasonable good faith discretion.  BofA shall notify the Company
            of  such  amount,   including,   upon  the  Company's  request,   an
            explanation of the basis of  determination  of such amount,  and the
            Company shall pay such amount in immediately  available funds on the
            Early Unwind Date. BofA and the Company represent and acknowledge to
            the other  that,  subject to the proviso  included in this  Section,
            upon  an  Early  Unwind,   all  obligations   with  respect  to  the
            Transaction shall be deemed fully and finally discharged.

      (l)   Dividends.  If at any time during the period from and  including the
            Trade Date,  to but excluding the  Expiration  Date, an  ex-dividend
            date for a cash  dividend  occurs  with  respect  to the  Shares (an
            "Ex-Dividend Date"), and that dividend is different from the Regular
            Dividend on a per Share basis then the  Calculation  Agent will,  in
            its reasonable  discretion,  adjust the Strike Price,  the Number of
            Warrants,  the Daily Number of Warrants and the Warrant  Entitlement
            to preserve  the fair value of the Warrant to BofA after taking into
            account such dividend.  "Regular  Dividend"  shall mean USD 0.09 per
            Share per quarter.

      (m)   Role of Agent.  Each party agrees and acknowledges  that (i) Banc of
            America  Securities LLC ("BASL"),  has acted solely as agent and not
            as principal with respect to this  Transaction  and (ii) BASL has no
            obligation  or  liability,  by  way  of  guaranty,   endorsement  or
            otherwise,  in any manner in respect of this Transaction (including,
            if  applicable,  in respect of the settlement  thereof).  Each party
            agrees it will look solely to the other party (or any  guarantor  in
            respect  thereof) for performance of such other party's  obligations
            under this Transaction.

      (n)   Additional Provisions.

            (i)   Notwithstanding   Section  9.7  of  the  Equity   Definitions,
            everything  in the first  paragraph of Section  9.7(b) of the Equity
            Definitions  after the words  "Calculation  Agent" in the third line
            through  the  remainder  of such  Section  9.7 shall be deleted  and
            replaced with the following:

            "based   on  an  amount   representing   the   Calculation   Agent's
            determination  of the fair  value to Buyer of an option  with  terms
            that would preserve for Buyer the economic equivalent of any payment
            or delivery  (assuming  satisfaction  of each  applicable  condition
            precedent)  by the  parties in respect of the  relevant  Transaction
            that would have been required after that date but for the occurrence
            of the Merger Event, Nationalization, Insolvency or Share De-listing
            as the case may be."

            (ii)  Sections  12.8 and 12.9 of the 2002  ISDA  Equity  Derivatives
            Definitions shall apply to this Transaction and, for the purposes of
            such sections, "Hedging Disruption", "Increased Cost of Hedging" and
            "Loss of Stock Borrow" shall be "Applicable" and, in each case, BofA
            shall be the Hedging Party and the Determining  Party.  With respect
            to the Loss of Stock  Borrow,  the  "Maximum  Stock Loan Rate" shall
            mean the Federal Funds Rate, as determined by the Calculation Agent,
            minus 50 basis points.

            "Federal Funds Rate" means, for any day, the rate set forth for such
            day opposite the caption "Federal funds",  as such rate is displayed
            on the  page  FedsOpen  <Index><GO>  on the  Bloomberg  Professional
            Service or any successor page;  provided that if no rate appears for
            any day on such page, the rate for the immediately preceding day for
            which a rate does so appear shall be used for such day.

      (o)   No  Collateral  or  Setoff.  Notwithstanding  any  provision  of the
            Agreement  or  any  other  agreement  between  the  parties  to  the
            contrary,  the obligations of the Company  hereunder are not secured
            by any collateral.  Obligations  under this Transaction shall not be
            set off by the Company (including,

                                       13
<PAGE>

            for  the  avoidance  of  doubt,  pursuant  to  Section  6(f)  of the
            Agreement)  against any other  obligations  of the parties,  whether
            arising  under the  Agreement,  this  Confirmation,  under any other
            agreement  between  the  parties  hereto,  by  operation  of  law or
            otherwise.  Any  provision  in the  Agreement  with  respect  to the
            satisfaction of the Company's  payment  obligations to the extent of
            BofA's  payment  obligations to the Company in the same currency and
            in the same Transaction (including,  without limitation Section 2(c)
            thereof)  shall not apply to the Company and,  for the  avoidance of
            doubt,  the Company  shall fully  satisfy such  payment  obligations
            notwithstanding any payment obligation to the Company by BofA in the
            same  currency  and in the  same  Transaction.  In  calculating  any
            amounts  under  Section  6(e)  of  the  Agreement,   notwithstanding
            anything to the  contrary in the  Agreement,  (1)  separate  amounts
            shall be  calculated  as set forth in such Section 6(e) with respect
            to (a) this Transaction and (b) all other Transactions, and (2) such
            separate  amounts shall be payable  pursuant to Section  6(d)(ii) of
            the Agreement, subject to the Share Termination Alternative.

      (p)   Alternative  Calculations  and Payment on Early  Termination  and on
            Certain Extraordinary Events. If, in respect of this Transaction, an
            amount is payable by the  Company to BofA,  (i)  pursuant to Section
            9.7  of  the   Equity   Definitions   (except  in  the  event  of  a
            Nationalization  or Insolvency  or a Merger Event,  in each case, in
            which the  consideration  to be paid to holders  of Shares  consists
            solely  of  cash)  or  (ii)  pursuant  to  Section  6(d)(ii)  of the
            Agreement  (except  in the event of an Event of Default in which the
            Company is the Defaulting Party or a Termination  Event in which the
            Company is the Affected Party, other than an Event of Default of the
            type described in Section  5(a)(iii),  (v), (vi), (vii) or (viii) of
            the Agreement or in this  Confirmation or a Termination Event of the
            type described in Section 5(b)(i), (ii), (iii), (iv), (v) or (vi) of
            the Agreement or this  Confirmation  in each case  resulting from an
            event  or  events   outside  the  Company's   control)  (a  "Payment
            Obligation"),  the Company may, in its sole discretion,  satisfy any
            such Payment  Obligation by the Share  Termination  Alternative  (as
            defined below) and shall give irrevocable telephonic notice to BofA,
            confirmed in writing within one Currency Business Day, no later than
            12:00 p.m. New York local time on the Merger  Date,  the date of the
            occurrence of the  Nationalization  or  Insolvency,  the date of the
            Share De-listing or the Early  Termination  Date, as applicable.  In
            calculating  any  amounts  under  Section  6(e)  of  the  Agreement,
            notwithstanding  anything  to the  contrary  in the  Agreement,  (1)
            separate  amounts  shall be  calculated as set forth in Section 6(e)
            with respect to (a) this Transaction and (b) any other  Transactions
            under the Agreement,  and (2) such separate amounts shall be payable
            pursuant to Section  6(d)(ii) of the  Agreement,  subject to, in the
            case of clause (1)(a),  the Company's Share Termination  Alternative
            right hereunder.

            Share Termination Alternative:   If  applicable,  the Company  shall
                                             deliver    to   BofA   the    Share
                                             Termination  Delivery  Property  on
                                             the   date    when   the    Payment
                                             Obligation  would otherwise be due,
                                             subject  to  Section   9(q)  below,
                                             pursuant  to  Section  9.7  of  the
                                             Equity      Definitions,       this
                                             Confirmation,  or Section  6(d)(ii)
                                             and  6(e)  of  the  Agreement,   as
                                             applicable (the "Share  Termination
                                             Payment Date"), in satisfaction, of
                                             the  Payment   Obligation   in  the
                                             manner reasonably requested by BofA
                                             free of payment.

            Share Termination                A  number   of  Share   Termination
            Delivery Property:               Delivery  Units,  as  calculated by
                                             the Calculation Agent, equal to the
                                             Payment  Obligation  divided by the
                                             Share  Termination  Unit Price. The
                                             Calculation  Agent shall adjust the
                                             Share Termination Delivery Property
                                             by

                                       14
<PAGE>

                                             replacing any fractional portion of
                                             a security  therein  with an amount
                                             of cash  equal to the value of such
                                             fractional  security  based  on the
                                             values used to calculate  the Share
                                             Termination Unit Price.

            Share Termination Unit Price:    The  value  to  BofA  of   property
                                             contained in one Share  Termination
                                             Delivery  Unit  on  the  date  such
                                             Share  Termination  Delivery  Units
                                             are  to  be   delivered   as  Share
                                             Termination  Delivery Property,  as
                                             determined by the Calculation Agent
                                             in its  discretion by  commercially
                                             reasonable  means and  notified  by
                                             the   Calculation   Agent   to  the
                                             Company at the time of notification
                                             of the Payment  Obligation.  In the
                                             case   of   a   Private   Placement
                                             Settlement  of  Share   Termination
                                             Delivery  Units that are Restricted
                                             Shares  (as  defined  below) as set
                                             forth in  paragraph  (q)(i)  below,
                                             the Share  Termination  Unit  Price
                                             shall   be    determined   by   the
                                             discounted price applicable to such
                                             Share  Termination  Delivery Units.
                                             In  the   case   of  a   Registered
                                             Settlement  of  Share   Termination
                                             Delivery  Units that are Restricted
                                             Shares  (as  defined  below) as set
                                             forth in paragraph  (q)(ii)  below,
                                             the Share  Termination  Unit  Price
                                             shall  be the  Settlement  Price on
                                             the  Merger  Date,  the date of the
                                             occurrence  of the  Nationalization
                                             or  Insolvency,  the  date  of  the
                                             Share   De-listing   or  the  Early
                                             Termination Date, as applicable.

            Share Termination Delivery Unit: In the case of a Share  De-listing,
                                             Termination   Event   or  Event  of
                                             Default,  one Share or, in the case
                                             of Nationalization or Insolvency or
                                             a Merger Event,  a unit  consisting
                                             of the  number  or  amount  of each
                                             type  of  property  received  by  a
                                             holder   of  one   Share   (without
                                             consideration of any requirement to
                                             pay cash or other  consideration in
                                             lieu of  fractional  amounts of any
                                             securities) in such Nationalization
                                             or Insolvency or such Merger Event.
                                             If such  Merger  Event  involves  a
                                             choice  of   consideration   to  be
                                             received  by  holders,  such holder
                                             shall be deemed to have  elected to
                                             receive the maximum possible amount
                                             of cash.

            Failure to Deliver:              Inapplicable

            Other applicable provisions:     If    the     Share     Termination
                                             Alternative  is   applicable,   the
                                             provisions  of Sections  6.6,  6.7,
                                             6.8,  6.9  and  6.10  (as  modified
                                             above)  of the  Equity  Definitions
                                             will be applicable, except that all
                                             references  in such  provisions  to
                                             "Physically-Settled"  shall be read
                                             as references to "Share Termination
                                             Settled"  and  all   references  to
                                             "Shares"    shall    be   read   as
                                             references  to  "Share  Termination
                                             Delivery Units". "Share

                                       15
<PAGE>

                                             Termination Settled" in relation to
                                             this  Transaction  means  that  the
                                             Share  Termination  Alternative  is
                                             applicable to this Transaction.

      (q)   Registration/Private  Placement  Procedures.  If, in the  reasonable
            opinion  of BofA,  based on the  advice of  counsel,  following  any
            delivery of Shares or Share  Termination  Delivery  Property to BofA
            hereunder,  such Shares or Share Termination Delivery Property would
            be in the hands of BofA subject to any applicable  restrictions with
            respect  to  any  registration  or   qualification   requirement  or
            prospectus delivery requirement for such Shares or Share Termination
            Delivery  Property  pursuant  to any  applicable  federal  or  state
            securities law (including,  without limitation, any such requirement
            arising  under Section 5 of the  Securities  Act as a result of such
            Shares or Share  Termination  Delivery  Property  being  "restricted
            securities",  as  such  term  is  defined  in  Rule  144  under  the
            Securities  Act,  or as a result of the sale of such Shares or Share
            Termination Delivery Property being subject to paragraph (c) of Rule
            145 under the  Securities  Act)  (such  Shares or Share  Termination
            Delivery  Property,  "Restricted  Shares"),  then  delivery  of such
            Restricted Shares shall be effected pursuant to either clause (i) or
            (ii) below at the  election of the Company,  unless  waived by BofA.
            Notwithstanding  the  foregoing,  solely in respect of any  Warrants
            exercised or deemed exercised on any Expiration Date, (x) BofA shall
            use  reasonable  efforts to give notice to the Company no later than
            twenty (20)  Exchange  Business  Days prior to the First  Expiration
            Date if it  believes  at such time that this  Section  9(q) would be
            applicable to Shares or Share  Termination  Delivery  Property to be
            delivered  in  connection  with any  Expiration  Date and (y) to the
            extent Net Share Settlement applies,  the Company shall elect, prior
            to the  first  Settlement  Date for the  first  Expiration  Date,  a
            Private  Placement  Settlement  or  Registered  Settlement  for  all
            deliveries of Restricted  Shares for all such Expiration Dates which
            election shall be applicable to all Settlement  Dates for such Daily
            Number of Warrants and the  procedures  in clause (i) or clause (ii)
            below shall  apply for all such  delivered  Restricted  Shares on an
            aggregate basis  commencing after the final Settlement Date for such
            Daily  Number  of  Warrants.   The  Calculation   Agent  shall  make
            reasonable adjustments to settlement terms and provisions under this
            Confirmation  to reflect a single  Private  Placement  Settlement or
            Registered Settlement for such aggregate Restricted Shares delivered
            hereunder.

            (i)   If the Company  elects to settle the  Transaction  pursuant to
                  this  clause  (i) (a  "Private  Placement  Settlement"),  then
                  delivery of Restricted Shares by the Company shall be effected
                  in customary private placement procedures with respect to such
                  Restricted Shares reasonably acceptable to BofA; provided that
                  the Company may not elect a Private  Placement  Settlement if,
                  on the date of its  election,  it has  taken,  or caused to be
                  taken,  any  action  that would  make  unavailable  either the
                  exemption  pursuant to Section 4(2) of the  Securities Act for
                  the sale by the Company to BofA (or any  affiliate  designated
                  by BofA) of the Restricted Shares or the exemption pursuant to
                  Section 4(1) or Section 4(3) of the Securities Act for resales
                  of the  Restricted  Shares by BofA (or any such  affiliate  of
                  BofA).  The Private  Placement  Settlement of such  Restricted
                  Shares shall  include  customary  representations,  covenants,
                  blue sky and other governmental filings and/or  registrations,
                  indemnities  to BofA,  due  diligence  rights (for BofA or any
                  designated buyer of the Restricted  Shares by BofA),  opinions
                  and certificates, and such other documentation as is customary
                  for private placement agreements, all reasonably acceptable to
                  BofA.  In the case of a  Private  Placement  Settlement,  BofA
                  shall  determine  the   appropriate   discount  to  the  Share
                  Termination  Unit  Price (in the case of  settlement  of Share
                  Termination Delivery Units pursuant to paragraph (p) above) or
                  any  Settlement  Price  (in the case of  settlement  of Shares
                  pursuant  to Section 2 above)  applicable  to such  Restricted
                  Shares in a commercially  reasonable  manner and appropriately
                  adjust the amount of such Restricted Shares to be delivered to
                  BofA hereunder; provided that in no event shall such number be
                  greater than 5,498,648 (the "Maximum Amount").

                                       16
<PAGE>

                  Notwithstanding  the Agreement or this Confirmation,  the date
                  of delivery of such  Restricted  Shares (the "Due Date") shall
                  be the Exchange  Business Day following  notice by BofA to the
                  Company,  of  such  applicable  discount  and  the  number  of
                  Restricted Shares to be delivered pursuant to this clause (i).
                  For the  avoidance  of doubt,  delivery of  Restricted  Shares
                  shall be due as set forth in the previous  sentence and not be
                  due on the  Share  Termination  Payment  Date  (in the case of
                  settlement of Share  Termination  Delivery  Units  pursuant to
                  paragraph  (p)  above)  or on the  Settlement  Date  for  such
                  Restricted  Shares  (in  the  case  of  settlement  of  Shares
                  pursuant to Section 2 above).

                  In the event the  Company  shall not have  delivered  the full
                  number of Restricted  Shares otherwise  applicable as a result
                  of the proviso  above  relating to the  Maximum  Amount  (such
                  deficit, the "Deficit Restricted  Shares"),  the Company shall
                  be continually  obligated to deliver,  from time to time until
                  the  full  number  of  Deficit  Restricted  Shares  have  been
                  delivered pursuant to this paragraph,  Restricted Shares when,
                  and to the extent,  that (i) Shares are repurchased,  acquired
                  or   otherwise   received   by  the  Company  or  any  of  its
                  subsidiaries  after the Trade Date (whether or not in exchange
                  for  cash,  fair  value  or  any  other  consideration),  (ii)
                  authorized  and  unissued  Shares  reserved  for  issuance  in
                  respect of other  transactions  prior to such date which prior
                  to the  relevant  date become no longer so reserved  and (iii)
                  the Company  additionally  authorizes and unissued Shares that
                  are not reserved  for other  transactions.  The Company  shall
                  immediately  notify  BofA  of  the  occurrence  of  any of the
                  foregoing  events  (including  the number of Shares subject to
                  clause  (i),  (ii) or (iii)  and the  corresponding  number of
                  Restricted  Shares to be delivered) and promptly  deliver such
                  Restricted Shares thereafter.

                  In the event of a Private Placement,  the Net Share Settlement
                  Amount  or the  Payment  Obligation,  respectively,  shall  be
                  deemed to be the Net Share  Settlement  Amount or the  Payment
                  Obligation,    respectively,   plus   an   additional   amount
                  (determined from time to time by the Calculation  Agent in its
                  commercially  reasonable  judgment)  attributable  to interest
                  that  would be earned on such Net Share  Settlement  Amount or
                  the Payment  Obligation,  respectively,  (increased on a daily
                  basis to reflect the accrual of such interest and reduced from
                  time to time by the amount of net proceeds received by BofA as
                  provided  herein)  at a rate equal to the open  Federal  Funds
                  Rate plus the Spread for the period from, and including,  such
                  Settlement Date or the date on which the Payment Obligation is
                  due, respectively, to, but excluding, the Due Date, calculated
                  on an  Actual/360  basis.  The  foregoing  provision  shall be
                  without   prejudice  to  BofA's  rights  under  the  Agreement
                  (including, without limitation, Sections 5 and 6 thereof).

                  As used in this Section 9(p)(i),  "Spread" means, with respect
                  to any Net  Share  Settlement  Amount or  Payment  Obligation,
                  respectively,  the credit spread over the applicable overnight
                  rate that would be  imposed  if BofA were to extend  credit to
                  the  Company in an amount  equal to such Net Share  Settlement
                  Amount,  all as determined by the Calculation  Agent using its
                  commercially  reasonable judgment as of the related Settlement
                  Date  or Due  Date,  respectively.  Commercial  reasonableness
                  shall take into  consideration  all factors deemed relevant by
                  the Calculation  Agent,  which are expected to include,  among
                  other  things,  the  credit  quality of the  Company  (and any
                  relevant  affiliates)  in the  then-prevailing  market and the
                  credit  spread of similar  companies in the relevant  industry
                  and other  companies  having a  substantially  similar  credit
                  quality.

            (ii)  If the Company  elects to settle the  Transaction  pursuant to
                  this  clause  (ii) (a  "Registration  Settlement"),  then  the
                  Company  shall  promptly  (but in any event no later  than the
                  beginning of the Resale  Period)  file and use its  reasonable
                  best  efforts to make  effective  under the  Securities  Act a
                  registration statement or supplement or amend an

                                       17
<PAGE>

                  outstanding  registration  statement  in  form  and  substance
                  reasonably  satisfactory  to BofA, to cover the resale of such
                  Restricted   Shares  in  accordance   with  customary   resale
                  registration  procedures,   including  covenants,  conditions,
                  representations,   underwriting   discounts  (if  applicable),
                  commissions (if applicable), indemnities due diligence rights,
                  opinions and certificates,  and such other documentation as is
                  customary  for  equity  resale  underwriting  agreements,  all
                  reasonably  acceptable  to BofA.  If BofA,  in its  reasonable
                  discretion,   is  not  satisfied  with  such   procedures  and
                  documentation,  Private  Placement  Settlement shall apply. If
                  BofA is satisfied with such procedures and  documentation,  it
                  shall sell the Restricted Shares pursuant to such registration
                  statement during a period (the "Resale Period")  commencing on
                  (x) the Share  Termination  Payment Date in case of settlement
                  of Share Termination  Delivery Units pursuant to paragraph (p)
                  above  or (y) the  Settlement  Date in  respect  of the  final
                  Expiration Date for all Daily Number of Warrants and ending on
                  the  earliest of (i) the  Exchange  Business Day on which BofA
                  completes  the sale of all  Restricted  Shares or a sufficient
                  number of Restricted  Shares so that the realized net proceeds
                  of such  sales  exceed  the  Payment  Obligation  (as  defined
                  above),  (ii) the date upon which all  Restricted  Shares have
                  been  sold or  transferred  pursuant  to Rule 144 (or  similar
                  provisions  then in  force) or Rule  145(d)(1)  or (2) (or any
                  similar  provision then in force) under the Securities Act and
                  (iii) the date upon which all Restricted Shares may be sold or
                  transferred by a non-affiliate pursuant to Rule 144(k) (or any
                  similar  provision  then in force) or Rule  145(d)(3)  (or any
                  similar  provision then in force) under the Securities Act. If
                  the Payment  Obligation exceeds the realized net proceeds from
                  such resale, the Company shall transfer to BofA by the open of
                  the regular  trading  session on the  Exchange on the Exchange
                  Trading Day  immediately  following the last day of the Resale
                  Period the amount of such excess (the "Additional  Amount") in
                  cash or in a number of Restricted Shares ("Make-whole Shares")
                  in an amount that,  based on the Settlement  Price on the last
                  day of the Resale  Period  (as if such day was the  "Valuation
                  Date" for purposes of computing such Settlement  Price), has a
                  dollar value equal to the Additional Amount. The Resale Period
                  shall continue to enable the sale of the Make-whole Shares. If
                  the Company elects to pay the Additional  Amount in Restricted
                  Shares,  the  requirements  and  provisions  for  Registration
                  Settlement  shall  apply.  This  provision  shall  be  applied
                  successively  until the Additional Amount is equal to zero. In
                  no event  shall the  Company  deliver  a number of  Restricted
                  Shares greater than the Maximum Amount.  Once the realized net
                  proceeds  of such sales  exceed the Payment  Obligation,  BofA
                  shall  return to the Company any excess  proceeds or remaining
                  Restricted Shares.

            (iii) Without limiting the generality of the foregoing,  but subject
                  to the last sentence of Section 9(s) below, the Company agrees
                  that any Restricted  Shares delivered to BofA, as purchaser of
                  such  Restricted  Shares,  (i) may be transferred by and among
                  BofA and its affiliates in compliance  with applicable law and
                  the Company  shall  effect such  transfer  without any further
                  action by BofA and (ii)  after the  minimum  "holding  period"
                  within the meaning of Rule 144(d) under the Securities Act has
                  elapsed after any Settlement Date for such Restricted  Shares,
                  the Company shall promptly remove, or cause the transfer agent
                  for such Restricted Shares to remove, any legends referring to
                  any such  restrictions  or  requirements  from such Restricted
                  Shares upon  delivery by BofA (or such  affiliate  of BofA) to
                  the Company or such  transfer  agent of seller's  and broker's
                  representation   letters  customarily  delivered  by  BofA  in
                  connection with resales of restricted  securities  pursuant to
                  Rule  144  under  the  Securities  Act,  without  any  further
                  requirement  for the  delivery  of any  certificate,  consent,
                  agreement,  opinion of counsel,  notice or any other document,
                  any  transfer tax stamps or payment of any other amount or any
                  other action by BofA (or such affiliate of BofA).

                                       18
<PAGE>

                  If  the  Private  Placement  Settlement  or  the  Registration
                  Settlement  shall not be  effected as set forth in clauses (i)
                  or (ii),  as  applicable,  then failure to effect such Private
                  Placement  Settlement or such  Registration  Settlement  shall
                  constitute  an Event of  Default  with  respect  to which  the
                  Company shall be the Defaulting Party.

      (r)   Limit on Beneficial Ownership.  Notwithstanding any other provisions
            hereof,  BofA may not exercise any Warrant  hereunder or receive any
            Shares as a result of such  exercise,  and Automatic  Exercise shall
            not apply  with  respect  thereto,  to the  extent  (but only to the
            extent) that such  exercise or receipt would result in BofA directly
            or  indirectly  beneficially  owning  (as such term is  defined  for
            purposes of Section 13(d) of the Exchange Act) at any time in excess
            of 9.0% of the outstanding  Shares. Any purported delivery hereunder
            shall be void and have no  effect  to the  extent  (but  only to the
            extent)  that  such  delivery  would  result  in  BofA  directly  or
            indirectly  so  beneficially   owning  in  excess  of  9.0%  of  the
            outstanding  Shares.  If any delivery owed to BofA  hereunder is not
            made,  in whole  or in part,  as a  result  of this  provision,  the
            Company's obligation to make such delivery shall not be extinguished
            and the Company shall make such delivery as promptly as  practicable
            after,  but in no event later than one Exchange  Business Day after,
            BofA gives notice to the Company that such delivery would not result
            in BofA directly or indirectly so  beneficially  owning in excess of
            9.0% of the outstanding Shares.

      (s)   Share Deliveries.  The Company  acknowledges and agrees that, to the
            extent the holder of this Warrant is not then an  affiliate  and has
            not been an  affiliate  for 90 days (it being  understood  that BofA
            will not be considered  an affiliate  under this Section 9(s) solely
            by reason of its receipt of Shares  pursuant  to this  Transaction),
            and otherwise satisfies all holding period and other requirements of
            Rule 144 of the  Securities  Act  applicable  to it, any delivery of
            Shares or Share Termination  Delivery Property hereunder at any time
            after two years from the Premium  Payment Date shall be eligible for
            resale  under  Rule  144(k) of the  Securities  Act and the  Company
            agrees to  promptly  remove,  or cause the  transfer  agent for such
            Shares  or Share  Termination  Delivery  Property,  to  remove,  any
            legends referring to any restrictions on resale under the Securities
            Act from the  Shares or Share  Termination  Delivery  Property.  The
            Company  further  agrees,  for  any  delivery  of  Shares  or  Share
            Termination  Delivery Property  hereunder at any time after one year
            from the  Premium  Payment  Date but within two years of the Premium
            Payment  Date,  to the  extent  the  holder  of  this  Warrant  then
            satisfies the holding period and other  requirements  of Rule 144 of
            the Securities Act, to promptly remove,  or cause the transfer agent
            for such Shares or Share  Termination  Delivery  Property to remove,
            any legends  referring to any such restrictions or requirements from
            such Shares or Share Termination  Delivery Property.  Such Shares or
            Share  Termination   Delivery  Property  will  be  de-legended  upon
            delivery by BofA (or such  affiliate of BofA) to the Company or such
            transfer  agent of customary  seller's  and broker's  representation
            letters in connection with resales of restricted securities pursuant
            to Rule 144 of the Securities Act,  without any further  requirement
            for the delivery of any certificate,  consent, agreement, opinion of
            counsel,  notice or any other  document,  any transfer tax stamps or
            payment  of any other  amount  or any other  action by BofA (or such
            affiliate of BofA).  The Company further agrees that any delivery of
            Shares or Share Termination Delivery Property prior to the date that
            is one year from the Premium Payment Date, may be transferred by and
            among BofA and its affiliates in compliance  with applicable law and
            the Company shall effect such transfer without any further action by
            BofA. Notwithstanding anything to the contrary herein, to the extent
            the  provisions of Rule 144 of the  Securities  Act or any successor
            rule are amended,  or the applicable  interpretation  thereof by the
            Securities  and  Exchange  Commission  or any court change after the
            Trade Date,  the  agreements  of the Company  herein shall be deemed
            modified to the extent  necessary,  in the opinion of counsel of the
            Company,  to comply with Rule 144 of the Securities  Act,  including
            Rule  144(k) as in effect at the time of  delivery  of the  relevant
            Shares or Share Termination Delivery Property.

                                       19
<PAGE>

      (t)   Additional Termination Event. If within the period commencing on the
            Trade Date and ending on the second  anniversary  of the Trade Date,
            an event shall occur,  as a result of which,  based on the advice of
            counsel,   BofA  reasonably  determines  that  it  is  advisable  to
            terminate a portion of this  Transaction  to comply with  applicable
            securities laws, rules or regulations,  the occurrence of such event
            shall constitute an Additional Termination Event under the Agreement
            permitting  BofA to  terminate  a  portion  of this  Transaction  in
            respect of which (1) the Company  shall be the sole  Affected  Party
            and (2) this  Transaction  shall be the sole  Affected  Transaction;
            provided,  however,  that BofA shall  have the right to effect  such
            termination only to the extent  reasonably  necessary to comply with
            such laws, rules or regulations.

      (u)   Right to  Extend.  BofA may delay any  Settlement  Date or any other
            date  of  delivery  by  BofA,  with  respect  to  some or all of the
            Warrants   hereunder,   if  BofA  reasonably   determines,   in  its
            discretion,  that such  extension is reasonably  necessary to enable
            BofA to effect  purchases of Shares in  connection  with its hedging
            activity  hereunder  in a manner  that would be in  compliance  with
            applicable legal and regulatory requirements.

      (v)   Governing  Law.  New York law  (without  reference  to choice of law
            doctrine).

      (w)   Waiver of Jury  Trial.  Each party  waives,  to the  fullest  extent
            permitted  by  applicable  law,  any right it may have to a trial by
            jury in respect of any suit,  action or proceeding  relating to this
            Transaction. Each party (i) certifies that no representative,  agent
            or  attorney  of the  other  party  has  represented,  expressly  or
            otherwise,  that such other  party would not, in the event of such a
            suit, action or proceeding, seek to enforce the foregoing waiver and
            (ii)  acknowledges  that it and the other party have been induced to
            enter into this Transaction,  as applicable, by, among other things,
            the mutual waivers and certifications provided herein.

      (x)   Maximum Share Delivery.  Notwithstanding any other provision of this
            Confirmation  or the  Agreement,  in no event  will the  Company  be
            required to deliver  more than the  Maximum  Amount of Shares in the
            aggregate to BofA in connection  with this  Transaction,  subject to
            the provisions regarding Deficit Restricted Shares.

      (y)   Status of Claims in Bankruptcy.  BofA  acknowledges  and agrees that
            this  confirmation  is not  intended  to convey to BofA  rights with
            respect to the transactions  contemplated  hereby that are senior to
            the claims of common stockholders in any U.S. bankruptcy proceedings
            of the Company;  provided,  however, that nothing herein shall limit
            or shall be deemed to limit BofA's  right to pursue  remedies in the
            event of a breach by the Company of its  obligations  and agreements
            with respect to this  Confirmation and the Agreement;  and provided,
            further, that nothing herein shall limit or shall be deemed to limit
            BofA's  rights  in  respect  of  any  transaction   other  than  the
            Transaction.

      (z)   Tax  Advice.  BofA and its  affiliates  do not  provide  tax advice.
            Accordingly,  any statements contained herein as to tax matters were
            neither  written nor  intended by BofA to be used and cannot be used
            by any taxpayer for the purpose of avoiding tax  penalties  that may
            be imposed  on such  taxpayer.  If any person  uses or refers to any
            such  tax  statement  in  promoting,  marketing  or  recommending  a
            partnership or other entity,  investment  plan or arrangement to any
            taxpayer,  then the statement  expressed above is being delivered to
            support the  promotion  or marketing  of the  transaction  or matter
            addressed  and  the  recipient  should  seek  advice  based  on  its
            particular   circumstances   from  an   independent   tax   advisor.
            Notwithstanding  anything herein to the contrary, the sender and any
            intended  recipient of this communication (and any of its employees,
            representatives  and  other  agents)  may  disclose  to any  and all
            persons,  without  limitation of any kind,  the tax treatment or tax
            structure of this transaction.

                                       20
<PAGE>

--------------------------------------------------------------------------------
                                                          Bank of America [LOGO]

                                                 EQUITY FINANCIAL PRODUCTS GROUP
--------------------------------------------------------------------------------

      Please  confirm that the foregoing  correctly  sets forth the terms of our
agreement  by  executing  this  Confirmation  and  returning  it in  the  manner
indicated in the attached cover letter.

                                             Very truly yours,

                                                  Bank of America, N.A.

                                                  By: /s/ Eric P. Hambleton
                                                      --------------------------
                                                  Authorized Signatory
                                                  Name: Eric P. Hambleton

Accepted and confirmed
as of the Trade Date:

ALBANY INTERNATIONAL CORP.

By: /s/ David C. Michaels
    ----------------------------
Authorized Signatory
Name: David C. Michaels

                                       21
<PAGE>

                                                                         Annex A

                              Form of Legal Opinion

                                       22
<PAGE>

                                                                 JPMorgan [LOGO]

JPMorgan Chase Bank, N.A.
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England

                                                     March 7, 2006

To: Albany International Corp.
1373 Broadway
Albany, New York 12204
Attention: Christopher J. Connally, Corporate Treasurer
Telephone No.:  (518) 445-2235
Facsimile No.:  (518) 447-6305

Re: Warrants

      The  purpose  of  this  letter  agreement  is to  confirm  the  terms  and
conditions  of the Warrants  issued by Albany  International  Corp.,  a Delaware
corporation  (the  "Company"),  to JPMorgan  Chase Bank,  National  Association,
London   Branch   ("JPMorgan"),   on  the  Trade  Date   specified   below  (the
"Transaction").  This letter agreement  constitutes a "Confirmation" as referred
to in the ISDA Master Agreement specified below. This Confirmation shall replace
any  previous   agreements  and  serve  as  the  final  documentation  for  this
Transaction.

      The  definitions  and  provisions   contained  in  the  1996  ISDA  Equity
Derivatives  Definitions  (the  "Equity  Definitions"),   as  published  by  the
International  Swaps and Derivatives  Association,  Inc., are incorporated  into
this  Confirmation.  In  the  event  of any  inconsistency  between  the  Equity
Definitions  and  this  Confirmation,   this  Confirmation  shall  govern.  This
Transaction shall be deemed to be a Share Option  Transaction within the meaning
set forth in the Equity Definitions.

      Each party is hereby advised,  and each such party acknowledges,  that the
other party has engaged in, or refrained from engaging in, substantial financial
transactions  and has taken other material actions in reliance upon the parties'
entry into the Transaction to which this  Confirmation  relates on the terms and
conditions set forth below.

1. This Confirmation evidences a complete and binding agreement between JPMorgan
and the Company as to the terms of the  Transaction  to which this  Confirmation
relates.  This Confirmation shall supplement,  form a part of, and be subject to
an agreement in the form of the 2002 ISDA Master Agreement (the  "Agreement") as
if JPMorgan  and the Company had executed an agreement in such form (but without
any Schedule except for the election of the laws of the State of New York as the
governing  law) on the Trade  Date.  In the event of any  inconsistency  between
provisions  of that  Agreement and this  Confirmation,  this  Confirmation  will
prevail for the purpose of the Transaction to which this  Confirmation  relates.
The parties hereby agree that no Transaction other than the Transaction to which
this Confirmation relates shall be governed by the Agreement.

2. The terms of the particular  Transaction to which this  Confirmation  relates
are as follows:

                    JPMorgan Chase Bank, National Association
 Organised under the laws of the United States as a National Banking Association
             Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
          Registered as a branch in England & Wales branch No. BR000746
            Registered Branch Office 125 London Wall, London EC2Y 5AJ
          Authorised and regulated by the Financial Services Authority

                                       1
<PAGE>

General Terms:

       Trade Date:                      March 7, 2006

       Warrants:                        Equity  call  warrants,  each giving the
                                        holder the right to  purchase  one Share
                                        at  the  Strike  Price,  subject  to the
                                        Settlement  Terms set forth  below.  For
                                        the purposes of the Equity  Definitions,
                                        each reference to a Warrant herein shall
                                        be  deemed to be a  reference  to a Call
                                        Option.

       Warrant Style:                   American

       Buyer:                           JPMorgan

       Seller:                          Company

       Shares:                          The Class A common stock of the Company,
                                        par value USD 0.001 per Share  (Exchange
                                        symbol "AIN")

       Number of Warrants:              2,061,993,   subject  to  adjustment  as
                                        provided herein

       Daily Number of Warrants:        Subject to "Expiration Dates" below, for
                                        any day,  the  Number of  Warrants  that
                                        have not expired or been exercised as of
                                        such  day,   divided  by  the  remaining
                                        number of  Expiration  Dates  (including
                                        such  day)  and  rounded   down  to  the
                                        nearest  whole number to account for any
                                        fractional Daily Number of Warrants.

       Warrant Entitlement:             One Share per Warrant

       Multiple Exercise:               Applicable

       Minimum Number of Warrants:      1

       Maximum Number of Warrants:      2,061,993

       Strike Price:                    USD 52.25

       Premium:                         USD 16,619,312.47

       Premium Payment Date:            March 13, 2006

       Exchange:                        The New York Stock Exchange

       Related Exchange(s):             The  principal  exchange(s)  for options
                                        contracts or futures contracts,  if any,
                                        with respect to the Shares.

Exercise and Valuation:

        Expiration Time:                The Valuation Time

                                       2
<PAGE>

        Expiration Dates:               Each  Exchange  Business  Day during the
                                        period  beginning on and  including  the
                                        First  Expiration Date and ending on and
                                        including the 59th Exchange Business Day
                                        following  the  First   Expiration  Date
                                        shall  be  an  "Expiration  Date"  for a
                                        number  of  Warrants  equal to the Daily
                                        Number of Warrants on such day.

                                        Notwithstanding    the   foregoing   and
                                        anything  to the  contrary in the Equity
                                        Definitions,   if  a  Market  Disruption
                                        Event  occurs  on  any  Expiration  Date
                                        (including the First  Expiration  Date),
                                        the   Calculation   Agent   shall   make
                                        adjustments   to  the  Daily  Number  of
                                        Warrants  for which such day shall be an
                                        Expiration  Date and shall  designate  a
                                        scheduled  Exchange  Business  Day  or a
                                        number of  scheduled  Exchange  Business
                                        Days as the  Expiration  Date(s) for the
                                        remaining  Daily Number of Warrants or a
                                        portion   thereof  for  the   originally
                                        scheduled  Expiration  Date,  with  such
                                        adjustments   based  on,   among   other
                                        factors,  the  duration  of  any  Market
                                        Disruption   Event   and   the   volume,
                                        historical trading patterns and price of
                                        the  Shares;   provided   that  if  such
                                        Expiration   Date   has   not   occurred
                                        pursuant  to  this  sentence  as of  the
                                        eighth  (8th)   Exchange   Business  Day
                                        following the last scheduled  Expiration
                                        Date under this Transaction, such eighth
                                        (8th) Exchange Business Day shall be the
                                        final    Expiration    Date    and   the
                                        Calculation  Agent shall  determine  its
                                        good faith  estimate  of the fair market
                                        value for the Shares as of the Valuation
                                        Time on that  eighth  Exchange  Business
                                        Day.

        First Expiration Date:          June 15, 2013 (or, if such day is not an
                                        Exchange    Business   Day,   the   next
                                        following    Exchange   Business   Day),
                                        subject  to  Market   Disruption   Event
                                        below.

        Automatic Exercise:             Applicable;  and means  that a number of
                                        Warrants for each  Expiration Date equal
                                        to the  Daily  Number  of  Warrants  (as
                                        adjusted  pursuant to the terms  hereof)
                                        for such  Expiration Date will be deemed
                                        to be automatically exercised.

        Market Disruption Event:        Section  4.3(a)(ii) is hereby amended by
                                        adding  after the words "or Share Basket
                                        Transaction"  in the first line  thereof
                                        the phrase "a failure by the Exchange or
                                        Related  Exchange  to open  for  trading
                                        during its regular  trading  session or"
                                        and  replacing  the phrase  "during  the
                                        one-half  hour  period  that ends at the
                                        relevant Valuation Time" with the phrase
                                        "at any time during the regular  trading
                                        session on the  Exchange  or any Related
                                        Exchange,  without regard to after hours
                                        or  any  other  trading  outside  of the
                                        regular trading session hours".

Valuation applicable to each Warrant:

       Valuation Time:                  At the close of trading  of the  regular
                                        trading session on the Exchange.

       Valuation Date:                  Each Exercise Date.

                                       3
<PAGE>

Settlement Terms applicable to the Transaction:

Method of Settlement:                   Net  Share  Settlement;  provided  that,
                                        with  respect  to  all  Warrants  to  be
                                        exercised on the Expiration  Dates, Cash
                                        Settlement  shall  apply if the  Company
                                        validly elects Cash Settlement  pursuant
                                        to the  provisions  of "Cash  Settlement
                                        Election" below.

Net Share   Settlement:                 On each  Settlement  Date,  the  Company
                                        shall  deliver  to  JPMorgan,  the Share
                                        Delivery  Quantity  for such  Settlement
                                        Date  to the  account  specified  herein
                                        free of payment  through  the  Clearance
                                        System.

Share Delivery Quantity:                For each  Settlement  Date, (i) a number
                                        of Shares  (rounded  down to the nearest
                                        whole  Share),   as  calculated  by  the
                                        Calculation  Agent, equal to the sum of,
                                        for each Valuation Date that occurred in
                                        the calendar week immediately  preceding
                                        such  Settlement  Date,  the  Settlement
                                        Amount for such  Valuation  Date divided
                                        by  the   Settlement   Price   on   such
                                        Valuation Date, and (ii) cash in lieu of
                                        any  fractional   Share  (based  on  the
                                        Settlement  Price on the last  Valuation
                                        Date during such week).

Settlement Amount:                      For each Valuation Date, an amount equal
                                        to the  product  of (i)  the  number  of
                                        Warrants  exercised or deemed  exercised
                                        on the relevant  Exercise Date, (ii) the
                                        Strike  Price   Differential   for  such
                                        Valuation  Date and  (iii)  the  Warrant
                                        Entitlement.

Strike Price Differential:              (a)  If the  Settlement  Price  for  any
                                        Valuation   Date  is  greater  than  the
                                        Strike  Price,  an  amount  equal to the
                                        excess of such Settlement Price over the
                                        Strike Price; or

                                        (b) If  such  Settlement  Price  is less
                                        than or equal to the Strike Price, zero.

Settlement Price:                       For any  Valuation  Date,  the per Share
                                        volume-weighted    average    price   as
                                        displayed  under the heading  "Bloomberg
                                        VWAP" on Bloomberg page AIN <equity> AQR
                                        (or any successor thereto) in respect of
                                        the period  from 9:30 a.m.  to 4:00 p.m.
                                        (New York City  time) on such  Valuation
                                        Date (or if such volume-weighted average
                                        price is  unavailable,  the market value
                                        of one Share on such Valuation  Date, as
                                        determined  by  the  Calculation   Agent
                                        using a volume-weighted method).

Settlement Date:                        The first Exchange  Business Day of each
                                        calendar  week  shall be the  Settlement
                                        Date in respect of each  Valuation  Date
                                        that occurred  during the prior calendar
                                        week.

Cash Settlement Election:               Notwithstanding  "Method of  Settlement"
                                        above,  with  respect to all Warrants to
                                        be  exercised on the  Expiration  Dates,
                                        the Company can elect Cash Settlement by
                                        delivering a written  notice to JPMorgan
                                        (the  "Cash  Settlement  Notice")  on or
                                        prior to the fifteenth  (15th) scheduled
                                        Exchange Business Day immediately

                                       4
<PAGE>

                                        preceding  the  First  Expiration  Date,
                                        which  Cash   Settlement   Notice  shall
                                        contain:

                                        (i) a  representation  that  (x)  on the
                                        date of such Cash Settlement Notice, the
                                        Company  is  not  in  possession  of any
                                        material  non-public   information  with
                                        respect to the  Company  or its  Shares,
                                        (y)  the   Company  is   electing   Cash
                                        Settlement in good faith and not as part
                                        of  a  plan  or   scheme  to  evade  the
                                        prohibitions  of Rule  10b-5  under  the
                                        Securities  Exchange  Act  of  1934,  as
                                        amended (the "Exchange Act") and (z) the
                                        Company has not entered  into or altered
                                        any hedging transaction  relating to the
                                        Shares  corresponding  to or  offsetting
                                        the Transaction;

                                        (ii) a  representation  that the Company
                                        is  not,   on  the  date  of  such  Cash
                                        Settlement  Notice,  and will not be, on
                                        any day during the period  commencing on
                                        such  day  and   ending  on  the  second
                                        Exchange Business Day following the last
                                        Settlement     Date    hereunder    (the
                                        "Settlement   Period"),   engaged  in  a
                                        distribution,  as  such  term is used in
                                        Regulation  M under  the  Exchange  Act,
                                        other than a  distribution  meeting  the
                                        requirements  of the exception set forth
                                        in Rules  101(b)(10)  and  102(b)(7)  of
                                        Regulation M;

                                        (iii) a representation  that the Company
                                        is  not  electing  Cash   Settlement  to
                                        create   actual  or   apparent   trading
                                        activity in the Shares (or any  security
                                        convertible into or exchangeable for the
                                        Shares)   or  to  raise  or  depress  or
                                        otherwise  manipulate  the  price of the
                                        Shares (or any security convertible into
                                        or exchangeable for the Shares);

                                        (iv) an  acknowledgment  by the  Company
                                        that (A) any  transaction  in  Shares by
                                        JPMorgan    following    the   Company's
                                        election  of Cash  Settlement  shall  be
                                        made at JPMorgan's  sole  discretion and
                                        for  JPMorgan's  own account and (B) the
                                        Company  does not  have,  and  shall not
                                        attempt to exercise,  any influence over
                                        how,  when,  whether or at what price to
                                        effect  such  transactions,  or  whether
                                        such   transactions   are  made  on  any
                                        securities exchange or privately; and

                                        (v) an  agreement  by the Company  that,
                                        during the  Settlement  Period,  without
                                        the prior  written  consent of JPMorgan,
                                        the Company  shall not,  and shall cause
                                        its  affiliated   purchasers   (each  as
                                        defined   in  Rule   10b-18   under  the
                                        Exchange   Act)  not  to,   directly  or
                                        indirectly      (including,      without
                                        limitation,  by  means  of a  derivative
                                        instrument),    purchase,    offer    to
                                        purchase,  place any bid or limit  order
                                        that  would  effect a  purchase  of,  or
                                        commence any tender  offer  relating to,
                                        any Shares or any  security  convertible
                                        into or  exchangeable  for the Shares in
                                        the public markets.

Cash Settlement:                        If Cash  Settlement  is  applicable,  on
                                        each Settlement  Date, the Company shall
                                        deliver  to  JPMorgan   (to  an  account
                                        specified  by  JPMorgan)  the sum of the
                                        Settlement Amounts for each

                                       5
<PAGE>

                                        Valuation  Date  that  occurred  in  the
                                        calendar week immediately preceding such
                                        Settlement Date.

                                        The  Company  agrees  that it shall  not
                                        have the right to elect Cash  Settlement
                                        if JPMorgan  notifies the Company  that,
                                        it has determined that in the good faith
                                        reasonable  judgment of JPMorgan,  based
                                        upon  advice of counsel  and as a result
                                        of  events  occurring  after  the  Trade
                                        Date, the election of Cash Settlement or
                                        any  purchases  of Shares that  JPMorgan
                                        (or  its   affiliates)   might  make  in
                                        connection    therewith    would   raise
                                        material    risks    under    applicable
                                        securities laws.

Failure to Deliver:                     Inapplicable

Other Applicable Provisions:            If Net  Share  Settlement  applies,  the
                                        provisions  of Sections  6.6,  6.7, 6.8,
                                        6.9 and 6.10 of the  Equity  Definitions
                                        will  be  applicable,  except  that  all
                                        references   in   such   provisions   to
                                        "Physically-Settled"  shall  be  read as
                                        references to "Net Share Settled".  "Net
                                        Share   Settled"   in  relation  to  any
                                        Warrant means that Net Share  Settlement
                                        is applicable to that Warrant.

3. Additional Terms applicable to the Transaction:

   Adjustments applicable to the Warrants:

    Method of Adjustment:               Calculation   Agent   Adjustment.    For
                                        avoidance   of  doubt,   in  making  any
                                        adjustments     under     the     Equity
                                        Definitions,  the Calculation  Agent may
                                        adjust the Strike  Price,  the Number of
                                        Warrants,  the Daily  Number of Warrants
                                        and     the     Warrant     Entitlement.
                                        Notwithstanding the foregoing,  any cash
                                        dividends or  distributions,  whether or
                                        not extraordinary,  shall be governed by
                                        Section  9(l) of this  Confirmation  and
                                        not by  Section  9.1(c)  of  the  Equity
                                        Definitions.

Extraordinary Events applicable to the Transaction:

       Consequence of Merger Events

       (a)  Share-for-Share:            Alternative  Obligation;  provided  that
                                        the Calculation  Agent will determine if
                                        the Merger Event affects the theoretical
                                        value of the Transaction and, if so, the
                                        Calculation Agent shall make adjustments
                                        to  the  Strike  Price,  the  Number  of
                                        Warrants,  the Daily  Number of Warrants
                                        and  the  Warrant  Entitlement  and  any
                                        other  term  necessary  to  reflect  the
                                        characteristics  (including  volatility,
                                        dividend  practice,  borrow cost, policy
                                        and   liquidity)   of  the  New  Shares.
                                        Notwithstanding      the      foregoing,
                                        Cancellation  and Payment shall apply in
                                        the  event  the  New   Shares   are  not
                                        publicly   traded  on  a  United  States
                                        national  securities  exchange or quoted
                                        on the  NASDAQ  National  Market (or any
                                        successor thereto).

       (b) Share-for-Other:             Cancellation and Payment

                                       6
<PAGE>

       (c)  Share-for-Combined:         Alternative Obligation in respect of the
                                        portion  of the  consideration  for  the
                                        relevant  Shares  that  consists  of New
                                        Shares  and  subject  to any  adjustment
                                        described  in the proviso  contained  in
                                        Share-for-Share  above, and Cancellation
                                        and Payment in respect of the portion of
                                        the   consideration   for  the  relevant
                                        Shares    that    consists    of   Other
                                        Consideration.    Notwithstanding    the
                                        foregoing,   Cancellation   and  Payment
                                        shall  apply in the event the New Shares
                                        are  not  publicly  traded  on a  United
                                        States national  securities  exchange or
                                        quoted on the NASDAQ National Market (or
                                        any successor thereto).

       Nationalization or Insolvency:   Cancellation and Payment

4. Calculation  Agent:                  JPMorgan. Whenever the Calculation Agent
                                        is   required  to  act  or  to  exercise
                                        judgment  in any  way,  it will do so in
                                        good   faith   and  in  a   commercially
                                        reasonable    manner   to    achieve   a
                                        commercially reasonable result.

                                        The Calculation  Agent shall,  not later
                                        than the  third  Currency  Business  Day
                                        following  receipt of a written  request
                                        of the Company, provide the Company with
                                        a  written  explanation  of the basis of
                                        any    determination,    adjustment   or
                                        calculation  made  hereunder;   provided
                                        that if,  after  reviewing  such written
                                        explanation, the Company objects to such
                                        determination,       adjustment       or
                                        calculation,  then the Company, JPMorgan
                                        and the  Calculation  Agent  shall  make
                                        reasonable  good faith  efforts to agree
                                        upon   an   appropriate   determination,
                                        adjustment or calculation.

5. Account Details:

         (a) Account for payments to the Company:

               JPMorgan, New York
               ABA: 021-000-021
               Acct: CHASUS33
               Acct No.: 910-1010-693

             Account for delivery of Shares from the Company:

               DTC 50108   (Computershare)
               Note: the shares cannot be sent electronically.
                     They must be DWACed.

         (b) Account for payments from/to JPMorgan:

               JPMorgan Chase Bank, N.A., New York
               ABA:  021 000 021
               Favour: JPMorgan Chase Bank N.A., - London
               A/C:  0010962009
               CHASUS33

                                       7
<PAGE>

             Account for delivery of Shares to JPMorgan:

               DTC 060

6. Offices:

The Office of the Company for the Transaction is:  Inapplicable,  the Company is
not a Multibranch Party.

The Office of JPMorgan for the Transaction is: New York

             JPMorgan Chase Bank, N.A.
             London Branch
             P.O. Box 161
             60 Victoria Embankment
             London EC4Y 0JP
             England

7. Notices: For purposes of this Confirmation:

         (a) Address for notices or communications to the Company:

             Albany International Corp.
             1373 Broadway
             Albany, New York 12204
             Attention: Christopher J. Connally
             Telephone No.:   (518) 445-2235
             Facsimile No.:   (518) 447-6305

             With a copy to:

             Albany International Corp.
             1373 Broadway
             Albany, New York 12204
             Attention: Charles J. Silva, Jr.
             Telephone No.:  (518) 445-2277
             Facsimile No.:  (518) 447-6575

         (b) Address for notices or communications to JPMorgan:

             JPMorgan Chase Bank, N. A.
             277 Park Avenue, 11th Floor
             New York, NY  10172
             Attention:  Nathan Lulek
             EDG Corporate Marketing
             Telephone No.: (212) 622-2262
             Facsimile No.: (212) 622-8091

8. Representations and Warranties of the Company

The  representations and warranties of the Company set forth in Section 4 of the
Purchase  Agreement  (the "Purchase  Agreement")  dated as of the Trade Date and
relating to the issuance of USD 150,000,000 principal amount of

                                       8
<PAGE>

2.25%
Convertible Senior Notes due 2026, (the "Convertible Notes") between the Company
and J.P. Morgan  Securities  Inc. and Banc of America  Securities LLC as Initial
Purchasers are true and correct and are hereby deemed to be repeated to JPMorgan
as if set forth herein.  The Company hereby  further  represents and warrants to
JPMorgan that:

      (a)   The Company  has all  necessary  corporate  power and  authority  to
            execute,  deliver  and perform  its  obligations  in respect of this
            Transaction; such execution, delivery and performance have been duly
            authorized by all necessary  corporate action on the Company's part;
            and  this  Confirmation  has  been  duly and  validly  executed  and
            delivered  by the  Company  and  constitutes  its valid and  binding
            obligation,  enforceable  against the Company in accordance with its
            terms,  subject to  applicable  bankruptcy,  insolvency,  fraudulent
            conveyance,  reorganization,  moratorium  and similar laws affecting
            creditors'  rights  and  remedies  generally,  and  subject,  as  to
            enforceability,   to  general   principles   of  equity,   including
            principles of commercial reasonableness, good faith and fair dealing
            (regardless of whether  enforcement is sought in a proceeding at law
            or  in  equity)  and  except  that  rights  to  indemnification  and
            contribution hereunder may be limited by federal or state securities
            laws or public policy relating thereto.

      (b)   Neither the  execution  and  delivery of this  Confirmation  nor the
            incurrence or performance  of  obligations of the Company  hereunder
            will  conflict  with or  result in a breach  of the  certificate  of
            incorporation  or  by-laws  (or  any  equivalent  documents)  of the
            Company,  or any applicable law or regulation,  or any order,  writ,
            injunction  or  decree  of any court or  governmental  authority  or
            agency,  or any  agreement or instrument to which the Company or any
            of its  Significant  Subsidiaries is a party or by which the Company
            or any of its  Significant  Subsidiaries  is bound  or to which  the
            Company  or any of  its  Significant  Subsidiaries  is  subject,  or
            constitute  a default  under,  or result in the creation of any lien
            under,  any such agreement or instrument,  or breach or constitute a
            default  under any  agreements  and contracts of the Company and its
            Significant  Subsidiaries  filed as exhibits to the Company's Annual
            Report on Form 10-K for the year ended December 31, 2004, as updated
            by any subsequent filings.

      (c)   No consent,  approval,  authorization,  or order of, or filing with,
            any  governmental  agency  or  body  or any  court  is  required  in
            connection  with  the  execution,  delivery  or  performance  by the
            Company of this  Confirmation,  except such as have been obtained or
            made and such as may be required  under the  Securities Act of 1933,
            as amended (the "Securities Act") or state securities laws.

      (d)   The Shares of the Company  initially  issuable  upon exercise of the
            Warrant by the net share  settlement  method (the "Warrant  Shares")
            have been reserved for issuance by all required  corporate action of
            the Company.  The Warrant Shares have been duly authorized and, when
            delivered  against  payment  therefor  (which may  include Net Share
            Settlement  in lieu of cash) and  otherwise as  contemplated  by the
            terms of the  Warrant  following  the  exercise  of the  Warrant  in
            accordance  with the terms and  conditions  of the Warrant,  will be
            validly issued,  fully-paid and non-assessable,  and the issuance of
            the Warrant  Shares will not be subject to any preemptive or similar
            rights.

      (e)   The Company is an "eligible  contract  participant" (as such term is
            defined in Section 1a(12) of the Commodity  Exchange Act, as amended
            (the "CEA") because one or more of the following is true:

            The   Company  is  a   corporation,   partnership,   proprietorship,
            organization, trust or other entity and:

            (A)   the Company has total assets in excess of USD 10,000,000;

                                       9
<PAGE>

            (B)   the obligations of the Company  hereunder are  guaranteed,  or
                  otherwise supported by a letter of credit or keepwell, support
                  or other  agreement,  by an  entity of the type  described  in
                  Section    1a(12)(A)(i)    through   (iv),    1a(12)(A)(v)(I),
                  1a(12)(A)(vii) or 1a(12)(C) of the CEA; or

            (C)   the Company has a net worth in excess of USD 1,000,000 and has
                  entered into this Agreement in connection  with the conduct of
                  the Company's  business or to manage the risk  associated with
                  an asset or liability  owned or incurred or reasonably  likely
                  to be owned or  incurred  by the Company in the conduct of the
                  Company's business.

      (f)   The  Company  is not,  on the  date  hereof,  in  possession  of any
            material non-public information with respect to the Company.

9. Other Provisions:

      (a)   Opinions.  The  Company  shall  deliver  to  JPMorgan  an opinion of
            counsel,  dated as of the Trade Date,  substantially in the form set
            forth in Exhibit A hereto.

      (b)   Amendment. If the Initial Purchasers party to the Purchase Agreement
            exercise their right to purchase additional Convertible Notes as set
            forth therein, then, at the discretion of the Company,  JPMorgan and
            the  Company  will  amend  this  Confirmation  to  provide  for such
            increase in  Convertible  Notes (but on pricing terms  acceptable to
            JPMorgan and the Company) (such amendment to provide for the payment
            by  JPMorgan  to the  Company  of  the  additional  premium  related
            thereto).

      (c)   No Reliance, etc. Each party represents that (i) it is entering into
            the Transaction  evidenced  hereby as principal (and not as agent or
            in any other capacity);  (ii) neither the other party nor any of its
            agents are acting as a  fiduciary  for it;  (iii) it is not  relying
            upon any  representations  except those  expressly  set forth in the
            Agreement or this Confirmation;  (iv) it has not relied on the other
            party  for  any  legal,  regulatory,   tax,  business,   investment,
            financial,   and  accounting   advice,  and  it  has  made  its  own
            investment,  hedging,  and  trading  decisions  based  upon  its own
            judgment  and not upon any view  expressed by the other party or any
            of its agents;  and (v) it is entering into this  Transaction with a
            full understanding of the terms, conditions and risks thereof and it
            is capable of and willing to assume those risks.

      (d)   Share  De-listing  Event.  If at any time during the period from and
            including  the Trade Date,  to and  including  the final  Expiration
            Date,  the Shares  cease to be listed or quoted on the  Exchange for
            any  reason  (other  than a Merger  Event as a result  of which  the
            shares of common stock  underlying the Warrants are listed or quoted
            on The New York Stock  Exchange,  The American Stock Exchange or the
            NASDAQ  National  Market  (or  their  respective   successors)  (the
            "Successor  Exchange")) and are not immediately  re-listed or quoted
            as of the  date of such  de-listing  on the  Successor  Exchange  (a
            "Share  De-listing"),  then  Cancellation and Payment (as defined in
            Section 9.6 of the Equity  Definitions,  treating the  "Announcement
            Date" as the  date of  first  public  announcement  that  the  Share
            De-listing will occur and the "Merger Date" as the date of the Share
            De-listing)  shall apply,  and the date of the  de-listing  shall be
            deemed the date of  termination  for  purposes  of  calculating  any
            payment  due from  one  party to the  other in  connection  with the
            cancellation  of this  Transaction.  If the Shares  are  immediately
            re-listed on a Successor  Exchange  upon their  de-listing  from the
            Exchange,  this Transaction shall continue in full force and effect,
            provided  that the  Successor  Exchange  shall be  deemed  to be the
            Exchange for all purposes  hereunder,  provided that the Calculation
            Agent  may  make  appropriate  adjustments  to  the  terms  of  this
            Transaction  to  reflect  the  effect  of such  re-listing.  For the
            avoidance of doubt, in no event will

                                       10
<PAGE>

            a Share  De-listing  result in an obligation of JPMorgan  under this
            Confirmation to make a payment to the Company.

      (e)   Repurchase  Notices.  The  Company  shall,  on any day on which  the
            Company  effects any repurchase of Shares,  promptly give JPMorgan a
            written notice of such  repurchase (a  "Repurchase  Notice") on such
            day if following such repurchase,  the number of outstanding  Shares
            on such day, subject to any adjustments provided herein, is (i) less
            than 25  million  (in the case of the  first  such  notice)  or (ii)
            thereafter,  more  than  125,000  less  than the  number  of  Shares
            included in the immediately preceding Repurchase Notice. The Company
            agrees to indemnify  and hold harmless  JPMorgan and its  affiliates
            and their respective  officers,  directors,  employees,  affiliates,
            advisors,  agents and  controlling  persons (each,  an  "Indemnified
            Person")  from and  against  any and all  losses  (including  losses
            relating  to   JPMorgan's   reasonable   hedging   activities  as  a
            consequence  of becoming,  or of the risk of becoming,  a Section 16
            "insider",   including  without  limitation,  any  forbearance  from
            reasonable   hedging   activities   or  cessation  of  such  hedging
            activities  and any losses in connection  therewith  with respect to
            this  Transaction),  claims,  damages,  judgments,  liabilities  and
            expenses (including  reasonable  attorney's fees), joint or several,
            which an  Indemnified  Person  actually may become  subject to, as a
            result  of  the  Company's   failure  to  provide  JPMorgan  with  a
            Repurchase  Notice on the day and in the  manner  specified  in this
            Section  9(e),  and to  reimburse,  within  30  days,  upon  written
            request,  each of such Indemnified  Persons for any reasonable legal
            or  other  expenses  incurred  in  connection  with   investigating,
            preparing for,  providing  testimony or other evidence in connection
            with  or  defending  any of the  foregoing.  If  any  suit,  action,
            proceeding (including any governmental or regulatory investigation),
            claim or demand shall be brought or asserted against the Indemnified
            Person, such Indemnified Person shall promptly notify the Company in
            writing,  and the Company,  upon request of the Indemnified  Person,
            shall retain  counsel  reasonably  satisfactory  to the  Indemnified
            Person to  represent  the  Indemnified  Person  and any  others  the
            Company may designate in such  proceeding and shall pay the fees and
            expenses of such  counsel  related to such  proceeding.  The Company
            shall not be liable for any  settlement of any  proceeding  effected
            without its written consent,  but if settled with such consent or if
            there be a final judgment for the  plaintiff,  the Company agrees to
            indemnify  any  Indemnified  Person  from  and  against  any loss or
            liability  by reason of such  settlement  or  judgment.  The Company
            shall not,  without  the prior  written  consent of the  Indemnified
            Person,   effect  any   settlement  of  any  pending  or  threatened
            proceeding  in respect of which any  Indemnified  Person is or could
            have been a party and indemnity could have been sought  hereunder by
            such  Indemnified   Person,   unless  such  settlement  includes  an
            unconditional  release of such Indemnified Person from all liability
            on claims that are the subject  matter of such  proceeding  on terms
            reasonably   satisfactory  to  such  Indemnified   Person.   If  the
            indemnification provided for in this paragraph (e) is unavailable to
            an  Indemnified  Person or  insufficient  in respect of any  losses,
            claims, damages or liabilities referred to therein, then the Company
            under  such  paragraph,  in lieu of  indemnifying  such  Indemnified
            Person thereunder, shall contribute to the amount paid or payable by
            such Indemnified Person as a result of such losses,  claims, damages
            or liabilities.  The remedies provided for in this paragraph (e) are
            not exclusive  and shall not limit any rights or remedies  which may
            otherwise  be  available  to  any  Indemnified  Person  at law or in
            equity. The indemnity and contribution  agreements contained in this
            paragraph  (e) shall remain  operative  and in full force and effect
            regardless of the termination of this Transaction.

      (f)   Regulation  M. The  Company  was not on the Trade Date and is not on
            the date hereof engaged in a  distribution,  as such term is used in
            Regulation  M under  the  Exchange  Act,  of any  securities  of the
            Company,  other than a distribution  meeting the requirements of the
            exception set forth in Rules  101(b)(10) and 102(b)(7) of Regulation
            M. The Company  shall not,  until the second  Exchange  Business Day
            immediately   following   the  Trade   Date,   engage  in  any  such
            distribution.

                                       11
<PAGE>

      (g)   No  Manipulation.  The Company is not entering into this Transaction
            to create actual or apparent  trading activity in the Shares (or any
            security  convertible  into or  exchangeable  for the  Shares) or to
            raise or depress or otherwise manipulate the price of the Shares (or
            any security convertible into or exchangeable for the Shares).

      (h)   Board Authorization. The Company represents that it is entering into
            the  Transaction,  solely  for  the  purposes  stated  in the  board
            resolution   authorizing   this   Transaction   and  in  its  public
            disclosure. The Company further represents that there is no internal
            policy,  whether written or oral, of the Company that would prohibit
            the  Company  from  entering  into any  aspect of this  Transaction,
            including,  but not  limited  to, the  issuance  of Shares  pursuant
            hereto.

      (i)   Transfer or Assignment.  (i) The Company may not transfer any of its
            rights or  obligations  under  this  Transaction  without  the prior
            written consent of JPMorgan.  JPMorgan may transfer or assign all or
            any portion of its rights or obligations  under this  Transaction in
            compliance with  applicable laws without consent of the Company.  In
            addition, if JPMorgan's  "beneficial  ownership" (within the meaning
            of Section 16 of the Exchange Act and rules promulgated  thereunder)
            exceeds 8% of the Company's  outstanding  shares,  or the product of
            the Number of Warrants  and the Warrant  Entitlement  divided by the
            total  number of the  Company's  outstanding  Shares  (the  "Warrant
            Equity  Percentage")   exceeds  15%  and  if,  in  the  good  faith,
            reasonable  judgment of JPMorgan based upon advice of counsel and as
            a  result  of  events  occurring  after  the  Trade  Date,  JPMorgan
            reasonably  determines  that it would be  inadvisable  to  engage in
            alternative hedging transactions which would enable it to reduce its
            "beneficial  ownership" or the Warrants Equity Percentage other than
            by transfer,  assignment  or  termination,  and JPMorgan  reasonably
            determines  that it is unable after making  commercially  reasonable
            efforts to effect  transfer or  assignment on pricing terms and in a
            time period reasonably  acceptable to JPMorgan that would reduce its
            "beneficial  ownership" to 7.5% or such Warrant Equity Percentage to
            14.5%,  respectively,  JPMorgan may designate any Exchange  Business
            Day as an Early  Termination  Date with  respect  to a portion  (the
            "Terminated Portion") of this Transaction, such that its "beneficial
            ownership" following such partial termination would be approximately
            equal  to but  less  than  7.5%  or the  Warrant  Equity  Percentage
            approximately equal to 14.5%, as applicable.

            (ii) If  JPMorgan  so  designates  an Early  Termination  Date  with
            respect to a portion  of this  Transaction,  (i) a payment  shall be
            made  pursuant  to  Section  6 of  the  Agreement  as  if  an  Early
            Termination  Date occurred in respect of a Transaction  having terms
            identical to this  Transaction and a Number of Warrants equal to the
            Terminated  Portion,  (ii) the  Company  shall be the sole  Affected
            Party  with  respect  to such  partial  termination  and (iii)  such
            Transaction  shall  be the  only  Terminated  Transaction.  For  the
            avoidance of doubt,  if JPMorgan  assigns or terminates any Warrants
            hereunder,  each Daily  Number of Warrants  not  previously  settled
            hereunder  shall be reduced  proportionately,  as  calculated by the
            Calculation Agent.

            (iii)  Notwithstanding  any other provision in this  Confirmation to
            the  contrary  requiring  or allowing  JPMorgan to  purchase,  sell,
            receive or deliver  any  Shares or other  securities  to or from the
            Company,  JPMorgan may designate any of its  affiliates to purchase,
            sell,  receive  or  deliver  such  Shares  or other  securities  and
            otherwise  to  perform  JPMorgan's  obligations  in  respect of this
            Transaction  and any such  designee  may  assume  such  obligations.
            JPMorgan shall be discharged of its  obligations to the Company only
            to the extent of any such performance.

      (j)   Damages.  Neither  party shall be liable  under  Section 6.10 of the
            Equity Definitions for special,  indirect or consequential  damages,
            even if informed of the possibility thereof.

      (k)   Early  Unwind.  In the  event the sale of  Convertible  Notes is not
            consummated with the initial  purchasers for any reason by the close
            of  business  in New York on March 13,  2006 (or such  later date as
            agreed  upon by the  parties)  (March 13, 2006 or such later date as
            agreed upon being the

                                       12
<PAGE>

            "Early Unwind Date"), this Transaction shall automatically terminate
            (the  "Early  Unwind"),  on  the  Early  Unwind  Date  and  (i)  the
            Transaction  and all of the  respective  rights and  obligations  of
            JPMorgan and the Company  under the  Transaction  shall be cancelled
            and  terminated and (ii) each party shall be released and discharged
            by the other party from and agrees not to make any claim against the
            other party with respect to any  obligations  or  liabilities of the
            other party  arising out of and to be performed in  connection  with
            the  Transaction  either  prior to or after the Early  Unwind  Date;
            provided  that,  if  the  failure  to  consummate  the  sale  of the
            Convertible  Notes  results  from a  breach  by the  Company  of any
            representation of or any undertaking by the Company contained in the
            Purchase Agreement,  the Company shall purchase from JPMorgan on the
            Early Unwind Date any Shares purchased by JPMorgan or one or more of
            its  affiliates in connection  with this  Transaction  and reimburse
            JPMorgan  for  any  costs  or  expenses  (including  market  losses)
            relating to the unwinding of its  reasonable  hedging  activities in
            connection  with the  Transaction  (including  any  losses  or costs
            incurred as a result of its terminating,  liquidating,  obtaining or
            reestablishing  any reasonable  hedge or related trading  position).
            The amount of any such reimbursement shall be determined by JPMorgan
            in its reasonable good faith  discretion.  JPMorgan shall notify the
            Company of such amount,  including,  upon the Company's request,  an
            explanation of the basis of  determination  of such amount,  and the
            Company shall pay such amount in immediately  available funds on the
            Early  Unwind  Date.   JPMorgan  and  the  Company   represent   and
            acknowledge  to the other that,  subject to the proviso  included in
            this Section,  upon an Early Unwind, all obligations with respect to
            the Transaction shall be deemed fully and finally discharged.

      (l)   Dividends.  If at any time during the period from and  including the
            Trade Date,  to but excluding the  Expiration  Date, an  ex-dividend
            date for a cash  dividend  occurs  with  respect  to the  Shares (an
            "Ex-Dividend Date"), and that dividend is different from the Regular
            Dividend on a per Share basis then the  Calculation  Agent will,  in
            its reasonable  discretion,  adjust the Strike Price,  the Number of
            Warrants,  the Daily Number of Warrants and the Warrant  Entitlement
            to preserve  the fair value of the Warrant to JPMorgan  after taking
            into account such dividend.  "Regular  Dividend" shall mean USD 0.09
            per Share per quarter.

      (m)   Role of Agent.  Each  party  agrees and  acknowledges  that (i) J.P.
            Morgan  Securities  Inc.,  an affiliate of JPMorgan  ("JPMSI"),  has
            acted  solely as agent and not as  principal  with  respect  to this
            Transaction and (ii) JPMSI has no obligation or liability, by way of
            guaranty, endorsement or otherwise, in any manner in respect of this
            Transaction (including,  if applicable, in respect of the settlement
            thereof).  Each party  agrees it will look solely to the other party
            (or any guarantor in respect  thereof) for performance of such other
            party's obligations under this Transaction.

      (n)   Additional Provisions.

            (i)   Notwithstanding   Section  9.7  of  the  Equity   Definitions,
            everything  in the first  paragraph of Section  9.7(b) of the Equity
            Definitions  after the words  "Calculation  Agent" in the third line
            through  the  remainder  of such  Section  9.7 shall be deleted  and
            replaced with the following:

            "based   on  an  amount   representing   the   Calculation   Agent's
            determination  of the fair  value to Buyer of an option  with  terms
            that would preserve for Buyer the economic equivalent of any payment
            or delivery  (assuming  satisfaction  of each  applicable  condition
            precedent)  by the  parties in respect of the  relevant  Transaction
            that would have been required after that date but for the occurrence
            of the Merger Event, Nationalization, Insolvency or Share De-listing
            as the case may be."

            (ii)  Sections  12.8 and 12.9 of the 2002  ISDA  Equity  Derivatives
            Definitions shall apply to this Transaction and, for the purposes of
            such sections, "Hedging Disruption", "Increased Cost of Hedging" and
            "Loss of Stock  Borrow"  shall be  "Applicable"  and,  in each case,
            JPMorgan shall be the Hedging Party and the Determining  Party. With
            respect to the Loss of Stock Borrow, the

                                       13
<PAGE>

            "Maximum  Stock Loan Rate"  shall mean the Federal  Funds  Rate,  as
            determined by the Calculation Agent, minus 50 basis points.

            "Federal Funds Rate" means, for any day, the rate set forth for such
            day opposite the caption "Federal funds",  as such rate is displayed
            on the  page  FedsOpen  <Index><GO>  on the  Bloomberg  Professional
            Service or any successor page;  provided that if no rate appears for
            any day on such page, the rate for the immediately preceding day for
            which a rate does so appear shall be used for such day.

      (o)   No  Collateral  or  Setoff.  Notwithstanding  any  provision  of the
            Agreement  or  any  other  agreement  between  the  parties  to  the
            contrary,  the obligations of the Company  hereunder are not secured
            by any collateral.  Obligations  under this Transaction shall not be
            set off by the  Company  (including,  for the  avoidance  of  doubt,
            pursuant  to  Section  6(f)  of the  Agreement)  against  any  other
            obligations  of the parties,  whether  arising under the  Agreement,
            this  Confirmation,  under any other  agreement  between the parties
            hereto,  by  operation  of law or  otherwise.  Any  provision in the
            Agreement with respect to the satisfaction of the Company's  payment
            obligations to the extent of JPMorgan's  payment  obligations to the
            Company in the same currency and in the same Transaction (including,
            without  limitation  Section  2(c)  thereof)  shall not apply to the
            Company and, for the  avoidance  of doubt,  the Company  shall fully
            satisfy  such  payment   obligations   notwithstanding  any  payment
            obligation  to the Company by JPMorgan in the same  currency  and in
            the same Transaction.  In calculating any amounts under Section 6(e)
            of the  Agreement,  notwithstanding  anything to the contrary in the
            Agreement,  (1) separate amounts shall be calculated as set forth in
            such Section 6(e) with respect to (a) this  Transaction  and (b) all
            other  Transactions,  and (2) such separate amounts shall be payable
            pursuant to Section 6(d)(ii) of the Agreement,  subject to the Share
            Termination Alternative.

      (p)   Alternative  Calculations  and Payment on Early  Termination  and on
            Certain Extraordinary Events. If, in respect of this Transaction, an
            amount is  payable by the  Company  to  JPMorgan,  (i)  pursuant  to
            Section  9.7 of the  Equity  Definitions  (except  in the event of a
            Nationalization  or Insolvency  or a Merger Event,  in each case, in
            which the  consideration  to be paid to holders  of Shares  consists
            solely  of  cash)  or  (ii)  pursuant  to  Section  6(d)(ii)  of the
            Agreement  (except  in the event of an Event of Default in which the
            Company is the Defaulting Party or a Termination  Event in which the
            Company is the Affected Party, other than an Event of Default of the
            type described in Section  5(a)(iii),  (v), (vi), (vii) or (viii) of
            the Agreement or in this  Confirmation or a Termination Event of the
            type described in Section 5(b)(i), (ii), (iii), (iv), (v) or (vi) of
            the Agreement or this  Confirmation  in each case  resulting from an
            event  or  events   outside  the  Company's   control)  (a  "Payment
            Obligation"),  the Company may, in its sole discretion,  satisfy any
            such Payment  Obligation by the Share  Termination  Alternative  (as
            defined  below)  and shall  give  irrevocable  telephonic  notice to
            JPMorgan,  confirmed in writing within one Currency Business Day, no
            later than 12:00 p.m.  New York local time on the Merger  Date,  the
            date of the occurrence of the  Nationalization  or  Insolvency,  the
            date of the Share  De-listing  or the  Early  Termination  Date,  as
            applicable.  In  calculating  any amounts  under Section 6(e) of the
            Agreement,   notwithstanding   anything  to  the   contrary  in  the
            Agreement,  (1) separate amounts shall be calculated as set forth in
            Section 6(e) with respect to (a) this  Transaction and (b) any other
            Transactions  under the  Agreement,  and (2) such  separate  amounts
            shall be payable  pursuant  to Section  6(d)(ii)  of the  Agreement,
            subject  to,  in the case of  clause  (1)(a),  the  Company's  Share
            Termination Alternative right hereunder.

         Share Termination Alternative:      If  applicable,  the Company  shall
                                             deliver  to   JPMorgan   the  Share
                                             Termination  Delivery  Property  on
                                             the   date    when   the    Payment
                                             Obligation  would otherwise be due,
                                             subject  to  Section   9(q)  below,
                                             pursuant  to

                                       14
<PAGE>

                                             Section    9.7   of   the    Equity
                                             Definitions,  this Confirmation, or
                                             Section  6(d)(ii)  and  6(e) of the
                                             Agreement,   as   applicable   (the
                                             "Share Termination  Payment Date"),
                                             in  satisfaction,  of  the  Payment
                                             Obligation in the manner reasonably
                                             requested   by  JPMorgan   free  of
                                             payment.

         Share Termination                   A  number   of  Share   Termination
         Delivery Property:                  Delivery  Units,  as  calculated by
                                             the Calculation Agent, equal to the
                                             Payment  Obligation  divided by the
                                             Share  Termination  Unit Price. The
                                             Calculation  Agent shall adjust the
                                             Share Termination Delivery Property
                                             by replacing any fractional portion
                                             of  a  security   therein  with  an
                                             amount  of cash  equal to the value
                                             of such  fractional  security based
                                             on the values used to calculate the
                                             Share Termination Unit Price.

         Share Termination Unit Price:       The value to  JPMorgan  of property
                                             contained in one Share  Termination
                                             Delivery  Unit  on  the  date  such
                                             Share  Termination  Delivery  Units
                                             are  to  be   delivered   as  Share
                                             Termination  Delivery Property,  as
                                             determined by the Calculation Agent
                                             in its  discretion by  commercially
                                             reasonable  means and  notified  by
                                             the   Calculation   Agent   to  the
                                             Company at the time of notification
                                             of the Payment  Obligation.  In the
                                             case   of   a   Private   Placement
                                             Settlement  of  Share   Termination
                                             Delivery  Units that are Restricted
                                             Shares  (as  defined  below) as set
                                             forth in  paragraph  (q)(i)  below,
                                             the Share  Termination  Unit  Price
                                             shall   be    determined   by   the
                                             discounted price applicable to such
                                             Share  Termination  Delivery Units.
                                             In  the   case   of  a   Registered
                                             Settlement  of  Share   Termination
                                             Delivery  Units that are Restricted
                                             Shares  (as  defined  below) as set
                                             forth in paragraph  (q)(ii)  below,
                                             the Share  Termination  Unit  Price
                                             shall  be the  Settlement  Price on
                                             the  Merger  Date,  the date of the
                                             occurrence  of the  Nationalization
                                             or  Insolvency,  the  date  of  the
                                             Share   De-listing   or  the  Early
                                             Termination Date, as applicable.

         Share Termination Delivery Unit:    In the case of a Share  De-listing,
                                             Termination   Event   or  Event  of
                                             Default,  one Share or, in the case
                                             of Nationalization or Insolvency or
                                             a Merger Event,  a unit  consisting
                                             of the  number  or  amount  of each
                                             type  of  property  received  by  a
                                             holder   of  one   Share   (without
                                             consideration of any requirement to
                                             pay cash or other  consideration in
                                             lieu of  fractional  amounts of any
                                             securities) in such Nationalization
                                             or Insolvency or such Merger Event.
                                             If such  Merger  Event  involves  a
                                             choice  of   consideration   to  be
                                             received  by  holders,  such holder
                                             shall be deemed to

                                       15
<PAGE>

                                             have elected to receive the maximum
                                             possible amount of cash.

         Failure to Deliver:                 Inapplicable

         Other applicable provisions:        If    the     Share     Termination
                                             Alternative  is   applicable,   the
                                             provisions  of Sections  6.6,  6.7,
                                             6.8,  6.9  and  6.10  (as  modified
                                             above)  of the  Equity  Definitions
                                             will be applicable, except that all
                                             references  in such  provisions  to
                                             "Physically-Settled"  shall be read
                                             as references to "Share Termination
                                             Settled"  and  all   references  to
                                             "Shares"    shall    be   read   as
                                             references  to  "Share  Termination
                                             Delivery Units". "Share Termination
                                             Settled"   in   relation   to  this
                                             Transaction  means  that the  Share
                                             Termination      Alternative     is
                                             applicable to this Transaction.

      (q)   Registration/Private  Placement  Procedures.  If, in the  reasonable
            opinion of JPMorgan,  based on the advice of counsel,  following any
            delivery  of  Shares  or  Share  Termination  Delivery  Property  to
            JPMorgan  hereunder,  such  Shares  or  Share  Termination  Delivery
            Property would be in the hands of JPMorgan subject to any applicable
            restrictions  with  respect  to any  registration  or  qualification
            requirement or prospectus  delivery  requirement  for such Shares or
            Share  Termination  Delivery  Property  pursuant  to any  applicable
            federal or state securities law (including,  without limitation, any
            such requirement  arising under Section 5 of the Securities Act as a
            result of such Shares or Share  Termination  Delivery Property being
            "restricted  securities",  as such term is defined in Rule 144 under
            the  Securities  Act,  or as a result of the sale of such  Shares or
            Share  Termination  Delivery Property being subject to paragraph (c)
            of Rule  145  under  the  Securities  Act)  (such  Shares  or  Share
            Termination Delivery Property,  "Restricted Shares"),  then delivery
            of such  Restricted  Shares  shall be  effected  pursuant  to either
            clause  (i) or (ii) below at the  election  of the  Company,  unless
            waived by JPMorgan. Notwithstanding the foregoing, solely in respect
            of any  Warrants  exercised or deemed  exercised  on any  Expiration
            Date, (x) JPMorgan  shall use  reasonable  efforts to give notice to
            the Company no later than twenty (20)  Exchange  Business Days prior
            to the First  Expiration  Date if it believes at such time that this
            Section  9(q)  would be  applicable  to Shares or Share  Termination
            Delivery  Property to be delivered in connection with any Expiration
            Date and (y) to the extent Net Share Settlement applies, the Company
            shall  elect,  prior to the  first  Settlement  Date  for the  first
            Expiration  Date,  a  Private  Placement  Settlement  or  Registered
            Settlement  for all  deliveries  of  Restricted  Shares for all such
            Expiration   Dates  which   election  shall  be  applicable  to  all
            Settlement   Dates  for  such  Daily  Number  of  Warrants  and  the
            procedures  in clause (i) or clause  (ii) below  shall apply for all
            such delivered  Restricted  Shares on an aggregate basis  commencing
            after the final  Settlement  Date for such Daily Number of Warrants.
            The  Calculation   Agent  shall  make   reasonable   adjustments  to
            settlement terms and provisions under this Confirmation to reflect a
            single  Private  Placement  Settlement or Registered  Settlement for
            such aggregate Restricted Shares delivered hereunder.

            (i)   If the Company  elects to settle the  Transaction  pursuant to
                  this  clause  (i) (a  "Private  Placement  Settlement"),  then
                  delivery of Restricted Shares by the Company shall be effected
                  in customary private placement procedures with respect to such
                  Restricted Shares reasonably acceptable to JPMorgan;  provided
                  that the Company may not elect a Private Placement  Settlement
                  if, on the date of its election, it has taken, or caused to be
                  taken,  any  action  that would  make  unavailable  either the
                  exemption  pursuant to Section 4(2) of the  Securities Act for
                  the  sale  by  the  Company  to  JPMorgan  (or  any  affiliate
                  designated  by  JPMorgan)  of  the  Restricted  Shares  or the
                  exemption pursuant to Section 4(1) or Section

                                       16
<PAGE>

                  4(3) of the  Securities  Act  for  resales  of the  Restricted
                  Shares by JPMorgan (or any such  affiliate of  JPMorgan).  The
                  Private  Placement  Settlement of such Restricted Shares shall
                  include  customary  representations,  covenants,  blue sky and
                  other governmental filings and/or  registrations,  indemnities
                  to  JPMorgan,  due  diligence  rights  (for  JPMorgan  or  any
                  designated  buyer  of  the  Restricted  Shares  by  JPMorgan),
                  opinions and certificates,  and such other documentation as is
                  customary for private  placement  agreements,  all  reasonably
                  acceptable  to  JPMorgan.  In the case of a Private  Placement
                  Settlement,  JPMorgan shall determine the appropriate discount
                  to the Share Termination Unit Price (in the case of settlement
                  of Share Termination  Delivery Units pursuant to paragraph (p)
                  above) or any  Settlement  Price (in the case of settlement of
                  Shares  pursuant  to  Section  2  above)  applicable  to  such
                  Restricted  Shares in a  commercially  reasonable  manner  and
                  appropriately  adjust the amount of such Restricted  Shares to
                  be delivered to JPMorgan hereunder;  provided that in no event
                  shall such  number be greater  than  8,247,972  (the  "Maximum
                  Amount").  Notwithstanding the Agreement or this Confirmation,
                  the date of  delivery  of such  Restricted  Shares  (the  "Due
                  Date") shall be the Exchange  Business Day following notice by
                  JPMorgan to the Company,  of such applicable  discount and the
                  number of Restricted  Shares to be delivered  pursuant to this
                  clause (i). For the avoidance of doubt, delivery of Restricted
                  Shares shall be due as set forth in the previous  sentence and
                  not be due on the Share Termination  Payment Date (in the case
                  of settlement of Share Termination  Delivery Units pursuant to
                  paragraph  (p)  above)  or on the  Settlement  Date  for  such
                  Restricted  Shares  (in  the  case  of  settlement  of  Shares
                  pursuant to Section 2 above).

                  In the event the  Company  shall not have  delivered  the full
                  number of Restricted  Shares otherwise  applicable as a result
                  of the proviso  above  relating to the  Maximum  Amount  (such
                  deficit, the "Deficit Restricted  Shares"),  the Company shall
                  be continually  obligated to deliver,  from time to time until
                  the  full  number  of  Deficit  Restricted  Shares  have  been
                  delivered pursuant to this paragraph,  Restricted Shares when,
                  and to the extent,  that (i) Shares are repurchased,  acquired
                  or   otherwise   received   by  the  Company  or  any  of  its
                  subsidiaries  after the Trade Date (whether or not in exchange
                  for  cash,  fair  value  or  any  other  consideration),  (ii)
                  authorized  and  unissued  Shares  reserved  for  issuance  in
                  respect of other  transactions  prior to such date which prior
                  to the  relevant  date become no longer so reserved  and (iii)
                  the Company  additionally  authorizes and unissued Shares that
                  are not reserved  for other  transactions.  The Company  shall
                  immediately  notify  JPMorgan of the  occurrence of any of the
                  foregoing  events  (including  the number of Shares subject to
                  clause  (i),  (ii) or (iii)  and the  corresponding  number of
                  Restricted  Shares to be delivered) and promptly  deliver such
                  Restricted Shares thereafter.

                  In the event of a Private Placement,  the Net Share Settlement
                  Amount  or the  Payment  Obligation,  respectively,  shall  be
                  deemed to be the Net Share  Settlement  Amount or the  Payment
                  Obligation,    respectively,   plus   an   additional   amount
                  (determined from time to time by the Calculation  Agent in its
                  commercially  reasonable  judgment)  attributable  to interest
                  that  would be earned on such Net Share  Settlement  Amount or
                  the Payment  Obligation,  respectively,  (increased on a daily
                  basis to reflect the accrual of such interest and reduced from
                  time  to  time  by the  amount  of net  proceeds  received  by
                  JPMorgan  as  provided  herein)  at a rate  equal  to the open
                  Federal  Funds Rate plus the Spread for the period  from,  and
                  including,  such  Settlement  Date or the  date on  which  the
                  Payment  Obligation is due,  respectively,  to, but excluding,
                  the Due Date, calculated on an Actual/360 basis. The foregoing
                  provision  shall be without  prejudice  to  JPMorgan's  rights
                  under the Agreement (including, without limitation, Sections 5
                  and 6 thereof).

                                       17
<PAGE>

                  As used in this Section 9(p)(i),  "Spread" means, with respect
                  to any Net  Share  Settlement  Amount or  Payment  Obligation,
                  respectively,  the credit spread over the applicable overnight
                  rate that would be imposed if JPMorgan  were to extend  credit
                  to the Company in an amount equal to such Net Share Settlement
                  Amount,  all as determined by the Calculation  Agent using its
                  commercially  reasonable judgment as of the related Settlement
                  Date  or Due  Date,  respectively.  Commercial  reasonableness
                  shall take into  consideration  all factors deemed relevant by
                  the Calculation  Agent,  which are expected to include,  among
                  other  things,  the  credit  quality of the  Company  (and any
                  relevant  affiliates)  in the  then-prevailing  market and the
                  credit  spread of similar  companies in the relevant  industry
                  and other  companies  having a  substantially  similar  credit
                  quality.

            (ii)  If the Company  elects to settle the  Transaction  pursuant to
                  this  clause  (ii) (a  "Registration  Settlement"),  then  the
                  Company  shall  promptly  (but in any event no later  than the
                  beginning of the Resale  Period)  file and use its  reasonable
                  best  efforts to make  effective  under the  Securities  Act a
                  registration  statement or supplement or amend an  outstanding
                  registration   statement  in  form  and  substance  reasonably
                  satisfactory  to  JPMorgan,   to  cover  the  resale  of  such
                  Restricted   Shares  in  accordance   with  customary   resale
                  registration  procedures,   including  covenants,  conditions,
                  representations,   underwriting   discounts  (if  applicable),
                  commissions (if applicable), indemnities due diligence rights,
                  opinions and certificates,  and such other documentation as is
                  customary  for  equity  resale  underwriting  agreements,  all
                  reasonably   acceptable  to  JPMorgan.  If  JPMorgan,  in  its
                  reasonable  discretion,  is not satisfied with such procedures
                  and documentation,  Private Placement  Settlement shall apply.
                  If   JPMorgan   is   satisfied   with  such   procedures   and
                  documentation, it shall sell the Restricted Shares pursuant to
                  such  registration  statement  during  a period  (the  "Resale
                  Period")  commencing on (x) the Share Termination Payment Date
                  in case of  settlement  of Share  Termination  Delivery  Units
                  pursuant to paragraph (p) above or (y) the Settlement  Date in
                  respect of the final  Expiration  Date for all Daily Number of
                  Warrants  and  ending  on the  earliest  of (i)  the  Exchange
                  Business  Day on  which  JPMorgan  completes  the  sale of all
                  Restricted  Shares or a sufficient number of Restricted Shares
                  so that the  realized  net  proceeds of such sales  exceed the
                  Payment  Obligation  (as  defined  above),  (ii) the date upon
                  which all  Restricted  Shares  have  been sold or  transferred
                  pursuant to Rule 144 (or similar  provisions then in force) or
                  Rule 145(d)(1) or (2) (or any similar provision then in force)
                  under the  Securities  Act and  (iii) the date upon  which all
                  Restricted   Shares   may  be   sold  or   transferred   by  a
                  non-affiliate   pursuant   to  Rule  144(k)  (or  any  similar
                  provision  then in force) or Rule  145(d)(3)  (or any  similar
                  provision  then in force)  under the  Securities  Act.  If the
                  Payment Obligation exceeds the realized net proceeds from such
                  resale,  the Company shall transfer to JPMorgan by the open of
                  the regular  trading  session on the  Exchange on the Exchange
                  Trading Day  immediately  following the last day of the Resale
                  Period the amount of such excess (the "Additional  Amount") in
                  cash or in a number of Restricted Shares ("Make-whole Shares")
                  in an amount that,  based on the Settlement  Price on the last
                  day of the Resale  Period  (as if such day was the  "Valuation
                  Date" for purposes of computing such Settlement  Price), has a
                  dollar value equal to the Additional Amount. The Resale Period
                  shall continue to enable the sale of the Make-whole Shares. If
                  the Company elects to pay the Additional  Amount in Restricted
                  Shares,  the  requirements  and  provisions  for  Registration
                  Settlement  shall  apply.  This  provision  shall  be  applied
                  successively  until the Additional Amount is equal to zero. In
                  no event  shall the  Company  deliver  a number of  Restricted
                  Shares greater than the Maximum Amount.  Once the realized net
                  proceeds of such sales exceed the Payment Obligation, JPMorgan
                  shall  return to the Company any excess  proceeds or remaining
                  Restricted Shares.

                                       18
<PAGE>

            (iii) Without limiting the generality of the foregoing,  but subject
                  to the last sentence of Section 9(s) below, the Company agrees
                  that any Restricted Shares delivered to JPMorgan, as purchaser
                  of such Restricted Shares, (i) may be transferred by and among
                  JPMorgan and its affiliates in compliance  with applicable law
                  and the Company shall effect such transfer without any further
                  action by JPMorgan and (ii) after the minimum "holding period"
                  within the meaning of Rule 144(d) under the Securities Act has
                  elapsed after any Settlement Date for such Restricted  Shares,
                  the Company shall promptly remove, or cause the transfer agent
                  for such Restricted Shares to remove, any legends referring to
                  any such  restrictions  or  requirements  from such Restricted
                  Shares  upon  delivery  by  JPMorgan  (or  such  affiliate  of
                  JPMorgan)  to the Company or such  transfer  agent of seller's
                  and broker's  representation  letters customarily delivered by
                  JPMorgan in connection  with resales of restricted  securities
                  pursuant  to Rule 144 under the  Securities  Act,  without any
                  further  requirement  for  the  delivery  of any  certificate,
                  consent,  agreement,  opinion of counsel,  notice or any other
                  document,  any  transfer  tax  stamps or  payment of any other
                  amount or any other action by JPMorgan  (or such  affiliate of
                  JPMorgan).

            If the Private Placement  Settlement or the Registration  Settlement
            shall  not be  effected  as set  forth in  clauses  (i) or (ii),  as
            applicable, then failure to effect such Private Placement Settlement
            or such Registration Settlement shall constitute an Event of Default
            with respect to which the Company shall be the Defaulting Party.

      (r)   Limit on Beneficial Ownership.  Notwithstanding any other provisions
            hereof,  JPMorgan may not exercise any Warrant  hereunder or receive
            any  Shares as a result of such  exercise,  and  Automatic  Exercise
            shall not apply with respect thereto, to the extent (but only to the
            extent)  that such  exercise  or receipt  would  result in  JPMorgan
            directly or indirectly  beneficially owning (as such term is defined
            for purposes of Section  13(d) of the  Exchange  Act) at any time in
            excess of 9.0% of the  outstanding  Shares.  Any purported  delivery
            hereunder  shall be void and have no effect to the extent  (but only
            to the extent) that such delivery would result in JPMorgan  directly
            or  indirectly  so  beneficially  owning  in  excess  of 9.0% of the
            outstanding  Shares.  If any delivery owed to JPMorgan  hereunder is
            not made,  in whole or in part, as a result of this  provision,  the
            Company's obligation to make such delivery shall not be extinguished
            and the Company shall make such delivery as promptly as  practicable
            after,  but in no event later than one Exchange  Business Day after,
            JPMorgan  gives notice to the Company that such  delivery  would not
            result in JPMorgan directly or indirectly so beneficially  owning in
            excess of 9.0% of the outstanding Shares.

      (s)   Share Deliveries.  The Company  acknowledges and agrees that, to the
            extent the holder of this Warrant is not then an  affiliate  and has
            not been an affiliate for 90 days (it being understood that JPMorgan
            will not be considered  an affiliate  under this Section 9(s) solely
            by reason of its receipt of Shares  pursuant  to this  Transaction),
            and otherwise satisfies all holding period and other requirements of
            Rule 144 of the  Securities  Act  applicable  to it, any delivery of
            Shares or Share Termination  Delivery Property hereunder at any time
            after two years from the Premium  Payment Date shall be eligible for
            resale  under  Rule  144(k) of the  Securities  Act and the  Company
            agrees to  promptly  remove,  or cause the  transfer  agent for such
            Shares  or Share  Termination  Delivery  Property,  to  remove,  any
            legends referring to any restrictions on resale under the Securities
            Act from the  Shares or Share  Termination  Delivery  Property.  The
            Company  further  agrees,  for  any  delivery  of  Shares  or  Share
            Termination  Delivery Property  hereunder at any time after one year
            from the  Premium  Payment  Date but within two years of the Premium
            Payment  Date,  to the  extent  the  holder  of  this  Warrant  then
            satisfies the holding period and other  requirements  of Rule 144 of
            the Securities Act, to promptly remove,  or cause the transfer agent
            for such Shares or Share  Termination  Delivery  Property to remove,
            any legends referring to any such restrictions or

                                       19
<PAGE>

            requirements  from  such  Shares  or  Share   Termination   Delivery
            Property. Such Shares or Share Termination Delivery Property will be
            de-legended   upon  delivery  by  JPMorgan  (or  such  affiliate  of
            JPMorgan)  to the  Company  or  such  transfer  agent  of  customary
            seller's  and broker's  representation  letters in  connection  with
            resales  of  restricted  securities  pursuant  to  Rule  144  of the
            Securities Act, without any further  requirement for the delivery of
            any certificate,  consent, agreement,  opinion of counsel, notice or
            any other document,  any transfer tax stamps or payment of any other
            amount  or any  other  action  by  JPMorgan  (or such  affiliate  of
            JPMorgan). The Company further agrees that any delivery of Shares or
            Share  Termination  Delivery  Property prior to the date that is one
            year from the Premium  Payment Date, may be transferred by and among
            JPMorgan and its  affiliates in compliance  with  applicable law and
            the Company shall effect such transfer without any further action by
            JPMorgan.  Notwithstanding  anything to the contrary herein,  to the
            extent  the  provisions  of Rule  144 of the  Securities  Act or any
            successor rule are amended, or the applicable interpretation thereof
            by the Securities and Exchange  Commission or any court change after
            the Trade Date, the agreements of the Company herein shall be deemed
            modified to the extent  necessary,  in the opinion of counsel of the
            Company,  to comply with Rule 144 of the Securities  Act,  including
            Rule  144(k) as in effect at the time of  delivery  of the  relevant
            Shares or Share Termination Delivery Property.

      (t)   Additional Termination Event. If within the period commencing on the
            Trade Date and ending on the second  anniversary  of the Trade Date,
            an event shall occur,  as a result of which,  based on the advice of
            counsel,  JPMorgan  reasonably  determines  that it is  advisable to
            terminate a portion of this  Transaction  to comply with  applicable
            securities laws, rules or regulations,  the occurrence of such event
            shall constitute an Additional Termination Event under the Agreement
            permitting  JPMorgan to terminate a portion of this  Transaction  in
            respect of which (1) the Company  shall be the sole  Affected  Party
            and (2) this  Transaction  shall be the sole  Affected  Transaction;
            provided, however, that JPMorgan shall have the right to effect such
            termination only to the extent  reasonably  necessary to comply with
            such laws, rules or regulations.

      (u)   Right to Extend. JPMorgan may delay any Settlement Date or any other
            date of delivery  by  JPMorgan,  with  respect to some or all of the
            Warrants  hereunder,  if  JPMorgan  reasonably  determines,  in  its
            discretion,  that such  extension is reasonably  necessary to enable
            JPMorgan  to  effect  purchases  of Shares  in  connection  with its
            hedging  activity  hereunder in a manner that would be in compliance
            with applicable legal and regulatory requirements.

      (v)   Governing  Law.  New York law  (without  reference  to choice of law
            doctrine).

      (w)   Waiver of Jury  Trial.  Each party  waives,  to the  fullest  extent
            permitted  by  applicable  law,  any right it may have to a trial by
            jury in respect of any suit,  action or proceeding  relating to this
            Transaction. Each party (i) certifies that no representative,  agent
            or  attorney  of the  other  party  has  represented,  expressly  or
            otherwise,  that such other  party would not, in the event of such a
            suit, action or proceeding, seek to enforce the foregoing waiver and
            (ii)  acknowledges  that it and the other party have been induced to
            enter into this Transaction,  as applicable, by, among other things,
            the mutual waivers and certifications provided herein.

      (x)   Maximum Share Delivery.  Notwithstanding any other provision of this
            Confirmation  or the  Agreement,  in no event  will the  Company  be
            required to deliver  more than the  Maximum  Amount of Shares in the
            aggregate to JPMorgan in connection with this  Transaction,  subject
            to the provisions regarding Deficit Restricted Shares.

      (y)   Status of Claims in  Bankruptcy.  JPMorgan  acknowledges  and agrees
            that this  confirmation is not intended to convey to JPMorgan rights
            with respect to the transactions contemplated hereby that are senior
            to  the  claims  of  common  stockholders  in  any  U.S.  bankruptcy
            proceedings of the Company;  provided,  however, that nothing herein
            shall limit or shall be deemed to limit

                                       20
<PAGE>

            JPMorgan's  right to pursue remedies in the event of a breach by the
            Company  of its  obligations  and  agreements  with  respect to this
            Confirmation and the Agreement; and provided,  further, that nothing
            herein shall limit or shall be deemed to limit JPMorgan's  rights in
            respect of any transaction other than the Transaction.

      (z)   Tax Advice.  JPMorgan and its  affiliates do not provide tax advice.
            Accordingly,  any statements contained herein as to tax matters were
            neither  written  nor  intended by JPMorgan to be used and cannot be
            used by any taxpayer for the purpose of avoiding tax penalties  that
            may be imposed on such taxpayer. If any person uses or refers to any
            such  tax  statement  in  promoting,  marketing  or  recommending  a
            partnership or other entity,  investment  plan or arrangement to any
            taxpayer,  then the statement  expressed above is being delivered to
            support the  promotion  or marketing  of the  transaction  or matter
            addressed  and  the  recipient  should  seek  advice  based  on  its
            particular   circumstances   from  an   independent   tax   advisor.
            Notwithstanding  anything herein to the contrary, the sender and any
            intended  recipient of this communication (and any of its employees,
            representatives  and  other  agents)  may  disclose  to any  and all
            persons,  without  limitation of any kind,  the tax treatment or tax
            structure of this transaction.

                                       21
<PAGE>

                                                                 JPMorgan [LOGO]

      Please  confirm that the foregoing  correctly  sets forth the terms of our
agreement  by  executing  this  Confirmation  and  returning  it in  the  manner
indicated in the attached cover letter.

                                 Very truly yours,

                                       J.P. Morgan Securities Inc., as agent for
                                       JPMorgan Chase Bank, National Association

                                       By: /s/ Sudheer Tegulapalle
                                           -------------------------------------
                                       Authorized Signatory
                                       Name: Sudheer Tegulapalle

Accepted and confirmed
as of the Trade Date:

ALBANY INTERNATIONAL CORP.

By: /s/ David C. Michaels
    ----------------------------
Authorized Signatory
Name: David C. Michaels

                    JPMorgan Chase Bank, National Association
 Organised under the laws of the United States as a National Banking Association
             Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
          Registered as a branch in England & Wales branch No. BR000746
            Registered Branch Office 125 London Wall, London EC2Y 5AJ
          Authorised and regulated by the Financial Services Authority

                                       22
<PAGE>

                                                                         Annex A

                             Form of Legal Opinion

                                       23

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