Credit Facility Agreement

EXHIBIT 10(i)


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$460,000,000


FIVE-YEAR REVOLVING CREDIT FACILITY AGREEMENT


dated as of


January 8, 2004


among


ALBANY INTERNATIONAL CORP.


The Borrowing Subsidiaries


The Lenders Party Hereto


and


JPMORGAN CHASE BANK,


as Administrative Agent


J.P. MORGAN EUROPE LIMITED,
as London Agent


----------


J.P. MORGAN SECURITIES INC.,


as Lead Arranger and Sole Bookrunner


FLEET NATIONAL BANK
and
ABN AMRO BANK, N.V.,
as Co-Syndication Agents


SUMITOMO MITSUI BANKING CORP., NEW YORK
and
WACHOVIA BANK, N.A.,
as Co-Documentation Agents


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[CS&M 6701-352]


TABLE OF CONTENTS


ARTICLE I


Definitions


SECTION 1.01. Defined Terms...................................................1 SECTION 1.02. Classification of Loans and Borrowings.........................23 SECTION 1.03. Terms Generally................................................23 SECTION 1.04. Accounting Terms; GAAP.........................................23 SECTION 1.05. Exchange Rates.................................................24 SECTION 1.06. Redenomination of Certain Foreign Currencies...................24


ARTICLE II


The Credits


SECTION 2.01. Commitments....................................................25 SECTION 2.02. Loans and Borrowings...........................................27 SECTION 2.03. Requests for Revolving Borrowings..............................28 SECTION 2.04. Swingline Loans................................................29 SECTION 2.05. Letters of Credit..............................................30 SECTION 2.06. Funding of Borrowings..........................................34 SECTION 2.07. Interest Elections.............................................35 SECTION 2.08. Termination of Commitments; Reductions and Increases of
Commitments...........................................37 SECTION 2.09. Repayment of Loans; Evidence of Debt...........................38 SECTION 2.10. Prepayment of Loans............................................38 SECTION 2.11. Fees ..........................................................40 SECTION 2.12. Interest ......................................................42 SECTION 2.13. Alternate Rate of Interest.....................................43 SECTION 2.14. Increased Costs................................................44 SECTION 2.15. Change in Legality.............................................45 SECTION 2.16. Break Funding Payments.........................................46 SECTION 2.17. Taxes .........................................................46 SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Setoffs.....48 SECTION 2.19. Mitigation Obligations; Replacement of Lenders.................50 SECTION 2.20. Borrowing Subsidiaries.........................................50


ARTICLE III


Representations and Warranties


SECTION 3.01. Organization; Powers...........................................51 SECTION 3.02. Authorization; Enforceability..................................51 SECTION 3.03. Governmental Approvals; No Conflicts...........................51


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SECTION 3.04. Financial Statements; No Material Adverse Change...............52 SECTION 3.05. Properties; Liens..............................................52 SECTION 3.06. Litigation and Environmental Matters...........................52 SECTION 3.07. Compliance with Laws...........................................53 SECTION 3.08. Investment and Holding Company Status..........................53 SECTION 3.09. Taxes .........................................................53 SECTION 3.10. ERISA .........................................................53 SECTION 3.11. Disclosure.....................................................53 SECTION 3.12. Subsidiaries...................................................54 SECTION 3.13. Solvency ......................................................54 SECTION 3.14. Federal Reserve Regulations....................................54


ARTICLE IV


Conditions


SECTION 4.01. Effective Date.................................................54 SECTION 4.02. Conditions to All Extensions of Credit.........................55 SECTION 4.03. Initial Credit Event for each Borrowing Subsidiary.............56


ARTICLE V


Affirmative Covenants


SECTION 5.01. Financial Statements and Other Information.....................57 SECTION 5.02. Notices of Material Events.....................................58 SECTION 5.03. Existence; Conduct of Business.................................59 SECTION 5.04. Payment of Obligations.........................................59 SECTION 5.05. Maintenance of Properties......................................59 SECTION 5.06. Insurance......................................................59 SECTION 5.07. Books and Records; Inspection Rights...........................59 SECTION 5.08. Compliance with Laws...........................................60 SECTION 5.09. Use of Proceeds and Letters of Credit..........................60 SECTION 5.10. Further Assurances.............................................60


ARTICLE VI


Negative Covenants


SECTION 6.01. Subsidiary Debt................................................60 SECTION 6.02. Negative Pledge................................................61 SECTION 6.03. Consolidations, Mergers and Sales of Assets....................62 SECTION 6.04. Transactions with Affiliates...................................63 SECTION 6.05. Restricted Payments............................................64 SECTION 6.06. Limitations on Sale-Leasebacks.................................64 SECTION 6.07. Investments, Loans, Advances, Guarantees and Acquisitions......64


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SECTION 6.08. Leverage Ratio.................................................65 SECTION 6.09. Interest Coverage Ratio........................................65 SECTION 6.10. Lines of Business..............................................65


ARTICLE VII


Events of Default.............................66


ARTICLE VIII


The Agents....................................69


ARTICLE IX


Guarantee.....................................71


ARTICLE X


Miscellaneous


SECTION 10.01. Notices 73 SECTION 10.02. Waivers; Amendments............................................74 SECTION 10.03. Expenses; Indemnity; Damage Waiver.............................75 SECTION 10.04. Successors and Assigns.........................................76 SECTION 10.05. Survival.......................................................79 SECTION 10.06. Counterparts; Integration; Effectiveness.......................79 SECTION 10.07. Severability...................................................80 SECTION 10.08. Right of Setoff................................................80 SECTION 10.09. Governing Law; Jurisdiction; Consent to
Service of Process........................................80 SECTION 10.10. WAIVER OF JURY TRIAL...........................................81 SECTION 10.11. Headings.......................................................81 SECTION 10.12. Confidentiality................................................81 SECTION 10.13. Conversion of Currencies.......................................82 SECTION 10.14. Interest Rate Limitation.......................................82


SCHEDULES: - ----------


Schedule 1.01 - Indebtedness to be Refinanced Schedule 2.01 - Commitments Schedule 2.05 - Existing Letters of Credit Schedule 3.06 - Disclosed Matters Schedule 3.12 - Subsidiaries


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Schedule 6.01 - Existing Indebtedness Schedule 6.01 - Existing Liens Schedule 6.04 - Certain Transactions with Affiliates Schedule 6.07 - Existing Investments


EXHIBITS: - ---------


Exhibit A-1 - Form of Borrowing Subsidiary Agreement Exhibit A-2 - Form of Borrowing Subsidiary Termination Exhibit B - Form of Alternate Currency Supplement Exhibit C - Form of Issuing Bank Agreement Exhibit D - Form of Subsidiary Guarantee Agreement Exhibit E - Form of Indemnity, Subrogation and Contribution Agreement Exhibit F - Form of Assignment and Assumption Exhibit G-1 - Form of Opinion of Cleary, Gottlieb, Steen & Hamilton Exhibit G-2 - Form of Opinion of Charles J. Silva Jr., General Counsel of Albany
International Corp.


FIVE-YEAR REVOLVING CREDIT FACILITY AGREEMENT
dated as of January 8, 2004, among
ALBANY INTERNATIONAL CORP.,
the BORROWING SUBSIDIARIES
from
time to time party hereto,
the LENDERS party hereto,
JPMORGAN CHASE BANK,
as Administrative Agent, and
J.P. MORGAN EUROPE LIMITED, as London Agent.


The Company (such term and each other capitalized term used but not otherwise defined herein having the meaning assigned to it in Article I) has requested (a) the Lenders to extend credit in the form of Revolving Loans in an aggregate principal amount at any time outstanding not in excess of $460,000,000 less the sum of the LC Exposure and the Swingline Exposure at such time, (b) the Swingline Lender to extend credit in the form of Swingline Loans in an aggregate principal amount at any time outstanding not in excess of $25,000,000 and (c) the Issuing Banks to issue Letters of Credit in an aggregate face amount at any time outstanding not in excess of $40,000,000. The proceeds of the Revolving Loans will be used to refinance Indebtedness under the Company's Existing Credit Agreement and for general corporate purposes. The Letters of Credit and the proceeds of the Swingline Loans will be used for general corporate purposes.


The Lenders are willing to extend such credit to the Borrowers on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows:


ARTICLE I


Definitions


SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:


"ABR", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.


"Adjusted LIBO Rate" means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.


"Administrative Agent" means JPMCB in its capacity as administrative agent for the Lenders hereunder.


"Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent.


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"Affiliate" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. The status of any individual as an officer or director of any Person shall not, in and of itself, be deemed to make such individual an Affiliate of such Person.


"Agents" means, collectively, the Administrative Agent and the London Agent.


"Aggregate Revolving Credit Exposure" means the aggregate amount of the Lenders' Revolving Credit Exposures.


"Agreement" means this Five-Year Revolving Credit Facility Agreement, as the same may hereafter be modified, supplemented or amended from time to time.


"Alternate Base Rate" means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.


"Alternate Currency" means, at any time, (a) euro, (b) Sterling and (c) any other freely available currency (i) that is freely transferable and freely convertible into US Dollars and in which dealings in deposits are carried on in the London interbank market, (ii) that has been approved by the Administrative Agent in a notice delivered to the Company and (iii) in respect of which one or more Alternate Currency Supplements shall have been executed and delivered by one or more Borrowers, one or more Fronting Lenders and the Administrative Agent and shall be in effect.


"Alternate Currency Commitment" means, with respect to each Fronting Lender and Alternate Currency Supplement, the commitment of such Fronting Lender to make Revolving Alternate Currency Loans under Section 2.01(b) and such Alternate Currency Supplement, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Fronting Lender pursuant to Section 10.04.


"Alternate Currency Exposure" means, with respect to any Revolving Lender at any time, the sum at such time, without duplication, of (a) such Revolving Lender's Applicable Percentage of the aggregate US Dollar Equivalents of the principal amounts of the outstanding Revolving Alternate Currency Loans (excluding any Revolving Alternate Currency Loans in respect of which such Revolving Lender has made, or is required to have made, payments to the applicable Fronting Lenders pursuant to Section 2.01(c)), and (b) the aggregate principal amount at such time of the Revolving Alternate Currency Loans that have been converted to US Dollar obligations and in respect of which such Revolving Lender has made, or is required to have made, payments to the applicable Fronting Lenders as provided in Section 2.01(c).


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"Alternate Currency Fronting Fee" shall have the meaning specified in Section 2.11(b)(ii).


"Alternate Currency Participation Fee" shall have the meaning specified in Section 2.11(b)(i).


"Alternate Currency Supplement" means an agreement in the form of Exhibit B hereto executed and delivered by one or more Borrowers, one or more Fronting Lenders and the Administrative Agent as provided in Section 2.01(d).


"Applicable Agent" means (a) with respect to a Loan or Borrowing denominated in US Dollars or a Letter of Credit, the Administrative Agent, and (b) with respect to a Loan or Borrowing denominated in any Alternate Currency, the London Agent.


"Applicable Percentage" means, with respect to any Revolving Lender, the percentage of the Total Revolving Commitment represented by such Lender's Revolving Commitment. If the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Revolving Commitments most recently in effect, after giving effect to any assignments.


"Applicable Rate" means, for any day, with respect to (a) any ABR Loan or Eurocurrency Loan or (b) the Commitment Fees, as the case may be, the applicable rate per annum set forth under the appropriate caption in the table below, based upon the Leverage Ratio:


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ABR Eurocurrency Commitment Fee
Category Leverage Ratio Spread Spread Rate - -----------------------------------------------------------------------------------------------------------
Category 1 1.50 and 1.75 and 2.00 and 2.25 and 2.50 0.500% 1.500% 0.300%
- ===========================================================================================================


Except as set forth below, the Leverage Ratio used to determine the Applicable Rate during the period from and including any Financial Statement Delivery Date to but excluding the next Financial Statement Delivery Date shall be that in effect at the date of the balance sheet required to be delivered by such first Financial Statement Delivery Date under Section 5.01(a) or (b); provided that if any Financial Statement Delivery Date shall have occurred and the financial statements required to have been delivered under Section 5.01(a) or (b) by such date have not been delivered, the Applicable Rate shall, until such financial statements shall have been delivered, be determined by reference to Category 6.


"Approved Fund" shall have the meaning specified in Section 10.04(b).


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"Arranger" means J.P. Morgan Securities Inc., in its capacity as arranger of the revolving credit facility provided for herein.


"Assignment and Assumption" means an Assignment and Assumption substantially in the form of Exhibit F or such other form as shall be approved by the Administrative Agent.


"Availability Period" means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Revolving Commitments.


"Board" means the Board of Governors of the Federal Reserve System of the United States of America.


"Borrower" means the Company or any Borrowing Subsidiary.


"Borrowing" means (a) Revolving Loans of the same Type and currency made, converted or continued on the same date and, in the case of Eurocurrency Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan.


"Borrowing Minimum" means (a) in the case of a Borrowing denominated in US Dollars, $5,000,000 and (b) in the case of a Borrowing denominated in any Alternate Currency, the smallest amount of such Alternate Currency that (i) is an integral multiple of 1,000,000 units (or in the case of Sterling, 500,000 units) of such Alternate Currency and (ii) has a US Dollar Equivalent in excess of $5,000,000.


"Borrowing Multiple" means (a) in the case of a Borrowing denominated in US Dollars, $1,000,000 and (b) in the case of a Borrowing denominated in any Alternate Currency, 1,000,000 units (or, in the case of Sterling, 500,000 units) of such Alternate Currency.


"Borrowing Request" means a request by a Borrower for a Revolving Borrowing in accordance with Section 2.03.


"Borrowing Subsidiary" means, at any time, each Subsidiary that has been designated as a Borrowing Subsidiary by the Company pursuant to Section 2.20 and that has not ceased to be a Borrowing Subsidiary as provided in such Section.


"Borrowing Subsidiary Agreement" means a Borrowing Subsidiary Agreement substantially in the form of Exhibit A-1.


"Borrowing Subsidiary Termination" means a Borrowing Subsidiary Termination substantially in the form of Exhibit A-2.


"Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that (a) when used in connection with a Eurocurrency Loan denominated in US Dollars, the term "Business Day" shall also exclude any day on


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which banks are not open for dealings in deposits in US Dollars in the London interbank market, (b) when used in connection with a Loan denominated in any Alternate Currency (other than euro), the term "Business Day" shall also exclude any day on which banks are not open for dealings in deposits in the applicable currency in the principal financial center of the country of such Alternate Currency, and (c) when used in connection with a Loan denominated in euro, the term "Business Day" shall also exclude any day on which the TARGET payment system is not open for the settlement of payments in euro.


"Calculation Date" means the last Business Day of each calendar month.


"Capital Expenditures" means, for any period, the additions to property, plant and equipment and other capital expenditures of the Company and its Consolidated Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Company for such period prepared in accordance with GAAP.


"Capital Lease Obligations" of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.


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


"Change in Law" means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender or by such Lender's or such Issuing Bank's holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority if such request, guideline or directive is made or issued after the date of this Agreement and reflects a change after the


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date of this Agreement in the policies or practices to which such request, guideline or directive relates.


"Class", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.


"Closing Date" means the date of the initial Credit Event hereunder.


"Code" means the Internal Revenue Code of 1986, as amended from time to time.


"Commitment" means a Revolving Commitment or an Alternate Currency Commitment.


"Commitment Fees" shall have the meaning specified in Section 2.11(a).


"Company" means Albany International Corp., a Delaware corporation.


"Consolidated EBITDA" means, for any period, Consolidated Net Income for such period, plus, without duplication and to the extent deducted from revenues in determining Consolidated Net Income, the sum of (a) Consolidated Interest Expense for such period, (b) income tax expense for such period, (c) depreciation and amortization for such period and (d) all non-cash charges (including any non-cash expenses relating to stock option exercises) during such period (provided that any cash payment made with respect to any such non-cash charge shall be subtracted in computing Consolidated EBITDA for the period in which such cash payment is made), and minus, without duplication, all non-cash gains and income for such period, all determined on a consolidated basis for the Company and its Subsidiaries in accordance with GAAP; provided that charges in connection with cost-cutting measures, which charges are (x) certified to the Administrative Agent by a Financial Officer of the Company and (y) approved by the Board of Directors of the Company, to the extent such charges would otherwise be deducted in determining Consolidated EBITDA under this definition, shall not reduce Consolidated EBITDA.


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


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


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"Consolidated Subsidiary" means at any ...