Exhibit 10(k)(vii)
THIRD AMENDMENT TO NOTE AGREEMENT AND AMENDMENT TO NOTES
THIRD AMENDMENT TO NOTE AGREEMENT AND AMENDMENT TO NOTES, dated as of
December 16, 2008 (this "Amendment"), among ALBANY INTERNATIONAL CORP., a
Delaware corporation (the "Company"), the Guarantors (as defined in the Note
Agreement referred to below), and The Prudential Insurance Company of America
("Prudential") and the several Purchasers (as defined in the Note Agreement
referred to below) (together with Prudential, individually, a "Purchaser", and
collectively, "Purchasers").
W I T N E S S E T H:
WHEREAS, the Company and Guarantors party thereto and the Purchasers are
parties to that certain Note Agreement and Guaranty, dated as of October 25,
2005 (as the same may be further amended, supplemented, waived or otherwise
modified from time to time, the "Note Agreement"); and
WHEREAS, the Company has requested the amendment of certain provisions of
the Note Agreement and the Notes (as defined in the Note Agreement), and the
Purchasers have indicated willingness to agree to such amendments subject to
certain limitations and conditions, as provided for herein;
NOW THEREFORE, in consideration of the premises, the mutual covenants and
the agreements hereinafter set forth and other good and valuable consideration,
the parties hereto hereby agree that on the Amendment Effective Date, as defined
herein, the Note Agreement and the Notes will be amended as follows:
1. Definitions. Unless otherwise defined herein, terms defined in the Note
Agreement are used herein as therein defined.
2. Amendment to Notes. As of the Amendment Effective Date, each of the
Notes outstanding on the Effective Date (herein the "Existing Notes"), and the
form of Note attached to the Note Agreement as Exhibit A, is hereby, without any
further action required on the part of any other Person, deemed to be
automatically amended to conform to and have the terms provided in Exhibit A
attached hereto (except that, with respect to such Existing Notes, the date,
registration number, principal amount and the payee thereof shall remain
unchanged). Any Note issued on or after the Amendment Effective Date shall be in
the form of Exhibit A attached hereto. The Company agrees, upon the request of
any Purchaser to promptly deliver a new Note in the form of Exhibit A attached
hereto in exchange for each Existing Note held by such Purchaser.
3. Amendment to Paragraph 5A of the Note Agreement (Financial Statements).
Paragraph 5A of the Note Agreement is hereby amended, as of the Amendment
Effective Date, by deleting the text in clause (iv) therein in its entirety and
inserting in lieu thereof the following text:
"(iv) concurrently with any delivery of financial statements under
clause (i) or (ii) above, a certificate of a Financial Officer of the
Company (a) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and
any action taken or proposed to be taken with respect thereto, (b) setting
forth reasonably detailed calculations demonstrating compliance with
Paragraphs 6A, 6E, 6H and 6I hereof, (c) setting forth reasonably detailed
calculations demonstrating the Unadjusted Leverage Ratio (as defined in
the Notes) as of the end of the most recently ended fiscal quarter covered
by such financial statements and setting forth (x) the Additional Interest
Rate (as defined in the Notes) for the Additional Interest Period (as
defined in the Notes) covered by such financial statements and (y) the
amount of Additional Interest (as defined in the Notes) due on the Notes
for such Additional Interest Period and (d) stating whether any change in
GAAP or in the application thereof has occurred since the date of the
Company's audited financial statements referred to in Paragraph 8B and, if
any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;"
4. Amendment to Paragraph 6E of the Note Agreement (Restricted Payments).
Paragraph 6E of the Note Agreement is hereby amended, as of the Amendment
Effective Date, by
(i) deleting clause (a) thereof and inserting in lieu thereof the
following:
"(a) the Leverage Ratio does not exceed (i) if on or before
November 17, 2008, 3.00 to 1.00, (ii) if on or after November 18,
2008 but prior to January 1, 2011, 3.50 to 1.00, and (iii) from
January 1, 2011 and at all times thereafter, 2.50 to 1.00"; and
(ii) adding the following new sentence at the end thereof:
"In the event that the corresponding covenant in the Revolving
Credit Agreement to this Paragraph 6E (currently Section 6.05) is
amended or modified to be more restrictive (including any amendment
or modification to any defined term directly or indirectly used in
such definition) then, without any further action on the part of the
Company or any of the holders of the Notes, this Paragraph 6E and
any related defined terms shall be deemed to be amended
automatically to match the corresponding amendments or modifications
to the Revolving Credit Agreement."
5. Amendment to Paragraph 6H of the Note Agreement (Leverage Ratio).
Paragraph 6H of the Note Agreement is hereby amended, as of the Amendment
Effective Date, by deleting the text therein in its entirety and inserting in
lieu thereof the following text:
"6H Leverage Ratio. The Company will not permit the Leverage Ratio
on any date to exceed (i) if on or before November 17, 2008, 3.00 to 1.00,
(ii) if on or after November 18, 2008 but prior to January 1, 2011, 3.50
to 1.00, and (iii) from January 1, 2011 and at all times thereafter, 2.50
to 1.00. In the event that the corresponding covenant in the Revolving
Credit Agreement to this Paragraph 6H (currently Section 6.08) is amended
or modified to be more restrictive (including any amendment or
modification to any defined term directly or indirectly used in such
definition) then, without any further action on the part of the Company or
any of the holders of the Notes, this Paragraph 6H (and any related
defined terms) shall be deemed to be amended
2
automatically to match the corresponding amendments or modifications to
the Revolving Credit Agreement."
6. Amendment to Paragraph 11B (Other Terms). Paragraph 11B of the Note
Agreement is hereby amended, as of the Amendment Effective Date, by
(i) deleting the definition of "Total Debt" therein in its
entirety and inserting in lieu thereof the following definition:
"Total Debt" shall mean, at any time, the sum of (a) all
Indebtedness that is or should be reflected as a liability on
a consolidated balance sheet of the Company and the
Subsidiaries in accordance with GAAP and (b) the consideration
(other than any note of a Subsidiary that serves as a conduit
in a sale or financing transaction with respect to
Receivables) received by the Company or any Consolidated
Subsidiary from any Person (other than the Company or a
Consolidated Subsidiary) for Receivables sold, which
Receivables remain uncollected at such time; less (x) the sum
of all cash and cash equivalents (as determined in accordance
with GAAP), (y) the cash surrender value of life insurance
policies naming the Company as beneficiary (as determined in
accordance with GAAP) and (z) the fair market value of any
Marketable Securities held by the Company and the Consolidated
Subsidiaries; provided, however, that with respect to any
Non-Wholly Owned Subsidiary, the Indebtedness (other than any
Indebtedness that is Guaranteed by the Company or a
Wholly-Owned Subsidiary) and assets thereof referred to in the
foregoing clauses shall be disregarded in the calculation of
"Total Debt" to the extent of any economic interest in such
Non-Wholly Owned Subsidiary that is owned by any Person other
than the Company or a Wholly-Owned Subsidiary.. For the
purposes of this definition, "Marketable Securities" means any
debt or equity securities for which an active trading market
exists and price quotations are available.
(ii) adding the following definitions in the appropriate
alphabetical order:
""Non-Wholly Owned Subsidiary" means a Subsidiary that
is not a Wholly Owned Subsidiary."
""Wholly Owned Subsidiary" means a Subsidiary all of the
capital stock and other equity interests in which, other than
qualifying shares and/or nominal equity interests that are
required to be held by Persons under applicable law, are owned
by the Company or a Subsidiary."
7. Representations and Warranties. The Company and each other Guarantor
hereby.
(a) Other than such representations expressly given as of a specific
date, repeats (and confirms as true and correct) as of the Amendment
Effective Date to the Purchasers that each of the representations and
warranties made by the Company and each other Guarantor pursuant to the
Note Agreement and are hereby incorporated herein (as though set forth
herein) in their entirety; and
3
(b) Further represent and warrant as of the Amendment Effective Date
that:
(i) No Default. No Default or Event of Default shall have
occurred and be continuing on such date after giving effect to this
Amendment;
(ii) Power of Authority. Each such Person has the corporate or
equivalent power to execute and deliver this Amendment, and to
perform the provisions hereof, and this Amendment has been duly
authorized by all necessary corporate or equivalent action on the
part of each such Person;
(iii) Due Execution. This Amendment has been duly executed and
delivered by such Person and constitutes such Person's legal, valid
and binding obligation, enforceable in accordance with its terms,
except as such enforceability may be limited (x) by general
principals of equity and conflicts of laws or (y) by bankruptcy,
reorganization, insolvency, moratorium or other laws of general
application relating to or affecting the enforcement of creditors'
rights.
(iv) No Consent's Required. No consent, approval,
authorization or order of, or filing, registration or qualification
with, any court or Governmental Authority or third party is required
in connection with the execution, delivery or performance by such
Person of this Amendment;
(v) Acknowledgment of Obligation: Waiver of Claims. It has no
defenses, offsets or counterclaims against any of its obligations
under and in respect to the Notes or the AI Guaranty Agreement and
that all amounts outstanding under and in respect of the Notes and
the Note Agreement are owing to holders of the Notes without
defense, offset or counterclaim; and
(vi) Revolving Credit Agreement. Other than (A) that certain
restatement dated as of ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) the First Amendment
dated as of August 28, 2006 and (C) the Second Amendment dated as of
April 27, 2007, there have been no amendments to the Revolving
Credit Agreement.
8. Acknowledgements and Consent of Guarantors. Each Guarantor hereby
acknowledges that it has reviewed the terms and provisions of the Note
Agreement, the Notes, the AI Guaranty Agreement and this Amendment and consents
to the amendment to Note Agreement and the Notes effected pursuant to this
Amendment. Each Guarantor confirms that they will continue to guarantee the
obligations to the fullest extent in accordance with the AI Guaranty Agreement
and acknowledges and agrees that: (a) the AI Guaranty Agreement shall continue
in full force and effect and that its obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment and (b)(i) notwithstanding, the conditions to
effectiveness hereof, such Guarantor is not required by the terms of the Note
Agreement, the Notes (as amended hereby) or the AI Guaranty Agreement to consent
to the amendments to the Note Agreement and the Notes effected pursuant to this
Amendment; and (ii) nothing in Note Agreement, the Notes or AI Guaranty
Agreement shall be deemed to require the consent of any such Guarantor to any
future amendments to the Note Agreement.
4
9. Conditions Precedent. This Amendment shall become effective as of the
first date on which the conditions precedent set forth below shall have been
fulfilled (the "Amendment Effective Date"):
(a) the Purchasers shall have received counterparts of this
Amendment, executed and delivered by a duly authorized officer of the
Company and each of the Guarantors;
(b) the representations and warranties contained in Section 7 above
shall be true and correct in all material respects on and as of the
Amendment Effective Date, as if made on and as of the Amendment Effective
Date and there shall exist on the Amendment Effective Date no Event of
Default or Default;
(c) the Company shall have paid all outstanding costs, expenses and
fees of the Purchasers (including reasonable attorneys fees and expenses
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP) incurred in connection with the documentation of
this Amendment (including a reasonable estimate of post-closing fees and
expenses) to the extent invoiced (this provision shall not be construed to
limit the obligations of the Company under Paragraph 12B of the Note
Agreement);
(d) each Purchaser shall have received an opinion, dated the
Amendment Effective Date, from ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Vice President-
General Counsel of the Company addressing, among other things, the
enforceability of this Amendment, and the Note Agreements and the Notes,
in each case as amended, and otherwise in form and substance satisfactory
to the Purchasers;
(e) the Company and each other Guarantor shall have made all
requests, filings, and registrations with, and obtained all consents and
approvals from, the relevant national, state, local or foreign
jurisdiction(s), or any administrative, legal or regulatory body or agency
thereof, that are necessary for the Company and each Guarantor in
connection with this Amendment and any and all other documents relating
thereto; and
(f) the Purchasers shall have received such additional documents or
certificates with respect to legal matters or corporate or other
proceeding related to the transactions contemplated hereby as may be
reasonable requested by the Purchasers.
10. Additional Interest. In consideration of this Amendment, the Company
hereby agrees pay to the Purchasers additional interest on the Notes (pro rata
based on the principal amount of the Notes) notwithstanding the terms of the
Notes in the aggregate amount of (a) $271,232.88 due and payable on January 25,
2009 and (b) if the Leverage Ratio exceeds 3.00 to 1.00 as at December 31, 2008,
$295,890.41, due and payable on March 15, 2009.
11. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
12. No Other Amendments: Confirmation. Except as expressly amended,
modified and supplemented hereby, the terms, provisions and conditions of the
Note Agreement, the
5
Notes, the AI Guaranty Agreement and the agreements and instruments relating
thereto are and shall remain unchanged and in full force and effect and are
hereby ratified and confirmed in all respects.
13. Headings. The headings of sections of this Amendment are inserted for
convenience only and shall not be deemed to constitute a part of this Agreement.
14. Counterparts. This Amendment may be executed in any number of
counterparts by the parties hereto, each of which counterparts when so executed
shall be an original, but all counterparts taken together shall constitute one
and the same instrument.
[Remainder of page intentionally left blank. Signature pages follow.]
6
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered by their respective proper and duly authorized officers
as of the day and year first above written.
ALBANY INTERNATIONAL CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
& Chief Financial Officer
ALBANY INTERNATIONAL HOLDINGS TWO, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President & Assistant Secretary
ALBANY INTERNATIONAL TECHNIWEAVE, INC.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President & Assistant Secretary
ALBANY INTERNATIONAL RESEARCH CO., as a
Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President, Assistant Treasurer
& Assistant Secretary
GESCHMAY CORP. as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President & Assistant Secretary
7
▇▇▇▇▇▇▇ DRYING FABRICS, INC., as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President & Assistant Secretary
GESCHMAY WET ▇▇▇▇▇, INC., as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President & Assistant Secretary
GESCHMAY FORMING FABRICS CORP., as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President & Assistant Secretary
8
The foregoing Amendment is hereby accepted as of the date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
GIBRALTAR LIFE INSURANCE CO., LTD
By: Prudential Investment Management (Japan), Inc., as Investment Manager
By: Prudential Investment Management, Inc., as Sub-Adviser
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
THE PRUDENTIAL LIFE INSURANCE COMPANY, LTD.
By: Prudential Investment Management (Japan), Inc., as Investment Manager
By: Prudential Investment Management, Inc., as Sub-Adviser
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SECURITY BENEFIT LIFE INSURANCE COMPANY, INC.
By: Prudential Private Placement Investors, L.P. (as Investment Advisor)
By: Prudential Private Placement Investors, Inc. (as its General Partner)
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
9