Exhibit 10.4

 

AMENDED AND RESTATED CANADIAN PLEDGE AGREEMENT

 

THIS AMENDED AND RESTATED CANADIAN PLEDGE AGREEMENT (this “Pledge Agreement”),
dated as of April 1, 2016, is by and among ARMSTRONG WORLD INDUSTRIES, INC., a
Pennsylvania corporation (the “Pledgor”), and BANK OF AMERICA, N.A., as
collateral agent (in such capacity, the “Collateral Agent”) for the holders of
the Secured Obligations referenced below.

 

W I T N E S S E T H

 

WHEREAS, revolving credit and term loan facilities were established in favour of
the Pledgor pursuant to the terms of that certain amended and restated credit
agreement dated as of March 15, 2013 (as amended and modified prior to the
Closing Date, the “Existing Credit Agreement”) among the Pledgor, Armstrong Wood
Products, Inc., a Delaware corporation, certain of their respective
Subsidiaries, as guarantors thereunder, the lenders party thereto and Bank of
America, N.A., as administrative agent and collateral agent for the lenders
thereunder;

 

WHEREAS, in connection with the Existing Credit Agreement, the Pledgor entered
into that certain Amended and Restated Canadian Pledge Agreement dated as of
March 15, 2013 (the “Existing Pledge Agreement”);

 

WHEREAS, the Pledgor has requested certain modifications to the revolving credit
and term loan facilities under the Existing Credit Agreement;

 

WHEREAS, the Lenders have agreed to the requested modifications on the terms and
conditions provided  in that certain  Amended  and  Restated  Credit
Agreement,  dated  as of the date hereof (as amended and modified, the “Credit
Agreement”), among the Pledgor, certain of its Subsidiaries, as guarantors
thereunder, the lenders party thereto and Bank of America, N.A., as
administrative agent and collateral agent for the lenders thereunder; and

 

WHEREAS, this Pledge Agreement is required under the terms of the Credit
Agreement, and is given in amendment to, restatement of and substitution for the
Existing Pledge Agreement provided in connection with the Existing Credit
Agreement.

 

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

1.Definitions.

 

(a)       Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to such terms in the definitions in Section 1.01 of the Credit
Agreement provided however that for the purposes hereof, any references to the
“Uniform Commercial Code” or “UCC” in such definitions shall and shall be deemed
to mean “the UCC, the PPSA or the STA, as applicable”. In addition, the
following terms which are defined, as applicable, in (i) the UCC; (ii) the PPSA;
or (iii) the STA are used as defined therein: Accession, Financial Asset,
Investment Property, Proceeds and Security. For greater certainty, where any
such term is defined in more than one of the UCC, PPSA or STA (each, an
“Applicable Statute”), its meaning for the purposes of any provision of this
Agreement where such term is used shall be the meaning ascribed to such term in
the Applicable Statute that applies to such provision.

 

(b)As used herein, the following terms shall have the meanings set forth below:

 

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“Collateral Agent” has the meaning provided in the introductory paragraph
hereof, together with its successors and assigns.

 

“Credit Agreement” has the meaning provided in the recitals hereof.

 

“Event of Default” has the meaning provided in Section 8 hereof.

 

“Existing Credit Agreement” has the meaning provided in the recitals hereof.

 

“Existing Pledge Agreement” has the meaning provided in the recitals hereof.

 

“Pledge Agreement” has the meaning provided in the introductory paragraph
hereof, as amended and modified.

 

“Pledged Collateral” has the meaning provided in Section 2 hereof.

 

“Pledged Shares” has the meaning provided in Section 2(a) hereof.

 

“Pledgor” has the meaning provided in the introductory paragraph hereof.

 

“PPSA” means the Personal Property Security Act as in force from time to time in
the relevant province or territory of Canada.

 

“Secured Obligations” means, without duplication, (a) all Obligations and (b)
all costs and expenses incurred in connection with enforcement and collection of
the Secured Obligations, including reasonable legal fees and expenses.

 

“STA” means the Securities Transfer Act as in force from time to time in the
relevant province or territory of Canada.

 

“UCC” means the Uniform Commercial Code as in effect in the state of New York
from time to time.

 

2.         Pledge and Grant of Security Interest.  To secure the prompt payment
and performance in full when due, whether by lapse of time, acceleration,
mandatory prepayment or otherwise, of the Secured Obligations, the Pledgor
hereby grants, pledges and assigns to the Collateral Agent, for the benefit of
the holders of the Secured Obligations, a continuing security interest in any
and all right, title and interest of the Pledgor in and to the following,
whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the “Pledged Collateral”):

 

(a)       Pledged Shares. Sixty-five percent (65%) (or, if less, the full amount
owned by the Pledgor) of the issued and outstanding voting Capital Stock (or
100% of the non-voting Capital Stock) owned by the Pledgor of each Material
First-Tier Foreign Subsidiary and each Excluded Subsidiary formed or existing
under the laws of Canada, or any province or territory thereof, set forth on
Schedule 2(a) attached hereto, in each case together with the certificates (or
other agreements or instruments), if any, representing such Capital Stock, and
all options and other rights, contractual or otherwise, with respect thereto
(collectively, together with the Capital Stock described in Section 2(b) and
2(c) below, the “Pledged Shares”), including the following:

 

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(A)     all shares, securities, membership interests or other equity interests
representing a dividend on any of the Pledged Shares, or representing a
distribution or return of capital upon or in respect of the Pledged Shares, or
resulting from a stock split, revision, reclassification or other exchange
therefor, and any subscriptions, warrants, rights or options issued to the
holder of, or otherwise in respect of, the Pledged Shares; and

 

(B)     without affecting the obligations of the Pledgor under any provision
prohibiting such action hereunder or under the Credit Agreement, in the event of
any consolidation or merger involving the issuer of any Pledged Shares and in
which such issuer is not the surviving entity, all Capital Stock of the
successor entity formed by or resulting from such consolidation or merger.

 

(b)       Additional Shares. Sixty-five percent (65%) (or, if less, the full
amount owned by the Pledgor) of the issued and outstanding voting Capital Stock
(or 100% of the non-voting Capital Stock) owned by the Pledgor of any Person
that hereafter becomes a Material First-Tier Foreign Subsidiary or an Excluded
Subsidiary, formed or existing under the laws of Canada, or any province or
territory thereof, including the certificates (or other agreements or
instruments) representing such Capital Stock.

 

(c)Proceeds.  All Proceeds of any and all of the foregoing.

 

Without limiting the generality of the foregoing, it is hereby specifically
understood and agreed that the Pledgor may from time to time hereafter deliver
additional Capital Stock to the Collateral Agent as collateral security for the
Secured Obligations. Upon delivery to the Collateral Agent, such additional
Capital Stock shall be deemed to be part of the Pledged Collateral of the
Pledgor and shall be subject to the terms of this Pledge Agreement whether or
not Schedule 2(a) is amended to refer to such additional Capital Stock.
Notwithstanding anything to the contrary contained herein, the security
interests granted under this Pledge Agreement shall not extend to, and the
“Pledged Collateral” shall not include, any Excluded Property.

 

3.Security for Secured Obligations.The security interest created hereby in the
Pledged

Collateral of the Pledgor constitutes continuing collateral security for all of
the Secured Obligations.

 

4.Delivery of the Pledged Collateral. The Pledgor hereby agrees that:

 

(a)       To the extent that Pledged Collateral is certificated, the Pledgor
shall (subject to the provisions of Section 7.14 of the Credit Agreement)
deliver to the Collateral Agent (i) simultaneously with or prior to the
execution and delivery of this Pledge Agreement, all certificates representing
the Pledged Shares of the Pledgor and (ii) promptly upon the receipt thereof by
or on behalf of the Pledgor, all other certificates and instruments constituting
Pledged Collateral of the Pledgor.   The Collateral Agent hereby acknowledges
that the certificate representing the Pledged Shares of the Pledgor as of the
date hereof was previously delivered to its counsel in connection with the
Existing Pledge Agreement. Prior to delivery to the Collateral Agent, all such
certificates and instruments constituting Pledged Collateral of the Pledgor
shall be held in trust by the Pledgor for the benefit of the Collateral Agent
pursuant hereto. All such certificates shall be delivered in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, substantially in the form provided in Exhibit
4(a) attached hereto.

 

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(b)       Additional Securities. If the Pledgor shall receive by virtue of its
being or having been the owner of any Pledged Collateral, any (i) certificate,
including any certificate representing a dividend or distribution in connection
with any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares or other equity interests,
stock splits, spin-off or split-off, promissory notes or other instruments; (ii)
option or right, whether as an addition to, substitution for, or an exchange
for, any Pledged Collateral or otherwise; (iii) dividends payable in securities;
or (iv) distributions of securities in connection with a partial or total
liquidation, dissolution or reduction of capital, capital surplus or paid-in
surplus, then the Pledgor shall receive such certificate, instrument, option,
right or distribution in trust for the benefit of the Collateral Agent, shall
segregate it from the Pledgor’s other property and shall deliver it forthwith to
the Collateral Agent in the exact form received together with any necessary
endorsement and/or appropriate stock power duly executed in blank, substantially
in the form provided in Exhibit 4(a), to be held by the Collateral Agent as
Pledged Collateral and as further collateral security for the Secured
Obligations.

 

(c)       Financing Statements. To the extent required by applicable law, the
Pledgor authorizes the Collateral Agent to file one or more financing statements
disclosing the Collateral Agent’s security interest in the Pledged Collateral.
The Pledgor shall execute and deliver to the Collateral Agent such other
applicable financing statements, other filings and other documents as may be
reasonably requested by the Collateral Agent in order to perfect and protect the
security interest created hereby in the Pledged Collateral of the Pledgor.

 

5.          Representations and Warranties.   The Pledgor hereby represents and
warrants to the Collateral Agent, for the benefit of the holders of the Secured
Obligations, that so long as any of the Secured Obligations remains outstanding
and until all of the commitments relating thereto have been terminated:

 

(a)       Authorization of Pledged Shares. The Pledged Shares have been duly
authorized and validly issued, are fully paid and non-assessable and are not
subject to the pre-emptive rights of any Person.

 

(b)       Title. The Pledgor has good and indefeasible title to the Pledged
Collateral of the Pledgor and is the legal and beneficial owner of such Pledged
Collateral free and clear of any Lien, other than Permitted Liens. With respect
to the Pledged Shares of the Pledgor, there exists no “adverse claim” within the
meaning of (i) Section 8-102 of the UCC or (ii) any corresponding provision of
the PPSA.

 

(c)       Exercising of Rights.   The exercise by the Collateral Agent of its
rights and remedies hereunder will not violate any Law or governmental
regulation or any material contractual restriction binding on or affecting the
Pledgor or any of its property.

 

(d)       Pledgor’s Authority. No authorization, approval or action by, and no
notice or filing with, any Governmental Authority or the issuer of any Pledged
Shares, its directors or shareholders is required either (i) for the pledge made
by the Pledgor or for the granting of the security interest by the Pledgor
pursuant to this Pledge Agreement (except as have been already obtained) or (ii)
for the exercise by the Collateral Agent or the holders of the Secured
Obligations of their rights and remedies hereunder (except as may be required by
Laws affecting the offering and sale of securities), except for such
authorization, approvals or actions as have already been obtained or performed
and are in full force and effect. Without limiting the generality of the
foregoing, there are no restrictions in any of the Organization Documents of the
issuer of the Pledged Shares which would limit or restrict the grant of security
interest hereunder or the

 

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exercise of the rights and remedies conferred hereby except such restrictions as
have already been complied with.

 

(e)       Security Interest/Priority. This Pledge Agreement creates a valid
security interest in favour of the Collateral Agent for the benefit of the
holders of the Secured Obligations, in the Pledged Collateral. The taking of
possession by the Collateral Agent or its duly authorized agent of the
certificates representing the Pledged Shares, or the acknowledgement by such
agent that it holds such certificates for the Agent, together with duly executed
instruments of transfer or assignment in blank, substantially in the form
provided in Schedule 4(a) attached hereto, and all other certificates and
instruments constituting Pledged Collateral, will perfect and establish the
first priority of the Collateral Agent’s security interest in the Pledged
Shares, and such possession will establish the first priority of such security
interest in all other Pledged Collateral represented by such Pledged Shares and
instruments securing the Secured Obligations. Except as set forth in this
Section 5(e), no action is necessary at this time to perfect or otherwise
protect such security interest.

 

(f)         Partnership and Membership Interests.   As of the date hereof, none
of the Pledged Shares consist of partnership or limited liability company
interests. Except as previously disclosed to the Collateral Agent, none of the
Pledged Shares consisting of partnership or limited liability company interests
(i) is dealt in or traded on a securities exchange or in a securities market,
(ii) by its terms expressly provides that it is a security governed by Article 8
of the UCC or any corresponding provisions of the STA, (iii) is an investment
company security, (iv) is held in a securities account or (v) constitutes a
Security or a Financial Asset.

 

(g)       No Other Interests. As of the Closing Date, pursuant to the terms of
the Credit Agreement, the Pledgor is not required to pledge any Capital Stock in
any Subsidiary other than as set forth on Schedule  2(a) attached hereto or as
pledged pursuant to any  other pledge agreement by the Pledgor to the Collateral
Agent to secure the Secured Obligations.

 

(h)       None of the issuers of the Pledged Shares are unlimited liability
companies and neither the Collateral Agent nor any other person shall be liable
for the obligations of any issuer of the Pledged Shares as a result of the grant
of security interest hereunder or the exercise of the rights and remedies
conferred hereby.

 

6.Covenants. The Pledgor hereby covenants, that so long as any of the Secured
Obligations remains outstanding and until all of the commitments relating
thereto have been terminated, the Pledgor shall:

 

(a)       Books and Records. Upon the reasonable request of the Collateral
Agent, mark its books and records (and shall cause the issuer of the Pledged
Shares of the Pledgor to mark its books and records) to reflect the security
interest granted to the Collateral Agent, for the benefit of the holders of the
Secured Obligations, pursuant to this Pledge Agreement.

 

(b)       Defense of Title. Warrant and defend title to and ownership of the
Pledged Collateral of the Pledgor at its own expense against the claims and
demands of all other parties claiming an interest therein, keep the Pledged
Collateral free from all Liens, except for Permitted Liens, and not sell,
exchange, transfer, assign, lease or otherwise dispose of Pledged Collateral of
the Pledgor or any interest therein, except as permitted under the Credit
Agreement and the other Loan Documents.

 

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(c)       Further Assurances.   Promptly execute and deliver at its expense all
further instruments and documents and take all further action that may be
necessary and desirable or that the Collateral Agent may reasonably request in
order to (i) perfect and protect the security interest created hereby in the
Pledged Collateral of the Pledgor (including any and all action necessary to
satisfy the Collateral Agent that the Collateral Agent has obtained a first
priority perfected security interest in all Pledged Collateral); (ii) enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder in
respect of the Pledged Collateral of the Pledgor; and (iii) otherwise effect the
purposes of this Pledge Agreement.

 

(d)       Amendments. Not make or consent to any amendment or other modification
or waiver with respect to any of the Pledged Collateral of the Pledgor or enter
into any agreement or allow to exist any restriction with respect to any of the
Pledged Collateral of the Pledgor other than pursuant hereto or as may be
permitted under the Credit Agreement.

 

(e)       Compliance with Securities Laws. File all reports and other
information now or hereafter required to be filed by the Pledgor with the SEC,
the Ontario Securities Commission, and any other state, provincial, territorial,
federal or foreign agency in connection with the ownership of the Pledged
Collateral of the Pledgor.

 

(f)         Issuance or Acquisition of Capital Stock Consisting of an Interest
in a Partnership or a Limited Liability Company. Not, without executing and
delivering, or causing to be executed and delivered, to the Collateral Agent
such agreements, documents and instruments as the Collateral Agent may require,
issue or acquire any Capital Stock of a Subsidiary consisting of an interest in
a partnership or a limited liability company that (i) is dealt in or traded on a
securities exchange or in a securities market, (ii) by its terms expressly
provides that it is a security governed by Article 8 of the UCC or the STA,
(iii) is an investment company security, (iv) is held in a securities account or
(v) constitutes a Security or a Financial Asset.

 

7.         Advances by Holders of the Secured Obligations. On failure of the
Pledgor to perform any of the covenants and agreements contained herein and upon
prior written notice to the Pledgor, the Collateral Agent may, at its sole
option and in its sole discretion, perform the same and in so doing may expend
such sums as the Collateral Agent may reasonably deem advisable in the
performance thereof, including the payment of any insurance premiums, the
payment of any taxes, a payment to obtain a release of a Lien or potential Lien,
expenditures made in defending against any adverse claim and all other
expenditures that the Collateral Agent may make for the protection of the
security hereof or may be compelled to make by operation of Law.  All such sums
and amounts so expended shall be repayable by the Pledgor promptly upon timely
notice thereof and demand therefor, shall constitute additional Secured
Obligations and shall, subject to Section 2.08 of the Credit Agreement, bear
interest from the date said amounts are expended at the rate then applicable to
Revolving Loans that are Base Rate Loans.   No such performance of any covenant
or agreement by the Collateral Agent on behalf of the Pledgor, and no such
advance or expenditure therefor, shall relieve the Pledgor of any default under
the terms of this Pledge Agreement, the other Loan Documents or any other
documents relating to the Secured Obligations. The Collateral Agent may make any
payment hereby authorized in accordance with any bill, statement or estimate
procured from the appropriate public office or holder of the claim to be
discharged without inquiry into the accuracy of such bill, statement or estimate
or into the validity of any tax assessment, sale, forfeiture, tax lien, title or
claim except to the extent such payment is being contested in good faith by the
Pledgor in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.

 

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8.Events of Default. The occurrence of an event that would constitute an Event
of Default under the Credit Agreement shall be an Event of Default hereunder (an
“Event of Default”).

 

9.Remedies.

 

(a)       General Remedies. Upon the occurrence of an Event of Default and
during the continuation thereof, the Collateral Agent and the holders of the
Secured Obligations shall have, in addition to the rights and remedies provided
herein, in the Loan Documents, in any other documents relating to the Secured
Obligations, or by Law (including levy of attachment and garnishment), the
rights and remedies of a secured party under the UCC or the PPSA, as the case
may be, of the jurisdiction applicable to the enforcement of security interests
in the affected Pledged Collateral.

 

(b)       Sale of Pledged Collateral.   Upon the occurrence of an Event of
Default and during the continuation thereof, without limiting the generality of
this Section 9 and without notice, the Collateral Agent may, in its sole
discretion, sell or otherwise dispose of or realize upon the Pledged Collateral,
or any part thereof, in one or more parcels, at public or private sale, at any
exchange or broker’s board or elsewhere, at such price or prices and on such
other terms as the Collateral Agent may deem commercially reasonable, for cash,
credit or for future delivery or otherwise in accordance with applicable Law. To
the extent permitted by Law, any holder of the Secured Obligations may in such
event, bid for the purchase of such securities.   The Pledgor agrees that, to
the extent notice of sale shall be required by Law and has not been waived by
the Pledgor, any requirement of reasonable notice shall be met if notice,
specifying the place of any public sale or the time after which any private sale
is to be made, is personally served on or mailed, postage prepaid, to the
Pledgor, in accordance with the notice provisions of Section 11.02 of the Credit
Agreement at least ten (10) days before the time of such sale or such other
notice as may be required by applicable Law.  The Collateral Agent shall not be
obligated to make any sale of Pledged Collateral of the Pledgor regardless of
notice of sale having  been given.   The Collateral Agent may adjourn any public
or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.

 

(c)       Private Sale.   Upon the occurrence of an Event of Default and during
the continuation thereof, the Pledgor recognizes that the Collateral Agent may
deem it impracticable to effect a public sale of all or any part of the Pledged
Shares or any of the securities constituting Pledged Collateral and that the
Collateral Agent may, therefore, determine to make one or more private sales of
any such Pledged Collateral to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such Pledged Collateral for
their own account, for investment and not with a view to the distribution or
resale thereof.   The Pledgor hereby waives any claims against the Collateral
Agent arising by reason that any such private sale shall not have been made in a
commercially reasonable manner and agrees that the Collateral Agent shall have
no obligation to delay sale of any such Pledged Collateral for the period of
time necessary to permit the issuer of such Pledged Collateral to register such
Pledged Collateral for public sale under the Securities Act of 1933, as amended
(the “Securities Act”) or qualify such Pledged Collateral for sale under the
applicable Law as in force from time to time in the relevant province or
territory of Canada. The Pledgor further acknowledges and agrees that any offer
to sell such Pledged Collateral that has been (i) publicly advertised on a bona
fide basis in a newspaper or other publication of general circulation in the
financial community of New York, New York (to the extent that such offer may be
advertised without prior registration under the Securities Act or the applicable
Law as in force from time to time in the relevant province or

 

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territory of Canada), or (ii) made privately in the manner described above shall
be deemed to involve a “public sale” under the UCC and the PPSA, as applicable,
notwithstanding that such sale may not constitute a “public offering” under the
Securities Act or the applicable Law as in force from time to time in the
relevant province or territory of Canada, and the Collateral Agent may, in such
event, bid for the purchase of such Pledged Collateral.

 

(d)       Retention of Pledged Collateral. To the extent permitted under
applicable Law, in addition to the rights and remedies hereunder, upon the
occurrence and continuance of an Event of Default, the Collateral Agent may,
after providing the notices required by Sections 9-

620 and 9-621 of the UCC or Section 65 of the PPSA (Ontario) as applicable, or
otherwise complying with the requirements of applicable Law of the relevant
jurisdiction, accept or retain

all or any portion of the Pledged Collateral in satisfaction of the Secured
Obligations. Unless and until the Collateral Agent shall have provided such
notices, however, the Collateral Agent shall

not be deemed to have accepted or retained any Pledged Collateral in
satisfaction of any Secured

Obligations for any reason.

 

(e)       Deficiency. In the event that the proceeds of any sale, collection or
realization are insufficient to pay all amounts to which the Collateral Agent or
the holders of the Secured Obligations are legally entitled, the Pledgor shall
be liable for the deficiency, together with interest thereon at the Default
Rate, together with the costs of collection and reasonable legal fees and
expenses. Any surplus remaining after the full payment and satisfaction of the
Secured Obligations shall be returned to the Pledgor or to whomsoever a court of
competent jurisdiction shall determine to be entitled thereto.

 

10.       Rights of the Collateral Agent.

 

(a)       Power of Attorney. In addition to other powers of attorney contained
herein, the Pledgor hereby designates and appoints the Collateral Agent, on
behalf of the holders of the Secured Obligations, and each of its designees or
agents, as attorney-in-fact of the Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following actions upon
the occurrence and during the continuation of an Event of Default:

 

(i)         to demand, collect, settle, compromise and adjust, and give
discharges and releases concerning the Pledged Collateral, all as the Collateral
Agent may reasonably deem appropriate;

 

(ii)        to commence and prosecute any actions at any court for the purposes
of collecting any of the Pledged Collateral and enforcing any other right in
respect thereof;

 

(iii)     to defend, settle or compromise any action brought and, in connection
therewith, give such discharge or release as the Collateral Agent may reasonably
deem appropriate;

 

(iv)       to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Pledged Collateral;

 

(v)       to direct any parties liable for any payment in connection with any of
the Pledged Collateral to make payment of any and all monies due and to become
due thereunder directly to the Collateral Agent or as the Collateral Agent shall
direct;

 

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(vi)       to receive payment of and receipt for any and all monies, claims, and
other amounts due and to become due at any time in respect of or arising out of
any Pledged Collateral;

 

(vii)     to sign and endorse any drafts, assignments, proxies, stock powers,
verifications, notices and other documents relating to the Pledged Collateral;

 

(viii)     to   execute   and   deliver   all   assignments,   conveyances,  
statements, financing statements, renewal financing statements, security and
pledge agreements, affidavits, notices and other agreements, instruments and
documents that the Collateral Agent may reasonably deem appropriate in order to
perfect and maintain the security interests and liens granted in this Pledge
Agreement and in order to fully consummate all of the transactions contemplated
therein;

 

(ix)       to exchange any of the Pledged Collateral or other property upon any
merger, consolidation, reorganization, recapitalization or other readjustment of
the issuer thereof and, in connection therewith, deposit any of the Pledged
Collateral with any committee, depository, transfer agent, registrar or other
designated agency upon such terms as the Collateral Agent may reasonably deem
appropriate;

 

(x)       to vote for a shareholder resolution, or to sign an instrument in
writing, sanctioning the transfer of any or all of the Pledged Collateral into
the name of the Collateral Agent or one or more of the holders of the Secured
Obligations or into the name of any transferee to whom the Pledged Collateral or
any part thereof may be sold pursuant to Section 9 hereof; and

 

(xi)       to do and perform all such other acts and things as the Collateral
Agent may reasonably deem appropriate or convenient in connection with the
Pledged Collateral.

 

This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Secured Obligations shall remain
outstanding and until all of the commitments relating thereto shall have been
terminated.   The Collateral Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and options
expressly or implicitly granted to the Collateral Agent in this Pledge
Agreement, and shall not be liable for any failure to do so or any delay in
doing so. The Collateral Agent shall not be liable for any act or omission or
for any error of judgment or any mistake of fact or Law in its individual
capacity or its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or wilful misconduct. This power of attorney is
conferred on the Collateral Agent solely to protect, preserve and realize upon
its security interest in the Pledged Collateral.

 

(b)       Assignment by  the  Collateral Agent.   The  Collateral Agent
may  assign the Secured  Obligations and any portion  thereof and/or the
Pledged  Collateral and  any portion thereof to a successor collateral agent
appointed pursuant to Section 10.09 of the Credit Agreement, and the assignee
shall be entitled to all of the rights and remedies of the Collateral Agent
under this Pledge Agreement in relation thereto.

 

(c)       The Collateral Agent’s Duty of Care. Other than the exercise of
reasonable care to assure the safe custody and preservation of the Pledged
Collateral while being held by the Collateral Agent hereunder, the Collateral
Agent shall have no duty or liability to preserve rights

 

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pertaining thereto, it being understood and agreed that the Pledgor shall be
responsible for preservation of all rights in the Pledged Collateral, and the
Collateral Agent shall be relieved of all responsibility for the Pledged
Collateral upon surrendering it or tendering the surrender of it to the
Pledgor.   The Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its possession
if such Pledged Collateral is accorded  treatment substantially  equal to  that
which the Collateral Agent accords  its own property, which shall be no less
than the treatment employed by a reasonable and prudent agent in the industry,
it being understood that the Collateral Agent shall not have responsibility for
(i) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Collateral, whether
or not the Collateral Agent has or is deemed to have knowledge of such matters,
or (ii) taking any necessary steps to preserve rights against any parties with
respect to any of the Pledged Collateral.

 

(d)Voting Rights in Respect of the Pledged Collateral.

 

(i)         So long as no Event of Default shall have occurred and be
continuing, to the extent permitted by Law, the Pledgor may exercise any and all
voting and other consensual rights pertaining to the Pledged Collateral of the
Pledgor or any part thereof for any purpose not inconsistent with the terms of
this Pledge Agreement or the Credit Agreement; and

 

(ii)        Upon the occurrence and during the continuance of an Event of
Default and notice from the Collateral Agent to the Pledgor that the Collateral
Agent intends to exercise its rights pursuant to this paragraph (ii), all rights
of the Pledgor to exercise the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to paragraph (i) of this subsection
shall cease and all such rights shall thereupon become vested in the Collateral
Agent, which shall then have the sole right to exercise such voting and other
consensual rights.

 

(e)Dividend Rights in Respect of the Pledged Collateral.

 

(i)         So long as no Event of Default shall have occurred and be continuing
and subject to Section 4(b) hereof, the Pledgor may receive and retain any and
all dividends (other than stock dividends and other dividends constituting
Pledged Collateral addressed hereinabove) or interest paid in respect of the
Pledged Collateral to the extent they are allowed under the Credit Agreement.

 

(ii)        Upon the occurrence and during the continuance of an Event of
Default and notice from the Collateral Agent to the Pledgor that the Collateral
Agent intends to exercise its rights pursuant to this paragraph (e):

 

(A)     all rights of the Pledgor to receive the dividends and interest payments
that it would otherwise be authorized to receive and retain pursuant to
paragraph (i) of this subsection shall cease and all such rights shall thereupon
be vested in the Collateral Agent, which shall then have the sole right to
receive and hold as Pledged Collateral such dividends and interest payments; and

 

(B)       all dividends and interest payments that are received by the Pledgor
contrary to the provisions of paragraph (A) of this subsection shall be received
in trust for the benefit of the Collateral Agent, shall be segregated from

 

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other property or funds of the Pledgor, and shall be forthwith paid over to the
Collateral Agent as Pledged Collateral in the exact form received, to be held by
the Collateral Agent as Pledged Collateral and as further collateral security
for the Secured Obligations.

 

(f)         Release of Pledged Collateral. The Collateral Agent may release any
of the Pledged Collateral from this Pledge Agreement or may substitute any of
the Pledged Collateral for other Pledged Collateral without altering, varying or
diminishing in any way the force, effect, lien, pledge or security interest of
this Pledge Agreement as to any Pledged Collateral not expressly released or
substituted, and this Pledge Agreement shall continue as a first priority lien
on all Pledged Collateral not expressly released or substituted.

 

11.       Rights of Required Lenders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the
Required Lenders.

 

12.       Application of Proceeds.  Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Pledged Collateral, when received by the
Collateral Agent or any of the holders of the Secured Obligations in cash or its
equivalent, will be applied in reduction of the Secured Obligations in the order
set forth in Section 9.03 of the Credit Agreement as though the word
“Obligations” therein were deleted and replaced with the phrase “Secured
Obligations,” and the Pledgor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Collateral Agent shall have the continuing and exclusive right to apply and
reapply any and all such payments and proceeds in the Collateral Agent’s sole
discretion, notwithstanding any entry to the contrary upon any of its books and
records.

 

13.        Costs of Counsel. At all times hereafter, whether or not upon the
occurrence of an Event of Default, the Pledgor agree to promptly pay upon demand
any and all reasonable costs and expenses (including reasonable legal fees and
expenses) of the Collateral Agent and the holders of the Secured Obligations (a)
as required under Section 11.04 of the Credit Agreement and (b) as necessary to
protect the Pledged Collateral or to exercise any rights or remedies under this
Pledge Agreement or with respect to any of the Pledged Collateral. All of the
foregoing costs and expenses shall constitute Secured Obligations hereunder.

 

14.Continuing Agreement.

 

(a)       This Pledge Agreement shall be a continuing agreement in every respect
and shall remain in full force and effect so long as any of the Secured
Obligations remains outstanding (other than contingent indemnity obligations not
yet due and payable) and until all of the commitments relating thereto have been
terminated. Upon such payment and termination, this Pledge Agreement shall be
automatically terminated and the Collateral Agent shall, upon the request and at
the expense of the Pledgor, forthwith release and discharge all of its liens and
security interests hereunder and shall execute and deliver all UCC termination
statements, PPSA discharges and/or other documents reasonably requested by the
Pledgor evidencing such termination, release and discharge and shall re-deliver
the certificates evidencing the Pledged Shares to the Pledgor or to such other
Person as the Pledgor shall direct. Notwithstanding the foregoing, all
indemnities provided hereunder shall survive termination of this Pledge
Agreement.

 

(b)       This Pledge Agreement shall continue to be effective or
be  automatically reinstated, as the case may be, if at any time payment, in
whole or in part, of any of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent or any

 

11

 

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holder of the Secured Obligations as a preference, fraudulent conveyance or
otherwise under any bankruptcy, insolvency or similar Law, all as though such
payment had not been made; provided that in the event payment of all or any part
of the Secured Obligations is rescinded or must be restored or returned, all
reasonable costs and expenses (including reasonable legal fees and expenses)
incurred by the Collateral Agent or any holder of the Secured Obligations in
defending and enforcing such reinstatement shall be deemed to be included as a
part of the Secured Obligations.

 

15.       Amendments and Waivers. This Pledge Agreement and the provisions
hereof may not be amended, waived, modified, changed, discharged or terminated
except as set forth in Section 11.01 of the Credit Agreement; provided that any
update or revision to Schedule 2(a) hereof shall not constitute an amendment for
purposes of this Section 15 or Section 11.01 of the Credit Agreement.

 

16.       Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon the
Pledgor, its successors and assigns, and shall inure, together with the rights
and remedies of the Collateral Agent and the holders of the Secured Obligations
hereunder, to the benefit of the Collateral Agent and the holders of the Secured
Obligations and their successors and  permitted assigns;
provided,  however,  that the Pledgor may not assign  its rights or delegate its
duties hereunder without the prior written consent of the requisite Lenders
under the Credit Agreement.

 

17.        Notices. All notices required or permitted to be given under this
Pledge Agreement shall be given as provided in Section 11.02 of the Credit
Agreement.

 

18.       Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. It shall not be
necessary in making proof of this Pledge Agreement to produce or account for
more than one such counterpart.

 

19.       Headings.   The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.

 

20.Governing Law; Jurisdiction; Waiver of Right to Trial by Jury; Etc.

 

(a)       THIS PLEDGE AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF
ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR
RELATING TO THIS PLEDGE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF
ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.

 

(b)       EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT
IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR
DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR
OTHERWISE, AGAINST THE COLLATERAL AGENT, OR ANY RELATED PARTY OF THE FOREGOING
IN ANY WAY RELATING TO THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS RELATING THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE
PROVINCE OF ONTARIO OR THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK
COUNTY AND OF THE UNITED STATES

 

12

 

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DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT
FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN
SUCH FEDERAL COURT.   EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS PLEDGE AGREEMENT OR IN ANY OTHER LOAN DOCUMENT
SHALL AFFECT ANY RIGHT THAT THE COLLATERAL AGENT MAY OTHERWISE HAVE TO BRING ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS PLEDGE AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST THE BORROWER, OR ANY OTHER LOAN PARTY OR THEIR PROPERTIES IN
THE COURTS OF ANY JURISDICTION.

 

(c)       EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS PLEDGE AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B)
OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)       EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02 OF THE CREDIT AGREEMENT.
NOTHING IN THIS PLEDGE AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY   HERETO  
TO   SERVE   PROCESS   IN   ANY   OTHER   MANNER   PERMITTED   BY APPLICABLE
LAW.

 

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

 

21.       Severability. If any provision of this Pledge Agreement or any related
document is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Pledge Agreement
and any other related document shall not be affected or impaired thereby and (b)
the parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

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22.       Entirety. This Pledge Agreement, the other Loan Documents and the
other documents relating to the Secured Obligations comprise the complete and
integrated agreement of the parties on the subject matter hereof and thereof and
supersedes all prior agreements, written or oral, on such subject matter. This
Pledge Agreement was drafted with the joint participation of the respective
parties thereto and shall be construed neither against nor in favour of any
party, but rather in accordance with the fair meaning thereof.

 

23.       Survival.     All representations and warranties made hereunder or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent, the Collateral Agent and each Lender, regardless of any
investigation made by the Administrative Agent, the Collateral Agent or any
Lender or on their behalf and notwithstanding that the Administrative Agent, the
Collateral Agent or any Lender may have had notice or knowledge of any Default
at the time of any Credit Extension, and shall continue in full force and effect
as long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied or any Letter of Credit shall remain outstanding.

 

24.       Other Security. To the extent that any of the Secured Obligations are
now or hereafter secured by property other than the Pledged Collateral
(including real and other personal property owned by the Pledgor), or by a
guarantee, endorsement or property of any other Person, then the Collateral
Agent shall have the right to proceed against such other property, guarantee or
endorsement upon the occurrence of any Event of Default, and the Collateral
Agent shall have the right, in its sole discretion, to determine which rights,
security, liens, security interests or remedies the Collateral Agent shall at
any time pursue, relinquish, subordinate, modify or take with respect thereto,
without in any way modifying or affecting any of them or the Secured Obligations
or any of the rights of the Collateral Agent or the holders of the Secured
Obligations under this Pledge Agreement, under any of the other Loan Documents
or under any other document relating to the Secured Obligations.

 

25.       Replacement of Existing Pledge Agreement. As of the date hereof, the
Existing Pledge Agreement shall be amended, restated and superseded and replaced
in its entirety by this Pledge Agreement.

 

[Signatures on Following Pages]

 

TOR01: 6249206: v4

 

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Each of the parties hereto has caused a counterpart of this Pledge Agreement to
be duly executed and delivered as of the date first above written.

 

 

PLEDGOR:

ARMSTRONG WORLD INDUSTRIES, INC., a Pennsylvania corporation

 

 

By: /s/ Brian L. MacNeal

Name: Brian L. MacNeal

Title: Senior Vice President and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARMSTRONG WORLD INDUSTRIES, INC. AMENDED AND RESTATED CANADIAN PLEDGE AGREEMENT

 

 

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Accepted and agreed to as of the date first above written.

 

COLLATERAL

 

AGENT:

BANK OF AMERICA, N.A., as Collateral Agent

 

 

 

By: /s/ Kimberly D. Williams Name: Kimberly D. Williams Title: Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARMSTRONG WORLD INDUSTRIES, INC. AMENDED AND RESTATED CANADIAN PLEDGE AGREEMENT

 

 

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SCHEDULES

 

 

 

 

Schedule 2(a)Pledged Shares

 

 

 

 

EXHIBITS

 

 

 

 

Exhibit 4(a)Form of Stock Power

 

 

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Schedule 2(a)

 

to

 

Amended and Restated Canadian Pledge Agreement dated as of April 1, 2016

in favour of Bank of America, N.A., as Collateral Agent

 

 

 

PLEDGED SHARES

 

 

 

 

Subsidiary

Class of Shares

Number held by Pledgor

 

Armstrong World Industries Canada Ltd.

 

Common

 

500

 

 

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Exhibit 4(a)

 

to

 

Amended and Restated Canadian Pledge Agreement dated as of April 1, 2016

in favour of Bank of America, N.A., as Collateral Agent

 

 

 

Form of Irrevocable Stock Power

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to

 

 

 

 

 

the following shares of capital stock of [ISSUER], a

corporation:

 

 

No. of SharesCertificate No.

 

 

 

 

 

and irrevocably appoints

its agent and attorney-in-fact to

 

transfer all or any part of such capital stock and to take all necessary and
appropriate action to effect any such transfer. The agent and attorney-in-fact
may substitute and appoint one or more persons to act for him. The effectiveness
of a transfer pursuant to this stock power shall be subject to any and all
transfer restrictions referenced on the face of the certificates evidencing such
interest or in the certificate of incorporation or bylaws of the subject
corporation, to the extent they may from time to time exist.

 

ARMSTRONG WORLD INDUSTRIES, INC.

 

 

 

 

By: Name:

Title: