Exhibit No. 10.8
AMENDMENT NO. 1
THIS AMENDMENT NO. 1, dated as of February _, 2008 (this “Amendment”), of that
certain Credit Agreement referenced below is by and among Armstrong World
Industries, Inc., a Pennsylvania corporation (the “Borrower”), the Lenders
identified on the signature pages hereto and Bank of America, N.A., as
Administrative Agent. Capitalized terms used but not otherwise defined herein
shall have the meanings provided in the Credit Agreement.
W I T N E S S E T H
WHEREAS, a $300 million revolving credit facility, $300 million pro rata term
loan and $500 million institutional term loan have each been established in
favor of the Borrower pursuant to the terms of that certain Credit Agreement
dated as of October 2, 2006 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the Borrower, the
Lenders, and Bank of America, N.A., as Administrative Agent;
WHEREAS, the Borrower has requested certain modifications to the terms of the
Credit Agreement; and
WHEREAS, the Lenders have agreed to the requested modifications on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Amendments to Credit Agreement. The Credit Agreement is amended as follows:
1.1 In Section 1.01 (Defined Terms) of the Credit Agreement, the pricing grid
set forth in the definition of “Applicable Rate” is amended to read as follows:

                              Pricing   Consolidated Leverage   Commitment    
Letters of     Eurodollar Rate     Base Rate   Tier   Ratio   Fee     Credit    
Loans     Loans  
 
                           
1
  ≥3.50:1   0.500 %   2.25 %   2.25 %   1.25 %
2
  ≥3.00:1 but <3.50:1   0.500 %   2.00 %   2.00 %   1.00 %
3
  ≥2.00:1 but <3.00:1   0.375 %   1.75 %   1.75 %   0.75 %
4
  ≥1.00:1 but <2.00:1   0.200 %   1.50 %   1.50 %   0.50 %
5
  <1.00:1   0.175 %   1.25 %   1.25 %   0.25 %

 

 

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1.2 Section 7.11 (Use of Proceeds) of the Credit Agreement is amended to read as
follows:
7.11 Use of Proceeds.
Use the proceeds of the Credit Extensions (a) to fund payments under the
Reorganization Plan and (b) to finance working capital, capital expenditures and
other lawful corporate purposes (including the funding of Special Distributions
(as defined in Section 8.06(c)); provided that in no event shall the proceeds of
the Credit Extensions be used in contravention of any Law or of any Loan
Document.
1.3 Section 8.06 (Restricted Payments) of the Credit Agreement is amended by
deleting the “and” at the end of subsection (b) and amending subsection (c) and
incorporating a new subsection (d), in each case to read as follows:
(c) the Borrower may declare and make other Restricted Payments in any fiscal
year in an amount not exceed the sum of (i) $25,000,000 plus (ii) an amount
equal to the difference of (A) twenty-five percent (25%) of cumulative
Consolidated Net Income earned after the Closing Date minus (B) the aggregate
amount of Restricted Payments in excess of $25,000,000 in any fiscal year after
the Closing Date (but excluding Special Distributions for purposes hereof), with
unused amounts in any fiscal year being carried over to succeeding fiscal years;
and
(d) so long as no Event of Default shall exist immediately before or after
giving effect thereto, the Borrower may make special Restricted Payments (
“Special Distributions”) in an aggregate amount of up to $500,000,000 at any
time on or before February 28, 2009; provided that if the Borrower makes Special
Distributions, the Borrower shall not make any Restricted Payments pursuant to
subsection (c) above until after February 28, 2009.
1.4 Section 8.11 (Financial Covenants) of the Credit Agreement is amended
incorporating a new subsection (c) to read as follows:
(c) Minimum Liquidity. Permit as of the end of any fiscal quarter of the
Borrower minimum liquidity of the Borrower and its Domestic Subsidiaries to be
less than $100 million, which may be comprised of a combination of unrestricted
readily-available domestic cash and Cash Equivalents and undrawn Revolving
Commitments, but only to the extent that, if drawn, the Borrower would be in
compliance with the financial covenants under this Section 8.11 after giving
effect thereto on a Pro Forma Basis.
2. Conditions Precedent. This Amendment shall become effective upon prior or
simultaneous satisfaction of the following conditions, in form and substance
reasonably satisfactory to the Administrative Agent:
(a) receipt by the Administrative Agent of executed copies of the consent and
direction letter to this Amendment from the Required Lenders;
(b) receipt by the Administrative Agent of executed copies of the signature
pages to this Amendment from the Loan Parties;
(c) receipt by the Administrative Agent of favorable opinions of (i) Weil,
Gotshal & Manges LLP, legal counsel to the Loan Parties, and (ii) in-house
counsel to the Loan Parties with respect to Pennsylvania law, in each case,
addressed to the Administrative Agent and each Lender, dated as of the date of
this Amendment, and in form and substance satisfactory to the Administrative
Agent;

 

 

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(d) receipt by the Administrative Agent of the following, each of which shall be
originals or facsimiles (followed promptly by originals), in form and substance
satisfactory to the Administrative Agent and its legal counsel:
(i) copies of the Organization Documents of each Loan Party certified to be true
and complete as of a recent date by the appropriate Governmental Authority of
the state or other jurisdiction of its incorporation or organization, where
applicable, and certified by a secretary or assistant secretary of such Loan
Party to be true and correct as of the date of this Amendment, unless a
Responsible Officer of the Borrower certifies in a certificate that the
Organization Documents previously delivered to the Administrative Agent in
connection with the Credit Agreement have not been amended, supplemented or
otherwise modified and remain in full force and effect as of the date hereof;
(ii) incumbency certificates identifying the Responsible Officers of the Loan
Parties who are authorized to execute this Amendment and related documents and
to act on the Loan Parties’ behalf in connection with this Agreement and the
Credit Documents, unless a Responsible Officer of the Borrower certifies in a
certificate that the incumbency certificates previously delivered to the
Administrative Agent in connection with the Credit Agreement have not been
amended, supplemented or otherwise modified and remain in full force and effect
as of the date hereof.
(iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Amendment; and
(iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and is validly existing, and in good standing in its state of organization or
formation;
(e) payment of an amendment fee, for the benefit of each Lender consenting to
this Amendment, in an amount equal to 0.25% of the aggregate Commitments of each
such consenting Lender and all other fees (including all reasonable fees,
expenses and disbursements of Moore & Van Allen PLLC) due in connection
herewith, which fees shall be deemed fully earned and due and payable on the
effective date of this Amendment.
3. Effectiveness of Amendment. Upon satisfaction of the condition precedent set
forth in Section 2 hereof, all references to the Credit Agreement in each of the
Loan Documents shall hereafter mean the Credit Agreement as amended by this
Amendment.

 

 

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4. Representations and Warranties; Defaults. The Borrower affirms that upon
authorization by the Board of Directors of this Amendment, the following:
(a) all necessary action by the Loan Parties to authorize the execution,
delivery and performance of this Amendment has been taken;
(b) after giving effect to this Amendment, the representations and warranties
set forth in the Credit Agreement and the other Loan Documents are true and
correct in all material respects as of the date hereof (except those which
expressly relate to an earlier period); and
(c) after giving effect to this Amendment, no Default or Event of Default shall
exist.
5. Full Force and Effect. Except as modified hereby, all of the terms and
provisions of the Credit Agreement and the other Loan Documents (including
schedules and exhibits thereto) shall remain in full force and effect.
6. Affirmation of Liens and Security Interests. The Loan Parties hereby affirm
the liens and security interests created and granted in the Loan Documents and
agree that this Amendment is not intended to, nor shall it, adversely affect or
impair such liens and security interests in any manner.
7. Expenses. The Loan Parties agree to pay all reasonable costs and expenses of
the Administrative Agent in connection with the preparation, execution and
delivery of this Amendment, including the reasonable fees and expenses of Moore
& Van Allen, PLLC.
8. Counterparts. This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, and it
shall not be necessary in making proof of this Amendment to produce or account
for more than one such counterpart.
9. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the law of the State of New York applicable to agreements made
and to be performed entirely within such state.