Exhibit 10.8








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	%






 


 









 





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;


 


 









 






(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.


 


 









 





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.