Exhibit 10.3





Exhibit 10.3




AMENDED AND RESTATED PLEDGE AGREEMENT




THIS AMENDED AND RESTATED PLEDGE AGREEMENT (this “Pledge Agreement”), dated as of
November 23, 2010, is by and among the parties identified as “Pledgors” on the signature pages
hereto and such other parties as may become Pledgors hereunder after the date hereof (individually
a “Pledgor”, and collectively the “Pledgors”) 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 favor of Armstrong
World Industries, Inc., a Pennsylvania corporation (“AWI”), pursuant to the terms of that
certain credit agreement dated as of October 2, 2006 (as amended and modified prior to the Closing
Date, the “Existing Credit Agreement”) among AWI, certain of its Subsidiaries, as
guarantors thereunder, the lenders party thereto and Bank of America, N.A., as administrative agent
for the lenders thereunder;



WHEREAS, in connection with the Existing Credit Agreement, AWI and certain of its Subsidiaries
entered into that certain Pledge Agreement dated as of October 2, 2006 (the “Existing Pledge
Agreement”);



WHEREAS, AWI 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 AWI and Armstrong Wood Products, Inc.,
a Delaware corporation (“Armstrong Wood Products”; together with AWI, the
“Borrowers”), certain of their Subsidiaries, as guarantors thereunder, the lenders party
thereto and Bank of America, N.A., as administrative agent for the lenders thereunder;



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 provided
in the Credit Agreement. In addition, the following terms, which are defined in the UCC as in
effect in the State of New York on the date hereof, are used as defined therein: Accession,
Financial Asset, Proceeds and Security.


 












 






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




“Borrowers” has the meaning provided in the recitals hereof.




“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.




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




“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 attorneys’ fees and expenses.




“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, each 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, and a right to set-off against, any and all right, title and interest of such Pledgor
in and to the following, whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the “Pledged Collateral”):




(a) Pledged Shares. (i) One hundred percent (100%) (or, if less, the full
amount owned by such Pledgor) of the issued and outstanding Capital Stock owned by such
Pledgor of each Material Domestic Subsidiary set forth on Schedule 2(a) attached
hereto and (ii) sixty-five percent (65%) (or, if less, the full amount owned by such
Pledgor) of the issued and outstanding Capital Stock owned by such Pledgor of each Material
First-Tier Foreign Subsidiary 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:




(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


 


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(B) without affecting the obligations of the Pledgors 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. (i) One hundred percent (100%) (or, if less, the full
amount owned by such Pledgor) of the issued and outstanding Capital Stock owned by such
Pledgor of any Person that hereafter becomes a Material Domestic Subsidiary and (ii)
sixty-five percent (65%) (or, if less, the full amount owned by such Pledgor) of the issued
and outstanding Capital Stock owned by such Pledgor of any Person that hereafter becomes a
Material First-Tier Foreign Subsidiary, including the certificates (or other agreements or
instruments) representing such Capital Stock.




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



Without limiting the generality of the foregoing, it is hereby specifically understood and
agreed that a 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 such 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 each Pledgor constitutes continuing collateral security for all of the
Secured Obligations.



4. Delivery of the Pledged Collateral. To the extent that Pledged Collateral is
certificated, each Pledgor hereby agrees that:




(a) Each 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
such Pledgor and (ii) promptly upon the receipt thereof by or on behalf of such Pledgor, all
other certificates and instruments constituting Pledged Collateral of such Pledgor. Prior
to delivery to the Collateral Agent, all such certificates and instruments constituting
Pledged Collateral of a Pledgor shall be held in trust by such 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.




(b) Additional Securities. If such 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 such Pledgor shall receive such certificate, instrument, option, right or
distribution in trust for the benefit of the Collateral Agent, shall segregate it from such
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.


 


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(c) Financing Statements. Each Pledgor authorizes the Collateral Agent to file
one or more financing statements (which may describe the Collateral as “all assets” or “all
personal property”) disclosing the Collateral Agent’s security interest in the Pledged
Collateral. Each Pledgor shall execute and deliver to the Collateral Agent such other
applicable financing statements and other filings 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 such Pledgor.



5. Representations and Warranties. Each 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 are duly authorized
and validly issued, are fully paid and nonassessable and are not subject to the preemptive
rights of any Person.




(b) Title. Each Pledgor has good and indefeasible title to the Pledged
Collateral of such Pledgor and is the legal and beneficial owner of such Pledged Collateral
free and clear of any Lien, other than Permitted Liens. There exists no “adverse claim”
within the meaning of Section 8-102 of the UCC with respect to the Pledged Shares of such
Pledgor.




(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 a 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 with the issuer of any Pledged Stock is
required either (i) for the pledge made by a Pledgor or for the granting of the security
interest by a 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).




(e) Security Interest/Priority. This Pledge Agreement creates a valid security
interest in favor of the Collateral Agent for the benefit of the holders of the Secured
Obligations, in the Pledged Collateral. The taking of possession, in the State of New York,
by the Collateral Agent of the certificates representing the Pledged Shares, to the extent
constituting Securities, 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, when properly perfected by filing or registration, 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) hereof, no action is
necessary to perfect or otherwise protect such security interest.


 


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(f) Partnership and Membership 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, (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, no Pledgor is required to pledge any Capital Stock in any Subsidiary other
than as set forth on Schedule 2(a) attached hereto.



6. Covenants. Each 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, such 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 such 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 such 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 such Pledgor or any interest therein, except as permitted
under the Credit Agreement and the other Loan Documents.




(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 such 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 such 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 such Pledgor or enter into any
agreement or allow to exist any restriction with respect to any of the Pledged Collateral of
such 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 such Pledgor with the United States Securities and
Exchange Commission and any other state, federal or foreign agency in connection with the
ownership of the Pledged Collateral of such 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, (iii) is an
investment company security, (iv) is held in a securities account or (v) constitutes a
Security or a Financial Asset.


 


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7. Advances by Holders of the Secured Obligations. On failure of any 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 Pledgors on a joint and several basis promptly upon timely
notice thereof and demand therefor, shall constitute additional Secured Obligations and shall,
subjection 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 any Pledgor, and no
such advance or expenditure therefor, shall relieve the Pledgors 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 a Pledgor in appropriate proceedings and against
which adequate reserves are being maintained in accordance with GAAP.



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 of the
jurisdiction applicable to 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. Each Pledgor agrees that, to the
extent notice of sale shall be required by Law and has not been waived by such 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 such 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.
The Collateral Agent shall not be obligated to make any sale of Pledged Collateral of such
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.


 


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(c) Private Sale. Upon the occurrence of an Event of Default and during the
continuation thereof, the Pledgors recognize 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. Each 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 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. Each 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 (ii) made privately in the manner described above shall be
deemed to involve a “public sale” under the UCC, notwithstanding that such sale may not
constitute a “public offering” under the Securities Act, 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 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 Pledgors shall be jointly and severally
liable for the deficiency (subject to Section 25 hereof), together with interest
thereon at the Default Rate, together with the costs of collection and reasonable attorneys’
fees and expenses. Any surplus remaining after the full payment and satisfaction of the
Secured Obligations shall be returned to the Pledgors 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, each 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 such 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;


 


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(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;




(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.


 


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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 willful 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 10.06 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 of the Pledged Collateral while being held by the Collateral
Agent hereunder, the Collateral Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that the Pledgors 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 Pledgors. 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, each Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral of such 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 applicable Pledgor that the Collateral Agent
intends to exercise its rights pursuant to this paragraph (ii), all rights
of a 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, each 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.


 


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




(A) all rights of a 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 a 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 other property or funds of such 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 the Credit Agreement or other document relating to the Secured Obligations,
and each 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 Pledgors agree to promptly pay upon demand any and all reasonable costs
and expenses (including reasonable attorneys’ 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.


 


10









 






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 Pledgors, forthwith release all of its liens and security
interests hereunder and shall execute and deliver all UCC termination statements and/or
other documents reasonably requested by the Pledgors evidencing such termination.
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 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 attorneys’ 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.



16. Successors in Interest. This Pledge Agreement shall create a continuing security
interest in the Collateral and shall be binding upon each 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
none of the Pledgors may 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.


 


11









 





20. Governing Law; Submission to Jurisdiction; Venue.




(a) THIS PLEDGE AGREEMENT 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;
PROVIDED THAT THE COLLATERAL AGENT SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.




(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS PLEDGE AGREEMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK, NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS PLEDGE AGREEMENT, EACH PARTY
HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS PLEDGE AGREEMENT OR OTHER DOCUMENT RELATED HERETO. EACH PARTY
HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.




(c) EACH PARTY TO THIS PLEDGE AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS PLEDGE AGREEMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS PLEDGE AGREEMENT, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS PLEDGE AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.



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.



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 favor 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.


 


12









 





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 a 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. Joint and Several Obligations of Pledgors.




(a) Subject to subsection (c) of this Section 25, each of the Pledgors
is accepting joint and several liability hereunder in consideration of the financial
accommodation to be provided by the holders of the Secured Obligations, for the mutual
benefit, directly and indirectly, of each of the Pledgors and in consideration of the
undertakings of each of the Pledgors to accept joint and several liability for the
obligations of each of them.




(b) Subject to subsection (c) of this Section 25, each of the Pledgors
jointly and severally hereby irrevocably and unconditionally accepts joint and several
liability with the other Pledgors with respect to the payment of all of the Secured
Obligations arising under this Pledge Agreement, the other Loan Documents and any other
documents relating to the Secured Obligations, it being the intention of the parties hereto
that all the payment Secured Obligations shall be the joint and several obligations of each
of the Pledgors without preferences or distinction among them.




(c) Notwithstanding any provision to the contrary contained herein, in any other of the
Loan Documents or in any other documents relating to the Secured Obligations, the
obligations of each Guarantor under the Credit Agreement and the other Loan Documents shall
be limited to an aggregate amount equal to the largest amount that would not render such
obligations subject to avoidance under Section 548 of the Bankruptcy Code of the United
States or any other applicable Debtor Relief Law (including any comparable provisions of any
applicable state law).



26. 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.


 


13









 






27. Termination and Release.




(a) This Pledge Agreement and all security interests granted hereby shall terminate
when (i) all of the Obligations under the Loan Documents (excluding contingent obligations
as to which no claim has been made) have been paid in full in cash, (ii) all Commitments
have terminated or expired and (iii) the aggregate amount available to be drawn under
Letters of Credit has been reduced to zero (including as a result of obtaining the consent
of the applicable L/C Issuer through the provision of Cash Collateral or other arrangement
satisfactory to the applicable L/C Issuer) and no L/C Issuer has any further obligation to
issue or amend Letters of Credit under the Credit Agreement.




(b) All security interests granted hereby shall also terminate and be released at the
time or times and in the manner set forth in Section 10.10 of the Credit Agreement.




(c) In connection with any termination or release pursuant to subsection (a) or
(b) of this Section 27, the Collateral Agent shall execute and deliver to
any Pledgor, at such Pledgor’s expense, all documents that such Pledgor shall reasonably
request to evidence such termination or release so long as the applicable Pledgor shall have
provided the Administrative Agent such certifications or documents as the Collateral Agent
shall reasonably request in order to demonstrate compliance with this Section 27.
Any execution and delivery of documents by the Collateral Agent pursuant to this Section
shall be without recourse to or warranty by the Collateral Agent.



[Signatures on Following Pages]



 


14









 





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.



	 	 	 	 	 
	PLEDGORS: 	 ARMSTRONG WORLD INDUSTRIES, INC.,

a Pennsylvania corporation

 	 
	 	By:  	/s/  Thomas J. Waters
 	 
	 	 	Name:  	Thomas J. Waters 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	ARMSTRONG REALTY GROUP, INC.,

a Pennsylvania corporation

 	 
	 	By:  	/s/  Thomas J. Waters
 	 
	 	 	Name:  	Thomas J. Waters 	 
	 	 	Title:  	Treasurer and Assistant Secretary 	 
	 
	 	ARMSTRONG VENTURES, INC.,

a Delaware corporation

 	 
	 	By:  	/s/  Thomas J. Waters
 	 
	 	 	Name:  	Thomas J. Waters 	 
	 	 	Title:  	Assistant Treasurer 	 
	 
	 	ARMSTRONG WOOD PRODUCTS, INC.,

a Delaware corporation

 	 
	 	By:  	/s/  Thomas J. Waters
 	 
	 	 	Name:  	Thomas J. Waters 	 
	 	 	Title:  	Treasurer 	 
	 
	 	AWI LICENSING COMPANY,

a Delaware corporation

 	 
	 	By:  	/s/  Thomas J. Waters
 	 
	 	 	Name:  	Thomas J. Waters 	 
	 	 	Title:  	Treasurer 	 
	 
	 	ARMSTRONG HARDWOOD FLOORING COMPANY,

a Tennessee corporation

 	 
	 	By:  	/s/  Thomas J. Waters
 	 
	 	 	Name:  	Thomas J. Waters 	 
	 	 	Title:  	Treasurer 	 
	 



ARMSTRONG WORLD INDUSTRIES, INC.

PLEDGE AGREEMENT




 


 









 





	 	 	 	 	 
	 	PATRIOT FLOORING SUPPLY, INC.,

a Delaware corporation

 	 
	 	By:  	/s/  Thomas J. Waters
 	 
	 	 	Name:  	Thomas J. Waters 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	HOMERWOOD HARDWOOD FLOORING COMPANY,

a Delaware corporation

 	 
	 	By:  	/s/  Thomas J. Waters
 	 
	 	 	Name:  	Thomas J. Waters 	 
	 	 	Title:  	Treasurer 	 
	 



ARMSTRONG WORLD INDUSTRIES, INC.

PLEDGE AGREEMENT





 


 









 








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.

PLEDGE AGREEMENT



 


 









 




SCHEDULES




	 	 	 
	Schedule 2(a)

	 	Pledged Stock





EXHIBITS




	 	 	 
	Exhibit 4(a)

	 	Form of Stock Power





 


 








 





Schedule 2(a)




to




Amended and Restated Pledge Agreement




dated as of November 23, 2010




in favor of Bank of America, N.A.,




as Collateral Agent




PLEDGED STOCK




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Number	 	 	Certificate	 
	Pledgor	 	Issuer	 	of Shares	 	 	Number	 
	Armstrong World Industries, Inc.	 	Armstrong Realty Group, Inc.
	 	 	1,000	 	 	 	1	 
	Armstrong World Industries, Inc.	 	Armstrong Ventures, Inc.
	 	 	505	 	 	 	1	 
	Armstrong World Industries, Inc.	 	AWI Licensing Company
	 	 	1,000	 	 	 	1	 
	Armstrong World Industries, Inc.	 	Armstrong Wood Products, Inc.
	 	 	1,000	 	 	NCS-2	 
	Armstrong Wood Products, Inc.	 	Armstrong Hardwood Flooring Company
	 	 	65,700	 	 	 	101	 
	Armstrong Wood Products, Inc.	 	Patriot Flooring Supply, Inc.
	 	 	1	 	 	 	3	 
	Armstrong Hardwood Flooring Company	 	HomerWood Hardwood Flooring Company
	 	 	10	 	 	 	1	 







 


 











 




Exhibit 4(a)




to




Amended and Restated Pledge Agreement




dated as of November 23, 2010




in favor 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 Shares
	 	Certificate 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.



	 	 	 	 	 
	 	[HOLDER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: