ARMSTRONG WORLD INDUSTRIES INC (Form: 8-K, Received: 10/02/2006 15:52:13)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): OCTOBER 2, 2006

ARMSTRONG WORLD INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

        PENNSYLVANIA                      1-2116                  23-0366390
(State or other jurisdiction of        (Commission            (I.R.S. employer
         incorporation)                file number)          identification no.)

P.O. BOX 3001, LANCASTER,
PENNSYLVANIA 17604 (Address of principal
executive offices) (Zip code)

Registrant's telephone number, including area code: (717) 397-0611

NOT APPLICABLE
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Introduction

On October 2, 2006 (the "Effective Date"), the Fourth Amended Plan of Reorganization, as Modified, dated February 21, 2006 (the "Plan of Reorganization"), of Armstrong World Industries, Inc. (the "Company"), which was confirmed by order of the U.S. District Court for the District of Delaware (the "Court") on August 18, 2006, became effective and the Company emerged from proceedings under Chapter 11 of the U.S. Bankruptcy Code. The Company on December 6, 2000 had filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in order to use the court-supervised reorganization process to achieve a resolution of asbestos-related liability claims against the Company. The Plan of Reorganization includes a comprehensive settlement resolving the Company's liability for asbestos-related personal injury claims by establishing and funding the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust (the "Asbestos Trust") for the benefit of current and future asbestos personal injury claimants against the Company. The Plan of Reorganization is Exhibit 2.1 hereto and was filed as Exhibit 2.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 2005 and is summarized in Note 2 to the Company's financial statements for the quarter ended June 30, 2006 included in the Company's Form 10-Q report for such quarter. Further information regarding the Plan of Reorganizations is contained in the Company's Disclosure Statement dated June 2, 2003, which is filed as Exhibit 99.2 to the Company's Form 8-K report filed on May 23, 2003 (the "Disclosure Statement").

In implementation of the Plan of Reorganization, the Company, among other things, is required to make to the Asbestos Trust and to the holders of allowed general unsecured creditor claims against the Company cash payments (and, in certain circumstances, notes) in an amount to be determined in accordance with the Plan of Reorganization, which will be $1,125 million at a minimum and may be greater depending on the amount of the Company's "Available Cash" (as defined in the Plan of Reorganization) on the Effective Date,. The bulk of such payments are expected to be made by October 17, 2006.

On the Effective Date, among other things, all pre-existing equity interests in the Company (which were owned by a wholly-owned subsidiary of Armstrong Holdings, Inc.) were cancelled pursuant to the Plan of Reorganization, and the articles of incorporation of the Company were amended and restated (as so restated, the "Articles") to authorize 200,000,000 Common Shares, par value $0.01 per share (the "Common Shares"), and 15,000,000 Preferred Shares, without par value (the "Preferred Shares"). The by-laws of the Company were simultaneously amended and restated (as so restated, the "By-laws") Pursuant to the Plan of Reorganization, the Company issued on the Effective Date or will subsequently issue thereafter a total of 56.4 million Common Shares to the its creditors. The Asbestos Trust has received 65.57% of such shares and the holders of allowed unsecured creditor claims against the Company will receive 34.43% of such shares. As a result, the Company today ceased to be a subsidiary of Armstrong Holdings, Inc. The Plan of Reorganization also provides for the establishment of the 2006 Long-Term Incentive Plan of the Company (the "LTIP"), under which the Company is authorized to issue to officers and key employees incentive awards in respect of up to 5,349,000 Common Shares. The Company adopted the LTIP and has obtained shareholder approval of it and its material terms on the Effective Date. Incentive awards for a total of 2,122,600 Common

Shares are being granted in connection with the Company's emergence from Chapter
11. No Preferred Shares were or are to be issued pursuant to the Plan of Reorganization and none are currently planned to be issued.

On the Effective Date, the Company's Board of Directors was reconstituted to consist of nine members selected in connection with the development of the Plan of Reorganization and designated in an exhibit to the Plan of Reorganization and the order of the Court confirming the Plan of Reorganization.

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

Described below are material agreements entered into in connection with the Company's emergence from Chapter 11.

Credit Agreement

On the Effective Date, the Company, together with certain of subsidiaries of the Company as guarantors, entered into a credit agreement (the "Credit Agreement") with a syndicate of lenders, Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A. and Barclays Bank PLC, as Co-Syndication Agents, and LaSalle Bank National Association and The Bank of Nova Scotia, as Co-Documentation Agents.

The Credit Agreement provides the Company with a $300 million revolving credit facility (the "Revolving Credit Facility"), with sublimits for letters of credit and swing-line loans and contemplates a $300 million Tranche A term loan (the "Tranche A Term Loan") and a $500 million Tranche B term loan (the "Tranche B Term Loan" and, together with the Tranche A Term Loan, the "Term Loans"). The Revolving Credit Facility is currently available and will be used to support the Company's on-going liquidity needs. The Term Loans are not yet committed, pending completion of the lender syndicate, but are currently expected by the Company to become available and to be funded on or about October 16, 2006. The proceeds of the Term Loans will be used to fund in part certain cash distributions required by the Plan of Reorganization to be made by the Company to creditors and to the Asbestos Trust. The Plan of Reorganization provides for the Company to issue certain notes (the "Plan Notes") instead of making a portion of such cash distributions in the event the Term Loans are not committed and funded in a sufficient amount by the time distributions are to be made to the Company's creditors. The Revolving Credit Facility and the Tranche A Term Loan will mature on October 2, 2011, and the Tranche B Term Loan will mature on October 2, 2013.

Borrowings under the Credit Agreement bear interest at a rate equal to an applicable margin plus, at the Company's option, either (a) a base rate determined by reference to the higher of (1) the federal funds rate plus 1/2 of 1% or (2) the "prime rate" of Bank of America, N.A. or (b) a LIBOR rate determined by reference to the British Bankers Association LIBOR Rate as published by Reuters for the interest period relevant to such borrowing adjusted for certain additional reserves. The initial applicable margin for borrowings under the Revolving Credit Facility will be 0.50% with respect to base borrowings and 1.50% with respect to LIBOR borrowings, with such applicable margins subject to adjustment based on the Company's leverage ratio. The Company expects that the initial applicable margin for the Tranche A Term Loan to be 0.50% with respect to base rate borrowings and 1.50% with respect to LIBOR borrowings, with such applicable margins subject to adjustment based on the Company's leverage ratio. The Company expects the applicable margin for the

Tranche B Term Loan to be 1.00% with respect to base rate borrowings and 2.00% with respect to LIBOR borrowings. In addition to paying interest on outstanding principal under the Credit Agreement, the Company will pay a commitment fee to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder at a rate per annum equal to 0.375% (subject to adjustment based on the Company's leverage ratio). The Company also expects to pay customary letter of credit fees.

The Credit Agreement requires the Company to prepay outstanding loans, subject to certain exceptions, with (i) 100% of the net cash proceeds of all non-ordinary course asset sales and casualty and condemnation events, subject to certain exceptions and limitations, and (ii) 50% of the Company's excess cash flow, subject to certain exceptions based on the Company's leverage ratio and debt ratings. In addition, the Company may voluntarily repay outstanding loans under the Credit Agreement at any time without premium or penalty, other than customary "breakage" costs with respect to LIBOR loans.

All obligations under the Credit Agreement will be unconditionally guaranteed by each of the Company's existing and future, direct and indirect, material domestic subsidiaries, subject to certain exceptions. All obligations of the Company under the Credit Agreement, and the guarantees of those obligations (as well as cash management obligations and any interest hedging or other swap agreements), will be secured by substantially all of the Company's assets as well as those of each subsidiary guarantor, subject to certain exceptions. These security interests will be released in certain circumstances based on the Company's debt ratings and the repayment in full of the Tranche B Term Loan.

The Credit Agreement requires the Company to comply with various covenants and restrictions, including covenants and restrictions relating to indebtedness, liens, investments, mergers and acquisitions, dividends and transactions with affiliates of the Company, each of which will be subject to certain exceptions. Additionally, the Credit Agreement contains financial covenants requiring the Company to maintain a maximum consolidated leverage ratio and a minimum consolidated interest coverage ratio. The Credit Agreement will also contain customary events of default.

The foregoing is only a brief description of material terms of the Credit Agreement, a copy of which is attached hereto as Exhibit 10.1 and to which reference is made for more detailed information regarding the Credit Agreement's terms.

Asbestos Trust Agreement

On October 2, 2006, the Company, in accordance with the Plan of Reorganization, entered into a trust agreement establishing the Asbestos Trust with certain individuals as trustees. As provided by the Plan of Reorganization,

the Company on October 2, 2006 issued to the Asbestos Trust 36,981,480 Common Shares. In addition, the Company will also pay on or about October 16, 2006 to the Asbestos Trust in cash an amount to be determined in accordance with the Plan of Reorganization in a minimum amount of approximately $ 724.9 million. These distributions discharge the Company's present and future liability for asbestos personal injury claims. In the event the Term Loans are not committed and funded by the time the cash payment is required to be made to the Asbestos Trust, the Company under the Plan of Reorganization may instead issue to the Asbestos Trust Plan Notes for part of such amount. The Company will play no role in the administration of the Asbestos Trust. A copy of the trust agreement is attached hereto as Exhibit 10.2.

Stockholder and Registration Rights Agreement

The Company and the Asbestos Trust on October 2, 2006 entered into a Stockholder and Registration Rights Agreement (the "Stockholder Agreement"), which provides, among other things, (i) a process for the Asbestos Trust to initiate the registration by the Company under the Securities Act of 1933, as amended (the "Securities Act"), for public sale of the Common Shares of the Company issued to the Asbestos Trust under the Plan of Reorganization, (ii) if the Company does not make the full cash payment to the Asbestos Trust required by the Plan of Reorganization, as referred to above, the registration by the Company under the Securities Act for public sale of the Plan Notes issued to the Asbestos Trust instead of making such cash payment; (iii) certain rights of minority shareholders to participate in certain sales of Common Shares and similar transactions undertaken by the Asbestos Trust; (iv) certain restrictions on actions that may be taken by the Company without the approval of the Asbestos Trust and (v) certain voting obligations of the Asbestos Trust with respect to the Common Shares owned by it. In general, the Asbestos Trust will have the same rights and be subject to the same obligations under the Stockholder Agreement with respect to any securities issued to it in respect of the Common Shares (or Plan Notes) as a dividend or distribution or as a result of a recapitalization of the Company, merger, exchange of securities or a similar transaction. In addition, the same provisions will apply in respect of any shares of the Company, other than Common Shares, that are entitled to vote in the election of directors which the Asbestos Trust may in the future come to own.

o Common Share and Plan Note Registration Rights

Pursuant to the Stockholder Agreement, the Asbestos Trust will be granted registration rights with respect to its shares of the Common Shares. These registration rights will include the right to "demand" registrations and unlimited "piggyback" rights with respect to registrations by the Company of its Common Shares. The Asbestos Trust, however, will not be permitted to demand registration of less than $100 million in aggregate principal amount of its shares of the Common Shares (or such lesser amount that the Asbestos Trust may hold at such time), and the Company will not be required to effect more than one demand registration in any nine-month period. In addition, the Asbestos Trust will not be permitted to demand registration or sell or otherwise transfer or dispose of its Common Shares for 90 days following the effective date of a

registration statement filed by the Company relating to the sale of Common Shares or any other equity security of the Company for the Company's benefit (or 180 days in the case of a registration statement related to the first registered public offering of equity by the Company after the Effective Date, with certain exceptions), except for Common Shares included in such registration.

The Stockholder Agreement provides that the Company has the customary right to refuse a demand registration under certain circumstances and for limited periods of time and that the Company will bear the costs and expenses associated with any registration and includes other customary terms, provisions, representations and warranties typically contained in registration rights agreements, including indemnification and contribution rights.

Pursuant to the Stockholder Agreement, the Asbestos Trust has also been granted the right to "demand" registrations with respect to Plan Notes owned by the Asbestos Trust, if Plan Notes are issued under the Plan of Reorganization. The terms of such registration rights are substantially similar to the registration rights afforded the Asbestos Trust with respect to Common Shares.

o Minority Shareholder Rights

As long as the Asbestos Trust is the beneficial owner of 20% or more of the outstanding Common Shares (determined as provided by the Stockholder Agreement), the holders of Common Shares other than the Asbestos Trust will have the right to participate with the Asbestos Trust in the certain sales of Common Shares by the Asbestos Trust and similar transactions. Subject to certain exceptions, these rights of participation will be triggered by a sale by the Asbestos Trust, in one or a series of related transaction, of Common Shares representing 5% or more of the outstanding Common Shares to a person who will beneficially own more than 35% of the Common Shares or more Common Shares than are then beneficially owned by the Asbestos Trust. These "tagalong" provisions are intended to ensure that the Asbestos Trust does not transfer a substantial block of the Common Shares without affording the minority holders the right to benefit in such transaction on a pro rata basis with the Asbestos Trust and may be affected by the making of a tender offer for the shares held by other Common Shareholder on the same terms on which the Asbestos Trust would sell its shares. Provisions to substantially the same effect are included in the Company's Articles, including provisions with respect to transfers of shares occurring by reason of a corporate transaction such as a merger (as further described in Item 8.01 below), and the Company is not permitted to give effect to a transfer of Common Shares by the Asbestos Trust that is not made in accordance with these provisions.

o Restrictions on Actions By the Company

The Stockholder Agreement provides that until the Asbestos Trust beneficially owns 20% or less of the outstanding Common Shares, the Company shall not, without the Asbestos Trust's approval, adopt or maintain a shareholder rights plan that provides some, but not all, holders of shares of

the Common Shares the right to acquire securities of the Company, for the purpose of making an acquisition of additional voting shares of the Company by a person or group acquiring more than a specified level of ownership in the Company more difficult or expensive. The Articles contain a provision to the same effect, as discussed in Item 8.01.

o Voting Obligations of the Asbestos Trust

Pursuant to the Stockholder Agreement, until the earlier of the tenth anniversary of the Effective Date and such time as the Asbestos Trust ceases to hold 20% or more of the outstanding Common Shares, the Asbestos Trust shall not knowingly nominate for election or vote its shares in favor of the election as a director of an individual, if, by reason of such individual's election, a majority of the members of the Board of Directors would cease to be "independent directors" within the meaning of the listing standards promulgated by NYSE and also Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

In addition, pursuant to the Stockholder Agreement and related to the selection of the Company's initial directors as of the Effective Date (as discussed in Item 5.01 below), the Asbestos Trust, in connection with the election of directors at the annual meeting of shareholders of the Company first held in 2008, shall vote its shares in favor of the re-election of James J. Gaffney and Robert C. Garland (or his successor in office as a director), or the individual nominated to fill his position on the Board in accordance with the procedures established by Section 4B of Article II of the Bylaws in the event that Mr. Gaffney or Mr. Garland (or his successor in office as a director) is unable or unwilling to serve as director. Further, if a director is to be elected by the shareholders to fill a vacancy on the Board of Directors occurring before the first annual meeting of shareholders held in 2009, the Asbestos Trust shall vote its shares of Voting Shares in favor of the election of the individual nominated by the Board of Directors to fill such vacancy in accordance with Section 4B of Article II of the Bylaws.

The foregoing description of the Stockholder Agreement does not purport to be complete and is qualified in its entirety by the text of the Stockholder Agreement, which is attached as Exhibit 10.3 hereto, and by the Articles and By-laws, which are attached as Exhibits 3.1 and 3.2 hereto, respectively.

2006 Long Term Incentive Plan

The LTIP authorizes the Management Development and Compensation Committee (the "Committee") of the Board of Directors to grant equity-based and cash awards (including performance-based awards) to officers and key employees of the Company. The purpose of the LTIP is to provide incentives which will attract, retain and motivate highly competent persons as officers and key employees of the Company by providing them with appropriate incentives and rewards to encourage them to enter into and continue in the employ of the Company as well as acquire a proprietary interest in the long-term success of the Company.

The following is a summary of the key provisions of the LTIP:

o Number of Shares. The aggregate number of shares reserved and available for grant under the LTIP is 5,349,000 Common Shares. The maximum number of Common Shares with respect to which awards may be granted to any individual participant under the LTIP in any one calendar year shall not exceed 750,000.

o Administration. The LTIP will be administered by the Committee.

o Eligibility. Officers and key employees of the Company are eligible to become participants in the LTIP, as determined by the Committee from time to time.

o Duration of the LTIP. The LTIP became effective as of October 2, 2006, and will terminate on October 2, 2016, after which date no further awards may be made under the LTIP.

o LTIP Awards. The LTIP authorizes the Committee to grant a variety of incentive awards to participants, as described below. Each award shall be evidenced by a written award agreement, which shall specify the terms and conditions of the award, as determined by the Committee in its discretion, subject to the limitations set forth in the LTIP.

* Stock Options. The Committee may grant options to acquire Common Shares, which may be incentive stock options or non-qualified stock options for U.S. federal income tax purposes. The exercise price of an option will be determined by the Committee.

* Stock Appreciation Rights. The Committee may grant stock appreciation rights. Upon the exercise of a stock appreciation right, the holder will have the right to receive the excess, if any, of the fair market value of one Common Share on the date of exercise, over the grant price of the stock appreciation right as determined by the Committee, which will not be less than the fair market value of a Common Share on the date of grant.

* Restricted Stock Awards. The Committee may grant awards of restricted Common Shares, which will be subject to restrictions on transferability and other restrictions as the Committee may impose, including, without limitation, restrictions on the right to vote restricted stock or the right to receive dividends, if any, on the restricted stock. These awards may be subject to forfeiture upon termination of employment or upon a failure to satisfy performance goals during the applicable restriction period.

* Stock Units. The Committee may grant Stock Units (a notional amount equal to one Common Share) which will be subject to such terms and conditions, including form of settlement and vesting, as the Committee determines appropriate and as the award agreement shall specify.

* Cash Awards. The Committee may grant awards to be settled solely in cash. Cash Awards may be subject to such terms and conditions, including vesting, as the Committee determines appropriate. The maximum Cash Award that may be paid to any participant in any one year is $3,000,000.

* Performance-Based Awards. The Committee may grant an award that will entitle the holder to receive a specified number of Common Shares, or cash in lieu of shares, or a combination thereof, if certain performance goals or market conditions are met. Performance-based awards can be determined based on the following criteria, individually or in combination, alone or in reference to other companies' performance: (i) net earnings; (ii) earnings per share; (iii) sales; (iv) operating income; (v) earnings before interest and taxes; (vi) earnings before interest, taxes, depreciation and amortization; (vii) cash flow; (viii) working capital targets; (ix) return on equity; (x) return on capital;
(xi) market price per share; and (xii) total return to shareholders.

o Interpretation. The Committee has the power to set, alter or change the rules, guidelines and regulations for the administration of the LTIP, and to interpret the LTIP and any and all guidelines, rules and regulations so adopted.

o Amendment or Termination. The Company may amend or terminate the LTIP at any time. The LTIP may not be amended to: (i) increase the aggregate number of shares of Common Shares available for awards under the LTIP;
(ii) increase the maximum number of shares or maximum Cash Award that may be awarded to any participant; (iii) change the types of business criteria on which Performance-Based Awards are to be based under the LTIP; or (iv) modify the requirements as to eligibility for participation in the LTIP without approval of the majority of the shareholders of the Company.

o Anti-Dilution. The number of Common Shares with respect to which awards may be granted under the LTIP or subject to any outstanding award, and the nature of the securities which may be issued under the LTIP, shall be adjusted, as applicable, as a result of stock splits, stock dividends, or other subdivisions or combinations of the Common Shares, or reorganizations, mergers, consolidations, dividends or reclassifications affecting the Company.

o Change in Control. In the event of a Change in Control (as defined in the LTIP) of the Company, all then outstanding and unvested Stock Options, Stock Appreciation Rights, Restricted Stock Awards and Stock Units shall immediately vest and become exercisable and any restrictions on transfer of such awards shall immediately lapse. Among other things, an acquisition by any person (other than the Asbestos Trust) of beneficial ownership of 35% or more of the Common Shares (determined as provided in the LTIP) will constitute a Change in Control for this purpose.

The foregoing description of the LTIP does not purport to be complete and is qualified in its entirety by the LTIP, which is filed as Exhibit 10.4 hereto.

The Committee has granted on October 2, 2006, non-qualified Stock Options and Restricted Stock Awards under the LTIP to 72 officers and key employees of the Company involving, together, a total of 2,122,600 Common Shares. The Restricted Stock Awards are conditioned upon the Company registering the shares involved under the Securities Act of 1933, as amended (the "Securities Act"). The Company expects to register such shares in October. The exercise price of the Stock Options shall be the volume weighted average of the closing price of the Common Shares over the trading days in the period from the commencement of "regular way" trading in the Common Shares through October 31, 2006. These Stock Options vest in three equal installments on the second, third and fourth anniversaries of the Effective Date, subject to the recipient's continued employment through the relevant vesting date except as otherwise provided by the LTIP. Each Stock Option is subject to the terms and conditions of a Stock Option Agreement and a notice of stock option grant, the forms of which are filed as Exhibits 10.5 and 10.7 hereto, respectively. The Common Shares subject to the Restricted Stock Awards cannot be sold or otherwise transferred by the recipient until the shares vest; the Restricted Shares vest and transfer restriction will lapse in three equal installments on the second, third and fourth anniversaries of the Effective Date, subject to the recipient's continued employment through the relevant vesting date, except as otherwise provided by the LTIP. The recipients are entitled to vote and to receive any dividends or other distributions on the Common Shares subject to the Restricted Stock Awards. The Restricted Stock Awards are subject to the terms and conditions of a Restricted Stock Agreement and a Notice of Restricted Stock Grant, the forms of which are filed as Exhibits 10.6 and 10.7 hereto, respectively.

Among these grants, the Company's executive officers will receive Options for the number of shares and the number of Restricted Shares as set forth in the table below:

Name and Position                                             Options                  Restricted Shares
-----------------                                             -------                  -----------------

Michael D. Lockhart, Chairman and Chief Executive             225,000                        75,000
Officer

Nicholas F. Grasberger, Senior Vice President and             124,200                        41,400
Chief Financial Officer

Stephen J. Senkowski, Executive Vice President                165,600                        55,200

John N. Rigas, Senior Vice President, Secretary and            82,800                        27,600
General Counsel

Frank J. Ready, President and Chief Executive                  82,800                        27,600
Officer of AFP N. America

Donald A. McCunniff, Senior Vice President of Human            82,800                        27,600
Resources

William C. Rodruan, Vice President and Controller              30,000                        10,000

Director and Officer Indemnification Agreements

The Company has entered into, effective as of the Effective Date, indemnification agreements, each in the form attached as Exhibit 10.8 hereto (an "Indemnification Agreement"), with each of its nine directors (who are named below) and each of its executive officers named above providing in each case for indemnification of such director or officer (each an "Indemnitee") against liabilities relating to their service as directors or officers.

The rights of the Indemnitees under the Indemnification Agreements are in addition to any other rights the Indemnitees may have under the Company's Articles or Bylaws or the Pennsylvania Associations Code or otherwise. Each Indemnification Agreement requires the Company to indemnify the Indemnite against liability that may arise by reason of his or her status or service to the Company, unless the Indemnitee acted with willful misconduct or recklessness, as determined by a court. The Indemnification Agreements further require the Company to purchase and maintain director's and officer's insurance coverage for the benefit of the Indemnitees for so long as the Indemnitees are directors or officers or are subject to any possible claim by reason of having been a director or officer, subject to certain exceptions and qualifications.

The Indemnification Agreements require the Company to advance all reasonable expenses incurred by or on behalf of an Indemnitee in connection with any proceeding to which an Indemnitee is, or is threatened to be, made a party or a witness and to indemnify for certain expenses where wholly or partly successful, subject to certain exceptions. In addition, the Indemnification Agreements establish guidelines as to the defense and settlement of claims by the parties.

The foregoing description of the Indemnification Agreements does not purport to be complete and is qualified in its entirety by the form of the Indemnification Agreement, which is attached as Exhibit 10.8 hereto.

ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

The disclosure set forth under Item 1.01 with respect to the Term Loans under the Credit Agreement is incorporated herein by reference.

ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.

As discussed in Item 1.01 above, on the Effective Date the Company issued 36,981,480 Common Shares to the Asbestos Trust. The Company will issue under the Plan of Reorganization up to 19,418,520 Common Shares to holders of allowed general unsecured creditor claims. Most of such shares will be issued on October 17, 2006, but some may be reserved for issuance to holders of general unsecured creditor claims that have not yet been resolved, to the extent their claims are allowed, or, to the extent such claim are disallowed, to all holders of allowed general unsecured creditor claims, divided among them pro rata in

accordance with the amount of their allowed claims. For a description of the claims discharged by reason of the issuance of such Common Shares to the Asbestos Trust and holders of allowed unsecured claims, see the Disclosure Statement and the Plan of Reorganization. The issuance of these Common Shares is exempt from registration under the Securities Act pursuant to Section 1145 of the U.S. Bankruptcy Code.

ITEM 3.03. MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS.

On the Effective Date, among other things, the Company pursuant to the Plan of Reorganization and the order of the Court confirming the Plan of Reorganization was discharged of all of its obligations respecting its previously outstanding debt securities, which included its 9% Medium-Term Notes Due 2001, 6.35% Senior Notes Due 2003, 6.50% Senior Notes Due 2005, 9.75% Debentures Due 2008, 7.45% Senior Notes Due 2029 and 7.45% Senior Quarterly Interest Bonds Due 2038, as well as all other general unsecured creditor claims against the Company subject to the Plan of Reorganization, in exchange for the distributions of cash (or cash and Plan Notes in the circumstances described in Item 1.01 above) and Common Shares provided by the Plan of Reorganization. In addition, the pre-existing equity interests in the Company were cancelled pursuant to the Plan of Reorganization. Also on the Effective Date, the articles of incorporation of the Company were amended and restated to authorize 200,000,000 Common Shares and 15,000,000 Preferred Shares, which may be issued in one or more series, each with such designations, rights, powers, preferences and privileges as may be provided by the Board of Directors or otherwise provided in accordance with the Articles.

ITEM 5.01. CHANGES IN CONTROL OF THE REGISTRANT.

As described in the Introduction, on the Effective Date, pursuant to the Plan of Reorganization all securities of the Company outstanding immediately prior to the Effective Date, including all the then outstanding common shares of the Company, which were owned by Armstrong Holdings, Inc., were cancelled.

As described in the Introduction and Item 1.01, on the Effective Date the Asbestos Trust was issued 36,981,480 Common Shares and became the sole shareholder of the Company. After the issuance of the additional Common Shares provided by the Plan of Reorganization to general unsecured creditors, the Asbestos Trust will own approximately 65.57 % of the Common Shares. By virtue of such share ownership, the Asbestos Trust may be considered to control the Company, subject to the provisions regarding the composition of the Board of Directors of the Company contained in the Articles, the By-laws and the Stockholder Agreement. As a result of the Company's emergence from Chapter 11, the identity of a majority of the directors of the Company's Board of Directors has changed as described in Item 5.02 below.

ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.

(d) On the Effective Date, in connection with the Company's emergence from Chapter 11, the size of the Company's Board of Directors was expanded to nine members. In implementation of the Plan of Reorganization, the following individuals were elected directors on the Effective Date: James J. Gaffney, Robert C. Garland, Scott D. Miller, Russell F. Peppet, Arthur J. Pergament and Alexander M. Sanders, Jr. In addition, in accordance with the Plan of Reorganization, Michael D. Lockhart, Judith R. Haberkorn and John J. Roberts, who were previously elected as directors, continue as members of the Board of Directors and Mr. Lockhart continues to serve as Chairman of the Board of Directors and Chief Executive Officer of the Company. These nine directors were selected in connection with the development of the Plan of Reorganization and named in an exhibit to the Plan of Reorganization and the order confirming the Plan of Reorganization. Specifically, Messrs. Miller, Peppet, Pergament and Sanders were selected jointly by the Official Committee of Asbestos Claimants and the Future Claimants' Representative appointed in the Company's Chapter 11 case, Messrs. Gaffney and Garland were selected by the Official Committee of Unsecured Creditors appointed in the case and Ms Haberkorn and Mr. Roberts were selected jointly by all three of such parties in the case. The continuation of Mr. Lockhart, Chief Executive Officer of the Company, as a member and Chairman of the Board of Directors was endorsed by all three of such parties. Pursuant to the Articles, the Bylaws and the Stockholders Agreement, the initial nine directors will have an initial term of office ending at the 2008 annual meeting of shareholders and, thereafter, a term ending at the next annual meeting of shareholders (and, in each case, the election and qualification of his or her successor).

ITEM 8.01. OTHER EVENTS.

Common Shares have or will be issued in connection with the Plan of Reorganization, as described above. The following is a description of the Common Shares and a summary of certain material provisions of the Articles and Bylaws of the Company, which have been amended and restated as of the Effective Date. This summary is qualified by the text of the Articles and the Bylaws, which are attached as Exhibits 3.1 and 3.2 hereto, respectively.

The holders of the Common Shares are entitled to one vote per share on all matters to be voted upon by the holders of Common Shares. Holders of the Common Shares are entitled to vote on all matters (including the election of all directors) on which the shareholders of the Company are entitled to vote. The Company's Board of Directors is not classified and all directors are elected for the same term of office by vote of the Common Shareholders.

Directors to be elected by the holders of Common Shares shall be elected by plurality vote and on all other matters, except as otherwise provided by the Articles and Bylaws or by law, the affirmative vote of the holders of a majority of the Common Shares present and voting at a meeting at which a quorum is present shall constitute the act of the Common Shareholders. The initial term of office of the directors extends until the 2008 annual meeting of shareholders of the Company. After the 2008 annual meeting of shareholders, their term extends until the next annual meeting of shareholders at which directors are elected, in each case subject to the earlier death, resignation, disqualification, removal or incapacity of a director. Amendment of the By-laws, approval of the issuance of Preferred Shares and certain other actions by the Board of Directors require a supermajority vote of the Board of Directors.

The holders of the Common Shares are entitled to receive dividends, when and as declared by the Company's Board of Directors, out of assets legally available for that purpose. The holders of the Common Shares have no preemptive, subscription or conversion rights, and the Common Shares are not subject to redemption.

The Articles provide that, commencing on the Effective Date and continuing until the Asbestos Trust first ceases to be the beneficial owner (determined as provided in the Articles) of at least 20% of the outstanding Common Shares, the Asbestos Trust may not, subject to certain exceptions, transfer, in one transaction or a series of related transactions, any Common Shares, or other shares entitled to vote generally in the election of directors ("Voting Shares"), representing more than 5% of the Common Shares (or entitled to cast more than 5% of the votes that may be cast in the election of directors) to any purchaser who, after giving effect to such transaction or transactions, would beneficially own shares enabling such person to cast more than 35% of the votes which may be cast by the holders of all shares entitled to vote are entitled to vote generally in the election of directors or more of such votes than the Asbestos Trust is entitled to cast. The Asbestos Trust may, however, effect such an otherwise prohibited transfer if:

(1) the transfer is a public sale of shares made in compliance with certain provisions of the U.S. federal securities laws or in certain derivative transactions (as specified in the Articles), or

(2) all other holders of Common Shares have an opportunity to participate in the transaction or series of transactions on the same terms as the Asbestos Trust, or

(3) in the case of a disposition of shares by the Asbestos Trust pursuant to a merger, consolidation, recapitalization or similar corporate transaction involving the Company, the material terms of the transaction have been approved by a majority of the Company's directors who have no personal financial interest in the transaction or by such vote of the holders of the Common Shares as is required by law, the Company's articles of incorporation or bylaws (as then in effect) or applicable listing standards, provided that, if a transaction referred to in this clause (3) would result in the Asbestos Trust receiving a type or amount of consideration per Common Share that is different from the consideration to be received by other holders of Common Shares, the transaction must be approved by the affirmative vote of the holders of a majority of the Common Shares not beneficially owned by the Asbestos Trust (in addition to any other required shareholder approval).

The Articles further provide that, until such time as the Asbestos Trust first ceases to be the beneficial owner of at least 20% of the outstanding Voting Shares, any transaction between the Company or any of its subsidiaries and the Asbestos Trust or any affiliate thereof (other than a dividend or other distribution made to all shareholders pro rata to their shareholdings and otherwise on terms which are the same with respect to the Asbestos Trust and all other participating shareholders), shall require review by and approval of a majority of the disinterested directors of the Company (as defined in the Articles), whether or not such review and approval is required by law or applicable listing standards, subject to any exception from such review and approval for transactions of an immaterial nature determined under such criteria

as have been approved in advance by a majority of the disinterested directors; provided that, in the case of any transaction involving any change in the shares of the Company, or any dividend, distribution or payment in respect of outstanding shares of the Company, that would result in the Asbestos Trust receiving any dividend, distribution, security, other property or payment that differs from that which would be received by all other holders of Common Shares, then the approval of the holders of a majority of the Common Shares not owned or controlled by the Asbestos Trust shall be required (in addition to approval by any shareholder vote otherwise required, but approval of a majority of the disinterested directors, as such, shall not be required).

Also until such time as the Asbestos Trust first ceases to be the beneficial owner of at least 20% of the outstanding Common Shares, the Company shall not without the prior, written consent of the Asbestos Trust:

(a) authorize any new class of shares (i.e., other than the Common Shares or Preferred Shares);

(b) issue any Preferred Shares, other than "Conventional Preferred Shares" as defined in the Articles;

(d) before the fifth anniversary of the Effective Date, implement any stock option, restricted stock, stock bonus or stock purchase plan, or any similar plan or arrangement, pursuant to which any one or more of the officers, directors or employees of, or consultants to, the Company or any of its subsidiaries, or any person who is the beneficial owner of 5% or more of the Voting Shares, may acquire shares of the Company, except:

(1) as permitted by the LTIP,

(2) for a dividend reinvestment plan or any plan or arrangement whereby any dividend, distribution, offer, issuance or sale of options, warrants, subscription rights or other equity interests is offered or made to shareholders of the Company generally, substantially in proportion to their shareholdings, or

(3) where options or shares are to be issued to a person not previously employed by the Company, as an inducement to such person's entering into an employment or consulting contract with the Company.

Until the Asbestos Trust first ceases to be the beneficial owner of at least 20% of the outstanding Voting Shares, the Board of Directors is required to present to the shareholders nominations of candidates for election to the Board of Directors (or recommend the election of such candidates as nominated by others) such that, and shall take such other corporate actions as may be reasonably required to provide that, to the best knowledge of the Board of Directors, if such candidates are elected by the shareholders, at least a majority of the members of the Board of Directors shall be independent directors (determined in accordance with the listing standards of the market on which the Common Shares are listed and in compliance with the standards of independence required by Rule 10A-3 under the Exchange Act). In addition, the Board of Directors shall only elect any person to fill a vacancy on the Board of

Directors if, to the best knowledge of the Board of Directors, after such person's election at least a majority of the members of the Board of Directors shall be independent directors.

The rights of the Common Shareholders, as described above, are subject to the rights of Preferred Shareholders, if any Preferred Shares are issued.

The Articles and By-laws also require, in effect, the affirmative vote of the Asbestos Trust for the amendment of the provisions of the Articles and By-laws providing to the Asbestos Trust the rights described above.

On October 2, 2006, the Company issued a press release announcing its emergence from Chapter 11, and discussing certain of the foregoing matters. A copy of the press release is attached hereto as Exhibit 99.1 and is hereby incorporated herein by reference.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

2.1         Fourth Amended Plan of Reorganization, as Modified, dated February
            21, 2006, of Armstrong World Industries, Inc., incorporated by
            reference from Exhibit 2.3 to the Annual Report on Form 10-K of
            Armstrong World Industries for the year ended December 31, 2005.

3.1         Amended and Restated Certificate of Incorporation of Armstrong World
            Industries, Inc.

3.2         Bylaws of Armstrong World Industries, Inc.

10.1        Credit Agreement, dated as of October 2, 2006, by and among the
            Company, certain subsidiaries of the Company as guarantors, Bank of
            America, N.A., as Administrative Agent, the other lenders party
            thereto, JPMorgan Chase Bank, N.A. and Barclays Bank PLC, as
            Co-Syndication Agents, and LaSalle Bank National Association and The
            Bank of Nova Scotia, as Co-Documentation Agents.

10.2        The Armstrong World Industries, Inc. Asbestos Personal Injury
            Settlement Trust Agreement, dated as of October 2, 2006, by and
            among Armstrong World Industries, Inc. and, as trustees, Anne M.
            Ferazzi, Harry Huge, Paul A. Knuti, Lewis R. Sifford and Thomas M.
            Tully.

10.3        Stockholder and Registration Rights Agreement, dated as of October
            2, 2006, by and between Armstrong World Industries, Inc. and the
            Armstrong World Industries, Inc. Asbestos Personal Injury Asbestos
            Trust.

10.4        Armstrong World Industries, Inc. 2006 Long-Term Incentive Plan.

10.5        Form of Armstrong World Industries, Inc. 2006 Long-Term Incentive
            Plan Stock Option Agreement.

10.6        Form of Armstrong World Industries, Inc. 2006 Long-Term Incentive
            Plan Restricted Stock Award Agreement.

10.7        Form of Armstrong World Industries, Inc. 2006 Long-Term Incentive
            Plan notice of restricted stock and or option award.

10.8        Form of Indemnification Agreement for directors and officers of
            Armstrong World Industries, Inc.

99.1        Press Release of Armstrong World Industries, Inc. dated October 2,
            2006.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 2, 2006

ARMSTRONG WORLD INDUSTRIES, INC.

By: /s/ Walter T. Gangl
    ----------------------------------------------
    Walter T. Gangl
    Deputy General Counsel and Assistant Secretary

EXHIBIT INDEX

Exhibit No.                              Description
-----------                              -----------

2.1         Fourth Amended Plan of Reorganization, as Modified, dated February
            21, 2006, of Armstrong World Industries, Inc., incorporated by
            reference from Exhibit 2.3 to the Annual Report on Form 10-K of
            Armstrong World Industries for the year ended December 31, 2005.

3.1         Amended and Restated Certificate of Incorporation of Armstrong World
            Industries, Inc.

3.2         Bylaws of Armstrong World Industries, Inc.

10.1        Credit Agreement, dated as of October 2, 2006, by and among the
            Company, certain subsidiaries of the Company as guarantors, Bank of
            America, N.A., as Administrative Agent, the other lenders party
            thereto, JPMorgan Chase Bank, N.A. and Barclays Bank PLC, as
            Co-Syndication Agents, and LaSalle Bank National Association and The
            Bank of Nova Scotia, as Co-Documentation Agents.

10.2        The Armstrong World Industries, Inc. Asbestos Personal Injury
            Settlement Trust Agreement, dated as of October 2, 2006, by and
            among Armstrong World Industries, Inc. and, as trustees, Anne M.
            Ferazzi, Harry Huge, Paul A. Knuti, Lewis R. Sifford and Thomas M.
            Tully.

10.3        Stockholder and Registration Rights Agreement, dated as of October
            2, 2006, by and between Armstrong World Industries, Inc. and the
            Armstrong World Industries, Inc. Asbestos Personal Injury Asbestos
            Trust.

10.4        Armstrong World Industries, Inc. 2006 Long-Term Incentive Plan.

10.5        Form of Armstrong World Industries, Inc. 2006 Long-Term Incentive
            Plan Stock Option Agreement.

10.6        Form of Armstrong World Industries, Inc. 2006 Long-Term Incentive
            Plan Restricted Stock Award Agreement.

10.7        Form of Armstrong World Industries, Inc. 2006 Long-Term Incentive
            Plan notice of restricted stock and /or option award.

10.8        Form of Indemnification Agreement for directors and officers of
            Armstrong World Industries, Inc.

99.1        Press Release of Armstrong World Industries, Inc. dated October 2,
            2006.

EXHIBIT 3.1

AMENDED AND RESTATED ARTICLES OF INCORPORATION

ARMSTRONG WORLD INDUSTRIES, INC.

(THE "CORPORATION")

FIRST: Name. The name of the Corporation is Armstrong World Industries, Inc.

SECOND: Registered Office. The location and post office address of its registered office in this Commonwealth is 2500 Columbia Avenue, Lancaster, Lancaster County, Pennsylvania.

THIRD: Purposes. The purpose or purposes for which the Corporation is incorporated under the Business Corporation Law of 1998 of the Commonwealth of Pennsylvania (the "PBCL") are to engage in, and do any lawful act concerning, any or all lawful business for which corporations may be incorporated under the PBCL, including, but not limited to, manufacturing, purchasing and selling a variety of interior furnishings, interior finish materials and related services for residential, commercial and institutional interiors, including resilient floors and carpeting, ceiling materials and ceiling systems, furniture and related accessory items; as well as insulation materials and industrial specialties; engaging in research and development, furnishing services, and acquiring, owning, using, and disposing of real property of any nature whatsoever.

FOURTH: Duration. The term of its existence is perpetual.

FIFTH: Authorized Shares.

(A) The authorized shares of the Corporation shall be of two classes:
15,000,000 Preferred Shares without par value, which may be issued in series as hereinafter provided, and 200,000,000 Common Shares, par value $0.01 per share.

(B) A description of each class of shares and a statement of the designations, voting rights, preferences, limitations and special rights granted to or imposed upon the shares of each class and of the authority vested in the Board of Directors of the Corporation to establish series of Preferred Shares and to set, and determine variations in, the designations, voting rights, preferences, limitations and special rights of the series of Preferred Shares are as follows:

(i) The holders of Common Shares shall be entitled to receive dividends, when and as declared by the Board of Directors, out of assets legally available therefor.

(ii) The holders of Common Shares shall have one vote per share.

(iii) The Corporation may issue shares, option rights or securities having conversion or option rights, without first offering them to holders of Preferred Shares or Common Shares.

(iv) The Board of Directors may in its discretion, at any time or from time to time, issue or cause to be issued all or any part of the authorized and unissued Common Shares for consideration of such character and value as the Board shall from time to time set or determine.

(v) (a) Subject to paragraph (vii) of Article Sixth (H), the Board of Directors is hereby expressly authorized, at any time or from time to time, by resolution or resolutions adopted by the Board to divide any or all of the Preferred Shares into one or more series, and, before issuance of any of the shares thereof, to set and determine the number of shares and the designation of such series, so as to distinguish it from the shares of all other series and classes, and to set and determine the voting rights, preferences, limitations and special rights of the series of Preferred Shares, or of all series of Preferred Shares, all by amendment of these Articles without approval of the shareholders and otherwise in the manner, and to the fullest extent now or hereafter permitted, by the PBCL, including, but not limited to, providing in respect of a series of Preferred Shares, and providing for variations between different series of Preferred Shares, in the following respects:

(1) the distinctive designation of such series and the number of shares that shall constitute such series, which number may be increased or decreased (but not below the number of shares thereof then outstanding) from time to time by the Board of Directors;

(2) the annual or other dividend rate for such series, and the date or dates from which dividends shall commence to accrue and whether or not dividends shall accumulate;

(3) the price or prices at which, and the terms and conditions on which, the shares of such series may be made redeemable;

(4) the redemption or purchase, and sinking fund provisions, if any, for the redemption or purchase, of shares of such series;

(5) the preferential amount or amounts payable upon shares of such series in the event of liquidation, dissolution, or winding up of the Corporation;

(6) the voting powers and rights, if any, of shares of such series;

(7) the terms and conditions, if any, upon which shares of such series may be converted or exchanged and the class or classes or series of shares of the Corporation or other securities into which such shares may be converted or exchanged;

(8) the relative seniority, priority or junior rank of such series as to dividends or assets with respect to any other classes or series of stock then or thereafter to be issued; and

(9) such other terms, qualifications, privileges, limitations, options, restrictions, and special or relative rights and preferences, if any, of shares of such series as the Board of Directors may, at the time of such resolution or resolutions, lawfully set or determine under the laws of the Commonwealth of Pennsylvania.

(b) Unless otherwise provided by law, the articles of incorporation or bylaws of the Corporation or in a resolution or resolutions establishing any particular series of Preferred Shares adopted pursuant to this Article Fifth, the aggregate number of authorized Preferred Shares Stock may be increased by an amendment of the articles of incorporation of the Corporation approved solely by the affirmative vote of the holders of a majority of the outstanding Common Shares.

(c) All shares within each series of Preferred Shares shall be alike in every particular, except with respect to the dates from which dividends shall commence to accrue or with respect to other rights, powers or privileges which may vary among the holders of such shares based on the number of shares held or the duration of their shareholdings.

(d) The Board of Directors may in its discretion, at any time or from time to time, issue or cause to be issued all or any part of the authorized and unissued Preferred Shares for consideration of such character and value as the Board of Directors shall from time to time set or determine.

(vi) Notwithstanding the foregoing provisions of this Article Fifth, the Board of Directors shall not issue or cause to be issued nonvoting shares of the Corporation or warrants, rights or options to acquire nonvoting shares of the Corporation (to the extent that issuance of nonvoting equity securities is prohibited by a debtor corporation by section 1123(a)(6) of title 11 of the United States Code).

(C) Any or all classes and series of shares of the Corporation, or any part thereof, may be represented by uncertificated shares to the extent determined by the Board of Directors, except that shares represented by a certificate that is issued and outstanding shall continue to be represented thereby until the certificate is surrendered to the Corporation. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof a written notice containing the information required by law to be set forth or stated on share certificates. The rights and obligations of the holders of shares represented by certificates and the rights and obligations of the holders of uncertificated shares of the same class and series shall be identical.

SIXTH: Management of the Corporation's Business and Affairs.

(A) Commencing with the effective date of these Amended and Restated Articles of Incorporation (October 2, 2006, the "Effective Date"), the Board of Directors shall be composed of nine members and, thereafter, subject to paragraph (vii) of Article Sixth (H) hereof, the Board of Directors shall have such number of members as shall be determined by or pursuant to the bylaws of the Corporation, provided (i) that, until the annual meeting of shareholders

first held in 2009, (the "Third Year Annual Meeting"), the number of members shall not be less than nine and (ii) no reduction in the number of members shall end the term of office of any director earlier than such term of office would otherwise end. Commencing with the Effective Date, the initial term of office of all directors shall extend from the Effective Date until the annual meeting of shareholders first held in 2008 (the "Second Year Annual Meeting"), and until the election at such annual meeting and the qualification of the director's successor, or until his or her earlier disqualification, resignation, removal, death or incapacity. The term of office of any director elected by the shareholders or the Board of Directors, as permitted by law, to fill any vacancy on the Board of Directors occurring before the Second Year Annual Meeting shall extend until the Second Year Annual Meeting and until the election at such annual meeting and qualification of the director's successor, or until his or her earlier disqualification, resignation, removal, death or incapacity. After the Second Year Annual Meeting, commencing in the case of each director upon his or her election at such annual meeting and qualification, the term of office of all directors shall extend until the next annual meeting of shareholders and the election at such annual meeting and qualification of the director's successor, or until his or her earlier disqualification, resignation, removal, death or incapacity, and the term of office of any director elected by the shareholders or the Board of Directors, as permitted by law, to fill any vacancy on the Board of Directors occurring after the Second Year Annual Meeting shall extend until the next annual meeting of shareholders and until the election at such annual meeting and qualification of the director's successor, or until his or her earlier disqualification, resignation, removal, death or incapacity.

(B) In addition to the right of the Board of Directors under law to remove a director for cause, and subject to the voting rights of the holders of any series of Preferred Stock, directors whose term of office is scheduled to expire at the (2009) Third Year Annual Meeting may be removed from office before the expiration of their terms of office only (i) for Cause (as defined below) with the affirmative vote of the holders of a majority of the Common Shares present (in person or by proxy) at a meeting of shareholders at which a quorum is present or by the written consent in lieu of a meeting, as permitted by law, of the holders of a majority of the Common Shares or (ii) without Cause with the affirmative vote or written consent, as permitted by law, of the holders of 75% of the Common Shares. In addition to the right of the Board of Directors under law to remove a director for cause, and subject to the voting rights of the holders of any series of Preferred Shares, commencing with the Third Year Annual Meeting, directors may be removed from office before the expiration of their terms of office at any time, with or without cause, by the affirmative vote of the holders of a majority of the Common Shares present (in person or by proxy) at a meeting of shareholders at which a quorum is present or, as permitted by law, by the written consent in lieu of a meeting of the holders of a majority of the Common Shares. For the avoidance of doubt, from said date forward, directors may be removed from office without assigning any cause regarding such removal. For purposes of this Article Sixth (B), "Cause" for the removal of a director shall mean conviction of a felony, any act of dishonesty in respect of the Corporation or a breach of fiduciary duty to the Corporation. With respect to the nomination of directors for election at the (2008) Second Year Annual Meeting, the provisions of Section 4B of the bylaws as in effect on the Effective Date shall apply.

(C) With respect to the election of directors, each shareholder shall be entitled to cast for any candidate for election as a director only one vote per share and shareholders shall not be entitled to cumulate their votes and

cast them in favor of one candidate or distribute them among any two or more candidates.

(D) A director of the Corporation shall not be personally liable, as such, for monetary damage for any action taken by him or her unless he or she has breached or failed to perform the duties of his or her office under subchapter B of chapter 17 of the PBCL and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness, except as otherwise specifically provided by the PBCL. No amendment or repeal of this Article Sixth (D) shall apply to or have any effect on the liability or alleged liability of any person who is or was a director of the Corporation for or with respect to any act or omission occurring prior to the effective date of such amendment or repeal. If Pennsylvania law is amended to permit a Pennsylvania corporation to provide greater protection to persons who serve or have served as directors of the corporation from personal liability with respect to their service to the corporation as directors than provided by the terms of this Article Sixth (D), then such protection shall also apply to the person who serve or have served as directors of the Corporation and this Article Sixth (D) shall be construed to provide such greater protection. To the fullest extent permitted by law (including, without limitation, as permitted by section 1746 of the PBCL) from time to time in effect, the Corporation shall indemnify persons who, after the Effective Date, serve as its directors and officers and shall advance to them expenses incurred in defending or responding to claims, actions, investigations, inquiries and other proceedings and may, by provisions in its bylaws, by contract and by any other means permitted by law, establish reasonable procedures for the making of such indemnification and advancement of expenses and may further obligate itself to provide indemnification or to advance expenses to such persons and may set apart funds to provide for the payment thereof. To the fullest extent permitted by law (including, without limitation, as permitted by section 1746 of the PBCL) from time to time in effect, the Corporation may indemnify persons who before the Effective Date served as directors or officers of the Corporation and persons who, before or after the Effective Date, serve as its employees and agents and may advance to them expenses incurred in defending or responding to claims, actions, investigations, inquiries and other proceedings and may, by provisions in its bylaws, by contract and by any other means permitted by law, obligate itself to provide indemnification or to advance expenses to such persons and may set apart funds to provide for the payment thereof. Notwithstanding the foregoing provisions of this Article Sixth (D), if Pennsylvania law shall be amended so as to limit or reduce the indemnification which a Pennsylvania corporation may provide to its directors or officers from that in effect on the Effective Date, then, to the fullest extent permitted by law, such limitation or reduction shall not apply to or have any effect on the right to indemnity or advancement of expenses provided by this Article Sixth (D) to a person who served as a director or officer of the Corporation with respect to any act or omission occurring prior to the effective date of such amendment.

(E) Commencing on the Effective Date, none of the provisions of Subchapters 25D, 25E, 25F, 25G and 25H of the PBCL (as in effect on such date) shall apply to the Corporation, except as may be required by law.

(F) Special meetings of shareholders may be called by the Board of Directors, by shareholders entitled to cast at least 20% of the votes that all shareholders generally are entitled to cast in the election of directors, by such holders of Preferred Shares as may be permitted to call a meeting of shareholders by provision of an amendment to the articles of incorporation of

the Corporation adopted by the Board of Directors as provided by Article Fifth (B) hereof and by such officers of the Corporation or other persons as may be provided in the bylaws of the Corporation.

(G) To the fullest extent and in the manner permitted by law, any action required or permitted to be taken at a meeting of shareholders or a class or series of shareholders may be taken without a meeting of the shareholders or of such class or series of shareholders upon the consent in writing signed by such shareholders who would have been entitled to vote the minimum number of votes that would be necessary to authorize the action at a meeting at which all the shareholders entitled to vote thereon were present and voting.

(H) Commencing on the Effective Date and continuing until the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust (the "Settlement Trust") first ceases to be the Beneficial Owner (as hereinafter defined) of at least 20% of the outstanding Common Shares of the Corporation, the following additional provisions shall apply to the management of the business and affairs of the Corporation:

(i) Until the (2009) Third Year Annual Meeting, in addition to any requirements or limitations relating to the establishment or functions of a committee of the Board of Directors provided by law and to any requirements relating thereto established by the bylaws, the selection of the members of any committee of the Board of Directors shall require approval by the affirmative vote of at least all but one of the members of the Board of Directors (assuming no vacancies).

(ii) The Board of Directors shall present to the shareholders nominations of candidates for election to the Board of Directors (or recommend the election of such candidates as nominated by others) such that, and shall take such other corporate actions as may be reasonably required to provide that, to the best knowledge of the Board of Directors, if such candidates are elected by the shareholders, at least a majority of the members of the Board of Directors shall be Independent Directors (as hereinafter defined). The Board of Directors shall only elect any person to fill a vacancy on the Board of Directors if, to the best knowledge of the Board of Directors, after such person's election at least a majority of the members of the Board of Directors shall be Independent Directors. The foregoing provisions of this paragraph shall not cause a director who, upon commencing his or her service as a member of the Board of Directors was determined by the Board of Directors to be an Independent Director but did not in fact qualify as such, or who by reason of any change in circumstances ceases to qualify as an Independent Director, from serving the remainder of the term as a director for which he or she was selected. Notwithstanding the foregoing provisions of this paragraph, no action of the Board of Directors shall be invalid by reason of the failure at any time of a majority of the members of the Board of Directors to be Independent Directors. For purposes hereof, "Independent Director" shall mean a director who (i) qualifies as an "independent director" within the meaning of the corporate governance listing standards from time to time adopted by the New York Stock Exchange or the Nasdaq Stock Market, whichever the Common Shares are listed for trading on at the time (or, if at any time the Common Shares are not listed on either such market, as would be applicable if the Common Shares were then listed on the New York Stock Exchange) with respect to the composition of the board of directors of a listed company (without regard to any independence criteria applicable under such standards only to the members of a committee of the board

of directors) and (ii) also satisfies the minimum requirements of director independence of Rule 10A-3(b)(1) under the Securities Exchange Act, as amended, as from time to time in effect (the "Exchange Act")), whether or not such director is a member of the audit committee.

(iii) The Settlement Trust will not Transfer (as hereinafter defined), in one transaction or a series of related transactions, any Common Shares representing more than five percent of the outstanding Common Shares (or Voting Shares (as hereinafter defined) entitling the holders thereof to cast more than five percent of all the votes which the holders of all Voting Shares are entitled to cast in the election of directors of the Corporation) to any Person (a "Proposed Purchaser") who, after giving effect to the transaction or series of related transactions, would Beneficially Own Voting Shares entitling the holders thereof to cast more than 35% of the votes which the holders of all Voting Shares are entitled to cast in the election of directors of the Corporation or more of such votes than the Settlement Trust is entitled to cast, and the Corporation will not register or give effect to any such Transfer, unless (A) such Transfer is (1) pursuant to a bona fide public distribution made either under an effective registration statement under the Securities Act of 1933, as amended (and from time to time in effect), (2) in a transaction satisfying the requirements of Regulation S (and from time to time in effect) under such Act, (3) in a transaction satisfying the requirements of Rule 144 (as from time to time in effect) under such Act, other than by reason of satisfying the provisions of Rule 144(k) thereof, or (4) is effected through "brokers' transactions" within the meaning of Section 4(4) of such Act or a transaction with a "market maker" as defined in Section 3(c)(38) of the Exchange Act, or (B) all other Common Shareholders are afforded the opportunity to participate in the transaction or series of transactions on the same terms (including, without limitation, the same type and amount of consideration per share) as the Settlement Trust, which requirement shall be deemed satisfied if the other Common Shareholders are provided an opportunity to sell the Voting Shares they own in accordance with the following provisions of this paragraph, or (C) in the case of a disposition of shares of Voting Shares by the Settlement Trust pursuant to a merger, consolidation, recapitalization or similar corporate transaction involving the Corporation, the material terms of the transaction have been approved by a majority of the Disinterested Directors (as defined in paragraph (v) of this Article Sixth (H)) or such vote of the holders of the Common Shares as is required by law, the articles of incorporation or the bylaws of the Corporation or applicable listing standards; provided, however, that, if the transaction would result in the Settlement Trust receiving a type or amount of consideration per share in respect of its shares that is different from the other Common Shareholders, the transaction has been approved by the affirmative vote of the holders of a majority of the Common Shares not Beneficially Owned by the Settlement Trust (in addition to approval by any other shareholder vote required). The entry by the Settlement Trust into a prepaid variable share forward contract or other derivative contract (such as those known as TRACES or SAILS) shall not constitute a Transfer of shares for purposes of this paragraph, even if it relates to Voting Shares entitling the holders thereof to cast more than five percent of all the votes which the holders of all Voting Shares are entitled to cast in the election of directors of the Corporation, to the extent such contract is a legitimate hedging transaction and neither such contract nor the settlement thereof will result in a counterparty becoming the Beneficial Owner of Voting Shares entitling the holders thereof to cast more than 35% of the votes which the holders of all Voting Shares are entitled to cast in the election of directors of the Corporation or more of such votes than the Settlement Trust is entitled to cast). The terms and conditions of a Transfer by the Settlement Trust of Common Shares to a Proposed Purchaser will be deemed

permitted by this paragraph if, in connection with such Transfer, the Proposed Purchaser shall have publicly undertaken to commence a tender offer in accordance with the Exchange Act and the applicable regulations thereunder, which shall be scheduled to close not later than 60 days after the Transfer of the Settlement Trust's shares (subject to any extension where required to satisfy conditions established by such tender offer), pursuant to which the other Common Shareholders will have the right to tender for purchase for the same type and amount of consideration per share available to the Settlement Trust in the Transfer, at each other Common Shareholder's option, a number of Common Shares equal to the product of (i) the total number of Common Shares owned by the other Common Shareholders and (ii) a fraction, the numerator of which shall be the number of Common Shares that the Settlement Trust proposes so to Transfer to the Proposed Purchaser and the denominator of which shall be the total number of Common Shares then owned by the Settlement Trust. For purposes hereof, (i) "Transfer" shall mean, directly or indirectly transfer, to sell, assign, donate, contribute, place in trust (including a voting trust), or otherwise voluntarily or involuntarily dispose of, (ii) "Voting Shares" shall mean shares of the Corporation, of any class or series, entitled to vote for the election of directors of the Corporation (including Common Shares), other than Preferred Shares entitled to vote for the election of directors who are to be elected only by the holders of a particular class or series of shares, or collectively by the holders of two or more classes or series of shares, and only in the event of an arrearage in payment of dividends on such class or series of shares and who constitute less than one-third of all the directors (assuming no vacancies on the Board of Directors), and (iii) "Beneficially Owned" or "Beneficial Ownership" shall have the meaning prescribed by Regulation 13D-G under the Exchange Act, as amended and from time to time in effect.

(iv) The Corporation shall not, without the prior written approval of the Settlement Trust, adopt or maintain a shareholder rights plan, "poison pill" or similar plan (however designated) which provides some, but not all, holders of Common Shares, in the event of the acquisition by any person or group of persons acting in concert of Voting Shares (as defined in paragraph (iii) of Article Sixth (H) hereof) constituting more than a specified level of ownership of the Corporation and with or without additional conditions or exceptions (an "Acquiring Person"), the right to acquire securities of the Corporation or of any successor company, or of any controlling person thereof, on more favorable terms than available to the Acquiring Person, or which limits the voting or other rights or the Acquiring Person, or which is otherwise designed to, or has the effect of, similarly making acquisition of additional Voting Shares by an Acquiring Person more difficult or expensive than would be the case in the absence of such shareholder rights or similar plan by providing to other shareholders any right or benefit which the Acquiring Person is not accorded.

(v) Any transaction between the Corporation or any Subsidiary (as hereinafter defined) and the Settlement Trust or any Affiliate (as hereinafter defined) thereof (other than a dividend or other distribution made to all shareholders pro rata to their shareholdings and otherwise on terms which are the same with respect to the Settlement Trust and all other participating shareholders), shall require review by and approval of a majority of the Disinterested Directors (as hereinafter defined), whether or not such review and approval is required by law or applicable listing standards, subject to any exception from such review and approval for transactions of an immaterial nature determined under such criteria as have been approved in advance by a majority of the Disinterested Directors; provided, however, that, in the case of any

transaction or series of related transactions involving the cancellation, retirement, disposition, conversion, exchange or reclassification of the shares of the Corporation, or any dividend, distribution or payment in respect of outstanding shares of the Corporation, pursuant to a merger, consolidation, recapitalization, reorganization or similar corporate transaction, which transaction would result in the Settlement Trust receiving any dividend, distribution, security, other property or payment that differs from that which would be received by all other holders of Common Shares, then the approval of the holders of a majority of the Common Shares not owned or controlled by the Settlement Trust shall be required (in addition to approval by any shareholder vote otherwise required, but approval of the Disinterested Directors shall not be required hereby). For the purposes hereof, (A) "Affiliate" (and "Affiliated") shall have the meaning ascribed to such term in Rule 12b-2 under the Exchange Act, as in effect on the Effective Date, (B) "Disinterested Directors" in respect of a transaction or potential transaction (or category of immaterial transactions) shall mean the directors of the Corporation who are not Affiliated with the Settlement Trust and who have no personal financial interest in the transaction (other than the same interest, if a shareholder of the Corporation, as the other shareholders of the Corporation) and (iii) "Subsidiary" shall mean any company controlled, directly or indirectly, by the Corporation.

(vi) Sections 4 and 5 of Article II of the bylaws of the Corporation as in effect on the Effective Date shall not apply to the Settlement Trust and the Board of Directors shall not adopt any bylaw or take any other action that would eliminate, limit, regulate or subject to any condition or procedural requirement the submission of any matter by the Settlement Trust for consideration by the shareholders at a meeting or by written consent, including (without limitation) the nomination of candidates for election of directors; provided, however, that this provision shall not prevent the Board of Directors from taking any action regarding shareholder nominations or shareholder proposals applicable to shareholders generally (even though also applicable to the Settlement Trust on a basis no more restrictive than any other shareholder) if such action is required by the Exchange Act or a regulation issued thereunder or by listing standards of the market on which the Common Shares are listed for trading and the Corporation cannot comply with such requirement by taking any action that does not restrict the Settlement Trust or is less restrictive on the Settlement Trust.

(vii) The Corporation shall not without the prior, written consent of the Trust (in addition to any shareholder vote required under applicable law):

(a) authorize any new class of shares (i.e., other than the Common Shares or Conventional Preferred Shares);

(b) issue any Preferred Shares, other than Conventional Preferred Shares (as hereinafter defined);

(c) before October 2, 2011, the fifth anniversary of the Effective Date, implement any stock option, restricted stock, stock bonus or stock purchase plan, or any similar plan or arrangement, pursuant to which any one or more of the officers, directors or employees of, or consultants to, the Corporation or any of its Subsidiaries, or any person who is the Beneficial Owner of 5% or more of the Voting Shares, may acquire shares of the Corporation, except:

(1) as permitted by the Long-Term Incentive Plan of the Corporation adopted on or about the Effective Date,

(2) for a dividend reinvestment plan or any plan or arrangement whereby any dividend, distribution, offer, issuance or sale of options, warrants, subscription rights or other equity interests is offered or made to shareholders of the Corporation generally, substantially in proportion to their shareholdings, or

(3) where options or shares are to be issued to a person not previously employed by the Corporation, as an inducement to such person's entering into an employment or consulting contract with the Corporation.

"Conventional Preferred Shares" shall mean Preferred Shares which satisfy all of the following requirements:

(a) the Preferred Shares are not convertible into, exchangeable for or exercisable to acquire Common Shares or any other class or series of shares of the Corporation, except that Preferred Shares shall be Conventional Preferred Shares if, but only if, they may be convertible into, exchangeable for or exercisable (1) only at a fixed conversion, exchange or exercise ratio or price (except that such conversion, exchange or exercise ratio or price may be subject to anti-dilution adjustments that are conventional for publicly-offered, investment-grade convertible preferred shares), (2) only at a conversion, exchange or exercise price (or ratio equivalent to a price) that, in the good faith judgment of the Board of Directors based on the advice of a nationally recognized investment banking firm, represents a premium to the market price of the Common Shares at the time of issuance of such Preferred Shares, and (3) only to acquire the number of Common Shares that (together with any other Preferred Shares to be issued in any related transaction), at the time of issuance of such Preferred Shares, would represent not more than 20% of the sum of the total number of Common Shares outstanding at the time of issuance of such Preferred Shares plus the number of Common Shares that would be issued upon exercise in full of such conversion, exchange or acquisition rights of such Preferred Shares;

(b) the Preferred Shares are not entitled to participate in dividends or distributions with the Common Shares or to dividends or distributions based on earnings or other results of operations of the Company (except insofar as earnings or results of operations may affect the amount legally available for the payment of dividends);

(c) the Preferred Shares and are not entitled to vote in the election of directors or vote on or consent to any other matter, except to vote on or consent to the election of not more than two directors in the event of an arrearage in the payment of preferred dividends thereon for a period of not less than 180 days and to vote on or consent to any amendment to the articles of incorporation of the Corporation that would adversely affect the rights, powers or privileges of such Preferred Shares or a merger, consolidation or other similar corporate transaction that would have the effect of leaving the Preferred Shares outstanding and amending the rights, powers or privileges of such Preferred Shares as established by the articles of incorporation of the Corporation in a way that would adversely affect such rights, powers or privileges, and

(d) the Preferred Shares do not have, in the good faith judgment of the Board of Directors approved by the affirmative vote of three-fourths of the members of the Board of Directors based on the advice of a nationally recognized investment banking firm and after consultation with the Settlement Trust, other rights, powers or privileges which are not customary for publicly-offered, investment-grade preferred shares.

(viii) Any amendment or repeal of the bylaws of the Corporation by the Board of Directors permitted by Article Eighth (B) hereof, and any change in the number of members of the Board of Directors permitted by Article Sixth (A) hereof to be made by the Board of Directors as provided pursuant to the bylaws of the Corporation, shall require the affirmative vote of at least 75% of the Board of Directors (assuming no vacancy on the Board of Directors); provided, however, that, without the prior written consent of the Settlement Trust, the Board may not increase the number of members of the Board of Directors to be more than nine at any time when the holders of Preferred Shares (of one or more series) are permitted to elect one or more directors.

(ix) Any amendment of the articles of incorporation of the Corporation, other than an amendment permitted without a vote of the shareholders in accordance with Article Fifth (B) hereof, and any action by the Board of Directors of the Corporation to establish or issue any series of Preferred Shares as permitted by Article Fifth (B) hereof shall require the affirmative vote of at least 75% of the Board of Directors (assuming no vacancy on the Board of Directors).

SEVENTH: Amendment of Articles of Incorporation: The articles of incorporation of the Corporation may be amended, modified or repealed and new provisions adopted as permitted by law, except that the provisions of Articles Sixth (A), (B), (F), (G) and (H) and this Article Seventh of these Amended and Restated Articles of Incorporation may be amended, modified or repealed, and any inconsistent provision may be adopted, only with the affirmative vote or written consent, as permitted by law, of the holders of 80% of the Common Shares.

EIGHTH: Effective Time; Bylaws.

(A) These Amended and Restated Articles of Incorporation shall become effective immediately upon filing with the Office of the Secretary of State of the Commonwealth of Pennsylvania on October 2, 2006.

(B) The bylaws of the Corporation adopted by the sole shareholder of the Corporation before the effective time of these Amended and Restated Articles of Incorporation and by their terms effective upon the effectiveness hereof shall be the bylaws of the Corporation commencing on the effectiveness hereof and may thereafter be amended, to the extent provided by such bylaws, by the shareholders or (to the fullest extent permitted by law, including, without limitation, with respect to the matters referred to in section 1504(b) of the PBCL) by the Board of Directors (subject, however, to the power of the shareholders to adopt, amend and repeal bylaws).

EXHIBIT 3.2

BYLAWS
of
ARMSTRONG WORLD INDUSTRIES, INC.

(A Pennsylvania corporation)

As in effect on October 2, 2006

ARTICLE I
Certain Definitions; Principal Office; Notices to the Corporation

SECTION 1. Certain Definitions. Unless the context otherwise requires, the following terms when used herein shall have the following meanings:

(a) "ARTICLES" shall mean the articles of incorporation of the Corporation, as from time to time amended and in effect in accordance with law, and shall include any amendment determining the designation, voting rights, preferences, limitations and special rights of Preferred Shares of the Corporation made by the Board as permitted by law, as then in effect.

(b) "BENEFICIAL OWNERSHIP" shall have the same meaning as provided by Regulation 13D-G under the Exchange Act, as from time to time in effect (and any successor regulation).

(c) "BOARD" shall mean the Board of Directors of the Corporation as constituted in accordance with Article III of the Bylaws.

(d) "BYLAWS" shall mean the Bylaws of the Corporation as from time to time amended and in effect in accordance with law. References in the Bylaws to "herein," "hereof" or "hereto," or any like reference, shall refer to the Bylaws (as amended and in effect from time to time) as a whole and not to any specific Article, Section, subsection, paragraph, sentence or clause of the Bylaws unless explicitly provided.

(e) "CORPORATION" shall mean Armstrong World Industries, Inc., the Pennsylvania corporation incorporated by the filing of articles of incorporation with the Secretary of State of the Commonwealth of Pennsylvania on December 30, 1891.

(f) "EFFECTIVE TIME" shall mean the effective time of these bylaws as provided by Article X hereof, namely October 2, 2006.

(g) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended and as the same may be amended from time to time (and any successor statute).

(h) "INDEPENDENT DIRECTOR" shall mean a director who (i) qualifies as an "independent director" within the meaning of the corporate governance listing standards from time to time adopted by the NYSE or Nasdaq, whichever market the Common Shares are listed for trading on at the time (or, if at any time the Common Shares are not listed for trading on either such market, as would be applicable if the Common Shares were then listed on the NYSE) with respect to

the composition of the board of directors of a listed company (without regard to any independence criteria applicable under such standards only to the members of a committee of the board of directors) and (ii) also satisfies the minimum requirements of director independence of Rule 10A-3(b)(1) under the Exchange Act (as from time to time in effect), whether or not such director is a member of the audit committee.

(i) "NYSE" shall mean the New York Stock Exchange.

(j) "NASDAQ" shall mean the Nasdaq Stock Market.

(k) "SUBSIDIARY" shall mean any company controlled, directly or indirectly, by the Corporation.

(l) "WHOLE BOARD" shall mean the number of members of the Board at any time if there were then no vacancies on the Board.

SECTION 2. Principal Office; Notices to the Corporation. The principal office of the Corporation shall be at such location in Lancaster, Pennsylvania as the Board of Directors shall from time to time determine. All notices to the Corporation required or permitted by the Bylaws may be addressed to the principal office of the Corporation and shall be marked to the attention of the Secretary unless otherwise provided herein.

ARTICLE II
Shareholders' Meetings

SECTION 1. Annual Meetings of Shareholders. An annual meeting of shareholders shall be held in each year on such date and at such time as may be set by the Board (or by an officer of the Corporation authorized to do so by the Board) for the purpose of electing directors and the transaction of such other business as may properly come before the meeting; provided, however, that (i) this section shall not require an annual meeting of shareholders during the first full calendar year following the year during which the Effective Time occurs (i.e. 2007) and (ii) an annual meeting of shareholders during the second full calendar year following the year during which the Effective Time occurs (i.e. 2008) shall be held not later than June 30 of such year.

SECTION 2. Special Meetings of Shareholders. Special meetings of the shareholders may be called at any time by the Board (or by an officer of the Corporation authorized to do so by the Board ). A special meeting of the shareholders may also be called by the holders of at least 20% of the votes that all shareholders are entitled to cast at the particular meeting. In addition, a special meeting of the holders of Preferred Shares or any series thereof for the purpose of electing directors who may be elected by such holders or taking any other action that such holders may take, as provided by the Articles, may be called as provided in the Articles. At any time, upon written request of any person or persons entitled to call and who have duly called a special meeting, it shall be the duty of the Secretary to set the date of the meeting, if such date has not been set by the Board, on a day not more than sixty days after the receipt of the request, and to give due notice of such meeting to the shareholders. If the Secretary shall neglect or refuse to set the date of the meeting and give notice thereof, the person or persons calling the meeting may do so.

SECTION 3. Place and Notice of Meetings of Shareholders. All meetings of shareholders shall be held at the principal office of the Corporation unless the Board (or an officer of the Corporation authorized to do so by the Board)shall decide otherwise, in which case such meetings may be held at such location within or without the Commonwealth of Pennsylvania as the Board may from time to time direct. Written notice of the place, day, and hour of all meetings of shareholders and, in the case of a special meeting, of the general nature of the business to be transacted at the meeting, shall be given to each shareholder of record entitled to vote at the particular meeting either personally or by sending a copy of the notice through the mail or by overnight courier to the address of the shareholder appearing on the books of the Corporation or supplied by such shareholder to the Corporation for the purpose of notice or by other means including electronic means permitted by law. Except as otherwise provided by the Bylaws or by law, such notice shall be given at least 10 days before the date of the meeting by the President, Vice President, or Secretary. A waiver in writing of any written notice required to be given, signed by the person entitled to such notice, whether before or after the time stated, shall be deemed equivalent to the giving of such notice. Attendance of a person, either in person or by proxy, at any meeting shall constitute a waiver of notice of such meeting, except where a person attends a meeting for the express purpose of objecting to the transaction of any business because the meeting was not lawfully called or convened.

SECTION 4. -A. Nominations by Shareholders of Candidates for Election as Directors. In addition to the nomination by the Board of candidates for election to the Board as hereinafter provided, candidates may be nominated by any shareholder of the Corporation entitled to notice of, and to vote at, any meeting called for the election of directors. Subject to the last sentence of Article Sixth (B) of the Articles and to paragraph (vi) of Article Sixth (H) of the Articles, nominations, other than those made by or on behalf of the Board, shall be made in writing and shall be received by the Secretary of the Corporation not later than (i) with respect to an election of directors to be held at an annual meeting of shareholders, (A) for the annual meeting of shareholders to be first held in the second full calendar year (i.e. 2008) following the year during which the Effective Time occurs (the "Second Year Annual Meeting"), by January 15 of such year and (B) for all other annual meetings of shareholders, 90 days prior to the anniversary date of the immediately preceding annual meeting of shareholders (provided that, if the date of the annual meeting of shareholders is more than 30 days before or after the anniversary date of the immediately preceding annual meeting of shareholders, the shareholder nomination shall be received within 15 days after the public announcement by the Corporation of the date of the annual meeting of shareholders, and (ii), with respect to an election of directors to be held at a special meeting of shareholders, the close of business on the 15th day following the date on which notice of such meeting is first given to shareholders or public disclosure of the meeting is first made, whichever is earlier. Such nomination shall contain the following information to the extent known to the notifying shareholder:

>> (a) the name, age, business address, and residence address of each proposed nominee and of the notifying shareholder;

>> (b) the principal occupation of each proposed nominee;

>> (c) a representation that the notifying shareholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;

>> (d) the class and total number of shares of the Corporation that are beneficially owned by the notifying shareholder and by the proposed nominee and, if such shares are not owned solely and directly by the notifying shareholder and the proposed nominee, the manner of beneficial ownership;

>> (e) a description of all arrangements or understandings between the notifying shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the notifying shareholder;

>> (f) such other information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Exchange Act had the nominee been nominated, or intended to be nominated, by the Board of Directors; and

>> (g) the consent of each nominee to serve as a director of the Corporation if so elected.

The Corporation may request any such proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the qualifications of the proposed nominee to serve as a director of the Corporation. Within 15 days following the receipt by the Secretary of a shareholder notice of nomination pursuant hereto, the Nominating and Governance Committee shall instruct the Secretary of the Corporation to advise the notifying shareholder of any deficiencies in the notice as determined by the Committee. The notifying shareholder shall cure such deficiencies within 15 days after receipt of such advice. No persons shall be eligible for election as a director of the Corporation unless nominated in accordance with the Bylaws. Nominations not made in accordance with the Bylaws may, in the discretion of the presiding officer at the meeting and with the advice of the nominating and governance committee of the Board, be disregarded by the presiding officer and, upon his or her instructions, all votes cast for each such nominee may be disregarded; the determinations of the presiding officer at the meeting with respect to such matters shall be conclusive and binding upon all shareholders of the Corporation for all purposes.

- B. Certain Nominations for the Second Year (i.e. 2008) Annual Meeting and to Fill Certain Vacancies. Subject to the mandatory requirements of applicable law, notwithstanding anything to the contrary in the foregoing provisions of Section 4-A of this Article, each of the two individuals identified on Schedule 6.3 of the Stockholder and Registration Rights Agreement between the Corporation and the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust, dated as of the Effective Date (or his successor as a director, if he did not serve for his full initial term until the Second Year Annual Meeting) shall be considered nominated for election as a

director at the Second Year Annual Meeting (in 2008) (if such individual is available and willing to serve as a director). Notwithstanding anything to the contrary in paragraph (c) of Section 9 of Article III hereof, if such individuals (or their successors) are not recommended by the nominating and governance committee and nominated the Board for election as directors at such Second Year Annual Meeting, then the candidate of the nominating and governance committee and nominee of the Board for the position on the Board held by either of such individuals (or his successor as a director, if he did not serve for his full initial term) shall (in addition to any other approval required by law, the Articles or the Bylaws) be subject to approval of each of such individuals if he is then a director or, if he is not then a director, shall be subject to approval by a majority of the other directors of the Corporation at such time, other than any director who is an "affiliated person" of the Trust within the meaning of Rule 10A-3 under the Exchange Act. In addition, with respect to the filling of any vacancy on the Board arising before the Third Year Annual Meeting (in 2009) by reason of the death, disability, resignation, removal or disqualification of either of such two identified individuals (or his successor as selected in accordance with the immediately preceding sentence or Section 3 of Article III hereof), the nomination of an individual to fill such vacancy shall be subject to the same approval as required for a nomination referred to in the immediately preceding sentence.

SECTION 5. Advance Notice of Other Matters to be Presented by Shareholders. At any annual meeting or special meeting of shareholders, only such business as is properly brought before the meeting in accordance with this paragraph may be transacted. Subject to paragraph (vi) of Article Sixth (H) of the Articles, to be properly brought before any meeting, any proposed business must be either (a) specified in the notice of the meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) if brought before the meeting by a shareholder, then (1) written notification of such proposed business must have been received by the Secretary of the Corporation from a shareholder of record on the record date for the determination of shareholders entitled to vote at such meeting not later than
(i), with respect to business to be proposed at an annual meeting of shareholders, (A) for the first annual meeting of shareholders held after the Effective Time, not more than 20 days after the public announcement by the Corporation of the date of the annual meeting of shareholders, and (B) for all other annual meetings of shareholders, 90 days prior to the anniversary date of the immediately preceding annual meeting of shareholders (provided, that, if the date of the annual meeting of shareholders is more than 30 days before or after the anniversary date of the immediately preceding annual meeting of shareholders, the notification must have been received within 15 days after the public announcement by the Corporation of the date of the annual meeting of shareholders) and (ii) with respect to business to be proposed at a special meeting of shareholders, the close of business on the 15th day following the date on which notice of such meeting is first given to shareholders or public disclosure of the meeting is made, whichever is earlier. Such shareholder notification shall set forth the nature of and reasons for the proposal in reasonable detail and, as to the shareholder giving notification, (1) the name and address of such shareholder and (2) the class and series of all shares of the Corporation that are beneficially owned by such shareholder. Within 15 days following receipt by the Secretary of a shareholder notification of proposed business pursuant hereto, the Corporation shall advise the shareholder of any deficiencies in the notification. The notifying shareholder may cure such

deficiencies within 15 days after receipt of such advice, failing which the shareholder's notification shall be deemed invalid.

SECTION 6. Quorum for Shareholder Meetings. At any meeting of the stockholders, the presence, in person or by proxy, of stockholders entitled to cast at least a majority of the votes which all shareholders are entitled to cast upon a matter shall constitute a quorum for the transaction of business upon such matter, and the stockholders present at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. If a meeting cannot be organized because a quorum has not attended, those present may, except as otherwise provided by law, adjourn the meeting to such time and place as they may determine, but in the case of any meeting called for the election of directors, those who attend the second of such adjourned meetings, although less than a quorum, shall nevertheless constitute a quorum for the purpose of electing directors.

SECTION 7. Votes Per Share. Except as otherwise provided in the Articles or by law, every stockholder of record shall have the right, at every stockholders' meeting, to one vote for every share standing in his name on the books of the Corporation. Except as may be explicitly provided for by the Articles with respect to the election of one or more directors by holders of one or more series of Preferred Stock, in the election of directors stockholders shall be entitled to cast for any candidate for election as a director only one vote per share and shall not be entitled to cumulate their votes and cast them for one candidate or distribute them among any two or more candidates.

SECTION 8. Proxies. Every stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for him by proxy. A proxy may be submitted to the Secretary by a stockholder in writing, by telephone, electronically or any other means permitted by law.

SECTION 9. Required Vote for Shareholder Action. Except in respect of the election of directors (as to which a plurality vote shall be required as provided by Article III of the Bylaws) and subject to Section 11 of this Article II, all questions submitted to the stockholders and all actions by the stockholders shall be decided by the affirmative vote of the shareholders present, in person or by proxy, entitled to cast at least a majority of the votes which all shareholders present are entitled to vote on the matter, unless otherwise provided by the Articles, the Bylaws or by law. For purposes of this section, in the event that a holder of shares of a class or series that is entitled to vote on a matter is present in person or by proxy at a meeting but is not permitted by reason of a legal disability or by a contractual restriction or otherwise to vote the shares such holder holds on such matter, the shares held by such holder and not so permitted to be voted shall nevertheless be considered entitled to vote and present for purposes of determining the number of votes required for stockholder action.

SECTION 10. Ballots; Judges of Election. Elections for directors need not be by ballot except on demand made by a stockholder at the election and before the voting begins. In advance of any meeting of stockholders, the Board may appoint judges of election who need not be stockholders to act at such meeting or any adjournment thereof, and if such appointment is not made, the chairman of

any such meeting may, and on request of any stockholder or his proxy shall, make such appointment at the meeting. The number of judges shall be one or three and, if appointed at a meeting on request of one or more stockholders or their proxies, the majority of the shares present and entitled to vote shall determine whether one or three judges are to be appointed. No person who is a candidate for office shall act as a judge. In case any person appointed as judge fails to appear or fails or refuses to act, the vacancy may be filled by appointment made by the Board in advance of the convening of the meeting or at the meeting by the person or officer acting as chairman of the meeting. On request of the chairman of the meeting or of any stockholder or his proxy, the judges shall make a report in writing of any challenge or question or matter determined by them and execute a certificate of any fact found by them.

SECTION 11. Action Without a Meeting. To the fullest extent and in the manner permitted by law, any action required or permitted to be taken at a meeting of the stockholders or of a class or series of stockholders may be taken without a meeting of the stockholders or of such class or series of stockholders upon the consent in writing signed by such stockholders who would have been entitled to vote the minimum number of votes that would be necessary to authorize the action at a meeting at which all the stockholders entitled to vote thereon were present and voting. The consents shall be filed with the Secretary.

ARTICLE III
The Board of Directors

SECTION 1. Authority of the Board of Directors. Except as otherwise provided by law and subject to the provisions of the Articles and the Bylaws, all powers vested by law in the Corporation may be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, a Board of Directors which shall be constituted as provided by law, the Articles and the Bylaws.

SECTION 2. Number Of Directors. In accordance with the Articles, commencing with the Effective Time, the Board shall consist of nine members and, thereafter until the first annual meeting held during the third full calendar year (2009) following the year during which the Effective Time occurs (the "Third Year Annual Meeting"), the Board shall consist of not less than nine members. After the Third Year Annual Meeting, subject to the provisions of law, the Articles and the Bylaws, the Board shall consist of not fewer than seven nor more than eleven individuals, the exact number to be set from time to time by the Board pursuant to a resolution adopted by the affirmative vote of a majority of the Board, plus such number of additional individuals as may be elected by the holders of Preferred Shares in accordance with the Articles and the Bylaws, provided that no reduction in the number of members shall end the term of office of any director earlier than such term of office would otherwise end and provided, further, that, for so long as the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust Beneficially Owns Voting Shares (as defined in paragraph (iii) of Article Sixth (H) of the Articles (as in effect at the Effective Time)) entitling the holders thereof to cast more than 20% of the votes which the holders of all Voting Shares are entitled to cast in the

election of directors, any increase in the number of members of the Board above eleven shall be subject to the prior written consent of such trust.

SECTION 3. Vacancies. Vacancies on the Board (including any vacancy created by an increase in the size of the Board) may be filled by action of the shareholders or the Board, as provided by and subject to applicable law and the Articles. With respect to any vacancy on the Board occurring prior to the Third Year Annual Meeting (2009) by reason of the death, disability, resignation, removal or disqualification of either of the two initial directors of the Corporation as of the Effective Date who are identified on Schedule 6.3 of the Stockholder and Registration Rights Agreement between the Corporation and the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust, dated as of the Effective Date, or the successor to such individual as a director selected in accordance with the following provisions of this sentence or nominated for election at the Second Year Annual Meeting in accordance with the provisions of Section 4-B of Article II hereof, the nomination of such individual for election by the shareholders or for election by the Board to fill the vacancy shall be subject to the approval required by the last sentence of
Section 4-B of Article II hereof.

SECTION 4. Annual Organizational Meeting of the Board. The Board shall hold an annual organizational meeting immediately following the annual meeting of the shareholders at the place thereof, without notice in addition to the notice of the annual meeting of shareholders, or at such other time as soon as practicable after such meeting as the Board shall determine and shall at the annual organizational meeting elect a President, a Secretary and a Treasurer of the Corporation and such other officers of the Corporation as shall be provided by the Bylaws or determined by the Board to be appropriate, shall establish the standing committees of the Board provided by the Bylaws and may take such other action as the Board determines to be appropriate. Officers of the Corporation and standing and other committees of the Board may also be elected at any other time by the Board.

SECTION 5. Other Meetings of the Board. All meetings of the Board, other than the annual organizational meeting, shall be held at the principal office of the Corporation unless the Board (or the person or persons entitled to call and calling the meeting) shall decide otherwise, in which case such meetings may be held at such location within or without the Commonwealth of Pennsylvania as the Board (or the person or persons entitled to call and calling the meeting) may from time to time direct. Regular meetings of the Board shall be held at such time (and place) in accordance with such schedule as the Board shall have determined in advance and no further notice of regular meetings of the Board shall be required. The Independent Directors shall meet periodically without any member of management present and, except as the Independent Directors may otherwise determine, without any other director present to consider the overall performance of management and the performance of the role of the Independent Directors in the governance of the Corporation; such meetings shall be held in connection with a regularly scheduled meeting of the Board except as the Independent Directors shall otherwise determine. Special meetings of the Board may be called by the Chairman of the Board (if any), a Vice Chairman of the Board (if any), the President or by any two or more directors by giving written notice at least two Business Days in advance of the day and hour of the meeting

to each director (unless it is determined by the Chairman of the Board (if any), a Vice Chairman of the Board (if any) or the President to be exigent under the circumstances for the protection of the interests of the Corporation that the Board meet earlier, in which case no less than twenty-four hours notice shall be given), either personally or by facsimile, or other means including electronic means permitted by law. Attendance at any meeting of the Board shall be a waiver of notice thereof, unless such lack of notice is protested at the outset of the meeting. If all the members of the Board are present at any meeting, no notice of the meeting shall be required. For purposes hereof, written notice shall include notice provided by e-mail or in other electronic form as long as a documentary copy of such electronic notice may be made.

SECTION 6. Quorum. A majority of the members of the Whole Board shall constitute a quorum for the transaction of business but, if at any meeting a quorum shall not be present, the meeting may adjourn by a majority of those present until such time, from time to time, until a quorum shall be present.

SECTION 7. Telephonic Participation. Directors may participate in a meeting of the Board or a committee thereof by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other.

SECTION 8. Chair and Vice Chair of the Board. The Board may, by resolution adopted by a majority of the Whole Board, at any time designate one of its members as Chair of the Board. The Chairman of the Board shall preside at the meetings of the Board, shall be responsible for the orderly conduct by the Board of its oversight of the business and affairs of the Corporation and its other duties as provided by law, the Articles and the Bylaws and shall have such other authority and responsibility as the Board may designate. The Board may, by resolution adopted by the Board, at any time also designate one or more of its members as Vice Chair of the Board. A Vice Chair of the Board shall assist the Chairman in the conduct of his duties, including by presiding at meetings of the Board in the absence of the Chair of the Board, and shall have such other authority and responsibility as the Board may designate. A Chair or Vice Chair of the Board shall not be considered an officer of the Corporation unless otherwise provided by the Board.

SECTION 9. Committees of the Board. The Board may, by resolution adopted by a majority of the Whole Board, at any time designate one or more committees, each committee to consist of one or more of the directors of the Corporation, except as otherwise provided by the Bylaws. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Subject to the following provisions of this section, any such committee to the extent provided in such resolution shall have and may exercise any or all of the authority and responsibility of the Board in the management of the business and affairs of the Corporation, except at otherwise provided by law, the Articles or the Bylaws. Except as otherwise provided by the Articles, the Bylaws or action of the Board, a quorum for action by a committee shall be a majority of the members (assuming no vacancy) and action by vote of a majority of the members at a meeting duly called at which a quorum is present shall constitute action by the committee. Each committee shall keep a record of its actions and all material actions taken by a committee on behalf of the Board shall be reported to the full Board

periodically. In all other respects, the Board may, by resolution adopted by a majority of the Whole Board, establish rules of procedure for a committee, including designating a member of a committee as its chair. In the absence of the designation by the Board of the chair of a committee or the adoption by the Board of rules of procedure for a committee, the committee shall adopt its own rules of procedure and elect its chair. The Board shall establish standing committees of the Board as provided by the following provisions of this section.

(a) Audit Committee. The audit committee shall be composed of at least three members of the Board, each of whom shall be an Independent Director, shall not, in relation to the Corporation, be an "affiliated person" as defined in Rule 10A-3 under the Exchange Act (as from time to time in effect) and shall meet such other qualifications for membership on the audit committee as are from time to time required by the listing standards of the NYSE or Nasdaq applicable to the Corporation. The audit committee shall assist the Board in overseeing the Corporation's financial reporting and shall have such authority and responsibility as is provided in the committee's charter (as hereinafter provided for) and, subject thereto, as is normally incident to the functioning of the audit committee of a publicly-traded company and shall perform the other functions provided to be performed by it by the Bylaws and such other functions as are from time to time assigned to it by the Board.

(b) Management Development and Compensation Committee. The management development and compensation committee shall be composed of at least three members of the Board, each of whom shall be an Independent Director and shall meet such other qualifications as may be necessary to qualify as a non-employee director under Rule 16b-3 under the Exchange Act (as from time to time in effect) and as an outside director under Section 162(m) of the Internal Revenue Code of 1986, as amended (and as from time to time in effect). No member of the committee shall be eligible to participate in any compensation plan or program of the Corporation or any Subsidiary of the Corporation that is administered or overseen by the committee. The management development and compensation committee shall assist the Board in overseeing the compensation of the Corporation's officers, the Corporation's employee stock option or other equity-based compensation plans and programs and the Corporation's management compensation policies and shall have such authority and responsibility as is provided in the committee's charter (as hereinafter provided for) and, subject thereto and subject to other direction of the Board, as is normally incident to the functioning of the management compensation committee of a publicly-traded company and shall perform the other functions provided to be performed by it by the Bylaws and such other functions as are from time to time assigned to it by the Board. Unless reviewed and, if necessary, approved by the committee, the Corporation shall not cause or permit any Subsidiary of the Corporation to pay or grant any compensation to any officer or employee of the Corporation which, if paid or granted by the Corporation, would require review or approval of the committee.

(c) Nominating and Governance Committee. The nominating and governance committee shall be composed of at least three members of the Board, each of whom shall be an Independent Director and the appointment of each of whom shall require the affirmative vote of a majority of the Independent Directors at the time. The nominating and governance committee (i) shall have authority and responsibility to recommend to the Board for approval the candidates to be recommended by the Board to the shareholders for election as directors of the Corporation or to be elected by the Board to fill a vacancy on the Board, who shall be such as to cause, if such candidates are elected, the composition of the Board to satisfy the requirements of the Articles regarding director independence and the requirements of this section, (ii) shall advise the Board on its policies and procedures for carrying out its responsibilities and on the Corporation's policies and procedures respecting shareholder participation in corporate governance and (iii) shall have such authority and responsibility as is provided in the committee's charter (as hereinafter provided for) and, subject thereto and subject to other direction of the Board, as is normally incident to the functioning of the nominating or governance committee of a publicly-traded company and (iv) shall perform the other functions provided to be performed by it by the Bylaws and such other functions as are from time to time assigned to it by the Board.

(d) Committee Charters. The Board, by majority vote of the Whole Board, shall approve a charter describing the purposes, functions and responsibilities of each standing committee of the Board. Each standing committee of the Board shall prepare and recommend to the Board for its approval the committee's charter and shall, at least annually, review and report to the Board on the adequacy thereof. In addition to and without limiting the provisions of paragraphs (a) through (c) of this section, each standing committee of the Board shall have the authority and responsibility provided by its Board-approved charter, subject to further action by the Board, and no further authorization of the Board shall be necessary for actions by a committee within the scope of its charter. Any other committee of the Board may likewise prepare and recommend to the Board a charter for the committee and shall have the authority and responsibility provided by its Board-approved charter.

(e) Committee Advisors and Resources. Each standing committee of the Board shall have the authority to retain, at the Corporation's expense, such legal and other counsel and advisors as it determines to be necessary or appropriate to carry out its responsibilities within the scope of its charter. Each other committee of the Board shall have like authority to the extent provided by its charter or otherwise authorized by the Board. The Corporation shall pay the compensation of the independent auditor of the Corporation for all audit services, as approved by the Audit Committee, without need for further authorization.

SECTION 10. Director Compensation. The Board may set the compensation of directors as permitted by law.

ARTICLE IV
Officers

SECTION 1. Officers Generally. The Board shall designate a President, one or more Vice Presidents, a Treasurer, a Secretary and a General Counsel and shall designate an officer as chief financial officer and an officer as chief accounting officer and may designate such other officers, with such titles, authority and responsibility (including Assistant Vice Presidents, Assistant Treasurers and Assistant Secretaries), as the Board considers appropriate for the conduct of the business and affairs of the Corporation. Any two or more offices may be held by the same individual. Unless sooner removed by the Board, all officers shall hold office until the next annual meeting of the Board and until their successors shall have been elected. Any officer may be removed from office at any time, with or without cause, by action of the Board.

SECTION 2. President. The President shall be the chief executive officer of the Corporation, shall have general supervision of the business and affairs and all other officers of the Corporation (except that, if there is a Chairman of the Board or a Vice Chairman of the Board who is considered an officer of the Corporation, the President shall play only such supervisory role with respect thereto as is provided by the Board) and, subject to the direction of the Board, shall have the authority and responsibility customary to such office. The President shall preside at all meetings of the shareholders and, in the absence of a Chairman of the Board (if any) or Vice Chairman of the Board and except as otherwise provided by the Board, at all meetings of the Board at which the President is present.

SECTION 3. Vice Presidents; Operation or Division Presidents. The Board may elect one or more Vice Presidents, with such further titles (including designation as President of a division or operation of the Corporation) and with such authority and responsibility as the Board may determine. In the absence or disability of the President, his duties shall be performed by one or more Vice Presidents or Operation or Division Presidents as designated by the Board.

SECTION 4. Chief Financial Officer; Controller. The Board shall designate an officer as the chief financial officer of the Corporation, who shall have general supervision of the financial affairs of the Corporation, such other authority and responsibility as the Board may designate and, subject to the direction of the Board, the authority and responsibility customary to such office. In the absence or disability of the chief financial officer, his or her duties may be performed by any other officer designated by him or her, by the President or by the Board. The Board shall also designate an officer as the Controller of the Corporation, who shall be the chief accounting officer of the Corporation (and may be the same as or different from the chief financial officer). The Controller shall have general supervision of the books and accounts of the Corporation, such other authority and responsibility as the Board may designate and, subject to the direction of the Board, the authority and responsibility customary to such office. In the absence or disability of the chief accounting officer, his or her duties may be performed by any other officer designated by him or her, by the President or by the Board.

SECTION 5. Treasurer. The Treasurer (who may be the same as or different from the chief financial officer and/or the chief accounting officer) shall have supervision and custody of all funds and securities of the Corporation and keep or cause to be kept accurate accounts of all money received or payments made by the Corporation, and shall have such other authority and responsibility as provided by the Bylaws or as the Board may designate and, subject to the direction of the Board, the authority and responsibility customary to such office. The Treasurer shall be ex-officio, and have the authority and responsibility of, an Assistant Secretary.

SECTION 6. General Counsel. The Board shall designate a General Counsel for the Corporation, who shall be the Corporation's chief legal officer and shall have general supervision of the legal affairs of the Corporation and such other authority and responsibility as the Board may designate and, subject to the direction of the Board, the authority and responsibility customary to such office.

SECTION 7. Secretary. The Secretary shall have custody of the minutes of the meetings of the Board, its committees and the stockholders, of the Articles as amended and the Bylaws as amended and such other records of the Corporation as respect its existence and authority to conduct business, shall have such other authority and responsibility as provided by the Bylaws or as the Board may designate and, subject thereto, the authority and responsibility customary to such office. The Secretary shall send out notices of meetings of the Board and stockholders as required by law or the Bylaws. The Secretary shall attend and keep the minutes of the Board except as the Board may otherwise designate. The Secretary shall be ex-officio, and have the authority and responsibility of, an Assistant Treasurer.

SECTION 8. Assistant Treasurers; Assistant Secretaries. In the absence or disability of the Secretary, his or her duties may be performed by an Assistant Secretary. In the absence or disability of the Treasurer, his or her duties may be performed by an Assistant Treasurer. Such assistant officers shall also have such authority and responsibility as may be assigned to them by the Board.

SECTION 9. Bonded Officers and Employees. Such officers and employees of the Corporation as the Board shall determine shall give bond for the faithful discharge of their duties in such form and for such amount and with such surety or sureties as the Board shall require. The expense of procuring such bonds shall be borne by the Corporation.

ARTICLE V

Limitation on Directors' Personal Liability; Indemnification of Directors,

Officers, Employees and Agents

SECTION 1. Limitation on Directors' Personal Liability. A director of the Corporation shall not be personally liable for monetary damages for any action taken or failure to take any action unless the director has breached or failed to perform the duties of his or her office under Subchapter B of Chapter 17 of the Pennsylvania Business Corporation Law of 1988, as amended, and such breach or failure to perform constitutes self-dealing, willful misconduct or

recklessness; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director

(i) for any responsibility or liability of such director pursuant to any criminal statute, or

(ii) for any liability of a director for the payment of taxes pursuant to local, state or federal law.

SECTION 2. Indemnification of Directors, Officers, Employees and Agents.

(a) Indemnification of Directors and Officers. The Corporation shall indemnify to the full extent permitted by law any person made, or threatened to be made, a party to or otherwise involved in (as a witness or otherwise) an action, suit or proceeding (whether civil, criminal, administrative, legislative or investigative, and whether by or in the right of the Company or otherwise asserted) by reason of the fact that the person

(i) is or was a director or officer of the Corporation or

(ii) while a director or officer of the Corporation, either

(A) serves or served as a director, officer, partner, member, trustee, employee or agent of any subsidiary of the Corporation or other related enterprise at the request of the Corporation or in connection with a related employee benefit plan of the Corporation, any subsidiary of the Corporation or any such enterprise,

(B) serves or served as a director, officer, partner, member, trustee, employee or agent of any other unrelated enterprise (including any charitable organization) in furtherance of the interests of, and at the specific written request of the Corporation, or in connection with a related employee benefit plan of such enterprise,

against any expenses, judgments, fines, and amounts paid in settlement actually and reasonably incurred in defending or responding to any such pending or threatened action, suit or proceeding (including any incurred in connection with any actions brought by or in the right of the Corporation). A resolution or other action by the Corporation or subsidiary electing, nominating or proposing a person to a position referred to in this subsection 2(a) shall constitute a specific written request of the Corporation sufficient for the purposes of this Section. Upon written request of a person claiming to be entitled to indemnification hereunder and specifying the expenses, judgments, fines and amounts paid in settlement against which indemnity is sought, the Corporation shall, as soon as practicable and in any event within 90 days of its receipt of such request, make a determination, in such manner as is required by law, as to the entitlement of such person to indemnification against such expenses as provided by this subsection 2(a). Such a determination, however, shall not be conclusive as to such person's entitlement to indemnification pursuant to this

subsection 2(a) and such person may seek to enforce an entitlement to indemnification pursuant to this subsection 2(a) by appropriate proceedings in any court of competent jurisdiction by showing that, notwithstanding such determination, such person satisfied the standard of conduct required by law to be satisfied in order for such person to be entitled to indemnification from the Corporation as permitted by law.

(b) Advancement of Expenses. Expenses reasonably incurred by a person referred to in subsection 2(a) above in defending or responding to a civil, criminal, administrative, legislative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of the action, suit or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount to the extent it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation against such expenses or, in the case of a criminal action in which a judgment has been entered against such person, the Board of Directors so determines.

(c) Indemnification of Employees and Agents. The Corporation may, upon authorization by the board of directors, the President or any other officer designated by the board of directors, indemnify, or agree to indemnify, and advance expenses to any person who is or was an employee or agent of the Corporation or any subsidiary of the Corporation to the same extent (or any lesser extent) to which it may indemnify and advance expenses to a director or officer of the Corporation in accordance with subsection 2(b) above.

(d) Non-Exclusivity. The right to indemnification and advancement of expenses conferred in this Section shall not be deemed exclusive of any other rights to which any person indemnified may be entitled under any agreement, vote of stockholders or directors or otherwise, the Corporation having the express authority to enter such agreements or make other provision for the indemnification of and advancement of expenses to any or all of its representatives as the Board of Directors deems appropriate, including corporate policies and the creation of one or more funds or equivalent guarantees for indemnity payments and or expense advancements to present or future indemnified persons.

(e) Continuing Contractual Rights. The right to indemnification and the advancement of expenses provided in this Section shall be a contract right, shall continue as to a person who has ceased to serve in the capacities described herein, and shall inure to the benefit of the heirs, executors and administrators of such person. Expenses reasonably incurred by a person in successfully enforcing a right to indemnification or advancement of expenses provided to such person by, or as permitted by, this Section 2 shall be paid by the Corporation.

SECTION 3. No Retroactive Amendment. No amendment, alteration or repeal of this Article V, nor the adoption of any provision inconsistent with this Article V, shall adversely affect any limitation on the personal liability of a director

or officer, or the rights of a person to indemnification and advancement of expenses, existing at the time of such amendment, modification or repeal, or the adoption of such an inconsistent provision.

ARTICLE VI
Seal

The Corporation shall have a seal that shall contain the words "Armstrong World Industries, Inc." and may be affixed to documents of the Corporation as prima facie evidence of the act of the Corporation to the extent provided by law.

ARTICLE VII
Share Certificates and Transfers

SECTION 1. Form of Share Certificates. Shares of the Corporation may be represented by certificates or may be uncertificated, but shareholders shall be entitled to receive share certificates representing their shares as provided by law. Share certificates shall be in such form as the Board may from time to time determine and shall be signed by the President or one of the Vice Presidents and countersigned by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary and embossed with the seal of the Corporation or, if not so signed and sealed, shall bear the engraved or printed facsimile signatures of the officers authorized to sign and the engraved or printed facsimile of the seal of the Corporation. The death, incapacity, resignation or removal of an officer who signed or whose facsimile signature appears on a share certificate shall not affect the validity of the share certificate.

SECTION 2. Transfers of Record. The shares of the Corporation shall, upon the surrender and cancellation of the certificate or certificates representing the same, be transferred upon the books of the Corporation at the request of the holder thereof, named in the surrendered certificate or certificates, in person or by his legal representatives or by his attorney duly authorized by written power of attorney filed with the Corporation or its transfer agent. In case of loss or destruction of a certificate of stock, another may be issued in lieu thereof in such manner and upon such terms as the Board shall authorize.

SECTION 3. Record Dates. The Board of Directors may set a time, not more than 90 days prior to the date of any meeting of the shareholders, or the date set for the payment of any dividend or distribution or the date for the allotment of rights, or the date when any change or conversion or exchange of shares stock will be made or go into effect, as a record date for the determination of the shareholders entitled to notice of, or to vote at, any such meeting, or entitled to receive payment of any such dividend or distribution, or to receive any such allotment of rights, or to exercise the rights in respect to any such change, conversion, or exchange of shares of the Corporation. In such case, only such shareholders as shall be shareholders of record on the date so set shall be entitled to notice of, or to vote at, such meeting, or to receive payment of such dividend or distribution, or to receive such allotment of rights, or exercise such rights, as the case may be, notwithstanding any transfer of shares of the Corporation on the books of the Corporation after any record date set as aforesaid.

ARTICLE VIII
Fiscal Year; Financial Statements

The fiscal year of the Corporation shall end on the 31st day of December. Without limiting any other financial reporting obligation the Corporation may have, the Board shall mail or otherwise cause to be sent to the stockholders, within 120 days after the close of each fiscal year, financial statements which shall include a balance sheet as of the end of such year, together with a statement of income and expense for such year, prepared so as to present fairly the financial condition and results of its operations of the Corporation in accordance with generally accepted accounting principles. Such financial statements shall have been audited in accordance with generally accepted auditing standards by a firm of independent certified public accountants and shall be accompanied by such firm's opinion as to the fairness of the presentation thereof.

ARTICLE IX
Amendments

SECTION 1. Amendment Generally. The Bylaws, as from time to time in effect, may be amended, modified or repealed, in whole or in part, at any time and from time to time in any respect by either (i) the shareholders, by the affirmative vote of the holders of a majority of the outstanding shares entitled to vote on the matter, or (ii) by the Board, by the affirmative vote of a majority of the Whole Board, in either case except as otherwise provided by law or by the Articles or by Section 2 of this Article of the Bylaws (as in effect at the Effective Time).

SECTION 2. Certain Amendments. Commencing on the Effective Time and continuing for so long as any shareholder Beneficially Owns at least 20% of the Common Shares (but terminating at such time as no shareholder Beneficially Owns at least 20% of the Common Shares), the Board shall not, without the affirmative vote of the holders of 80% of the Common Shares outstanding, repeal, or adopt any amendment of the Bylaws that would modify or be inconsistent with, the following provisions of these Bylaws: (i) the definition of "Independent Directors" in Section 1(h) of Article I (as in effect at the Effective Time),
(ii) Section 2 of Article II (as in effect at the Effective Time) insofar as such section permits the holder or holders of a at least 20% of the votes that all shareholders are entitled to cast to call a special meeting of the stockholders to vote on a matter, (iii) Section 11 of Article II (as in effect at the Effective Time) governing action by the stockholders by written consent in lieu of a meeting, (iv) Section 3 of Article III and Section 4B of Article II (as in effect at the Effective Time) insofar as such sections relate to the selection of directors to fill vacancies before the 2009 Annual Meeting or the nomination of individuals for election of directors at the 2008 Annual Meeting,
(iv) Section 2 of Article III insofar as it relates to the Trust's consent rights with respect to increases of the size of the Board above eleven members, and (v) Section 10(c) of Article III insofar as such section provides that appointment of members of the nominating and governance committee will require the affirmative vote of a majority of the Independent Directors, and (vi) any provision of section of this Article IX (as in effect at the Effective Time).

ARTICLE X
Effective Time

The foregoing Bylaws have been adopted before the Effective Time by action of the sole stockholder of the Corporation and shall be effective upon the filing with the office of the Secretary of State of the Commonwealth of Pennsylvania of Amended and Restated Article of Incorporation of the Corporation and the effectiveness of such Amended and Restated Articles of Incorporation in accordance with law on October 2, 2006 (the "Effective Time").

EXHIBIT 10.1

[PUBLISHED CUSIP NUMBER: ______________]

A published CUSIP number entitles subscribers (primarily banks and brokers) of Standard & Poor's CUSIP Service Bureau to obtain the number and associated CUSIP data from the Bureau whether or not the subscriber is a Lender under the Credit Agreement. Associated CUSIP data will include the Borrower's name, place of incorporation, the Administrative Agent's name, the date of the Credit Agreement, the total amount of the facilities thereunder, and the amount, type and maturity date of each facility thereunder.

CREDIT AGREEMENT

Dated as of October 2, 2006

among

ARMSTRONG WORLD INDUSTRIES, INC.,
as the Borrower,

CERTAIN SUBSIDIARIES OF THE BORROWER IDENTIFIED HEREIN,
as the Guarantors,

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

THE OTHER LENDERS PARTY HERETO

JPMORGAN CHASE BANK, N.A., and
BARCLAYS BANK PLC,
as Co-Syndication Agents,

and

LASALLE BANK NATIONAL ASSOCIATION, and
THE BANK OF NOVA SCOTIA,
as Co-Documentation Agents

Arranged By:

BANC OF AMERICA SECURITIES LLC,
J.P. MORGAN SECURITIES, INC.,
and
BARCLAYS CAPITAL,

the investment banking division of Barclays Bank PLC, as Co-Lead Arrangers and Joint Book Managers

TABLE OF CONTENTS

                                                                                                                Page

ARTICLE I  DEFINITIONS AND ACCOUNTING TERMS.......................................................................1
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         1.01     Defined Terms...................................................................................1
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         1.02     Other Interpretive Provisions..................................................................24
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         1.03     Accounting Terms...............................................................................25
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         1.04     Rounding.......................................................................................25
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         1.05     References to Agreements and Laws..............................................................25
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         1.06     Times of Day...................................................................................25
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         1.07     Letter of Credit Amounts.......................................................................25
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ARTICLE II  THE COMMITMENTS AND CREDIT EXTENSIONS................................................................26
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         2.01     Revolving Loans and Term Loans.................................................................26
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         2.02     Borrowings, Conversions and Continuations of Loans.............................................29
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         2.03     Letters of Credit..............................................................................30
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         2.04     Swing Line Loans...............................................................................38
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         2.05     Prepayments....................................................................................41
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         2.06     Termination or Reduction of Aggregate Revolving Committed Amount...............................43
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         2.07     Repayment of Loans.............................................................................43
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         2.08     Interest.......................................................................................44
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         2.09     Fees...........................................................................................45
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         2.10     Computation of Interest and Fees...............................................................45
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         2.11     Evidence of Debt...............................................................................46
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         2.13     Sharing of Payments............................................................................48
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ARTICLE III  TAXES, YIELD PROTECTION AND ILLEGALITY..............................................................48
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         3.01     Taxes..........................................................................................48
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         3.02     Illegality.....................................................................................49
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         3.03     Inability to Determine Rates...................................................................49
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         3.04     Increased Cost and Reduced Return; Capital Adequacy............................................50
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         3.05     Funding Losses.................................................................................50
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         3.06     Matters Applicable to all Requests for Compensation............................................51
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         3.07     Survival.......................................................................................51
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ARTICLE IV  GUARANTY.............................................................................................51
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         4.01     The Guaranty...................................................................................51
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         4.02     Obligations Unconditional......................................................................52
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         4.03     Reinstatement..................................................................................53
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         4.04     Certain Additional Waivers.....................................................................53
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         4.05     Remedies.......................................................................................53
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         4.06     Rights of Contribution.........................................................................53
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         4.07     Guarantee of Payment; Continuing Guarantee.....................................................54
         ----     -------------------------------------------
ARTICLE V  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS.............................................................54
----------------------------------------------------
         5.01     Conditions of Initial Credit Extension.........................................................54
         ----     ---------------------------------------
         5.02     Conditions to all Credit Extensions............................................................56
         ----     ------------------------------------
ARTICLE VI  REPRESENTATIONS AND WARRANTIES.......................................................................57
------------------------------------------
         6.01     Existence, Qualification and Power.............................................................57
         ----     -----------------------------------
         6.02     Authorization; No Contravention................................................................57
         ----     --------------------------------
         6.03     Governmental Authorization; Other Consents.....................................................57
         ----     -------------------------------------------
         6.04     Binding Effect.................................................................................58
         ----     ---------------
         6.05     Financial Statements; No Material Adverse Effect...............................................58
         ----     -------------------------------------------------

                                TABLE OF CONTENTS
                                   (CONTINUED)
                                                                                                                Page

         6.06     Litigation.....................................................................................58
         ----     -----------
         6.07     No Default.....................................................................................59
         ----     -----------
         6.08     Ownership of Property; Liens...................................................................59
         ----     -----------------------------
         6.09     Environmental Compliance.......................................................................59
         ----     -------------------------
         6.10     Insurance......................................................................................60
         ----     ----------
         6.11     Taxes..........................................................................................60
         ----     ------
         6.12     ERISA Compliance...............................................................................60
         ----     -----------------
         6.13     Subsidiaries...................................................................................61
         ----     -------------
         6.14     Margin Regulations; Investment Company Act.....................................................61
         ----     -------------------------------------------
         6.15     Disclosure.....................................................................................61
         ----     -----------
         6.16     Compliance with Laws...........................................................................61
         ----     ---------------------
         6.17     Intellectual Property; Licenses, Etc...........................................................61
         ----     -------------------------------------
         6.18     Solvency.......................................................................................62
         ----     ---------
         6.19     Perfection of Security Interests in the Collateral.............................................62
         ----     ---------------------------------------------------
         6.20     Business Locations.............................................................................62
         ----     -------------------
         6.21     Labor Matters..................................................................................62
         ----     --------------
ARTICLE VII  AFFIRMATIVE COVENANTS...............................................................................63
----------------------------------
         7.01     Financial Statements...........................................................................63
         ----     ---------------------
         7.02     Certificates; Other Information................................................................63
         ----     --------------------------------
         7.03     Notices........................................................................................65
         ----     --------
         7.04     Payment of Obligations.........................................................................66
         ----     -----------------------
         7.05     Preservation of Existence, Etc.................................................................66
         ----     -------------------------------
         7.06     Maintenance of Properties......................................................................66
         ----     --------------------------
         7.07     Maintenance of Insurance.......................................................................66
         ----     -------------------------
         7.08     Compliance with Laws...........................................................................67
         ----     ---------------------
         7.09     Books and Records..............................................................................67
         ----     ------------------
         7.10     Inspection Rights..............................................................................67
         ----     ------------------
         7.11     Use of Proceeds................................................................................67
         ----     ----------------
         7.12     Additional Subsidiaries........................................................................67
         ----     ------------------------
         7.13     ERISA Compliance...............................................................................68
         ----     -----------------
         7.14     Pledged Assets.................................................................................68
         ----     ---------------
         7.15     Further Assurances.............................................................................69
         ----     -------------------
ARTICLE VIII  NEGATIVE COVENANTS.................................................................................69
--------------------------------
         8.01     Liens..........................................................................................69
         ----     ------
         8.02     Investments....................................................................................71
         ----     ------------
         8.03     Indebtedness...................................................................................72
         ----     -------------
         8.04     Fundamental Changes............................................................................73
         ----     --------------------
         8.05     Dispositions...................................................................................73
         ----     -------------
         8.06     Restricted Payments............................................................................73
         ----     --------------------
         8.07     Change in Nature of Business...................................................................74
         ----     -----------------------------
         8.08     Transactions with Affiliates...................................................................74
         ----     -----------------------------
         8.09     Burdensome Agreements..........................................................................74
         ----     ----------------------
         8.10     Use of Proceeds................................................................................75
         ----     ----------------
         8.11     Financial Covenants............................................................................75
         ----     --------------------
         8.12     Prepayment of Other Indebtedness, Etc..........................................................75
         ----     --------------------------------------


                                       ii

                                TABLE OF CONTENTS
                                   (CONTINUED)
                                                                                                                Page

         8.13     Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of Entity.........75
         ----     ---------------------------------------------------------------------------------------
ARTICLE IX  EVENTS OF DEFAULT AND REMEDIES.......................................................................75
------------------------------------------
         9.01     Events of Default..............................................................................75
         ----     ------------------
         9.02     Remedies Upon Event of Default.................................................................77
         ----     -------------------------------
         9.03     Application of Funds...........................................................................78
         ----     ---------------------
ARTICLE X  ADMINISTRATIVE AGENT..................................................................................79
-------------------------------
         10.01             Appointment and Authority.............................................................79
         -----             --------------------------
         10.02             Rights as a Lender....................................................................79
         -----             -------------------
         10.03             Exculpatory Provisions................................................................80
         -----             -----------------------
         10.04             Reliance by Administrative Agent......................................................80
         -----             ---------------------------------
         10.05             Delegation of Duties..................................................................81
         -----             ---------------------
         10.06             Resignation of Administrative Agent...................................................81
         -----             ------------------------------------
         10.07             Non-Reliance on Administrative Agent and Other Lenders................................82
         -----             -------------------------------------------------------
         10.08             No Other Duties; Etc..................................................................82
         -----             ---------------------
         10.09             Administrative Agent May File Proofs of Claim.........................................82
         -----             ----------------------------------------------
         10.10             Collateral and Guaranty Matters.......................................................83
         -----             --------------------------------
ARTICLE XI  MISCELLANEOUS........................................................................................83
-------------------------
         11.01             Amendments, Etc.......................................................................83
         -----             ----------------
         11.02             Notices and Other Communications; Facsimile Copies....................................86
         -----             ---------------------------------------------------
         11.03             No Waiver; Cumulative Remedies........................................................87
         -----             -------------------------------
         11.04             Attorney Costs, Expenses and Taxes....................................................87
         -----             -----------------------------------
         11.05             Indemnification by the Borrower.......................................................88
         -----             --------------------------------
         11.06             Payments Set Aside....................................................................89
         -----             -------------------
         11.07             Successors and Assigns................................................................89
         -----             -----------------------
         11.08             Confidentiality.......................................................................93
         -----             ----------------
         11.09             Set-off...............................................................................94
         -----             --------
         11.10             Interest Rate Limitation..............................................................94
         -----             -------------------------
         11.11             Counterparts..........................................................................94
         -----             -------------
         11.12             Integration...........................................................................94
         -----             ------------
         11.13             Survival of Representations and Warranties............................................94
         -----             -------------------------------------------
         11.14             Severability..........................................................................95
         -----             -------------
         11.15             Tax Forms.............................................................................95
         -----             ----------
         11.16             Replacement of Lenders................................................................97
         -----             -----------------------
         11.17             Governing Law.........................................................................97
         -----             --------------
         11.18             Waiver of Right to Trial by Jury......................................................98
         -----             ---------------------------------
         11.19             USA PATRIOT Act Notice................................................................98
         -----             -----------------------
         11.20             No Advisory or Fiduciary Responsibility...............................................98
         -----             ----------------------------------------

iii

SCHEDULES

         2.01     Commitments and Pro Rata Shares
         2.03     Existing DIP Letters of Credit
         6.10     Insurance
         6.13     Subsidiaries
         6.17     IP Rights
         6.20(a)  Location of Chief Executive Office, Etc.
         6.20(b)  Changes in Legal Name, State of Formation and Structure
         6.21     Labor Matters
         8.01     Liens Existing on the Closing Date
         8.02     Investments Existing on the Closing Date
         8.03     Indebtedness Existing on the Closing Date
         8.05     Dispositions
         8.11     Consolidated EBITDA Adjustments
         11.02    Certain Addresses for Notices

EXHIBITS

         A-1      Form of Loan Notice
         A-2      Form of Notice of Continuation/Conversion
         B        Form of Swing Line Loan Notice
         C-1      Form of Revolving Note
         C-2      Form of Swing Line Note
         C-3      Form of Tranche A Term Note
         C-4      Form of Tranche B Term Note
         D        Form of Compliance Certificate
         E        Form of Assignment and Assumption
         F        Form of Guarantor Joinder Agreement

CREDIT AGREEMENT

This CREDIT AGREEMENT is entered into as of October 2, 2006 among ARMSTRONG WORLD INDUSTRIES, INC., a Pennsylvania corporation (the "Borrower"), the Guarantors (defined herein), the Lenders (defined herein) and BANK OF AMERICA, N.A., as Administrative Agent.

The Borrower has requested that the Lenders provide credit facilities for the purposes set forth herein, and the Lenders are willing to do so on the terms and conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms.

As used in this Agreement, the following terms shall have the meanings set forth below:

"144A Indenture" means any indenture executed by the Borrower pursuant to which 144A Notes have been or will be issued.

"144A Notes" means any senior unsecured notes issued by the Borrower after the Closing Date pursuant to an offering consummated in accordance with
Section 144A of the Securities Exchange Act of 1933.

"Acquisition", by any Person, means the acquisition by such Person, in a single transaction or in a series of related transactions, of all or any substantial portion of the Property of, or of a business unit or division of, another Person or at least a majority of the Voting Stock of another Person, in each case whether or not involving a merger or consolidation with such other Person and whether for cash, property, services, assumption of Indebtedness, securities or otherwise.

"Administrative Agent" means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

"Administrative Agent's Office" means the Administrative Agent's address as set forth on Schedule 11.02, or such other address as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

"Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent.

"Affiliate" means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling" and "Controlled" have meanings correlative thereto.

"Aggregate Commitments" means the aggregate principal amount of the Revolving Commitments, the Tranche A Term Loan Commitments and the Tranche B Term Loan Commitments.

"Aggregate Revolving Committed Amount" has the meaning given such term in Section 2.01(a).

"Agreement" means this Credit Agreement.

"Applicable Rate" means, from time to time:

(a) with respect to Revolving Loans, Letters of Credit, Swing Line Loans and the Tranche A Term Loan, if any, the following percentages per annum, based upon the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 7.02(b):

----------- ------------------------------------- ---------------- -------------- ----------------- ---------------
 Pricing                                                            Letters of    Eurodollar Rate     Base Rate
   Tier     Consolidated Leverage Ratio           Commitment Fee      Credit           Loans            Loans
----------- ------------------------------------- ---------------- -------------- ----------------- ---------------
            (greater than
    1        or equal to) 3.50:1                       0.500%           2.00%           2.00%            1.00%
----------- ------------------------------------- ---------------- -------------- ----------------- ---------------
            (greater than
    2        or equal to) 3.00:1 but <3.50:1           0.500%           1.75%           1.75%            0.75%
----------- ------------------------------------- ---------------- -------------- ----------------- ---------------
            (greater than
    3        or equal to) 2.00:1 but <3.00:1           0.375%           1.50%           1.50%            0.50%
----------- ------------------------------------- ---------------- -------------- ----------------- ---------------
            (greater than
    4        or equal to) 1.00:1 but <2.00:1           0.200%           1.25%           1.25%            0.25%
----------- ------------------------------------- ---------------- -------------- ----------------- ---------------
    5                    <1.00:1                       0.175%           1.00%           1.00%            0.00%
----------- ------------------------------------- ---------------- -------------- ----------------- ---------------

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is required to be delivered pursuant to Section 7.02(b); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Tier 1 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall continue to apply until the first Business Day immediately following the date a Compliance Certificate is delivered in accordance with
Section 7.02(b), whereupon the Applicable Rate shall be adjusted based upon the calculation of the Consolidated Leverage Ratio contained in such Compliance Certificate. The Applicable Rate in effect from the Closing Date through the first Business Day immediately following the date a Compliance Certificate is required to be delivered pursuant to
Section 7.02(b) for the fiscal year ending December 31, 2006 shall be determined based upon Pricing Tier 3.

(b) with respect to the Tranche B Term Loan, if any, (i) 2.00% in the case of Eurodollar Rate Loans and (ii) 1.00% in the case of Base Rate Loans.

"Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

"Asbestos PI Trust" means the trust established by the Borrower in accordance with the Asbestos PI Trust Agreement.

"Asbestos PI Trust Agreement" means the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust Agreement, dated as of October 2, 2006, by the Borrower, the Legal Representative for Asbestos-Related Future Claimants, the Official Committee of Asbestos Creditors, the Trustees and the members of the PI Trust Advisory Committee.

"Assignment and Assumption" means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 11.07(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.

"Attorney Costs" means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel.

"Attributable Indebtedness" means, on any date, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP,
(b) in respect of any Synthetic Lease, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease, (c) in respect of any Securitization Transaction of any Person, the outstanding principal amount of such financing, after taking into account reserve accounts and making appropriate adjustments, determined by the Administrative Agent in its reasonable judgment and (d) in the case of any Sale and Leaseback Transaction, the present value (discounted in accordance with GAAP at the debt rate implied in the applicable lease) of the obligations of the lessee for rental payments during the term of such lease).

"Audited Financial Statements" means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2005, and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto.

"Availability Period" means, with respect to the Revolving Commitments, the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Revolving Committed Amount pursuant to Section 2.06, and (c) the date of termination of the commitment of each Lender to make Loans and of the obligation of the of the L/C Issuers to make L/C Credit Extensions pursuant to Section 9.02.

"Bank of America" means Bank of America, N.A. and its successors.

"Bankruptcy Court " means the United States Bankruptcy Court for the District of Delaware.

"BAS" means Banc of America Securities LLC, in its capacity as co-lead arranger and joint book manager.

"Base Rate" means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate." The "prime rate" is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in the "prime rate" announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

"Base Rate Loan" means a Loan that bears interest based on the Base Rate.

"Borrower" has the meaning specified in the introductory paragraph hereto.

"Borrower Materials" has the meaning specified in Section 7.02.

"Borrowing" means a borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.

"Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, New York, New York and, if such day relates to any interest rate settings as to a Eurodollar Rate Loan, any fundings, disbursements, settlements and payments in respect of any such Eurodollar Rate Loan, or any other dealings to be carried out pursuant to this Agreement in respect of any such Eurodollar Rate Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market.

"Businesses" means, at any time, a collective reference to the businesses operated by the Borrower and its Subsidiaries at such time.

"Capital Lease" means, as applied to any Person, any lease of any Property by that Person as lessee which, in accordance with GAAP, is required to be accounted for as a capital lease on the balance sheet of that Person.

"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (iii) in the case of a partnership, partnership interests (whether general or limited), (iv) in the case of a limited liability company, membership interests and (v) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

"Cash Collateralize" has the meaning specified in Section 2.03(g).

"Cash Equivalents" means, as at any date, (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) Dollar denominated time deposits and certificates of deposit of (i) any Lender, (ii) any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or
(iii) any bank whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody's is at least P-1 or the equivalent thereof (any such bank being an "Approved Bank"), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody's and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by any Person with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations, (e) Investments, classified in accordance with GAAP as current assets, in money market investment

programs registered under the Investment Company Act of 1940 which are administered by reputable financial institutions having capital of at least $500,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (d), and (f) with respect to Foreign Subsidiaries of the Borrower, instruments equivalent to those referred to in clauses (a) through (e) above denominated in any foreign currency comparable in credit quality and tenor to those referred to above and customarily used by corporations for cash management purposes in any jurisdiction outside the United States.

"Change of Control" means an event or series of events by which:

(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding (i) the Asbestos PI Trust and (ii) any employee benefit plan of such person or its subsidiaries and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934), directly or indirectly, of forty percent (40%) or more of the Capital Stock of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully diluted basis; provided, however, that the occurrence of the foregoing event shall not be deemed a Change of Control if the Asbestos PI Trust owns, directly or indirectly, of record and beneficially, fifty percent (50%) or more of the Capital Stock of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully diluted basis;

(b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iv) who were members of that board or equivalent governing body on the Closing Date or who receives the vote of the Asbestos PI Trust in his or her election by the stockholders of the Borrower; or

(c) the occurrence of a "Change of Control" (or any comparable term) under, and as defined in, the Plan Note Indenture or any 144A Indenture.

"Closing Date" means the date hereof.

"Collateral" means a collective reference to all Property with respect to which Liens in favor of the Collateral Agent are purported to be granted pursuant to and in accordance with the terms of the Collateral Documents.

"Collateral Agent" means Bank of America in its capacity as collateral agent for the holders of the secured obligations identified in the Collateral Documents, and its successors and assigns in such capacity.

"Collateral Documents" means a collective reference to the Security Agreement, the Pledge Agreement, each Collateral Joinder Agreement and other security documents as may be executed and delivered by the Loan Parties pursuant to the terms of Section 7.14.

"Collateral Joinder Agreement" means a joinder agreement by which an additional pledgor or guarantor may be added to a Pledge Agreement or Security Agreement.

"Commitments" means the Revolving Commitments, the L/C Commitment, the Swing Line Commitment, the Tranche A Term Loan Commitments and/or the Tranche B Term Loan Commitments.

"Compliance Certificate" means a certificate substantially in the form of Exhibit D.

"Confirmation Order" means that certain Order Confirming the Fourth Amended Plan of Reorganization of Armstrong World Industries, Inc., as Modified, dated August 18, 2006, in the Chapter 11 Case captioned In re Armstrong World Industries, Inc., et al., pending in the United States Bankruptcy Court for the District of Delaware, Chapter 11 Case No. 00-4471 (JKF).

"Consolidated Capital Expenditures" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, all capital expenditures, as determined in accordance with GAAP; provided, however, that Consolidated Capital Expenditures shall not include (a) expenditures made with proceeds of any Involuntary Disposition to the extent such expenditures are used to purchase Property that is the same as or similar to the Property subject to such Involuntary Disposition or (b) Permitted Acquisitions.

"Consolidated EBITDA" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to (i) Consolidated Operating Income for such period plus (ii) the amount of depreciation and amortization expense for such period, as determined in accordance with GAAP, plus (iii) to the extent relating to the applicable period, the Consolidated EBITDA Adjustments for such period.

"Consolidated EBITDA Adjustments" means for each fiscal quarter identified on Schedule 8.11, the items or amounts identified on such Schedule as "Consolidated EBITDA Adjustments" for each such fiscal quarter.

"Consolidated Excess Cash Flow" means, for any period for the Borrower and its Subsidiaries, an amount equal to (a) Consolidated EBITDA minus (b) Consolidated Capital Expenditures paid in cash minus (c) the cash portion of Consolidated Interest Charges minus (d) cash taxes paid minus (e) Consolidated Scheduled Funded Debt Payments minus (f) the amount of any voluntary prepayments of Consolidated Funded Indebtedness (other than voluntary prepayments of revolving lines of credit unless accompanied by a corresponding permanent reduction in the commitments thereunder) during such fiscal year plus (g) Consolidated Net Changes in Working Capital minus (h) the aggregate amount of cash consideration paid during the period for Permitted Acquisitions minus (i) the aggregate amount of Restricted Payments paid in cash by the Borrower during the period, in each case on a consolidated basis determined in accordance with GAAP.

"Consolidated Funded Indebtedness" means Funded Indebtedness of the Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP.

"Consolidated Interest Charges" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to the sum of (i) all interest, premium payments, debt discount, fees, charges and related expenses of the Borrower and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, plus (ii) the portion of rent expense of the Borrower and its Subsidiaries with respect to such period under Capital Leases that is treated as interest in accordance with GAAP; provided, that for purposes of calculating

Consolidated Interest Charges for the periods of four consecutive fiscal quarters ended December 31, 2006, March 31, 2007 and June 30, 2007, respectively, Consolidated Interest Charges shall be deemed to be (i) the actual Consolidated Interest Charges for the fiscal quarter ended December 31, 2006 multiplied by four, (ii) the actual Consolidated Interest Charges for the two consecutive fiscal quarters ended March 31, 2007 multiplied by two, and (iii) the actual Consolidated Interest Charges for the three consecutive fiscal quarters ended June 30, 2007 multiplied by 4/3, respectively.

"Consolidated Interest Coverage Ratio" means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of the four fiscal quarters most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b) to (b) Consolidated Interest Charges for the period of the four fiscal quarters most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b).

"Consolidated Leverage Ratio" means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended for which the Borrower has delivered financial statements pursuant to
Section 7.01(a) or (b).

"Consolidated Net Changes in Working Capital" means, for any period for the Borrower and its Subsidiaries, an amount (positive or negative) equal to the sum of (a) the net amount of decreases (or minus the amount of increases) in accounts receivable, inventory, prepaid expenses and other current assets, plus
(b) the net amount of increases (or minus the amount of decreases) in accounts payable (including accrued interest expense), accrued expenses and other current liabilities, in each case on a consolidated basis determined in accordance with GAAP and as set forth in the audited annual financial statements for the Borrower and its Subsidiaries delivered pursuant to Section 7.01(a).

"Consolidated Net Income" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the net income of the Borrower and its Subsidiaries for that period, as determined in accordance with GAAP.

"Consolidated Operating Income" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the operating income of the Borrower and its Subsidiaries (before deductions for interest and taxes) for that period, as determined in accordance with GAAP, including in any event, without limitation, the Borrower's share of reported net income from WAVE for such period on an "as-earned" basis rather than on an "as-received" basis.

"Consolidated Scheduled Funded Debt Payments" means for any period for the Borrower and its Subsidiaries on a consolidated basis, the sum of all scheduled payments of principal on Consolidated Funded Indebtedness, as determined in accordance with GAAP. For purposes of this definition, "scheduled payments of principal" (a) shall be determined without giving effect to any reduction of such scheduled payments resulting from the application of any voluntary or mandatory prepayments made during the applicable period, (b) shall be deemed to include the Attributable Indebtedness in respect of Capital Leases, Sale and Leaseback Transactions and Synthetic Leases, and (c) shall not include any voluntary prepayments or mandatory prepayments required pursuant to Section 2.05.

"Contractual Obligation" means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

"Control" has the meaning specified in the definition of "Affiliate".

"Corporate Rating" means, as of any date of determination, the rating as determined by either S&P or Moody's (collectively, the "Corporate Ratings") of the corporate credit rating or corporate family rating of the Borrower, as appropriate.

"Credit Extension" means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.

"Debt Rating" means, as of any date of determination, the rating as determined by either S&P or Moody's (collectively, the "Debt Ratings") of the Loans and extensions of credit under this Agreement.

"Debtor Entities" means Nitram Liquidators, Inc. and Desseaux Corporation of North America.

"Debtor Relief Laws" means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

"Default" means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

"Default Rate" means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus
(ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable Laws and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum, in all cases to the fullest extent permitted by applicable Laws.

"Defaulting Lender" means, as of any date of determination, any Lender that (a) has failed to fund any portion of the Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder and such failure has not been cured, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due (unless the subject of a good faith dispute) and such failure has not been cured, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

"DIP Loan Agreement" means that certain Revolving Credit and Guaranty Agreement dated as of December 6, 2000 among the Borrower, certain of its Subsidiaries, Nitram Liquidators, Inc., Desseaux Corporation of North America, the financial institutions party thereto and JPMorgan Chase Bank, N.A.

"Disposition" or "Dispose" means the sale, transfer, license, lease or other disposition (including any Sale and Leaseback Transaction) of any Property by the Borrower or any Subsidiary (including the Capital Stock of any Subsidiary), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, but excluding (i) the sale, lease, license, transfer or other disposition of inventory or other Property in the ordinary course of business of the Borrower and its Subsidiaries, (ii) the sale, lease, license, transfer or other disposition of machinery, equipment or other Property no longer used or useful in the conduct of business of the Borrower and its Subsidiaries, (iii) any sale, lease, license, transfer or other disposition of Property by the Borrower or any Subsidiary to any Loan Party, (iv) any Disposition by the Borrower or any Subsidiary to the extent constituting a Permitted Investment, (v) any sale, lease, license, transfer or other disposition of Property by any Foreign Subsidiary to the Borrower or any other Subsidiary, (vi) dispositions of equipment or real property to the extent that

(a) such property is exchanged for credit against the purchase price of similar replacement equipment or property or (b) the proceeds of such disposition are reasonably promptly applied to the purchase price of such replacement equipment or property; (vii) licenses, sublicenses, leases and subleases not interfering in any material respect with the business of the Borrower or its Subsidiaries,
(viii) sales or discounts of accounts receivable in connection with the compromise or collection thereof and (ix) dispositions set forth on Schedule 8.05.

"Dollar" and "$" mean lawful money of the United States.

"Domestic Subsidiary" means any Subsidiary that is organized under the laws of any state of the United States or the District of Columbia, other than
(a) a Subsidiary which is a disregarded entity for U.S. Federal income tax purposes and directly or indirectly holds any interest in a Subsidiary not organized under the laws of any state of the United States or the District of Columbia or (b) any other Subsidiary which is a Subsidiary of an entity described in the foregoing clause (a).

"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent (and, in the case of an assignment of a Revolving Commitment, the L/C Issuers and the Swing Line Lender), and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, "Eligible Assignee" shall not include the Borrower or any of the Borrower's Affiliates or Subsidiaries.

"Environmental Laws" means any and all federal, state, local, foreign and other applicable statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

"Environmental Liability" means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

"ERISA" means the Employee Retirement Income Security Act of 1974.

"ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions relating to Section 412 of the Internal Revenue Code).

"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of

ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

"Eurodollar Base Rate" means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the "Eurodollar Rate" for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

"Eurodollar Rate" means for any Interest Period with respect to any Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent to be equal to the quotient obtained by dividing (a) the Eurodollar Base Rate for such Eurodollar Rate Loan for such Interest Period by (b) one minus the Eurodollar Reserve Percentage for such Eurodollar Rate Loan for such Interest Period.

"Eurodollar Rate Loan" means a Loan that bears interest at a rate based on the Eurodollar Rate.

"Eurodollar Reserve Percentage" means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurodollar funding (currently referred to as "Eurodollar liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

"Event of Default" has the meaning specified in Section 9.01.

"Excluded Property" means, with respect to any Loan Party, (a) any owned or leased personal Property which is located outside of the United States,
(b) any personal Property (including, without limitation, motor vehicles and aircraft) in respect of which perfection of a Lien is not either (i) governed by the Uniform Commercial Code or (ii) effected by appropriate evidence of the Lien being filed in either the United States Copyright Office or the United States Patent and Trademark Office, unless requested by the Administrative Agent or the Required Lenders, (c) the Capital Stock of any First-Tier Foreign Subsidiary to the extent not required to be pledged to secure the Obligations pursuant to
Section 7.14(b), (d) any personal Property which, subject to the terms of
Section 8.09, is subject to a Lien of the type described in Section 8.01(i) pursuant to documents which prohibit such Loan Party from granting any other Liens in such Property, but only to the extent that any such prohibition would not be rendered ineffective under applicable provisions of the Uniform Commercial Code, other applicable law (including Debtor Relief Laws) or principles of equity and a violation of such prohibition would not result in the termination thereof or give the other parties thereto the right to terminate, accelerate or otherwise materially and adversely alter such Loan Party's rights, titles and interests thereunder (including upon the giving of notice or the

lapse of time or both), (e) any fee or leasehold interests in real property, (f) any Property that is subject to a Lien pursuant to a Securitization Transaction permitted pursuant to Section 8.03(l), (g) the Capital Stock of WAVE or any Debtor Entity and (h) any permit, lease, license, contract or instrument now or hereafter in effect of a Loan Party if the grant of a security interest in such permit, lease, license, contract or instrument in a manner contemplated by the Loan Documents, under the terms thereof or under applicable Law, is prohibited and would result in the termination thereof or give the other parties thereto the right to terminate, accelerate or otherwise materially and adversely alter such Loan Party's rights, titles and interests thereunder (including upon the giving of notice or the lapse of time or both).

"Existing DIP Letters of Credit" means the letters of credit outstanding on the Closing Date and identified on Schedule 2.03.

"Existing Swap Contracts" means the Swap Contracts with a Lender or an Affiliate of a Lender existing on the Closing Date.

"Facilities" means, at any time, a collective reference to the facilities and real properties owned, leased or operated by the Borrower or any Subsidiary.

"Federal Funds Rate" means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

"Fee Letter" means the letter agreement, dated September 22, 2006 among the Borrower, the Administrative Agent and BAS.

"First Tier Foreign Subsidiary" means each Foreign Subsidiary that is owned directly by a Loan Party.

"Foreign Lender" has the meaning specified in Section 11.15(a)(i).

"Foreign Subsidiary" means any Subsidiary that is not a Domestic Subsidiary.

"FRB" means the Board of Governors of the Federal Reserve System of the United States.

"Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

"Funded Indebtedness" means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations for borrowed money, whether current or long-term (including the Obligations) and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) all purchase money Indebtedness;

(c) the principal portion of all obligations under conditional sale or other title retention agreements relating to Property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business);

(d) all obligations arising under standby letters of credit and similar obligations that back obligations that would constitute Indebtedness (but specifically excluding those that support performance obligations);

(e)) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

(f) all Attributable Indebtedness;

(g) all preferred stock or other equity interests providing for mandatory redemptions, sinking fund or like payments prior to the Maturity Date;

(h) all Funded Indebtedness of others secured by (or for which the holder of such Funded Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, Property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed;

(i) all Guarantees with respect to Funded Indebtedness of the types specified in clauses (a) through (h) above of another Person; and

(j) all Funded Indebtedness of the types referred to in clauses (a) through (h) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer and has liability for such obligations, but only to the extent there is recourse to such Person for payment thereof.

For purposes hereof, except as provided in clause (d) above, obligations arising under letters of credit and similar instruments shall not constitute Funded Indebtedness.

"GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, consistently applied and as in effect from time to time.

"Governmental Authority" means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

"Guarantee" means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of)

such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term "Guarantee" as a verb has a corresponding meaning.

"Guaranty" means the Guaranty made by the Guarantors in favor of the Administrative Agent and the Lenders pursuant to Article IV hereof.

"Guaranty Joinder Agreement" means a joinder agreement by which a Domestic Subsidiary of the Borrower or other Person may become a Guarantor hereunder. A form of Guaranty Joinder Agreement is attached as Exhibit F.

"Guarantors" means each Domestic Subsidiary of the Borrower identified as a "Guarantor" on the signature pages hereto and each other Person that joins as a Guarantor pursuant to Section 7.12, together with their successors and permitted assigns.

"Hazardous Materials" means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

"Honor Date" has the meaning set forth in Section 2.03(c).

"Incremental Credit Facilities" has the meaning set forth in Section 2.01(d).

"Indebtedness" means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all Funded Indebtedness;

(b) the Swap Termination Value of any Swap Contract;

(c) all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) and (b) above of any other Person; and

(d) all Indebtedness of the types referred to in clauses (a) through (c) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, and has liability for such obligations, but only to the extent there is recourse to such Person for payment thereof.

"Indemnified Liabilities" has the meaning set forth in Section 11.05.

"Indemnitees" has the meaning set forth in Section 11.05.

"Interest Payment Date" means (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date.

"Interest Period" means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Loan Notice; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the Maturity Date.

"Interim Financial Statements" has the meaning set forth in Section 5.01(c).

"Internal Revenue Code" means the Internal Revenue Code of 1986.

"Investment" means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Capital Stock of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) an Acquisition. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

"Involuntary Disposition" means any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any Property of the Borrower or any of its Subsidiaries.

"IP Rights" has the meaning set forth in Section 6.17.

"IRS" means the United States Internal Revenue Service.

"ISP" means, with respect to any Letter of Credit, the "International Standby Practices 1998" published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

"Issuer Documents" means with respect to any Letter of Credit, the Letter Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor the applicable L/C Issuer and relating to any such Letter of Credit.

"Joinder Agreements" means a Guaranty Joinder Agreement, a Lender Joinder Agreement and/or a Collateral Joinder Agreement, as appropriate.

"Laws" means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

"L/C Advance" means, with respect to each Lender, such Lender's funding of its participation in any L/C Borrowing in accordance with its Pro Rata Share.

"L/C Borrowing" means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing of Revolving Loans.

"L/C Commitment" means, with respect to any L/C Issuer, the commitment of such L/C Issuer to issue and to honor payment obligations under Letters of Credit in accordance with Section 2.03.

"L/C Credit Extension" means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.

"L/C Issuer" means with respect to a particular Letter of Credit (a) as to Existing DIP Letters of Credit, the Lenders identified on Schedule 2.03, (b) Bank of America in its capacity as issuer of such Letter of Credit or (c) such other Lender selected by the Borrower (upon notice to the Administrative Agent) from time to time to issue such Letter of Credit, or any successor issuer of Letters of Credit hereunder.

"L/C Obligations" means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be "outstanding" in the amount so remaining available to be drawn.

"Lender Joinder Agreement" means a joinder agreement by which a Lender is joined under this Agreement to provide additional commitments in respect of an Incremental Credit Facility or otherwise.

"Lenders" means the Revolving Lenders, the Tranche A Term Lenders and the Tranche B Term Lenders and, as the context requires, includes the L/C Issuers and the Swing Line Lender.

"Lending Office" means, as to any Lender, the office or offices of such Lender described as such in such Lender's Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

"Letter of Credit" means any letter of credit issued hereunder and shall include the Existing DIP Letters of Credit. A Letter of Credit may be a commercial letter of credit or a standby letter of credit.

"Letter of Credit Application" means an application and agreement for the issuance or amendment of a letter of credit in the form from time to time in use by the applicable L/C Issuer.

"Letter of Credit Expiration Date" means the day that is thirty days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

"Letter of Credit Fee" has the meaning specified in Section 2.03(i).

"Letter of Credit Sublimit" has the meaning specified in Section
2.03(a)(i). The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Revolving Committed Amount.

"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing).

"Loan" means an extension of credit by a Lender to the Borrower under Article II in the form of a Revolving Loan, Swing Line Loan, Tranche A Term Loan or Tranche B Term Loan.

"Loan Documents" means this Agreement, each Note, each Letter of Credit, each Letter of Credit Application, each Joinder Agreement, the Collateral Documents and the Fee Letter.

"Loan Notice" means a notice of (a) a Borrowing of Revolving Loans, Tranche A Term Loan or Tranche B Term Loan, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to
Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A-1.

"Loan Parties" means, collectively, the Borrower and each Guarantor.

"Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the ability of the Borrower and its Subsidiaries taken as a whole to perform their obligations under any Loan Document to which they are a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower and its Subsidiaries taken as a whole of any Loan Document to which they are a party.

"Material Domestic Subsidiary" means any Domestic Subsidiary of the Borrower that individually, or together with its Subsidiaries on a consolidated basis, has assets of more than $1,000,000; provided, however, that notwithstanding the foregoing, the Debtor Entities shall not constitute Material Domestic Subsidiaries.

"Material First-Tier Foreign Subsidiary" means any First-Tier Foreign Subsidiary that individually, or together with its Subsidiaries on a consolidated basis, has assets of more than $10,000,000; provided, however, that notwithstanding the foregoing, the following Foreign Subsidiaries shall not constitute Material First-Tier Foreign Subsidiaries: (a) any Foreign Subsidiary organized under the laws of the People's Republic of China or any state or other political subdivision thereof and (b) any other Foreign Subsidiary if a pledge

of such Foreign Subsidiary's Capital Stock violates any Law or could reasonably be expected to have an adverse effect on the business of such Foreign Subsidiary.

"Maturity Date" (a) as to the Revolving Loans, Tranche A Term Loan, Swing Line Loans and Letters of Credit (and the related L/C Obligations), October 2, 2011 and (b) as to the Tranche B Term Loan, October 2, 2013 or such later date provided in the applicable Lender Joinder Agreement.

"Moody's" means Moody's Investors Service, Inc. and any successor thereto.

"Multiemployer Plan" means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

"Net Cash Proceeds" means the aggregate cash or Cash Equivalents proceeds (including insurance proceeds and condemnation awards) received by the Borrower or any Subsidiary in respect of any Disposition or Involuntary Disposition, net of (a) direct costs incurred in connection therewith (including, without limitation, legal, accounting and investment banking fees, and sales commissions), (b) taxes paid or payable as a result thereof and (c) the amount necessary to retire any Indebtedness secured by a Permitted Lien (ranking senior to any Lien of the Administrative Agent) on the related Property; it being understood that "Net Cash Proceeds" shall include, without limitation, any cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration received by the Borrower or any Subsidiary in any Disposition or Involuntary Disposition.

"Note" or "Notes" means the Revolving Notes, the Swing Line Note, the Tranche A Term Notes and/or the Tranche B Term Notes, individually or collectively, as appropriate.

"Notice of Continuation/Conversion" means the written notice of continuation or conversion in substantially the form of Exhibit A-2.

"Obligations" means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. The foregoing shall also include (a) all obligations under any Swap Contract between any Loan Party and any Lender or Affiliate of a Lender that is permitted to be incurred pursuant to Section 8.03(d) and (b) all obligations under any Treasury Management Agreement between any Loan Party and any Lender or Affiliate of a Lender.

"Organization Documents" means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

"Other Taxes" has the meaning set forth in Section 3.01(b).

"Outstanding Amount" means (i) with respect to any Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of any Loans occurring on such date; and (ii) with respect to any L/C Obligations on any date, the aggregate outstanding amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

"Overnight Rate" means, for any day, the greater of (a) the Federal Funds Rate and (b) an overnight rate determined by the Administrative Agent, the applicable L/C Issuer, or the Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation.

"Participant" has the meaning specified in Section 11.07(d).

"PBGC" means the Pension Benefit Guaranty Corporation.

"Pension Plan" means any "employee pension benefit plan" (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

"Permitted Acquisitions" means Investments consisting of an Acquisition by a Loan Party, provided that (i) immediately after giving effect to such Acquisition, such Loan Party would be in compliance with Section 8.07, (ii) in the case of an Acquisition of all or substantially all of the Capital Stock of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such Acquisition, (iii) the Borrower shall have delivered to the Administrative Agent a Pro Forma Compliance Certificate demonstrating that, upon giving effect to such Acquisition on a Pro Forma Basis, the Loan Parties would be in compliance with the financial covenants set forth in Section 8.11 as of the most recent fiscal quarter for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b) and (iv) no Default or Event of Default shall exist immediately after giving effect to such Acquisition.

"Permitted Investments" means, at any time, Investments by the Borrower or any of its Subsidiaries permitted to exist at such time pursuant to the terms of Section 8.02.

"Permitted Liens" means, at any time, Liens in respect of Property of the Borrower or any of its Subsidiaries permitted to exist at such time pursuant to the terms of Section 8.01.

"Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Internal Revenue Code or Title IV of ERISA, any ERISA Affiliate.

"Plan Note Indenture" means the Indenture or Indentures, by and among the Borrower and Wells Fargo Bank Minnesota, National Association, as trustee, pursuant to which any of the Plan Notes will be issued.

"Plan Notes" means the "Plan Notes" as defined by the Reorganization Plan.

"Platform" has the meaning specified in Section 7.02.

"Pledge Agreement" means the pledge agreement dated as of the Closing Date executed in favor of the Collateral Agent by each of the Loan Parties.

"Pro Forma Basis" means, for purposes of calculating the financial covenants set forth in Section 8.11 and for purposes of determining the Applicable Rate, that any Disposition, Involuntary Disposition, Acquisition or incurrence of Indebtedness pursuant to Section 8.03(e) or 8.03(g) shall be deemed to have occurred as of the first day of the most recent four fiscal quarter period preceding the date of such transaction for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b). In connection with the foregoing, (a) with respect to any Disposition or Involuntary Disposition, (i) income statement and cash flow statement items (whether positive or negative) attributable to the Property disposed of shall be excluded to the extent relating to any period occurring prior to the date of such transaction and (ii) Indebtedness which is retired shall be excluded and deemed to have been retired as of the first day of the applicable period and (b) with respect to any Acquisition, (i) income statement items attributable to the Person or Property acquired shall be included to the extent relating to any period applicable in such calculations to the extent (A) such items are not otherwise included in such income statement items for the Borrower and its Subsidiaries in accordance with GAAP or in accordance with any defined terms set forth in Section 1.01 and (B) such items are supported by financial statements or other information reasonably satisfactory to the Administrative Agent and
(ii) any Indebtedness incurred or assumed by the Borrower or any Subsidiary (including the Person or Property acquired) in connection with such transaction and any Indebtedness of the Person or Property acquired which is not retired in connection with such transaction (A) shall be deemed to have been incurred as of the first day of the applicable period and (B) if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination.

"Pro Forma Compliance Certificate" means a certificate of a Responsible Officer of the Borrower containing reasonably detailed calculations of the financial covenants set forth in Section 8.11 as of the most recent fiscal quarter end for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b) after giving effect to the applicable transaction on a Pro Forma Basis.

"Pro Rata Share" means, as to each Lender at any time, (a) with respect to such Lender's Revolving Commitment at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Revolving Commitment of such Lender at such time and the denominator of which is the Aggregate Revolving Committed Amount at such time; provided that if the commitment of each Lender to make Revolving Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been terminated pursuant to Section 9.02, then the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof, (b) with respect to such Lender's outstanding Tranche A Term Loan at any time, a fraction (expressed as a percentage, carried out to the

ninth decimal place), the numerator of which is the principal amount of the Tranche A Term Loan held by such Lender at such time and the denominator of which is the aggregate principal amount of the Tranche A Term Loan at such time and (c) with respect to such Lender's outstanding Tranche B Term Loan at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the principal amount of the Tranche B Term Loan held by such Lender at such time and the denominator of which is the aggregate principal amount of the Tranche B Term Loan at such time. The initial Pro Rata Share of each Lender is set forth opposite the name of such Lender on Schedule 2.01.

"Property" means any interest of any kind in any property or asset, whether real, personal or mixed, or tangible or intangible.

"Register" has the meaning specified in Section 11.07(c).

"Related Parties" means, with respect to any Person, such Person's Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person's Affiliates.

"Reorganization Plan" means the Fourth Amended Plan of Reorganization of Armstrong World Industries, Inc., et al., as Modified, dated as of February 21, 2006, and as confirmed by the Bankruptcy Court by order entered on August 18, 2006.

"Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty-day notice period has been waived.

"Request for Credit Extension" means (a) with respect to a Borrowing, a Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

"Required Lenders" means, as of any date of determination, Lenders having more than fifty percent (50%) of the Aggregate Commitments, or if the Commitments shall have expired or been terminated, Lenders holding in the aggregate more than fifty percent (50%) of the outstanding Loans and L/C Obligations (including, in each case, the aggregate amount of each Lender's participation interests in L/C Obligations and Swing Line Loans); provided that the Commitments of, and the portion of the applicable Obligations held or deemed held by, any Defaulting Lender shall be excluded for purposes of making determinations of "Required Lenders" hereunder.

"Required Revolving Lenders" means, as of any date of determination, Revolving Lenders having more than fifty percent (50%) of the Revolving Commitments, or if the Revolving Commitments shall have expired or been terminated, Revolving Lenders holding in the aggregate more than fifty percent (50%) of the Total Revolving Outstandings (including, in each case, the aggregate amount of each Revolving Lender's participation interests in L/C Obligations and Swing Line Loans); provided that the Revolving Commitments of, and the portion of the Total Revolving Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making determinations of "Required Revolving Lenders" hereunder.

"Required Tranche A Term Lenders" means, as of any date of determination, Lenders having more than fifty percent (50%) of the aggregate principal amount of Tranche A Term Loan Commitments; provided that the Tranche A Term Loan Commitments held or deemed held by any Defaulting Lenders shall be excluded for purposes of making determinations of "Required Tranche A Term Lenders" hereunder.

"Required Tranche B Term Lenders" means, as of any date of determination, Lenders having more than fifty percent (50%) of the aggregate principal amount of Tranche B Term Loan Commitments; provided that the Tranche B Term Loan Commitments held or deemed held by any Defaulting Lenders shall be

excluded for purposes of making determinations of "Required Tranche B Term Lenders" hereunder.

"Responsible Officer" means the chief executive officer, president, chief financial officer, vice president and treasurer or vice president and controller of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

"Restricted Payment" means any dividend or other distribution (whether in cash, securities or other property) with respect to any Capital Stock of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Capital Stock or of any option, warrant or other right to acquire any such Capital Stock.

"Revolving Commitment" means, as to each Revolving Lender, its obligation to (a) make Revolving Loans to the Borrower pursuant to Section 2.01,
(b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans. The amount of the initial Revolving Commitments is identified on Schedule 2.01.

"Revolving Lenders" means those Lenders with Revolving Commitments, together with their successors and permitted assigns. The initial Revolving Lenders are identified on the signature pages hereto and on Schedule 2.01.

"Revolving Loan" has the meaning specified in Section 2.01(a).

"Revolving Note" has the meaning specified in Section 2.11(a).

"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.

"Sale and Leaseback Transaction" means, with respect to the Borrower or any Subsidiary, any arrangement, directly or indirectly, with any person whereby the Borrower or such Subsidiary shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

"SEC" means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

"Securitization Receivables" has the meaning specified in the definition of "Securitization Transaction".

"Securitization Transaction" means, with respect to any Person, any financing transaction or series of financing transactions (including factoring arrangements) pursuant to which such Person or any Subsidiary of such Person may sell, convey or otherwise transfer, or grant a security interest in, accounts, payments, receivables, rights to future lease payments or residuals or similar rights to payment (the "Securitization Receivables") to a special purpose subsidiary or affiliate of such Person.

"Security Agreement" means the security agreement dated as of the Closing Date executed in favor of the Collateral Agent by each of the Loan Parties.

"Solvent" or "Solvency" means, with respect to any Person as of a particular date, that on such date (a) such Person is generally able to pay its debts and other liabilities, contingent obligations and other commitments as they mature, (b) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person's Property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (c) the fair value of the Property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person and (d) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay all liabilities of such Person on its debts as they become absolute and matured. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

"Subsidiary" of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of Capital Stock having ordinary voting power for the election of directors or other governing body (other than Capital Stock having such power only by reason of the happening of a contingency) are at the time beneficially owned, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Borrower. Notwithstanding anything to the contrary herein or in any other Loan Document, any reference to any Subsidiary of the Borrower shall be deemed not to include any Debtor Entity.

"Swap Contract" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a "Master Agreement"), including any such obligations or liabilities under any Master Agreement.

"Swap Termination Value" means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

"Swing Line Commitment" means, with respect to the Swing Line Lender, the commitment of the Swing Line Lender to make Swing Line Loans in accordance with Section 2.04.

"Swing Line Lender" means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

"Swing Line Loan" has the meaning specified in Section 2.04(a).

"Swing Line Loan Notice" means a notice of a Borrowing of Swing Line Loans pursuant to Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit B.

"Swing Line Note" has the meaning specified in Section 2.11(a).

"Swing Line Sublimit" has the meaning specified in Section 2.04(a). The Swing Line Sublimit is part of, and not in addition to, the Aggregate Revolving Committed Amount.

"Synthetic Lease" means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing arrangement whereby the arrangement is considered borrowed money indebtedness for tax purposes but is classified as an operating lease or does not otherwise appear on a balance sheet under GAAP.

"Total Revolving Outstandings" means the aggregate Outstanding Amount of all Revolving Loans, all Swing Line Loans and all L/C Obligations.

"Tranche A Term Lenders" means those Lenders having a portion of the Tranche A Term Loan, together with their successors and permitted assigns.

"Tranche A Term Loan" has the meaning specified in Section 2.01(d).

"Tranche A Term Loan Commitment" means, as to each Tranche A Term Lender, upon establishment of the Tranche A Term Loan under Section 2.01(f) or increase in the Tranche A Term Loan under Section 2.01(e), its obligation to make its portion of the Tranche A Term Loan to the Borrower pursuant to Section 2.01(b); provided that at any time after funding of the Tranche A Term Loan, determinations of "Required Lenders" and "Required Tranche A Lenders" shall be based on the Outstanding Amount of the Tranche A Term Loan.

"Tranche A Term Note" has the meaning specified in Section 2.11(a).

"Tranche B Term Lenders" means those Lenders having a portion of the Tranche B Term Loan, together with their successors and permitted assigns.

"Tranche B Term Loan" has the meaning specified in Section 2.01(d).

"Tranche B Term Loan Commitment" means, as to each Tranche B Term Lender, upon establishment of the Tranche B Term Loan under Section 2.01(g) or increase in the Tranche B Term Loan under Section 2.01(e), its obligation to make its portion of the Tranche B Term Loan to the Borrower pursuant to Section 2.01(c); provided that at any time after funding of the Tranche B Term Loan, determinations of "Required Lenders" and "Required Tranche B Lenders" shall be based on the Outstanding Amount of the Tranche B Term Loan.

"Tranche B Term Note" has the meaning specified in Section 2.11(a).

"Treasury Management Agreement" means any agreement governing the provision of treasury or cash management services, including deposit accounts, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services.

"Type" means, with respect to any Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

"Uniform Commercial Code" means the Uniform Commercial Code in effect in any applicable jurisdiction from time to time.

"United States" and "U.S." mean the United States of America.

"Unreimbursed Amount" has the meaning specified in Section 2.03(c)(i).

"Voting Stock" means, with respect to any Person, Capital Stock issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency.

"WAVE" means the unincorporated joint venture established pursuant to that Joint Venture Agreement dated March 23, 1992, between Armstrong Ventures, Inc. and Worthington Industries, Inc.

"Wholly Owned Subsidiary" means any Person 100% of whose Capital Stock is at the time owned by the Borrower directly or indirectly through other Persons 100% of whose Capital Stock is at the time owned, directly or indirectly, by the Borrower.

1.02 Other Interpretive Provisions.

With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) (i) The words "herein," "hereto," "hereof" and "hereunder" and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

(ii) Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.

(iii) The term "including" is by way of example and not limitation.

(iv) The term "documents" includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

(c) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including;" the words "to" and "until" each mean "to but excluding;" and the word "through" means "to and including."

                  (d) Section headings herein and in the other Loan Documents
         are included for convenience of reference only and shall not affect the
         interpretation of this Agreement or any other Loan Document.

1.03     Accounting Terms.

         (a) Except as otherwise specifically prescribed herein, all accounting

terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time.

(b) The Borrower will provide a written summary of material changes in GAAP and in the consistent application thereof with each annual and quarterly Compliance Certificate delivered in accordance with Section 7.02(b). If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

(c) Notwithstanding the above, the parties hereto acknowledge and agree that all calculations of the financial covenants in Section 8.11 shall be made on a Pro Forma Basis.

1.04 Rounding.

Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

1.05 References to Agreements and Laws.

Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

1.06 Times of Day.

Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

1.07 Letter of Credit Amounts.

Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Revolving Loans and Term Loans.

(a) Revolving Loans. Subject to the terms and conditions set forth herein, each Revolving Lender severally agrees to make loans (each such loan, a "Revolving Loan") to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of such Revolving Lender's Revolving Commitment; provided, however, that after giving effect to any Borrowing of Revolving Loans,
(i) with regard to the Revolving Lenders collectively, the Total Revolving Outstandings shall not exceed THREE HUNDRED MILLION DOLLARS ($300,000,000) (as such amount may be increased or decreased in accordance with the provisions hereof, the "Aggregate Revolving Committed Amount") and (ii) with regard to each Revolving Lender individually, such Revolving Lender's Pro Rata Share of Total Revolving Outstandings shall not exceed such Revolving Lender's Revolving Commitment. Within the limits of each Revolving Lender's Revolving Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under Section 2.05, and reborrow under this
Section 2.01. Revolving Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

(b) Tranche A Term Loan. At any time on or after the Closing Date, the Borrower may elect to establish a Tranche A Term Loan hereunder in Dollars in accordance with the provisions of subsections (d) and (f) of this Section 2.01. Amounts repaid on the Tranche A Term Loan may not be reborrowed. The Tranche A Term Loan may consist of Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

(c) Tranche B Term Loan. At any time on or after the Closing Date, the Borrower may elect to establish a Tranche B Term Loan hereunder in accordance with the provisions of subsections (d) and (g) of this Section 2.01. Amounts repaid on the Tranche B Term Loan may not be reborrowed. The Tranche B Term Loan may consist of Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

(d) Incremental Loan Facilities. At any time on or after the Closing Date, the Borrower may, on written notice to the Administrative Agent, establish additional credit facilities (collectively, the "Incremental Credit Facilities") by increasing the Aggregate Revolving Committed Amount, the amount of the Tranche A Term Loan or the amount of the Tranche B Term Loan hereunder as provided in Section 2.01(e), establishing the Tranche A Term Loan as provided in
Section 2.01(f) (the "Tranche A Term Loan") or establishing the Tranche B Term Loan as provided in Section 2.01(g) (the "Tranche B Term Loan"), or some combination thereof; provided that:

(i) no Default shall have occurred and be continuing or shall result after giving effect to the Incremental Credit Facility;

(ii) the conditions to all Credit Extensions in Section 5.02 shall have been satisfied;

(iii) the Borrower will provide (A) a compliance certificate from a Responsible Officer confirming that no Default shall exist immediately before or immediately after giving effect to the establishment of the Incremental Credit Facility and demonstrating compliance with the financial covenants hereunder after giving effect to the Incremental Credit Facility (assuming, for purposes hereof, that the Incremental Credit Facility is fully drawn and funded), and (b) supporting resolutions, legal opinions, promissory notes and other items as may be reasonably required by the Administrative Agent and the Lenders providing the commitments for the Incremental Credit Facility; and

(iv) to the extent reasonably necessary in the judgment of the Administrative Agent, amendments to each of the Collateral Documents, if any, and related documents or agreements shall have been made, in each case in a manner satisfactory to the Administrative Agent.

In connection with establishment of any Incremental Credit Facility, (A) none of the Lenders or their affiliates shall have any obligation to provide commitments or loans for any Incremental Credit Facility without their prior written approval, and (B) Schedule 2.01 will be deemed to be revised to reflect the Lenders, Loans, Commitments and Pro Rata Shares after giving effect to establishment of any Incremental Credit Facility.

(e) Increases in the Aggregate Revolving Committed Amount, the Tranche A Term Loan and the Tranche B Term Loan. Subject to Section 2.01(d), the Borrower may increase the Aggregate Revolving Committed Amount, the Tranche A Term Loan and the Tranche B Term Loan; provided that:

(i) the aggregate amount of additional commitments established pursuant to this subsection will not exceed TWO HUNDRED MILLION DOLLARS ($200,000,000);

(ii) the Aggregate Revolving Committed Amount, after giving effect to all such increases, will not exceed FIVE HUNDRED MILLION DOLLARS ($500,000,000);

(iii) such increase shall be in a minimum amount of $50,000,000 and in integral multiples of $5,000,000 in excess thereof;

(iv) any new lender providing additional commitments pursuant to this subsection must be reasonably acceptable to the Administrative Agent and, in the case of an increase in the Revolving Commitments, also to the L/C Issuers and the Swing Line Lender;

(v) lenders providing additional commitments pursuant to this subsection will provide a Lender Joinder Agreement and such other agreements reasonably acceptable to the Administrative Agent;

(vi) if any Revolving Loans, Tranche A Term Loans or Tranche B Term Loans, as appropriate, are outstanding at the time of any such increase, the Borrower will make such payments and adjustments on the subject Loans (including payment of any break-funding amounts owing under Section 3.05) as may be necessary to give effect to the revised commitment amounts and percentages; and

(vii) in the case of an increase in the amount of the Tranche A Term Loan or the Tranche B Term Loan after the first principal amortization payment date, adjustments will be made to the schedule of amortization payment provided in Section 2.07(c) or (d), as appropriate, to give effect thereto; provided that the principal amortization amount payable on any payment date in respect of the

Tranche A Term Loan or Tranche B Term Loan, as applicable, as in effect prior to the increase will not be reduced.

(f) Establishment of Tranche A Term Loan. Subject to Section 2.01(d), the Borrower may, at any time on or after the Closing Date, establish a Tranche A Term Loan; provided that:

(i) the aggregate amount of commitments under the Tranche A Term Loan plus the aggregate amount of commitments under the Tranche B Term Loan will not exceed EIGHT HUNDRED MILLION DOLLARS ($800,000,000);

(ii) such Tranche A Term Loan shall be in a minimum amount of $50,000,000 and in integral multiples of $5,000,000 in excess thereof;

(iii) the Tranche A Term Loan shall be established not later than October 16, 2006;

(iv) the proceeds of the Tranche A Term Loan will be used to fund the Asbestos PI Trust and other payments required under the Reorganization Plan and to pay transaction costs, fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby;

(v) the aggregate principal amount of the Tranche A Term Loan, the Tranche B Term Loan and the Plan Notes shall be at least $775,000,000 and, if applicable, the Administrative Agent shall have received a copy, certified by a Responsible Officer of the Borrower as true and complete, of the Plan Note Indenture as originally executed and delivered, together with all exhibits and schedules thereto;

(vi) any new lender providing commitments for the Tranche A Term Loan must be reasonably acceptable to the Administrative Agent; and

(vii) lenders providing commitments for the Tranche A Term Loan pursuant to this Section 2.01(f) will provide a Lender Joinder Agreement and such other agreements reasonably acceptable to the Administrative Agent.

(g) Establishment of Tranche B Term Loan. Subject to Section 2.01(d), the Borrower may, at any time on or after the Closing Date, establish a Tranche B Term Loan; provided that:

(ii) such Tranche B Term Loan shall be in a minimum amount of $50,000,000 and in integral multiples of $5,000,000 in excess thereof;

(iii) the Tranche B Term Loan shall be established not later than October 16, 2006;

(iv) the proceeds of the Tranche B Term Loan will be used to fund the Asbestos PI Trust and other payments required under the Reorganization Plan and to pay transaction costs, fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby;

                  (v) the aggregate principal amount of the Tranche A Term Loan,
         the Tranche B Term Loan and the Plan Notes shall be at least
         $775,000,000 and, if applicable, the Administrative Agent shall have
         received a copy, certified by a Responsible Officer of the Borrower as
         true and complete, of the Plan Note Indenture as originally executed
         and delivered, together with all exhibits and schedules thereto;

                  (vi) lenders providing commitments for the Tranche B Term Loan
         must be reasonably acceptable to the Administrative Agent; and

                  (vii) lenders providing commitments for the Tranche B Term
         Loan pursuant to this Section 2.01(f) will provide a Lender Joinder
         Agreement and such other agreements reasonably acceptable to the
         Administrative Agent.

2.02     Borrowings, Conversions and Continuations of Loans.

         (a) (i) Each Borrowing shall be made upon the Borrower's irrevocable
         notice to the Administrative Agent, which may be given by telephone.
         Each such notice must be received by the Administrative Agent not later
         than 11:00 a.m. (A) three Business Days prior to the requested date of
         any Borrowing of Eurodollar Rate Loans, and (B) one Business Day prior
         to the requested date of any Borrowing of Base Rate Loans. Each
         telephonic notice by the Borrower pursuant to this Section 2.02(a) must
         be confirmed promptly by delivery to the Administrative Agent of a
         written Loan Notice, appropriately completed and signed by an
         authorized officer of the Borrower. Each Borrowing of Eurodollar Rate
         Loans shall be in a principal amount of $5,000,000 or a whole multiple
         of $1,000,000 in excess thereof. Except as provided in Sections 2.03(c)
         and 2.04(c), each Borrowing of Base Rate Loans shall be in a principal
         amount of $1,000,000 or a whole multiple of $500,000 in excess thereof.
         Each Loan Notice (whether telephonic or written) shall specify (A) the
         requested date of the Borrowing (which shall be a Business Day), (B)
         the principal amount of Loans to be borrowed, (C) the Type of Loans to
         be borrowed and (E) if applicable, the duration of the Interest Period
         with respect thereto. If the Borrower fails to specify a Type of a Loan
         in a Loan Notice, then the applicable Loans shall be made as Base Rate
         Loans. Any automatic conversion to Base Rate Loans shall be effective
         as of the last day of the Interest Period then in effect with respect
         to the applicable Eurodollar Rate Loans. If the Borrower requests a
         Borrowing of Eurodollar Rate Loans in any Loan Notice, but fails to
         specify an Interest Period, it will be deemed to have specified an
         Interest Period of one month.

                  (ii) Following receipt of a Loan Notice, the Administrative
         Agent shall promptly notify each Lender of the amount of its Pro Rata
         Share of the applicable Loans. Each Lender shall make the amount of its
         Loan available to the Administrative Agent in immediately available
         funds at the Administrative Agent's Office not later than 1:00 p.m. on
         the Business Day specified in the applicable Loan Notice. Upon
         satisfaction of the applicable conditions set forth in Section 5.02
         (and, if such Borrowing is the initial Credit Extension, Section 5.01),
         the Administrative Agent shall make all funds so received available to
         the Borrower in like funds as received by the Administrative Agent
         either by (i) crediting the account of the Borrower on the books of
         Bank of America with the amount of such funds or (ii) wire transfer of
         such funds, in each case in accordance with instructions provided to
         (and reasonably acceptable to) the Administrative Agent by the
         Borrower; provided, however, that if, on the date of a Borrowing of
         Revolving Loans, there are L/C Borrowings outstanding, then the
         proceeds of such Borrowing, first, shall be applied to the payment in
         full of any such L/C Borrowings and second, shall be made available to
         the Borrower as provided above.

(iii) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. The determination of the Eurodollar Rate by the Administrative Agent shall be conclusive in the absence of manifest error. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America's prime rate used in determining the Base Rate promptly following the public announcement of such change.

(b) The Borrower shall have the option, on any Business Day, to extend existing Loans into a subsequent permissible Interest Period or to convert Loans into Loans of another interest rate type; provided, however, that (i) except as provided in Section 3.05, Eurodollar Loans may be converted into Base Rate Loans or extended as Eurodollar Loans for new Interest Periods only on the last day of the Interest Period applicable thereto, (ii) Loans extended as, or converted into, Eurodollar Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (iii) any request for continuation or conversion of a Eurodollar Loan which shall fail to specify an Interest Period shall be deemed to be a request for an Interest Period of one month. Each such continuation or conversion shall be effected by the Borrower by giving a Notice of Extension/Conversion (or telephonic notice promptly confirmed in writing) to the office of the Administrative Agent specified in Section 11.02, or at such other office as the Administrative Agent may designate in writing, prior to 11:00 a.m., on the Business Day of, in the case of the conversion of a Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior to, in the case of the continuation of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed continuation or conversion, the Loans to be so extended or converted, the types of Loans into which such Loans are to be converted and, if appropriate, the applicable Interest Periods with respect thereto. In the event the Borrower fails to request continuation or conversion of any Eurodollar Loan in accordance with this Section, or any such conversion or continuation is not permitted or required by this Section, then such Eurodollar Loan shall be automatically converted into a Base Rate Loan at the end of the Interest Period applicable thereto. The Administrative Agent shall give each Lender notice as promptly as practicable of any such proposed continuation or conversion affecting any Revolving Loan.

(c) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than 5 Interest Periods in effect with respect to Revolving Loans, 5 Interest Periods in effect with respect to the Tranche A Term Loan and 5 Interest Periods in effect with respect to the Tranche B Term Loan.

2.03     Letters of Credit.

         (a) The Letter of Credit Commitment.

                  (i) Subject to the terms and conditions set forth herein, (A)
         each L/C Issuer agrees, in reliance upon the agreements of the other
         Lenders set forth in this Section 2.03, (1) from time to time on any
         Business Day during the period from the Closing Date until the Letter
         of Credit Expiration Date, to issue Letters of Credit denominated in
         Dollars for the account of the Borrower or its Subsidiaries, and to
         amend or extend Letters of Credit previously issued by it, in
         accordance with subsection (b) below, and (2) to honor drawings under
         the Letters of Credit issued by it; and (B) the Revolving Lenders
         severally agree to participate in Letters of Credit issued for the
         account of the Borrower or its Subsidiaries and any drawings
         thereunder; provided that after giving effect to any L/C Credit
         Extension with respect to any Letter of Credit, (w) with regard to the
         Revolving Lenders collectively, the Total Revolving Outstandings shall
         not exceed the Aggregate Revolving Committed Amount, (x) with regard to
         each Revolving Lender individually, such Revolving Lender's Pro Rata
         Share of Total Revolving Outstandings shall not exceed such Revolving

Lender's Revolving Commitment and (y) the Outstanding Amount of the L/C Obligations shall not exceed ONE HUNDRED FIFTY MILLION DOLLARS ($150,000,000) (the "Letter of Credit Sublimit"). Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower's ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing DIP Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.

(ii) An L/C Issuer shall not issue any Letter of Credit if:

(A) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Revolving Lenders have approved such expiry date; or

(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Revolving Lenders have approved such expiry date.

(iii) An L/C Issuer shall be under no obligation to issue any Letter of Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good faith deems material to it;

(B) the issuance of such Letter of Credit would violate any Laws or one or more policies of such L/C Issuer;

(C) except as otherwise agreed by the Administrative Agent and such L/C Issuer, such Letter of Credit is in an initial face amount less than $100,000, in the case of a commercial Letter of Credit, or $250,000, in the case of a standby Letter of Credit;

(D) such Letter of Credit is to be denominated in a currency other than Dollars; or

(E) a default of any Revolving Lender's obligations to fund under Section 2.03(e) exists or any Revolving Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Revolving Lender to eliminate the L/C Issuer's risk with respect to such Revolving Lender.

(iv) An L/C Issuer shall not amend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.

(v) An L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(vi) An L/C Issuer shall be under no obligation to issue or amend any Letter of Credit if such L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, on or prior to the Business Day prior to the requested date of issuance or amendment of such Letter of Credit, that one or more applicable conditions contained in Section 5.02 shall not then be satisfied.

(vii) Each L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and such L/C Issuer shall have all of the benefits and immunities (i) provided to the Administrative Agent in Article X with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term "Administrative Agent" as used in Article X included such L/C Issuer with respect to such acts or omissions, and (ii) as additionally provided herein with respect to such L/C Issuer.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.

(i) Requests for Issuance. Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the applicable L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by an authorized officer of the Borrower. Such Letter of Credit Application must be received by the applicable L/C Issuer and the Administrative Agent not later than 11:00
a.m. at least five Business Days prior to the proposed issuance date or date of amendment, as the case may be, or such later date and time as the Administrative Agent and such L/C Issuer may agree in a particular instance in their sole discretion. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as such L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as such L/C Issuer may require. Additionally, the Borrower shall furnish to the applicable L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as such L/C Issuer or the Administrative Agent may require.

(ii) Issuance. Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the applicable L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Section 5.02 shall not then be satisfied, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with such L/C Issuer's usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from such L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Revolving Lender's Pro Rata Share times the amount of such Letter of Credit.

(iii) Auto-Extension Letters of Credit. If the Borrower so requests in any applicable Letter of Credit Application, the applicable L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an "Auto-Extension Letter of Credit"); provided that any such Auto-Extension Letter of Credit must permit such L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the "Non-Extension Notice Date") in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the applicable L/C Issuer, the Borrower shall not be required to make a specific request to such L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Revolving Lenders shall be deemed to have authorized (but may not require) the applicable L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that such L/C Issuer shall not permit any such extension if (A) such L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clauses (ii) and (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Revolving Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or any Loan Party that one or more of the applicable conditions specified in Section 5.02 is not then satisfied, and in each such case directing such L/C Issuer not to permit such extension.

(iv) Reporting by L/C Issuer. Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment. On a monthly basis, each L/C Issuer shall deliver to the Administrative Agent a complete list of all outstanding Letters of Credit issued by such L/C Issuer as provided in Section 2.03(f).

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of drawing under such Letter of Credit, the applicable L/C Issuer shall notify the Borrower and the Administrative Agent thereof. The applicable L/C Issuer shall notify the Borrower of the amount of the drawing promptly following the determination thereof, and

in any event no later than 9:00 a.m. on the Honor Date (as hereafter defined). Not later than 11:00 a.m. on the date of any payment by the applicable L/C Issuer under a Letter of Credit (each such date, an "Honor Date"), the Borrower shall reimburse such L/C Issuer in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the applicable L/C Issuer by such time, such L/C Issuer shall promptly notify the Administrative Agent, whereupon the Administrative Agent shall promptly notify each Revolving Lender of the Honor Date, the amount of the unreimbursed drawing (the "Unreimbursed Amount"), and the amount of such Revolving Lender's Pro Rata Share thereof. In such event, the Borrower shall be deemed to have requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, the amount of the unutilized portion of the Aggregate Revolving Committed Amount or the conditions set forth in Section 5.02. Any notice given by the applicable L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii) Each Revolving Lender (including any Revolving Lender acting as L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the applicable L/C Issuer in Dollars at the Administrative Agent's Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Revolving Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the applicable L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing of Base Rate Loans for any reason, the Borrower shall be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Revolving Lender's payment to the Administrative Agent for the account of the applicable L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Revolving Lender in satisfaction of its participation obligation under this Section 2.03.

(iv) Until each Revolving Lender funds its Revolving Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Revolving Lender's Pro Rata Share of such amount shall be solely for the account of such L/C Issuer.

(v) Each Revolving Lender's obligation to make Revolving Loans or L/C Advances to reimburse the applicable L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Revolving Lender may have against such L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, (C) noncompliance with the conditions set forth in Section 5.02 or (D) any other occurrence, event or condition, whether or not similar to any of the foregoing. No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the applicable L/C Issuer for the amount of any payment made by such L/C

Issuer under any Letter of Credit, together with interest as provided herein.

(vi) If any Revolving Lender fails to make available to the Administrative Agent for the account of the applicable L/C Issuer any amount required to be paid by such Revolving Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in
Section 2.03(c)(ii), such L/C Issuer shall be entitled to recover from such Revolving Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the applicable Overnight Rate from time to time in effect. A certificate of the applicable L/C Issuer submitted to any Revolving Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

(d) Repayment of Participations.

(i) At any time after the applicable L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Lender such Revolving Lender's L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of such L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Revolving Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Lender's L/C Advance was outstanding) in Dollars and in the same funds as those received by the Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of the applicable L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in
Section 11.06 (including pursuant to any settlement entered into by such L/C Issuer in its discretion), each Revolving Lender shall pay to the Administrative Agent for the account of such L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Revolving Lender, at a rate per annum equal to the applicable Overnight Rate from time to time in effect. The obligations of the Revolving Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e) Obligations Absolute. The obligation of the Borrower to reimburse the applicable L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this Agreement or any other Loan Document;

(ii) the existence of any claim, counterclaim, set-off, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), such L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv) any payment by such L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by such L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any Subsidiary.

The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower's instructions or other irregularity, the Borrower will immediately notify the applicable L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the applicable L/C Issuer and its correspondents unless such notice is given as aforesaid.

(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the applicable L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any of the respective correspondents, participants or assignees of the L/C Issuers shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders, the Revolving Lenders, the Required Revolving Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any of the respective correspondents, participants or assignees of the L/C Issuers, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the applicable L/C Issuer, and such L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by such L/C Issuer's willful misconduct or gross negligence or such L/C Issuer's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, each L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and such L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a

Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. Each L/C Issuer shall provide to the Administrative Agent a list of outstanding Letters of Credit (together with amounts) issued by it on a monthly basis (and upon the request of the Administrative Agent); the Administrative Agent shall provide a copy of such list to any Lender upon request.

(g) Cash Collateral. (i) Upon the request of the Administrative Agent, (A) if the applicable L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (B) if, as of the Letter of Credit Expiration Date, any Letter of Credit for any reason remains outstanding and partially or wholly undrawn, the Borrower shall immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to such Outstanding Amount determined as of the date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case may be).

(ii) In addition, if the Administrative Agent notifies the Borrower at any time that the Outstanding Amount of all L/C Obligations at such time exceeds 105% of the Letter of Credit Sublimit then in effect, then, within two Business Days after receipt of such notice, the Borrower shall Cash Collateralize the L/C Obligations in an amount equal to the amount by which the Outstanding Amount of all L/C Obligations exceeds the Letter of Credit Sublimit.

(iii) Sections 2.05 and 9.02(c) set forth certain additional requirements to deliver Cash Collateral hereunder. For purposes of this
Section 2.03, Section 2.05 and Section 9.02(c), "Cash Collateralize" means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuers (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The Borrower hereby grants to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, interest bearing deposit accounts at Bank of America.

(h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the applicable L/C Issuer and the Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing DIP Letter of Credit),
(i) the rules of ISP shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance shall apply to each commercial Letter of Credit.

(i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the account of each Revolving Lender in accordance with its Pro Rata Share, in Dollars, a Letter of Credit fee (the "Letter of Credit Fee") (i) for each commercial Letter of Credit equal to the Applicable Rate times the daily amount available to be drawn under such Letter of Credit and (ii) for each standby Letter of Credit equal to the Applicable Rate times the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07. Letter of Credit Fees shall be (i) computed on a monthly basis in arrears and
(ii) due and payable on the fifth (5th) Business Day after the end of each month, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate during any month, the daily maximum amount of each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such month that such Applicable Rate was in effect. Notwithstanding anything to the contrary

contained herein, upon the request of the Required Revolving Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The Borrower shall pay directly to the applicable L/C Issuer for its own account, (i) a one time fronting fee for each commercial Letter of Credit issued by it (other than Existing DIP Letters of Credit) equal to 1/8 of 1% times the amount of such commercial Letter of Credit, due and payable at the time of issuance and (ii) a fronting fee with respect to each standby Letter of Credit issued by it (other than Existing DIP Letters of Credit) in an amount equal to 1/8 of 1% per annum on the daily amount available to be drawn thereunder, due and payable monthly in arrears on the fifth (5th) Business Day after the end of each month, commencing with the first such date to occur after the issuance of such standby Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07. In addition, the Borrower shall pay directly to the applicable L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

(k) Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse the applicable L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and that the Borrower's business derives substantial benefits from the businesses of such Subsidiaries.

(m) Existing DIP Letters of Credit and Existing Swap Contracts. The Borrower has assumed all obligations under the Existing DIP Letters of Credit and Existing Swap Contracts and shall be considered substituted as account party or contracting party for all purposes in respect thereof.

2.04 Swing Line Loans.

(a) Swing Line Facility. Subject to the terms and conditions set forth herein, the Swing Line Lender agrees to make loans (each such loan, a "Swing Line Loan") to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed TWENTY-FIVE MILLION DOLLARS ($25,000,000) (the "Swing Line Sublimit") at any time outstanding, notwithstanding the fact that such Swing Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of Revolving Loans and L/C Obligations of the Swing Line Lender in its capacity as a Revolving Lender, may exceed the amount of such Revolving Lender's Revolving Commitment; provided, however, that after giving effect to any Swing Line Loan, (i) with regard to the Revolving Lenders collectivity, the Total Revolving Outstandings shall not exceed the Aggregate Revolving Committed Amount, and (ii) with regard to each Revolving Lender individually such Revolving Lender's Pro Rata Share of Total Revolving Outstandings shall not exceed such Revolving Lender's Revolving Commitment. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.04, prepay under
Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall bear interest at such rate mutually agreed to between the Borrower and the Swing Line Lender or, in the absence of such mutual agreement, shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Revolving Lender

shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Lender's Pro Rata Share times the amount of such Swing Line Loan.

(b) Borrowing Procedures. Each Borrowing of Swing Line Loans shall be made upon the Borrower's irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum principal amount of $250,000 and integral multiples of $100,000 in excess thereof, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by an authorized officer of the Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of the proposed Borrowing of Swing Line Loans (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Section 5.02 is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00
p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower.

(i) The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Borrower (which hereby irrevocably requests and authorizes the Swing Line Lender to so request on its behalf), that each Revolving Lender make a Base Rate Loan in an amount equal to such Revolving Lender's Pro Rata Share of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, the unutilized portion of the Aggregate Revolving Committed Amount or the conditions set forth in
Section 5.02. The Swing Line Lender shall furnish the Borrower with a copy of the applicable Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Lender shall make an amount equal to its Pro Rata Share of the amount specified in such Loan Notice available to the Administrative Agent in immediately available funds for the account of the Swing Line Lender at the Administrative Agent's Office not later than 1:00 p.m. on the day specified in such Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Revolving Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Borrowing of Revolving Loans in accordance with
Section 2.04(c)(i), the request for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Lender's payment to the Administrative Agent for the account of the

Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii) If any Revolving Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Revolving Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in
Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Revolving Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the applicable Overnight Rate from time to time in effect. A certificate of the Swing Line Lender submitted to any Revolving Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv) Each Revolving Lender's obligation to make Revolving Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right that such Revolving Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, (C) non-compliance with the conditions set forth in Section 5.02 or (D) any other occurrence, event or condition, whether or not similar to any of the foregoing. No such purchase or funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein.

(d) Repayment of Participations.

(i) At any time after any Revolving Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Revolving Lender its Pro Rata Share of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Lender's risk participation was funded) in the same funds as those received by the Swing Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 11.06 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving Lender shall pay to the Swing Line Lender its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the applicable Overnight Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Revolving Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Revolving Lender funds its Revolving Loans that are Base Rate Loans or risk participation pursuant to this Section 2.04 to refinance such Revolving Lender's Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.

2.05 Prepayments.

(a) Voluntary Prepayments. The Loans may be repaid in whole or in part without premium or penalty; provided that

(i) (A) in the case of Loans other than Swing Line Loans, (1) notice thereof must be received by 11:00 a.m. by the Administrative Agent at least three Business Days prior to the date of prepayment, in the case of Eurodollar Rate Loans and (2) one Business Day prior to the date of prepayment, in the case of Base Rate Loans, (B) any such prepayment shall be a minimum principal amount of (1) $5,000,000 and integral multiples of $1,000,000 in excess thereof, in the case of Eurodollar Rate Loans and (2) $1,000,000 and integral multiples of $500,000 in excess thereof, in the case of Base Rate Loans, or, in each case, the entire remaining principal amount thereof, if less; and

(ii) in the case of Swing Line Loans, (A) notice thereof must be received by the Swing Line Lender by 1:00 p.m. on the date of prepayment (with a copy to the Administrative Agent), and (B) any such prepayment shall be in the same minimum principal amounts as for advances thereof (or any lesser amount that may be acceptable to the Swing Line Lender).

Each such notice of voluntary prepayment hereunder shall be irrevocable and shall specify the date and amount of prepayment and the Loans and Types of Loans that are being prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans; provided, however, that the Borrower may rescind any notice of voluntary prepayment hereunder if such prepayment would have resulted from a refinancing of all of the Loans and Commitment, and such refinancing shall not have been consummated or shall otherwise have been delayed. The Administrative Agent will give prompt notice to the applicable Lenders of any prepayment on the Loans and the Lender's interest therein. Prepayments of Eurodollar Rate Loans hereunder shall be accompanied by accrued interest on the amount prepaid and breakage amounts, if any, under Section 3.05.

(b) Mandatory Prepayments.

(i) Revolving Commitments. If at any time (A) the Total Revolving Outstandings shall exceed the Aggregate Revolving Committed Amount, (B) the Outstanding Amount of L/C Obligations shall exceed the Letter of Credit Sublimit, or (C) the Outstanding Amount of Swing Line Loans shall exceed the Swing Line Sublimit, the Borrower shall immediately prepay the Total Revolving Outstandings and/or Cash Collateralize L/C Obligations in an amount equal to such excess; provided, however, that, except with respect to clauses (A) and (B) above, L/C Obligations will not be Cash Collateralized hereunder until the Revolving Loans and Swing Line Loans have been paid in full.

(ii) Dispositions. The Borrower shall prepay the Loans and L/C Obligations within 5 Business Days following receipt of Net Cash Proceeds required to be prepaid pursuant to the provisions hereof in an amount equal to 100% of the Net Cash Proceeds received from any Disposition or Involuntary Disposition by the Borrower or any of its Subsidiaries, to the extent (A) such proceeds are not reinvested in the same or similar properties or assets within nine months of the date of such Disposition or Involuntary Disposition (or, if the Borrower or any of its Subsidiaries enters into a commitment to reinvest such Net Cash Proceeds within nine months of the date of such Disposition or Involuntary Disposition, within nine months of the date of such

commitment) and (B) the aggregate amount of such proceeds that are not reinvested (or committed to be reinvested) in accordance with clause (A) hereof exceeds $10,000,000 in any fiscal year.

(iii) Consolidated Excess Cash Flow. The Borrower shall prepay the Loans and L/C Obligations within 5 Business Days following delivery of each annual Compliance Certificate delivered under Section 7.02(b), commencing with the Compliance Certificate for the fiscal year ending December 31, 2007, in an amount equal to 50% of Consolidated Excess Cash Flow for the fiscal year to which such Compliance Certificate relates; provided that no such prepayment shall be required if at such time (A) the Consolidated Leverage Ratio shall be equal to or less than 2.5:1.0 and (B) the Debt Ratings are BB (stable) or higher as rated by S&P and Ba2 (stable) or higher as rated by Moody's.

(c) Application of Prepayments. Within each Loan, prepayments will be applied first to Base Rate Loans, then to Eurodollar Rate Loans in direct order of Interest Period maturities. In addition:

(i) Voluntary Prepayments. Voluntary prepayments shall be applied to such Loans as specified by the Borrower; provided that prepayments on the Tranche A Term Loan or the Tranche B Term Loan, as applicable, shall be applied pro rata to remaining principal amortization installments. Voluntary prepayments will be paid by the Administrative Agent to the Lenders ratably in accordance with their respective interests therein.

(ii) Mandatory Prepayments. Mandatory prepayments on the outstanding Loans and L/C Obligations will be paid by the Administrative Agent to the Lenders ratably in accordance with their respective interests therein; provided that:

(A) mandatory prepayments under subsection (b)(i)
above shall be applied to the respective Revolving Loans, Swing Line Loans and/or L/C Obligations as appropriate; and

(B) mandatory prepayments under subsections (b)(ii)
and (b)(iii) above shall be applied first to the Tranche B Term Loan until paid in full, second to the Tranche A Term Loan until paid in full and third to the Total Revolving Outstandings. Mandatory prepayments on the Tranche A Term Loan and the Tranche B Term Loan shall be applied pro rata to remaining principal amortization installments.

(iii) Eurodollar Prepayment Account. If the Borrower is required to make a mandatory prepayment of Eurodollar Rate Loans under this Section 2.04(b), so long as no Event of Default exists, the Borrower shall have the right, in lieu of making such prepayment in full, to deposit an amount equal to such mandatory prepayment with the Administrative Agent in a cash collateral account maintained (pursuant to documentation reasonably satisfactory to the Administrative Agent) by and in the sole dominion and control of the Administrative Agent. Any amounts so deposited shall be held by the Administrative Agent as collateral for the prepayment of such Eurodollar Rate Loans and shall be applied to the prepayment of the applicable Eurodollar Rate Loans at the end of the current Interest Periods applicable thereto or, sooner, at the election of the Administrative Agent, upon the occurrence of an Event of Default. At the request of the Borrower, amounts so deposited shall be invested by the Administrative Agent in Cash Equivalents maturing on or prior to the date or dates on which it is anticipated that such amounts will be applied to prepay such Eurodollar Rate Loans; any interest earned on such Cash Equivalents will be for the account of the Borrower and the Borrower will deposit with the Administrative Agent the amount of any loss on any such Cash Equivalents to the extent

         necessary in order that the amount of the prepayment to be made with
         the deposited amounts may not be reduced.

2.06     Termination or Reduction of Aggregate Revolving Committed Amount.

         The Aggregate Revolving Committed Amount may be permanently reduced in

whole or in part by notice from the Borrower to the Administrative Agent; provided that (a) any such notice thereof must be received by 11:00 a.m. at least three Business Days prior to the date of reduction or termination and any such reduction or termination shall be in a minimum principal amount of $5,000,000 and integral multiples of $1,000,000 in excess thereof (or the remaining amount of the Aggregate Revolving Committed Amount); and (b) the Aggregate Revolving Committed Amount may not be reduced to an amount less than the Total Revolving Outstandings. The Administrative Agent will give prompt notice to the Revolving Lenders of any such reduction in Aggregate Revolving Committed Amount. Any reduction of the Aggregate Revolving Committed Amount shall be applied to the Revolving Commitments of the Revolving Lenders ratably in accordance with their respective interests therein. All commitment or other fees accrued until the effective date of any termination of the Aggregate Revolving Committed Amount shall be paid on the effective date of such termination.

2.07 Repayment of Loans.

(a) Revolving Loans. The Borrower shall repay to the Revolving Lenders on the Maturity Date the aggregate principal amount of all Revolving Loans outstanding on such date.

(b) Swing Line Loans. The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) demand by the Swing Line Lender and (ii) the Maturity Date.

(c) Tranche A Term Loan. The outstanding principal amount of the Tranche A Term Loan shall be repayable in consecutive quarterly installments on the dates set forth below, beginning on December 31, 2007 and ending on the Maturity Date, as follows (expressed in terms of percentage of original principal amount), unless accelerated sooner pursuant to Section 9.02:

------------------------------------- -------------------------------
            PAYMENT DATE                 PRINCIPAL AMORTIZATION
                                              PAYMENT AMOUNT
------------------------------------- -------------------------------
         December 31, 2007                        1.25%
------------------------------------- -------------------------------
           March 31, 2008                         1.25%
------------------------------------- -------------------------------
           June 30, 2008                          1.25%
------------------------------------- -------------------------------
         September 30, 2008                       1.25%
------------------------------------- -------------------------------
         December 31, 2008                        1.25%
------------------------------------- -------------------------------
           March 31, 2009                         1.25%
------------------------------------- -------------------------------
           June 30, 2009                          1.25%
------------------------------------- -------------------------------
         September 30, 2009                       1.25%
------------------------------------- -------------------------------
         December 31, 2009                        2.50%
------------------------------------- -------------------------------
           March 31, 2010                         2.50%
------------------------------------- -------------------------------
           June 30, 2010                          2.50%
------------------------------------- -------------------------------
         September 30, 2010                       2.50%
------------------------------------- -------------------------------
         December 31, 2010                        2.50%
------------------------------------- -------------------------------
           March 31, 2011                         2.50%
------------------------------------- -------------------------------
           June 30, 2011                          2.50%
------------------------------------- -------------------------------
           Maturity Date                          72.50%
------------------------------------- -------------------------------
               Total                             100.00%
------------------------------------- -------------------------------

(d) Tranche B Term Loan. The outstanding principal amount of the Tranche B Term Loan shall be repayable in consecutive quarterly installments on the dates set forth below, beginning on December 31, 2006 and ending on the Maturity Date, as follows (expressed in terms of percentage of original principal amount), unless accelerated sooner pursuant to Section 9.02.

------------------------------- ---------------------------- ---------------------------- ----------------------------
         PAYMENT DATE             PRINCIPAL AMORTIZATION            PAYMENT DATE            PRINCIPAL AMORTIZATION
                                      PAYMENT AMOUNT                                            PAYMENT AMOUNT
------------------------------- ---------------------------- ---------------------------- ----------------------------
      December 31, 2006                    0.25%                    June 30, 2010                    0.25%
------------------------------- ---------------------------- ---------------------------- ----------------------------
        March 31, 2007                     0.25%                 September 30, 2010                  0.25%
------------------------------- ---------------------------- ---------------------------- ----------------------------
        June 30, 2007                      0.25%                  December 31, 2010                  0.25%
------------------------------- ---------------------------- ---------------------------- ----------------------------
      September 30, 2007                   0.25%                   March 31, 2011                    0.25%
------------------------------- ---------------------------- ---------------------------- ----------------------------
      December 31, 2007                    0.25%                    June 30, 2011                    0.25%
------------------------------- ---------------------------- ---------------------------- ----------------------------
        March 31, 2008                     0.25%                 September 30, 2011                  0.25%
------------------------------- ---------------------------- ---------------------------- ----------------------------
        June 30, 2008                      0.25%                  December 31, 2011                  0.25%
------------------------------- ---------------------------- ---------------------------- ----------------------------
      September 30, 2008                   0.25%                   March 31, 2012                    0.25%
------------------------------- ---------------------------- ---------------------------- ----------------------------
      December 31, 2008                    0.25%                    June 30, 2012                    0.25%
------------------------------- ---------------------------- ---------------------------- ----------------------------
        March 31, 2009                     0.25%                 September 30, 2012                  0.25%
------------------------------- ---------------------------- ---------------------------- ----------------------------
        June 30, 2009                      0.25%                  December 31, 2012                  1.00%
------------------------------- ---------------------------- ---------------------------- ----------------------------
      September 30, 2009                   0.25%                   March 31, 2013                    1.00%
------------------------------- ---------------------------- ---------------------------- ----------------------------
      December 31, 2009                    0.25%                    June 30, 2013                    1.00%
------------------------------- ---------------------------- ---------------------------- ----------------------------
        March 31, 2010                     0.25%                    Maturity Date                   91.00%
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                                                        Total                       100.00%
------------------------------- ---------------------------- ---------------------------- ----------------------------

2.08     Interest.

         (a) Subject to the provisions of subsection (b) below, (i) each
         Eurodollar Rate Loan shall bear interest on the outstanding principal
         amount thereof for each Interest Period at a rate per annum equal to
         the sum of (A) the Eurodollar Rate for such Interest Period plus (B)
         the Applicable Rate; (ii) each Base Rate Loan shall bear interest on
         the outstanding principal amount thereof from the applicable borrowing
         date at a rate per annum equal to the Base Rate plus the Applicable
         Rate; and (iii) unless otherwise mutually agreed between the Borrower
         and the Swing Line Lender, each Swing Line Loan shall bear interest on
         the outstanding principal amount thereof from the applicable borrowing
         date at a rate per annum equal to the Base Rate plus the Applicable
         Rate.

         (b) (i) If any amount of principal of any Loan is not paid when due
         (without regard to any applicable grace periods), whether at stated
         maturity, by acceleration or otherwise, such amount shall thereafter
         bear interest at a fluctuating interest rate per annum at all times
         equal to the Default Rate to the fullest extent permitted by applicable
         Laws.

                  (ii) If any amount (other than principal of any Loan) payable
         by the Borrower under any Loan Document is not paid when due (without
         regard to any applicable grace periods), whether at stated maturity, by
         acceleration or otherwise, then upon the request of the Required
         Lenders, such amount shall thereafter bear interest at a fluctuating
         interest rate per annum at all times equal to the Default Rate to the
         fullest extent permitted by applicable Laws.

(iii) Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

2.09 Fees.

In addition to certain fees described in subsections (i) and (j) of
Section 2.03:

                  (a) Commitment Fee. The Borrower shall pay to the
         Administrative Agent for the account of each Revolving Lender in
         accordance with its Pro Rata Share, a commitment fee in Dollars equal
         to the product of (i) the Applicable Rate times (ii) the actual daily
         amount by which the Aggregate Revolving Committed Amount exceeds the
         sum of (y) the Outstanding Amount of Revolving Loans and (z) the
         Outstanding Amount of L/C Obligations. The commitment fee shall accrue
         at all times during the Availability Period, including at any time
         during which one or more of the conditions in Section 5.02 is not met,
         and shall be (i) computed on a quarterly basis in arrears and (ii) due
         and payable on the fifth (5th) Business Day after the end of each
         March, June, September and December, commencing with the first such
         date to occur after the Closing Date, and on the Maturity Date. The
         commitment fee shall be calculated quarterly in arrears, and if there
         is any change in the Applicable Rate during any quarter, the actual
         daily amount shall be computed and multiplied by the Applicable Rate
         separately for each period during such quarter that such Applicable
         Rate was in effect. For purposes of clarification, Swing Line Loans
         shall not be considered outstanding for purposes of determining the
         unused portion of the Aggregate Revolving Committed Amount.

                  (b) Fee Letter. The Borrower shall pay to BAS and the
         Administrative Agent for their own respective accounts, in Dollars,
         fees in the amounts and at the times specified in the Fee Letter. Such
         fees shall be fully earned when paid and shall be non-refundable for
         any reason whatsoever.

2.10     Computation of Interest and Fees.

         All computations of interest for Base Rate Loans when the Base Rate is

determined by Bank of America's "prime rate" shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day.

2.11 Evidence of Debt.

(a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a promissory note, which shall evidence such Lender's Loans in addition to such accounts or records. Each such promissory note shall (i) in the case of Revolving Loans, be in the form of Exhibit C-1 (a "Revolving Note"), (ii) in the case of Swing Line Loans, be in the form of Exhibit C-2 (a "Swing Line Note"), (iii) in the case of the Tranche A Term Loan, be in the form of Exhibit C-3 (a "Tranche A Term Note") and (iv) in the case of the Tranche B Term Loan, be in the form of Exhibit C-4 (a "Tranche B Term Note"). Each Lender may attach schedules to a Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

(b) In addition to the accounts and records referred to in subsection
(a), each Revolving Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Revolving Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

2.12 Payments Generally; Administrative Agent's Clawback.

(a) General. All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent's Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender's Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. Subject to the definition of "Interest Period", if any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02)

and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the Overnight Rate, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender's Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Overnight Rate.

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Section 5.02 are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 11.05(b) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 11.05(b) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 11.05(b).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

2.13 Sharing of Payments.

If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Loans made by it, or the participations in L/C Obligations or in Swing Line Loans held by it (but not including any amounts applied by the Swing Line Lender to outstanding Swing Line Loans), any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Loans made by them and/or such subparticipations in the participations in L/C Obligations or Swing Line Loans held by them, as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Loans or such participations, as the case may be, pro rata with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section 11.06 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender's ratable share (according to the proportion of (i) the amount of such paying Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon. The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 11.09) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or repayments. Each Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Any and all payments by any Loan Party to or for the account of the Administrative Agent or any Lender under any Loan Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, branch profits taxes and all liabilities with respect thereto, excluding, in the case of the Administrative Agent and each Lender, taxes imposed on or measured by its overall net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Agent or such Lender, as the case may be, is organized or maintains a lending office (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as "Taxes"). If any Loan Party shall be required by any Laws to deduct any Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), each of the Administrative Agent and such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan Party shall make such deductions, (iii) such Loan Party shall pay the full amount deducted

to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within thirty days after the date of such payment, such Loan Party shall furnish to the Administrative Agent (which shall forward the same to such Lender) the original or a certified copy of a receipt evidencing payment thereof.

(b) In addition, the Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter referred to as "Other Taxes").

(c) If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, the Borrower shall also pay to the Administrative Agent or to such Lender, as the case may be, at the time interest is paid, such additional amount that the Administrative Agent or such Lender specifies is necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) that the Administrative Agent or such Lender would have received if such Taxes or Other Taxes had not been imposed.

(d) The Borrower agrees to indemnify the Administrative Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by the Administrative Agent and such Lender, (ii) amounts payable under Section 3.01(c) and (iii) any liability (including additions to tax, penalties, interest and expenses) arising therefrom or with respect thereto, in each case whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Payment under this subsection (d) shall be made within thirty days after the date the Lender or the Administrative Agent makes a demand therefor.

3.02 Illegality.

If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of Dollars in the applicable interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans, shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert such Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.

3.03 Inability to Determine Rates.

If the Administrative Agent determines that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (i) deposits are not being offered to banks in the applicable offshore interbank market for Dollars for the applicable amount and Interest Period of such Eurodollar Rate Loan, (ii) adequate and reasonable means do not exist for determining the Eurodollar Base Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (iii) the Eurodollar Base Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to the Lenders of funding such Loan, the Administrative Agent will promptly notify the Borrower and all Lenders. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing, conversion or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

3.04 Increased Cost and Reduced Return; Capital Adequacy.

(a) If any Lender determines that as a result of the introduction of or any change in or in the interpretation of any Law, or such Lender's compliance therewith, there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Loans or (as the case may be) issuing or participating in Letters of Credit, or a reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this subsection (a) any such increased costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or any foreign jurisdiction or any political subdivision of either thereof under the Laws of which such Lender is organized or has its Lending Office, and (iii) reserve requirements utilized, as to Eurodollar Rate Loans, in the determination of the Eurodollar Rate), then from time to time upon demand of such Lender (with a copy of such demand to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction.

(b) If any Lender determines that the introduction of any Law regarding capital adequacy or any change therein or in the interpretation thereof, or compliance by such Lender (or its Lending Office) therewith, has the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender's desired return on capital), then from time to time upon demand of such Lender (with a copy of such demand to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction.

3.05 Funding Losses.

Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower;

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of:

(i) a request by the Borrower pursuant to Section 11.16; or

(ii) an assignment by Bank of America pursuant to
Section 11.07(b) as part of the primary syndication of the Commitments and Loans during the 180-day period immediately following the Closing Date, provided that Bank of America agrees to use reasonable efforts to reduce the breakage costs payable by the Borrower in connection therewith (including, without limitation, to the extent reasonably practical, closing such assignments at the end of Interest Periods of outstanding Eurodollar Rate Loans);

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the offshore interbank eurodollar market for Dollars for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

3.06 Matters Applicable to all Requests for Compensation.

(a) A certificate of the Administrative Agent or any Lender claiming compensation under this Article III and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, the Administrative Agent or such Lender may use any reasonable averaging and attribution methods.

(b) Upon any Lender's making a claim for compensation under Section 3.01 or 3.04, the Borrower may replace such Lender in accordance with Section 11.16.

3.07 Survival.

All of the Borrower's obligations under this Article III shall survive termination of the Commitments and repayment of all other Obligations hereunder.

ARTICLE IV

GUARANTY

4.01 The Guaranty.

Each of the Guarantors hereby jointly and severally guarantees to each Lender, each Affiliate of a Lender that enters into a Swap Contract or Treasury Management Agreement with a Loan Party, and the Administrative Agent as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors hereby further

agree that if any of the Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms of such extension or renewal.

Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents, Swap Contracts or Treasury Management Agreements, the obligations of each Guarantor under this 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 the Debtor Relief Laws or any comparable provisions of any applicable state law.

4.02 Obligations Unconditional.

The obligations of the Guarantors under Section 4.01 are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan Documents, Swap Contracts or Treasury Management Agreements, or any other agreement or instrument referred to therein, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this
Section 4.02 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each Guarantor agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any other Guarantor for amounts paid under this Article IV until such time as the Obligations have been paid in full and the Commitments have expired or terminated. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as described above:

(a) at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Obligations shall be extended, or such performance or compliance shall be waived;

(b) any of the acts mentioned in any of the provisions of any of the Loan Documents, any Swap Contract or Treasury Management Agreement between any Loan Party and any Lender, or any Affiliate of a Lender, or any other agreement or instrument referred to in the Loan Documents, such Swap Contracts or such Treasury Management Agreements shall be done or omitted;

(c) the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Loan Documents, any Swap Contract or Treasury Management Agreement between any Loan Party and any Lender, or any Affiliate of a Lender, or any other agreement or instrument referred to in the Loan Documents, such Swap Contracts or such Treasury Management Agreements shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with;

(d) any Lien granted to, or in favor of, the Administrative Agent or any Lender or Lenders as security for any of the Obligations shall fail to attach or be perfected; or

(e) any of the Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of any Guarantor) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of any Guarantor).

With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents, any Swap Contract or Treasury Management Agreement between any Loan Party and any Lender, or any Affiliate of a Lender, or any other agreement or instrument referred to in the Loan Documents, such Swap Contracts or such Treasury Management Agreements, or against any other Person under any other guarantee of, or security for, any of the Obligations.

4.03 Reinstatement.

The obligations of the Guarantors under this Article IV shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent and each Lender on demand for all reasonable costs and expenses (including, without limitation, fees and expenses of counsel) incurred by the Administrative Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

4.04 Certain Additional Waivers.

Each Guarantor further agrees that such Guarantor shall have no right of recourse to security for the Obligations, except through the exercise of rights of subrogation pursuant to Section 4.02 and through the exercise of rights of contribution pursuant to Section 4.06.

4.05 Remedies.

The Guarantors agree that, to the fullest extent permitted by law, as between the Guarantors, on the one hand, and the Administrative Agent and the Lenders, on the other hand, the Obligations may be declared to be forthwith due and payable as provided in Section 9.02 (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 9.02) for purposes of Section 4.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become automatically due and payable), the Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of Section 4.01. The Guarantors acknowledge and agree that their obligations hereunder are secured in accordance with the terms of the Collateral Documents and that the Lenders may exercise their remedies thereunder in accordance with the terms thereof.

4.06 Rights of Contribution.

The Guarantors agree among themselves that, in connection with payments made hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under applicable law. Such contribution rights shall be subordinate and subject in right of payment to the obligations of such

Guarantors under the Loan Documents and no Guarantor shall exercise such rights of contribution until all Obligations have been paid in full and the Commitments have terminated.

4.07 Guarantee of Payment; Continuing Guarantee.

The guarantee in this Article IV is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to all Obligations whenever arising.

ARTICLE V

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

5.01 Conditions of Initial Credit Extension.

The obligation of each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:

(a) Loan Documents. Receipt by the Administrative Agent of executed counterparts of this Agreement, the Security Agreement and the Pledge Agreement, each properly executed by a Responsible Officer of the signing Loan Party and, in the case of this Agreement, by each Lender.

(b) Opinions of Counsel. 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 Closing Date, and in form and substance satisfactory to the Administrative Agent.

(i) consolidated financial statements of the Borrower and its Subsidiaries for the fiscal years ended December 31, 2003, December 31, 2004 and December 31, 2005, including balance sheets and income and cash flow statements, in each case audited by independent public accountants of recognized national standing and prepared in conformity with GAAP; and

(ii) unaudited consolidated financial statements of the Borrower and its Subsidiaries for the fiscal quarter ending June 30, 2006, including balance sheets and statements of income or operations, shareholders' equity and cash flows (the "Interim Financial Statements").

(d) No Material Adverse Change. There shall not have occurred a material adverse change since December 31, 2005 in the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.

(e) Litigation. There shall not exist any action, suit, investigation or proceeding pending or threatened in any court or before an arbitrator or Governmental Authority that could reasonably be expected to have a Material Adverse Effect or a material adverse effect on any transaction contemplated hereby or by the Reorganization Plan.

(f) Organization Documents, Resolutions, Etc. 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 Closing Date;

(ii) 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 Agreement and the other Loan Documents to which such Loan Party is a party; and

(iii) 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.

(g) Perfection and Priority of Liens. Receipt by the Administrative Agent of the following:

(i) searches of Uniform Commercial Code filings in the jurisdiction of formation of each Loan Party, and, if located in the states of Alabama, Mississippi or Arizona, also the jurisdiction of the chief executive office of each Loan Party and each jurisdiction where any Collateral is located;

(ii) all certificates evidencing any certificated Capital Stock (including those evidencing interests in Material First-Tier Foreign Subsidiaries, but subject to the provisions of Section 7.15 regarding certain items and deliveries which may be made after the Closing Date in respect thereof) pledged to the Collateral Agent pursuant to the Pledge Agreement, together with duly executed in blank, undated stock powers attached thereto;

(iii) searches of ownership of, and Liens on, intellectual property of each Loan Party in the United States Copyright Office and the United States Patent and Trademark Office; and

(iv) duly executed notices of grant of security interest in the form required by the Security Agreement as are necessary, in the Collateral Agent's sole discretion, to perfect the Collateral Agent's security interest in the intellectual property of the Loan Parties.

(h) Evidence of Insurance. Receipt by the Administrative Agent of certificates of insurance of the Loan Parties evidencing general liability and property insurance meeting the requirements set forth in the Loan Documents, including, but not limited to, naming the Collateral Agent as additional insured (in the case of general liability insurance) or loss payee for claims in excess of $10,000,000 (in the case of property insurance) on behalf of the Lenders.

(i) Closing Certificate. Receipt by the Administrative Agent of a certificate signed by a Responsible Officer of the Borrower certifying that the conditions specified in Sections 5.01(d) and (e) and Sections 5.02(a) and (b) have been satisfied.

(j) Reorganization Plan; Confirmation Order. Confirmation that
(i) there have been no substantive modifications to the provisions of
Section 7.16 of the Reorganization Plan, including clause (g) thereof,
(ii) all the conditions to the occurrence of the "Effective Date" of the Reorganization Plan set forth in Sections 7.16(b) - (f) and (h) (other than that related to the effectiveness of the Senior Credit Facility) under the Reorganization Plan shall have been satisfied or waived in a manner provided in the Reorganization Plan, (iii) the senior credit facilities provided hereunder constitute the credit facility referenced in Sections 7.16(g) and 7.23(f) of the Reorganization Plan and (iv) the Confirmation Order (as defined in the Reorganization Plan) shall have been entered, and shall not be subject to any stay and the condition precedent in Section 7.16(a) of the Reorganization Plan has either been satisfied or waived in accordance with the Reorganization Plan.

(k) Availability. After giving effect to the transactions contemplated hereby to occur on the Closing Date (including the initial Credit Extensions), there shall be at least $50,000,000 of availability existing under the Aggregate Revolving Committed Amount.

(l) DIP Loan Agreement. The commitments under the DIP Loan Agreement shall have been terminated and all obligations owing thereunder shall have been paid in full or otherwise satisfied to the satisfaction of the Administrative Agent.

(m) Fees. Receipt by the Administrative Agent and the Lenders of any fees required to be paid on or before the Closing Date.

(n) Attorney Costs. Unless waived by the Administrative Agent, the Borrower shall have paid all Attorney Costs of the Administrative Agent to the extent invoiced prior to or on the Closing Date, plus such additional amounts of Attorney Costs as shall constitute its reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).

Without limiting the generality of the provisions of Section 10.04, for purposes of determining compliance with the conditions specified in this Section 5.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

5.02 Conditions to all Credit Extensions.

The obligation of each Lender to honor any Request for Credit Extension is subject to the following conditions precedent:

(a) The representations and warranties of the Borrower and each other Loan Party contained in Article VI or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of the date of such Credit Extension, except to the extent that such representations and

warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date.

(b) No Default shall exist, or would result from such proposed Credit Extension.

(c) The Administrative Agent and, if applicable, the applicable L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof (other than with respect to the Existing DIP Letters of Credit).

Each Request for Credit Extension submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 5.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

The Loan Parties represent and warrant to the Administrative Agent and the Lenders that:

6.01 Existence, Qualification and Power.

Each Loan Party (a) is a corporation, partnership or limited liability company duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or
(c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.02 Authorization; No Contravention.

The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not (a) contravene the terms of any of such Person's Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under (i) any Contractual Obligation to which such Person is a party or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law (including, without limitation, Regulation U or Regulation X issued by the FRB); except in each case referred to in clause (b) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.03 Governmental Authorization; Other Consents.

No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document other than (i) those that have already been obtained and are in full force and effect and (ii) filings to perfect the Liens created by the Collateral Documents.

6.04 Binding Effect.

This Agreement and each other Loan Document has been duly executed and delivered by each Loan Party that is party thereto. This Agreement and each other Loan Document constitutes a legal, valid and binding obligation of each Loan Party that is party thereto, enforceable against each such Loan Party in accordance with its terms.

6.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, commitments and Indebtedness.

(b) The Interim Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

(c) From the date of the Audited Financial Statements to and including the Closing Date, there has been no Disposition by the Borrower or any Subsidiary, or any Involuntary Disposition, of any material part of the business or Property of the Borrower and its Subsidiaries, taken as a whole, and no purchase or other acquisition by any of them of any business or property (including any Capital Stock of any other Person) material in relation to the consolidated financial condition of the Borrower and its Subsidiaries, taken as a whole, in each case, which is not reflected in the foregoing financial statements or in the notes thereto and has not otherwise been disclosed in writing to the Lenders on or prior to the Closing Date.

(d) The financial statements delivered pursuant to Section 7.01(a) and
(b) have been prepared in accordance with GAAP (except as may otherwise be permitted under Section 7.01(a) and (b)) and present fairly (on the basis disclosed in the footnotes to such financial statements) the consolidated financial condition, results of operations and cash flows of the Borrower and its Subsidiaries as of such date and for such periods.

(e) Since the date of the Audited Financial Statements, there has been no event or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

6.06 Litigation.

There are no actions, suits, proceedings, investigations, claims or disputes pending or, to the knowledge of the Loan Parties, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that could reasonably be expected to have a Material Adverse Effect.

6.07 No Default.

(a) Neither the Borrower nor any Subsidiary is in default under or with respect to any Contractual Obligation that could reasonably be expected to have a Material Adverse Effect.

         (b) No Default has occurred and is continuing.

6.08     Ownership of Property; Liens.

         Each of the Borrower and its Subsidiaries has good record and

marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The property of the Borrower and its Subsidiaries is subject to no Liens, other than Permitted Liens.

6.09     Environmental Compliance.

         Except as could not reasonably be expected to have a Material Adverse
Effect:

                  (a) Each of the Facilities and all operations at the
         Facilities are in compliance with all applicable Environmental Laws,
         and there is no violation of any Environmental Law with respect to the
         Facilities or the Businesses, and there are no conditions relating to
         the Facilities or the Businesses that could give rise to liability
         under any applicable Environmental Laws.

                  (b) None of the Facilities contains, or has previously
         contained, any Hazardous Materials at, on or under the Facilities in
         amounts or concentrations that constitute or constituted a violation of
         Environmental Laws.

                  (c) Neither the Borrower nor any Subsidiary has received any
         written or verbal notice of, or inquiry from any Governmental Authority
         regarding, any violation, alleged violation, non-compliance, liability
         or potential liability regarding environmental matters or compliance
         with Environmental Laws with regard to any of the Facilities or the
         Businesses, nor does any Responsible Officer of any Loan Party have
         knowledge or reason to believe that any such notice will be received or
         is being threatened.

                  (d) Hazardous Materials have not been transported or disposed
         of from the Facilities, or generated, treated, stored or disposed of
         at, on or under any of the Facilities or any other location, in each
         case by or on behalf the Borrower or any Subsidiary in violation of, or
         in a manner that would be reasonably likely to give rise to liability
         under, any applicable Environmental Law.

                  (e) No judicial proceeding or governmental or administrative
         action is pending or, to the knowledge of the Responsible Officers of
         the Loan Parties, threatened, under any Environmental Law to which the
         Borrower or any Subsidiary is or will be named as a party, nor are
         there any consent decrees or other decrees, consent orders,
         administrative orders or other orders, or other administrative or
         judicial requirements outstanding under any Environmental Law with
         respect to the Borrower, any Subsidiary, the Facilities or the
         Businesses.

                  (f) There has been no release or, threat of release of
         Hazardous Materials at or from the Facilities, or arising from or
         related to the operations (including, without limitation, disposal) of
         the Borrower or any Subsidiary in connection with the Facilities or
         otherwise in connection with the Businesses, in violation of or in

         amounts or in a manner that could give rise to liability under
         Environmental Laws.

6.10     Insurance.

         The properties of the Borrower and its Subsidiaries are insured with

financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates. The insurance coverage of the Loan Parties as in effect on the Closing Date is outlined as to carrier, policy number, expiration date, type, amount and deductibles on Schedule 6.10.

6.11 Taxes.

The Borrower and its Subsidiaries have filed all federal, state and other material tax returns and reports required to be filed, and have paid all federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP and except to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect. There is no proposed tax assessment against the Borrower or any Subsidiary that would, if made, have a Material Adverse Effect.

6.12 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Internal Revenue Code and other federal or state Laws, except non-compliance that has not resulted or could not reasonably be expected to result in a Material Adverse Effect. Each Pension Plan that is intended to qualify under Section 401(a) of the Internal Revenue Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of the Loan Parties, nothing has occurred which would prevent, or cause the loss of, such qualification and has resulted or could reasonably be expected to result in a Material Adverse Effect. Each Loan Party and each ERISA Affiliate have timely made all required contributions to each Pension Plan subject to Section 412 of the Internal Revenue Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Internal Revenue Code has been made with respect to any Pension Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(b) There are no pending or, to the best knowledge of the Loan Parties, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Pension Plan that could be reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(c) (i) No ERISA Event has occurred since the Closing Date or is reasonably expected to occur; (ii) no Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA) which has resulted or could reasonably be expected to result in a Material Adverse Effect; and (iii) no Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with

respect to a Multiemployer Plan, which has resulted or could reasonably be expected to result in a Material Adverse Effect.

6.13 Subsidiaries.

Set forth on Schedule 6.13 is a complete and accurate list as of the Closing Date of each Subsidiary, together with (i) jurisdiction of formation,
(ii) with respect to the Loan Parties only, the number of shares of each class of Capital Stock outstanding, (iii) percentage of outstanding shares of each class owned (directly or indirectly) by the Borrower or any Subsidiary and (iv) number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect thereto. The outstanding Capital Stock of each Subsidiary is validly issued, fully paid and non-assessable.

6.14 Margin Regulations; Investment Company Act.

(a) The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.

(b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is required to be registered as an "investment company" under the Investment Company Act of 1940.

6.15 Disclosure.

Each Loan Party has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished in writing by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

6.16 Compliance with Laws.

Each of the Borrower and each Subsidiary is in compliance with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

6.17 Intellectual Property; Licenses, Etc.

The Borrower and its Subsidiaries own, or possess the legal right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, "IP Rights") that are reasonably necessary for the operation of their respective businesses. Set forth on Schedule 6.17 is a list of all material IP Rights registered or pending registration with the United States Copyright Office or the United States Patent and Trademark Office and owned by

each Loan Party as of the Closing Date. Except for such claims and infringements that could not reasonably be expected to have a Material Adverse Effect, no claim has been asserted and is pending by any Person challenging or questioning the use of any IP Rights or the validity or effectiveness of any IP Rights, nor does any Loan Party know of any such claim, and, to the knowledge of the Responsible Officers of the Loan Parties, the use of any IP Rights by the Borrower or any Subsidiary or the granting of a right or a license in respect of any IP Rights from the Borrower or any Subsidiary does not infringe on the rights of any Person. As of the Closing Date, none of the material IP Rights owned by any of the Loan Parties is subject to any licensing agreement or similar arrangement except as set forth on Schedule 6.17.

6.18     Solvency.

         The Loan Parties are Solvent on a consolidated basis.

6.19     Perfection of Security Interests in the Collateral.

         (a) The Security Agreement is effective to create in favor of the

Collateral Agent, for the ratable benefit of the holders of the secured obligations identified therein, a legal and valid security interest in the Collateral identified therein, and, when Uniform Commercial Code financing statements (or other appropriate notices) in appropriate form are duly filed at the office of the secretary of state of the jurisdiction of incorporation or organization of each Loan Party, the Security Agreement shall create a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in such Collateral, in each case prior and superior in right to any other Lien other than Permitted Liens.

(b) The Pledge Agreement is effective to create in favor of the Collateral Agent, for the ratable benefit of the holders of the secured obligations identified therein, a legal and valid security interest in the Collateral identified therein, and the Pledge Agreement shall create a fully perfected first priority Lien on, and security interest in, all right, title and interest of the pledgors thereunder in such Collateral, in each case prior and superior in right to any other Lien (i) with respect to any such Collateral that is a "security" (as such term is defined in the Uniform Commercial Code) and is evidenced by a certificate, when such Collateral is delivered to the Collateral Agent with duly executed stock powers with respect thereto, (ii) with respect to any such Collateral that is a "security" (as such term is defined in the Uniform Commercial Code) but is not evidenced by a certificate, when Uniform Commercial Code financing statements in appropriate form are filed in the appropriate filing offices in the jurisdiction of organization of the pledgor or when "control" (as such term is defined in the Uniform Commercial Code) is established by the Collateral Agent over such interests in accordance with the provision of Section 8-106 of the Uniform Commercial Code, or any successor provision, and (iii) with respect to any such Collateral that is not a "security" (as such term is defined in the Uniform Commercial Code), when Uniform Commercial Code financing statements in appropriate form are filed in the appropriate filing offices in the jurisdiction of organization of the pledgor.

6.20 Business Locations.

Set forth on Schedule 6.20(a) is the exact legal name, jurisdiction of organization, chief executive office and organizational identification number of each Loan Party as of the Closing Date. Except as set forth on Schedule 6.20(b), no Loan Party has during the four months preceding the Closing Date (i) changed its legal name, (ii) changed its state of formation, or (iii) been party to a merger, consolidation or other change in structure.

6.21 Labor Matters.

Except as set forth on Schedule 6.21, there are no collective bargaining agreements or Multiemployer Plans covering the employees of the Borrower or any Subsidiary as of the Closing Date. Neither the Borrower nor any Subsidiary has suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last five years that could reasonably be expected to have a Material Adverse Effect.

ARTICLE VII

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Loan Parties shall and shall cause each Subsidiary to:

7.01     Financial Statements.

         Deliver to the Administrative Agent and each Lender:

                  (a) as soon as available, but in any event within ninety days
         after the end of each fiscal year of the Borrower, a consolidated
         balance sheet of the Borrower and its Subsidiaries as at the end of
         such fiscal year, and the related consolidated statements of income or
         operations, shareholders' equity and cash flows for such fiscal year,
         setting forth in each case in comparative form the figures for the
         previous fiscal year, all in reasonable detail and prepared in
         accordance with GAAP, audited and accompanied by a report and opinion
         of KPMG LLP or another independent certified public accountant of
         nationally recognized standing reasonably acceptable to the Required
         Lenders, which report and opinion shall be prepared in accordance with
         generally accepted auditing standards and shall not be subject to any
         "going concern" or like qualification or exception or any qualification
         or exception as to the scope of such audit; and

                  (b) as soon as available, but in any event within forty-five
         days after the end of each of the first three fiscal quarters of each
         fiscal year of the Borrower, a consolidated balance sheet of the
         Borrower and its Subsidiaries as at the end of such fiscal quarter, and
         the related consolidated statements of income or operations,
         shareholders' equity and cash flows for such fiscal quarter and for the
         portion of the Borrower's fiscal year then ended, setting forth in each
         case in comparative form the figures for the corresponding fiscal
         quarter of the previous fiscal year and the corresponding portion of
         the previous fiscal year, all in reasonable detail and certified by a
         Responsible Officer of the Borrower as fairly presenting the financial
         condition, results of operations, shareholders' equity and cash flows
         of the Borrower and its Subsidiaries in accordance with GAAP, subject
         only to normal year-end audit adjustments and the absence of footnotes.

         As to any information contained in materials furnished pursuant to
         Section 7.02(c), the Borrower shall not be separately required to
         furnish such information under clause (a) or (b) above, but the
         foregoing shall not be in derogation of the obligation of the Borrower
         to furnish the information and materials described in subsections (a)
         and (b) above at the times specified therein.

7.02     Certificates; Other Information.

         Deliver to the Administrative Agent and each Lender, in form and detail

reasonably satisfactory to the Administrative Agent:

(a) concurrently with the delivery of the financial statements referred to in Sections 7.01(a) and (b), a duly completed Compliance Certificate signed by a Responsible Officer of the Borrower, which certificate shall include (i) in the case of the annual Compliance Certificate, if a prepayment is required pursuant to Section 2.05(b)(iii), a calculation of Consolidated Excess Cash Flow for the applicable fiscal year and (ii) in the case of the annual Compliance Certificate, a listing of (A) all applications, if any, for material Copyrights, Patents or Trademarks (each such term as defined in the Security Agreement) made by any Loan Party since the date of the prior certificate (or, in the case of the first such certificate, the Closing Date) and (B) all issuances of registrations or letters on existing applications for material Copyrights, Patents and Trademarks (each such term as defined in the Security Agreement) received by any Loan Party since the date of the prior certificate (or, in the case of the first such certificate, the Closing Date);

(b) beginning with the fiscal year ending December 31, 2007, an annual business plan and budget of the Borrower and it Subsidiaries containing, among other things, pro forma financial statements for the fiscal year, when and as available, but in any event within ninety (90) days after the beginning of the fiscal year;

(c) promptly after any request by the Administrative Agent or any Lender through the Administrative Agent, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of any of them;

(d) promptly after the same are available, (i) copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934 or to a holder of any Indebtedness owed by the Borrower or any Subsidiary in its capacity as such a holder and not otherwise required to be delivered to the Administrative Agent pursuant hereto and (ii) upon the request of the Administrative Agent, all reports and written information to and from the United States Environmental Protection Agency, or any state or local agency responsible for environmental matters, the United States Occupational Health and Safety Administration, or any state or local agency responsible for health and safety matters, or any successor agencies or authorities concerning environmental, health or safety matters; and

(e) promptly, such additional information regarding the business, financial or corporate affairs of the Borrower or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 7.01(a) or (b) or Section 7.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower's website on the Internet at the website address listed on Schedule 11.02; or (ii) on which such documents are posted on the Borrower's behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease

delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrower shall notify (which may be by facsimile or electronic mail) the Administrative Agent and each Lender of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 7.02(a) to the Administrative Agent. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or BAS will make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, "Borrower Materials") by posting the Borrower Materials on IntraLinks or another similar electronic system (the "Platform") and (b) certain of the Lenders may be "public-side" Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Borrower or its securities) (each, a "Public Lender"). The Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked "PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall appear prominently on the first page thereof; (x) by marking Borrower Materials "PUBLIC," the Borrower shall be deemed to have authorized the Administrative Agent, BAS and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 11.08); (y) all Borrower Materials marked "PUBLIC" are permitted to be made available through a portion of the Platform designated as "Public Investor;" and (z) the Administrative Agent and BAS shall be entitled to treat any Borrower Materials that are not marked "PUBLIC" as being suitable only for posting on a portion of the Platform not marked as "Public Investor." Notwithstanding the foregoing, the Borrower shall not be under any obligation to mark any Borrower Materials "PUBLIC."

7.03 Notices.

(a) Promptly (and in any event, within two Business Days) notify the Administrative Agent and each Lender of the occurrence of any Default.

(b) Promptly notify the Administrative Agent and each Lender of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(d) Promptly notify the Administrative Agent and each Lender of any material change in accounting policies or financial reporting practices by the Borrower or any Subsidiary.

(e) Promptly notify the Administrative Agent and each Lender of any change in the Debt Ratings or Corporate Ratings or the fact that such ratings are no longer being publicly announced by S&P or Moody's.

Each notice pursuant to this Section 7.03 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section

7.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

7.04 Payment of Obligations.

Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien upon its property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness, except in each case to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

7.05 Preservation of Existence, Etc.

(a) Preserve, renew and maintain in full force and effect its legal existence under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 8.04 or 8.05.

(b) Preserve, renew and maintain in full force and effect its good standing under the Laws of the jurisdiction of its organization, except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect.

(c) Take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

(d) Preserve or renew all of its material registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

7.06 Maintenance of Properties.

(a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted.

(b) Make all necessary repairs thereto and renewals and replacements thereof, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

7.07 Maintenance of Insurance.

Maintain in full force and effect insurance (including worker's compensation insurance, liability insurance, casualty insurance and business interruption insurance) with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates. The Collateral Agent shall be named as loss payee, with respect to property insurance, and as additional insured, with respect to general liability insurance.

7.08 Compliance with Laws.

Comply with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

7.09 Books and Records.

(a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be.

(b) Maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.

7.10 Inspection Rights.

(a) Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower.

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, provided that in no event shall the proceeds of the Credit Extensions be used in contravention of any Law or of any Loan Document.

7.12 Additional Subsidiaries.

(a) Material Domestic Subsidiaries. Cause each Material Domestic Subsidiary to become a Guarantor hereunder promptly, but in any event within thirty (30) days of the Subsidiary becoming a Material Domestic Subsidiary, by execution and delivery of a Guaranty Joinder Agreement or such other documents as the Administrative Agent may deem appropriate for such purpose, together with certified copies of resolutions and Organization Documents and favorable opinions of counsel (including, among other things, due authorization, execution, delivery, and enforceability of the Guaranty Joinder Agreement and related documents), all in form, scope and substance reasonably satisfactory to the Administrative Agent.

(b) Other Domestic Subsidiaries. In addition, cause each Domestic Subsidiary that gives a Guarantee in respect of the Plan Notes or any 144A Notes to become a Guarantor hereunder promptly, but within thirty (30) days of the Subsidiary giving such a Guarantee, by execution and delivery of a Guaranty Joinder Agreement or such other documents as the Administrative Agent may deem appropriate for such purpose, together with certified copies of resolutions and Organization Documents and favorable opinions of counsel (including, among other

things, due authorization, execution, delivery, and enforceability of the Guaranty Joinder Agreement and related documents), all in form, scope and substance reasonably satisfactory to the Administrative Agent.

7.13 ERISA Compliance.

Cause, and cause each of its ERISA Affiliates to cause, each Plan that is qualified under Section 401(a) of the Internal Revenue Code to maintain such qualification, and make all required contributions to any Plan subject to
Section 412 of the Internal Revenue Code, except where the failure to do so would not result in a Material Adverse Effect.

7.14 Pledged Assets.

(a) Capital Stock of Material Domestic Subsidiaries. Subject to clause
(d) below, pledge one hundred percent (100%) of the issued and outstanding Capital Stock of each Loan Party's Material Domestic Subsidiaries promptly, but in any event within thirty (30) days of the formation or acquisition thereof, in each case pursuant to a pledge agreement or Collateral Joinder Agreement reasonably acceptable to the Administrative Agent, together with such filings and deliveries necessary or appropriate to perfect the security interests therein, and opinions of counsel relating thereto, all in form, scope and substance reasonably satisfactory to the Administrative Agent.

(b) Capital Stock of Material First-Tier Foreign Subsidiaries. Subject to clause (d) below, pledge sixty-five percent (65%) of the issued and outstanding Capital Stock of each Material First-Tier Foreign Subsidiary promptly, but in any event within ninety (90) days of such Subsidiary becoming a Material First-Tier Foreign Subsidiary, pursuant to a pledge agreement or Collateral Joinder Agreement reasonably acceptable to the Administrative Agent, together with such filings and deliveries necessary or appropriate to perfect the security interests therein, and opinions of counsel (including, among other things, opinions regarding execution, notarization and recordation of local pledge agreements, parallel debt agreements and such other acts necessary or appropriate to give effect to the pledge under local law) relating thereto, all in form, scope and substance reasonably satisfactory to the Administrative Agent; provided that in each such case the Administrative Agent will, in consultation with the Borrower, do an analysis of the relative benefits associated with the prospective pledge and where, in its reasonable discretion, the Administrative Agent shall make a determination, taking into account local custom and practice, that the costs, circumstances and requirements under local law associated with the pledge out-weigh the relative benefits of the pledge, then in any such case local pledge agreements (and related local law requirements) will not be required.

(c) Domestic Personal Property. Subject to clause (d) below, grant a security interest in all of each Loan Party's personal property (other than Excluded Property). In connection with any grant of security interest under this subsection, the Loan Parties will deliver to the Administrative Agent promptly, but in any event within thirty (30) days (with extensions as deemed necessary by the Administrative Agent) (i) a security agreement or Collateral Joinder Agreement in form and substance reasonably satisfactory to the Administrative Agent, executed in multiple counterparts, (ii) notices of grant of security interest in respect of material intellectual property with the United States Copyright Office or the United States Patent and Trademark Office reasonably satisfactory to the Administrative Agent, executed in multiple counterparts,
(iii) such opinions of counsel as the Administrative Agent may deem necessary or appropriate, in form and substance reasonably satisfactory to the Administrative Agent, (iv) evidence of property insurance (consistent with the requirements for insurance hereunder) showing the Collateral Agent as loss payee (if insurance is provided by a commercial insurer), and (v) such other filings and deliveries as may be necessary or appropriate as determined by the Administrative Agent in its reasonable discretion.

(d) Release and Reinstatement of Collateral Interests. Where the Corporate Ratings are BB+ (stable) or better by S&P and Ba1 (stable) or better by Moody's (the "Requisite Ratings") and provided that the Tranche B Term Loan has been repaid in full, then the Borrower shall not be required to deliver the security interests provided in this Section 7.14 and the Administrative Agent will promptly release the security interests in the Collateral; provided that should the Borrower fail to maintain the Requisite Ratings, the security interests in such personal property will be re-granted in accordance with the provisions of Sections 7.14(a), 7.14(b) and 7.14(c).

(e) Scope of Secured Obligations. The security interests granted under this Section 7.14 will ratably secure the Obligations hereunder (including obligations under Swap Contracts between a Loan Party and a Lender or its affiliates to the extent permitted hereunder and obligations under Treasury Management Agreements between a Loan Party and a Lender or its affiliates).

7.15     Further Assurances.

         The Borrower will provide, or cause to be provided, the following:

                  (a) Material First-Tier Foreign Subsidiaries. By March 31,
         2007 (or such later date acceptable to the Administrative Agent), the
         Borrower will pledge, or cause to be pledged, the Capital Stock of all
         its Material First-Tier Foreign Subsidiaries in accordance with the
         provisions of Section 7.14(b), including local pledge agreements and
         related instruments, where necessary or appropriate under local law,
         and together with opinions of local counsel relating thereto, in form
         and substance reasonably acceptable to the Administrative Agent.

ARTICLE VIII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, no Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly:

8.01 Liens.

Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:

(a) Liens pursuant to any Loan Document;

(b) Liens existing on the date hereof and listed on Schedule 8.01 and any renewals or extensions thereof, provided that the property covered thereby is not increased and any renewal or extension of the obligations secured or benefited thereby is permitted by Section 8.03(b);

(c) Liens (other than Liens imposed under ERISA) for taxes, assessments or governmental charges or levies not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(d) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and suppliers and other Liens imposed by law or pursuant to customary reservations or retentions of

title arising in the ordinary course of business, provided that such Liens secure only amounts not yet due and payable or, if due and payable, are unfiled and no other action has been taken to enforce the same or are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established;

(e) pledges or deposits in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

(f) deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(g) easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

(h) Liens securing judgments for the payment of money (or appeal or other surety bonds relating to such judgments) that do not result in an Event of Default under Section 9.01(h);

(i) Liens securing Indebtedness permitted under Section 8.03(e); provided that (i) such Liens do not at any time encumber any Property other than the Property financed by such Indebtedness, (ii) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the Property being acquired on the date of acquisition and (iii) such Liens attach to such Property concurrently with or within ninety days after the acquisition thereof;

(j) leases or subleases granted to others not interfering in any material respect with the business of the Borrower or any of its Subsidiaries;

(k) any interest of title of a lessor under, and Liens arising from UCC financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases permitted by this Agreement;

(l) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 8.02;

(m) normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions;

(n) Liens of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection;

(o) Liens of sellers of goods to the Borrower and any of its Subsidiaries arising under Article 2 of the Uniform Commercial Code or similar provisions of applicable law in the ordinary course of business, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses;

(p) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

                  (q) Liens on property or assets acquired in connection with a
         Permitted Acquisition, provided that (i) the indebtedness secured by
         such Liens is permitted under Section 8.03, and (ii) the Liens are not
         incurred in connection with, or in contemplation or anticipation of,
         the acquisition and do not attach or extend to any other property or
         assets;

                  (r) Liens on Securitization Receivables sold, contributed,
         financed or otherwise conveyed or pledged in connection with a
         Securitization Transaction permitted pursuant to Section 8.03(k); and

                  (s) other Liens not described above, provided that such Liens
         do not secure obligations in excess of $5,000,000 at any one time
         outstanding.

8.02     Investments.

         Make any Investments, except:

                  (a) Investments held by the Borrower or such Subsidiary in the
         form of cash or Cash Equivalents;

                  (b) Investments existing as of the Closing Date and set forth
         in Schedule 8.02;

                  (c) Investments in any Person that is a Loan Party prior to
         giving effect to such Investment;

                  (d) Investments consisting of extensions of credit in the
         nature of accounts receivable or notes receivable arising from the
         grant of trade credit in the ordinary course of business, and
         Investments received in satisfaction or partial satisfaction thereof
         from financially troubled account debtors to the extent reasonably
         necessary in order to prevent or limit loss;

                  (e) Guarantees permitted by Section 8.03;

                  (f) Permitted Acquisitions;

                  (g) Investments made after the Closing Date in Foreign
         Subsidiaries, provided that the aggregate amount of all such
         Investments made by Loan Parties in Foreign Subsidiaries shall not
         exceed an amount equal to five percent (5%) of total assets of the
         Borrower and its Subsidiaries on a consolidated basis determined in
         accordance with GAAP as of the last day of the fiscal quarter
         immediately preceding the date of determination;

                  (h) to the extent not prohibited by applicable Law, advances
         to officers, directors and employees of the Borrower and its
         Subsidiaries made in the ordinary course of business, for travel,
         entertainment, relocation and other ordinary business purposes;

                  (i) Investments by Foreign Subsidiaries in the Borrower and
         any of its Subsidiaries (including other Foreign Subsidiaries);

                  (j) Investments made as part of Securitization Transaction
         permitted pursuant to Section 8.03(k);

                  (k) Investments representing non-cash consideration received
         in connection with any Disposition permitted hereunder; and

                  (l) other Investments not contemplated in the foregoing
         clauses in an amount not to exceed $50,000,000 in the aggregate at any
         time outstanding.

8.03     Indebtedness.

         Create, incur, assume or suffer to exist any Indebtedness, except:

                  (a) Indebtedness under the Loan Documents;

                  (b) Indebtedness of the Borrower and its Subsidiaries set
         forth in Schedule 8.03 (and renewals, refinancings and extensions
         thereof on terms and conditions not materially less favorable to the
         applicable debtor(s) or at then prevailing market terms);

                  (c) unsecured intercompany Indebtedness among the Borrower and
         its Subsidiaries to the extent permitted under Section 8.02;

                  (d) obligations (contingent or otherwise) of the Borrower or
         any Subsidiary existing or arising under any Swap Contract, provided
         that (i) such obligations are (or were) entered into by such Person in
         the ordinary course of business for the purpose of directly mitigating
         risks associated with liabilities, commitments, investments, assets, or
         property held or reasonably anticipated by such Person, or changes in
         the value of securities issued by such Person, and not for purposes of
         speculation or taking a "market view;" and (ii) such Swap Contract does
         not contain any provision exonerating the non-defaulting party from its
         obligation to make any termination payments upon the designation of an
         "early termination date" (as defined therein) to the defaulting party;

                  (e) purchase money Indebtedness (including obligations in
         respect of Capital Leases or Synthetic Leases) hereafter incurred by
         the Borrower or any of its Subsidiaries to finance the purchase of
         fixed assets, and renewals, refinancings and extensions thereof,
         provided that (i) such Indebtedness when incurred shall not exceed the
         purchase price of the asset(s) financed, (ii) no such Indebtedness
         shall be refinanced for a principal amount in excess of the principal
         balance outstanding thereon at the time of such refinancing, and (iii)
         at the time of and immediately after giving effect to such incurrence,
         the Borrower will be in compliance with the financial covenants in
         Section 8.11 on a Pro Forma Basis;

                  (f) Indebtedness evidenced by the Plan Notes in an aggregate
         principal amount not to exceed $775,000,000, and renewals, refinancings
         and extensions thereof on prevailing market terms;

                  (g) other unsecured Indebtedness of the Borrower, provided
         that at the time of and immediately after giving effect to such
         incurrence, the Borrower will be in compliance with the financial
         covenants in Section 8.11 on a Pro Forma Basis;

                  (h) Guarantees with respect to Indebtedness permitted under
         clauses (a) through (g) of this Section 8.03;

                  (i) Indebtedness acquired or assumed pursuant to a Permitted
         Acquisition, provided that such Indebtedness was not incurred in
         connection with, or in anticipation or contemplation of, such Permitted
         Acquisition;

                  (j) Indebtedness arising under any performance or surety bond
         entered into in the ordinary course of business; and

                  (k) Securitization Transactions in an aggregate principal
         amount not to exceed $150,000,000.

8.04     Fundamental Changes.

         Merge, dissolve, liquidate, consolidate with or into another Person, or

Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person; provided that, notwithstanding the foregoing provisions of this Section 8.04 but subject to the terms of Sections 7.12 and 7.14, (a) the Borrower may merge or consolidate with any of its Subsidiaries provided that the Borrower shall be the continuing or surviving corporation, (b) any Loan Party other than the Borrower may merge or consolidate with any other Loan Party other than the Borrower, (c) any Foreign Subsidiary may be merged or consolidated with or into any Loan Party provided that such Loan Party shall be the continuing or surviving corporation, (d) any Foreign Subsidiary may be merged or consolidated with or into any other Foreign Subsidiary, (e) any Subsidiary of the Borrower may merge with any Person that is not a Loan Party in connection with a Permitted Acquisition provided that, if such Permitted Acquisition involves the Borrower, the Borrower shall be the continuing or surviving corporation, and (f) any Subsidiary may dissolve, liquidate or wind up its affairs at any time provided that such dissolution, liquidation or winding up, as applicable, could not have a Material Adverse Effect.

8.05 Dispositions.

Make any Disposition (other than an Involuntary Disposition) unless (a) the total consideration shall be in an amount not less than the fair market value of the Property disposed of, (b) such transaction does not involve a sale or other disposition of receivables other than in connection with a Securitization Transaction permitted pursuant to Section 8.03(k) or receivables owned by or attributable to other Property concurrently being disposed of in a transaction otherwise permitted under this Section 8.05, and (c) the aggregate net book value of all of the assets sold or otherwise disposed of by the Borrower and its Subsidiaries in all such transactions in any fiscal year of the Borrower shall not exceed an amount equal to fifteen percent (15%) of the total assets of the Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP as of the last day of the fiscal quarter immediately preceding the date of determination.

8.06 Restricted Payments.

Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that:

(a) each Subsidiary may make Restricted Payments (directly or indirectly) to its parent or to any Loan Party (and, in the case of a Restricted Payment by a non-wholly-owned Subsidiary, to each owner of Capital Stock in such Subsidiary on a pro rata basis based on such owner's respective ownership interests);

                  (b) the Borrower and each Subsidiary may declare and make
         dividend payments or other distributions payable solely in the Capital
         Stock of such Person; and

                  (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, with unused amounts in any fiscal year being carried over to
         succeeding fiscal years.

8.07     Change in Nature of Business.

         Engage in any material line of business substantially different from

those lines of business conducted by the Borrower and its Subsidiaries on the Closing Date or any business related or incidental thereto.

8.08 Transactions with Affiliates.

Enter into or permit to exist any transaction or series of transactions with any Affiliate of such Person other than (a) advances of working capital to any Loan Party, (b) transfers of cash and assets to any Loan Party, (c) intercompany transactions expressly permitted by Section 8.02, Section 8.03,
Section 8.04, Section 8.05 or Section 8.06, (d) transactions among the Borrower and its Subsidiaries and (e) except as otherwise specifically limited in this Agreement, other transactions which are entered into in the ordinary course of such Person's business on terms and conditions substantially as favorable to such Person as would be obtainable by it in a comparable arms-length transaction with a Person other than an officer, director or Affiliate.

8.09 Burdensome Agreements.

(a) Enter into, or permit to exist, any Contractual Obligation that encumbers or restricts on the ability of any such Person to (i) pay dividends or make any other distributions to any Loan Party on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits,
(ii) pay any Indebtedness or other obligation owed to any Loan Party, (iii) make loans or advances to any Loan Party, (iv) sell, lease or transfer any of its Property to any Loan Party, (v) pledge its Property pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof or (vi) act as a Loan Party pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except (in respect of any of the matters referred to in clauses (i)-(v) above) for (1) this Agreement, the other Loan Documents, the Plan Note Indenture and any 144A Indenture, (2) with respect to clauses (iv) and (v) above, any document or instrument governing Indebtedness incurred pursuant to Section 8.03(e), provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith, (3) customary restrictions and conditions contained in any agreement relating to the sale of any Property permitted under Section 8.05 pending the consummation of such sale or (4) restrictions and conditions on any Foreign Subsidiary organized under the laws of the People's Republic of China or any state or other political subdivision thereof.

(b) Enter into, or permit to exist, any Contractual Obligation that prohibits or otherwise restricts the existence of any Lien upon any of its Property in favor of the Administrative Agent (for the benefit of the Lenders) for the purpose of securing the Obligations, whether now owned or hereafter acquired, or requiring the grant of any security for any obligation if such Property is given as security for the Obligations, except (i) any document or instrument governing Indebtedness incurred pursuant to Section 8.03(e), provided that any such restriction contained therein relates only to the asset or assets

constructed or acquired in connection therewith, (ii) in connection with any Permitted Lien described in Section 8.01(j) or (k) or any document or instrument governing any such Permitted Lien, provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien,
(iii) pursuant to customary restrictions and conditions contained in any agreement relating to the sale of any Property permitted under Section 8.05, pending the consummation of such sale and (iv) the Plan Note Indenture and any 144A Indenture.

8.10 Use of Proceeds.

Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

8.11 Financial Covenants.

(a) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less than 3.0 to 1.0, commencing with the fiscal quarter ending December 31, 2006.

(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of the Borrower to be greater than 3.75 to 1.0, commencing with the fiscal quarter ending December 31, 2006.

8.12 Prepayment of Other Indebtedness, Etc.

If any Default has occurred and is continuing or shall exist immediately after giving effect thereto, except for the refinancing of the Plan Notes with the proceeds of 144A Notes, make (or give any notice with respect thereto) any voluntary or optional payment or prepayment or redemption or acquisition for value of (including without limitation, by way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due), refund, refinance or exchange of any Indebtedness of the Borrower or any Subsidiary (other than Indebtedness arising under the Loan Documents).

8.13     Organization Documents; Fiscal Year; Legal Name, State of Formation and
         Form of Entity.

         (a) Amend, modify or change its Organization Documents in a manner

materially adverse to the Lenders.

(b) Change its fiscal year.

(c) With respect to any Loan Party, without providing 5 days' prior written notice to the Administrative Agent, change its name, state of formation or form of organization.

ARTICLE IX

EVENTS OF DEFAULT AND REMEDIES

9.01 Events of Default.

Any of the following shall constitute an Event of Default:

(a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan or any L/C Obligation, or (ii) within three Business Days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) within five Business Days after written notice thereof to the defaulting party by the Administrative Agent of the same becoming due, any other amount payable hereunder or under any other Loan Document; or

(b) Specific Covenants. (i) The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 7.03(a), 7.05, 7.11, 7.12 or 7.14 or Article VIII; or

(ii) The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 7.01, 7.02, or 7.10 and such failure continues for five days; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty days after written notice to the defaulting party by the Administrative Agent; or

(d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or

(e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $50,000,000, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is greater than $50,000,000; or

(f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator,

         rehabilitator or similar officer for it or for all or any material part
         of its property; or any receiver, trustee, custodian, conservator,
         liquidator, rehabilitator or similar officer is appointed without the
         application or consent of such Person and the appointment continues
         undischarged or unstayed for sixty calendar days; or any proceeding
         under any Debtor Relief Law relating to any such Person or to all or
         any material part of its property is instituted without the consent of
         such Person and continues undismissed or unstayed for sixty calendar
         days, or an order for relief is entered in any such proceeding; or

                  (g) Inability to Pay Debts; Attachment. (i) The Borrower or
         any Subsidiary becomes unable or admits in writing its inability or
         fails generally to pay its debts as they become due, or (ii) any writ
         or warrant of attachment or execution or similar process is issued or
         levied against all or any material part of the property of any such
         Person and is not released, vacated or fully bonded within thirty days
         after its issue or levy; or

                  (h) Judgments. There is entered against the Borrower or any
         Subsidiary (i) one or more final judgments or orders for the payment of
         money in an aggregate amount exceeding $50,000,000 (to the extent not
         covered by independent third-party insurance as to which the insurer
         does not dispute coverage), or (ii) any one or more non-monetary final
         judgments that have, or could reasonably be expected to have,
         individually or in the aggregate, a Material Adverse Effect and, in
         either case, (A) enforcement proceedings are commenced by any creditor
         upon such judgment or order, or (B) there is a period of ten
         consecutive days during which a stay of enforcement of such judgment,
         by reason of a pending appeal or otherwise, is not in effect; or

                  (i) ERISA. (i) An ERISA Event occurs with respect to a Pension
         Plan or Multiemployer Plan which has resulted or could reasonably be
         expected to result in liability of the Borrower under Title IV of ERISA
         to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate
         amount in excess of $50,000,000, or (ii) the Borrower or any ERISA
         Affiliate fails to pay when due, after the expiration of any applicable
         grace period, any installment payment with respect to its withdrawal
         liability under Section 4201 of ERISA under a Multiemployer Plan in an
         aggregate amount in excess of $50,000,000; or

                  (j) Invalidity of Loan Documents. Any Loan Document, at any
         time after its execution and delivery and for any reason other than as
         expressly permitted hereunder or satisfaction in full of all the
         Obligations, ceases to be in full force and effect; or any Loan Party
         or any other Person contests in any manner the validity or
         enforceability of any Loan Document; or any Loan Party denies that it
         has any or further liability or obligation under any Loan Document, or
         purports to revoke, terminate or rescind any Loan Document;

                  (k) Revocation of Confirmation Order. The Confirmation Order
         shall be revoked by the Bankruptcy Court or any other court of
         competent jurisdiction;

                  (l) Plan Note Indenture. There shall occur and be continuing
         any "Event of Default" (or any comparable term) under, and as defined
         in, the Plan Note Indenture; or

                  (m) Change of Control. There occurs any Change of Control.

9.02     Remedies Upon Event of Default.

         If any Event of Default occurs and is continuing, the Administrative

Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans and any obligation of an L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower;

(c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and

(d) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable law;

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of each L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

9.03 Application of Funds.

After the exercise of remedies provided for in Section 9.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 9.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including Attorney Costs and amounts payable under Article III) payable to the Administrative Agent and the Collateral Agent, in each case in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including Attorney Costs and amounts payable under Article III), ratably among them in proportion to the amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans and L/C Borrowings and fees, premiums and scheduled periodic payments, and any interest accrued thereon, due under any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender, to the extent such Swap Contract is permitted by Section 8.03(d), ratably among the Lenders (and, in the case of such Swap Contracts, Affiliates of Lenders) in proportion to the respective amounts described in this clause Third held by them;

Fourth, to (a) payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings, (b) payment of breakage, termination or other payments, and any interest accrued thereon, due under any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender, to the extent such Swap Contract is permitted by Section 8.03(d), (c) payments of amounts due under any Treasury Management Agreement between any Loan Party and any Lender, or

any Affiliate of a Lender and (d) Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit, ratably among the Lenders (and, in the case of such Swap Contracts, Affiliates of Lenders) in proportion to the respective amounts described in this clause Fourth held by them; and

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.

ARTICLE X

ADMINISTRATIVE AGENT

10.01 Appointment and Authority.

(a) Each of the Lenders hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.

(b) Each of the Lenders hereby irrevocably appoints Bank of America to act on its behalf as the Collateral Agent hereunder and under the other Loan Documents and authorizes the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The Collateral Agent shall act on behalf of the Lenders with respect to any Collateral and the Collateral Documents, and the Collateral Agent shall have all of the benefits and immunities (i) provided to the Administrative Agent in this Article X with respect to any acts taken or omissions suffered by the Collateral Agent in connection with any Collateral or the Collateral Documents as fully as if the term "Administrative Agent" as used in this Article X and (ii) as additionally provided herein or in the Collateral Documents with respect to the Collateral Agent.

(c) The provisions of this Article are solely for the benefit of the Administrative Agent, the Collateral Agent and the Lenders, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

10.02 Rights as a Lender.

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with any Loan Party or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

10.03 Exculpatory Provisions.

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.01 and 9.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower or a Lender.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

10.04 Reliance by Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining

compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Loan Parties), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

10.05 Delegation of Duties.

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

10.06 Resignation of Administrative Agent.

The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the consent of the Borrower (except if an Event of Default has occurred and is continuing), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and
(b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent's resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 11.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer and Swing Line Lender. Upon the acceptance of a successor's appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender, (ii) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit.

10.07 Non-Reliance on Administrative Agent and Other Lenders.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

10.08 No Other Duties; Etc.

Anything herein to the contrary notwithstanding, none of the bookrunners, arrangers, syndication agents, documentation agents or co-agents shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.

10.09 Administrative Agent May File Proofs of Claim.

In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations arising under the Loan Documents that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and 11.04) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to

the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 11.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender to authorize the Administrative Agent to vote in respect of the claim of any Lender or in any such proceeding.

10.10 Collateral and Guaranty Matters.

The Lenders irrevocably authorize the Administrative Agent and the Collateral Agent, in each case at its option and in its discretion,

(a) to release any Lien on any property granted to or held by the Collateral Agent under any Loan Document (i) upon termination of all Commitments and payment in full of all Obligations arising under the Loan Documents (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit, (ii) that is transferred or to be transferred as part of or in connection with any Disposition not prohibited hereunder or under any other Loan Document, or (iii) if approved, authorized or ratified in writing in accordance with Section 11.01;

(b) to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary or a Guarantor as a result of a transaction permitted hereunder; and

(c) to subordinate any Lien on any property granted to or held by the Collateral Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 8.01(i).

Upon request by the Administrative Agent or the Collateral Agent at any time, the Required Lenders will confirm in writing the Collateral Agent's authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty, pursuant to this Section 10.10. In each case as specified in this Section 10.10, the Collateral Agent will, at the Borrower's expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 10.10.

ARTICLE XI

MISCELLANEOUS

11.01 Amendments, Etc.

(a) No amendment or waiver of, or any consent to deviation from, any provision of this Agreement or any other Loan Document shall be effective unless in writing and signed by the Borrower, the Loan Parties and the Required Lenders, and each such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which it is given; provided, further, that:

(i) unless also signed by each Lender directly affected thereby, no such amendment, waiver or consent shall:

(A) extend or increase the Commitment of any Lender (or reinstate such Lender's Commitment terminated pursuant to
Section 9.02) (it being understood and agreed that a waiver of any condition precedent set forth in Section 5.02 or of any Default or a mandatory reduction in Commitments is not considered an extension or increase in Commitments of any Lender) without the consent of such Lender;

(B) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal (excluding mandatory prepayments), interest, fees or other amounts due to any Lender hereunder or under any other Loan Document without the consent of such Lender;

(C) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or any fees or other amounts payable to any Lender hereunder or under any other Loan Document without the consent of such Lender; provided, however, that only the consent of the Required Lenders shall be necessary to amend (i) the definition of "Default Rate" or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) subject to subsection
(b)(iii) below, to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;

(D) change Section 2.13 or Section 9.03 in a manner that would alter the pro rata sharing of payments required thereby;

(E) change any provision of this Section 11.01(a) or the definition of "Required Lenders" (except as expressly provided in subsection (b) of this Section below), "Required Revolving Lenders", "Required Tranche A Term Lenders" or "Required Tranche B Term Lenders";

(F) except in connection with a Disposition permitted under Section 8.05 or as otherwise contemplated by Section 7.14, release all or substantially all of the Collateral; or

(G) release the Borrower or, except in connection with a merger or consolidation permitted under Section 8.04 or a Disposition permitted under Section 8.05, all or substantially all of the Guarantors, from its or their obligations under the Loan Documents;

(ii) unless also signed by the Required Revolving Lenders, no such amendment, waiver or consent shall:

(A) waive any Default for purposes of Section 5.02 for purposes of any Revolving Loan borrowing, L/C Credit Extension or Swing Line Loan borrowing,

(B) amend or waive the manner of application of any mandatory prepayment to Revolving Loans, Swing Line Loans or L/C Obligations under Section 2.05(c), or

(iii) unless also signed by the Required Tranche A Term Lenders, no such amendment, waiver or consent shall:

(A) amend or waive the manner of application of any mandatory prepayment to the Tranche A Term Loan under Section 2.05(c), or

(B) amend or waive the provisions of this Section 11.01(c);

(iv) unless also signed by the Required Tranche B Term Lenders, no such amendment, waiver or consent shall:

(A) amend or waive the manner of application of any mandatory prepayment to the Tranche B Term Loan under Section 2.05(c), or

(B) amend or waive the provisions of this Section 11.01(d); or

(v) unless also signed by the Collateral Agent, no such amendment, waiver or consent shall affect the rights or duties of the Collateral Agent under this Agreement or any other Loan Document;

and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the each L/C Issuer in addition to the Lenders required above, affect the rights or duties of such L/C Issuer under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

Notwithstanding the fact that the consent of all the Lenders is required in certain circumstances as set forth above, (x) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set forth herein and (y) the Required Lenders shall determine whether or not to allow a Loan Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders.

(b) Additional Commitments or Tranches. For the avoidance of doubt and notwithstanding provisions to the contrary in this Section 11.01, this Agreement may be amended (or amended and restated) with the written consent of the Loan Parties and the Required Lenders to (i) increase the aggregate amount of commitments under any of the respective facilities, (ii) add one or more additional borrowing tranches hereunder and to provide for the ratable sharing of the benefits of this Agreement and the other Loan Documents with the other commitments and Obligations contemplated herein and therein, and (iii) include the lenders providing the commitments and extensions of credit therefor in the

determination of "Required Lenders" and /or to provide consent rights for such lenders consistent with those afforded under clauses (ii), (iii) and (iv) of
Section 11.01(a) above.

11.02 Notices and Other Communications; Facsimile Copies.

(a) General. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrower, the Administrative Agent, an L/C Issuer or the Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 11.02; and

(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower (on behalf of itself and the other Loan Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(c) The Platform. THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF

MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the "Agent Parties") have any liability to the Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower's or the Administrative Agent's transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

(d) Change of Address, Etc. Each of the Borrower, the Administrative Agent, any L/C Issuer and the Swing Line Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent, the L/C Issuers and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower, except to the extent such losses, costs, expenses or liabilities resulted from the gross negligence or willful misconduct of the applicable Person. All telephonic notices to and other communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

11.03 No Waiver; Cumulative Remedies.

No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

11.04 Attorney Costs, Expenses and Taxes.

The Borrower agrees (a) to pay or reimburse the Administrative Agent for all reasonable costs and expenses incurred in connection with the development, preparation, negotiation, execution and administration of this Agreement and the other Loan Documents and any amendment, waiver, consent or

other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs and costs and expenses in connection with the use of Intralinks, Inc. or other similar information transmission systems in connection with this Agreement, and (b) to pay or reimburse the Administrative Agent and each Lender for all reasonable costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any "workout" or restructuring in respect of the Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall include all search, filing, recording, title insurance and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Administrative Agent and the cost of independent public accountants and other outside experts retained by the Administrative Agent or any Lender. All amounts due under this Section 11.04 shall be payable within ten Business Days after demand therefor. The agreements in this Section shall survive the termination of the Commitments and repayment of all other Obligations.

11.05 Indemnification by the Borrower.

(a) Indemnification. Whether or not the transactions contemplated hereby are consummated, the Borrower agrees to indemnify and hold harmless the Administrative Agent, each Lender and their respective Related Parties (collectively the "Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the Loan Documents or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by an L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (c) any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by the Borrower, any Subsidiary or any other Loan Party, or any Environmental Liability related in any way to the Borrower, any Subsidiary or any other Loan Party, or (d) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified Liabilities"); provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall any Indemnitee have any liability for any indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date). All amounts due under this
Section 11.05 shall be payable within ten Business Days after demand therefor. The agreements in this Section shall survive the resignation of the Administrative Agent or the Collateral Agent, the replacement of any Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all the other Obligations.

(b) Reimbursement by Lenders. To the extent that the Loan Parties for any reason fail to indefeasibly pay any amount required under Section 11.04 or subsection (a) of this Section to be paid by them to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender's Pro Rata Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity. The obligations of the Lenders under this subsection (b) are subject to the provisions of Section 2.12(d).

(c) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no Loan Party shall assert, and each Loan Party hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (a) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

11.06 Payments Set Aside.

To the extent that any payment by or on behalf of any Loan Party is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate from time to time in effect.

11.07 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder or thereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be

null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and the related Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A)
of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 in the case of an assignment of a Revolving Commitment (and the related Revolving Loans thereunder), $2,500,000 in the case of an assignment of Tranche A Term Loans and $1,000,000 in the case of an assignment of Tranche B Term Loans unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single assignee (or to an assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met.

(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's Loans and Commitments, and rights and obligations with respect thereto, assigned, except that this clause (ii) shall not (A) apply to the Swing Line Lender's rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its rights and obligations in respect of its Revolving Commitment (and the related Revolving Loans thereunder) and its outstanding Tranche A Term Loans or Tranche B Term Loans on a non-pro rata basis;

(iii) Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless
(1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;

(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (i) any Tranche A Term Loan Commitment, Tranche B Term Loan Commitment or Revolving Commitment if such assignment is to a Person that is not a Lender with a Commitment in respect of the Commitment subject to such assignment, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (ii) any Tranche A Term Loan or Tranche B Term Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund; and

(C) the consent of the L/C Issuers (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and

(D) the consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment in respect of Revolving Loans and Revolving Commitments.

(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower or any of the Borrower's Affiliates or Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 11.04 and 11.05 with respect to facts and circumstances occurring prior to the effective date of such assignment). Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent's Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The Register

shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower's Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender's participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in clause (a) of the first proviso to Section 11.01 that directly affects such Participant. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.09 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender.

(e) Limitation of Participant Rights. A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 11.15 as though it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(g) Electronic Execution of Assignments. The words "execution," "signed," "signature," and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

(h) Resignation as L/C Issuer or Swing Line Lender after Assignment. Notwithstanding anything to the contrary contained herein, if at any time any Lender acting as an L/C Issuer or the Swing Line Lender assigns all of its Commitments and Loans pursuant to subsection (b) above, Bank such Lender may, upon thirty days' notice to the Borrower and the Lenders, resign as L/C Issuer and/or Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,

however, that no failure by the Borrower to appoint any such successor shall affect the resignation of the such resigning L/C Issuer or Swing Line Lender, as the case may be. If a Lender acting as an L/C Issuer resigns as L/C Issuer, it shall retain all the rights and obligations of an L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If the Lender acting as Swing Line Lender resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section
2.04(c). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (1) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (2) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit issued by such retiring L/C Issuer, if any, outstanding at the time of such succession or make other arrangements satisfactory to such retiring L/C Issuer to effectively assume the obligations of such retiring L/C Issuer with respect to such Letters of Credit.

11.08 Confidentiality.

Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its Affiliates' respective partners, directors, officers, employees, agents, advisors, representatives and to any direct or indirect contractual counterparty (or such contractual counterparty's professional advisor) under any swap agreement relating to Loans outstanding under this Agreement (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it; (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder;
(f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty's or prospective counterparty's professional advisor) to any credit derivative transaction relating to obligations of the Loan Parties; (g) with the consent of the Borrower; (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower; or (i) to the National Association of Insurance Commissioners or any other similar organization or any nationally recognized rating agency that requires access to information about a Lender's or its Affiliates' investment portfolio in connection with ratings issued with respect to such Lender or its Affiliates. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Administrative Agent and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments, and the Credit Extensions. For the purposes of this Section, "Information" means all information received from the Borrower or any of its Subsidiaries relating to the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary; provided that, in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified in writing at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information

as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

11.09 Set-off.

In addition to any rights and remedies of the Lenders provided by law, upon the occurrence and during the continuance of any Event of Default, each Lender and any Affiliate of any Lender is authorized at any time and from time to time, without prior notice to the Borrower or any other Loan Party, any such notice being waived by the Borrower (on its own behalf and on behalf of each Loan Party) to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender to or for the credit or the account of the respective Loan Parties against any and all Obligations owing to such Lender hereunder or under any other Loan Document, now or hereafter existing, irrespective of whether or not the Administrative Agent or such Lender shall have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application.

11.10 Interest Rate Limitation.

Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

11.11 Counterparts.

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

11.12 Integration.

This Agreement, together with the other Loan Documents, comprises 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. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document 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.

11.13 Survival of Representations and Warranties.

All representations and warranties made hereunder and in any other Loan Document 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 and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative 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.

11.14 Severability.

If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents 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.

11.15    Tax Forms.

         (a) (i) Each Lender that is not a "United States person" within the
         meaning of Section 7701(a)(30) of the Internal Revenue Code (a "Foreign
         Lender") shall deliver to the Administrative Agent, prior to receipt of
         any payment subject to withholding under the Internal Revenue Code (or
         upon accepting an assignment of an interest herein), two duly signed
         completed copies of either IRS Form W-8BEN or any successor thereto
         (relating to such Foreign Lender and entitling it to an exemption from,
         withholding tax on all payments to be made to such Foreign Lender by
         the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any
         successor thereto (relating to all payments to be made to such Foreign
         Lender by the Borrower pursuant to this Agreement) or such other
         evidence satisfactory to the Borrower and the Administrative Agent that
         such Foreign Lender is entitled to an exemption from U.S. withholding
         tax, including any exemption pursuant to Section 881(c) of the Internal
         Revenue Code. Thereafter and from time to time, each such Foreign
         Lender shall (A) promptly submit to the Administrative Agent such
         additional duly completed and signed copies of one of such forms (or
         such successor forms as shall be adopted from time to time by the
         relevant United States taxing authorities) as may then be available
         under then current United States laws and regulations to avoid, or such
         evidence as is satisfactory to the Borrower and the Administrative
         Agent to obtain any available exemption from or reduction of, United
         States withholding taxes in respect of all payments to be made to such
         Foreign Lender by the Borrower pursuant to this Agreement, (B) promptly
         notify the Administrative Agent of any change in circumstances which
         would modify or render invalid any claimed exemption or reduction, and
         (C) take such steps as shall not be materially disadvantageous to it,
         in the reasonable judgment of such Lender, and as may be reasonably
         necessary (including the re-designation of its Lending Office) to avoid
         any requirement of applicable Laws that the Borrower make any deduction
         or withholding for taxes from amounts payable to such Foreign Lender.

                  (ii) Each Foreign Lender, to the extent it does not act or
         ceases to act for its own account with respect to any portion of any
         sums paid or payable to such Lender under any of the Loan Documents
         (for example, in the case of a typical participation by such Lender),
         shall deliver to the Administrative Agent on the date when such Foreign
         Lender ceases to act for its own account with respect to any portion of
         any such sums paid or payable, and at such other times as may be

necessary in the determination of the Administrative Agent (in the reasonable exercise of its discretion), (A) two duly signed completed copies of the forms or statements required to be provided by such Lender as set forth above, to establish the portion of any such sums paid or payable with respect to which such Lender acts for its own account that is not subject to U.S. withholding tax or is subject to U.S. withholding tax at a reduced rate, and (B) two duly signed completed copies of IRS Form W-8IMY (or any successor thereto), together with any information such Lender chooses to transmit with such form, and any other certificate or statement of exemption required under the Internal Revenue Code, to establish that such Lender is not acting for its own account with respect to a portion of any such sums payable to such Lender.

(iii) The Borrower shall not be required to pay any additional amount to any Foreign Lender under Section 3.01 (A) with respect to any Taxes required to be deducted or withheld on the basis of the information, certificates or statements of exemption such Lender transmits with an IRS Form W-8IMY pursuant to this Section 11.15(a) or (B) if such Lender shall have failed to satisfy the foregoing provisions of this Section 11.15(a); provided that if such Lender shall have satisfied the requirement of this Section 11.15(a) on the date such Lender became a Lender or ceased to act for its own account with respect to any payment under any of the Loan Documents, nothing in this
Section 11.15(a) shall relieve the Borrower of its obligation to pay any amounts pursuant to Section 3.01 in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender or other Person for the account of which such Lender receives any sums payable under any of the Loan Documents is not subject to withholding or is subject to withholding at a reduced rate; and provided further that if an L/C Issuer shall issue, amend or extend any Letter of Credit from a branch or other office in any jurisdiction at the request of (or with the consent of ) the Borrower and such L/C Issuer shall not be lawfully able or entitled to satisfy the requirements of this Section 11.15(a) at the time of issuance, amendment or extension of any Letter of Credit by reason of the selection of such branch or office in such jurisdiction, nothing in this Section 11.15(a) shall relieve the Borrower of its obligation to pay any amounts pursuant to Section 3.01 owing to such L/C Issuer.

(iv) The Administrative Agent may, without reduction, withhold any Taxes required to be deducted and withheld from any payment under any of the Loan Documents with respect to which the Borrower is not required to pay additional amounts under this Section 11.15(a).

(b) Upon the request of the Administrative Agent, each Lender that is a "United States person" within the meaning of Section 7701(a)(30) of the Internal Revenue Code shall deliver to the Administrative Agent two duly signed completed copies of IRS Form W-9. If such Lender fails to deliver such forms, then the Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable back-up withholding tax imposed by the Internal Revenue Code, without reduction.

(c) If any Governmental Authority asserts that the Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and expenses (including Attorney Costs) of the Administrative Agent. The obligation of the Lenders under this Section shall survive the termination of the Commitments, repayment of all other Obligations hereunder and the resignation of the Administrative Agent.

11.16 Replacement of Lenders.

If (i) any Lender requests compensation under Section 3.04, (ii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01,
(iii) a Lender (a "Non-Consenting Lender") does not consent to a proposed change, waiver, discharge or termination with respect to any Loan Document that has been approved by the Required Lenders as provided in Section 11.01 but requires unanimous consent of all Lenders or all Lenders directly affected thereby (as applicable) and, or (iv) any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.07), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 11.07(b);

(b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;

(d) such assignment does not conflict with applicable Laws; and

(e) in the case of any such assignment resulting from a Non-Consenting Lender's failure to consent to a proposed change, waiver, discharge or termination with respect to any Loan Document, the applicable replacement bank, financial institution or Fund consents to the proposed change, waiver, discharge or termination; provided that the failure by such Non-Consenting Lender to execute and deliver an Assignment and Assumption shall not impair the validity of the removal of such Non-Consenting Lender and the mandatory assignment of such Non-Consenting Lender's Commitments and outstanding Loans and participations in L/C Obligations and Swing Line Loans pursuant to this
Section 11.16 shall nevertheless be effective without the execution by such Non-Consenting Lender of an Assignment and Assumption.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

11.17 Governing Law.

(a) THIS 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.

(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT 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 AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. 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 ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. 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.

11.18 Waiver of Right to Trial by Jury.

EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, 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 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.

11.19 USA PATRIOT Act Notice.

Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act.

11.20 No Advisory or Fiduciary Responsibility.

In connection with all aspects of each transaction contemplated hereby, the Loan Parties each acknowledge and agree that: (i) the credit facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm's-length commercial transaction between the Loan Parties and their respective Affiliates, on the one hand, and the Administrative Agent and the arrangers, on the other hand, and each of the Loan Parties is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, the Administrative Agent and the Arrangers each is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for the Loan Parties or any of their respective Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the Administrative Agent nor either arranger has assumed or will assume an advisory, agency or fiduciary responsibility in favor of any Loan Party with respect to any of the transactions contemplated hereby or the process leading

thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent or either arranger has advised or is currently advising any of the Loan Parties or any of their respective Affiliates on other matters) and neither the Administrative Agent nor either arranger has any obligation to any of the Loan Parties or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent and the arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Loan Parties and their respective Affiliates, and neither the Administrative Agent nor the Arrangers has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent and the arrangers have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and each Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. Each Loan Party hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent and the arrangers with respect to any breach or alleged breach of agency or fiduciary duty.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

BORROWER:                      ARMSTRONG WORLD INDUSTRIES, INC.,
                               a Pennsylvania corporation

                               By: /s/ Barry M. Sullivan
                                   -------------------------------------------
                               Name: Barry M. Sullivan
                               Title: Vice President & Treasurer


GUARANTORS:                    ARMSTRONG REALTY GROUP, INC.,
                               a Pennsylvania corporation

                               By: /s/ Barry M. Sullivan
                                   -------------------------------------------
                               Name: Barry M. Sullivan
                               Title: Treasurer & Assistant Secretary


                               ARMSTRONG VENTURES, INC.,
                               a Delaware corporation

                               By: /s/ Barry M. Sullivan
                                   -------------------------------------------
                               Name: Barry M. Sullivan
                               Title: Assistant Secretary


                               ARMSTRONG WOOD PRODUCTS, INC.,
                               a Delaware corporation

                               By: /s/ Barry M. Sullivan
                                   -------------------------------------------
                               Name: Barry M. Sullivan
                               Title: Treasurer

AWI LICENSING COMPANY,
a Delaware corporation

By: /s/ Barry M. Sullivan
    -------------------------------------------
Name: Barry M. Sullivan
Title: Treasurer

ARMSTRONG HARDWOOD FLOORING COMPANY,
a Tennessee corporation

By: /s/ Barry M. Sullivan
    -------------------------------------------
Name: Barry M. Sullivan
Title: Treasurer

WORLDWIDE KITCHENS, INC.,
a Delaware corporation

By: /s/ Barry M. Sullivan
    -------------------------------------------
Name: Barry M. Sullivan
Title: Treasurer

HOMERWOOD HARDWOOD FLOORING COMPANY,
a Delaware corporation

By: /s/ Barry M. Sullivan
    -------------------------------------------
Name: Barry M. Sullivan
Title: Treasurer

ADMINISTRATIVE AGENT:          BANK OF AMERICA, N.A.,
                               as Administrative Agent and Collateral Agent

                               By: /s/ Anne B. Lazorik
                                   -------------------------------------------
                               Name: Anne B. Lazorik
                               Title: Vice President


LENDERS:                       BANK OF AMERICA, N.A.,
                               as a Lender, L/C Issuer and Swing Line Lender

                               By: /s/ W. Thomas Barnett
                                   -------------------------------------------
                               Name: W. Thomas Barnett
                               Title: Senior Vice President


                               JPMORGAN CHASE BANK, N.A.,
                               as a Lender and L/C Issuer

                               By: /s/ Stephanie Parker
                                   -------------------------------------------
                               Name: Stephanie Parker
                               Title: Vice President

BARCLAYS BANK PLC

By: /s/ Douglas A. Kelly
    -------------------------------------------
Name: Douglas A. Kelly
Title: Director

LASALLE BANK NATIONAL ASSOCIATION

By: /s/ David P. Barrett
    -------------------------------------------
Name: David P. Barrett
Title: Vice President

THE BANK OF NOVA SCOTIA

By: /s/ N. Bell
    -------------------------------------------
Name: N. Bell
Title: Senior Manager

EXHIBIT 10.2

ARMSTRONG WORLD INDUSTRIES, INC. ASBESTOS PERSONAL INJURY SETTLEMENT TRUST AGREEMENT

This Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust Agreement ("PI TRUST AGREEMENT"), dated the date set forth on the signature page hereof and effective as of the Effective Date, is entered into by Armstrong World Industries, Inc. ("AWI," the "SETTLOR," or the "DEBTOR"), the Debtor and debtor-in-possession in Case No. 00-4471 (RJN) in the United States Bankruptcy Court for the District of Delaware as Settlor; the Legal Representative for Asbestos-Related Future Claimants ("FUTURE CLAIMANTS' REPRESENTATIVE"); the Official Committee of Asbestos Creditors ("ACC"); and the Trustees ("Trustees") and the members of the PI Trust Advisory Committee ("TAC") identified on the signature page hereof and appointed at Confirmation pursuant to Armstrong World Industries, Inc. Fourth Amended Plan of Reorganization under Chapter 11 of the United States Bankruptcy Code, dated May 23, 2003 ("PLAN"), as such Plan may be amended, modified or supplemented from time to time. All capitalized terms not otherwise defined herein shall have their respective meanings as set forth in the Plan, and such definitions are incorporated herein by reference. All capitalized terms not defined herein or defined in the Plan, but defined in the Bankruptcy Code or Rules, shall have the meanings ascribed to them by the Bankruptcy Code and Rules, and such definitions are incorporated herein by reference.

WHEREAS, at the time of the entry of the order for relief in the Chapter 11 case, AWI was named as a defendant in actions involving personal injury ("PI") or death claims caused by exposure to asbestos-containing products for which AWI, its predecessors, successors and assigns have legal liability ("ASBESTOS PERSONAL INJURY CLAIMS" as defined in the Plan); and

WHEREAS, AWI has reorganized under the provisions of Chapter 11 of the Bankruptcy Code in a case pending in the United States Bankruptcy Court for the District of Delaware, known as In re Armstrong World Industries, Inc., Debtor, Case No. 00-4471 (RJN); and

WHEREAS, the Plan has been confirmed by the Bankruptcy Court; and

WHEREAS, the Plan provides, inter alia, for the creation of the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust ("PI TRUST"); and

WHEREAS, pursuant to the Plan, the PI Trust is to use its assets and income to satisfy all Asbestos Personal Injury Claims; and

WHEREAS, it is the intent of AWI, the Trustees, the ACC, the TAC, and the Future Claimants' Representative that the PI Trust be administered, maintained, and operated at all times through mechanisms that provide reasonable assurance that the PI Trust will satisfy all Asbestos Personal Injury Claims pursuant to the AWI Asbestos Personal Injury Settlement Trust Distribution Procedures ("TDP") that are attached to the Plan as Exhibit 1.24 in substantially the same manner, and in strict compliance with the terms of this PI Trust Agreement; and

WHEREAS, pursuant to the Plan, the PI Trust is intended to qualify as a "qualified settlement fund" within the meaning of section 1.468B-1 et seq. of the Treasury Regulations promulgated under section 468B of the Internal Revenue Code ("IRC"); and

WHEREAS, the Bankruptcy Court has determined that the PI Trust and the Plan satisfy all the prerequisites for an injunction pursuant to section 524(g) of the Bankruptcy Code, and such injunction has been entered in connection with the Confirmation Order;

NOW, THEREFORE, it is hereby agreed as follows:

SECTION 1

AGREEMENT OF TRUST

1.1 CREATION AND NAME. AWI as Settlor hereby creates a trust known as the "Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust," which is the PI Trust provided for and referred to in the Plan. The Trustees of the PI Trust may transact the business and affairs of the PI Trust in the name of the PI Trust.

1.2 PURPOSE. The purpose of the PI Trust is to assume the liabilities of AWI, its predecessors and successors in interest, for all Asbestos Personal Injury Claims (as defined in the Plan), and to use the PI Trust's assets and income to pay the holders of all Asbestos Personal Injury Claims in accordance with this PI Trust Agreement and the TDP in such a way that such holders of Asbestos Personal Injury Claims are treated fairly, equitably and reasonably in light of the limited assets available to satisfy such claims, and to otherwise comply in all respects with the requirements of a trust set forth in section 524(g)(2)(B) of the Bankruptcy Code.

1.3 TRANSFER OF ASSETS. Pursuant to the Plan, certain assets have been transferred and assigned to the PI Trust to settle and discharge all Asbestos Personal Injury Claims ("PI TRUST ASSETS"). Pursuant to the Plan, AWI, its successors in interest thereto, from and after the Effective Date ("REORGANIZED AWI") and others may also transfer and assign additional assets to the PI Trust from time to time, which will be added to the PI Trust Assets. In all events, the PI Trust Assets will be transferred to the PI Trust free and clear of any liens or other claims by AWI, Reorganized AWI, any creditor, or other entity. AWI, Reorganized AWI, and any other transferors shall also execute and deliver such documents to the PI Trust as the Trustees reasonably request to transfer and assign the PI Trust Assets to the PI Trust.

1.4 ACCEPTANCE OF ASSETS AND ASSUMPTION OF LIABILITIES

(a) In furtherance of the purposes of the PI Trust, the Trustees, on behalf of the PI Trust, hereby expressly accept the transfer and assignment to the PI Trust of the PI Trust Assets in the time and manner contemplated in the Plan.

(b) In furtherance of the purposes of the PI Trust, the Trustees, on behalf of the PI Trust, expressly assume all liability for (i) all Asbestos Personal Injury Claims and (ii) all premiums, deductibles, retrospective premium adjustments, security or collateral arrangements, or any other charges, costs, fees, or expenses (if any) that become due to any insurer in connection with the Asbestos PI Insurance Asset (as such term is defined in the Plan) as a result of Asbestos Personal Injury Claims, asbestos-related personal injury claims against Entities insured under policies included in the Asbestos PI Insurance Asset by reason of vendor's endorsements, or under indemnity provisions of settlement agreements that AWI made with various insurers prior to the Commencement Date (as such term is defined in the Plan) to the extent that those indemnity provisions relate to Asbestos Personal Injury Claims.

(c) No provision herein or in the TDP shall be construed to mandate distributions on any claims or other actions that would contravene the PI Trust's compliance with the requirements of a qualified settlement fund within the meaning of section 1.468B-1 et seq. of the Treasury Regulations promulgated under section 468B of the IRC.

(d) AWI and Reorganized AWI shall be entitled to indemnification from the PI Trust for any expenses, costs, and fees (including attorneys' fees and costs, but excluding any such expenses, costs, and fees incurred prior to the Effective Date), judgments, settlements, or other liabilities arising from or incurred in connection with any action related to Asbestos Personal Injury Claims, including, but not limited to, indemnification or contribution for such claims prosecuted against Reorganized AWI.

(e) Nothing in this PI Trust Agreement shall be construed in any way to limit the scope, enforceability, or effectiveness of the Section 524(g) injunction issued in connection with the Plan or the PI Trust's assumption of

all liability for Asbestos Personal Injury Claims, subject to the provisions of
Section 1.4(b) above.

SECTION 2

POWERS AND TRUST ADMINISTRATION

2.1 POWERS.

(a) The Trustees are and shall act as the fiduciaries to the PI Trust in accordance with the provisions of this PI Trust Agreement and the Plan. The Trustees shall, at all times, administer the PI Trust and the PI Trust Assets in accordance with the purposes set forth in Section 1.2 above. Subject to the limitations set forth in this PI Trust Agreement, the Trustees shall have the power to take any and all actions that, in the judgment of the Trustees, are necessary or proper to fulfill the purposes of the PI Trust, including, without limitation, each power expressly granted in this Section 2.1, any power reasonably incidental thereto, and any trust power now or hereafter permitted under the laws of the State of Delaware.

(b) Except as required by applicable law or otherwise specified herein, the Trustees need not obtain the order or approval of any court in the exercise of any power or discretion conferred hereunder.

(c) Without limiting the generality of Section 2.1(a) above, and except as limited below, the Trustees shall have the power to:

(i) receive and hold the PI Trust Assets, vote the Reorganized AWI common stock, and exercise all rights with respect to, and sell, any securities issued by Reorganized AWI that are included in the PI Trust Assets, subject to any restrictions set forth in the Restated Certificate of Reorganized AWI;

(ii) invest the monies held from time to time by the PI Trust;

(iii) sell, transfer, or exchange any or all of the PI Trust Assets at such prices and upon such terms as the Trustees may consider proper, consistent with the other terms of this PI Trust Agreement;

(iv) enter into leasing and financing agreements with third parties to the extent such agreements are reasonably necessary to permit the PI Trust to operate;

(v) pay liabilities and expenses of the PI Trust, including, but not limited to, PI Trust expenses;

(vi) establish such funds, reserves and accounts within the PI Trust estate, as deemed by the Trustees to be useful in carrying out the purposes of the PI Trust;

(vii) sue and be sued and participate, as a party or otherwise, in any judicial, administrative, arbitrative, or other proceeding;

(viii) establish, supervise and administer the PI Trust in accordance with the TDP and the terms thereof;

(ix) appoint such officers and hire such employees and engage such legal, financial, accounting, investment, auditing and forecasting, and other consultants and agents as the business of the PI Trust requires, and delegate to such persons such powers and authorities as the fiduciary duties of the Trustees permit and as the Trustees, in their discretion, deem advisable or necessary in order to carry out the terms of this PI Trust;

(x) pay employees, legal, financial, accounting, investment, auditing, and forecasting, and other consultants, advisors, and agents, including those engaged by the PI Trust in connection with its alternative dispute resolution activities, reasonable compensation;

(xi) compensate the Trustees, the TAC members, and the Future Claimants' Representative as provided below, and their employees, legal, financial, accounting, investment and other advisors, consultants, independent contractors, and agents, and reimburse the Trustees, the TAC members and the Future Claimants' Representative all reasonable out-of-pocket costs and expenses incurred by such persons in connection with the performance of their duties hereunder;

(xii) execute and deliver such instruments as the Trustees consider proper in administering the PI Trust;

(xiii) enter into such other arrangements with third parties as are deemed by the Trustees to be useful in carrying out the purposes of the PI Trust, provided such arrangements do not conflict with any other provision of this PI Trust Agreement;

(xiv) in accordance with Section 4.6 below, defend, indemnify and hold harmless (and purchase insurance indemnifying) (A) the Trustees, the members of TAC, and the Future Claimants' Representative, and (B) the officers and employees of the PI Trust, and any agents, advisors and consultants of the PI Trust, the TAC, or the Future Claimants' Representative (the "ADDITIONAL INDEMNITEES"), to the fullest extent that a corporation or trust organized under the laws of the State of Delaware is from time to time entitled to indemnify and/or insure its directors, trustees, officers, employees, agents, advisors and representatives;

(xv) delegate any or all of the authority herein conferred with respect to the investment of all or any portion of the PI Trust Assets to any one or more reputable individuals or recognized institutional investment advisors or investment managers without liability for any action taken or omission made because of any such delegation, except as provided in Section 4.4 below;

(xvi) consult with Reorganized AWI, the TAC and the Future Claimants' Representative at such times and with respect to such issues relating to the conduct of the PI Trust as the Trustees consider desirable; and

(xvii) make, pursue (by litigation or otherwise), collect, compromise or settle, in the name of the PI Trust or the name of Reorganized AWI, any claim, right, action, or cause of action included in the PI Trust Assets including, but not limited to, insurance recoveries, before any court of competent jurisdiction; provided that settlement of actions before the Bankruptcy Court require the approval of the Bankruptcy Court after notice to Reorganized AWI.

(d) The Trustees shall not have the power to guarantee any debt of other persons.

(e) The Trustees shall give the TAC, the Future Claimants' Representative and Reorganized AWI prompt notice of any act performed or taken pursuant to Sections 2.1(c)(i), (iii), (vii), or (xv) above, and any act proposed to be performed or taken pursuant to Section 2.2(f) below.

2.2 GENERAL ADMINISTRATION.

(a) The Trustees shall adopt and act in accordance with the PI Trust Bylaws, a copy of which is attached hereto as Annex A. To the extent not inconsistent with the terms of this PI Trust Agreement, the PI Trust Bylaws shall govern the affairs of the PI Trust. In the event of an inconsistency between the PI Trust Bylaws and this PI Trust Agreement, the PI Trust Agreement shall govern.

(b) The Trustees shall (i) timely file such income tax and other returns and statements and shall timely pay all taxes required to be paid, (ii) comply with all withholding obligations, as required under the applicable provisions of the IRC and of any state law and the regulations promulgated thereunder, (iii) meet without limitation all requirements necessary to qualify and maintain qualification of the PI Trust as a qualified settlement fund within the meaning of section 1.468B-1 et seq. of the Treasury Regulations promulgated under section 468B of the IRC, and (iv) take no action that could cause the PI

Trust to fail to qualify as a qualified settlement fund within the meaning of section 1.468B-1 et seq. of the Treasury Regulations promulgated under section 468B of the IRC.

(i) The Trustees shall cause to be prepared and filed with the Bankruptcy Court, as soon as available, and in any event within one hundred and twenty (120) days following the end of each fiscal year, an annual report containing financial statements of the PI Trust (including, without limitation, a balance sheet of the PI Trust as of the end of such fiscal year and a statement of operations for such fiscal year) audited by a firm of independent certified public accountants selected by the Trustees and accompanied by an opinion of such firm as to the fairness of the financial statements' presentation of the cash and investments available for the payment of claims and as to the conformity of the financial statements with generally accepted accounting principles. The Trustees shall provide a copy of such report to the TAC, the Future Claimants' Representative, and Reorganized AWI when such reports are filed with the Bankruptcy Court.

(ii) Simultaneously with delivery of each set of financial statements referred to in Article 2.2(c)(i) above, the Trustees shall cause to be prepared and filed with the Bankruptcy Court a report containing a summary regarding the number and type of claims disposed of during the period covered by the financial statements. The Trustees shall provide a copy of such report to the TAC, the Future Claimants' Representatives, and Reorganized AWI when such report is filed.

(iii) All materials required to be filed with the Bankruptcy Court by this Section 2.2(c) shall be available for inspection by the public in accordance with procedures established by the Bankruptcy Court and shall be filed with the Office of the United States Trustee for the District of Delaware.

(d) The Trustees shall cause to be prepared as soon as practicable prior to the commencement of each fiscal year a budget and cash flow projections covering such fiscal year and the succeeding four fiscal years. The budget and cash flow projections shall include determining the Maximum Annual Payment pursuant to Section 2.4 of the TDP, and the Asbestos Personal Injury Claims Payment Ratio pursuant to Section 2.5 of the TDP. The Trustees shall provide a copy of the budget and cash flow projections to the TAC and the Future Claimants' Representative.

(e) The Trustees shall consult with the TAC and the Future Claimants' Representative (i) on the general implementation and administration of the PI Trust; (ii) on the general implementation and administration of the TDP; and (iii) on such other matters as may be required under this PI Trust Agreement and the TDP.

(f) The Trustees shall be required to obtain the consent of the TAC and the Future Claimants' Representative pursuant to the Consent Process set forth in Section 5.7(b) and 6.6(b) below, in addition to any other instances elsewhere enumerated, in order:

(i) to change the Claims Payment Ratio described in
Section 2.5 of the TDP in the event that the requirements for such a change as set forth in said provision have been met;

(ii) to change the Scheduled Diseases, Disease Levels and/or Medical/Exposure Criteria set forth in Section 5.3(a)(3) of the TDP, and/or the Maximum Values set forth in Section 5.3(b)(4) and
Section 5.4(a) of the TDP;

(iii) to change the Payment Percentage described in Section 2.3 of the TDP as provided in Section 4.2 of the TDP;

(iv) to establish and/or to change the Claims Materials to be provided holders of Asbestos Personal Injury Claims under Section 6.1 of the TDP;

(v) to require that claimants provide additional kinds of medical and/or exposure evidence pursuant to Section 7.1 of the TDP;

(vi) to change the form of release to be provided pursuant to Section 7.8 of the TDP;

(vii) to terminate the PI Trust pursuant to Section 7.2 below;

(viii) to settle the liability of any insurer under any insurance policy or legal action related thereto;

(ix) to change the compensation of the members of the TAC, the Future Claimants' Representative or Trustees, other than to reflect cost-of-living increases or changes approved by the Bankruptcy Court as otherwise provided herein;

(x) to take structural or other actions to minimize any tax on the PI Trust Assets; or

(xi) to amend the PI Trust Bylaws in accordance with the terms thereof;

(xii) to amend any provision of this PI Trust Agreement or the TDP in accordance with the terms thereof;

(xiii) to vote the stock of the Reorganized Debtor for the purpose of electing members of the Board of Directors of the Reorganized Debtor; or

(xiv) to merge any asbestos claims resolution organization formed by the PI Trust with another asbestos claims resolution organization that is not specifically created by this PI Trust Agreement or the TDP, or to contract with another asbestos claims resolution organization or other entity that is not specifically created by this PI Trust Agreement or the TDP, or permit any other party to join in any asbestos claims resolution organization that is formed by the PI Trust pursuant to the PI Trust Agreement or the TDP; provided that such merger, contract or joinder shall not (a) subject Reorganized AWI or any successors in interest thereto, to any risk of having any PI Trust Claim asserted against it or them, or (b) otherwise jeopardize the validity or enforceability of the section 524(g) injunction; and provided further that the terms of such merger will require the surviving organization to make decisions about the allowability and value of claims in accordance with Section 2.1 of the TDP which requires that such decisions be based on the provisions of the TDP.

(g) The Trustees shall meet with the TAC and the Future Claimants' Representative no less often than quarterly. The Trustees shall meet in the interim with the TAC and the Future Claimants' Representative when so requested by either.

(h) The Trustees, upon notice from either the TAC or the Future Claimants' Representative, if practicable in view of pending business, shall at their next meeting with the TAC or the Future Claimants' Representative consider issues submitted by the TAC or the Future Claimants' Representative.

(i) Periodically, but not less often than once a year, the Trustees shall make available to claimants and other interested parties the number of claims by disease levels that have been resolved both by individual review and by arbitration, as well as by trial, indicating the amounts of the awards and the averages of the awards by jurisdiction pursuant to Section 7.10 of the TDP.

2.3 CLAIMS ADMINISTRATION.

The Trustees shall promptly proceed to implement the TDP.

SECTION 3

ACCOUNTS, INVESTMENTS, AND PAYMENTS

3.1 ACCOUNTS. The Trustees may, from time to time, create such accounts and reserves within the PI Trust estate as they may deem necessary, prudent, or useful in order to provide for the payment of expenses and payment of Asbestos Personal Injury Claims and may, with respect to any such account or reserve, restrict the use of monies therein.

3.2 INVESTMENTS. Investment of monies held in the PI Trust shall be administered in the manner in which individuals of ordinary prudence, discretion, and judgment would act in the management of their own affairs, subject to the following limitations and provisions:

(a) The PI Trust shall not acquire, directly or indirectly, equity in any entity (other than Reorganized AWI or any successor to Reorganized AWI) or business enterprise if, immediately following such acquisition, the PI Trust would hold more than 5% of the equity in such entity or business enterprise. The PI Trust shall not hold, directly or indirectly, more than 10% of the equity in any entity (other than Reorganized AWI or any successor to Reorganized AWI) or business enterprise.

(b) The PI Trust shall not acquire or hold any long-term debt securities unless (i) such securities are PI Trust Assets under the Plan, (ii) such securities are rated "Baa" or higher by Moody's, "BBB" or higher by Standard & Poor's ("S&P'S"), or have been given an equivalent investment grade rating by another nationally recognized statistical rating agency, or (iii) have been issued or fully guaranteed as to principal and interest by the United States of America or any agency or instrumentality thereof.

(c) The PI Trust shall not acquire or hold for longer than ninety
(90) days any commercial paper unless such commercial paper is rated "Prime-1" or higher by Moody's or "A-1" or higher by S&P's or has been given an equivalent rating by another nationally recognized statistical rating agency.

(d) Excluding any securities by the Debtor or Reorganized AWI, the PI Trust shall not acquire or hold any common or preferred stock or convertible securities unless such stock or securities are rated "A" or high by Moody's or "A" or higher by S&P's or have been given an equivalent investment grade rating by another nationally recognized statistical rating agency.

(e) The PI Trust shall not acquire any debt securities or other instruments issued by any entity (other than debt securities or other instruments issued or fully guaranteed as to principal and interest by the United States of America or any agency or instrumentality thereof) if, following such acquisition, the aggregate market value of all debt securities and instruments issued by such entity held by the PI Trust would exceed 2% of the aggregate value of the PI Trust estate. The PI Trust shall not hold any debt securities or other instruments issued by any entity (other than debt securities or other instruments issued or fully guaranteed as to principal and interest by the United States of America or any agency or instrumentality thereof and other than debt securities or other instruments of Reorganized AWI or any successor to Reorganized AWI) to the extent that the aggregate market value of all securities and instruments issued by such entity held by the PI Trust would exceed 5% of the aggregate value of the PI Trust Assets.

(f) The PI Trust shall not acquire or hold any certificates of deposit unless all publicly held, long-term debt securities, if any, of the financial institution issuing the certificate of deposit and the holding company, if any, of which such financial institution is a subsidiary, meet the standards set forth in Section 3.2(b) above.

(g) The PI Trust may acquire and hold any securities or instruments issued by Reorganized AWI or any successor to Reorganized AWI, or obtained as proceeds of litigation or otherwise to resolve disputes, without regard to the limitations set forth in Subsections (a)-(f) above.

(h) The PI Trust shall not acquire or hold any repurchase obligations unless, in the opinion of the Trustees, they are adequately collateralized.

(i) The PI Trust shall not acquire or hold any options other than options or other derivative securities acquired or held in connection with bona fide hedging transactions with respect to the stock of Reorganized AWI to the extent then permitted by the Articles of Incorporation of Reorganized AWI.

3.3 SOURCE OF PAYMENTS. All PI Trust expenses and payments and all liabilities with respect to claims shall be payable solely by the Trustees out of the PI Trust Assets. Neither AWI, Reorganized AWI, their subsidiaries, any successor in interest, the present or former directors, officers, employees or agents of AWI, Reorganized AWI, nor the Trustees, the TAC or Future Claimants' Representative, or any of their officers, agents, advisors, or employees shall be liable for the payment of any PI Trust expense or any other liability of the PI Trust.

SECTION 4

TRUSTEES

4.1 NUMBER. There shall be five (5) Trustees. The initial Trustees shall be those persons named on the signature page hereof.

4.2 TERM OF SERVICE.

(a) The five initial Trustees named pursuant to Article 4.1 above shall each serve an initial two (2) year term. At the expiration of these initial two (2) year terms, the number of Trustees shall be reduced from five
(5) to three (3), unless the TAC and the Future Claimants' Representative agree that the Trust should maintain five (5) Trustees past this initial two (2) year term. When the number of Trustees is reduced from five (5) to three (3), Trustees Anne Ferazzi, Thomas Tully, and Harry Huge shall continue to serve as Trustees, serving staggered terms of three (3), four (4), or five (5) years, such terms to be determined by the TAC and the Future Claimants' Representative. Thereafter, each Trustee's term of service shall be five (5) years. The initial Trustees shall serve from the Effective Date until the earlier of (i) the end of his or her term, (ii) his or her death, (iii) his or her resignation pursuant to
Section 4.2(b) below, (iv) his or her removal pursuant to Section 4.2(c) below, or (v) the termination of the PI Trust pursuant to Section 7.2 below.

(b) A PI Trustee may resign at any time by written notice to the remaining Trustees, the TAC and the Future Claimants' Representative. Such notice shall specify a date when such resignation shall take place, which shall not be less than 90 days after the date such notice is given, where practicable.

(c) A Trustee may be removed by unanimous vote of the remaining Trustees in the event that he or she becomes unable to discharge his or her duties hereunder due to accident or physical or mental deterioration, or for other good cause. Good cause shall be deemed to include, without limitation, any substantial failure to comply with the general administration provisions of
Section 2.2 above, a consistent pattern of neglect and failure to perform or participate in performing the duties of the Trustees hereunder, or repeated non-attendance at scheduled meetings. Such removal shall require the approval of the Bankruptcy Court and shall take effect at such time as the Bankruptcy Court shall determine.

4.3 APPOINTMENT OF SUCCESSOR TRUSTEES.

(a) In the event of a vacancy in the position of PI Trustee, whether by term expiration, resignation or removal, the remaining Trustees shall consult with the TAC and the Future Claimants' Representative concerning the appointment of a successor PI Trustee. The vacancy shall be filled by the unanimous vote of the remaining Trustees unless a majority of the TAC or the Future Claimants' Representative vetoes the appointment. In the event that the remaining Trustees cannot agree on a Successor PI Trustee, or a majority of the TAC or the Future Claimants' Representative vetoes the appointment of a

successor PI Trustee, the Bankruptcy Court shall make the appointment. Nothing shall prevent the reappointment of a PI Trustee for an additional term or terms.

(b) Immediately upon the appointment of any Successor PI Trustee, all rights, titles, duties, powers and authority of the predecessor PI Trustee hereunder shall be vested in, and undertaken by, the Successor PI Trustee without any further act. No Successor PI Trustee shall be liable personally for any act or omission of his or her predecessor Trustees.

(c) Each Successor PI Trustee shall serve until the earlier of (i) the end of a full term of five (5) years if the predecessor PI Trustee completed his or her term, (ii) the end of the remainder of the term of the PI Trustee whom he or she is replacing if said predecessor PI Trustee did not complete said term, (iii) his or her death, (iv) his or her resignation pursuant to Section 4.2(b) above, (v) his or her removal pursuant to Section 4.2(c) above, or (vi) the termination of the PI Trust pursuant to Section 7.2 below.

4.4 LIMITATION OF LIABILITY OF TRUSTEES, TAC, AND FUTURE CLAIMANTS' REPRESENTATIVE. The Trustees, the members of the TAC, and the Future Claimants' Representative shall not be liable to the PI Trust, to any individual holding an asbestos claim, or to any other person, except for such individual's own breach of trust committed in bad faith or willful misappropriation. In addition, the Trustees, the members of the TAC, and the Future Claimants' Representative shall not be liable for any act or omission of any other person unless such Trustee, member of the TAC, or Future Claimants' Representative acted with bad faith in the selection or retention of such person.

4.5 COMPENSATION AND EXPENSES OF TRUSTEES.

(a) The Trustees shall receive a retainer from the PI Trust for their services as Trustees in the amount of $65,000 per annum, which amount shall be payable in quarterly installments, except that the Managing Trustee shall receive $75,000 per annum for his or her service. All Trustees shall also receive the sum of $2,500 for attendance at a meeting of the Trustees, which amount shall not be charged against the annual retainer. A meeting is any scheduled, emergency or sub-committee meeting of the Trustees that is noticed and/or authorized by the chairperson in which participation is either in person or telephonically and the duration of which is no less than two (2) hours and not in excess of five (5) hours. A PI Trust meeting also includes attendance at meetings of Reorganized AWI's Board of Directors. For all other time expended in preparation, authorized special projects, and time in excess of the (5) hours in a meeting, the Trustees shall receive the sum of $450 per hour, and the sum of $225 per hour for non-working travel, in both cases computed on a quarter-hour basis. The Trustees shall record all meeting and hourly time to be charged to the Trust on a daily basis. The per annum retainer, meeting and hourly compensation payable to the Trustees hereunder shall be reviewed every three (3) years and appropriately adjusted for changes in the cost of living. Any other changes in compensation of the Trustees shall be made subject to the approval of the Bankruptcy Court.

(b) The PI Trust will promptly reimburse the Trustees for all reasonable out-of-pocket costs and expenses incurred by the Trustees in connection with the performance of their duties hereunder.

(c) The PI Trust shall include a description of the amounts paid under this Section 4.5 in the accounts to be filed with the Bankruptcy Court and provided to the TAC, the Future Claimants' Representative, and Reorganized AWI pursuant to Section 2.2(c)(i).

4.6 INDEMNIFICATION OF TRUSTEES, TAC, FUTURE CLAIMANTS' REPRESENTATIVE, AND ADDITIONAL INDEMNITEES.

(a) The PI Trust shall indemnify and defend the Trustees, the members of the TAC, and the Futures Claimants' Representative in the performance of their duties hereunder to the fullest extent that a corporation or trust organized under the laws of the State of Delaware is from time to time entitled to indemnify and defend such persons against any and all liabilities, expenses, claims, damages or losses incurred by them in the performance of their duties hereunder or in connection with activities undertaken by them prior to the

Effective Date in connection with the formation, establishment, or funding of the PI Trust. The PI Trust may indemnify any of the Additional Indemnitees in the performance of their duties hereunder to the fullest extent that a corporation or trust organized under the laws of the PI Trust's situs is from time to time entitled to indemnify and defend such persons against any and all liabilities, expenses, claims, damages or losses incurred by them in the performance of their duties hereunder or in connection with activities undertaken by them prior to the Effective Date in connection with the formation, establishment, or funding of the PI Trust. Notwithstanding the foregoing, no individual shall be indemnified or defended in any way for any liability, expense, claim, damage, or loss for which he or she is ultimately liable under
Section 4.4 above.

(b) Reasonable expenses, costs and fees (including attorneys' fees and costs) incurred by or on behalf of a PI Trustee, a member of the TAC, Future Claimants' Representative, or Additional Indemnitee in connection with any action, suit, or proceeding, whether civil, administrative or arbitrative from which they are indemnified by the PI Trust pursuant to Section 4.6(a) above, shall be paid by the PI Trust in advance of the final disposition thereof upon receipt of an undertaking, by or on behalf of the Trustees, the members of the TAC, Future Claimants' Representative, or Additional Indemnitee, to repay such amount in the event that it shall be determined ultimately by final order that such PI Trustee, member of the TAC, Future Claimants' Representative, or Additional Indemnitee is not entitled to be indemnified by the PI Trust.

(c) The Trustees may purchase and maintain reasonable amounts and types of insurance on behalf of an individual who is or was a PI Trustee, member of the TAC, Future Claimants' Representative, or Additional Indemnitee against liability asserted against, or incurred by, such individual in that capacity or arising from his or her status as a PI Trustee, TAC member, Future Claimants' Representative, officer, employee, agent or other representative.

4.7 TRUSTEES' LIEN. The Trustees, members of the TAC, Future Claimants' Representative, and the Additional Indemnitees shall have a first priority lien upon the PI Trust Assets to secure the payment of any amounts payable to them pursuant to Section 4.6 above.

4.8 TRUSTEES' EMPLOYMENT OF EXPERTS. The Trustees may, but shall not be required to, retain and/or consult with counsel, accountants, appraisers, auditors and forecasters, and other parties deemed by the Trustees to be qualified as experts on the matters submitted to them, and the written opinion of or information provided by any such parties on any matters submitted to them by the Trustees shall be full and complete authorization and protection in respect of any action taken or not taken by the Trustees hereunder in good faith and in accordance with the written opinion of or information provided by any such party.

4.9 TRUSTEES' INDEPENDENCE. The Trustees shall not, during the term of their service, hold a financial interest in, act as attorney or agent for, or serve as any other professional for Reorganized AWI. Notwithstanding the foregoing, any PI Trustee may serve, without any additional compensation other than the per diem compensation to be paid by the PI Trust pursuant to Section 4.5(a) above, as a director of Reorganized AWI. No PI Trustee shall act as an attorney for any person who holds an asbestos claim.

4.10 BOND. The Trustees shall not be required to post any bond or other form of surety or security unless otherwise ordered by the Bankruptcy Court.

SECTION 5

TRUST ADVISORY COMMITTEE

5.1 MEMBERS. The TAC shall consist of five (5) members, who shall initially be the persons named on the signature page hereof.

5.2 DUTIES. The members of the TAC shall serve in a fiduciary capacity representing all holders of present Asbestos Personal Injury Claims.

The Trustees must consult with the TAC on matters identified in Section 2.2(e) above and in other provisions herein, and must obtain the consent of the TAC on matters identified in Section 2.2(f) above. Where provided in the TDP, certain other actions by the Trustees are also subject to the consent of the TAC.

5.3 TERM OF OFFICE.

(a) Each member of the TAC shall serve until the earlier of (i) his or her death, (ii) his or her resignation pursuant to Section 5.3(b) below,
(iii) his or her removal pursuant to Section 5.3(c) below, or (iv) the termination of the PI Trust pursuant to Section 7.2 below.

(b) A member of the TAC may resign at any time by written notice to the other members of the TAC, the Trustees and the Future Claimants' Representative. Such notice shall specify a date when such resignation shall take effect, which shall not be less than ninety (90) days after the date such notice is given, where practicable.

(c) A member of the TAC may be removed in the event that he or she becomes unable to discharge his or her duties hereunder due to accident, physical deterioration, mental incompetence, or a consistent pattern of neglect and failure to perform or to participate in performing the duties of such member hereunder, such as repeated non-attendance at scheduled meetings, or for other good cause. Such removal shall be made at the recommendation of the remaining members of the TAC with the approval of the Bankruptcy Court.

5.4 APPOINTMENT OF SUCCESSOR.

(a) In the event of a vacancy caused by the resignation or death of a TAC member, his or her successor shall be selected by the TAC member who is resigning or deceased, or by his or her law firm in the vent that such member had not pre-selected a successor. If neither the member nor the law firm exercises the right to make such a selection, the successor shall be chosen by a majority vote of the remaining TAC members. If a majority of the remaining members cannot agree, the Bankruptcy Court shall appoint the successor. In the event of a vacancy caused by the removal of a TAC member, the remaining members of the TAC by majority vote shall name the successor. If the majority of remaining members of the TAC cannot reach agreement, the Bankruptcy Court shall appoint the successor.

(b) Each successor TAC member shall serve until the earlier of (i) his or her death, (ii) his or her resignation pursuant to Section 5.3(b) above,
(iii) his or her removal pursuant to Section 5.3(c) above, or (iv) the termination of the PI Trust pursuant to Section 7.2 below.

5.5 TAC'S EMPLOYMENT OF PROFESSIONALS.

(a) The TAC may but is not required to retain and/or consult counsel, accountants, appraisers, auditors, forecasters, experts, and financial and investment advisors, and such other parties deemed by the TAC to be qualified as experts on matters submitted to the TAC (the "PROFESSIONALS"). The TAC and its Professionals shall at all times have complete access to the PI Trust's officers, employees and agents, as well as to the Professionals retained by the PI Trust, and shall also have complete access to all information generated by them or otherwise available to the PI Trust or the Trustees. In the absence of gross negligence, the written opinion of or information provided by any Professional deemed by the TAC to be qualified as an expert on the particular matter submitted to the TAC shall be full and complete authorization and protection in support of any action taken or not taken by the TAC in good faith and in accordance with the written opinion of or information provided by the Professional.

(b) The Trust shall promptly reimburse, or pay directly if so instructed, the TAC for all reasonable fees and costs associated with the TAC's employment of legal counsel pursuant to this provision in connection with the TAC's performance of its duties hereunder. The Trust shall also promptly reimburse, or pay directly if so instructed, the TAC for all reasonable fees and costs associated with the TAC's employment of any other Professional pursuant to this provision in connection with the TAC's performance of its duties hereunder; provided, however, that (i) the TAC has first submitted to the Trust a written request for such reimbursement setting forth the reasons (A) why the TAC desires

to employ such Professional, and (B) why the TAC cannot rely on Professionals retained by the Trust to meet the need of the TAC for such expertise or advice, and (ii) the Trust has approved the TAC's request for reimbursement in writing. If the Trust agrees to pay for the TAC Professional, such reimbursement shall be treated as a Trust expense. If the Trust declines to pay for the TAC Professional, it must set forth its reasons in writing. If the TAC still desires to employ such Professional at Trust expense, the TAC and/or the Trustees shall resolve their dispute pursuant to Section 7.13 below.

5.6 COMPENSATION AND EXPENSES OF TAC. The members of the TAC shall receive compensation from the PI Trust for their services as TAC members in the form of a reasonable hourly rate set by the Trustees for attendance at meetings or other conduct of PI Trust business. The members of the TAC shall also be reimbursed promptly for all reasonable out-of-pocket costs and expenses incurred in connection with the performance of their duties hereunder. Such reimbursement or direct payment shall be deemed a PI Trust expense. The PI Trust shall include a description of the amounts paid under this Section 5.6 in the accounts to be filed with the Bankruptcy Court and provided to the Trustees, the Future Claimants' Representative, and Reorganized AWI pursuant to Section 2.2(c)(i).

5.7 PROCEDURES FOR CONSULTATION WITH AND OBTAINING THE CONSENT OF THE TAC.

(a) CONSULTATION PROCESS.

(i) In the event the Trustees are required to consult with the TAC pursuant to Section 2.2(e) above or on other matters as provided herein, the Trustees shall provide the TAC with written advance notice of the matter under consideration, and with all relevant information concerning the matter as is reasonably practicable under the circumstances. The Trustees shall also provide the TAC with such reasonable access to Professionals and other experts retained by the PI Trust and its staff (if any) as the TAC may reasonably request during the time that the Trustees are considering such matter, and shall also provide the TAC the opportunity, at reasonable times and for reasonable periods of time, to discuss and comment on such matter with the Trustees.

(ii) The Trustees shall take into consideration the time required for the TAC, if its members so wish, to engage and consult with its own independent financial or investment advisors as to such matter.

(b) CONSENT PROCESS.

(i) In the event the Trustees are required to obtain the consent of the TAC pursuant to Section 2.2(f) above, the Trustees shall provide the TAC with a written notice stating that their consent is being sought pursuant to that provision, describing in detail the nature and scope of the action the Trustees propose to take, and explaining in detail the reasons why the Trustees desire to take such action. The Trustees shall provide the TAC as much relevant additional information concerning the proposed action as is reasonably practicable under the circumstances. The Trustees shall also provide the TAC with such reasonable access to Professionals and other experts retained by the PI Trust and its staff (if any) as the TAC may reasonably request during the time that the Trustees are considering such action, and shall also provide the TAC the opportunity, at reasonable times and for reasonable periods of time, to discuss and comment on such action with the Trustees.

(ii) The TAC must consider in good faith and in a timely fashion any request for its consent by the Trustees, and must in any event advise the Trustees in writing of its consent or its objection to the proposed action within 30 days of receiving the original request for consent from the Trustees. The TAC may not withhold its consent unreasonably. If the TAC decides to withhold its consent, it must explain in detail its objections to the proposed action. If the TAC does not advise the Trustees in writing of its consent or its objections to the action within 30 days of receiving notice regarding such request, the TAC's consent to the proposed actions shall be deemed to have been affirmatively granted.

(iii) If, after following the procedures specified in this
Section 5.7(b), the TAC continues to object to the proposed action and to withhold its consent to the proposed action, the Trustees and/or the TAC shall resolve their dispute pursuant to Section 7.13. However, the burden of proof with respect to the validity of the TAC's objection and withholding of its consent shall be on the TAC.

SECTION 6

THE FUTURE CLAIMANTS' REPRESENTATIVE

6.1 DUTIES. The initial Future Claimants' Representative shall be the individual identified on the signature pages hereto, namely Dean M. Trafelet, Esquire. He shall serve in a fiduciary capacity, representing the interests of the holders of future Asbestos Personal Injury Claims for the purpose of protecting the rights of such persons. The Trustees must consult with the Future Claimants' Representative on matters identified in Section 2.2(e) above and on certain other matters provided herein, and must obtain the consent of the Future Claimants' Representative on matters identified in Section 2.2(f) above. Where provided in the TDP, certain other actions by the Trustees are also subject to the consent of the Future Claimants' Representative.

6.2 TERM OF OFFICE.

(a) The Future Claimants' Representative shall serve until the earlier of (i) his or her death, (ii) his or her resignation pursuant to Section 6.2(b) below, (iii) his or her removal pursuant to Section 6.2(c) below, or (iv) the termination of the PI Trust pursuant to Section 7.2 below.

(b) The Future Claimants' Representative may resign at any time by written notice to the Trustees. Such notice shall specify a date when such resignation shall take effect, which shall not be less than ninety (90) days after the date such notice is given, where practicable.

(c) The Future Claimants' Representative may be removed by the Bankruptcy Court in the event he or she becomes unable to discharge his or her duties hereunder due to accident, physical deterioration, mental incompetence, or a consistent pattern of neglect and failure to perform or to participate in performing the duties hereunder, such as repeated non-attendance at scheduled meetings, or for other good cause.

6.3 APPOINTMENT OF SUCCESSOR. A vacancy caused by resignation or death shall be filled with an individual nominated prior to the effective date of the resignation or the death by the resigning Future Claimants' Representative, and a vacancy caused by removal of the Future Claimants' Representative shall be filled with an individual nominated by the Trustees, in consultation with the TAC, subject to the approval of the Bankruptcy Court. In the event a majority of the Trustees cannot agree, or a nominee has not been pre-selected, the successor shall be appointed by the Bankruptcy Court.

6.4 FUTURE CLAIMANTS' REPRESENTATIVE'S EMPLOYMENT OF PROFESSIONALS.

(a) The Future Claimants' Representative may but is not required to retain and/or consult counsel, accountants, appraisers, auditors, forecasters, experts, and financial and investment advisors, and such other parties deemed by the Future Claimants' Representative to be qualified as experts on matters submitted to the Future Claimants' Representative (the "PROFESSIONALS"). The Future Claimants' Representative and his or her experts shall at all times have complete access to the PI Trust's officers, employees and agents, as well as to the Professionals retained by the PI Trust, and shall also have complete access to all information generated by them or otherwise available to the PI Trust or the Trustees. In the absence of gross negligence, the written opinion of or information provided by any Professional deemed by the Future Claimants' Representative to be qualified as an expert on the particular matter submitted to the Future Claimants' Representative shall be full and complete authorization and protection in support of any action taken or not taken by the Future Claimants' Representative in good faith and in accordance with the written opinion of or information provided by the Professional.

(b) The Trust shall promptly reimburse, or pay directly if so instructed, the Future Claimants' Representative for all reasonable fees and costs associated with the Future Claimants' Representative's employment of legal counsel pursuant to this provision in connection with the Future Claimants' Representative's performance of his or her duties hereunder. The Trust shall also promptly reimburse, or pay directly if so instructed, the Future Claimants' Representative for all reasonable fees and costs associated with the Future Claimants' Representative's employment of any other Professionals pursuant to this provision in connection with the Future Claimants' Representative's performance of his or her duties hereunder; provided, however, that (i) the Future Claimants' Representative has first submitted to the Trust a written request for such reimbursement setting forth the reasons (A) why the Future Claimants' Representative desires to employ the Professional, and (B) why the Future Claimants' Representative cannot rely on Professionals retained by the Trust to meet the need of the Future Claimants' Representative for such expertise or advice, and (ii) the Trust has approved the Future Claimants' Representative's request for reimbursement in writing. If the Trust agrees to pay for the Future Claimants' Representative's Professional, such reimbursement shall be treated as a Trust Expense. If the Trust declines to pay for the Future Claimants' Representative's Professional, it must set forth its reasons in writing. If the Future Claimants' Representative still desires to employ the Professional at Trust expense, the Future Claimants' Representative and/or the Trustees shall resolve their dispute pursuant to Section 7.13 below.

6.5 COMPENSATION AND EXPENSES OF THE FUTURE CLAIMANTS' REPRESENTATIVE. The Future Claimants' Representative shall receive compensation from the PI Trust in the form of the Future Claimants' Representative's normal hourly rate for services performed. The PI Trust will promptly reimburse the Future Claimants' Representative for all reasonable out-of-pocket costs and expenses incurred by the Future Claimants' Representative in connection with the performance of his or her duties hereunder. Such reimbursement or direct payment shall be deemed a PI Trust expense. The PI Trust shall include a description of the amounts paid under this Section 6.5 in the accounts to be filed with the Bankruptcy Court and provided to the Trustees, the Future Claimants' Representative, and Reorganized AWI pursuant to Section 2.2(c)(i).

6.6 PROCEDURES FOR CONSULTATION WITH AND OBTAINING THE CONSENT OF THE FUTURE CLAIMANTS REPRESENTATIVE.

(a) CONSULTATION PROCESS.

(i) In the event the Trustees are required to consult with the Future Claimants' Representative pursuant to Section 2.2(e) above or on any other matters specified herein, the Trustees shall provide the Future Claimants' Representative with written advance notice of the matter under consideration, and with all relevant information concerning the matter as is reasonably practicable under the circumstances. The Trustees shall also provide the Future Claimants' Representative with such reasonable access to Professionals and other experts retained by the PI Trust and its staff (if any) as the Future Claimants' Representative may reasonably request during the time that the Trustees are considering such matter, and shall also provide the Future Claimants' Representative the opportunity, at reasonable times and for reasonable periods of time, to discuss and comment on such matter with the Trustees.

(ii) The Trustees shall take into consideration the time required for the Future Claimants' Representative, if he or she so wishes, to engage and consult with his or her own independent financial or investment advisors as to such matter.

(b) CONSENT PROCESS.

(i) In the event the Trustees are required to obtain the consent of the Future Claimants' Representative pursuant to Section 2.2(f) above, the Trustees shall provide the Future Claimants' Representative with a written notice stating that his or her consent is being sought pursuant to that provision, describing in detail the nature and scope of the action the Trustees propose to take, and explaining in detail the reasons why the Trustees desire to take such

action. The Trustees shall provide the Future Claimants' Representative as much relevant additional information concerning the proposed action as is reasonably practicable under the circumstances. The Trustees shall also provide the Future Claimants' Representative with such reasonable access to Professional and other experts retained by the PI Trust and its staff (if any) as the Future Claimants' Representative may reasonably request during the time that the Trustees are considering such action, and shall also provide the Future Claimants' Representative the opportunity, at reasonable times and for reasonable periods of time, to discuss and comment on such action with the Trustees.

(ii) The Future Claimants' Representative must consider in good faith and in a timely fashion any request for his or her consent by the Trustees, and must in any event advise the Trustees in writing of his or her consent or objection to the proposed action within 30 days of receiving the original request for consent from the Trustees. The Future Claimants' Representative may not withhold his or her consent unreasonably. If the Future Claimants' Representative decides to withhold consent, he or she must explain in detail his or her objections to the proposed action. If the Future Claimants' Representative does not advise the Trustees in writing of his or her consent or objections to the proposed action within 30 days of receiving the notice from the Trustees regarding such consent, the Future Claimants' Representative's consent shall be deemed to have been affirmatively granted.

(iii) If, after following the procedures specified in this
Section 5.7(b), the Future Claimants' Representative continues to object to the proposed action and to withhold its consent to the proposed action, the Trustees and/or the Future Claimants' Representative shall resolve their dispute pursuant to Section 7.13. However, the burden of proof with respect to the validity of the Future Claimants' Representative's objection and withholding of his or her consent shall be on the Future Claimants' Representative.

SECTION 7

GENERAL PROVISIONS

7.1 IRREVOCABILITY. The PI Trust is irrevocable.

7.2 TERMINATION.

(a) The PI Trust shall automatically terminate on the date ninety
(90) days after the first to occur of the following events:

(i) the Trustees decide to terminate the PI Trust because (A) they deem it unlikely that new asbestos claims will be filed against the PI Trust, (B) all Asbestos Personal Injury Claims duly filed with the PI Trust have been liquidated and paid to the extent provided in this PI Trust Agreement and the TDP or disallowed by a final, non-appealable order, to the extent possible based upon the funds available through the Plan, and (C) twelve (12) consecutive months have elapsed during which no new asbestos claim has been filed with the PI Trust; or

(ii) if the Trustees have procured and have in place irrevocable insurance policies and have established claims handling agreements and other necessary arrangements with suitable third parties adequate to discharge all expected remaining obligations and expenses of the PI Trust in a manner consistent with this PI Trust Agreement and the TDP, the date on which the Bankruptcy Court enters an order approving such insurance and other arrangements and such order becomes a final order; or

(iii) to the extent that any rule against perpetuities shall be deemed applicable to the PI Trust, twenty-one (21) years less ninety-one (91) days pass after the death of the last survivor of all of the descendants of the late Joseph P. Kennedy, Sr., father of the late President John F. Kennedy, living on the date hereof.

(b) On the Termination Date, after payment of all the PI Trust's liabilities have been provided for, all monies remaining in the PI Trust estate shall be given to such organization(s) exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, which tax-exempt organization(s) shall be selected by the Trustees using their reasonable discretion; provided, however, that (i) if practicable, the activities of the selected tax-exempt organization(s) shall be related to the treatment of, research on, or the relief of suffering of individuals suffering from asbestos related lung disorders, and
(ii) the tax-exempt organization(s) shall not bear any relationship to Reorganized AWI within the meaning of section 468B(d)(3) of the Internal Revenue Code. Notwithstanding any contrary provision of the Plan and related documents, this Section 7.2(b) cannot be modified or amended.

7.3 AMENDMENTS. The Trustees, after consultation with the TAC and the Future Claimants' Representative, and subject to the unanimous consent of the members of the TAC and the Future Claimants' Representative, may modify or amend this PI Trust Agreement and the PI Trust By-laws. The Trustees, after consultation with the TAC and the Future Claimants' Representative, and subject to the consent of the TAC and the Future Claimants' Representative, may modify or amend the TDP; provided, however, that no amendment to the TDP shall be inconsistent with the provisions limiting amendments to that document provided therein, and in particular the provisions limiting amendment of the Claims Payment Ratio set forth in Section 2.5 of the TDP and of the Payment Percentage set forth in Section 4.2 of the TDP. Any modification or amendment made pursuant to this Article must be done in writing. Notwithstanding anything contained in this PI Trust Agreement to the contrary, neither this PI Trust Agreement, the PI Trust Bylaws, the TDP, nor any document annexed to the foregoing shall be modified or amended in any way that could jeopardize, impair, or modify the applicability of section 524(g) of the Bankruptcy Code, the efficacy or enforceability of the injunction entered thereunder, or the PI Trust's qualified settlement fund status under Section 468B of the Internal Revenue Code.

7.4 [Intentionally omitted]

7.5 SEVERABILITY. Should any provision in this PI Trust Agreement be determined to be unenforceable, such determination shall in no way limit or affect the enforceability and operative effect of any and all other provisions of this PI Trust Agreement.

7.6 NOTICES. Notices to persons asserting claims shall be given by first class mail, postage prepaid, at the address of such person, or, where applicable, such person's legal representative, in each case as provided on such person's claim form submitted to the PI Trust with respect to his or her PI Trust Claim.

(a) Any notices or other communications required or permitted hereunder to the following parties shall be in writing and delivered at the addresses designated below, or sent by telex, telecopy or facsimile pursuant to the instructions listed below, or mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows, or to such other address or addresses as may hereafter be furnished in writing to each of the other parties listed below in compliance with the terms hereof.

To the PI Trust through the Trustees:       Anne M. Ferazzi, Trustee
                                            11923 Winwood
                                            Houston, TX 77024
                                            Telephone: (713) 334-7775
                                            Facsimile: (713) 953-1107
                                            Email: ferazzi@mindspring.com

                                            Mr. Harry Huge, Trustee
                                            25 East Battery
                                            Charleston, SC 29401
                                            Telephone: (843) 722-1628
                                            Facsimile: (843) 720-8794
                                            Email: harryhuge@comcast.net

                                            Paul A. Knuti, Trustee
                                            7727 Sauna Road
                                            Embarrass, MN 55732
                                            Telephone:  (218) 984-3048
                                            Facsimile:  (218) 984-3864
                                            Email:  knutifarm@frontiernet.net

                                            Lewis R. Sifford, Trustee
                                            Sifford Anderson Vice & MacFarlane
                                            2001 Bryan Street - Suite 2050
                                            Dallas, TX 75202
                                            Telephone:  (214) 978-4611
                                            Facsimile:  (214) 220-0206
                                            Email:  LSifford@sifford.com

                                            Thomas M. Tully, Trustee
                                            33 North Dearborn - Suite 2450
                                            Chicago, IL 60602
                                            Telephone:  (312) 917-8700
                                            Facsimile:  (312) 917-8711
                                            Email:  Thomas@tullyassoc.com

                                            With a copy to:

                                            Kevin E. Irwin
                                            Keating, Muething & Klekamp, PLL
                                            1400 Provident Tower
                                            One East Fourth Street
                                            Cincinnati, OH 45202
                                            Telephone:  (513) 579-6400
                                            Facsimile:  (513) 579-6457
                                            Email:  kirwin@kmklaw.com

To the TAC:                                 John D. Cooney
                                            Cooney & Conway
                                            120 North LaSalle - 30th Floor
                                            Chicago, IL 60602
                                            Telephone:  (312) 236-6166
                                            Facsimile:  (312) 236-3029
                                            Email:  jcooney@cooneyconway.com

                                            Russell W. Budd
                                            Baron & Budd
                                            Suite 1100
                                            3102 Oak Lawn Avenue
                                            Dallas, TX 75219
                                            Telephone:  (214) 523-6265
                                            Facsimile:  (214) 520-1181
                                            Email:  rbudd@baronbudd.com

Steven Kazan Kazan, McClain, Abrams, Fernandez, Lyons, Farrise & Greenwood 171 Twelfth Street Third Floor Oakland, CA 94607 Telephone: (510) 465-7728 Facsimile: (510) 835-4913 Email: skazan@kazanlaw.com

Joseph F. Rice Motley Rice LLC 28 Bridgeside Boulevard P.O. Box 1792 Mount Pleasant, SC 29465 Telephone: (843) 216-9159 Facsimile: (843) 216-9290 Email: jrice@motleyrice.com

Perry Weitz Weitz & Luxemberg, P.C.

180 Maiden Lane
New York, NY 10038-4925
Telephone: (212) 558-5508
Facsimile: (212) 344-5461
Email: pweitz@weitzlux.com

With a copy to:

Elihu Inselbuch
Caplin & Drysdale, Chartered
375 Park Avenue
35th Floor
New York, NY 10152-3500
Telephone: (212) 319-9240
Facsimile: (212) 644-6755
Email: ei@capdale.com

To the Future Claimants' Representative:    Dean M. Trafelet
                                            Future Claimants' Representative
                                            P.O. Box 518
                                            9130 Wild Lane
                                            Baileys Harbor, WI 54202
                                            Telephone:  (312) 335-1726
                                            Facsimile:  (312) 335-8015
                                            Email:  dtrafelet@dcwis.com and
                                                    dtrafelet@sbcglobal.net

With a copy to:

Andrew A. Kress Kaye Scholer LLP 425 Park Avenue New York, New York 10022 Telephone: 212-836-8781 Facsimile: 212-836-6728 Email: akress@kayescholer.com

To Reorganized AWI:                         General Counsel
                                            Armstrong World Industries, Inc.
                                            2500 Columbia Avenue
                                            Lancaster, PA 17522
                                            Telephone:  (717) 396-2168
                                            Facsimile:  (717) 396-6121

                                            With a copy to:

                                            Debra A. Dandeneau
                                            Weil, Gotshal & Manges LLP
                                            767 Fifth Avenue
                                            Telephone:  (212) 310-8000
                                            Facsimile:  (212) 310-8007
                                            Email:  debra.dandeneau@weil.com

(b) All such notices and communications if mailed shall be effective when physically delivered at the designated addresses or, if electronically transmitted, when the communication is received at the designated addresses and confirmed by the recipient by return transmission.

7.7 SUCCESSORS AND ASSIGNS. The provisions of this PI Trust Agreement shall be binding upon and inure to the benefit of AWI, the PI Trust, the Trustees and Reorganized AWI, and their respective successors and assigns, except that neither AWI, the PI Trust, the Trustees nor Reorganized AWI may assign or otherwise transfer any of its, or their, rights or obligations under this PI Trust Agreement except, in the case of the PI Trust and the Trustees, as contemplated by Section 2.1 above.

7.8 LIMITATION ON CLAIM INTERESTS FOR SECURITIES LAWS PURPOSES. Asbestos Personal Injury Claims, and any interests therein (a) shall not be assigned, conveyed, hypothecated, pledged or otherwise transferred, voluntarily or involuntarily, directly or indirectly, except by will or under the laws of descent and distribution; (b) shall not be evidenced by a certificate or other instrument; (c) shall not possess any voting rights; and (d) shall not be entitled to receive any dividends or interest; provided, however, that clause
(a) of this Section 7.8 shall not apply to the holder of a claim that is subrogated to a PI Trust Claim as a result of its satisfaction of such PI Trust Claim.

7.9 ENTIRE AGREEMENT; NO WAIVER. The entire agreement of the parties relating to the subject matter of this PI Trust Agreement is contained herein and in the documents referred to herein, and this PI Trust Agreement and such documents supersede any prior oral or written agreements concerning the subject matter hereof. No failure to exercise or delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any further exercise thereof or of any other right, power or privilege. The

rights and remedies herein provided are cumulative and are not exclusive of rights under law or in equity.

7.10 HEADINGS. The headings used in this PI Trust Agreement are inserted for convenience only and do not constitute a portion of this PI Trust Agreement, nor in any manner affect the construction of the provisions of this PI Trust Agreement.

7.11 GOVERNING LAW. This PI Trust Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to Delaware conflict of law principles.

7.12 SETTLOR REPRESENTATIVE AND COOPERATION. AWI is hereby irrevocably designated as the Settlor, and it is hereby authorized to take any action required of the Settlor in connection with the PI Trust Agreement. AWI agrees to cooperate in implementing the goals and objectives of this PI Trust.

7.13 DISPUTE RESOLUTION. Any disputes that arise under this PI Trust Agreement or under the TDP shall be resolved by submission of the matter to an alternative dispute resolution ("ADR") process mutually agreeable to the parties involved. Should any party to the ADR process be dissatisfied with the decision of the arbitrator(s), that party may apply to the Bankruptcy Court for a judicial determination of the matter. In either case, if the dispute arose pursuant to the consent provision set forth in Section 5.7(b) (in the case of the TAC) or Section 6.6(b) (in the case of the Future Claimants' Representative), the burden of proof shall be on the party or parties who withheld consent to show that the objection was valid. Should the dispute not be resolved by ADR process within thirty (30) days after submission, the parties are relieved of the requirement to pursue ADR prior to application to the Bankruptcy Court. Notwithstanding anything else herein contained, to the extent any provision of this PI Trust Agreement is inconsistent with any provision of the Plan or the TDP, the Plan or the TDP shall control.

7.14 ENFORCEMENT AND ADMINISTRATION. The provisions of this PI Trust Agreement and the TDP attached hereto shall be enforced by the Bankruptcy Court pursuant to the Plan. The parties hereby further acknowledge and agree that the Bankruptcy Court shall have exclusive jurisdiction over the settlement of the accounts of the Trustees and over any disputes hereunder not resolved by alternative dispute resolution in accordance with Section 7.13 above.

7.15 EFFECTIVENESS. This PI Trust Agreement shall not become effective until it has been executed and delivered by all the parties hereto.

7.16 COUNTERPART SIGNATURES. This PI Trust Agreement may be executed in any number of counterparts, each of which shall constitute an original, but such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this PI Trust Agreement this _____ day of ________________________, _______.

ARMSTRONG WORLD INDUSTRIES, INC., SETTLOR, BY

Name:

Title:

RUSTEES

Anne M. Ferazzi

Harry Huge

Paul A. Knuti

Lewis R. Sifford

Thomas M. Tully

ASBESTOS CLAIMANTS' COMMITTEE

By:
John D. Cooney

TRUST ADVISORY COMMITTEE

John D. Cooney

Russell W. Budd

Steven Kazan

Joseph F. Rice

Perry Weitz

FUTURE CLAIMANTS' REPRESENTATIVE

Dean M. Trafelet, Esq.

Annex A to the Trust Agreement

ARMSTRONG WORLD INDUSTRIES, INC.
ASBESTOS PERSONAL INJURY SETTLEMENT TRUST

BYLAWS

ARTICLE I.
OFFICES

Section 1. Principal Office. The initial principal office of the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust shall be in ____________ or at such other places as the Trustees shall from time to time select.

Section 2. Other Offices. The Trust may have such other offices at such other places as the Trustees may from time to time determine to be necessary for the efficient and cost-effective administration of the Trust.

ARTICLE II.
TRUSTEES

Section 1. Control of Property, Business, and Affairs. The property, business, and affairs of the Trust shall be managed by or under the direction of the Trustees, provided that certain decisions of the Trustees shall be subject to the consent of the PI Trust Advisory Committee ("TAC") and the Legal Representative for Asbestos-related future claimants ("FUTURE CLAIMANTS' REPRESENTATIVE"), pursuant to the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust Agreement ("TRUST AGREEMENT") to which these Bylaws are attached. In the event of any conflict between the provisions of the Trust Agreement and the provisions of these Bylaws, the provisions of the Trust Agreement shall govern and control.

Section 2. Number, Resignation and Removal. The number of Trustees and provisions governing their resignation and removal and the appointment of successors are governed by the Trust Agreement.

Section 3. Quorum and Manner of Acting. A majority of the Trustees shall constitute a quorum for the transaction of business. In the absence of a quorum, the Trustees present may adjourn the meeting until a quorum shall be present. The vote, at a meeting at which a quorum is present, of a majority of all Trustees shall be an act of the Trustees.

Section 4. Regular Meetings. Regular meetings of the Trustees with the TAC members and the Future Claimants' Representative may be held at such times and places as shall from time to time be determined by the Trustees. At least one regular meeting each year shall be held at the place where the Trust maintains its principal office. The Trustees shall meet at least once each calendar quarter and give notice annually of the schedule of regular meetings to each Trustee, members of the TAC, and the Future Claimants' Representative. Thereafter, meetings covered by the scheduled notice may be held without further notice. Whenever possible, Trustees shall attend all regular meetings in person.

- 2 -

Section 5. Special Meetings. Special meetings of the Trustees shall be held whenever called by one or more of the Trustees. Notice of each such meeting shall be delivered to each Trustee, TAC member, and the Future Claimants' Representative, by overnight courier, by facsimile, or by e-mail to the place, number, or e-mail address designated by each of them for receipt of such notices, or, failing such designation, at their residence or usual place of business, at least 24 hours before the time at which the meeting is to be held. Such notice shall state the place, date, and hour of the meeting and the purposes for which it is called. In lieu of the notice, a waiver of notice in writing, signed by the individual involved, whether before or after the meeting, shall be equivalent to a notice. Attendance at a meeting shall constitute a waiver of notice of that meeting. In instances in which the Trustees reasonably determine that attendance of the TAC members and the Future Claimants Representative would compromise privileged communications or that the purposes of the meeting concern matters confidential as to the Trustees, notices of such a meeting shall be given only to the Trustees.

Section 6. Action Without a Meeting; Meeting by Conference Call. Any action required or permitted to be taken at any meeting of the Trustees may be taken without a meeting if all Trustees consent thereto in writing, after notice to the TAC members and the Future Claimants' Representatives pursuant to the notice provisions in Article II, Section 5, above, and the writings are filed with the minutes of proceedings of the Trustees.

The Trustees also may take any action required or permitted to be taken at any meeting by means of conference telephone or other communication equipment provided that all persons participating can hear and speak with each other. Participation in such a meeting shall constitute presence in person at such meeting.

Section 7. Committees. The Trustees may appoint committees and delegate to them particular powers and responsibilities from time to time.

ARTICLE III.
OFFICERS

Section 1. Principal Officers. The Trustees shall annually elect a Chair and such other principal officers, including, without limitation, Vice Chair, Executive Director, Secretary and Treasurer, as the Trustees believe will promote the efficient and cost-effective administration of the Trust. Each such principal officer shall hold office until a successor shall have been chosen and qualified or until death, resignation, retirement or removal.

Section 2. Powers and Duties. All principal officers, as between themselves and the Trust, shall respectively have such authority to operate the Trust in the ordinary course of business and perform such duties as are customarily incident to their respective offices in a corporate setting, and such other powers and duties as may be specified from time to time by the Trustees. The Trustees shall, from time to time, establish by resolution limits on the authorization of expenditures and the extent of legal commitments that may be made by the officers. Except for the Chair and Vice Chair, the officers need not be Trustees.

- 3 -

Section 3. Removal. The Chair and any other principal officer may be removed as a principal officer with or without cause, at any time, by resolution adopted by the Trustees at any regular meeting of the Trustees or at any special meeting of the Trustees called for that purpose.

Section 4. Subordinate Officers. The Trustees may appoint such other subordinate officers, agents, and employees as the Trustees may deem necessary and advisable for the efficient and cost-effective administration of the Trust, each of whom shall hold office for such period, have such authority, and perform such duties as the Trustees may from time to time determine. The Chair may remove any such subordinate officer, agent, or employee at any time with or without cause.

Section 5. Resignations. Any officer may resign at any time by giving written notice to the Trustees. The resignation of any officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

ARTICLE IV.
AMENDMENTS

Section 1. These Bylaws, other than Article II, Article III, Section 3, and this Article IV, may be amended by the Trustees at any meeting of the Trustees, provided that notice of the proposed amendment is contained in the notice of such meeting. Article II, Article III, Section 3, and this Article IV, may be amended by the Trustees only after receipt of the consent of the TAC members and the Future Claimants' Representative.

EXHIBIT 10.3

EXECUTION COPY

STOCKHOLDER AND REGISTRATION RIGHTS AGREEMENT

BY AND BETWEEN

ARMSTRONG WORLD INDUSTRIES, INC.

AND

ARMSTRONG WORLD INDUSTRIES, INC. ASBESTOS PERSONAL INJURY SETTLEMENT TRUST

DATED AS OF OCTOBER 2, 2006

                                TABLE OF CONTENTS

                                                                            PAGE



ARTICLE I             DEFINITIONS..............................................2

ARTICLE II            EQUITY REGISTRATION RIGHTS...............................8

         2.1      Equity Security Demand Registration..........................8

         2.2      Piggyback Registration......................................10

         2.3      Registration Procedures.....................................11

         2.4      Expenses....................................................13

         2.5      Indemnification and Contribution............................14

         2.6      Rule 144....................................................17

         2.7      Duration of Equity Registration Rights......................17

         2.8      "Market Stand-Off" Agreement................................17

         2.9      Transfer of Registration Rights.............................17

         2.10     Granting of Additional Registration Rights..................18

ARTICLE III           DEBT REGISTRATION RIGHTS................................18

         3.1      Debt Security Demand Registration...........................18

         3.2      Shelf Registration..........................................20

         3.3      Registration Procedures.....................................20

         3.4      Expenses....................................................22

         3.5      Indemnification and Contribution............................23

         3.6      Rule 144....................................................26

         3.7      Duration of Debt Registration Rights........................26

         3.8      "Market Stand-Off" Agreement................................26

         3.9      Transfer of Registration Rights.............................27

         3.10     Granting of Additional Registration Rights..................27

ARTICLE IV            TAG-ALONG RIGHTS........................................27

         4.1      Restrictions on Transfer of Shares of Common
                  Stock by the Trust..........................................27

         4.2      Offer to Other Stockholders.................................28

         4.3      Third Party Beneficiary Rights..............................28

ARTICLE V             CERTAIN COVENANTS OF THE COMPANY........................29

         5.1      Approval Requirements Respecting A Shareholder Rights
                  Plan........................................................29

                                TABLE OF CONTENTS
                                   (CONTINUED)
                                                                            PAGE


ARTICLE VI            VOTING AGREEMENT AND RELATED COVENANTS OF THE TRUST.....29

         6.1      Independent Directors.......................................29

         6.2      Approval of New Long-term Incentive Plan....................29

         6.3      Certain Director Elections..................................30

         6.4      Third Party Beneficiary Rights..............................30

ARTICLE VII           MISCELLANEOUS PROVISIONS................................30

         7.1      Successor Securities........................................30

         7.2      Equitable Relief............................................31

         7.3      No Inconsistent Agreements..................................31

         7.4      Amendments and Waivers......................................31

         7.5      Notice Generally............................................31

         7.6      Successors and Assigns......................................32

         7.7      Headings....................................................33

         7.8      Governing Law; Jurisdiction; Jury Waiver....................33

         7.9      Severability................................................33

         7.10     Entire Agreement............................................33

         7.11     Counterparts................................................33

STOCKHOLDER AND REGISTRATION RIGHTS AGREEMENT

Stockholder and Registration Rights Agreement, dated as of October 2, 2006, by and between Armstrong World Industries, Inc., a Pennsylvania corporation (the "COMPANY"), and the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust (the "TRUST") established pursuant to the Trust Agreement (as hereinafter defined).

W I T N E S S E T H :

WHEREAS, the Company filed its Fourth Amended Plan of Reorganization, as Modified dated February 21, 2006 with the United States Bankruptcy Court for the District of Delaware (the "COURT") pursuant to and in accordance with chapter 11 of the U.S. Bankruptcy Code (as filed with the Court and as may be amended from time to time in accordance with its terms, the "PLAN"), which was confirmed on August 18, 2006; and

WHEREAS, capitalized terms used herein and not defined above shall have the meaning provided by Article I hereof or otherwise provided below; and

WHEREAS, pursuant to the Plan, (i) on the Effective Date, all previously outstanding shares of the Company will be cancelled, (ii) on the Effective Date, the Trust will receive new shares of Common Stock to be issued by the Company, and on the Initial Distribution Date the holders of Allowed Unsecured Claims will receive new shares of Common Stock to be issued by the Company, representing 65.57% and 34.43%, respectively, of the shares of Common Stock to be outstanding on the Initial Distribution Date, (iii) on the Initial Distribution Date, Plan Notes may be issued to the Trust and to the holders of Allowed Unsecured Claims, upon the terms and in accordance with certain provisions of the Plan and (iv) in accordance with the Plan, the New Long Term Incentive Plan will be established; and

WHEREAS, in accordance with the Plan, the Company and the Trust are entering into this Agreement on the Effective Date (i) to provide for certain rights and obligations of the Trust with respect to shares of Common Stock held by the Trust, including certain obligations for the benefit of the holders of shares of Common Stock issued to holders of Allowed Unsecured Claims (and any transferees, other than the Trust, of the shares of Common Stock of such holders) and other future holders of shares of Common Stock (other than any such holder whose shares are Beneficially Owned by the Trust) (all such holders, including but not limited to those who are holders of Allowed Unsecured Claims, collectively, the "OTHER STOCKHOLDERS") with respect to certain transactions by the Trust in shares of Common Stock held by the Trust, and certain consent

rights for the benefit of the Trust, (ii) to provide registration rights for the Trust with respect to its holding of shares of Common Stock, and (iii) to provide registration rights for the Trust with respect to its holdings of Plan Notes, if they are issued under the Plan;

NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained, it is hereby agreed as follows:

ARTICLE I

DEFINITIONS

As used in this Agreement, the following capitalized terms shall have the meanings ascribed thereto below (such meanings being equally applicable to both the singular and plural form of the terms defined):

"ACTION" shall have the meaning provided by Section 2.5(e) or 3.5(e) hereof, as the case may be.

"AFFILIATE," with respect to a Person, means any other Person which directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person, within the meaning of Rule 12b-2 under the Exchange Act.

"AGREEMENT" shall mean this Stockholder and Registration Rights Agreement, as the same may from time to time be amended, modified and supplemented in accordance with its terms.

"ALLOWED UNSECURED CLAIMS" shall have the meaning provided in the Plan.

"ARTICLES OF INCORPORATION" shall mean the Amended and Restated Articles of Incorporation of the Company, as in effect on the Effective Date and as the same may from time to time be amended or restated in accordance with its terms.

"BUSINESS DAY" shall mean any day on which commercial banks are required to be open for business in New York, New York.

"BENEFICIALLY OWNED" or "BENEFICIAL OWNERSHIP" shall have the meaning prescribed by Regulation 13D-G under the Exchange Act, as amended and from time to time in effect.

"BYLAWS" shall mean the amended and restated bylaws of the Company, as in effect on the Effective Date and as the same may from time to time be amended or restated in accordance with their terms.

"CHANGE IN CONTROL" with respect to the Company shall mean the acquisition by any person, or any group (within the meaning of Section 13(d) of the Exchange Act), of either Beneficial Ownership of more than 25% of the Voting Stock or the right, by contract, voting power or otherwise (or any combination thereof), to designate more than one-third of the members of the board of directors of the Company (assuming no vacancy on the board of directors).

"CHAPTER 11 CASE" shall mean the chapter 11 case of Armstrong World Industries, Inc., pending in the Court as In re Armstrong World Industries, Inc., et al., Case No. 00-4471 (RJN) (Jointly Administered).

"COMMON STOCK" shall meaning the common shares, $0.01 par value per share, of the Company, as authorized by the Articles of Incorporation on the Effective Date, and any successor security as provided by Section 7.1 hereof.

"DEBT SECURITY DEMAND REGISTRATION" shall have the meaning provided by Section 3.1(a) hereof.

"DEMANDING EQUITY SECURITY HOLDERS" shall have the meaning provided by Section 2.2(a) hereof.

"DEMANDING OTHER DEBT SECURITY HOLDERS" shall have the meaning provided by Section 3.2(a) hereof.

"DISINTERESTED DIRECTOR" shall mean, in respect of a transaction or potential transaction (or category of immaterial transactions), a director who is not Affiliated with the Trust and who has no personal financial interest in the transaction (other than the same interest, if a shareholder of the Corporation, as the other shareholders of the Corporation).

"EFFECTIVE DATE" shall mean October 2, 2006 (which is the first Business Day of the month immediately following the date by which all of the conditions precedent to the effectiveness of the Plan specified in Section 7.17 of the Plan have been satisfied or waived, no stay of the order confirming the Plan in accordance with chapter 11 of the U.S. Bankruptcy Code being in effect on such date. The Effective Date for purposes of this Agreement shall be the same as the Effective Date for purposes of the Plan.

"EQUITY SECURITY DEMAND REGISTRATION" shall have the meaning set forth in Section 2.1 (a) hereof.

"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations of the SEC promulgated thereunder, all as the same may be amended and shall be in effect from time to time.

"INDEMNIFIED PARTY" shall have the meaning provided by Section 2.5(e) or 3.5(e) hereof, as the case may be.

"INDEMNIFYING PARTY" shall have the meaning provided by
Section 2.5(e) or 3.5(e) hereof, as the case may be.

"INDEPENDENT DIRECTOR" shall mean a director who (i) qualifies as an "independent director" within the meaning of the corporate governance listing standards from time to time adopted by the NYSE or Nasdaq with respect to the composition of the board of directors of a listed company (without regard to any independence criteria applicable under such standards only to the members of a committee of the board of directors), as applicable to whichever market the shares of Common Stock are to be listed on for trading upon the issuance of such shares pursuant to the Plan and, thereafter, are from time to time listed for trading on) and (ii) satisfies the minimum requirements of director independence of SEC Rule 10A-3(b)(1) under the Exchange Act; provided, however, that, to the extent that any requirements in addition to those required in order for a director to be considered independent in accordance with such listing standards must be satisfied in order for a director of the Company to qualify as an "outside director" for purposes of Rule 16b-3 under the Exchange Act or for purposes of Section 162(m) of the Internal Revenue Code, at least three directors of the Company must also qualify as such under such additional requirements in order for the Company to be considered to have Independent Directors in satisfaction of clause (i) of subparagraph (a) of Article VI hereof.

"INITIAL DISTRIBUTION DATE" shall mean a date on or after the Effective Date that is selected by the Company in its discretion but, in any event, is within fifteen (15) days after the Effective Date, or such later date as the Court may establish upon request by the Company, for cause shown, as permitted by the Plan; provided, however, that in no event shall the Initial Distribution Date be more than forty-five days after the Effective Date.

"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time, and any applicable rulings, Treasury Regulations, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or the IRS.

"IRS" shall mean the United States Internal Revenue Service.

"NASD" shall mean the National Association of Securities Dealers, Inc., or any successor corporation thereto.

"NASDAQ" shall mean the Nasdaq Stock Market.

"NEW LONG-TERM INCENTIVE PLAN" shall mean the New Long-Term Incentive Plan of the Company, substantially in the form of Exhibit 1.90 attached to the Plan.

"NYSE" shall mean the New York Stock Exchange.

"OTHER STOCKHOLDERS" shall have the meaning set forth in the fourth recital of this Agreement.

"PERSON" shall mean any individual, partnership (general, limited or limited liability), corporation, limited liability company, trust, unincorporated organization or other legal entity, and a government or agency or political subdivision thereof.

"PLAN NOTE INDENTURES" shall mean the indentures, substantially in the form of Exhibit 1.96 to the Plan and qualified under the Trust Indenture Act of 1939, as amended, entered into by and between the Company, as the issuer, and a trustee selected by the Company, pursuant to which, if issued or to be issued, Plan Notes have been or will be issued.

"PLAN NOTES" shall mean, if issued or to be issued, the unsecured notes issued or to be issued by the Company pursuant to the Plan Note Indentures as provided by Sections 3.2(f) and (g) of the Plan.

"PROPOSED PURCHASER" shall have the meaning set forth in
Section 4.1 hereof.

"PROSPECTUS" shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Equity Securities covered by such Registration Statement, and all amendments and supplements thereto and all material incorporated by reference therein.

"REGISTRABLE DEBT SECURITIES" shall mean (i) the Plan Notes issued to the Trust pursuant to the Plan (if any), (ii) any other debt security issued by the Company in exchange for, upon conversion of or as a result of a reclassification of or otherwise in respect of the Plan Notes or any other debt security issued by the Company that is a Registrable Debt Security, and (iii) any debt security issued by the Company in exchange for, as a reclassification of or otherwise in respect of any Registrable Equity Security, in each case for so long as such debt security is owned by the Trust or a permitted transferee of the Trust's rights under Article III hereof in accordance with Section 3.9 hereof. For the avoidance of doubt, it is understood and agreed that any particular Registrable Debt Security shall cease to be such when (A) a Registration Statement with respect to the sale of such security shall have become effective under the Securities Act and such security shall have been disposed of in accordance with such Registration Statement, (B) such security shall have been sold pursuant to Rule 144 or (C) such security shall have ceased to be outstanding.

"REGISTRABLE EQUITY SECURITIES" shall mean (i) the shares of Common Stock issued to the Trust pursuant to the Plan, (ii) any additional shares of Common Stock or other Voting Stock or other equity securities issued by the Company to the Trust as a dividend upon or a distribution in respect of, or upon conversion of or in exchange for or as a result of any reclassification of, any such shares of Common Stock or any other equity security that is a Registrable Equity Security, (iii) any equity security issued upon exercise of

any warrant, right or option which is a Registrable Equity Security, (iv) any equity security issued by the Company in exchange for, as a reclassification of or otherwise in respect of any Registrable Debt Security and (v) any other equity security which is considered a successor security in respect of any such security as provided in Section 7.1 hereof, in each case for so long as such equity security is owned by the Trust or a permitted transferee of the Trust's rights under Article II hereof in accordance with Section 2.9 hereof. For the avoidance of doubt, it is understood and agreed that any particular Registrable Equity Security shall cease to be such when (A) a Registration Statement with respect to the sale of such security shall have become effective under the Securities Act and such security shall have been disposed of in accordance with such Registration Statement, (B) such security shall have been sold pursuant to Rule 144 or (C) such security shall have ceased to be outstanding.

"REGISTRATION STATEMENT" shall mean a registration statement of the Company as it may be amended or supplemented from time to time, including without limitation, all exhibits, financial statements, schedules and attachments thereto.

"RULE 144" shall mean Rule 144 promulgated by the SEC under the Securities Act, or any similar rule or regulation permitting the sale of securities without registration under the Securities Act, hereafter adopted by the SEC, as the same may be amended and shall be in effect from time to time.

"SEC" shall mean the Securities and Exchange Commission or any other federal agency then administering the Securities Act and other federal securities laws.

"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the SEC promulgated thereunder, all as the same may be amended and shall be in effect from time to time.

"TRANSFER" shall mean directly or indirectly transfer, sell, assign, donate, contribute, place in trust (including a voting trust), or otherwise voluntarily or involuntarily dispose.

"TREASURY REGULATIONS" shall mean the regulations (including temporary and proposed regulations) promulgated under the Internal Revenue Code by the United States Treasury Department, as amended from time to time.

"TRUST" shall have the meaning set forth in the introductory paragraph of this Agreement.

"TRUST AGREEMENT" shall mean the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust Agreement, dated as of October 2, 2006, and entered into by the Company, the Legal Representative for Asbestos-Related Future Claimants and the Official Committee of Asbestos Creditors (each as appointed by the Court in the Chapter 11 Case) and the trustees and members of the PI Trust Advisory Committee identified on the signature page thereof.

"TRUST PRO RATA SHARE", for purposes of Section 2.2(b) hereof, shall mean the ratio of (i) the number of shares of Common Stock owned by the Trust to (ii) the total number of shares of Common Stock owned by the Trust and each Other Stockholder for whose benefit shares of Common Stock will be included in the Registration Statement, such ratio calculated as of the date of filing of the applicable Registration Statement pursuant to Section 2.2(b) and, for purposes of Section 3.2(b) hereof, shall mean the ratio of (i) the aggregate principal amount of Registrable Debt Securities owned by the Trust to (ii) the sum of the aggregate principal amount of Registrable Debt Securities owned by the Trust plus the aggregate principal amount of debt securities of Demanding Other Debt Security Holders whose debt securities will be included in the Registration Statement, such ratio calculated as of the date of filing of the applicable Registration Statement pursuant to Section 3.2(b) .

"VOTING STOCK" shall mean shares of the Company, of any class or series, entitled to vote for the election of directors of the Company, including shares of Common Stock (other than preferred shares entitled to vote for the election of directors who are to be elected only by the holders of a particular class or series of shares, or collectively by the holders of two or more classes or series of shares, and only in the event of an arrearage in payment of dividends on such class or series of shares and who constitute less than one-third of all the directors (assuming no vacancies on the board of directors)) and any successor security as provided in Section 7.1 hereof.

Other terms are defined herein and shall have the meanings elsewhere provided herein.

ARTICLE II

EQUITY REGISTRATION RIGHTS

2.1 Equity Security Demand Registration.

(a) Request for Equity Security Demand Registration. If at any time after the Effective Date, the Company receives a written request (a "DEMAND NOTICE") from the Trust requesting that the Company effect a registration under the Securities Act of Registrable Equity Securities and specifying the intended method or methods of disposition thereof, the Company shall, as promptly as practicable, but in no event later than 60 days following receipt of the Demand Notice, prepare and cause to be filed with the SEC a Registration Statement on the appropriate form relating to resales of such Registrable Equity Securities ("EQUITY SECURITY DEMAND Registration") and shall use its reasonable best efforts to cause the Equity Security Demand Registration to become effective within 90 days following the date on which it receives the Demand Notice (including, without limitation, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations). The obligations of the Company under this Section 2.1(a) are subject to the provisions of Section 2.(b) hereof.

(b) Conditions on Requirement to Effect Equity Security Demand Registration.

The obligations of the Company set forth in Section 2.1(a) are subject to each of the following limitations, conditions and qualifications:

(i) The Company shall not be required to take any action to effect an Equity Security Demand Registration unless the anticipated aggregate offering price of the Registrable Equity Securities to be offered and sold pursuant to such registration is at least $100,000,000 (or, if the anticipated aggregates offering price for all Registrable Equity Securities owned by the Trust at the time such demand is made is less than $100,000,000, such lesser amount).

(ii) The Company shall not be required to take any action to effect an Equity Security Demand Registration pursuant to
Section 2.1(a) more than once in any nine month period or at such time when the Trust is not permitted to sell shares in accordance with Section 2.8 hereof.

(iii) The Company shall be entitled to postpone, for a reasonable period of time (which shall be as short as practicable), during no more than two periods aggregating not more than 90 days in any twelve-month period, the filing or effectiveness of, or suspend the right of the Trust to make sales pursuant to, any Registration Statement otherwise required to be prepared, filed and made and kept effective by it under the registration covenants described in Section 2.1 or 2.2 hereof, in the event that (i) (A) an event has occurred or a circumstance exists as a result of which such Registration Statement, any related Prospectus or any document incorporated therein by reference as then amended or supplemented or proposed to be filed would, in the Company's good faith judgment, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (in which case the Company will be obligated to file an appropriate amendment to the Registration Statement as contemplated in Section 2.3(k) hereof at such time as required by this paragraph), and (B) either (x) the Company has determined in its good faith judgment that the disclosure of the event or circumstance at that time would materially and adversely affect, interfere with or hinder the success of any financing, acquisition, merger or similar transaction involving the Company or (y) after consultation with the Trust concerning the matter, the Company has reasonably determined that the disclosure would otherwise have a material adverse effect on the business, operations or prospects of the Company or (ii) the Company shall have received a notice issued by the SEC of a stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. If the Company shall so postpone the filing or effectiveness of, or suspend the rights of the Trust to make sales pursuant to, a Registration Statement it shall promptly notify the Trust in writing of such determination (a "SUSPENSION NOTICE"). The Suspension Notice shall contain a statement of the reasons for such suspension and an approximation of the anticipated delay. Upon receipt of such Suspension Notice, to the extent applicable, the Trust will forthwith discontinue disposition of Registrable Equity Securities pursuant to the Registration Statement until (i) the Trust has received copies of the supplemented or amended Prospectus contemplated by Sections 2.3(b) and (k) hereof, or (ii) the Trust is advised in writing by the Company that the use of the Prospectus may be resumed, and has received

copies of any additional or supplemental filings that are incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT DATE"). The time period provided in Section 2.3(a) hereof for which the Company is required to maintain the effectiveness of any Registration Statement shall be extended by the aggregate number of days by which sales of securities pursuant to any Registration Statement that has been declared effective has been delayed, postponed or suspended by the Company pursuant to this
Section 2.1(b) (iii).

(iv) If the Company receives a request for a Equity Security Demand Registration during a "lock-up" period (the "LOCK-UP PERIOD") agreed to by the Trust pursuant to Section 2.8 of this Agreement pursuant to or in connection with any underwriting or purchase agreement relating to an offering under Rule 144A under the Securities Act (or any successor rule or regulation, as the same may be amended or in effect from time to time) or a registered public offering of Common Stock or securities convertible into or exchangeable for Common Stock, the Company shall not be required to file a Registration Statement under Section 2.1 of this Agreement prior to the end of the Lock-Up Period.

(v) The Company's obligations shall be subject to the obligations of the Trust to furnish all information and materials and to take any and all actions as may be required of it under Federal and state securities laws and regulations to permit the Company to comply with all applicable requirements of the SEC and to obtain any acceleration of the effective date of such Registration Statement. Without limiting the generality of the forgoing, the Trust shall furnish to the Company in writing, promptly after receipt of a request therefore, the information specified in Item 507 or 508 of Regulation S-K, as applicable, of the Securities Act for use in connection with any Registration Statement or Prospectus or preliminary Prospectus included therein. The Trust agrees to promptly furnish additional information required to be disclosed in order to make the information previously furnished to the Company by the Trust not materially misleading.

(vi) The Company shall not be obligated to cause any special audit to be undertaken in connection with any Registration Statement pursuant to this Agreement.

(c) Underwriting. The managing underwriter for any underwritten offering of Registrable Equity Securities pursuant to an Equity Securities Demand Registration under his Section 2.1 shall be selected by the Company and shall be reasonably acceptable to the Trust, and the co-managing underwriter shall be selected by the Trust and shall be reasonably acceptable to the Company.

2.2 Piggyback Registration.

(a) If the Company at any time proposes to file on its behalf and/or on behalf of any of its holders of equity securities other than the Trust (collectively, the "DEMANDING OTHER EQUITY SECURITY HOLDERS") a Registration Statement under the Securities Act on any form (other than a Registration Statement on Form S-4 or S-8, or any successor form, for securities to be

offered in a transaction of the type referred to in Rule 145 under the Securities Act or to employees of the Company pursuant to any employee benefit plan, respectively, which may be used for the registration of shares of Common Stock, it will give written notice of such proposed filing to the Trust at least 20 Business Days before the initial filing with the SEC of such Registration Statement (the "PIGGYBACK NOTICE"), which Piggyback Notice shall set forth the number of securities proposed to be offered and a description of the intended method of disposition of such securities. The Piggyback Notice shall offer to include in such filing such number of Registrable Equity Securities as the Trust may request. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Trust as part of the Piggyback Notice. In such event, the right of the Trust to include its Registrable Equity Securities in the registration shall be conditioned upon the Trust entering into an underwriting agreement in customary form, which shall be the same for all selling shareholders, with the managing underwriter selected for such underwriting by the Company.

(b) The Trust shall advise the Company in writing within 10 Business Days after the date of receipt of the Piggyback Notice from the Company, of its election to accept the Company's offer to include its Registrable Equity Securities in the Registration Statement to be filed by the Company pursuant to Section 2.2(a), setting forth the amount of such Registrable Equity Securities for which registration is requested. The Company shall thereupon include in such filing the number of Registrable Equity Securities for which registration is so requested; provided, however, that, (i) if the managing underwriter of a proposed underwritten offering shall advise the Company in writing that, in its opinion, the distribution of the Registrable Equity Securities requested to be included in the registration concurrently with the securities being registered by the Company or a Demanding Other Equity Security Holder would adversely affect the distribution by the Company of the shares of Common Stock of the Company or such Other Demanding Equity Security Holder, then the Company and its underwriters shall be entitled to reduce the number of Registrable Equity Securities to be registered by the Trust; and provided, further, however, that, if after such reduction any shares of Common Stock are to be included in such Registration Statement on behalf of Demanding Other Equity Security Holders, the number of Registrable Equity Securities to be included in such Registration Statement on behalf of the Trust shall be no less than the Trust Pro Rata Share of all securities to be included in such Registration Statement on behalf of all selling shareholders, and (ii) in connection with piggyback rights in a secondary offering by a selling Demanding Other Equity Security Holder, the number of Registrable Equity Securities to be included in such Registration Statement on behalf of the Trust shall be no less than the Trust Pro Rata Share of all securities to be included in such Registration Statement.

(c) The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not the Trust has elected to include securities in such registration.

2.3 Registration Procedures. If the Company is required by the provisions of Article II to effect the registration of any Registrable Equity Securities under the Securities Act, the Company will, as promptly as practicable:

(a) prepare and file in accordance with this Article II with the SEC a Registration Statement with respect to such securities and use it reasonable best efforts to cause such Registration Statement to become and remain effective for at least one hundred and eighty (180) days or until the distribution described in the Registration Statement has been completed;

(b) prepare and file with the SEC such amendments (including post-effective amendments) to such Registration Statement, and such supplements to the related prospectus, as may be required by the applicable rules, regulations or instructions under the Securities Act during the applicable period in accordance with the intended methods of disposition specified by the Trust, (ii) make generally available earnings statements satisfying the provisions of Section 11(a) of the Securities Act (provided that the Company shall be deemed to have complied with this clause if it has complied with Rule 158 under the Securities Act) and (iii) cause the related prospectus as so supplemented to be filed pursuant to Rule 424 under the Securities Act;

(c) notify the Trust promptly and, if requested, confirm such notice in writing (i) when a prospectus, prospectus supplement or post-effective amendment has been filed and, with respect to such Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC for amendments or supplements to such Registration Statement or the related Prospectus or for additional information regarding the Trust or any Other Stockholder whose shares are registered pursuant to such Registration Statement, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or the initiation of any proceedings for the purpose, and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Equity Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(d) use reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such Registration Statement, or the lifting of any suspension of the qualification or exemption from qualification of any Registrable Equity Securities for sale in any jurisdiction in the United States;

(e) furnish to the Trust, counsel for the Trust and each managing underwriter, if any, without charge, such number of copies of the Registration Statement as initially filed with the SEC and of each pre-effective and post-effective amendment or supplement thereto (in each case including at least one copy of all exhibits thereto and all documents incorporated by reference therein) and of the Prospectus included therein, including the preliminary Prospectus and any summary Prospectus, and any other Prospectus filed under Rule 424 under the Securities Act in connection with the disposition of any Registrable Equity Securities covered by such Registration Statement, and such other documents as the Trust may reasonably request;

(f) use its reasonable best efforts to register or qualify the Registrable Equity Securities covered by such Registration Statement under such other securities or blue sky laws of such jurisdictions within the United States and Puerto Rico as the Trust may reasonably request (provided, however, that the

Company shall not be obligated to qualify as a foreign corporation to do business under the laws of any jurisdiction in which it is not then qualified or to file any general consent to service of process to effect such registration), and do such other reasonable acts and things as may be required of it to enable the Trust to consummate the disposition in such jurisdiction of the Registrable Equity Securities covered by such Registration Statement;

(g) in the event of any underwritten public offering, use its reasonable best efforts to furnish, at the request of the Trust, on the date that such Registrable Equity Securities are delivered to the underwriters for sale pursuant to such registration, (1) an opinion, dated such date, of the independent counsel representing the Company for the purposes of such registration, addressed to the underwriters and covering matters of the type customarily covered in such legal opinions; (2) a comfort letter dated such date, and updates thereof, from the independent certified public accountants who have issued an audit report on the Company's financial statements included or incorporated by reference in the Registration Statement, addressed to the underwriters and covering matters of the type customarily covered by such comfort letters and as the underwriters shall reasonably request and (3) if requested and if an underwriting agreement is entered into, indemnification of the underwriters pursuant to provisions and procedures reasonably requested by the underwriters; the procedures referred to in this paragraph shall be followed at each closing under such underwriting or similar agreement, as and to the extent required thereunder;

(h) enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Equity Securities;

(i) cooperate with the Trust, the underwriters participating in the offering and their counsel in any due diligence investigation reasonably requested by the Trust or the underwriters in connection therewith, and participate, to the extent reasonably requested by the managing underwriter for the offering or the Trust, in efforts to sell the Registrable Equity Securities in the offering (including, without limitation, participating in "roadshow" meetings with prospective investors) that would be customary for underwritten primary offerings of a comparable amount of equity securities by the Company;

(j) use its reasonable best efforts to cause the Registrable Equity Securities covered by a Registration Statement to be listed on each national securities exchange or Nasdaq, as applicable, on which the Company's equity securities are then listed at the time of the sale of such Registrable Equity Securities pursuant to such Registration Statement;

(k) notify the Trust, at any time when a Prospectus is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, such Prospectus (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (including in a document incorporated by reference therein), in light of the circumstances under which they were made, not misleading, and promptly prepare a supplement or post-effective amendment to such Registration Statement or the related

prospectus or a supplement or amendment to any document incorporated or deemed to be incorporated therein by reference, and file with the SEC any other required document so that, as thereafter delivered to the purchasers of such Registrable Equity Securities, such Prospectus shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and

(l) on or before the effective date of such Registration Statement, provide the transfer agent of the Company for the Registrable Equity Securities with printed certificates for the Registrable Equity Securities by such Registration Statement, which are in a form eligible for deposit with The Depository Trust Company.

2.4 Expenses. All expenses incurred in complying with Article II, including, without limitation, all SEC or stock exchange registration or filing fees (including all expenses incident to filing with the NASD), stock exchange listing fees, Nasdaq quotation fees, printing expenses (including all expenses of printing certificates for Registrable Equity Securities and of printing prospectuses if the printing of prospectuses is requested by the Trust or the managing underwriter, if any), fees and disbursements of counsel for the Company, the reasonable fees and expenses of one counsel for the Trust and all other selling security holders (selected by those holding a majority of the Registrable Equity Securities being registered), fees of the Company's independent public accountants and the expenses of any special audit work incident to or required for any such registration (including expenses of any "cold comfort" letters required in connection with this Article II), but subject to Section 2.1(b)(vi) hereof, the expenses of complying with the securities or blue sky laws of any jurisdiction and fees and disbursements of underwriters customarily paid by the issuers or sellers of securities (including reasonable fees of counsel to the underwriters), shall be paid by the Company except that any discounts, commissions or brokers' fees or fees of similar securities industries professionals and transfer taxes relating to the disposition of the Registrable Equity Securities will be payable by the Trust (or other securityholders participating in such registered offering) and the Company will have no obligation to pay any such amounts.

2.5 Indemnification and Contribution.

(a) In the event of any registration of any Registrable Equity Securities under the Securities Act pursuant to this Agreement, the Company shall indemnify and hold harmless the Trust, the Trust's Affiliates, trustees, officers and agents, and each other Person (including each underwriter) who participated in the offering of such Registrable Equity Securities and each other Person, if any, who controls the Trust or such participating person within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Trust or any such Affiliate, trustee, officer, agent or participating person or controlling person may become subject under the Securities Act or any other statute or at common law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which such Registrable Equity Securities were registered under the Securities Act, any preliminary Prospectus or final Prospectus contained therein, or any amendment or supplement thereto, or (ii) any omission or alleged omission to

state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse the Trust or such Affiliate, director, officer, agent or participating person or controlling person for any legal or any other expenses reasonably incurred by the Trust or such Affiliate, director, officer, agent or participating person or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any actual or alleged untrue statement or actual or alleged omission made in such Registration Statement, preliminary Prospectus, Prospectus or amendment or supplement in reliance upon and in conformity with written information furnished to the Company by the Trust specifically for use therein or (in the case of any registration pursuant to
Section 2.1) so furnished for such purposes by any underwriter. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Trust or such Affiliate, director, officer, agent or participating person or controlling person, and shall survive the transfer of such Registrable Equity Securities by the Trust.

(b) The Trust, by acceptance hereof, agrees to indemnify and hold harmless the Company, its directors and officers and each other person, if any, who controls the Company within the meaning of the Securities Act against any losses, claims, damages or liabilities, joint or several, to which the Company or any such director or officer or any such person may become subject under the Securities Act or any other statute or at common law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which Registrable Equity Securities were registered under the Securities Act, any preliminary Prospectus or final Prospectus contained therein, or any amendment or supplement thereto or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if in any such case such statement or alleged statement or omission or alleged omission was made in reliance on and in conformity with information in writing provided to the Company by the Trust specifically for use in such Registration Statement, preliminary Prospectus or final Prospectus or any amendment or supplement thereto. Notwithstanding the provisions of this paragraph (b) or paragraph (c) below, the Trust shall not be required to indemnify any person pursuant to this Section 2.5 nor to contribute pursuant to paragraph (c) below in an amount in excess of the amount of the aggregate net proceeds received by the Trust in connection with any such registration under the Securities Act.

(c) If the indemnification provided for in this Section 2.5 from the Indemnifying Party (as defined in Section 2.5(e) hereof) is unavailable to an Indemnified Party (as defined in Section 2.5(e) hereof) hereunder in respect of any losses, claims, damages, liabilities or expenses referred to therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party

and Indemnified Parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.5(c) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. If indemnification is available under this Section 2.5, the Indemnifying Party shall indemnify the Indemnified Party to the full extent provided in Section 2.5(a) or 2.5(b) hereof, as applicable, without regard to the relative fault of the Indemnifying Party or the Indemnified Party or any other equitable consideration provided for in this
Section 2.5(c).

(d) The indemnification and contribution required by this Section 2.5 shall be made by periodic payment of the amount thereof during the course of the investigation or defense, as and when bills are received or expenses are incurred.

(e) The party seeking indemnification pursuant to this Section 2.5 is referred to as the "INDEMNIFIED PARTY" and the party from whom indemnification is sought under this Section 2.5 is referred to as the "INDEMNIFYING Party." The Indemnified Party shall give prompt written notice to the Indemnifying Party of the commencement of any action or proceeding involving a matter referred to in Section 2.5(a) or 2.5(b) (an "ACTION"), if an indemnification claim in respect thereof is to be made against the Indemnifying Party; provided, however, that the failure to give such prompt notice shall not relieve the Indemnifying Party of its indemnity obligations hereunder with respect to such Action, except to the extent that the Indemnifying Party is materially prejudiced by such failure. The Indemnifying Party shall be entitled to participate in and to assume the defense of such Action, with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party; provided, however, that (i) the Indemnifying Party, within a reasonable period of time after the giving of notice of such indemnification claim by the Indemnified Party, (x) notifies the Indemnified Party of its intention to assume such defense and (y) appoints such counsel, and (ii) the Indemnifying Party may not, without the consent of the Indemnified Party, consent to entry of any judgment or enter into any settlement unless (A) there is as part thereof no finding or admission of any violation of any rights of any person and no effect adverse to the Indemnified Party on any other claims that may be made against the Indemnified Party, (B) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party and (C) such judgment or settlement includes as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release, in form and substance reasonably satisfactory to the Indemnified Party, from all liability in respect of such claim or litigation for which such Indemnified Party would be

entitled to indemnification hereunder. If the Indemnifying Party so assumes the defense of any such Action, (A) the Indemnifying Party shall pay all costs associated with, any damages awarded in, and all expenses arising from the defense or settlement of such Action, and (B) the Indemnified Party shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement of such Action, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party except that if (x) the Indemnified Party has been advised by its counsel that there are likely to be one or more defenses available to it which are different from or additional to those available to the Indemnifying Party, or (z) such counsel has been selected by the Indemnified Party solely due to a conflict of interest which exists between counsel selected by the Indemnifying Party and the Indemnified Party, the Indemnifying Party shall pay in any such case that portion of the reasonable fees and expenses of one separate counsel per Action for an Indemnified Party (or Indemnified Parties in the aggregate, as the case may be), that are reasonably related to matters covered by the indemnity provided in this
Section 2.5. If the Indemnifying Party does not so assume the defense of such Action, the Indemnified Party shall be entitled to exercise control of the defense, compromise or settlement of such Action. No Indemnified Party shall settle or compromise any Action for which it is entitled to indemnification under this Agreement without the prior written consent of the Indemnifying Party (which consent may not be unreasonably withheld or delayed). The other party shall cooperate with the party assuming the defense, compromise or settlement of any Action in accordance with this Agreement in any manner that such party reasonably may request and the party assuming the defense, compromise or settlement of any Action shall keep the other party fully informed in the defense of such Action.

2.6 Rule 144. So long as the Company has securities registered under the Exchange Act, it shall take all actions reasonably necessary to enable the Trust to sell Registrable Equity Securities without registration under the Securities Act within the limitations of the exemptions provided by Rule 144, including, without limiting the generality of the foregoing, filing on a timely basis all reports required to be filed by the Exchange Act.

2.7 Duration of Equity Registration Rights. The rights and obligations provided for under this Article II (except for the indemnification and contribution obligations in Section 2.5) shall terminate on the date which is the earlier of (i) the date on which the Trust (or, in the case of a permitted transferee of the Trust's rights under this Article II, such transferee), in the reasonable opinion of the Trust and the Company, may sell pursuant to Rule 144(k) any and all of the Registrable Equity Securities owned by it and (ii) such time as the Trust (and, in the case of any permitted transferee or transferees of the Trust's rights under this Article II, all such permitted transferees) no longer own any Registrable Equity Securities.

2.8 "Market Stand-Off" Agreement. The Trust hereby agrees that during the 90-day period following the effective date of a Registration Statement of the Company filed under the Securities Act relating to the sale of Common Stock or any other equity security of the Company for the benefit of the Company (provided that a 180-day period shall apply in the case of a Registration Statement related to the first registered public offering of equity by the Company after the Effective Date, other than such an offering that is

registered on Form S-4 or S-8 or any similar form), it shall not, directly or indirectly, to the extent reasonably requested by the Company and any underwriter, sell, pledge, transfer, loan, or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any Common Stock held by it an any time during such period except Common Stock included in such registration; provided, that all executive officers and directors of the Company shall enter into written agreements in a form satisfactory to the Company and applicable underwriter, to be similarly bound; and provided further, however, that the market stand-off agreement contemplated by this Section 2.8 shall not apply to any Registrable Equity Securities in respect of which the Trust is entitled to and has exercised its demand registration rights under Section 2.1 hereof (unless and until the Registration Statement required thereby has been declared effective and such securities have not been sold pursuant thereto during the effective period thereof). In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Equity Securities of the Trust (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period.

2.9 Transfer of Registration Rights. The rights of the Trust under this Article II may be transferred by the Trust to a transferee of Registrable Equity Securities, and by such a transferee to a subsequent transferee of Registrable Equity Securities, but only where the transfer is not made pursuant to an effective Registration Statement or Rule 144 and only to such a transferee, provided that the transferee agrees in a writing executed by such transferee to assume the applicable obligations of the Trust under this Article II.

2.10 Granting of Additional Registration Rights. The Company shall not, without the Trust's prior written consent, grant to any third party piggyback registration rights with respect to an Equity Security Demand Registration.

ARTICLE III

DEBT REGISTRATION RIGHTS

3.1 Debt Security Demand Registration.

(a) Request for Debt Security Demand Registration. If at any time after the Effective Date, the Company receives a written request (a "DEBT SECURITY DEMAND NOTICE") from the Trust requesting that the Company effect a registration under the Securities Act of Registrable Debt Securities and specifying the intended method or methods of disposition thereof, the Company shall, as promptly as practicable, but in no event later than 60 days following receipt of the Debt Demand Notice, prepare and cause to be filed with the SEC a Registration Statement on the appropriate form relating to resales of such Registrable Debt Securities ("DEBT SECURITY DEMAND REGISTRATION") and shall use its reasonable best efforts to cause the Debt Security Demand Registration to become effective within 90 days following the date on which it receives the Debt Demand Notice (including, without limitation, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations). The obligations of the Company under this Section 3.1(a) are subject to the provisions of Section 3.2(b) hereof.

(b) Conditions on Requirement to Effect Debt Security Demand Registration.

The obligations of the Company set forth in Section 3.1(a) are subject to each of the following limitations, conditions and qualifications:

(i) The Company shall not be required to take any action to effect a Debt Security Demand Registration unless the anticipated aggregate offering price of the Registrable Debt Securities to be offered and sold pursuant to such registration is at least $100,000,000 (or, if the anticipated aggregate offering price for all Registrable Debt Securities owned by the Trust at the time such demand is made is less than $100,000,000, such lesser amount).

(ii) The Company shall not be required to take any action to effect a Debt Security Demand Registration pursuant to Section 3.1(a) more than once in any nine month period or at such time when the Trust is not permitted to sell debt securities in accordance with Section 3.8 hereof.

The Company shall be entitled to postpone, for a reasonable period of time (which shall be as short as practicable), during no more than two periods aggregating not more than 90 days in any twelve-month period, the filing or effectiveness of, or suspend the right of the Trust to make sales pursuant to, any Registration Statement otherwise required to be prepared, filed and made and kept effective by it under the registration covenants described in Section 3.1 or 3.2 hereof, in the event that (i) (A) an event has occurred or a circumstance exists as a result of which such Registration Statement, any related Prospectus or any document incorporated therein by reference as then amended or supplemented or proposed to be filed would, in the Company's good faith judgment, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (in which case the Company will be obligated to file an appropriate amendment to the Registration Statement as contemplated in Section 2.3(k) hereof at such time as required by this paragraph), and (B) either (x) the Company has determined in its good faith judgment that the disclosure of the event or circumstance at that time would materially and adversely affect, interfere with or hinder the success of any financing, acquisition, merger or similar transaction involving the Company or
(y) after consultation with the Trust concerning the matter, the Company has reasonably determined that the disclosure would otherwise have a material adverse effect on the business, operations or prospects of the Company or (ii) the Company shall have received a notice issued by the SEC of a stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. If the Company shall so postpone the filing or effectiveness of, or suspend the rights of the Trust to make sales pursuant to, a Registration Statement it shall promptly notify the Trust in writing of such determination (a "DEBT OFFERING SUSPENSION NOTICE"). The Debt Offering Suspension Notice shall contain a statement of the reasons for such suspension and an approximation of the anticipated delay. Upon receipt of such Debt Offering Suspension Notice, to the extent applicable, the Trust will forthwith discontinue disposition of Registrable Debt Securities pursuant to the Registration Statement until (i) the Trust has received copies of the

supplemented or amended Prospectus contemplated by Section 3.3(b) hereof, or
(ii) the Trust is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus (in each case, the "DEBT OFFERING RECOMMENCEMENT DATE"). The time period provided in
Section 3.3(a) hereof for which the Company is required to maintain the effectiveness of any Registration Statement shall be extended by the aggregate number of days by which sales of securities pursuant to any Registration Statement that has been declared effective has been delayed, postponed or suspended by the Company pursuant to this Section 3.1(b) (iii).

(iii) If the Company receives a request for a Debt Security Demand Registration during a "lock-up" period (the "DEBT OFFERING LOCK-UP PERIOD") agreed to by the Trust pursuant to Section 3.8 hereof pursuant to or in connection with any underwriting or purchase agreement relating to an offering under Rule 144A under the Securities Act (or any successor rule or regulation, as the same may be amended or in effect from time to time) or a registered public offering of debt securities of the Company, the Company shall not be required to file a Registration Statement under Section 3.1 of this Agreement prior to the end of the Debt Offering Lock-Up Period.

(iv) The Company's obligations shall be subject to the obligations of the Trust to furnish all information and materials and to take any and all actions as may be required of it under Federal and state securities laws and regulations to permit the Company to comply with all applicable requirements of the SEC and to obtain any acceleration of the effective date of such Registration Statement. Without limiting the generality of the forgoing, the Trust shall furnish to the Company in writing, promptly after receipt of a request therefore, the information specified in Item 507 or 508 of Regulation S-K, as applicable, of the Securities Act for use in connection with any Registration Statement or Prospectus or preliminary Prospectus included therein. The Trust agrees to promptly furnish additional information required to be disclosed in order to make the information previously furnished to the Company by the Trust not materially misleading.

(v) The Company shall not be obligated to cause any special audit to be undertaken in connection with any Registration Statement pursuant to this Agreement.

(c) Underwriting. The managing underwriter for any underwritten offering of Registrable Debt Securities pursuant to an Debt Securities Demand Registration under his Section 3.1 shall be selected by the Company and shall be reasonably acceptable to the Trust, and the co-managing underwriter shall be selected by the Trust and shall be reasonably acceptable to the Company.

3.2 Shelf Registration. At such time as the Company is eligible to register the Trust's Registrable Debt Securities on a Registration Statement on Form S-3, upon written request from the Trust, the Company shall file a Registration Statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT").

3.3 Registration Procedures. If the Company is required by the provisions of Article III to effect the registration of any Registrable Debt Securities under the Securities Act, the Company will, as promptly as practicable:

(a) prepare and file in accordance with this Article III with the SEC a Registration Statement with respect to such securities and use its reasonable best efforts to cause such Registration Statement to become and remain effective for at least one hundred and eighty (180) days (or in the case of a Shelf Registration Statement, for two years) or until the distribution described in the Registration Statement has been completed;

(c) notify the Trust promptly and, if requested, confirm such notice in writing (i) when a prospectus, prospectus supplement or post-effective amendment has been filed and, with respect to such Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC for amendments or supplements to such Registration Statement or the related Prospectus or for additional information regarding the Trust or any other securityholder whose securities are registered pursuant to such Registration Statement, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or the initiation of any proceedings for the purpose, and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Debt Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(d) use reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such Registration Statement, or the lifting of any suspension of the qualification or exemption from qualification of any Registrable Debt Securities for sale in any jurisdiction in the United States;

(e) furnish to the Trust, counsel for the Trust and each managing underwriter, if any, without charge, such number of copies of the Registration Statement as initially filed with the SEC and of each pre-effective and post-effective amendment or supplement thereto (in each case including at least one copy of all exhibits thereto and all documents incorporated by reference therein) and of the Prospectus included therein, including the preliminary Prospectus and any summary Prospectus, and any other Prospectus filed under Rule 424 under the Securities Act in connection with the disposition of any Registrable Debt Securities covered by such Registration Statement, and such other documents as the Trust may reasonably request;

(f) use its reasonable best efforts to register or qualify the Registrable Debt Securities covered by such Registration Statement under such other securities or blue sky laws of such jurisdictions within the United States and Puerto Rico as the Trust may reasonably request (provided, however, that the Company shall not be obligated to qualify as a foreign corporation to do business under the laws of any jurisdiction in which it is not then qualified or to file any general consent to service of process to effect such registration), and do such other reasonable acts and things as may be required of it to enable the Trust to consummate the disposition in such jurisdiction of the Registrable Debt Securities covered by such Registration Statement;

(g) in the event of any underwritten public offering, use its reasonable best efforts to furnish, at the request of the Trust, on the date that such Registrable Debt Securities are delivered to the underwriters for sale pursuant to such registration, (1) an opinion, dated such date, of the independent counsel representing the Company for the purposes of such registration, addressed to the underwriters and covering matters of the type customarily covered in such legal opinions; (2) a comfort letter dated such date, and updates thereof, from the independent certified public accountants who have issued an audit report on the Company's financial statements included or incorporated by reference in the Registration Statement, addressed to the underwriters and covering matters of the type customarily covered by such comfort letters and as the underwriters shall reasonably request and (3) if requested and if an underwriting agreement is entered into, indemnification of the underwriters pursuant to provisions and procedures reasonably requested by the underwriters; the procedures referred to in this paragraph shall be followed at each closing under such underwriting or similar agreement, as and to the extent required thereunder;

(i) cooperate with the Trust, the underwriters participating in the offering and their counsel in any due diligence investigation reasonably requested by the Trust or the underwriters in connection therewith, and participate, to the extent reasonably requested by the managing underwriter for the offering or the Trust, in efforts to sell the Registrable Debt Securities in the offering (including, without limitation, participating in "roadshow" meetings with prospective investors) that would be customary for underwritten primary offerings of a comparable amount of debt securities by the Company;

(j) use its reasonable best efforts to cause the Registrable Debt Securities covered by a Registration Statement to be listed on each national securities exchange on which the Company's debt securities are then listed at the time of the sale of such Registrable Debt Securities pursuant to such Registration Statement;

they were made, not misleading, and promptly prepare a supplement or post-effective amendment to such Registration Statement or the related prospectus or a supplement or amendment to any document incorporated or deemed to be incorporated therein by reference, and file with the SEC any other required document so that, as thereafter delivered to the purchasers of such Registrable Debt Securities, such Prospectus shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(l) on or before the effective date of such Registration Statement, provide the transfer agent of the Company for the Registrable Debt Securities with printed certificates for the Registrable Debt Securities by such Registration Statement, which are in a form eligible for deposit with The Depository Trust Company; and

(m) to the extent necessary, qualify the indenture under which the Registrable Debt Securities were issued under the Trust Indenture Act of 1939, as amended.

3.4 Expenses. All expenses incurred in complying with Article III, including, without limitation, all SEC or stock exchange registration or filing fees (including all expenses incident to filing with the NASD), stock exchange listing fees, Nasdaq quotation fees, printing expenses (including all expenses of printing certificates for Registrable Debt Securities and of printing prospectuses if the printing of prospectuses is requested by the Trust or the managing underwriter, if any), fees and disbursements of counsel for the Company, the reasonable fees and expenses of one counsel for the Trust and all other selling security holders (selected by those holding a majority of the Registrable Debt Securities being registered), fees of the Company's independent public accountants and the expenses of any special audit work incident to or required for any such registration (including expenses of any "cold comfort" letters required in connection with this Article III), but subject to Section 3.1(b)(vi) hereof, the expenses of complying with the securities or blue sky laws of any jurisdiction and fees and disbursements of underwriters customarily paid by the issuers or sellers of securities (including reasonable fees of counsel to the underwriters), shall be paid by the Company except that any discounts, commissions or brokers' fees or fees of similar securities industries professionals and transfer taxes relating to the disposition of the Registrable Debt Securities will be payable by the Trust (or other securityholders participating in such registered offering) and the Company will have no obligation to pay any such amounts.

3.5 Indemnification and Contribution.

(a) In the event of any registration of any Registrable Debt Securities under the Securities Act pursuant to this Agreement, the Company shall indemnify and hold harmless the Trust, the Trust's Affiliates, trustees, officers and agents, and each other Person (including each underwriter) who participated in the offering of such Registrable Debt Securities and each other Person, if any, who controls the Trust or such participating person within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Trust or any such Affiliate, trustee, officer, agent or participating person or controlling person may become subject under the Securities Act or any other statute or at common law, insofar

as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which such Registrable Debt Securities were registered under the Securities Act, any preliminary Prospectus or final Prospectus contained therein, or any amendment or supplement thereto, or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse the Trust or such Affiliate, director, officer, agent or participating person or controlling person for any legal or any other expenses reasonably incurred by the Trust or such Affiliate, director, officer, agent or participating person or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any actual or alleged untrue statement or actual or alleged omission made in such Registration Statement, preliminary Prospectus, Prospectus or amendment or supplement in reliance upon and in conformity with written information furnished to the Company by the Trust specifically for use therein or (in the case of any registration pursuant to
Section 3.1) so furnished for such purposes by any underwriter. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Trust or such Affiliate, director, officer, agent or participating person or controlling person, and shall survive the transfer of such Registrable Debt Securities by the Trust.

(b) The Trust, by acceptance hereof, agrees to indemnify and hold harmless the Company, its directors and officers and each other person, if any, who controls the Company within the meaning of the Securities Act against any losses, claims, damages or liabilities, joint or several, to which the Company or any such director or officer or any such person may become subject under the Securities Act or any other statute or at common law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which Registrable Debt Securities were registered under the Securities Act, any preliminary Prospectus or final Prospectus contained therein, or any amendment or supplement thereto or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if in any such case such statement or alleged statement or omission or alleged omission was made in reliance on and in conformity with information in writing provided to the Company by the Trust specifically for use in such Registration Statement, preliminary Prospectus or final Prospectus or any amendment or supplement thereto. Notwithstanding the provisions of this paragraph (b) or paragraph (c) below, the Trust shall not be required to indemnify any person pursuant to this Section 3.5 nor to contribute pursuant to paragraph (c) below in an amount in excess of the amount of the aggregate net proceeds received by the Trust in connection with any such registration under the Securities Act.

(c) If the indemnification provided for in this Section 3.5 from an Indemnifying Party (as defined in Section 3.5(e) hereof) is unavailable hereunder to an Indemnified Party (as defined in Section 3.5(e) hereof) in respect of any losses, claims, damages, liabilities or expenses referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified

Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 3.5(c) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. If indemnification is available under this Section 3.5, the Indemnifying Party shall indemnify the Indemnified Party to the full extent provided in Section 3.5(a) or 3.5(b) hereof, as applicable, without regard to the relative fault of the Indemnifying Party or the Indemnified Party or any other equitable consideration provided for in this
Section 3.5(c).

(d) The indemnification and contribution required by this Section 3.5 shall be made by periodic payment of the amount thereof during the course of the investigation or defense, as and when bills are received or expenses are incurred.

(e) The party seeking indemnification pursuant to this Section 3.5 is referred to in this Section 3.5 as the "INDEMNIFIED PARTY" and the party from whom indemnification is sought under this Section 3.5 is referred to as the "INDEMNIFYING PARTY." The Indemnified Party shall give prompt written notice to the Indemnifying Party of the commencement of any action or proceeding involving a matter referred to in Section 3.5(a) or 3.5(b) (an "Action"), if an indemnification claim in respect thereof is to be made against the Indemnifying Party; provided, however, that the failure to give such prompt notice shall not relieve the Indemnifying Party of its indemnity obligations hereunder with respect to such Action, except to the extent that the Indemnifying Party is materially prejudiced by such failure. The Indemnifying Party shall be entitled to participate in and to assume the defense of such Action, with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party; provided, however, that (i) the Indemnifying Party, within a reasonable period of time after the giving of notice of such indemnification claim by the Indemnified Party, (x) notifies the Indemnified Party of its intention to assume such defense and (y) appoints such counsel, and (ii) the Indemnifying Party may not, without the consent of the Indemnified Party, consent to entry of any judgment or enter into any settlement unless (A) there is as part thereof no finding or admission of any violation of any rights of any person and no effect adverse to the Indemnified Party on any other claims that

may be made against the Indemnified Party, (B) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party and (C) such judgment or settlement includes as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release, in form and substance reasonably satisfactory to the Indemnified Party, from all liability in respect of such claim or litigation for which such Indemnified Party would be entitled to indemnification hereunder. If the Indemnifying Party so assumes the defense of any such Action, (A) the Indemnifying Party shall pay all costs associated with, any damages awarded in, and all expenses arising from the defense or settlement of such Action, and (B) the Indemnified Party shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement of such Action, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party except that if (x) the Indemnified Party has been advised by its counsel that there are likely to be one or more defenses available to it which are different from or additional to those available to the Indemnifying Party, or (z) such counsel has been selected by the Indemnified Party solely due to a conflict of interest which exists between counsel selected by the Indemnifying Party and the Indemnified Party, the Indemnifying Party shall pay in any such case that portion of the reasonable fees and expenses of one separate counsel per Action for an Indemnified Party (or Indemnified Parties in the aggregate, as the case may be), that are reasonably related to matters covered by the indemnity provided in this
Section 3.5. If the Indemnifying Party does not so assume the defense of such Action, the Indemnified Party shall be entitled to exercise control of the defense, compromise or settlement of such Action. No Indemnified Party shall settle or compromise any Action for which it is entitled to indemnification under this Agreement without the prior written consent of the Indemnifying Party (which consent may not be unreasonably withheld or delayed). The other party shall cooperate with the party assuming the defense, compromise or settlement of any Action in accordance with this Agreement in any manner that such party reasonably may request and the party assuming the defense, compromise or settlement of any Action shall keep the other party fully informed in the defense of such Action.

3.6 Rule 144. So long as the Company has securities registered under the Exchange Act, it shall take all actions reasonably necessary to enable the Trust to sell Registrable Debt Securities without registration under the Securities Act within the limitations of the exemptions provided by Rule 144, including, without limiting the generality of the foregoing, filing on a timely basis all reports required to be filed by the Exchange Act.

3.7 Duration of Debt Registration Rights. The rights and obligations provided for under this Article III (except for the indemnification and contribution obligations in Section 3.5) shall terminate on the date which is the earlier of (i) the date on which the Trust (or, in the case of a permitted transferee of the Trust's rights under this Article III, such transferee), in the reasonable opinion of the Trust and the Company, may sell pursuant to Rule 144(k) any and all of the Registrable Debt Securities owned by it and (ii) such time as the Trust (and, in the case of any permitted transferee or transferees of the Trust's rights under this Article III, all such permitted transferees) no longer own any Registrable Debt Securities.

3.8 "Market Stand-Off" Agreement. The Trust hereby agrees that during the 90-day period following (x) the effective date of a Registration Statement of the Company filed under the Securities Act relating to a public offering of debt securities of the Company for the benefit of the Company (but not including any Registration Statement filed in connection with a new issue of debt securities to be offered in exchange for debt securities issued under Rule 144A of the Securities Act) or (y) the date on which the Company executes a purchase agreement relating to an offering by the Company of its debt securities under Rule 144A of the Securities Act, it shall not, directly or indirectly, to the extent reasonably requested by the Company and any underwriter (or in the case of a Rule 144A offering, any initial purchaser), sell, pledge, transfer, loan, or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any debt securities held by it at any time during such period except debt securities included in such registration; provided however, that the market stand-off agreement contemplated by this Section 3.8 shall not apply to any Registrable Debt Securities in respect of which the Trust is entitled to and has exercised its demand registration rights under Section 3.1 hereof (unless and until the Registration Statement required thereby has been declared effective and such securities have not been sold pursuant thereto during the effective period thereof). In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Debt Securities of the Trust (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period.

3.9 Transfer of Registration Rights. The rights of the Trust under this Article III may be transferred by the Trust to a transferee of Registrable Debt Securities, and by such a transferee to a subsequent transferee of Registrable Debt Securities, but only where the transfer is not made pursuant to an effective Registration Statement or Rule 144 and only to such a transferee, provided that the transferee agrees in a writing executed by such transferee to assume the applicable obligations of the Trust under this Article III.

3.10 Granting of Additional Registration Rights. The Company shall not, without the Trust's prior written consent, grant to any third party piggyback registration rights with respect to any Debt Security Demand Registration.

ARTICLE IV

TAG-ALONG RIGHTS

4.1 Restrictions on Transfer of Shares of Common Stock by the Trust. Until such time as the Trust ceases to own 20% or more of the Voting Stock, the Trust will not Transfer, in one transaction or a series of related transactions, any shares of Common Stock representing more than five percent of the outstanding shares of Common Stock (or any shares of Voting Stock entitling the holders thereof to cast more than five percent of all the votes which the holders of all outstanding shares of Voting Stock are entitled to cast in the election of directors of the Company) to any Person (a "PROPOSED PURCHASER") who, after giving effect to the transaction or series of related transactions, would Beneficially Own shares of Voting Stock entitling the holders thereof to cast more than 35% of the votes which the holders of all outstanding shares of Voting Stock are entitled to cast in the election of directors of the Company or more of such votes than the Trust is entitled to cast), and the Company shall

not be required to register or give effect to any such Transfer, unless (A) such Transfer is (1) pursuant to a bona fide public distribution made under an effective Registration Statement under the Securities Act, (2) in a transaction satisfying the requirements of Regulation S under the Securities Act, or (3) in a transaction satisfying the requirements of Rule 144 under the Securities Act, other than by reason of satisfying the provisions of Rule 144(k) thereof or (4) is effected through "brokers' transactions" within the meaning of Section 4(4) of the Securities Act or a transaction with a "market maker" as defined in
Section 3(c)(38) of the Exchange Act, or (B) all Other Stockholders are afforded the opportunity to participate in the transaction or series of transactions on the same terms as the Trust, which requirement shall be deemed satisfied if the Other Stockholders are provided an opportunity to sell the shares of Voting Stock they own in accordance with the provisions of Section 4.2 below, or (C) in the case of a disposition of shares of Voting Stock by the Trust pursuant to a merger, consolidation, recapitalization or similar corporate transaction involving the Company, the material terms of the transaction have been approved by a majority of the Disinterested Directors or such vote of the holders of the shares of Common Stock of the Company is required by law, the Articles of Incorporation or the Bylaws or applicable listing standards; provided, however, that, if the transaction would result in the Trust receiving a type or amount of consideration per share in respect of its shares that is different from the Other Stockholders, the transaction has been approved by the affirmative vote of the holders of a majority of the shares of Common Stock not Beneficially Owned by the Settlement Trust (in addition to approval by any other shareholder vote required). The entry by the Settlement Trust into a prepaid variable share forward contract or other derivative contract (such as those known as TRACES or SAILS) shall not constitute a Transfer of shares for purposes of this paragraph, even if it relates to shares of Voting Stock entitling the holders thereof to cast more than five percent of all the votes which the holders of all outstanding shares of Voting Stock are entitled to cast in the election of directors of the Corporation), to the extent such contract is a legitimate hedging transaction and neither such contract nor the settlement thereof will result in a counterparty becoming the Beneficial Owner of shares of Voting Stock entitling the holders thereof to cast more than 35% of the votes which the holders of all outstanding shares of Voting Stock are entitled to cast in the election of directors of the Corporation or more of such votes than the Settlement Trust is entitled to cast).

4.2 Offer to Other Stockholders. The terms and conditions of a Transfer by the Trust of shares of Common Stock to a Proposed Purchaser will be deemed permitted by clause (B) of the first sentence of Section 4.1 hereof if, in connection with such Transfer, the Proposed Purchaser shall have publicly undertaken to commence a tender offer in accordance with the Exchange Act and the applicable regulations thereunder, which shall be scheduled to close not later than 60 days after the Transfer of the Trust's shares (subject to any extension where required to satisfy conditions established by such tender offer), pursuant to which the Other Stockholders will have the right to tender for purchase for the same type and amount of consideration per share available to the Trust in the Transfer, at each Other Stockholder's option, a number of shares of Common Stock equal to the product of (i) the total number of the shares of Common Stock owned by the Other Stockholder and (ii) a fraction, the numerator of which shall be the number of shares of Common Stock that the Trust proposes so to Transfer to the Proposed Purchaser and the denominator of which shall be the total number of shares of Common Stock then owned by the Trust.

4.3 Third Party Beneficiary Rights. The Other Stockholders are intended to be, and shall be, third party beneficiaries of the covenants and agreements of this Article IV, which shall inure to the benefit of the Other Stockholders, who, individually or as a class, shall be entitled to rely on and, subject to the limitations set forth herein, enforce such covenants and agreements, to the same extent as if they were a party to this Agreement. The provisions of this Article IV may not be amended in such a way as to extinguish or alter the rights of the Other Stockholders under this Article IV without the consent of Other Stockholders representing at least two-thirds of the shares of Common Stock not beneficially owned by the Trust; provided that, if any payment is to be made to any Other Stockholder for its consent, such amendment shall not be binding on any Other Stockholder who does not consent.

ARTICLE V

CERTAIN COVENANTS OF THE COMPANY

5.1 Approval Requirements Respecting A Shareholder Rights Plan. Until such time as the Trust ceases to own 20% or more of the Voting Stock, the Company shall not, without the prior written approval of the Trust, adopt or maintain a shareholder rights plan, "poison pill" or any similar plan (however designated) which provides some, but not all, holders of shares of Common Stock, in the event of the acquisition by any person or group of persons acting in concert of shares of Voting Stock constituting more than a specified level of ownership of the Corporation and with or without additional conditions or exceptions (an "ACQUIRING PERSON"), the right to acquire securities of the Company or of any successor company, or of any controlling person thereof, on more favorable terms than available to the Acquiring Person, or which is otherwise designed to, or has the effect of, similarly making acquisition of additional shares of the Company's Voting Stock by an Acquiring Person more difficult or expensive than would be the case in the absence of such shareholder rights or similar plan by providing to other shareholders any right or benefit which the Acquiring Person is not accorded.

ARTICLE VI

VOTING AGREEMENT AND RELATED COVENANTS OF THE TRUST

6.1 Independent Directors. Until the earlier of (i) the tenth anniversary of the Effective Date and (ii) such time as the Trust ceases to Beneficially Own 20% or more of the Voting Stock, the Trust shall not, in connection with any election of directors of the Company, knowingly nominate for election or vote, or cause to be voted, any shares of Voting Stock Beneficially Owned by the Trust or which the Trust has the power to vote (whether shares now owned or hereafter acquired by the Trust) in favor of the election as a director of an individual, if, to the best knowledge of the Trust, by reason of such individual's election, a majority of the members of the Board of Directors of the Company would cease to be Independent Directors. The foregoing provisions of this section shall not prevent the Trust from withholding its vote from any nominee for election as a director or voting in favor of the removal of any director, even if, as a result of such individual's election or removal, a majority of the members of the Board of Directors would cease to be Independent

Directors; provided, however, that the Trust, in good faith, shall not engage in a pattern of removal of directors so as knowingly to cause the composition of the Board of Directors to fail on an on-going basis to include a majority of Independent Directors. The Trust may conclusively rely on the determination of the Board of Directors as to whether or not any individual is an Independent Director but shall not be bound by the determination of the Board of Directors with respect thereto.

6.2 Approval of New Long-term Incentive Plan. The Trust shall vote any shares of Voting Stock Beneficially Owned by the Trust so that the New Long-Term Incentive Plan is authorized, approved and/or ratified by the shareholders of the Company as may from time to time be required by any legal regulation or listing standard or to satisfy any tax requirement; provided, however, that such vote is sought not later than December 31, 2006.

6.3 Certain Director Elections. In connection with the election of directors of the Company at the annual meeting of shareholders of the Company first held in 2008, the Trust shall vote any shares of Voting Stock Beneficially Owned by the Trust in favor of the re-election of the two initial directors of the Company as of the Effective Date identified on Schedule 6.3 hereto (or in each case his successors if he has not served his full initial term of office), if such individual is nominated (whether by the Board or any shareholder if the Board shall not have nominated such individual) for election as a director and such individual is available and willing to serve as such, or, in the case of either of such individuals, if he is not nominated for re-election (by the Board or any shareholder) or is not available or willing to serve as a director, for the nominee of the Board of Directors nominated in accordance with the provisions of Section 4B of Article II of the Bylaws. In addition, in the event a director is to be elected by the shareholders to fill a vacancy in the position on the Board of Directors filled by such individual, or his successor, occurring before the first annual meeting of shareholders held in 2009, the Trust shall likewise vote any shares of Voting Stock Beneficially Owned by the Trust in favor of the election of the individual nominated by the Board to fill such vacancy in accordance with Section 4B of Article II of the Bylaws.

6.4 Third Party Beneficiary Rights. The Other Stockholders are intended to be, and shall be, third party beneficiaries of the covenants and agreements contained in Section 6.3 hereof, which shall inure to the benefit of the Other Stockholders, who, individually or as a class, shall be entitled to rely on and, subject to the limitations set forth herein, enforce such covenants and agreements, to the same extent as if they were a party to this Agreement. The provisions of this Article VI may not be amended in such a way as to extinguish or alter the rights of the Other Stockholders under this Article VI without the consent of Other Stockholders representing at least two-thirds of the shares of Common Stock not beneficially owned by the Trust; provided that, if any payment is to be made to any Other Stockholder for its consent, such amendment shall not be binding on any Other Stockholder who does not consent.

ARTICLE VII

MISCELLANEOUS PROVISIONS

7.1 Successor Securities. The provisions of this Agreement pertaining to shares of Common Stock or Voting Stock shall apply equally to any additional shares of Common Stock authorized after the Effective Date and any shares of the Company, regardless of class, series, designation or par value, that are issued as a dividend on or in any other distribution in respect of, or as a result of a reclassification (including a change in par value) in respect of, shares of Common Stock or any other shares of Voting Stock or other shares of the Company which, as provided by this section, are considered as shares of Common Stock for purposes of this Agreement and shall also apply to any voting equity security (or, in the case of Article II, any equity security even if not voting) issued by any company that succeeds, by merger, consolidation, a share exchange, a reorganization of the Company or any similar transaction, to all or substantially all the business of the Company, or to the ownership thereof, if such security was issued in exchange for or otherwise as consideration for or in respect of shares of Common Stock (or other shares considered as shares of Common Stock, as provided by this Section) in connection with such succession transaction.

7.2 Equitable Relief. It is hereby acknowledged that irreparable harm would occur in the event that any of the provisions of this Agreement were not performed fully by the parties hereto in accordance with the terms specified herein, and that monetary damages are an inadequate remedy for breach of this Agreement because of the difficulty of ascertaining and quantifying the amount of damage that will be suffered by the parties relying hereon in the event that the undertakings and provisions contained in this Agreement were breached or violated. Accordingly, each party hereto hereby agrees that each other party hereto shall be entitled to an injunction or injunctions to restrain, enjoin and prevent breaches of the undertakings and provisions hereof and to enforce specifically the undertakings and provisions hereof in any court of the United States or any state having jurisdiction over the matter; it being understood that such remedies shall be in addition to, and not in lieu of, any other rights and remedies available at law or in equity.

7.3 No Inconsistent Agreements. The Company has not previously, or simultaneously, entered into any agreement with respect to any of its securities granting any registration rights to any person. The Company shall not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Trust in this Agreement or which violates any of the covenants of the Company made in this Agreement. The Trust has not previously, or simultaneously, entered into any agreement which is inconsistent with the performance of its obligations hereunder and shall not do so.

7.4 Amendments and Waivers. The provisions of this Agreement may be amended, modified or supplemented, and waivers or consents to departure from the provisions hereof may be given, only in a writing executed by the Company and the Trust. To the extent permitted by law, no failure to exercise, and no delay on the part of the Trust or the Company in exercising any power or right in connection with this Agreement, or available at law or in equity, shall operate as a waiver thereof, and no single or partial exercise of any such right

or power, or any abandonment or discontinuance of steps to enforce such right or power, shall preclude any other or further exercise thereof or the exercise of any other rights or powers. Any written modification or waiver of any provision of this Agreement shall be effective only in the specific instance and for the purpose for which it is given.

7.5 Notice Generally. Any notice, demand, request, consent, approval, declaration, delivery or other communication to be made pursuant to the provisions of this Agreement or in connection herewith shall be deemed delivered, served and received: (i) when delivered by hand to the recipient named below, (ii) on the date of delivery to the address indicated below, properly addressed, as confirmed by the agency or firm making delivery if the notice is delivered by regularly operating overnight delivery service, such as Federal Express, (iii) on the date of delivery to the address indicated below, properly addressed, if sent via the United States Postal Service when sent by either registered or certified mail, postage prepaid, return receipt requested,
(iv) if on a business day, on the date sent via telecopy, provided such delivery is confirmed (via a fax confirmation report), or (v) five business days after having been deposited with the United States Postal Service, properly addressed and postage prepaid. Notices shall be addressed by name and address to the recipient, as follows:

if to the Trust, at:

Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust
c/o Kevin E. Irwin, Esq.

Keating, Muething & Klekamp PLL

One East Fourth Street, Suite 1400 Cincinnati, Ohio 45202 Telecopy No.: 513-579-6457

with a copy similarly sent to:

Keating, Muething & Klekamp LLP One East Fourth Street, Suite 1400 Cincinnati, Ohio 45202 Attention: Kevin Irwin, Esq.

Telecopy No.: 513-579-6457, or

if to the Company, at:

Armstrong World Industries, Inc.
2500 Columbia Avenue
Lancaster, Pennsylvania 17603

Attention: General Counsel Telecopy No.: 717-396-6121

with a copy similarly sent to:

Weil, Gotshal & Manges LLP 767 Fifth Avenue
New York, New York 10153 Attention: Robert L. Messineo, Esq.

Telecopy No.: 212-310-8007,

or at such other address as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice.

7.6 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon a successor company to the Company by merger, consolidation, reorganization or any like transaction. Except in respect of a successor company to the Company and except as provided in respect of the rights and obligations of the Trust under Articles II and III hereof, the rights and obligations of the parties hereunder shall not be assignable.

7.7 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

7.8 Governing Law; Jurisdiction; Jury Waiver. This Agreement shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to the conflict or choice of laws provisions thereof. Each of the parties hereby submits to the non-exclusive personal jurisdiction of, and waives any objection as to venue in respect of any litigation respecting this agreement in, the Court of Common Pleas of the County of Allegheny, Commonwealth of Pennsylvania, the Court or the federal district court of the Eastern District of Pennsylvania . Service of process on the parties in any action arising out of or relating to this Agreement shall be effective if mailed to the parties in accordance with Section 7.5 hereof. EACH PARTY HERETO WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT HEREUNDER.

7.9 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity only, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

7.10 Entire Agreement. This Agreement represents the complete agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to the subject matter hereof.

7.11 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the Company and the Trust have executed this Agreement as of the date first above written.

ARMSTRONG WORLD INDUSTRIES, INC.

By:

Name:

An authorized officer thereof

ARMSTRONG WORLD INDUSTRIES, INC.
ASBESTOS PERSONAL INJURY
SETTLEMENT TRUST

By:

Name:

A trustee thereof

Schedule 6.3

James J. Gaffney

Robert C. Garland

EXHIBIT 10.4

ARMSTRONG WORLD INDUSTRIES, INC.

2006 LONG-TERM INCENTIVE PLAN

EFFECTIVE AS OF

OCTOBER 2, 2006

INDEX OF DEFINED TERMS

TERM                                                   SECTION WHERE DEFINED OR FIRST USED

Beneficial Owner .................................................. 14(c)(ii)

Benefits...........................................................  4

Cash Awards ....................................................... 10

Change in Control ................................................. 14(c)(iii)

Code ..............................................................  2(a)

Committee .........................................................  2(a)

Common Stock ......................................................  5(a)

Company ...........................................................  1

Dividend Equivalent Right .........................................  9(c)

Effective Date ....................................................  24

Exchange Act ......................................................  2(a)

Fair Market Value .................................................. 17

Incentive Stock Option ............................................. 6(a)

Injurious Conduct .................................................. 13

Non-Employee Director .............................................. 2(a)

Nonqualified Stock Option .......................................... 6(a)

Parent Corporation ................................................. 6(f)

Performance-Based Awards ........................................... 11(a)

Person ............................................................. 14(c)(iv)

Plan ............................................................... 1

Restoration Stock Options .......................................... 6(e)

Restricted Stock Award ............................................. 8

Stock Appreciation Rights .......................................... 7

Stock Options ...................................................... 6

Stock Unit ......................................................... 9(c)

Subsidiary Corporation ............................................. 6(f)

ARMSTRONG WORLD INDUSTRIES, INC.

2006 LONG-TERM INCENTIVE PLAN

1. PURPOSE. Armstrong World Industries, Inc. 2006 Long-Term Incentive Plan (the "Plan") is intended to provide incentives which will attract, retain and motivate highly competent persons as officers and key employees of Armstrong World Industries, Inc., a Pennsylvania corporation (the "Company"), and its subsidiaries and affiliates, by providing them with appropriate incentives and rewards to encourage them to enter into and continue in the employ of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling their personal responsibilities for long-range achievements.

2. ADMINISTRATION.

(a) Committee. The Plan will be administered by a committee (the "Committee") appointed by the Board of Directors of the Company from among its members (which may be the Management Development and Compensation Committee) and shall be comprised, unless otherwise determined by the Company's Board of Directors, solely of not less than two (2) members who shall be (i) "Non-Employee Directors" within the meaning of Rule 16b-3(b)(3) (or any successor rule) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and (ii) "outside directors" within the meaning of Treasury Regulation Section 1.162-27(e)(3) under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").

(b) Authority. The Committee is authorized, subject to the provisions of the Plan, to establish such rules and regulations as it deems necessary for the proper administration of the Plan and to make such determinations and interpretations and to take such action in connection with the Plan and any Benefits granted hereunder as it deems necessary or advisable. All determinations and interpretations made by the Committee shall be binding and conclusive on all participants and their legal representatives.

(c) Indemnification. No member of the Committee and no employee of the Company shall be liable for any act or failure to act hereunder, except in circumstances involving his or her bad faith or willful misconduct, or for any act or failure to act hereunder by any other member or employee or by any agent to whom duties in connection with the administration of this Plan have been delegated. The Company shall indemnify members of the Committee and any agent of the Committee who is an employee of the Company, a subsidiary or an affiliate against any and all liabilities or expenses to which they may be subjected by reason of any act or failure to act with respect to their duties on behalf of

the Plan, except in circumstances involving such person's bad faith or willful misconduct.

(d) Delegation and Advisers. The Committee may delegate to one or more of its members, to management or to or to one or more agents, such administrative duties as it may deem advisable; provided, such delegation does not adversely effect the exemption provided by Rule 16b-3 of the Exchange Act, prevent a Benefit from qualifying as a Performance-Based Award, if so intended, and complies with applicable law. The Committee, or any person to whom it has delegated duties as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan. The Committee may employ such legal or other counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion or computation received from any such counsel, consultant or agent. Expenses incurred by the Committee in the engagement of such counsel, consultant or agent shall be paid by the Company, or the subsidiary or affiliate whose employees have benefited from the Plan, as determined by the Committee.

3. PARTICIPANTS. Participants will consist of such officers and key employees of the Company and its subsidiaries and affiliates as the Committee in its sole discretion determines to be significantly responsible for the success and future growth and profitability of the Company and whom the Committee may designate from time to time to receive Benefits under the Plan. Designation of a participant in any year shall not require the Committee to designate such person to receive a Benefit in any other year or, once designated, to receive the same type or amount of Benefit as granted to the participant in any other year. The Committee shall consider such factors as it deems pertinent in selecting participants and in determining the type and amount of their respective Benefits.

4. TYPE OF BENEFITS. Benefits under the Plan may be granted in any one or a combination of (a) Stock Options, (b) Stock Appreciation Rights, (c) Restricted Stock Awards, (d) Stock Units and (e) Cash Awards (each as described below, and collectively, the "Benefits"). Restricted Stock Awards, Stock Units and Cash Awards may, as determined by the Committee in its discretion, constitute Performance-Based Awards, as described in Section 11 hereof. Benefits granted under the Plan shall be evidenced by an agreement (which need not be identical) that may provide additional terms and conditions associated with such Benefits, as determined by the Committee in its sole discretion, provided, however, that in the event of any conflict between the provisions of the Plan and any such agreement, the provisions of the Plan shall prevail.

5. COMMON STOCK AVAILABLE UNDER THE PLAN.

(a) Basic Limitations. The aggregate number of shares of common stock of the Company (the "Common Stock") that may be subject to Benefits, granted under this Plan shall be 5,349,000 shares of Common Stock, which may be authorized and unissued shares or treasury shares or may be purchased on the open market or by private purchase, subject to any adjustments made in accordance with Section 14(a) hereof. The maximum number of shares of Common Stock with respect to which Benefits may be granted or measured to any individual participant under the Plan

in any one calendar year shall not exceed 750,000 (subject to adjustments made in accordance with Section 14(a) hereof).

(b) Additional Shares. Any shares of Common Stock subject to (or referenced by) a Benefit which are not ultimately used to settle a Benefit shall again be available for Benefits under this Plan and any shares of Common Stock delivered to the Company as part or full payment for the exercise of a Stock Option, Stock Appreciation Right, or Restricted Stock Award or to satisfy a tax obligation shall also be available for Benefits under this Plan. This includes shares of Common Stock that are: (i) covered by a Stock Option or referenced by a Stock Appreciation Right which for any reason is cancelled or terminated without having been exercised, (ii) subject to Restricted Stock Awards or Stock Units which are forfeited, and (iii) not delivered to a participant because all or a portion of a Benefit is settled in cash. The preceding sentences of this
Section shall apply only for purposes of determining the aggregate number of shares of Common Stock subject to Benefits but shall not apply for purposes of determining the maximum number of shares of Common Stock with respect to which Benefits (including the maximum number of shares of Common Stock subject to Stock Options and Stock Appreciation Rights) that may be granted to any individual participant under the Plan.

(c) Acquisitions. In connection with the acquisition of any business by the Company or any of its subsidiaries or affiliates, any outstanding grants, awards or sales of options or other similar rights pertaining to such business may be assumed or replaced by Benefits under the Plan upon such terms and conditions as the Committee determines in its sole discretion.

6. STOCK OPTIONS.

(a) Generally. Stock Options will consist of awards from the Company that will enable the holder to purchase a number of shares of Common Stock, at set terms. Stock Options may be "incentive stock options" ("Incentive Stock Options"), within the meaning of Section 422 of the Code, or Stock Options which do not constitute Incentive Stock Options ("Nonqualified Stock Options"). The Committee will have the authority to grant to any participant one or more Incentive Stock Options, Nonqualified Stock Options, or both types of Stock Options (in each case with or without Stock Appreciation Rights). Each Stock Option shall be subject to such terms and conditions, including vesting, consistent with the Plan as the Committee may impose from time to time, subject to the following limitations.

(b) Exercise Price. Each Nonqualified Stock Option granted hereunder shall have a per-share exercise price as the Committee may determine on the date of grant.

(c) Payment of Exercise Price. The option exercise price may be paid in cash or, in the discretion of the Committee, by the delivery of shares of Common Stock of the Company then owned by the participant, provided such shares have been held by such participant for at least six (6) months. In the discretion of the Committee, payment may also be made by delivering a properly executed exercise notice to the Company together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan

proceeds to pay the exercise price as long as such transaction does not constitute an impermissible loan to an executive officer under the Sarbanes-Oxley Act of 2002. To facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms. The Committee may prescribe any other method of paying the exercise price that it determines to be consistent with applicable law and the purpose of the Plan, including, without limitation, in lieu of the exercise of a Stock Option by delivery of shares of Common Stock of the Company then owned by a participant, providing the Company with a notarized statement attesting to the number of shares owned, where upon verification by the Company, the Company would issue to the participant only the number of incremental shares to which the participant is entitled upon exercise of the Stock Option.

(d) Exercise Period. Stock Options granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions, including vesting, as shall be determined by the Committee; provided, however, that no Stock Option shall be exercisable later than ten (10) years after the date it is granted. All Stock Options shall terminate at such earlier times and upon such conditions or circumstances as the Committee shall in its discretion set forth in such option agreement on the date of grant.

(e) Restoration of Stock Options. The Committee may, at the time of grant of an option, provide for the grant of a subsequent Restoration Stock Option if the exercise price is paid for by delivering previously owned shares of Common Stock of the Company. Restoration Stock Options (i) may be granted in respect of no more than the number of shares of Common Stock tendered in exercising the predecessor Stock Option, (ii) shall have an exercise price equal to the Fair Market Value (as defined in Section 16 below) on the date the Restoration Stock Option is granted, and (iii) may have an exercise period that does not extend beyond the remaining term of the predecessor Stock Option. In determining which methods a participant may utilize to pay the exercise price, the Committee may consider such factors as it determines are appropriate.

(f) Limitations on Incentive Stock Options. Incentive Stock Options may be granted only to participants who are employees of the Company or of a "Parent Corporation" or "Subsidiary Corporation" (as defined in Sections 424(e) and (f) of the Code, respectively) on the date of grant. The aggregate Fair Market Value (determined as of the time the Stock Option is granted) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under all option plans of the Company and of any Parent Corporation or Subsidiary Corporation) shall not exceed one hundred thousand dollars ($100,000), provided, however, that if such $100,000 limit is exceeded, the excess Incentive Stock Options shall be treated as Nonqualified Stock Options. For purposes of the preceding sentence, Incentive Stock Options will be taken into account in the order in which they are granted. The per-share exercise price of an Incentive Stock Option shall not be less than one hundred percent (100%) of the Fair Market Value of the Common Stock on the date of grant, and no Incentive Stock Option may be exercised later than ten
(10) years after the date it is granted.

(g) Additional Limitations on Incentive Stock Options for Ten Percent Shareholders. Incentive Stock Options may not be granted to any participant who, at the time of grant, owns stock possessing (after the application of the attribution rules of Section 424(d) of the Code) more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent Corporation or Subsidiary Corporation, unless the exercise price of the option is fixed at not less than one hundred ten percent (110%) of the Fair Market Value of the Common Stock on the date of grant and the exercise of such option is prohibited by its terms after the expiration of five (5) years from the date of grant of such option.

7. STOCK APPRECIATION RIGHTS.

(a) Generally. The Committee may, in its discretion, grant Stock Appreciation Rights, including a concurrent grant of Stock Appreciation Rights in tandem with any Stock Option grant. A Stock Appreciation Right means a right to receive a payment in cash, Common Stock or a combination thereof, as determined by the Committee, in an amount equal to the excess of (i) the Fair Market Value, or other specified valuation, of a specified number of shares of Common Stock on the date the right is exercised over (ii) the Fair Market Value of such shares of Common Stock on the date the right is granted, or other specified amount, all as determined by the Committee; provided, however, that if a Stock Appreciation Right is granted in tandem with or in substitution for a Stock Option, the designated Fair Market Value in the award agreement shall reflect the Fair Market Value on the date such Stock Option was granted. Each Stock Appreciation Right shall be subject to such terms and conditions, including vesting, as the Committee shall impose from time to time, provided, however, that if a Stock Appreciation Right is granted in connection with a Stock Option, the Stock Appreciation Right shall become exercisable, be transferable and shall expire according to the same vesting, transferability and expiration rules as the corresponding Stock Option.

(b) Exercise Period. Stock Appreciation Rights granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions, including vesting, as shall be determined by the Committee; provided, however, that no Stock Appreciation Rights shall be exercisable later than ten (10) years after the date it is granted. All Stock Appreciation Rights shall terminate at such earlier times and upon such conditions or circumstances as the Committee shall in its discretion set forth in such right at the date of grant.

8. RESTRICTED STOCK AWARDS.

(a) Generally. The Committee may, in its discretion, grant Restricted Stock Awards consisting of Common Stock issued or transferred to participants with or without other payments therefor. Each participant granted a Restricted Stock Award shall execute and deliver to the Company an agreement with respect to the Restricted Stock setting forth the restrictions applicable to such Restricted Stock. If a participant fails to execute such an agreement, the Restricted Stock Award shall be null and void.

(b) Payment of the Purchase Price. If the Restricted Stock Award requires payment therefor, the purchase price of any shares of Common Stock subject to a Restricted Stock Award may be paid in any manner authorized by the Committee, which may include any manner authorized under the Plan for the payment of the exercise price of a Stock Option. Restricted Stock Awards may also be made in consideration of services rendered to the Company or its subsidiaries or affiliates.

(c) Additional Terms. Restricted Stock Awards may be subject to such terms and conditions, including vesting, as the Committee determines appropriate, including, without limitation, (i) restrictions on the sale or other disposition of such shares, and (ii) the right of the Company to reacquire such shares for no consideration upon termination of the participant's employment within specified periods, the participant's competition with the Company, or the participant's breach of other obligations to the Company. Restricted Stock Awards may constitute Performance-Based Awards, as described in Section 11 hereof. The Committee may require the participant to deliver a duly signed stock power, endorsed in blank, relating to the Common Stock covered by such an Award. The Committee may also require that the stock certificates evidencing such shares be held in custody or bear restrictive legends until the restrictions thereon shall have lapsed.

(d) Rights as a Shareholder. The participant shall have, with respect to the shares of Common Stock subject to a Restricted Stock Award, all of the rights of a holder of shares of Common Stock of the Company, including the right to vote the shares. At the discretion of the Committee, cash dividends and stock dividends with respect to the Restricted Stock may be either currently paid to the participant or withheld by the Company for the participant's account, and interest may be credited on the amount of cash dividends withheld at a rate and subject to such terms as determined by the Committee. The cash dividends or stock dividends so withheld by the Committee and attributable to any particular share of Restricted Stock (and earnings thereon, if applicable) shall be distributed to the participant upon the release of restrictions on such shares and, if such share is forfeited, the participant shall have no right to such cash dividends or stock dividends.

9. STOCK UNITS.

(a) Generally. The Committee may, in its discretion, grant Stock Units (as defined in subsection (c) below) to participants hereunder. Stock Units may be subject to such terms and conditions, including vesting, as the Committee determines appropriate. Stock Units may constitute Performance-Based Awards, as described in Section 11 hereof. A Stock Unit granted by the Committee shall provide payment in shares of Common Stock at such time as the award agreement shall specify. Shares of Common Stock issued pursuant to this Section 9 may be issued with or without other payments therefor as may be required by applicable law or such other consideration as may be determined by the Committee. The Committee shall determine whether a participant granted a Stock Unit shall be entitled to a Dividend Equivalent Right (as defined in subsection (c) below).

(b) Settlement of Stock Units. Shares of Common Stock representing the Stock Units shall be distributed to the participant unless the Committee provides for the payment of the Stock Units in cash equal to the value of the shares of Common Stock which would otherwise be distributed to the participant or partly in cash and partly in shares of Common Stock.

(c) Definitions. A "Stock Unit" means a notional account representing one
(1) share of Common Stock. A "Dividend Equivalent Right" means the right to receive the amount of any dividend paid on the share of Common Stock underlying a Stock Unit, which shall be payable in cash or in the form of additional Stock Units.

10. CASH AWARDS.

The Committee may, in its discretion, grant awards to be settled solely in cash ("Cash Awards"). Cash Awards may be subject to such terms and conditions, including vesting, as the Committee determines appropriate. Cash Awards may constitute Performance-Based Awards, as described in Section 11 hereof. The maximum Cash Award payout that may be made to any participant in any one year is $3,000,000.

11. PERFORMANCE-BASED AWARDS.

(a) Generally. Any Benefits granted under the Plan may be granted in a manner such that the Benefits qualify for the performance-based compensation exemption of Section 162(m) of the Code ("Performance-Based Awards"). As determined by the Committee in its sole discretion, either the granting or vesting of such Performance-Based Awards shall be based on achievement of performance objectives that are based on one or more of the business criteria described below that apply to the individual participant, one or more business units or the Company as a whole.

(b) Business Criteria. The business criteria shall be as follows, individually or in combination: (i) net earnings; (ii) earnings per share; (iii) sales; (iv) operating income; (v) earnings before interest and taxes (EBIT);
(vi) earnings before interest, taxes, depreciation and amortization (EBITDA);
(vii) cash flow; (viii) working capital targets; (ix) return on equity; (x) return on capital; (xi) market price per share; and (xii) total return to shareholders. In addition, Performance-Based Awards may include comparisons to the performance of other companies, such performance to be measured by one or more of the foregoing business criteria.

(c) Establishment of Performance Goals. With respect to Performance-Based Awards, the Committee shall establish in writing (i) the performance goals applicable to a given period, and such performance goals shall state, in terms of an objective formula or standard, the method for computing the amount of compensation payable to the participant if such performance goals are obtained and (ii) the individual employees or class of employees to which such performance goals apply; provided, however, that such performance goals shall be established in writing no later than ninety (90) days after the commencement of the applicable performance period (but in no event after twenty-five percent (25%) of such performance period has elapsed).

(d) Certification of Performance. No Performance-Based Awards shall be payable to or vest with respect to, as the case may be, any participant for a given period until the Committee certifies in writing that the objective performance goals (and any other material terms) applicable to such period have been satisfied.

(e) Modification of Performance-Based Awards. With respect to any Benefits intended to qualify as Performance-Based Awards, after establishment of a performance goal, the Committee shall not revise such performance goal or increase the amount of compensation payable thereunder (as determined in accordance with Section 162(m) of the Code) upon the attainment of such performance goal. Notwithstanding the preceding sentence, the Committee may reduce or eliminate the number of shares of Common Stock or cash granted or the number of shares of Common Stock vested upon the attainment of such performance goal.

12. FOREIGN LAWS. The Committee may grant Benefits to individual participants who are subject to the tax laws of nations other than the United States, which Benefits may have terms and conditions as determined by the Committee as necessary to comply with applicable foreign laws. The Committee may take any action which it deems advisable to obtain approval of such Benefits by the appropriate foreign governmental entity; provided, however, that no such Benefits may be granted pursuant to this Section 12 and no action may be taken which would result in a violation of the Exchange Act, the Code or any other applicable law.

13. CERTAIN TERMINATIONS OF EMPLOYMENT; FORFEITURES.

(a) Forfeiture of Unsettled Benefits. Unless the Committee or any agreement providing for Benefits under this Plan shall otherwise provide, a participant shall forfeit all Benefits, which have not been settled under this Plan (other than fully vested Restricted Stock Awards) if:

(i) the participant's employment with the Company or with any Parent Corporation or Subsidiary Corporation is terminated for willful, deliberate, or gross misconduct, as determined by the Committee, in its sole discretion, or

(ii) following the participant's termination of employment with the Company (or with any Parent Corporation or Subsidiary Corporation) and for a period of two (2) years thereafter, the participant engages in any business or enters into any employment relationship which the Committee in its sole discretion determines to be either directly or indirectly competitive with the business of the Company or substantially injurious to the Company's business interest.

The activities described in (i) and (ii) above are hereafter referred to as "Injurious Conduct".

(b) Forfeiture of Settled Benefits. If the Committee determines that a participant has engaged in Injurious Conduct during the course of his employment (or during the two (2) year period following his or her termination of employment), the Committee may in its discretion require the participant to return to the Company any Common Stock or cash received in settlement of any

Benefit under this Plan. If the Common Stock acquired in settlement of a Benefit has been disposed of by the participant, then the Company may require the participant to pay to the Company the economic value of the Common Stock as of the date of disposition.

(c) Timing. The Committee shall exercise the right of forfeiture provided to the Company in this Section 13 within ninety (90) days after the discovery of the activities giving rise to the Company's right of forfeiture, which activities must have occurred no later than twenty-four (24) months after the participant's termination of employment.

(d) Determination from the Committee. A participant may make a request to the Committee in writing for a determination regarding whether any proposed business or activity would constitute Injurious Conduct. Such request shall fully describe the proposed business or activity. The Committee shall respond to the participant in writing and the Committee's determination shall be limited to the specific business or activity so described.

(e) Condition Precedent. Unless the Committee or any agreement providing for Benefits under this Plan shall otherwise provide, no Benefit shall be deemed awarded to any participant under this Plan unless and until the participant agrees to the applicability of this Section 13.

(f) Enforceability. The purpose of this Section 13 is to protect the Company (and any Parent and Subsidiaries) from Injurious Conduct. To the extent that this Section 13 is not fully enforceable as written, the unenforceable provisions shall be modified so as to provide the Company with the fullest protection permitted by law.

14. ADJUSTMENT PROVISIONS; CHANGE IN CONTROL.

(a) Adjustment. Benefits granted under the Plan and any agreements evidencing such Benefits, the maximum number of shares of Common Stock subject to all Benefits stated in Section 5(a) and the maximum number of shares of Common Stock with respect to which Benefits may be granted to any one person during any period stated in Section 5(a) shall be subject to mandatory adjustment or substitution, as determined by the Committee in its sole discretion, as to the number, price or kind of a share of Common Stock or other consideration subject to such Benefits or as otherwise determined by the Committee to be equitable (i) in the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of stock or extraordinary cash dividends, stock splits, reverse stock splits, recapitalization, reorganizations, mergers, consolidations, combinations, exchanges, or other relevant changes in capitalization occurring after the date of grant of any such Benefit or (ii) in the event of any change in applicable laws or any change in circumstances which results in or would result in any substantial dilution or enlargement of the rights granted to, or available for, participants, or which otherwise warrants equitable adjustment because it interferes with the intended operation of the Plan. Any adjustment in Incentive Stock Options under this Section 14 shall be made only to the extent not

constituting a "modification" within the meaning of Section 424(h)(3) of the Code, and any adjustments under this Section 14 shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. Further, with respect to Benefits intended to qualify as "performance-based compensation" under Section 162(m) of the Code, such adjustments or substitutions shall be made only to the extent that the Committee determines that such adjustments or substitutions may be made without causing the Company to be denied a tax deduction on account of Section 162(m) of the Code. The Company shall give each participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.

(b) Effect of a Change in Control. Notwithstanding any other provision of this Plan, if there is a Change in Control (as defined in subsection (c) below) of the Company, all then outstanding Stock Options, Stock Appreciation Rights and Stock Units shall immediately vest and become exercisable and any restrictions on Restricted Stock Awards or Stock Units shall immediately lapse. Thereafter, insofar as any Benefit is provided in shares of stock of the Company or in Stock Options or Stock Appreciation Rights or is determined based on the value or other attributes of a share of stock of the Company, such Benefit shall be subject to the same terms to which a share of stock of the Company is subject in accordance with any agreement effecting the Change in Control, which agreement, may provide, without limitation, that each Stock Option and Stock Appreciation Right outstanding hereunder shall terminate within a specified number of days after notice to the holder, and that such holder shall receive, with respect to each share of Common Stock subject to such Stock Option or Stock Appreciation Right, an amount equal to the excess of the Fair Market Value of such shares of Common Stock immediately prior to the occurrence of such Change in Control over the exercise price per share underlying such Stock Option or Stock Appreciation Right with such amount payable in cash, in one or more kinds of property (including the property, if any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion, shall determine.

(i) "Affiliate' means (i) any entity that directly or indirectly is controlled by, controls or is under common control with the Company and
(ii) any entity in which the Company has a significant equity interest, in either case as determined by the Committee.

(ii) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

(iii) "Change in Control" of the Company, with respect to any participant, shall be deemed to have occurred upon any of the following events (unless another definition is provided in any applicable individual change in control agreement between the Company and the participant, in which case such agreement shall govern):

(A) Any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates) representing twenty percent (20%) or more of either the then outstanding shares of Common Stock or the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of Paragraph
(C) below;

(B) The following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the Effective Date (as defined in Section 24 below), constitute the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company's shareholder's was approved by a vote of least two-thirds (2/3) of the directors then still in office who either were directors on the Effective Date or whose appointment, election or nomination for election was previously so approved; or

(C) There is consummated a merger or consolidation of the Company (including a triangular merger to which the Company is a party) with any other corporation other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least sixty-six and two-thirds percent (66-2/3%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its subsidiaries) representing twenty percent (20%) or more of either the then outstanding shares of Common Stock or the combined voting power of the Company's then outstanding securities;

(D) The shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity at least seventy-five percent (75%) of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, no "change in Control" shall be deemed to have occurred if there is consummated any transaction or series of integrated transactions immediately following which the record holders of the Common Stock immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in the entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

(iv) "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Section 13(d) and 14(d) thereof, except that such term shall not include (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportion as their ownership of the Common Stock, or (E) an entity or entities which are eligible to file and have filed a Schedule 13G under Rule 13d-1(b) under the Exchange Act, which Schedule indicates beneficial ownership of fifteen percent (15%) or more of the outstanding shares of Common Stock or of the combined voting power of the Company's then outstanding securities.

15. NONTRANSFERABILITY. Each Benefit granted under the Plan to a participant (other than awards of unrestricted Stock Awards, vested restricted Stock Awards and vested Cash Awards) shall not be transferable otherwise than by will or the laws of descent and distribution, and shall be exercisable, during the participant's lifetime, only by the participant. In the event of the death of a participant, each Stock Option or Stock Appreciation Right theretofore granted to him or her shall be exercisable during such period after his or her death as the Committee shall in its discretion set forth in such option or right at the date of grant and then only by the executor or administrator of the estate of the deceased participant or the person or persons to whom the deceased participant's rights under the Stock Option or Stock Appreciation Right shall pass by will or the laws of descent and distribution. Notwithstanding the foregoing, at the discretion of the Committee, an award of a Benefit other than an Incentive Stock Option may permit the transferability of a Benefit by a participant solely to the participant's spouse, siblings, parents, children and grandchildren or trusts for the benefit of such persons or partnerships, corporations, limited liability companies or other entities owned solely by such persons, including trusts for such persons, subject to any restriction included in the award of the Benefit.

16. OTHER PROVISIONS. The award of any Benefit under the Plan may also be subject to such other provisions (whether or not applicable to the Benefit awarded to any other participant) as the Committee determines appropriate, including, without limitation, for the forfeiture of, or restrictions on resale or other disposition of, Common Stock acquired under any form of Benefit, for the acceleration of exercisability or vesting of Benefits, or to comply with federal and state securities laws, or understandings or conditions as to the participant's employment in addition to those specifically provided for under the Plan.

17. FAIR MARKET VALUE. For purposes of this Plan and any Benefits awarded hereunder, Fair Market Value on any given date means (i) if the Common Stock is listed on a national securities exchange or is quoted in the National Market System of the National Association of Securities Dealers Automated Quotation System ("NASDAQ") on a last sale basis, the closing price reported as having occurred on the such date, or, if there is no sale on such date, then on the last preceding date on which such a sale was reported, or (ii) if the Common Stock is not listed on a national securities exchange nor quoted in NASDAQ on a last sale basis, the amount determined by the Committee to be the fair market value based upon a good faith attempt to value the Common Stock accurately. Notwithstanding, the Committee may determine another appropriate means to determine the Fair Market Value of the initial stock option and Restricted Stock Awards on October 2, 2006.

18. WITHHOLDING. All payments or distributions of Benefits made pursuant to the Plan shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. If the Company proposes or is required to distribute Common Stock pursuant to the Plan, it may require the recipient to remit to it or to the corporation that employs such recipient an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company or the employing corporation shall have the right to withhold the amount of such taxes from any other sums due or to become due from such corporation to the recipient as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit an optionee or award or right holder to pay all or a portion of the federal, state and local withholding taxes arising in connection with any Benefit consisting of shares of Common Stock by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at minimum statutory withholding rates.

19. EMPLOYMENT RIGHTS. Neither the Plan nor any action taken hereunder shall be construed as giving any participant the right to be retained in the employ or service of the company or any of its subsidiaries or affiliates.

20. UNFUNDED PLAN. Participants shall have no right, title, or interest whatsoever in or to any investments which the Company may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any participant, beneficiary, legal representative or any other person. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.

21. NO FRACTIONAL SHARES. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Benefit. The Committee shall determine whether cash, or Benefits, or other property shall be issued or paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

22. DURATION, AMENDMENT AND TERMINATION. No Benefit shall be granted more than ten (10) years after the Effective Date. The Company may amend the Plan from time to time or suspend or terminate the Plan at any time. No amendment of the Plan may be made without approval of the majority of the shareholders of the Company if the amendment will: (i) increase the aggregate number of shares of Common Stock that may be delivered through Stock Options under the Plan; (ii) increase the maximum number of shares that may be awarded to any participant under Section 5 hereof or the maximum Cash Award that can be paid to any individual under Section 10 hereof; (iii) change the types of business criteria on which Performance-Based Awards are to be based under the Plan; or (iv) modify the requirements as to eligibility for participation in the Plan.

23. GOVERNING LAW. This Plan, Benefits granted hereunder and actions taken in connection herewith shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania (regardless of the law that might otherwise govern under applicable Pennsylvania principles of conflict of laws).

24. EFFECTIVE DATE. This Plan is adopted by the Company in anticipation of its emergence from chapter 11 of title 11 of the United States Bankruptcy Code, as a publicly-owned SEC reporting issuer. Stock Options and Restricted Stock Awards provided for in the Company's plan of reorganization will be provided under this Plan. The Plan shall be effective as of the date on which all the conditions to the effectiveness of the Company's plan of reorganization (the "Effective Date", namely October 2, 2006), provided that the Plan is approved by the sole shareholder of the Company on the Effective Date. Such shareholder approval shall be a condition to the right of each participant to receive any Benefits hereunder. Any Benefits granted under the Plan prior to such shareholder approval shall be effective as of the date of grant (unless, with respect to any Benefit, the Committee specifies otherwise at the time of grant), but no such Benefit may be exercised or settled and no restrictions relating to any Benefit may lapse prior to such shareholder approval, and if such shareholder approval is not obtained as provided hereunder, any such Benefit shall be cancelled.

EXHIBIT 10.5

ARMSTRONG WORLD INDUSTRIES, INC.

2006 LONG-TERM INCENTIVE PLAN (THE "PLAN")

STOCK OPTION AGREEMENT

(NONSTATUTORY STOCK OPTION)

[DATE OF GRANT]

This notice does not constitute an offer to sell or issue stock of Armstrong World Industries, Inc. ("AWI"). AWI plans to file a registration statement on Form S-8 with the SEC as soon as practicable. A prospectus covering the securities to be registered pursuant to the Form S-8 will be provided to you. BECAUSE THESE DOCUMENTS CONTAIN IMPORTANT INFORMATION, PLEASE READ THEM. When the Form S-8 is filed with the SEC, it will be available for free (along with any other documents and reports we file with the SEC) at the SEC's Web site, http://www.sec.gov.

Armstrong World Industries, Inc. (the "Company") hereby awards to ____________ (the "Optionee") an option to purchase ______ shares of Common Stock of the Company (the "Stock Option") at $__.__ per share in accordance with the provisions of the Plan and subject to the terms and conditions described in this Agreement, the registration of these shares with the Securities and Exchange Commission (SEC) and the letter to you dated October 2, 2006.

1.       Your options will become exercisable as follows:

           NUMBER OF SHARES                          DATE EXERCISABLE
           ----------------                          ----------------
                _____                               ___________________
                _____                               ___________________
                _____                               ___________________

2. No shares of stock may be acquired by exercise of an option after a maximum of ten years from the date the option was granted except as provided in the case of the Optionee's death.

3. This Stock Option is subject to all terms and conditions stated in the Plan, this Agreement and the letter to you dated October 2, 2006. If this Agreement is not signed and returned by the Optionee by November 30, 2006, the Stock Option will be deemed to have been declined.

4. All capitalized terms not defined herein shall have the meanings ascribed to them in the Plan.

WITNESS the due execution hereof the day and year first above written.

ATTEST:                                       ARMSTRONG WORLD INDUSTRIES, INC.



-----------------------------                 ----------------------------------
[Assistant] Secretary                         [Executive Officer]

ACCEPTANCE AGREEMENT

I agree to the provisions of this Stock Option Agreement, and acknowledge receipt of the accompanying copy of the Plan and letter dated _________. I agree to accept as binding, conclusive and final all decisions and interpretations of the Board of Directors and, where applicable, the Committee administering the Plan, upon any questions arising under the Plan, and further agree to remit to the Company any applicable taxes required to be withheld by the Company as a result of this award.

Date:___________________________ ________________________________ Participant

EXHIBIT 10.6

ARMSTRONG WORLD INDUSTRIES, INC.

2006 LONG-TERM INCENTIVE PLAN (THE "PLAN")

RESTRICTED STOCK AWARD AGREEMENT

[DATE OF GRANT]

This notice does not constitute an offer to sell or issue stock of Armstrong World Industries, Inc. ("AWI"). AWI plans to file a registration statement on Form S-8 with the SEC as soon as practicable. A prospectus covering the securities to be registered pursuant to the Form S-8 is being provided to you with this agreement. BECAUSE THESE DOCUMENTS CONTAIN IMPORTANT INFORMATION, PLEASE READ THEM. When the Form S-8 is filed with the SEC, it will be available for free (along with any other documents and reports we file with the SEC) at the SEC's Web site, http://www.sec.gov. This award of Common Shares is subject to the condition that the shares have been so registered.

Armstrong World Industries, Inc. (the "Company") hereby awards to __________ (the "Participant") ______ shares of Common Stock of the Company (the "Restricted Stock Award") in accordance with the provisions of the Plan and subject to the terms and conditions described in this Agreement, the registration of these shares with the Securities and Exchange Commission (SEC) and the accompanying letter.

1. Shares of Common Stock awarded under this Agreement shall be registered in the Participant's name pending distribution following the lapse or waiver of the restrictions imposed and subject to forfeiture in accordance with the terms of this award.

2. The Participant has the right to vote the shares awarded under this Restricted Stock Award. Cash dividends paid with respect to these shares shall be paid to the Participant.

3. The Restriction Periods applicable to this Restricted Stock Award are as follows:

NUMBER OF SHARES                      END OF RESTRICTION PERIOD
----------------                      -------------------------
     ______                                  ________________
     ______                                  ________________
     ______                                  ________________

During the Restricted Period, the Participant shall not be permitted to pledge, sell or transfer the shares awarded other than by will or the laws of descent and distribution. The Committee may accelerate or waive such restrictions, in whole or in part, based on service and such other factors as the Committee may determine.

4. This award is subject to all terms and conditions stated in the Plan, the accompanying letter, and this Agreement. It is also subject to effectiveness of the registration of these shares with the SEC, and until this registration is effective no rights or benefits are available under this award.

If this Agreement is not signed and returned by the Participant by ________, the Restricted Stock Award will be deemed to have been declined.

5. All capitalized terms not defined herein shall have the meanings ascribed to them in the Plan.

WITNESS the due execution hereof the day and year first above written.

ATTEST:                                         ARMSTRONG WORLD INDUSTRIES, INC.



-------------------------------                 --------------------------------
[Assistant] Secretary                           [Executive Officer]

ACCEPTANCE AGREEMENT

I agree to the provisions of this Restricted Stock Award Agreement, and acknowledge receipt of the accompanying copy of the Plan and letter dated ____________. I agree to accept as binding, conclusive and final all decisions and interpretations of the Board of Directors and, where applicable, the Committee administering the Plan, upon any questions arising under the Plan, and further agree to remit to the Company any applicable taxes required to be withheld by the Company as a result of this award.

Date:___________________________ ________________________________ Participant

EXHIBIT 10.7

[Armstrong Logo] ARMSTRONG WORLD INDUSTRIES, INC.

2500 COLUMBIA AVE., P.O. BOX 3001
LANCASTER, PA 17604

717.397.0611 www.armstrong.com

[Date]

[Name and Title]
[Address as Appropriate]

Subject: Emergence Equity Awards

Dear __________:

The Management Development and Compensation Committee of the Board of Directors of reorganized Armstrong World Industries, Inc. (AWI) acted to offer you Emergence Equity Awards effective October 2, 2006. On behalf of the Committee, I am happy to offer you the following:

______ shares of Restricted Stock of Armstrong ______ Stock Options to purchase Armstrong common stock

This award is made under the Company's 2006 Long-Term Incentive Plan (the "Plan") which became effective today. A copy of the Plan text is provided.

Restricted Stock Award
This award is subject to all terms and conditions stated in the Plan, this letter and the enclosed Restricted Stock Award Agreement. It is also subject to the registration of these shares with the Securities and Exchange Commission (SEC) and until this registration is effective no rights or benefits are available under this award. These shares of AWI common stock will be registered in your name pending distribution following the specified restriction period, subject to forfeiture in accordance with the terms of this award. While you have the right to vote the shares, during the restriction period these shares may not be pledged, sold or transferred other than by will or the laws of descent and distribution.

Your Restricted Stock Award will vest in three equal installments at two, three and four years from October 2, 2006. If you remain employed by Armstrong on the scheduled vesting date, you will receive unrestricted ownership of the respective Restricted Stock Award installment. If AWI makes cash dividend payments to holders of AWI common stock, you will receive a cash payment from Armstrong of an equal amount.

If you terminate employment due to voluntary resignation or retirement without "Good Reason" (as defined below) or if you are involuntarily terminated, you will forfeit all unvested shares of Restricted Stock. Retirement is defined as termination from Armstrong at age 55 or higher following five years of service. In the event of your death, long-term disability, or resignation or retirement for Good Reason, all unvested shares of Restricted Stock will immediately vest and be free of restrictions.

Good Reason for purposes of these Emergence Equity Awards is defined as the occurrence of any one of the following events which occurs prior to October 2, 2007:
o the assignment to the manager of any duties which constitutes a significant reduction in the manager's responsibilities or any demotion of the manager

o a reduction by the Company of more than 10% to the sum of the manager's annual base salary and short-term incentive target award
o the relocation of the manager's place of employment by more than 50 miles unless such relocation is closer to the manager's residence

In the event of a post-emergence Change in Control of AWI, all unvested shares of Restricted Stock will immediately vest and be free of restrictions. Change in Control is defined in Section 14(c)(iii) of the Plan.

Following the expiration of the restriction period, a stock certificate for the number of shares held in your name will be distributed to you. In accordance with Section 18 of the Plan, you may elect to satisfy your tax withholding obligations by requesting that the Company withhold shares of common stock that would otherwise be delivered to you.

YOU WILL FIND TWO COPIES OF THE RESTRICTED STOCK AWARD AGREEMENT, ONE OF WHICH YOU SHOULD SIGN AND RETURN TO CATHY PUTT BY OCTOBER 31, 2006. IF THE AGREEMENT IS NOT SIGNED BY THIS DATE, THE RESTRICTED STOCK AWARD WILL BE DEEMED TO NOT HAVE BEEN ACCEPTED. THE AGREEMENT SHOULD BE READ CAREFULLY SINCE IT CONTAINS CERTAIN PROVISIONS WHICH SUPPLEMENT THE PLAN LANGUAGE. WE ALSO ASK THAT YOU SIGN AND RETURN THE ENCLOSED STOCK POWER FORM.

Stock Options

Each Stock Option will entitle you to purchase one share of AWI common stock at an exercise price equal to the volume weighted average closing price of AWI shares for regular way trading covering the period of October 18, 2006 through October 31, 2006 as reported by the New York Stock Exchange. We will communicate the Stock Option exercise price in a Stock Option Agreement which will be provided to you in early November. This grant is subject to all terms and conditions stated in the Plan, this letter and the Stock Option Agreement. You are not permitted to pledge, sell or transfer these Stock Options prior to exercise other than by will or the laws of descent and distribution.

These option grants are "non-qualified" stock options for tax purposes and accordingly will not be subject to the additional restrictions or tax treatment applicable to qualified (or "incentive") stock options. The Stock Options will have a ten-year term starting October 2, 2006. The Stock Options will vest and become exercisable in three equal installments at two, three and four years from October 2, 2006. If you remain employed by Armstrong on the scheduled vesting date, you will be entitled to exercise the respective Stock Option installment thereafter.

If you terminate employment due to voluntary resignation without "Good Reason" (as defined earlier), you will forfeit all vested and unvested Stock Options. If you terminate employment due to voluntary retirement (minimum age 55 with 5 years of service) without Good Reason, you will forfeit all unvested Stock Options and you will have until the earlier of five years from the date of retirement or the Stock Option expiration date to exercise any vested Stock Options.

If you are involuntarily terminated for reasons other than willful, deliberate or gross misconduct, you will forfeit all unvested Stock Options and you will have until the earlier of three months from the date of termination or the Stock Option expiration date to exercise any vested Stock Options.

In the event of your long-term disability or death, all unvested Stock Options will immediately vest and be exercisable. You or your beneficiary will have until the earlier of three years from the date of disability or death, or the Stock Option expiration date to exercise any outstanding Stock Options. In the case of death, your beneficiary will have a minimum of one year from the date of death to exercise any outstanding Stock Options without regard to the scheduled Stock Option expiration date.

If you resign or retire for Good Reason, all unvested Stock Options will immediately vest and be exercisable. You will have until the earlier of five years from the date of resignation or retirement, or the Stock Option expiration date to exercise any outstanding Stock Options.

In the event of a post-emergence Change in Control of AWI, all unvested Stock Options will immediately vest and be exercisable. You will have until the earlier of five years from the date of Change in Control or the Stock Option expiration date to exercise any outstanding Stock Options.

In accordance with Section 6(c) of the Plan, you may pay the exercise price by delivering shares of AWI stock you have owned for at least six months. You may also elect to satisfy your tax withholding obligations by requesting that the Company withhold shares of common stock that would otherwise be delivered to you.

Forfeiture of Awards
The Plan provisions described under Section 13, Certain Termination of Employment; Forfeitures, limit your rights to receive payment of Restricted Stock and exercise Stock Options under certain circumstances. Events that may result in forfeiture of these awards include termination for willful, deliberate or gross misconduct, or post-termination engagement in any business or employment determined to be competitive with or substantially injurious to the Company's business interest. These forfeiture provisions will apply for a period of two years following a participant's termination of employment.

Future Long-Term Incentive Awards
This Emergence Equity Award is intended to cover your long-term incentive compensation for 2007. You should not expect to receive another long-term incentive award before 2008.

This letter does not constitute an offer of stock or options, which are offered only pursuant to the attached agreements and subject to registration under the Securities Act of 1933. A prospectus with respect to AWI common stock will be provided to you.

We are pleased to communicate these Emergence Equity Award grants and are confident that you will provide the leadership to increase the value of the Company. Please call ___________ or ____________ if you have questions regarding these documents.

Sincerely,

Michael D. Lockhart Chairman and Chief Executive Officer

EXHIBIT 10.8

INDEMNIFICATION AGREEMENT
FOR
DIRECTORS AND OFFICERS OF ARMSTRONG WORLD INDUSTRIES, INC.

This Agreement is made effective as of the 2nd day of October 2006, by and between Armstrong World Industries, Inc., a Pennsylvania corporation (the "Corporation") and referred to herein as the "Indemnitor") and [insert director name] (the "Indemnitee").

WHEREAS, it is essential to the Corporation that the Corporation retain and attract as directors and officers the most capable persons available; and

WHEREAS, Indemnitee is an officer and/or a member of the Board of Directors of the Corporation and in that capacity is performing a valuable service for the Corporation; and

WHEREAS, the Indemnitor has purchased and maintains one or more policies of Directors and Officers Liability Insurance ("D & O Insurance") covering certain liabilities which may be incurred by directors and officers in their performance of services for the Corporation; and

WHEREAS, there is concern over the continued adequacy and reliability of D & O Insurance protection available to corporate directors and officers; and

WHEREAS, the Corporation has provisions in both its Articles of Incorporation and its Bylaws (together referred to herein as the "Bylaw") which provide for indemnification of and advancement of expenses to the officers and directors of the Corporation to the full extent permitted by law, and the Bylaw and the applicable indemnification statutes of the Commonwealth of Pennsylvania provide that they are not exclusive; and

WHEREAS, in recognition of Indemnitee's need for substantial protection against personal liability in order to induce and retain Indemnitee's service to the Corporation, the increasing difficulty in obtaining satisfactory D & O Insurance coverage, and Indemnitee's reliance on the Bylaw, and in part to provide Indemnitee with specific contractual assurance that the protection promised by the Bylaw will be available to Indemnitee (regardless of, among other things, any amendment to or revocation of the Bylaw or any change in the composition of the Corporation's Board of Directors or acquisition transaction relating to the Corporation), the Indemnitor wishes to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to the fullest extent (whether partial or complete) permitted by law on the date hereof

and as set forth in this Agreement, and, to the extent insurance is maintained, for the continued coverage of Indemnitee under the Indemnitor's D & O Insurance policies.

NOW, THEREFORE, in consideration of the premises and of Indemnitee agreeing to serve or continuing to serve the Corporation directly or, at its request, another enterprise, and intending to be legally bound hereby, the parties hereto agree as follows:

1. INDEMNITY OF INDEMNITEE.

(a) The Indemnitor shall hold harmless and indemnify the Indemnitee against any and all reasonable expenses, including attorneys' fees, and any and all liability and loss, including judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement, incurred or paid by Indemnitee in connection with any threatened, pending or contemplated action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter "a proceeding") and whether or not by or in the right of the Corporation or otherwise, to which the Indemnitee is, was or at any time becomes a party, or is threatened to be made a party or is involved (as a witness or otherwise) by reason of the fact that Indemnitee is or was a director or officer of the Corporation or is or was serving as director, officer, trustee or representative of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans or the Armstrong Foundation, whether the basis of such proceeding is alleged action in an official capacity, or in any other capacity while serving, as a director, officer, trustee or representative, unless the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness; provided, however, that the Indemnitor shall indemnify the Indemnitee in connection with a proceeding (or part thereof) initiated by the Indemnitee (other than a proceeding to enforce the Indemnitee's rights to indemnification under this Agreement or otherwise) prior to a Change of Control, as defined in Section 2(e), only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.

(b) Subject to the foregoing limitation concerning certain proceedings initiated by the Indemnitee prior to a Change of Control, the Indemnitor shall pay the expenses (including attorneys' fees) incurred by Indemnitee in connection with any proceeding in advance of the final disposition thereof

promptly after receipt by the Indemnitor of a request therefor stating in reasonable detail the expenses incurred or to be incurred.

(c) If a claim under paragraph (a) or (b) of this section is not paid in full by the Indemnitor within forty-five (45) days after a written claim has been received by the Corporation, the Indemnitee may, at any time thereafter, bring suit against the Indemnitor to recover the unpaid amount of the claim. The burden of proving that indemnification or advances are not appropriate shall be on the Indemnitor. The Indemnitee shall also be entitled to be paid the expenses of prosecuting such claim to the extent he or she is successful in whole or in part on the merits or otherwise in establishing his or her right to indemnification or to the advancement of expenses. The Indemnitor shall pay such fees and expenses in advance of the final disposition of such action on the terms and conditions set forth in Section 1(b).

2. MAINTENANCE OF INSURANCE AND FUNDING.

(a) The Indemnitor represents that as of the present date, it has in force and effect one or more policies of D & O Insurance (the "Insurance Policies"), providing a minimum of $75,000,000 in coverage. Subject only to the provisions of Section 2(b) hereof, the Indemnitor agrees that, so long as Indemnitee shall continue to serve as an officer or director of the Corporation (or shall continue to serve as a director, officer, trustee or representative of another Armstrong corporation, partnership, joint venture, trust, foundation or other enterprise, including service with respect to an employee benefit plan) and thereafter so long as Indemnitee shall be subject to any possible claim or threatened, pending or contemplated action, suit or proceeding, whether civil, criminal or investigative, by reason of the fact that Indemnitee was a director or officer of the Corporation (or served in any of said other capacities), except as indicated in (b) below, the Indemnitor shall purchase and maintain in effect for the benefit of Indemnitee a binding and enforceable policy or policies of D & O Insurance providing coverage at least comparable to that provided pursuant to the Insurance Policies.

(b) The Corporation shall not be required to maintain said policy or policies of D & O Insurance in effect if, in the reasonable business judgment of the then directors of the Corporation (i) the premium cost for such insurance is substantially disproportionate to the amount of coverage, (ii) the coverage provided by such insurance is so limited by exclusions that there is insufficient benefit from such insurance or (iii) said insurance is not

otherwise reasonably available; provided however, that in the event those directors make such a judgment, the Indemnitor shall purchase and maintain in force a policy or policies of D & O Insurance in the amount and with such coverage as such directors determine to be reasonably available. Notwithstanding the general provisions of this Section 2(b), following a Change of Control, any decision not to maintain any policy or policies of D & O Insurance or to reduce the amount or coverage under any such policy or policies shall be effective only if there are "disinterested directors" (as defined in Section 2(e) hereof) and shall require the concurrence of a majority of such "disinterested directors."

(c) If and to the extent the Indemnitor, acting under Section 2(b), does not purchase and maintain in effect the policy or policies of D & O Insurance described in Section 2(a), the Indemnitor shall indemnify and hold harmless the Indemnitee to the full extent of the coverage which would otherwise have been provided by such policies. The rights of the Indemnitee hereunder shall be in addition to all other rights of Indemnitee under the remaining provisions of this Agreement.

(d) In the event of a Potential Change of Control or if and to the extent the Indemnitor is not required to maintain in effect the policy or policies of D & O Insurance described in Section 2(a) pursuant to the provisions of Section 2(b), the Indemnitor shall, upon written request by Indemnitee, create a "Trust" for the benefit of Indemnitee and from time to time, upon written request by Indemnitee, shall fund such Trust in an amount sufficient to pay any and all expenses, including attorneys' fees, and any and all liability and loss, including judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement actually and reasonably incurred by Indemnitee or on his or her behalf for which the Indemnitee is entitled to indemnification or with respect to which indemnification is claimed, reasonably anticipated or proposed to be paid in accordance with the terms of this Agreement or otherwise; provided that in no event shall more than $100,000 be required to be deposited in any Trust created hereunder in excess of the amounts deposited in respect of reasonably anticipated expenses, including attorneys' fees. The amounts to be deposited in the Trust pursuant to the foregoing funding obligation shall be determined by the Reviewing Person whose determination shall be final and conclusive. The Reviewing Person shall have no liability to the Indemnitee for his or her decisions hereunder. The terms of the Trust shall provide that upon a Change of Control (i) the Trust shall not be revoked or the principal thereof invaded, without the written consent of the Indemnitee, (ii)

the Trust shall advance, within two business days of a request by the Indemnitee, any and all expenses, including attorneys' fees, to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under the circumstances under which the Indemnitee would be required to reimburse the Indemnitor under
Section 5 of this Agreement), (iii) the Trust shall continue to be funded by the Indemnitor in accordance with the funding obligation set forth above, (iv) the Trustee shall promptly pay to the Indemnitee all amounts for which the Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in such Trust shall revert to the Indemnitor upon a final determination by the Reviewing Party or a court of competent jurisdiction, as the case may be, that the Indemnitee has been fully indemnified under the terms of this Agreement. The Trustee shall be a bank or trust company or other individual or entity chosen by the Indemnitee and acceptable to and approved of by the Indemnitor.

(e) For the purposes of this Agreement:

(i) a "Change of Control" shall occur if, after the date hereof, (A) any person acquires "beneficial ownership" of more than 28% of the then outstanding "voting stock" of the Corporation and within five years thereafter, "disinterested directors" no longer constitute at least a majority of its entire Board of Directors or (B) there shall occur a "business combination" with an "interested shareholder" not approved by a majority of the "disinterested directors".

(ii) a "Potential Change of Control" shall occur if (A) the Corporation enters into an agreement or arrangement, the consummation of which would result in the occurrence of a Change in Control; (B) any person publicly announces a tender offer or comparable action which if consummated would constitute a Change of Control; (C) any person (other than the Armstrong Asbestos Personal Injury Trust, a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation acting in such capacity or a corporation owned, directly or indirectly, by the shareholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation), who is or becomes the beneficial owner, directly or indirectly, of securities of the Corporation representing 10% or more of the combined voting stock increases his or her beneficial ownership of such securities by 5% or more over the percentage so owned by such person on the date hereof; or (D) the Board of the Corporation adopts a resolution to the effect

that, for the purposes of this Agreement, a Potential Change of Control has occurred.

(iii) a "Reviewing Person" means any appropriate person or body consisting of a member or members of the Corporation's Board of Directors or any other person or body appointed by that Board which, following a Change of Control, shall require the concurrence of a majority of the "disinterested directors" or shall be independent legal counsel approved and accepted by the Indemnitee who is not a party to the particular claim for which Indemnitee is seeking indemnification.

(iv) a "Business Combination" means (A) any merger or consolidation of the Corporation or any Subsidiary with (i) any Interested Shareholder or with (ii) any other corporation (whether or not itself an Interested Shareholder) which is, or after such merger or consolidation would be, an Affiliate or Associate of an Interested Shareholder; (B) any sale, lease, exchange, mortgage, pledge, transfer, or other disposition (in one transaction or a series of transactions) to or with any Interested Shareholder and/or any Affiliate or Associate of any Interested Shareholder of all or a Substantial Part of the assets of the corporation or any Subsidiary thereof; (C) the issuance, exchange, sale, or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Shareholder and/or any Affiliate or Associate of any Interested Shareholder in exchange for cash, securities, or other consideration (or a combination thereof) having an aggregate Fair Market Value of, equal to or in excess of a Substantial Part of the assets of the Corporation; (D) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of any Interested Shareholder or any Affiliate or Associate of any Interested Shareholder; or (E) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Shareholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity securities or securities convertible into equity securities of the Corporation or any Subsidiary which is directly or indirectly owned by an Interested Shareholder or any Affiliate or Associate of any Interested Shareholder.

(v) a "person" means any individual, firm, corporation, or other entity and shall include any group comprised of any person and any other person with whom such person or any Affiliate or Associate of such person has any agreement, arrangement, or understanding, directly or indirectly, for the purpose of acquiring, holding, voting, or disposing of Voting Stock of the Corporation.

(vi) an "Interested Shareholder" at any particular time means any person (other than the Corporation or any Subsidiary and other than any profit sharing, employee stock ownership, or other employee benefit plan of the Corporation or any Subsidiary or any trustee of or fiduciary with respect to any such plan when acting in such capacity) who or which (A) is at such time the beneficial owner, directly or indirectly, of more than ten percent (10%) of the voting power of the outstanding Voting Stock; (B) was at any time within the two-year period immediately prior to such time the beneficial owner, directly or indirectly, of more than ten percent (10%) of the voting power of the then outstanding Voting Stock; or (C) is at such time an assignee of or has otherwise succeeded to the beneficial ownership of any shares of Voting Stock which were at any time within the two-year period immediately prior to such time beneficially owned by any Interested Shareholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933, as amended.

(vii) a person shall be a "beneficial owner" of any shares of Voting Stock (A) which such person or any of its Affiliates or Associates beneficially owns, directly or indirectly; (B) which such person or any of its Affiliates or Associates has (i) the right to acquire (whether or not such right is exercisable immediately) pursuant to any agreement, arrangement, or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to any agreement, arrangement, or understanding; or (C) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement, or understanding for the purpose of acquiring, holding, voting, or disposing of any shares of Voting Stock.

(viii) For the purposes of determining whether a person is an Interested Shareholder, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned by an Interested Shareholder

immediately preceding but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement, or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise.

(ix) an "Affiliate" or "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, as in effect on January 1, 2006 (the term "registrant" in said Rule 12b-2 meaning in this case the Corporation).

(x) a "Subsidiary" means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Interested Shareholder, the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation.

(xi) a "Disinterested Director" means any member of the Board of Directors of the Corporation who is unaffiliated with, and not a representative of, an Interested Shareholder and who was a member of the Board of Directors prior to the time that the Interested Shareholder became an Interested Shareholder or became a member subsequently to fill a vacancy created by an increase in the size of the Board of Directors and did receive the favorable vote of a majority of the Disinterested Directors in connection with being nominated for election by the shareholders to fill such vacancy or in being elected by the Board of Directors to fill such vacancy, and any successor of a Disinterested Director who is unaffiliated with, and not a representative of, the Interested Shareholder and is recommended or elected to succeed a Disinterested Director by a majority of the disinterested directors then on the Board of Directors.

(xii) "Fair Market Value" means (A) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934, as amended, on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period

preceding the date in question on the National Association of Securities Dealers, Inc., Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the Board of Directors in good faith with the approval of at least a majority of the Disinterested Directors in the determination made; and (B) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined by the Board of Directors in good faith with the approval of at least a majority of the Disinterested Directors in the determination made.

(xiii) In the event of any Business Combination in which the Corporation survives, the phrase "consideration other than cash to be received" as used herein shall include the shares of Common Stock and/or the shares of any class of outstanding Voting Stock retained by the holders of such shares.

(xiv) "Substantial Part" of the Corporation means more than ten percent (10%) of the fair market value of the total assets of the Corporation as of the end of its most recent fiscal quarter ending prior to the time the determination is made.

(xv) The term "Voting Stock" means all outstanding shares of capital stock of the Corporation entitled to vote in an annual election of directors.

(xvi) The term "beneficial owner" shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, as in effect on January 1, 2006.

3. CONTINUATION OF INDEMNITY.

All agreements and obligations of the Indemnitor contained in this Agreement shall continue during the period the Indemnitee is a director or officer of the Corporation (or is or was serving at the request of the Corporation as a director, officer, trustee or representative of another Armstrong corporation, partnership, joint venture, trust or other enterprise, including any employee benefit plan) and shall continue thereafter so long as the Indemnitee shall be subject to any possible claim or threatened, pending or contemplated action, suit or proceeding, whether civil, criminal or investigative, by reason of the fact that the Indemnitee was a director or officer of the Corporation or serving in any other capacity referred to herein.

4. NOTIFICATION AND DEFENSE OF CLAIM.

As soon as practicable after receipt by the Indemnitee of actual knowledge of any action, suit or proceeding the Indemnitee will notify the Indemnitor thereof, if a claim in respect thereof may be or is being made by the Indemnitee against the Indemnitor under this Agreement. With respect to any action, suit or proceeding as to which the Indemnitee has so notified the Indemnitor:

(a) The Indemnitor will be entitled to participate therein at its own expense; and

(b) Except as otherwise provided below, the Indemnitor may assume the defense thereof, with counsel reasonably satisfactory to the Indemnitee. After the Indemnitor notifies the Indemnitee of its election to so assume the defense, the Indemnitor will not be liable to the Indemnitee under this Agreement for any legal or other expenses subsequently incurred by the Indemnitee in connection with the defense, other than reasonable costs of investigation, including an investigation in connection with determining whether there exists a conflict of interest of the type described in (ii) of this paragraph, or as otherwise provided in this paragraph. The Indemnitee shall have the right to employ his or her counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after the Indemnitor notifies the Indemnitee of its assumption of the defense shall be at the expense of the Indemnitee unless (i) the Indemnitor authorizes the Indemnitee's employment of counsel which, following a "Change of Control", shall be effective if authorized by a majority of the "disinterested directors" (which terms are defined in Section 2(e)), although less than a quorum or majority of a quorum of the directors then in office; (ii) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Indemnitor and the Indemnitee in the conduct of the defense or (iii) the Indemnitor shall not have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel shall be at the expense of the Indemnitor. The Indemnitor shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Indemnitor or as to which the Indemnitee shall have made the conclusion described in (ii) of this paragraph.

(c) The Indemnitor shall not be obligated to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. The Indemnitor shall not settle any action or claim in any manner which would impose any penalty limitation on the Indemnitee without the Indemnitee's written consent. Neither the Indemnitor nor the Indemnitee shall unreasonably withhold their consent to any proposed settlement.

5. UNDERTAKING TO REPAY EXPENSES.

In the event it shall ultimately be determined that the Indemnitee is not entitled under law to be indemnified for the expenses paid by the Indemnitor pursuant to Section 1(b) hereof or otherwise or was not entitled to be fully indemnified, the Indemnitee shall repay to the Indemnitor such amount of the expenses or the appropriate portion thereof, so paid or advanced.

6. NOTICE.

Any notice to the Corporation shall be directed to Armstrong World Industries, Inc., 2500 Columbia Avenue, Lancaster, Pennsylvania 17603, Attention: Secretary (or such other address as the Corporation shall designate in writing to the Indemnitee).

7. ENFORCEMENT.

In the event the Indemnitee is required to bring any action to enforce rights or to collect monies due under this Agreement, the Indemnitor shall pay to the Indemnitee the fees and expenses incurred by the Indemnitee in bringing and pursuing such action to the extent the Indemnitee is successful, in whole or in part, on the merits or otherwise, in such action. The Indemnitor shall pay such fees and expenses in advance of the final disposition of such action on the terms and conditions set forth in Section 1(b).

8. SEVERABILITY.

If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:

(a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any
Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and

(b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

9. INDEMNIFICATION UNDER THIS AGREEMENT NOT EXCLUSIVE.

The indemnification provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may be entitled under the Articles of Incorporation of the Corporation or its bylaws, any other agreement, any vote of stockholders or directors, or otherwise, both as to action in the Indemnitee's official capacity and as to action in another capacity while holding such office.

10. MISCELLANEOUS.

(a) This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania.

(b) This Agreement shall be binding upon the Indemnitee and jointly and severally upon the Corporation and its respective successors and assigns, and shall inure to the benefit of the Indemnitee, his or her heirs, executors, personal representatives and assigns and to the benefit of the Corporation and its respective successors and assigns. If the Corporation shall merge or consolidate with another corporation or shall sell, lease, transfer or otherwise dispose of all or substantially all of its assets to one or more persons or groups (in one transaction or series of transactions), (i) the Corporation shall cause the successor in the merger or consolidation or the transferee of the assets that is receiving the greatest portion of the assets or earning power transferred pursuant to the transfer of the assets, by agreement in form and substance satisfactory to the Indemnitee, to expressly assume all of the Indemnitor's obligations under and agree to perform this Agreement, and (ii) the term "Corporation" whenever used in this Agreement shall mean and include any such successor or transferee.

(c) No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both of the parties hereto.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

ARMSTRONG WORLD INDUSTRIES, INC.

____________________________________           By ______________________________
           Indemnitee                          Title:  Sr. Vice President, Human
                                                       Resources

EXHIBIT 99.1
[ARMSTRONG LOGO]

FOR IMMEDIATE RELEASE
October 2, 2006

CONTACT:   Media Inquiries:
           Dorothy Brown Smith
           Vice President
           Corporate Communication
           (717) 396-5696

           Investor Inquiries:
           Beth Riley
           Director
           Investor Relations
           (717) 396-6354

ARMSTRONG EMERGES FROM CHAPTER 11

COURT-APPROVED PLAN OF REORGANIZATION BECOMES EFFECTIVE TODAY
AND PROVIDES FOR COMPREHENSIVE RESOLUTION OF ASBESTOS LIABILITY

LANCASTER, Pa., Oct. 2, 2006 - Armstrong World Industries, Inc. ("AWI"), a global leader in the design and manufacture of flooring, ceilings and cabinets, announced today that its "Fourth Amended Plan of Reorganization, as Modified," dated February 21, 2006 (the "Plan"), which was confirmed by U.S. District Court Judge Eduardo Robreno in August, has become effective and AWI has emerged from Chapter 11. The Plan includes a comprehensive settlement resolving AWI's asbestos liability by establishing and funding a trust to compensate all current and future asbestos personal injury claimants.

"This is an exciting day for Armstrong and its employees," said Michael D. Lockhart, AWI's Chairman and Chief Executive Officer. "Today we emerged from Chapter 11 having made significant operational improvements that provide the opportunity to grow and strengthen our business.

"In addition to resolving AWI's asbestos liability, we used the time in Chapter 11 to restructure our flooring business to make it more competitive," Mr. Lockhart said. "We made substantial improvements in our cost structure by closing several plants and streamlining our workforce in the U.S. We have also expanded capacity to manufacture wood flooring, broadened our product lines and improved product quality and customer service."

AWI has had several consecutive quarters of improved financial performance. In the second quarter of 2006 AWI nearly doubled its operating income (from $36.6 million to $72.5 million) from a year ago. This increase was primarily due to increased manufacturing productivity and a 3% sales increase. For the first six months of 2006, AWI's operating income increased to $120.7 million (compared to $44.3 million for the first six months of 2005). The improvement in operating income was primarily due to higher sales, improved manufacturing productivity, and reduced SG&A expenses.

"I would like to thank the nearly 15,000 Armstrong employees around the world for their hard work, dedication and loyalty during the past six years," said Mr. Lockhart. "Armstrong has gone through a lengthy and challenging Chapter 11 reorganization. We could not have overcome the many obstacles we encountered without the outstanding effort and commitment of our employees."

EXIT FINANCING

AWI expects to receive commitments for a total of $1.1 billion in a senior credit facility, including: (i) a $300 million revolving credit facility;
(ii) a $300 million term loan with a five year maturity; and (iii) a $500 million term loan with a seven year maturity. The Revolving Credit Facility is immediately available to support AWI's ongoing liquidity needs. Both term loans are expected to be funded on or about October 16, and will be utilized to satisfy distributions under the Plan.

"We are emerging from Chapter 11 with less debt and a stronger balance sheet than six years ago," said Mr. Lockhart. "Our solid capital structure, combined with our recent financial performance, means that our employees, customers, distributors, suppliers and other business partners can be assured that the company is on strong financial footing with good prospects for continued growth and profitability going forward."

PLAN PROVISIONS

As previously announced, pursuant to the Plan, AWI has established a trust in accordance with the provisions of section 524(g) of the U.S. Bankruptcy Code to resolve all current and future asbestos personal injury claims (the "Trust"). AWI is funding the Trust by making a one-time contribution of cash, insurance assets and common stock of the reorganized AWI. Those assets will be administered by the Trust's trustees and used to pay asbestos claims in accordance with the provisions of the Plan and the related Trust documents. The reorganized AWI will have no role or responsibility in the administration of the Trust. Pursuant to the Plan, all present and future asbestos personal injury claims must be asserted against the Trust, and all asbestos claimants will be permanently enjoined from pursuing their claims against the reorganized AWI.

The Plan provides for general unsecured creditors to receive a combination of cash and common stock of the reorganized AWI on account of their allowed claims. Distributions to unsecured creditors are expected to begin on October 17. Plans for listing and trading of AWI's new common stock are expected to be announced next week.

As previously announced, pursuant to the Plan, the ownership of AWI by its former parent, Armstrong Holdings, Inc. ("AHI"), ended upon AWI's emergence from Chapter 11. All AWI stock owned by AHI has been cancelled. AHI is issuing a separate press release on related matters today.

BOARD OF DIRECTORS

AWI has a new, nine member Board of Directors. Mr. Lockhart will continue to serve as Chairman and CEO of AWI, and no senior management changes are expected. In addition to Mr. Lockhart, Judith R. Haberkorn and John J. Roberts, both of whom had served on the Board of AHI, will serve on the new AWI Board. The six additional members of the new AWI Board are:

o James J. Gaffney - Chairman of Imperial Sugar Company; former Chairman and CEO of General Aquatics, Inc;

o Robert C. Garland - CEO of AFR Holdco, Inc., American Fiber Resources and Great Lakes Pulp Company;

o Scott D. Miller -President and CEO of the Six Sigma Academy; former Vice Chairman and President of Hyatt Hotels Corporation;

o Russell F. Peppet - Special Advisor to Park Avenue Equity Partners, a private equity firm; formerly Vice Chairman of Peat, Marwick, Mitchell & Co., now KPMG;

o Arthur J. Pergament - Founder and CEO of Pergament Advisors, LLC, a New York based asset manager serving the institutional and high net worth communities; and

o Hon. Alexander M. Sanders, Jr. - former President of Charleston College and Chief Judge on the South Carolina Court of Appeals.

FRESH START ACCOUNTING

AWI will adopt fresh-start financial reporting as of its emergence from Chapter 11. Fresh start accounting requires the Company to mark-to-market its entire balance sheet, similar to purchase accounting. This includes revaluing assets and liabilities to current estimated fair value, setting shareholders' equity at an amount to be determined by a third party valuation, and recording any portion of the equity value that cannot be attributed to specific tangible or intangible assets as goodwill. The adoption of fresh start accounting will have a material effect on AWI's financial statements, primarily due to additional non-cash expenses related to higher asset values. As a result of the

application of fresh start reporting as of October 2, 2006, AWI's financial statements in future periods will not be comparable with prior financial statements.

THIRD QUARTER RESULTS

AWI currently expects to report its third quarter earnings at the end of October. At that time, AWI also expects to provide an outlook for the remainder of 2006. In addition, AWI is preparing to hold meetings with investors during the month of November.
For copies of the Plan and related exhibits, please visit http://www.armstrongplan.com

Armstrong World Industries, Inc., is a global leader in the design and manufacture of floors, ceilings and cabinets. In 2005, Armstrong's net sales totaled nearly $4 billion. Based in Lancaster, PA, Armstrong operates 41 plants in 12 countries and has approximately 14,600 employees worldwide.

Additional information about Armstrong and the Chapter 11 reorganization is available on the Internet at http://www.armstrong.com and www.armstrongplan.com.

These materials may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements provide expectations or forecasts of future events. Our results could differ materially due to known and unknown risks and uncertainties, including: Armstrong World Industries, Inc.'s ("AWI") Chapter 11 case and the magnitude of its asbestos liabilities; claims and legal proceedings, lower construction activity reducing our market opportunities, unavailability and/or increased costs for raw materials and energy; success in introducing new products, achieving manufacturing efficiencies and implementing price increases to offset increased costs; risks related to our international trade and business; labor relations issues; price competition stemming from factors such as worldwide excess industry capacity; business combinations among competitors, suppliers and customers; the loss of business with key customers; and other factors disclosed in our recent reports on Forms 10-K, 10-Q and 8-K filed with the SEC. We undertake no obligation to update any forward-looking statement.

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