Exhibit 10.3

EQUITY COMMITMENT AGREEMENT

May 10, 2006

J.P. Morgan Securities Inc.

270 Park Avenue

New York, New York 10017

Ladies and Gentlemen:

Subject to the approval of this Agreement by the Bankruptcy Court (as defined
below), Owens Corning, a Delaware corporation (as a debtor-in-possession and a
reorganized debtor, as applicable, the “Company”), proposes to offer and sell
shares of its new common stock, par value $0.10 per share, to be issued pursuant
to its Amended Plan (as defined below) (together with any associated share
purchase rights other than the Rights (as defined below), “New Common Stock”),
pursuant to a rights offering (the “Rights Offering”) whereby each holder of a
Bondholder Claim, and each Holder of an Allowed Class A6-A Claim or an Allowed
Class A6-B Claim (each an “Eligible Holder”), as of the date (the “Record Date”)
fixed by the Bankruptcy Court for the solicitation of acceptances and rejections
of the Amended Plan, shall be offered the right (each, a “Right”) to purchase up
to its Pro Rata share of 72,900,000 shares (each a “Share”) of New Common Stock
at a purchase price of $30.00 per Share (the “Purchase Price”). Each capitalized
term used but not defined in this letter (the “Agreement”) shall have the
meaning given to it in the Fifth Amended Joint Plan of Reorganization for Owens
Corning and its Affiliated Debtors and Debtors-In-Possession filed on
December 31, 2005 (as it may have been amended or supplemented, the “Existing
Plan”).

In order to facilitate the Rights Offering, pursuant to this Agreement, and
subject to the terms, conditions and limitations set forth herein, J.P. Morgan
Securities Inc. (the “Investor”), agrees to purchase on the Closing Date (as
defined in Section 2), and the Company agrees to sell, for the Purchase Price
per share, a number of shares of New Common Stock equal to 72,900,000 minus the
number of shares of New Common Stock offered pursuant to the Rights Offering
purchased on or before the Expiration Time (as defined below) in the Rights
Offering (such Shares in the aggregate, the “Unsubscribed Shares”).

The Company will conduct the Rights Offering pursuant to an amended plan of
reorganization (the “Amended Plan”), which shall include only those revisions,
modifications and amendments to the Existing Plan as necessary to incorporate
the Company’s proposed restructuring transactions described in the term sheet
attached hereto as Exhibit A (the “Settlement Term Sheet”) and such other
revisions, modifications and amendments that the Company and the other
proponents of the Amended Plan (“Amended Plan Proponents”) deem necessary or
appropriate and that shall not (i) materially adversely affect the obligations
or rights of the Investor hereunder, (ii) cause any representation or warranty
contained herein to be incorrect or (iii) be inconsistent with the terms of the
Settlement Term Sheet, and shall be approved by the court (together with the
applicable District Court, to the extent District Court approval of the Amended
Plan is sought or required, the “Bankruptcy Court”) administering the Company’s
proceedings (the “Proceedings”) under the United States Bankruptcy Code, 11
U.S.C. §§ 101, et seq. (the “Bankruptcy Code”).

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Simultaneously with the delivery of this Agreement, (i) the Company (subject,
however, to Bankruptcy Court approval), the Asbestos Claimants Committee, the
Future Claimants’ Representative and certain Bondholders have entered into the
Lockup Agreement, attached hereto as Exhibit B (the “Lock-Up Agreement”) and
(ii) the Investor and certain Persons (collectively, the “Ultimate Purchasers”)
have entered into a syndication agreement (the “Syndication Agreement”),
pursuant to which the Ultimate Purchasers have agreed to purchase certain
Unsubscribed Shares from the Investor in the event the Investor purchases
Unsubscribed Shares under this Agreement.

In consideration of the foregoing, and the representations, warranties and
covenants set forth herein, and other good and valuable consideration, the
Company and the Investor agree as follows:

1. The Rights Offering. The Rights Offering will be conducted as follows:

(a) Subject to the terms and conditions of this Agreement (including Bankruptcy
Court approval), the Company hereby undertakes to offer Shares for subscription
by holders of Rights as set forth in this Agreement.

(b) In connection with the Amended Plan the Company shall issue Rights to
purchase 72,900,000 Shares in the aggregate. Each Eligible Holder as of the
Record Date will receive a Right to purchase up to its Pro Rata share of
72,900,000 Shares. The ballot form(s) (the “Ballots”) distributed in connection
with the solicitation of acceptance of the Amended Plan shall provide a place
whereby each Eligible Holder may exercise its Right. The Rights may be exercised
during a period (the “Rights Exercise Period”) specified in the Amended Plan,
which period will commence on the date the Ballots are distributed and will end
at the Expiration Time. For the purposes of this Agreement, the “Expiration
Time” means 5:00 p.m. New York City time on the 20th calendar day (or if such
day is not a Business Day, the next Business Day) after the date the Ballots are
distributed under the Amended Plan, or such later date as the Company, subject
to the approval of the Investor (which shall not be unreasonably withheld) and
the reasonable consent of the other Amended Plan Proponents, may specify in a
notice provided to the Investor before 9:00 a.m. New York City time on the
Business Day before the then-effective Expiration Time. For the purposes of this
Agreement, “Business Day” means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York City are
generally authorized or obligated by law or executive order to close. Subject to
the approval of this Agreement by the Bankruptcy Court, the Amended Plan shall
provide that in order to exercise a Right, each Eligible Holder shall, prior to
the Expiration Time, (i) return a duly executed Ballot to the Subscription Agent
(as defined below) and (ii) pay an amount equal to the full purchase price of
the number of shares of New Common Stock elected to be purchased by such
Eligible Holder by wire transfer of immediately available funds reasonably in
advance of the date on which the hearing to confirm the Amended Plan is
scheduled to commence (the “Confirmation Hearing”) to an escrow account
established for the Rights Offering.

 

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(c) There will be no over-subscription rights provided in connection with the
Rights Offering.

(d) The Company will issue the Shares to the Eligible Holders with respect to
which Rights were validly exercised by such holder upon the effective date of
the Amended Plan (the “Effective Date”). If the exercise of a Right would result
in the issuance of a fractional share of New Common Stock, then the number of
shares of New Common Stock to be issued in respect of such Right will be
calculated to one decimal place and rounded down to the next lower whole share.

(e) The Amended Plan will provide that the Company or the Subscription Agent (as
defined below) will give notice to each Eligible Holder with respect to which
Rights were validly exercised by such holder, advising them of (i) the number of
whole shares of New Common Stock that they are bound to purchase pursuant to the
Rights Offering, and the aggregate purchase price thereof and (ii) the date or
time after the notice by which a wire transfer of such purchase price must be
received and (iii) wire transfer instructions for wiring such purchase price to
the subscription agent for the Rights Offering (the “Subscription Agent”) or
another person designated by the Company.

(f) The Company hereby agrees and undertakes to give the Investor by electronic
facsimile transmission the certification by an executive officer of the Company
conforming to the requirements specified herein for such certification of either
(i) the number of Unsubscribed Shares and the aggregate Purchase Price therefor
(a “Purchase Notice”) or (ii) in the absence of any Unsubscribed Shares, the
fact that there are no Unsubscribed Shares and that the Backstop Commitment (as
defined below) is terminated (a “Satisfaction Notice”) as soon as practicable
after the Expiration Time and, in any event, reasonably in advance of the
Closing Date (to be specified in the Agreement Order) (the date of transmission
of confirmation of a Purchase Notice or a Satisfaction Notice, the
“Determination Date”).

 

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2. The Backstop Commitment.

(a) On the basis of the representations and warranties contained herein, but
subject to the conditions set forth in Section 7 (including without limitation
the entry of the Agreement Order (as defined below) and the Agreement Order
becoming a Final Agreement Order), the Investor agrees to subscribe for and
purchase on the Closing Date, and the Company agrees to sell and issue, at the
aggregate Purchase Price therefor, all Unsubscribed Shares as of the Expiration
Time (the “Backstop Commitment”). For purposes of this Agreement, “Final
Agreement Order” shall mean an order or judgment of the Bankruptcy Court, which
has not been reversed, stayed, modified or amended, and as to which (a) the time
to appeal, seek certiorari or request reargument or further review or rehearing
has expired and no appeal, petition for certiorari or request for reargument or
further review or rehearing has been timely filed, or (b) any appeal that has
been or may be taken or any petition for certiorari or request for reargument or
further review or rehearing that has been or may be filed has been resolved by
the highest court to which the order or judgment was appealed, from which
certiorari was sought or to which the request was made and no further appeal or
petition for certiorari has been or can be taken or granted.

(b) On the basis of the representations and warranties herein contained, but
subject to the entry of the Agreement Order, the Company will pay to the
Investor a backstop fee of $100,000,000 (the “Backstop Fee”) to compensate the
Investor for the risk of its undertaking herein. The Backstop Fee will be paid
in U.S. dollars on the first Business Day after the tenth day after the entry of
the Agreement Order; it being understood that in the event the Agreement Order
is appealed, and the highest court to which the Agreement Order was appealed
issues an order vacating or reversing the Agreement Order and further orders
disgorgement of all or a portion of the Backstop Fee, the Investor shall
promptly return to the Company the portion of the Backstop Fee required to be so
disgorged. Subject to the entry of the Agreement Order, the Extension Fee (as
defined below), if any, will be paid by the Company as provided in
Section 10(a)(ii); it being understood that in the event the Agreement Order is
appealed, and the highest court to which the Agreement Order was appealed issues
an order vacating or reversing the Agreement Order and further orders
disgorgement of all or a portion of the Extension Fee, the Investor shall
promptly return to the Company the portion of the Extension Fee required to be
so disgorged. Payment of the Backstop Fee and the Extension Fee, if any, will be
made by wire transfer of federal (same day) funds to the account specified by
the Investor to the Company at least 24 hours in advance; provided, that if the
Investor receives the Backstop Fee, the Investor shall waive any of its rights
to receive indirect, consequential or punitive damages in connection with this
Agreement and the transactions contemplated hereby. Except as set forth herein,
the Backstop Fee and the Extension Fee, if any, will be nonrefundable when paid.

(c) Upon the entry of the Agreement Order, the Company will reimburse or pay, as
the case may be, the out-of-pocket expenses reasonably incurred by the Investor
with respect to the transactions contemplated hereby and all Bankruptcy Court
and other judicial and regulatory proceedings related to such transactions
(collectively, “Transaction Expenses”), including all reasonable fees and
expenses of both Simpson Thacher & Bartlett LLP and Stroock & Stroock & Lavan
LLP, counsel to the Investor, and reasonable fees and expenses of any other
professionals to be retained by the Investor with the prior approval of the
Company (which approval shall not be unreasonably withheld) in connection with
the transactions contemplated by the Settlement

 

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Term Sheet, within 10 days of presentation of an invoice approved by the
Investor, without Bankruptcy Court review or further Bankruptcy Court order,
whether or not the transactions contemplated hereby are consummated; it being
understood that in the event the Agreement Order is appealed, and the highest
court to which the Agreement Order was appealed issues an order vacating or
reversing the Agreement Order and further orders disgorgement of all or a
portion of the Transaction Expenses, the Investor shall promptly return to the
Company the portion of the Transaction Expenses required to be so disgorged.
Subject to the entry of the Agreement Order, the filing fee, if any, required by
the HSR Act (as defined below) shall be paid by the Company on behalf of the
Investor when filings under the HSR Act are made, together with all expenses of
the Investor incurred to comply therewith. These obligations are in addition to,
and do not limit, the Company’s obligations under Section 8.

(d) As promptly as practicable, but in any event at least four (4) Business Days
prior to the Closing Date, the Company will provide a Purchase Notice or a
Satisfaction Notice to the Investor as provided above, setting forth a true and
accurate determination of the aggregate number of Unsubscribed Shares, if any;
provided, that on the Closing Date the Investor will purchase, and the Company
will sell, only such number of Unsubscribed Shares as are listed in the Purchase
Notice, without prejudice to the rights of the Investor to seek later an upward
or downward adjustment if the number of Unsubscribed Shares in such Purchase
Notice is inaccurate.

(e) Delivery of the Unsubscribed Shares will be made by the Company to the
account of the Investor (or to such other accounts as the Investor may
designate) at 9:00 a.m., New York City time, on the Effective Date (the “Closing
Date”) against payment of the aggregate Purchase Price for the Shares by wire
transfer of federal (same day) funds to the account specified by the Company to
the Investor at least 24 hours in advance.

(f) All Unsubscribed Shares will be delivered with any and all issue, stamp,
transfer or similar taxes or duties payable in connection with such delivery
duly paid by the Company to the extent required under the Confirmation Order or
applicable law.

(g) The documents to be delivered on the Closing Date by or on behalf of the
parties hereto and the Unsubscribed Shares will be delivered at the offices of
Simpson Thacher & Bartlett LLP, 425 Lexington Ave, New York, New York 10017 on
the Closing Date.

(h) Notwithstanding anything to the contrary in this Agreement, the Investor, in
its sole discretion, may designate that some or all of the Shares be issued in
the name of, and delivered to, one or more of its Affiliates or to any other
Person, including any Ultimate Purchaser.

3. Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with, the Investor as set forth below. Except for
representations, warranties and agreements that are expressly limited as to
their date, each representation, warranty and agreement is made as of the date
hereof and as of the Closing Date:

(a) Incorporation and Qualification. The Company and each of its Subsidiaries
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of

 

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their respective jurisdictions of incorporation, with the requisite power and
authority to own its properties and conduct its business as currently conducted.
Each of the Company and its Subsidiaries has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except to the extent
the failure to be so qualified or be in good standing has not had or could not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the business, results of operations, property or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole or
on the ability of the Company, subject to the approvals and other authorizations
set forth in Section 3(g) below, to consummate the transactions contemplated by
this Agreement or the Amended Plan (a “Material Adverse Effect”).

(b) Corporate Power and Authority.

(i) (A) The Company has the requisite corporate power and authority to enter
into, execute and deliver this Agreement and, subject to entry of the Agreement
Order and the Confirmation Order (together, the “Court Orders”) and the
expiration, or waiver by the Bankruptcy Court, of the 10-day period set forth in
Rules 6004(h) and 3020(e) of the Federal Rules of Bankruptcy Procedure (the
“Bankruptcy Rules”) respectively, to perform its obligations hereunder and
thereunder, including the issuance of the Rights and Shares. The Company has
taken all necessary corporate action required for the due authorization,
execution, delivery and performance by it of this Agreement, including the
issuance of the Rights and Shares, other than board of directors’ approval of,
or other board action to be taken with respect to, the documents to implement
the Rights Offering.

(B) When executed and delivered, the Company will have the requisite corporate
power and authority to enter into, execute and deliver the Registration Rights
Agreement (as defined in Section 5(n) hereof) and all necessary corporate action
required for the due authorization, execution, delivery and, subject to entry of
the Court Orders and the expiration, or waiver by the Bankruptcy Court, of the
10-day period set forth in Bankruptcy Rules 6004(h) and 3020(e), respectively,
performance of the Registration Rights Agreement will have been taken by the
Company.

(ii) Prior to the entry of the Agreement Order, the Company will have the
requisite corporate power and authority to execute the Amended Plan and to file
the Amended Plan with the Bankruptcy Court and, subject to entry of the
Confirmation Order and the expiration, or waiver by the Bankruptcy Court, of the
10-day period set forth in Bankruptcy Rule 3020(e), to perform its obligations
thereunder, and will have taken all necessary corporate actions required for the
due authorization, execution, delivery and performance by it of the Amended
Plan.

(c) Execution and Delivery; Enforceability.

(i) This Agreement has been and the Registration Rights Agreement will be duly
and validly executed and delivered by the Company, and, upon the entry of the
Agreement Order and the expiration, or waiver by the Bankruptcy Court, of the
10-day period set forth in Bankruptcy Rule 6004(h), each such document will
constitute the valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms.

 

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(ii) The Amended Plan will be duly and validly filed with the Bankruptcy Court
by the Company and, upon the entry of the Confirmation Order and the expiration,
or waiver by the Bankruptcy Court, of the 10-day period set forth in Bankruptcy
Rule 3020(e), will constitute the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.

(d) Authorized Capital Stock. Upon the Effective Date, the authorized capital
stock of the Company will conform to the authorized capital stock set forth in
the Disclosure Statement and the issued and outstanding shares of capital stock
of the Company will conform to the description set forth in the Settlement Term
Sheet.

(e) Issuance. Subject to the approval of this Agreement by the Bankruptcy Court,
the distribution of the Rights and issuance of the Shares, including the Shares
to be issued and sold by the Company to the Investor hereunder, have been duly
and validly authorized and, when the Shares are issued and delivered against
payment therefor in the Rights Offering or to the Investor hereunder, will be
duly and validly issued, fully paid and non-assessable, and free and clear of
all taxes, liens, pre-emptive rights, rights of first refusal, subscription and
similar rights.

(f) No Conflict. Subject to the entry of the Court Orders and the expiration, or
waiver by the Bankruptcy Court, of the 10-day period set forth in Bankruptcy
Rules 6004(h) and 3020(e), as applicable, the distribution of the Rights, the
sale, issuance and delivery of the Shares upon exercise of the Rights and the
consummation of the Rights Offering by the Company and the execution and
delivery (or, with respect to the Amended Plan, the filing) by the Company of
this Agreement and the Amended Plan and compliance by the Company with all of
the provisions hereof and thereof and the consummation of the transactions
contemplated herein and therein (including compliance by the Investor with its
obligations hereunder and thereunder) (i) will not conflict with or result in a
breach or violation of, any of the terms or provisions of, or constitute a
default under (with or without notice or lapse of time, or both), or result,
except to the extent provided in or contemplated by the Amended Plan, in the
acceleration of, or the creation of any lien under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound or to which any of the property or assets of the
Company or any of its Subsidiaries is subject, (ii) will not result in any
violation of the provisions of the Certificate of Incorporation or Bylaws of the
Company included in the Amended Plan and as applicable to the Company from and
after the Effective Date and (iii) will not result in any violation of, or any
termination or material impairment of any rights under, any statute or any
license, authorization, injunction, judgment, order, decree, rule or regulation
of any court or governmental agency or body having jurisdiction over the Company
or any of its Subsidiaries or any of their properties, except in any such case
described in subclause (i) or (iii) as will not have or could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
and except in any such case described in subclause (i), for (w) the registration
under the Securities Act of 1933 and the rules and regulations of the Commission
thereunder (collectively, the “Securities Act”) of resales of the Shares
following exercise of Rights, (x) the approval by the Bankruptcy Court of the
Company’s authority to enter into and

 

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implement this Agreement, (y) filings with respect to and the expiration or
termination of the waiting period under the Hart-Scott-Rodino Antitrust Act (the
“HSR Act”) relating to the placement of Shares with the Investor and (z) such
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the purchase
of the Shares by the Investor.

(g) Consents and Approvals. No consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body having jurisdiction over the Company or any of its Subsidiaries or any of
their properties is required for the distribution of the Rights, the sale,
issuance and delivery of the Shares upon exercise of the Rights or to Investor
hereunder and the consummation of the Rights Offering by the Company and the
execution and delivery by the Company of this Agreement, the Registration Rights
Agreement or the Amended Plan and performance of and compliance by the Company
with all of the provisions hereof and thereof and the consummation of the
transactions contemplated herein and therein, except (i) the entry of the Court
Orders and the expiration, or waiver by the Bankruptcy Court, of the 10-day
period set forth in Bankruptcy Rules 6004(h) and 3020(e), as applicable,
(ii) the registration under the Securities Act of resales of the Unsubscribed
Shares, (iii) filings with respect to and the expiration or termination of the
waiting period under the HSR Act relating to the placement of Shares with the
Investor, (iv) the filing with the Secretary of State of the State of Delaware
of the Certificate of Incorporation to be applicable to the Company from and
after the Effective Date and (v) such consents, approvals, authorizations,
registrations or qualifications (x) as may be required under NYSE or Nasdaq
rules and regulations in order to consummate the transactions contemplated
herein, (y) as may be required under state securities or Blue Sky laws in
connection with the purchase of the Shares by the Investor or (z) the absence of
which will not have or could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.

(h) Arm’s Length. The Company acknowledges and agrees that the Investor is
acting solely in the capacity of an arm’s length contractual counterparty to the
Company with respect to the transactions contemplated hereby (including in
connection with determining the terms of the offering) and not as a financial
advisor or a fiduciary to, or an agent of, the Company or any other person.
Additionally, the Investor is not advising the Company or any other person as to
any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company shall consult with its own advisors concerning such
matters and shall be responsible for making their own independent investigation
and appraisal of the transactions contemplated hereby, and the Investor shall
have no responsibility or liability to the Company with respect thereto. Any
review by the Investor of the Company, the transactions contemplated hereby or
other matters relating to such transactions will be performed solely for the
benefit of the Investor and shall not be on behalf of the Company.

(i) Non-public information. As of the date hereof, all material non-public
information relevant to the valuation of the Company which has been made
available to the Investor has also been made available to the representatives of
the Asbestos Claimants Committee.

(j) Financial Statements. The financial statements and the related notes thereto
of the Company and its consolidated Subsidiaries included or incorporated by
reference in the

 

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Disclosure Statement, the Exchange Act Documents (as defined below), and to be
included or incorporated by reference in the Registration Statement (as defined
below) and the Prospectus, comply in all material respects with the applicable
requirements of the Securities Act, the Securities Exchange Act of 1934 and the
rules and regulation of the Commission thereunder (the “Exchange Act”) and the
Bankruptcy Code, as applicable, and present fairly in all material respects the
financial position of the Company and its Subsidiaries as of the dates indicated
and the results of their operations and the changes in their cash flows for the
periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods covered thereby (except as disclosed in the Exchange Act
Documents), and the supporting schedules included or incorporated by reference
in the Disclosure Statement and the Exchange Act Documents, and to be included
or incorporated by reference in the Registration Statement and the Prospectus,
present fairly the information required to be stated therein; and the other
financial information included or incorporated by reference in the Disclosure
Statement and the Exchange Act Documents, and to be included or incorporated by
reference in the Registration Statement and the Prospectus, has been derived
from the accounting records of the Company and its Subsidiaries and presents
fairly the information shown thereby; and the pro forma financial information
and the related notes thereto included or incorporated by reference in the
Disclosure Statement and the Exchange Act Documents, and to be included in the
Registration Statement and the Prospectus, has been prepared in accordance with
the applicable requirements of the Securities Act and the Exchange Act, as
applicable, and the assumptions underlying such pro forma financial information
are reasonable and are set forth in the Disclosure Statement and the Exchange
Act Documents and will be set forth in the Registration Statement and the
Prospectus when they become effective. Notwithstanding the foregoing, the
Investor acknowledges that the financial position of the Company reflected in
the financial information included or incorporated by reference in the
Disclosure Statement and the Exchange Act Documents, to be included or
incorporated by reference in the Registration Statement and the Prospectus, does
not reflect implementation of “fresh start” accounting pursuant to Statement of
Position 90-7, “Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code” by the American Institute of Certified Public Accountants.

(k) Disclosure Statement and Exchange Act Documents. The Disclosure Statement,
when it was filed with the Bankruptcy Court, and the documents filed under the
Exchange Act with the Commission prior to the date of this Agreement (the
“Exchange Act Documents”), when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects, in the case
of the Disclosure Statement, to the Bankruptcy Code, and in the case of the
Exchange Act Documents, to the requirements of the Securities Act or the
Exchange Act, as applicable, and none of such Disclosure Statement or Exchange
Act Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated by
reference in the Disclosure Statement or the Prospectus, as the case may be,
when such documents become effective or are filed with the Bankruptcy Court or
the Commission, as the case may be, will conform in all material respects to, in
the case of the Disclosure Statement, the requirements of the Bankruptcy Code,
and in the case of documents filed under the Exchange Act, the requirements of
the Exchange Act, as applicable, and will not

 

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contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.

(l) Preliminary Prospectus. Each Preliminary Prospectus, at the time of filing
thereof, will comply in all material respects with the Securities Act and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation and warranty with
respect to any statements or omissions made in reliance upon and in conformity
with information relating to the Investor furnished to the Company in writing by
the Investor expressly for use in any Preliminary Prospectus. As used herein,
the term “Preliminary Prospectus” means each prospectus included in such
registration statement (and any amendments thereto) before it becomes effective,
any prospectus filed with the Commission pursuant to Rule 424(a) under the
Securities Act and the prospectus included in the Registration Statement, at the
time of their respective effectiveness that omits Rule 430A Information, and the
term “Prospectus” means the prospectus in the form first used to confirm sales
of the Shares.

(m) Registration Statement and Prospectus. As of the effective date of the
Registration Statement, the Registration Statement will comply in all material
respects with the Securities Act, and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and as of the
applicable filing date of the Prospectus and any amendment or supplement thereto
and as of the Closing Date, the Prospectus will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating to
the Investor or the Ultimate Purchasers furnished to the Company in writing by
the Investor or the Ultimate Purchasers expressly for use in the Registration
Statement and the Prospectus and any amendment or supplement thereto.

(n) No Material Adverse Change. As of the date hereof, since December 31, 2005,
(i) there has not been any change in the capital stock or long-term debt of the
Company or any of its Subsidiaries, or any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on any class of
capital stock, or any material adverse change, or any development involving a
material adverse change, in or affecting the business, properties, management,
financial position, stockholders’ equity or results of operations of the Company
and its Subsidiaries taken as a whole; (ii) neither the Company nor any of its
Subsidiaries has entered into any transaction or agreement that is material to
the Company and its Subsidiaries taken as a whole or incurred any liability or
obligation, direct or contingent, that is material to the Company and its
Subsidiaries taken as a whole; and (iii) neither the Company nor any of its
Subsidiaries has sustained any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority,
except in each case (x) as otherwise disclosed in the Disclosure Statement or
the Exchange Act Documents and (y) the transactions contemplated hereby or by
the Settlement Term Sheet.

 

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(o) Descriptions of the Transaction Documents. Each of this Agreement, the
Registration Rights Agreement, the Syndication Agreement, the Collars, the
Amended Plan, the Agreement Order and the Confirmation Order (collectively, the
“Transaction Documents”) will conform in all material respects to the
description thereof contained in the Registration Statement and the Prospectus.

(p) No Violation or Default. As of the date hereof, neither the Company nor any
of its Significant Subsidiaries is in violation of its charter or by-laws or
similar organizational documents. As of the date hereof, neither the Company nor
any of its Subsidiaries is: (i) except as a result of the Proceedings, in
default, and no event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject; or (ii) in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except, in the case of clauses (i) and (ii) above, for
any such default or violation that would not, individually or in the aggregate,
have a Material Adverse Effect.

(q) Legal Proceedings. Except as described in the Disclosure Statement or the
Exchange Act Documents, as of the date hereof, there are no legal, governmental
or regulatory investigations, actions, suits or proceedings pending to which the
Company or any of its Subsidiaries is or may be a party or to which any property
of the Company or any of its Subsidiaries is or may be the subject that,
individually or in the aggregate, if determined adversely to the Company or any
of its Subsidiaries, could reasonably be expected to have a Material Adverse
Effect or materially and adversely affect the ability of the Company to perform
its obligations under the Transaction Documents; as of the date hereof, no such
investigations, actions, suits or proceedings are threatened or, to the best
knowledge of the Company, contemplated by any governmental or regulatory
authority or threatened by others; and as of the date hereof, (i) there are no
current or pending legal, governmental or regulatory actions, suits or
proceedings that are required under the Exchange Act to be described in the
Exchange Act Documents that are not so described and (ii) there are no statutes,
regulations or contracts or other documents that are required under the Exchange
Act to be filed as exhibits to the Exchange Act Documents or described in the
Exchange Act Documents that are not so filed or described.

(r) Independent Accountants. PricewaterhouseCoopers LLP
(“PricewaterhouseCoopers”), who have certified certain financial statements of
the Company and its Subsidiaries are independent public accountants with respect
to the Company and its Subsidiaries as required by the Securities Act.

(s) Title to Intellectual Property. As of the date hereof, the Company and its
Subsidiaries own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or

 

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unpatentable proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses, except where the
failure to own or possess any such rights could not reasonably be expected to
have a Material Adverse Effect; and as of the date hereof, except as could not
reasonably be expected to have a Material Adverse Effect, the conduct of their
respective businesses will not conflict in any material respect with any such
rights of others, and the Company and its Subsidiaries have not received any
notice of any material claim of infringement or conflict with any such material
rights of others.

(t) No Undisclosed Relationships. As of the date hereof, no relationship, direct
or indirect, exists between or among the Company or any of its Subsidiaries, on
the one hand, and the directors, officers, stockholders, customers or suppliers
of the Company or any of its Subsidiaries, on the other, that is required by the
Exchange Act to be described in the Exchange Act Documents and that are not
described.

(u) Investment Company Act. As of the date hereof, the Company is not and, after
giving effect to the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be required to
register as an “investment company” or an entity “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder.

(v) Licenses and Permits. As of the date hereof, the Company and its
Subsidiaries possess all licenses, certificates, permits and other
authorizations issued by, and have made all declarations and filings with, the
appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective
properties or the conduct of their respective businesses as described in the
Disclosure Statement and the Exchange Act Documents, except where the failure to
possess or make the same would not, individually or in the aggregate, have a
Material Adverse Effect; and as of the date hereof, except as described in the
Disclosure Statement and the Exchange Act Documents and except as would not
reasonably be expected to have a Material Adverse Effect, neither the Company
nor any of its Subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or authorization or has
any reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course.

(w) Compliance With Environmental Laws. As of the date hereof, the Company and
its Subsidiaries (i) are in compliance with any and all applicable federal,
state, local and foreign laws, rules, regulations, decisions and orders relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants (collectively,
“Environmental Laws”); (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (iii) have not
received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except, in the case of each of the clauses
(i), (ii) and (iii), as would not, individually or in the aggregate, have a
Material Adverse Effect.

(x) Compliance With ERISA. As of the date hereof, each employee benefit plan,
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), that is maintained, administered or
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of its affiliates for employees or former employees of the Company and its
affiliates has been maintained in compliance with its terms and the requirements
of any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”),
except where the failure to comply with such applicable statutes, orders, rules
and regulations would not, individually or in the aggregate, have a Material
Adverse Effect, as of the date hereof, no prohibited transaction, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with
respect to any such plan excluding transactions effected pursuant to a statutory
or administrative exemption, except such transactions that would not,
individually or in the aggregate, have a Material Adverse Effect; and for each
such plan that is subject to the funding rules of Section 412 of the Code or
Section 302 of ERISA, no “accumulated funding deficiency” as defined in
Section 412 of the Code has, as of the date hereof, been incurred, whether or
not waived, and, as of the date hereof, the fair market value of the assets of
each such plan (excluding for these purposes accrued but unpaid contributions)
exceeds the present value of all benefits accrued under such plan determined
using reasonable actuarial assumptions.

(y) Accounting Controls. As of the date hereof, the Company and its Subsidiaries
maintain systems of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

(z) Insurance. As of the date hereof, the Company and its Subsidiaries have
insurance covering their respective properties, operations, personnel and
businesses, including business interruption insurance, which insurance is in
amounts and insures against such losses and risks as are customary for companies
whose businesses are similar to the Company and its Subsidiaries; and, as of the
date hereof, neither the Company nor any of its Subsidiaries has (i) received
notice from any insurer or agent of such insurer that capital improvements or
other expenditures are required or necessary to be made in order to continue
such insurance or (ii) any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to
continue its business.

(aa) No Unlawful Payments. As of the date hereof, neither the Company nor any of
its Subsidiaries nor, to the best knowledge of the Company, any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its Subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.

(bb) No Restrictions on Subsidiaries. Except as described in the Disclosure
Statement or otherwise set forth in the record of the Proceedings, and subject
to the Bankruptcy Code, no

 

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Subsidiary of the Company is currently prohibited, directly or indirectly, under
any agreement or other instrument to which it is a party or is subject, from
paying any dividends to the Company, from making any other distribution on such
Subsidiary’s capital stock, from repaying to the Company any loans or advances
to such Subsidiary from the Company or from transferring any of such
Subsidiary’s properties or assets to the Company or any other Subsidiary of the
Company.

(cc) No Broker’s Fees. Neither the Company nor any of its Subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the Company or any
of its Subsidiaries or the Investor for a brokerage commission, finder’s fee or
like payment in connection with the offering and sale of the Rights or the
Shares.

(dd) No Registration Rights. Except as will be expressly provided in the
Registration Rights Agreement or the Disclosure Statement, no person has the
right to require the Company or any of its Subsidiaries to register any
securities for sale under the Securities Act by reason of the filing of the
Registration Statement with the Commission or the issuance and sale of the
Rights and the Shares.

(ee) No Stabilization. The Company has not taken, directly or indirectly, any
action designed to or that could reasonably be expected to cause or result in
any stabilization or manipulation of the price of the Shares.

(ff) Business With Cuba. The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida) relating to
doing business with the Government of Cuba or with any person or affiliate
located in Cuba.

(gg) Margin Rules. Neither the issuance, sale and delivery of the Rights or the
Shares nor the application of the proceeds thereof by the Company as to be
described in the Registration Statement and the Prospectus will violate
Regulation T, U or X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board of Governors.

(hh) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the case of the Disclosure Statement and the Exchange Act
Documents, has been made or reaffirmed, and in the case of the Registration
Statement and the Prospectus, will be made or reaffirmed, without a reasonable
basis or has been disclosed other than in good faith.

(ii) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data to be included in the Disclosure Statement, Registration
Statement and the Prospectus is not based on or derived from sources that are
reliable and accurate in all material respects.

4. Representations and Warranties of the Investor. The Investor represents and
warrants to, and agrees with, the Company as set forth below. Each
representation, warranty and agreement is made as of the date hereof and as of
the Closing Date:

(a) Incorporation. The Investor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware.

 

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(b) Corporate Power and Authority. The Investor has the requisite corporate
power and authority to enter into, execute and deliver this Agreement and to
perform its obligations hereunder and thereunder and has taken all necessary
corporate action required for the due authorization, execution, delivery and
performance by it of this Agreement and the Registration Rights Agreement.

(c) Execution and Delivery. This Agreement has been duly and validly executed
and delivered by the Investor and constitutes its valid and binding obligation,
enforceable against it in accordance with its terms.

(d) Securities Laws Compliance. The Unsubscribed Shares will not be offered for
sale, sold or otherwise transferred by the Investor except pursuant to a
registration statement or in a transaction exempt from or not subject to
registration under the Securities Act and any applicable state securities laws.

(e) Sophistication. The Investor has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
its investment in the Shares being acquired hereunder. The Investor is an
“accredited investor” within the meaning of Rule 501(a) under the Securities
Act. The Investor understands and is able to bear any economic risks associated
with such investment (including, without limitation, the necessity of holding
the Shares for an indefinite period of time).

(f) Information. The Investor acknowledges that it has been afforded the
opportunity to ask questions and receive answers concerning the Company and to
obtain additional information that it has requested to verify the accuracy of
the information contained herein. Notwithstanding the foregoing, nothing
contained herein will operate to modify or limit in any respect the
representations and warranties of the Company or to relieve it from any
obligations to the Investor for breach thereof or the making of misleading
statements or the omission of material facts in connection with the transactions
contemplated herein.

5. Additional Covenants of the Company. The Company agrees with the Investor:

(a) Agreement Motion and Agreement Order. To file a motion and supporting papers
(the “Agreement Motion”) (including an order in form and substance satisfactory
to each of the Company and the Investor) seeking an order of the Bankruptcy
Court (the “Agreement Order”) approving this Agreement and the exhibits attached
hereto, the Syndication Agreement, the payment of the Backstop Fee, Extension
Fee and Termination Fee provided for herein, and the release and exculpation of
the Investor, its affiliates, representatives and advisors from any liability
for participation in the transactions contemplated hereby, by the Registration
Rights Agreement, the Amended Plan and the Syndication Agreement to the fullest
extent permitted under applicable law. The Company agrees that it shall use its
reasonable best efforts, subject to any applicable fiduciary duties, to
(i) fully support the Agreement Motion, and any application seeking Bankruptcy
Court approval and authorization to pay the fees and expenses hereunder
including the Termination Fee, if any, as an administrative expense of the
estate, including, but

 

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not limited to, filing supporting affidavits on behalf of the Company and/or its
financial advisor and providing the testimony of the affiants if needed and
(ii) obtain approval of the Agreement Order as soon as practicable following the
filing of the motion therefor.

(b) Amended Plan and Amended Disclosure Statement. To file the Amended Plan (and
a related disclosure statement (the “Amended Disclosure Statement”)) in a form
that is reasonably satisfactory to the Company and the other Amended Plan
Proponents, and that is consistent in all material respects with the Settlement
Term Sheet, and to use its reasonable best efforts to obtain the entry of the
Confirmation Order by the Bankruptcy Court. The Company will, subject to the
reasonable consent of the other Amended Plan Proponents, authorize, execute,
file with the Bankruptcy Court and seek confirmation of, an Amended Plan that
(i) is consistent in all material respects with this Agreement, (ii) provides
for the release and exculpation of the Investor, its affiliates, representatives
and advisors to the fullest extent permitted under applicable law, and (iii) has
conditions to confirmation and the effective date of the Amended Plan (and to
what extent any such conditions can be waived and by whom) that are reasonably
consistent with this Agreement. The Company will provide to the Investor and its
counsel a copy of the Amended Plan and the Amended Disclosure Statement and a
reasonable opportunity to review and comment on such documents prior to such
documents being filed with the Bankruptcy Court. In addition, the Company will
provide to the Investor and its counsel a copy of the Confirmation Order and a
reasonable opportunity to review and comment on such order prior to such order
being filed with the Bankruptcy Court.

(c) Rights Offering. To effectuate the Rights Offering as provided herein and to
use reasonable best efforts to seek entry of an order of the Bankruptcy Court,
prior to the commencement of the Rights Offering, authorizing the Company to
conduct the Rights Offering pursuant to the securities exemption provisions set
forth in section 1145(a) of the Bankruptcy Code.

(d) Listing. To use reasonable best efforts to list and maintain the listing of
the New Common Stock (and any applicable associated share purchase rights) on
the NYSE or the quotation of the New Common Stock (and any applicable associated
share purchase rights) on the Nasdaq National Market.

(e) Notification. To notify, or to cause the Subscription Agent to notify, on
each Friday during the Rights Exercise Period and on each Business Day during
the five Business Days prior to the Expiration Time (and any extensions
thereto), or more frequently if reasonably requested by the Investor, the
Investor of the aggregate number of Rights known by the Company or the
Subscription Agent to have been exercised pursuant to the Rights Offering as of
the close of business on the preceding Business Day or the most recent
practicable time before such request, as the case may be.

(f) Unsubscribed Shares. To determine the number of Unsubscribed Shares, if any,
in good faith, to provide a Purchase Notice or a Satisfaction Notice that
accurately reflects the number of Unsubscribed Shares as so determined and to
provide to the Investor a certification by the Subscription Agent of the
Unsubscribed Shares or, if such certification is not available, such written
backup to the determination of the Unsubscribed Shares as Investor may
reasonably request.

 

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(g) Stock Splits, Dividends, etc. In the event of any stock split, stock
dividend, stock combination or similar transaction affecting the number of
issued and outstanding shares of New Common Stock, the Purchase Price and the
number of Unsubscribed Shares to be purchased hereunder will be proportionally
adjusted to reflect the increase or decrease in the number of issued and
outstanding shares of New Common Stock.

(h) HSR. To use its reasonable best efforts to promptly prepare and file all
necessary documentation and to effect all applications that are necessary or
advisable under the HSR Act so that the applicable waiting period shall have
expired or been terminated thereunder with respect to the purchase of Shares
hereunder, and not to take any action that is intended or reasonably likely to
materially impede or delay the ability of the parties to obtain any necessary
approvals required for the transactions contemplated by this Agreement.

(i) Effectiveness of the Registration Statement. To use its reasonable best
efforts to prepare and file, in cooperation with the Investor, a shelf
registration statement (the “Registration Statement”) covering resales of New
Common Stock held by the Investor and the Ultimate Purchasers as soon as
practicable after the date hereof and provide the Investor with a reasonable
opportunity to review and propose changes to the Registration Statement before
any filing with the Commission; to advise the Investor, promptly after it
receives notice thereof, of the time when the Registration Statement has been
filed or has become effective or any prospectus or prospectus supplement has
been filed and to furnish the Investor with copies thereof; to advise the
Investor promptly after it receives notice thereof of any comments or inquiries
by the Commission (and to furnish the Investor with copies of any correspondence
related thereto), of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any prospectus, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
prospectus or for additional information. The foregoing provisions, as well as
provisions applicable to customary demand and piggyback registration rights,
shall be set forth in the Registration Rights Agreement.

(j) Clear Market. For a period of 180 days after the Closing Date (unless the
Put Agreement (as defined in Section 5(n)) has been entered into, in which case,
until the end of the exercise period under the Put Agreements (as defined
below)) (the “Restricted Period”), the Company will not (i) offer, pledge,
announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for capital stock of the Company
or (ii) enter into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the capital stock of the
Company, whether any such transaction described in clause (i) or (ii) above is
to be settled by delivery of capital stock of the Company or such other
securities, in cash or otherwise, without the prior written consent of the
Investor, except for (i) Rights and New Common Stock issuable upon exercise of
Rights, (ii) shares of New Common Stock issued upon the exercise of any stock
options outstanding as of the Effective Date, (iii) the issuance of New Common
Stock and other equity interests as set forth in the Settlement Term Sheet and
pursuant to the Amended Plan and (iv) the issuance in the aggregate of up to 5%
of the outstanding New Common Stock as of the Closing Date. Notwithstanding the
foregoing, if (1) during the last 17 days of the Restricted

 

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Period, the Company issues an earnings release or material news or a material
event relating to the Company occurs; or (2) prior to the expiration of the
Restricted Period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the Restricted Period, the
restrictions imposed by this Agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event.

(k) Use of Proceeds. The Company will apply the net proceeds from the sale of
the Rights or the Shares as provided in the Settlement Term Sheet under the
heading “Use of Proceeds”.

(l) No Stabilization. The Company will not take, directly or indirectly, any
action designed to or that could reasonably be expected to cause or result in
any stabilization or manipulation of the price of the Shares.

(m) Reports. So long as the Investor holds Shares, the Company will furnish to
the Investor, as soon as they are available, copies of all reports or other
communications (financial or other) furnished to holders of the Rights or the
Shares, as the case may be, and copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange or
automatic quotation system.

(n) Put Agreements; Call Agreements; and Registration Rights Agreements. The
Company agrees that it shall file with the Bankruptcy Court no less than 5
Business Days prior to the hearing to approve the Amended Disclosure Statement
forms of (i) definitive agreements, reasonably satisfactory to the Investor,
relating to obligations of the Ultimate Purchasers to purchase 28.6 million
shares of New Common Stock from the Asbestos PI Trust (the “Put
Agreements”), and relating to obligations of the Asbestos PI Trust to sell
28.6 million shares of New Common Stock to the Ultimate Purchasers (the “Call
Agreements” and together with the Put Agreement, the “Collars”), and (ii) a
registration rights agreement (the “Registration Rights Agreement”) in form and
substance reasonably satisfactory to the Company and the Investor and which
shall include the terms set forth in Exhibit C hereto. The Company and the
Investor shall use reasonable best efforts to negotiate and execute, and seek
Bankruptcy Court approval of, the Registration Rights Agreement as promptly as
practicable; provided that, the Company shall not be required to seek an
approval outside of the Confirmation Hearing to approve the Registration Rights
Agreement.

6. Additional Covenants of the Investor. The Investor agrees with the Company:

(a) Information. To provide the Company with such information as the Company
reasonably requests regarding the Investor for inclusion in the Registration
Statement and the Disclosure Statement.

(b) HSR Act. To use reasonable best efforts to promptly prepare and file all
necessary documentation and to effect all applications that are necessary or
advisable under the HSR Act so that the applicable waiting period shall have
expired or been terminated thereunder with respect to the purchase of Shares
hereunder, and not to take any action that is intended or reasonably likely to
materially impede or delay the ability of the parties to obtain any necessary
approvals required for the transactions contemplated by this Agreement.

 

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(c) To use reasonable efforts to facilitate the entry of the Agreement Order.

(d) To not file any pleading or take any other action in the Bankruptcy Court
with respect to this Agreement, the Amended Plan, the Amended Disclosure
Statement or the Confirmation Order of the consummation of the transactions
contemplated hereby or thereby that is inconsistent in any material respect with
this Agreement or the Company’s efforts to obtain the entry of court orders
consistent with this Agreement.

(e) Document Approval. To approve the documents listed in subparts (i) through
(iii) of Section 7(b) within the time limits set forth therein so long as such
documents satisfy the criteria set forth in subparts (i) through (iii) of such
section.

7. Conditions to the Obligations of the Investor. The obligation of the Investor
to purchase the Unsubscribed Shares pursuant to the Backstop Commitment on the
Closing Date are subject to the following conditions:

(a) Agreement Order. The Agreement Order shall have been entered by the
Bankruptcy Court in the form satisfactory to each of the Company and the
Investor, and the Agreement Order shall have become a Final Agreement Order.

(b) Approval of Amended Plan. The Investor shall have approved in writing
(i) prior to filing with the Bankruptcy Court, a draft of the Amended Plan that
(A) is consistent in all material respects with this Agreement, (B) is
consistent in all material respects with the Settlement Term Sheet, (C) provides
for the release and exculpation of the Investor, its affiliates, representatives
and advisors to the fullest extent permitted under applicable law, and (D) has
conditions to confirmation and the effective date of the plan (and to what
extent any such conditions can be waived and by whom) that are consistent with
this Agreement in all material respects; (ii) prior to filing with the
Bankruptcy Court, a draft of the Amended Disclosure Statement that is consistent
in all material respects with the Amended Plan as it relates to this Agreement;
(iii) prior to filing with the Bankruptcy Court, a draft of the Confirmation
Order, that is consistent in all material respects with the provisions of the
Amended Plan specified in 7(b)(i)(A)-(D) above; and (iv) prior to filing with
the Bankruptcy Court, drafts of any amendments or supplements to any of the
foregoing, to the extent any such amendment or supplement effects a material
change to the Amended Plan as it relates to this Agreement or any change to the
total amount of or conditions to the payments made or to be made under this
Agreement.

(c) Inconsistent Transaction. Subject to the approval of this Agreement by the
Bankruptcy Court, the Company shall not have made a public announcement, entered
into an agreement, or filed any pleading or document with the Bankruptcy Court,
evidencing its intention to support, or otherwise supported, any transaction
inconsistent with the Amended Plan approved by the Investor in accordance with
Section 7(b) or this Agreement (a “Competing Transaction”).

 

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(d) Confirmation Order. The Confirmation Order shall have been entered by the
Bankruptcy Court and such order shall be non-appealable, shall not have been
appealed within ten calendar days of entry or, if such order is appealed, shall
not have been stayed pending appeal, and there shall not have been entered by
any court of competent jurisdiction any reversal, modification or vacatur, in
whole or in part, of the Confirmation Order.

(e) Amended Plan and Confirmation Order. The Amended Plan, as approved, and the
Confirmation Order as entered, by the Bankruptcy Court, shall be in the form
approved by Investor in accordance with Section 7(b), with such amendments,
modifications or changes that (i) are consistent in all respects with this
Agreement, (ii) are consistent in all material respects with the form of the
Amended Plan and the Confirmation Order approved by the Investor pursuant to
Section 7(b), (iii) provide for the release and exculpation of the Investor, its
affiliates, representatives and advisors to the fullest extent permitted under
applicable law and (iv) otherwise are consistent in all material respects with
the Settlement Term Sheet.

(f) Conditions to Confirmation. The conditions to confirmation and the
conditions to the effective date of the Amended Plan have been satisfied or
waived by the Company and the other Amended Plan Proponents in accordance with
the Amended Plan, and the Effective Date shall have occurred or will occur on
the Closing Date.

(g) Registration Statement. The Registration Statement shall be effective not
later than the Effective Date and no stop order shall have been entered by the
Commission with respect thereto.

(h) Rights Offering. The Company shall have commenced the Rights Offering, the
Rights Offering shall have been conducted in accordance with Section 1145 under
the Bankruptcy Code and in all material respects in accordance with this
Agreement and the Expiration Time shall have occurred.

(i) Purchase Notice. The Investor shall have received a Purchase Notice in
accordance with Section 1(f) from the Company, dated as of the Determination
Date, certifying as to the number of Unsubscribed Shares to be purchased
pursuant to the Backstop Commitment.

(j) Valid Issuance. The New Common Stock shall be, upon payment of the aggregate
Purchase Price as provided herein, validly issued, fully paid, non-assessable
and free and clear of all taxes, liens, pre-emptive rights, rights of first
refusal, subscription and similar rights.

(k) No Restraint. No judgment, injunction, decree or other legal restraint shall
prohibit the consummation of the Amended Plan, the Rights Offering or the
transactions contemplated by this Agreement.

(l) Extension Fee. If required by Section 10(a)(ii), the Investor shall have
received payment of the Extension Fee; the Extension Fee, if any, shall not have
been required to be repaid, by the Bankruptcy Court or otherwise, to the
Company.

 

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(m) HSR Act. If any of the purchase of Shares by the Investor pursuant to this
Agreement, the purchase of Shares from the Asbestos PI Trust (as defined in the
Settlement Term Sheet) pursuant to the agreements referred to in
Section 10(a)(vi) hereof or the purchases from the Investor under the
Syndication Agreement is subject to the terms of the HSR Act, the applicable
waiting period shall have expired or been terminated thereunder with respect to
such purchase.

(n) Enforceability. This Agreement shall be valid and enforceable against the
Company and the Company shall not be in breach of this Agreement.

(o) NYSE/Nasdaq. The New Common Stock issuable upon exercise of the Rights shall
be approved for trading on the NYSE or Nasdaq, subject to official notice of
issuance.

(p) Comfort Letters. On the date of this Agreement and on the Closing Date,
PricewaterhouseCoopers shall have furnished to the Investor, at the request of
the Company, letters, dated the respective dates of delivery thereof and
addressed to the Investor, in form and substance reasonably satisfactory to the
Investor, containing statements and information of the type customarily included
in accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information contained or incorporated by
reference in the Registration Statement and the Prospectus; provided, that the
letter delivered on the Closing Date shall use a “cut-off” date no more than
three business days prior to such Closing Date.

(q) Opinion of Counsel for the Company. Sidley Austin LLP, counsel for the
Company, shall have furnished to the Investor, at the request of the Company,
their written opinion and negative assurance statement relating to the
Registration Statement and Prospectus1, dated the Closing Date and addressed to
the Investor, in form and substance reasonably satisfactory to the Investor.

(r) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued in
each by any federal, state or foreign governmental or regulatory authority that,
as of the Closing Date, prohibits the issuance or sale of the Rights or the
Shares or the resale of the Shares pursuant to the Syndication Agreement; and no
injunction or order of any federal, state or foreign court shall have been
issued that, as of the Closing Date, prohibits the issuance or sale of the
Rights or the Shares or the resale of the Shares pursuant to the Syndication
Agreement.

(s) Good Standing. The Investor shall have received on and as of the Closing
Date satisfactory evidence of the good standing of the Company and its
Significant Subsidiaries (as such term is defined in Article 1, Rule 1-02 of
Regulation S-X promulgated pursuant to the Securities Act) in their respective
jurisdictions of organization, in each case in writing or any standard form of
telecommunication from the appropriate governmental authorities of such
jurisdictions.

(t) Representations and Warranties and Covenants. The representations and
warranties of the Company in paragraphs (a)-(h), (j)-(m), (o), (r) and
(bb)-(ii) of Section 3 shall

 

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1 Containing a 10b-5 statement.

 

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be true and correct on the date hereof and as if made on the Closing Date, the
representations and warranties of the Company in paragraphs (i), (n), (p),
(q) and (s)-(aa) of Section 3 shall be true and correct on the date hereof (and
shall not be required to be true on any subsequent date) and the Company shall
have complied in all material respects with all covenants to this Agreement and
the Registration Rights Agreement.

(u) Officer’s Certificate. The Investor shall have received on and as of the
Closing Date a certificate of the chief financial officer or chief accounting
officer of the Company and one additional senior executive officer of the
Company who is satisfactory to the Investor (i) confirming that such officers
have carefully reviewed the Registration Statement and the Prospectus and, to
the best knowledge of such officers, the information set forth therein is true
and correct, (ii) confirming that the Company has satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to such Closing Date
and (iii) to the effect set forth in Sections 7(g) and 7(t) above.

(v) Bankruptcy Court Approval. The Collars and the Registration Rights Agreement
shall have been approved by the Bankruptcy Court and shall have been executed by
the parties thereto in substantially the same form as the forms thereof filed
with the Bankruptcy Court.

8. Indemnification.

(a) Subject to the approval of this Agreement by the Bankruptcy Court, whether
or not the Rights Offering is consummated or this Agreement or the Backstop
Commitment is terminated, the Company (in such capacity, the “Indemnifying
Party”) shall indemnify and hold harmless the Investor and Ultimate Purchasers,
their respective affiliates and their respective officers, directors, employees,
agents and controlling persons (each an “Indemnified Person”) from and against
any and all losses, claims, damages, liabilities and reasonable expenses, joint
or several, to which any such Indemnified Person may become subject arising out
of or in connection with any claim, challenge, litigation, investigation or
proceeding with respect to the Rights Offering, the Backstop Commitment, the
Transaction Documents, the Registration Statement or the Prospectus or the
transactions contemplated thereby, including without limitation, payment of the
Extension Fee, the Backstop Fee, or Termination Fee (as defined below), if any,
distribution of Rights, purchase and sale of Shares in the Rights Offering and
purchase and sale of Shares pursuant to the Backstop Commitment, or any breach
of the Company of this Agreement or the Registration Rights Agreement,
regardless of whether any of such Indemnified Persons is a party thereto, and to
reimburse such Indemnified Persons for any reasonable legal or other reasonable
out-of-pocket expenses as they are incurred in connection with investigating,
responding to or defending any of the foregoing, provided that the foregoing
indemnification will not, as to any Indemnified Person, apply to losses, claims,
damages, liabilities or expenses to the extent that they are finally judicially
determined to have resulted from (i) bad faith, gross negligence or willful
misconduct on the part of such Indemnified Person or (ii) statements or
omissions in the Registration Statement or Prospectus or any amendment or
supplement thereto made in reliance upon or in conformity with information
relating to the Investor or the Ultimate Purchaser furnished to the Company in
writing by or on behalf of the Investor or the Ultimate Purchaser expressly for
use in the Registration Statement or Prospectus or any amendment or supplement
thereto. If for any reason the foregoing indemnification is unavailable to any
Indemnified Person or insufficient to hold it harmless, then the Indemnifying

 

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Party shall contribute to the amount paid or payable by such Indemnified Person
as a result of such loss, claim, damage, liability or expense in such proportion
as is appropriate to reflect not only the relative benefits received by the
Indemnifying Party on the one hand and such Indemnified Person on the other hand
but also the relative fault of the Indemnifying Party, on the one hand, and such
Indemnified Person, on the other hand, as well as any relevant equitable
considerations. It is hereby agreed that the relative benefits to the
Indemnifying Party on the one hand and all Indemnified Persons on the other hand
shall be deemed to be in the same proportion as (i) the total value received or
proposed to be received by the Company pursuant to the sale of Shares
contemplated by this Agreement bears to (ii) the fee paid or proposed to be paid
to the Investor in connection with such sale. The Indemnifying Party also agree
that no Indemnified Person shall have any liability based on their exclusive or
contributory negligence or otherwise to the Indemnifying Party, any person
asserting claims on behalf of or in right of any of the Indemnifying Party, or
any other person in connection with or as a result of the Rights Offering, the
Backstop Commitment, the Transaction Documents, the Registration Statement, the
Prospectus or the transactions contemplated thereby, except as to any
Indemnified Person to the extent that any losses, claims, damages, liability or
expenses incurred by the Company are finally judicially determined to have
resulted from (i) bad faith, gross negligence or willful misconduct of such
Indemnified Person in performing the services that are the subject of this
Agreement or the Registration Rights Agreement or (ii) statements or omissions
in the Registration Statement or Prospectus or any amendment or supplement
thereto made in reliance upon or in conformity with information relating to the
Investor or the Ultimate Purchaser furnished to the Company in writing by or on
behalf of the Investor or the Ultimate Purchaser expressly for use in the
Registration Statement or Prospectus or any amendment or supplement thereto;
provided, however, that in no event shall an Indemnified Person or such other
parties have any liability for any indirect, consequential or punitive damages
in connection with or as a result of any of their activities related to the
foregoing. The indemnity, reimbursement and contribution obligations of the
Indemnifying Party under this Section 8 shall be in addition to any liability
that the Indemnifying Party may otherwise have to an Indemnified Person and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Indemnifying Party and any Indemnified
Person.

(b) Promptly after receipt by an Indemnified Person of notice of the
commencement of any claim, litigation, investigation or proceeding relating to
the Transaction Documents, the Registration Statement, the Prospectus or any of
the transactions contemplated thereby (“Proceedings”), such Indemnified Person
will, if a claim is to be made hereunder against the Indemnifying Party in
respect thereof, notify the Indemnifying Party in writing of the commencement
thereof; provided that (i) the omission so to notify the Indemnifying Party will
not relieve it from any liability that it may have hereunder except to the
extent it has been materially prejudiced by such failure and (ii) the omission
so to notify the Indemnifying Party will not relieve it from any liability that
it may have to an Indemnified Person otherwise than on account of this Section
8. In case any such Proceedings are brought against any Indemnified Person and
it notifies the Indemnifying Party of the commencement thereof, the Indemnifying
Party will be entitled to participate therein, and, to the extent that it may
elect by written notice delivered to such Indemnified Person, to assume the
defense thereof, with counsel reasonably satisfactory to such Indemnified
Person, provided that if the defendants in any such Proceedings include both
such Indemnified Person and the Indemnifying Party and such Indemnified Person

 

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shall have concluded that there may be legal defenses available to it that are
different from or additional to those available to the Indemnifying Party, such
Indemnified Person shall have the right to select separate counsel to assert
such legal defenses and to otherwise participate in the defense of such
Proceedings on behalf of such Indemnified Person. Upon receipt of notice from
the Indemnifying Party to such Indemnified Person of its election so to assume
the defense of such Proceedings and approval by such Indemnified Person of
counsel, the Indemnifying Party shall not be liable to such Indemnified Person
for expenses incurred by such Indemnified Person in connection with the defense
thereof (other than reasonable costs of investigation) unless (i) such
Indemnified Person shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the Indemnifying Party shall not be
liable for the expenses of more than one separate counsel, approved by Investor,
representing the Indemnified Persons who are parties to such Proceedings),
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to such Indemnified Person to represent such Indemnified Person
within a reasonable time after notice of commencement of the Proceedings or
(iii) the Indemnifying Party shall have authorized in writing the employment of
counsel for such Indemnified Person.

(c) The Indemnifying Party shall not be liable for any settlement of any
Proceedings effected without its written consent (which consent shall not be
unreasonably withheld). If any settlement of any Proceeding is consummated with
the written consent of the Indemnifying Party or if there is a final judgment
for the plaintiff in any such Proceedings, the Indemnifying Party agrees to
indemnify and hold harmless each Indemnified Person from and against any and all
losses, claims, damages, liabilities and expenses by reason of such settlement
or judgment in accordance with, and subject to the limitations of, the
provisions of this Section 8. Notwithstanding anything in this Section 8 to the
contrary, if at any time an Indemnified Person shall have requested the
Indemnifying Party to reimburse such Indemnified Person for legal or other
expenses in connection with investigating, responding to or defending any
Proceedings as contemplated by this Section 8, the Indemnifying Party shall be
liable for any settlement of any Proceedings effected without its written
consent if (i) such settlement is entered into more than (x) 60 days after
receipt by the Indemnifying Party of such request for reimbursement and (y) 30
days after receipt by the Indemnified Party of the material terms of such
settlement and (ii) the Indemnifying Party shall not have reimbursed such
Indemnified Person in accordance with such request prior to the date of such
settlement. The Indemnifying Party shall not, without the prior written consent
of an Indemnified Person (which consent shall not be unreasonably withheld),
effect any settlement of any pending or threatened Proceedings in respect of
which indemnity has been sought hereunder by such Indemnified Person unless
(a) such settlement includes an unconditional release of such Indemnified Person
in form and substance satisfactory to such Indemnified Person from all liability
on the claims that are the subject matter of such Proceedings and (b) does not
include any statement as to or any admission of fault, culpability or a failure
to act by or on behalf of any Indemnified Person.

9. Survival of Representations and Warranties, Etc. Notwithstanding any
investigation at any time made by or on behalf of any party hereto, all
representations and warranties made in this Agreement will survive the execution
and delivery of this Agreement and the Closing Date, except that the
representations and warranties made in Sections 3(i), (n), (p) (q) and (s)-(aa)
will only survive for a period of three (3) years after the Closing Date.

 

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10. Termination.

(a) The Investor may terminate this Agreement:

(i) On or after June 30, 2006, if the Bankruptcy Court has not entered the
Agreement Order;

(ii) On or after October 31, 2006; provided that if the Company notifies the
Investor in writing by 3:00 p.m. New York City time on or before October 24,
2006 that it wishes to extend such date until December 15, 2006, then the
Investor may not terminate pursuant to this paragraph (a)(ii) until December 15,
2006, provided that, as a condition to the effectiveness of such extension, the
Company has paid to the Investor not later than 3:00 p.m. New York City time on
October 31, 2006, a fee (the “Extension Fee”) in the amount of $30,000,000,
which amount will be paid to the Investor by the Company by wire transfer of
immediately available funds;

(iii) Upon the failure of the Company to pay the Extension Fee, if any, when
due;

(iv) Upon the failure of any of the conditions set forth in Section 7 hereof to
be satisfied, which failure cannot be cured by October 31, 2006 or, if the
Extension Fee has been paid, December 15, 2006; or

(v) If the Company makes a public announcement, enters into an agreement, or
files any pleading or document with the Bankruptcy Court, evidencing its
intention to support, or otherwise supports, any Competing Transaction.

(b) Prior to the entry of the Agreement Order, the Company may provide written
notice to the Investor of its determination not to proceed with the transactions
contemplated hereby, whereupon this Agreement will terminate.

(c) If this Agreement is terminated pursuant to Section 10(b) and at the time of
such termination the Investor is in compliance in all material respects with
this Agreement, then, subject to the approval of the Bankruptcy Court, the
Company shall pay the Investor $20,000,000 (the “Termination Fee”), and, in any
case, the Company shall pay to the Investor any Transaction Expenses and any
other amounts certified by the Investor to be due and payable hereunder that
have not been paid theretofore. Payment of the amounts due under this
Section 10(c), will be made by wire transfer of federal (same day) funds to the
account specified by the receiving party at least 24 hours in advance to the
other party hereto. The provision for the payment of the Termination Fee is an
integral part of the transactions contemplated by this Agreement and without
this provision the Investor would not have entered into this Agreement and
shall, subject to the approval of the Bankruptcy Court, constitute an
administrative expense of the Company under section 364(c)(1) of the Bankruptcy
Code. Accordingly, if payment shall become due and payable pursuant to this
Section, and suit is commenced which results in a final judgment against the
Company no longer subject to appeal, the Company shall pay to the Investor its
costs and expenses, including attorneys’ fees, in connection with collecting or
enforcing its rights and remedies hereunder.

 

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(d) In no event will the Termination Fee, if any, be refundable upon termination
of this Agreement pursuant to this Section 10.

(e) Upon termination under this Section 10, the covenants and agreements made by
the parties herein under Sections 8, 9 and 11 through 18 will survive
indefinitely in accordance with their terms.

11. Notices. All notices and other communications in connection with this
Agreement will be in writing and will be deemed given (and will be deemed to
have been duly given upon receipt) if delivered personally, sent via electronic
facsimile (with confirmation), mailed by registered or certified mail (return
receipt requested) or delivered by an express courier (with confirmation) to the
parties at the following addresses (or at such other address for a party as will
be specified by like notice):

 

(a) If to Investor, to:

J.P. Morgan Securities Inc.

270 Park Avenue, 17th Floor

New York, New York 10017

Attention: Mr. Stanley Lim,

Operations Group

Fax: (212) 270-2157

with copies to:

Stroock & Stroock & Lavan LLP

180 Maiden Lane

New York, New York 10038

Attention: Lewis Kruger

                    Brett Lawrence

Fax: (212) 806-6006

and to:

Simpson Thacher & Bartlett LLP

425 Lexington Ave,

New York New York 10017

Attention: Michael D. Nathan

                    Mark Thompson

Fax: (212) 455-2502

 

(b) If to the Company, to:

Owens Corning

One Owens Corning Parkway

Toledo, Ohio 43659

Attention: Michael Thaman

                    Stephen Krull

Fax:                     

 

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with a copy to:

Sidley Austin LLP

One South Dearborn

Chicago, Illinois 60603

Attention: Larry A. Barden

      James R. Looman

Fax: (312) 853-7036

12. Assignment; Third Party Beneficiaries. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement will be assigned by any of
the parties (whether by operation of law or otherwise) without the prior written
consent of the other party. Notwithstanding the previous sentence, this
Agreement, or the Investor’s obligations hereunder, may be assigned, delegated
or transferred, in whole or in part, by the Investor to any Affiliate (as
defined in Rule 12b-2 under the Exchange Act) of the Investor over which the
Investor or any of its Affiliates exercises investment authority, including,
without limitation, with respect to voting and dispositive rights; provided,
that any such assignee assumes the obligations of the Investor hereunder and
agrees in writing to be bound by the terms of this Agreement in the same manner
as the Investor. Notwithstanding the foregoing or any other provisions herein,
no such assignment will relieve the Investor of its obligations hereunder if
such assignee fails to perform such obligations. Except as provided in Section 8
with respect to the Indemnified Parties, this Agreement (including the documents
and instruments referred to in this Agreement) is not intended to and does not
confer upon any person other than the parties hereto any rights or remedies
under this Agreement.

13. Prior Negotiations; Entire Agreement. This Agreement (including the
agreements attached as exhibits to and the documents and instruments referred to
in this Agreement) constitutes the entire agreement of the parties and
supersedes all prior agreements, arrangements or understandings, whether written
or oral, between the parties with respect to the subject matter of this
Agreement, except that the parties hereto acknowledge that any confidentiality
agreements heretofore executed among the parties will continue in full force and
effect.

14. GOVERNING LAW; VENUE. THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE. THE INVESTOR HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF, AND VENUE IN, THE UNITED STATES
BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE AND WAIVES ANY OBJECTION BASED ON
FORUM NON CONVENIENS.

15. Counterparts. This Agreement may be executed in any number of counterparts,
all of which will be considered one and the same agreement and will become
effective when counterparts have been signed by each of the parties and
delivered to the other party (including via facsimile or other electronic
transmission), it being understood that each party need not sign the same
counterpart.

 

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16. Waivers and Amendments. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended, and the terms and conditions of this Agreement
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance, and subject, to the extent
required, to the approval of the Bankruptcy Court. No delay on the part of any
party in exercising any right, power or privilege pursuant to this Agreement
will operate as a waiver thereof, nor will any waiver on the part of any party
of any right, power or privilege pursuant to this Agreement, nor will any single
or partial exercise of any right, power or privilege pursuant to this Agreement,
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege pursuant to this Agreement. The rights and remedies
provided pursuant to this Agreement are cumulative and are not exclusive of any
rights or remedies which any party otherwise may have at law or in equity.

17. Headings. The headings in this Agreement are for reference purposes only and
will not in any way affect the meaning or interpretation of this Agreement.

18. Specific Performance. The parties acknowledge and agree that any breach of
the terms of this Agreement would give rise to irreparable harm for which money
damages would not be an adequate remedy, and, accordingly, the parties agree
that, in addition to any other remedies, each will be entitled to enforce the
terms of this Agreement by a decree of specific performance without the
necessity of proving the inadequacy of money damages as a remedy and without the
necessity of posting bond.

19. Modifications Necessary to Reflect Corporate Restructuring. The Amended Plan
currently contemplates that, on the Effective Date, the Company intends to
effect a restructuring plan which would organize the Company and its
subsidiaries along the Company’s major business lines. This restructuring plan
may result in the creation of a new Delaware company to serve as the parent
corporation and holding company for the Company and its subsidiaries (“Holdco”).
To the extent that such plan to create the Holdco structure is pursued with the
approval of the Bankruptcy Court, the parties hereto shall consider in good
faith making appropriate modifications to this Agreement and the Registration
Rights Agreement to accommodate the Holdco structure.

[Signature Page Follows]

 

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If the foregoing is in accordance with your understanding, please sign and
return to us a counterpart hereof, and upon the acceptance hereof by you, this
letter and such acceptance hereof will constitute a binding agreement between
you and (subject to the approval of the Bankruptcy Court) the Company.

 

Very truly yours, OWENS CORNING By:  

 

Name:   Title:  

 

Accepted as of the date hereof:

J.P. MORGAN SECURITIES INC. By:  

 

Name:   Title:  

[Signature Page of Equity Commitment Agreement]