SEPARATION AND CONSULTING AGREEMENT

This Separation and Consulting Agreement (this “Agreement”) dated as of June 19,
2008 between Foamex International Inc., a Delaware corporation, and its primary
operating subsidiary Foamex L.P. (together with their subsidiaries, successors
and assigns, collectively, the “Company”), and Paul A. Haslanger (the
“Executive”).

WHEREAS, the Executive is currently employed as the Executive Vice President,
Engineering and Technology of Foamex International Inc. and Foamex L.P.; and

WHEREAS, the Company is eliminating the Executive’s position as Executive Vice
President, Engineering and Technology of Foamex International Inc. and Foamex
L.P. effective as of June 27, 2008 (the “Effective Date”); and

WHEREAS, under the circumstances of the Executive’s severance, the Foamex L.P.s
Severance Policy provides for a certain “Severance Entitlement” in exchange for
the Executive’s Release; and

WHEREAS, the Executive has agreed to provide valuable consulting services and to
enter into covenants of confidentiality and non-competition upon the terms and
conditions set forth in the provisions of this Agreement relating to consulting
services; and .

NOW THEREFORE, in consideration of the promises, mutual covenants and other good
and valuable consideration set forth in this Agreement, the receipt and
sufficiency of which is hereby acknowledged, the Executive and the Company agree
as follows:

I.

Entire Agreement

Except as otherwise stated in this Agreement, this Agreement is the entire
agreement between the Company and the Executive with respect to the subject
matter hereof and contains all agreements, whether written, oral, express or
implied, between the Company and the Executive relating to the termination of
the Executive’s employment with and severance from the Company (in accordance
with Foamex L.P. Severance Pay Policy) and the Executive’s provision of
consulting services to the Company, and, as of the date of this Agreement,
supersedes and extinguishes any other agreement relating to the terms and
conditions applicable to the termination of the Executive’s employment, and the
Executive’s provision of consulting services to the Company, whether written,
oral, express or implied, between the Company and the Executive, including,
without limitation, such provisions included in the Change in Control Protection
Agreement, dated December 20, 2007, as amended on January 31, 2007 (the “CIC
Agreement”). This Agreement may not be modified or amended, nor may any rights
under it be waived, except in a writing signed and agreed to by the Company and
the Executive specifically referencing the provision being so changed or
modified.

II.

Termination of Employment; Resignation from Positions; Consulting Services

The Executive’s current employment by the Company and any and all titles,
positions and appointments the Executive holds with the Company, whether as an
officer,

--------------------------------------------------------------------------------

 

director or employee (including, without limitation, as the Executive Vice
President, Engineering and Technology, shall cease as of the Effective Date
unless earlier terminated by the Company for “cause” (within the meaning of the
Foamex L.P. Severance Pay Policy) or due to the Executive’s death. If the
Executive’s employment is terminated prior to the Effective Date by the Company
for “cause” (within the meaning of the Foamex L.P. Severance Pay Policy) or due
to the Executive’s death, the provisions of Section IIIA and IIIB of this
Agreement, shall be null and void and the provisions of the Foamex L.P.
Severance Pay Policy shall govern any rights of the Executive in connection with
such termination of employment. Effective as of the Effective Date, the
Executive shall have no authority to act on behalf of the Company and shall not
hold himself out as having such authority, enter into any agreement or incur any
obligations on behalf of the Company, commit any member of the Company in any
manner or otherwise act in an executive or other decision-making capacity with
respect to the Company. For the period commencing on October 1, 2008 and ending
on June 30, 2010, the Executive shall make himself available to provide
consulting services pursuant to the terms of Section IV of this Agreement.

III.

Severance Payments and Benefits

In consideration for the Executive’s past employment with the Company and
entering into this Agreement, specifically including the restrictive covenants
contained in Section V of this Agreement and the Executive’s execution on or
following the Effective Date of a release of claims in the form attached to this
Agreement as Exhibit A (the “Release”), the Executive shall be entitled to
receive the payments and benefits pursuant to the Foamex L.P. Severance Pay
Policy. The following payments and benefits are to be made pursuant to the
Severance Pay Policy and are subject to the Executive’s executing the Release
and not revoking the Release before expiration of the seven-day revocation
period described therein.

A.              a cash amount equal to $265,000, payable in twenty-six (26)
equal installments following the Effective Date (the “Severance Period”) in
accordance with the Company’s regular payroll practices in effect as of the date
of this Agreement (the “Severance Payment”), with the first installment payable
on the first regularly scheduled payroll date occurring after the expiration of
the seven-day revocation period described in the Release (which amount, together
with Company medical and dental benefits described in this Paragraph III A
below) shall be deemed in full satisfaction of the Company’s obligations under
the Foamex L.P. Severance Pay Policy.continued participation, through the
Severance Period, for the Executive and his eligible dependents in the Company’s
medical and dental plans in which the Executive participated immediately prior
to the Effective Date on a basis no less favorable to the Executive than the
basis generally provided to other similarly-situated senior executives of the
Company. The Executive agrees to provide appropriate documentation for any
expenses incurred with respect to the Executive’s continued participation in the
Company’s medical and dental plans described in the preceding sentence, and the
Company agrees to reimburse such expenses no later than the last day of the
taxable year following the taxable year during which such expenses were
incurred. As soon as reasonably practicable following the Effective Date, or
such earlier date as may be required by applicable state statute or regulation,
the Company shall pay (i) any annual base salary or other compensation earned
but not paid to the Executive prior to the Effective Date, (ii) any payments,
benefits or entitlements that are vested, fully and unconditionally earned or
due pursuant to any Company plan, policy, program or arrangement or other
agreement, (iii) payment for $6,624.95 representing unused vacation days for
fiscal year

--------------------------------------------------------------------------------

 

2008, with such payment being made on the first regularly scheduled payroll date
occurring following the Effective Date and (iv) any business expenses that
remain unreimbursed as of the Effective Date. The amounts described in clauses
(i) through (iv) of the preceding sentence are referred to herein as the
“Accrued/Other Obligations”. All payments due under Section IIIC(ii) shall be
paid in accordance with the applicable plan, policy, program or other agreement.

 

B.

No Duplication of Benefits

For the avoidance of doubt, the Accrued/Other Obligations described in
Section IIIC are not intended to result in any duplication of any payments or
benefits described in this Agreement or any compensation or benefits plans,
policies, programs, agreements or arrangements of the Company determined on a
payment-by- payment and benefit-by-benefit basis.

 

C.

Equity Awards

All outstanding equity awards held by the Executive as of the Effective Date
will be treated in accordance with the terms of the applicable plans and award
agreements governing such awards. The Executive acknowledges and agrees that, by
signing this Agreement, notwithstanding any provision of this Agreement or the
CIC Agreement to the contrary, he waives, effective as of the date of this
Agreement, any right or alleged right that he has, or may have, to (i) the
vesting of the Executive’s outstanding stock options pursuant to the CIC
Agreement or on account of any claim that the Company breached the CIC
Agreement, including any right to accelerated vesting of outstanding stock
options in connection therewith, based on, arising out of or in connection with
any fact, event, occurrence, omission or other matter or thing occurring prior
to the date of this Agreement, including, without limitation, any fact, event,
occurrence, omission or other matter or thing relating to the negotiation and
execution of the transactions contemplated by the Equity Commitment Agreement,
dated April 1, 2008, between the Company and each of D.E. Shaw Laminar
Portfolios, L.L.C., Sigma Capital Associates, LLC, CDGO, LLC and Q Funding III
L.P. (the “Transaction”), or (ii) the accelerated vesting of the Executive’s
outstanding stock options upon the consummation of the Transaction.

 

D.

280G Gross-Up Provision.

The Company and the Executive agree that the termination of the Executive’s
employment is not in connection with a Change in Control or a change in
ownership or effective control within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), and both parties agree
to cooperate to rebut any such presumption. Section 6 of the CIC Agreement is
incorporated in full into this Agreement, and the Executive shall continue to be
afforded the full benefits of such Section 6 of the CIC Agreement; provided that
the reference to “this Agreement” in such Section 6 of the CIC Agreement shall
be deemed to be a reference to this Agreement; and provided further that, any
reimbursement pursuant to such Section 6 shall be paid promptly when any such
taxes are due but not later than the last day of the taxable year following the
taxable year during which the expense was incurred. In addition, the Company and
the Executive hereby agree that, notwithstanding anything to the contrary set
forth herein, the consummation of the Transaction, alone or in combination with
any other event, will not constitute a Change in Control for purposes of the CIC
Agreement; provided that,

--------------------------------------------------------------------------------

 

notwithstanding the foregoing nothing shall in any way operate to the limit the
rights that the Executive would otherwise be entitled to under Section 6 of the
CIC Agreement.

 

E.

Full Satisfaction

The Executive acknowledges and agrees that, except as otherwise set forth in
this Agreement, the Executive is not entitled to any other compensation or
benefits from the Company (including without limitation any severance or
retirement compensation or benefits under the Foamex L.P. Severance Pay Policy
or otherwise), and, as of and after the Effective Date, except as otherwise set
forth in this Agreement, the Executive shall no longer participate in, accrue
service credit or have contributions made on his behalf under any employee
benefit plan sponsored by the Company in respect of periods commencing on and
following the Effective Date, including without limitation any plan that is
intended to qualify under Section 401(a) of the Code (a “Qualified Plan”);
provided, that, except as expressly provided herein, nothing in this Agreement
shall constitute a waiver by the Executive of his rights to vested benefits, if
any, under any Qualified Plan or under any group health plan of the Company in
respect of his services to the Company prior to the Effective Date.

 

F.

Release

The payments and benefits described in Sections IIIA and IIIB above shall be
contingent on the Executive’s entering into the Release effective on or promptly
after July 18, 2008 and not revoking such Release during the applicable
seven-day revocation period set forth therein. If the Executive revokes such
Release during the period described in the immediately preceding sentence, this
Agreement shall be void as of and following the Effective Date and of no further
effect except with respect to the second sentence of Section IIIE which shall
remain in full force and effect.

 

G.

Obligations Absolute

The obligations of the Company under this Agreement shall be absolute and
unconditional and shall not be affected by any circumstances, including without
limitation (i) the Executive’s receipt of compensation and benefits from another
employer in the event that the Executive accepts new employment following the
Effective Date or (ii) any set-off, counterclaim, recoupment, defense or other
right that the Company or any of its subsidiaries or affiliates may have against
the Executive or anyone else.

IV.

Consulting Services, Payments and Benefits

A.              On October 1, 2008 and for a period continuing through June 30,
2010 (the “Consulting Period”), the Company hereby retains the Executive, and
the Executive hereby agrees to serve as a consultant to the Company, on the
terms and subject to the conditions of this Section IV.

B.              During the Consulting Period, the Executive shall, from time to
time at the request of the Company upon reasonable advance notice, engage in the
specific activities, as may be requested by the Company (the “Consulting
Services”), at such times and places as mutually agreed upon by the Executive
and the Company with a target of fifteen (15) days in each of the

--------------------------------------------------------------------------------

 

consecutive three (3) calendar month periods occurring during the Consulting
Period (each, a “Consulting Quarter”); provided that the aggregate time or times
that the Executive provides Consulting Services shall not exceed (i) a total of
one hundred five (105) days during the entire Consulting Period, or (ii) thirty
(30) days in each of the Consulting Quarters; provided further that, (i) if the
Executive provides services to the Company for less than fifteen (15) days in
any Consulting Quarter, such number of days less of fifteen (15) will carry over
to subsequent Consulting Quarters; (ii) but, even in the event of a carry over,
under no circumstances shall consulting services exceed 30 days in any
Consulting Quarter.

C.              The Company shall provide the Executive with reasonable advance
notice of any multi-day or multi-week assignments and the Executive shall
provide the Company with reasonable advance notice of any time or times that the
Executive will not be available to provide services to the Company during the
Consulting Period.

D.              In consideration for the Consulting Services, the Company shall
pay the Executive a consulting fee at a rate of $265,000, and provide medical
and dental benefits pursuant to the Company sponsored medical and dental plans
(the “Consulting Fee”) on a basis no less favorable to the Executive than the
basis generally provided to other similarly-situated senior executives of the
Company. The Company shall pay the Consulting Fee in twenty-six (26) equal
installments in accordance with the Company’s regular payroll practices in
effect as of the date of this Agreement, with the first installment payable on
the first regularly scheduled payroll date occurring after all installments of
the Severance Payment have been paid. In addition, the Company shall reimburse
the Executive for all reasonable travel and entertainment related out-of-pocket
expenses incurred by the Executive in performing the Consulting Services in
accordance with the Company’s policy in effect from time to time; provided that
such expenses are incurred with the prior approval of the Company, and the
Executive provides the Company with an itemized invoice of the expenses
incurred.

E.              In performing the Consulting Services, the Executive shall have
no authority to act as an agent of the Company, except on authority specifically
so delegated in writing, and he shall not represent contrary to any person.

V.

Restrictive Covenants - Confidentiality; Non-Competition

A.              The Executive agrees that he will not, at any time after the
date if this Agreement, make use of or divulge to any other person, firm or
corporation any trade or business secret, process, method or means, or any other
confidential information concerning the business or policies of the Company,
which he may have learned in connection with his employment or the consulting
services provided under this Agreement. For purposes of this Agreement, a “trade
or business secret, process, method or means, or any other confidential
information” shall mean and include written information reasonably treated as
confidential or as a trade secret by the Company. The Executive’s obligation
under this Section VA shall not apply to any information which (i) is known
publicly (including information known publicly within the relevant trade or
industry); (ii) is in the public domain or hereafter enters the public domain
without the fault of the Executive; (iii) is known to the Executive prior to his
receipt of such information from the Company, as evidenced by written records of
the Executive; or (iv) is hereafter disclosed to the Executive by a third party
not under an obligation of confidence to the

--------------------------------------------------------------------------------

 

Company. On or after the date of this Agreement, the Executive agrees not to
remove from the premises of the Company, except as specifically permitted in
writing by the Company, any document or other object containing or reflecting
any such confidential information. The Executive recognizes that all such
documents and objects, whether developed by him or by someone else, will be the
sole exclusive property of the Company. On or promptly following the Effective
Date, the Executive shall deliver to the Company all such confidential
information, including, without limitation, all lists of customers,
correspondence, accounts, records and any other documents or property made or
held by him or under his control in relation to the business or affairs of the
Company, and no copy of any such confidential information shall be retained by
him; provided, however, that nothing herein shall prevent the Executive from
retaining (i) his papers and other materials of a personal nature, including,
without limitation, photographs, correspondence, personal diaries, calendars,
personal files and phone books, (ii) information showing his compensation or
relating to reimbursement of his business expenses, (iii) information that is
necessary for tax purposes, and (iv) copies of plans, programs, policies and
agreements relating to his employment, or termination thereof, with the Company
and its affiliates. Anything herein or elsewhere to the contrary
notwithstanding, the provisions of this Section VA shall not apply (x) when
disclosure is required by law or by any court, arbitrator, mediator or
administrative or legislative body (including any committee thereof) with
jurisdiction to order the Executive to disclose or make accessible any
information or (y) with respect to any other litigation, arbitration or
mediation involving this Agreement or any other agreement between the parties,
including, without limitation, the enforcement of such agreements.

B.              The Executive shall not, for a period of two (2) years after the
Effective Date, directly or indirectly, whether as an employee, consultant,
independent contractor, partner or joint venturer, (i) perform any services for
a competitor which has material operations which directly compete with the
Company in the sale of any products sold by the Company at the time of the
termination of the Executive’s employment (“Competitive Business”); (ii) solicit
or induce, or in any manner attempt to solicit or induce, any person employed
by, or as agent of, the Company to terminate such person’s contract of
employment or agency, as the case may be, with the Company; or (iii) divert, or
attempt to divert, any person, concern or entity from doing business with the
Company, nor will he solicit or cause any other person or entity to solicit any
person, concern or entity to cease being a customer or supplier of the Company.
Notwithstanding anything herein to the contrary, this Section VB shall not
prevent the Executive from acquiring securities representing not more than 1% of
the outstanding voting securities of any entity.

C.              In the event of any conflict between the provisions of this
Section V and the provisions of any other Company agreement, plan, policy,
program or arrangement, whether entered into before, on or after the date of
this Agreement, the provisions of this Section V shall control, unless the
Executive has expressly agreed in writing that the conflicting provision will
override or amend this Section V.

 

D.

Enforcement

The Executive acknowledges and agrees that the Company’s remedies at law for a
breach or threatened breach by the Executive of any of the provisions of Section
VA or Section

--------------------------------------------------------------------------------

 

VB of this Agreement would be inadequate, and, in recognition of this fact, the
Executive agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.

VI.

Miscellaneous

A.              Waiver. The waiver by either party of a breach of any provision
of this Agreement shall not operate or be construed as a continuing waiver or as
a consent to or waiver of any subsequent breach hereof.

B.              Indemnification; D&O Liability Insurance. The Company agrees to
indemnify and hold harmless the Executive (and advance him expenses) to the
fullest extent permitted by the Company’s or any affiliate’s certificate of
incorporation and/or by-laws, which, for Foamex International Inc., shall be the
certificate of incorporation and by-laws in effect as of the date of this
Agreement (unless such documents are amended in a manner favorable to the
Executive, in which case the Executive shall be afforded the benefits of such
amendment), or, if greater, in accordance with applicable law for actions or
inactions of the Executive as an officer, director, employee or agent of the
Company or any affiliate or as a fiduciary of any benefit plan of any of the
foregoing or as otherwise set forth in the applicable document. The Company also
agrees to provide the Executive with directors’ and officers’ liability
insurance coverage with regard to matters occurring during employment, which
coverage will be at a level at least equal to the level being maintained at such
time for the then current officers and directors and shall continue until such
time as suits can no longer be brought against the Executive as a matter of law.

C.              Notices. Any notice required or permitted hereunder shall be in
writing and shall be sufficiently given if personally delivered, or if sent by
registered or certified mail, postage prepaid, with return receipt requested, or
by a nationally recognized overnight courier addressed: (i) in the case of the
Company to Foamex International Inc., Attention: Deputy General Counsel at the
address of the Company’s headquarters at the time such notice is delivered, or
to such other address and/or to the attention of such other person as the
Company shall designate by written notice to the Executive; and (ii) in the case
of the Executive, to his then current home address as shown on the Company’s
records, or to such other address as the Executive shall designate by written
notice to the Company. Any notice given hereunder shall be deemed to have been
given at the time of receipt thereof by the person to whom such notice is given
(which in the case of registered or certified mail or overnight courier, shall
be the date acknowledgement of delivery is obtained by such service). Any notice
given to Foamex International Inc. by the Executive shall be deemed to be a
notice to the Company for purposes of this Agreement.

 

D.

Benefit of Agreement; Assignment; Beneficiary.

1.   This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns, including, without limitation, any
corporation or person which may acquire all or substantially all of the
Company’s assets or business, or with or into

--------------------------------------------------------------------------------

 

which the Company may be consolidated or merged. This Agreement shall also inure
to the benefit of, and be enforced by, the Executive and his personal or legal
representatives, executors, administrators, successor, heirs, distributes,
devisees and legatees.

2.   No rights or obligations of the Executive hereunder may be assigned or
transferred by the Executive, without the prior written consent of the Company,
except to the extent permitted under any applicable plan, policy, program,
arrangement or other agreement with the Company or its affiliates or by will or
operation of law. No rights or obligations of Foamex International Inc. or
Foamex L.P under this Agreement may be assigned by either entity, without the
prior written consent of the Executive, except that such rights or obligations
may be assigned or transferred pursuant to a merger or consolidation in which
Foamex International Inc. is not the continuing entity or a sale or liquidation
or other disposition of all or substantially all of the assets of Foamex
International Inc.; provided that the assignee or transferee is the successor to
all or substantially all of the assets of Foamex International Inc. and assumes
the liabilities, obligations and duties of Foamex International Inc. and Foamex
L.P. (and, to the extent applicable, their respective subsidiaries and
affiliates) under this Agreement. For the avoidance of doubt, “Company” shall
include any successor entity to Foamex International Inc.; provided however,
upon any Change in Control (as defined in the CIC Agreement), if such successor,
transferee or assignee conducts businesses which were not conducted by the
Company immediately prior to such transaction (“Other Businesses”) references to
the Company and its affiliates or subsidiaries in Section V of this Agreement
shall not include such Other Businesses nor shall any reference to employees,
agents, customers or suppliers include a reference to an employee, agent,
customer or supplier of such successor entity unless such employee, agent,
customer or supplier was also an employee, agent, customer or supplier of the
Company immediately prior to such transaction. Any action taken by Foamex
International Inc. under this Agreement shall be deemed to be an action by the
Company.

3.   If the Executive should die while any amount, benefit or entitlement would
still be payable (or due) to the Executive hereunder, all such amounts, benefits
and entitlements shall be paid or provided in accordance with the terms of this
Agreement to the Executive’s beneficiary, devisee, legatee or other designee, or
if there is no such designee, to the Executive’s estate.

E.              Taxes; Offset. Notwithstanding any other provision of this
Agreement to the contrary, the Company may withhold from all amounts payable
under this Agreement all federal, state or local taxes that are required to be
withheld pursuant to any applicable laws and regulations. The Company may offset
any amounts due and payable by the Executive to the Company against any amounts
the Company owes the Executive hereunder.

F.              Headings. The Section headings herein are for convenience of
reference only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.

G.              Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision or provisions of this Agreement, which shall remain in full
force and effect.

 

H.              Non-Admission. Nothing contained in the Agreement shall be
deemed or construed as an admission of wrongdoing or liability on the part of
the Executive or on the part of the Company.

I.               No Mitigation. The Executive shall not be required to mitigate
damages resulting from his termination of employment.

J.               Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the internal laws of the
Commonwealth of Pennsylvania without reference to the principles of conflict of
laws.

K.              Arbitration. Except for disputes with respect to Section V of
this Agreement, any dispute between the parties hereto respecting the meaning
and intent of this Agreement or any of its terms and provisions (each, a
“Covered Claim”) shall be submitted to arbitration in Philadelphia,
Pennsylvania, in accordance with the Commercial Rules of the American
Arbitration Association then in effect, and the arbitration determination
resulting from any such submission shall be final and binding upon the parties
hereto. Judgment upon any such arbitration award may be entered in any court of
competent jurisdiction.

L.              Section 409A. The parties agree that to the best of their
knowledge the severance pay pursuant to the Foamex L.P. Severance Pay Policy
hereunder complies with Section 409A of the Code and its implementing
regulations or guidance (“Section 409A”). It is the understanding of the parties
that payments and medical and dental insurance coverage made pursuant to the
consulting agreement herein are contemporaneous compensation for (i) the
Executive’s consulting services, and (ii) the Executive’s agreement to enter
into the confidentiality and non-compete covenants described herein. To the
extent that any regulations or guidance issued under Section 409A (after
application of the previous provision of this paragraph) would result in the
Executive being subject to the payment of interest, penalties or any additional
tax under Section 409A, the Company and the Executive agree in good faith to
make amendments to this Agreement as the parties mutually agree, reasonably and
in good faith, are necessary or desirable to avoid the possible imposition of
taxes or penalties under Section 409A, while (i) preserving any affected benefit
or payment to the Executive , and (ii) without materially increasing the cost to
the Company or diminishing the benefit to the Executive.

M.             Counterparts. The Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument. Signatures delivered by
facsimile shall be effective for all purposes.

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
effective as of June 19, 2008.

/s/ Paul A. Haslanger

Paul A. Haslanger

FOAMEX INTERNATIONAL INC.

 

By:

/s/ Michael V. Johnson

 

Name:

Michael V. Johnson

 

Title:

Senior Vice President, Human Resources

FOAMEX L.P.

 

By:

/s/ Michael V. Johnson

 

Name:

Michael V. Johnson

 

Title:

Senior Vice President, Human Resources