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Exhibit 10.27    
    

March
5, 2008 

John
Tattersfield

519 Bay Road

South Easton, MA 02375 

Dear
Rick: 

In
consideration of the award to you on December 21, 2007, of the option to purchase 8,168 shares of common stock of GT Solar International, Inc. ("Company") at $95.86 per share pursuant
to the terms of the Stock Option Award, the Company's amended and restated 2006 Stock Option Plan, the Stock Option Agreement between you and the Company and related agreements, you and the Company
have agreed that the Employment Agreement between you and GT Solar Incorporated, the Company's wholly-owned subsidiary, dated as of August 6, 2007 ("Employment Agreement") shall be amended in
the following respects: paragraph 3 (e) of the Employment Agreement is deleted in its entirety, effective immediately, shall have no further force or effect, and no payments shall be due
to you thereunder. All other provisions of the Employment Agreement shall remain in effect. 

Please
indicate your agreement with the terms of this letter agreement by signing where indicated below and returning a copy of this letter agreement to Edwin Lewis, General Counsel of GT Solar
Incorporated. 

Thank
you. 

Sincerely,

	/s/ Brian Logue
 Brian Logue

Vice President, Human Resources	 	 

I
have read and agree to the terms of the foregoing letter amendment to the Employment Agreement. 

	/s/ John Tattersfield
 John Tattersfield	 	 

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Exhibit 10.27Exhibit 4.20

 

Execution Copy

 

EQUITY COMMITMENT
AGREEMENT

 

April 1, 2008

 

Foamex International Inc.

1000 Columbia Avenue

Linwood, PA  19061

 

Re:          Equity Funding
Commitment

 

Ladies and Gentlemen:

 

We understand that Foamex
International Inc. (the “Company”) proposes to carry out an offering
(the “Rights Offering”) to the Company’s existing common stockholders
(collectively, the “Equityholders”) of rights (the “Rights”) to
purchase additional shares of common stock of the Company and an offering (the “Second Lien Term Loan
Offering”) to the Second Lien Term Loan Lenders (as defined in the Term
Sheet) of rights to purchase additional shares of common stock of the Company
by assigning their Second Lien Term Loans (as defined in the Term Sheet), in
accordance with the terms and conditions described in the term sheet annexed
hereto as Exhibit A (the “Term Sheet”) and the Put Option
Agreements annexed hereto as Exhibit B (the “Put Option
Agreements”).  The Term Sheet and the
Put Option Agreements are hereby incorporated herein in their entirety as if
set forth below in their entirety, and capitalized terms used but not defined
herein have the meanings assigned to them therein.

 

In consideration of the
foregoing, and the representations and warranties set forth in this letter
agreement (the “Equity Commitment Agreement”), and other good and
valuable consideration, the value of which is hereby acknowledged, the Company
and the Significant Equityholders agree as follows:

 

1.             The Significant
Equityholders’ Commitment.

 

Subject to the terms and
conditions set forth in the Term Sheet and the Put Option Agreements, and on
the basis of the representations and warranties herein contained, in exchange
for the Put Option Premiums, each of the Significant Equityholders agrees, severally
and not jointly, to sell to the Company, and the Company agrees to purchase
from the respective Significant Equityholders, the Put Options.

 

2.             Representations
and Warranties of the Company.  The
Company represents and warrants to, and agrees with, the Significant
Equityholders as set forth below.  Each
representation, warranty and agreement set forth in this Section 2 is made
as of the date hereof:

 

(a)           Each of the Company and
its Subsidiaries (as defined below) has been duly organized and is validly
existing as a corporation or other form of entity in good standing under the
laws of its state of organization, 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 or other form of entity 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 such 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, assets, liabilities,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole or on the ability of the Company to
consummate the transactions contemplated by the Definitive Documents (a “Material
Adverse Effect”).  For the purposes
of this Equity Commitment Agreement, a “Subsidiary” of any person means,
with respect to such person, any corporation, partnership, joint venture or
other legal entity of which such person (either alone or through or together
with any other subsidiary) owns, directly or indirectly, more than 50% of the
stock or other equity interests, has the power to elect a majority of the board
of directors or similar governing body, or has the power to direct the business
and policies.

 

(b)           The Company has the
requisite corporate power and authority to enter into, execute, deliver and
perform its obligations under this Equity Commitment Agreement.  Subject to the approval of the Series E
Certificate of Designations by the board of directors of the Company and
subject to the filing of the Series D Certificate of Designations or the Series E
Certificate of Designations, if and as applicable, with the Secretary of State
of the State of Delaware pursuant to Section 103 of the Delaware General
Corporation Law, the Company and its Subsidiaries have taken all necessary
corporate action required for the due authorization, execution, delivery and
performance by each of them of the Definitive Documents, including having
obtained the approval of the boards of directors of the Company and, where
required, such Subsidiaries and the approval of the special committee of the
board of directors of the Company formed in connection with the Rights Offering
and related transactions.

 

(c)           This Equity Commitment
Agreement has been duly and validly executed and delivered by the Company, and
constitutes a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, moratorium, reorganization and similar laws affecting the
rights of creditors generally and the availability of equitable remedies
(regardless of whether such enforceability is considered in a proceeding at
equity or at law).  Each of the other Definitive Documents will be
duly authorized and validly executed and delivered by the Company and will
constitute a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, moratorium, reorganization and similar laws affecting the
rights of creditors generally and the availability of equitable remedies
(regardless of whether such enforceability is considered in a proceeding at
equity or at law).

 

(d)           The Company and its
Subsidiaries have taken all necessary corporate action required for the due
authorization, execution, delivery and performance by each of them of the
Credit Facility Amendments.  Each of the
Credit Facility 

 

2

 

Amendments has been duly authorized and validly executed and delivered
by the Company and its Subsidiaries and constitutes a valid and binding
obligation of the Company and its Subsidiaries enforceable against them in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization and similar laws affecting the rights of
creditors generally and the availability of equitable remedies (regardless of
whether such enforceability is considered in a proceeding at equity or at law).

 

(e)           If and when issued
pursuant to the exercise of the Rights, in accordance with the terms of the Put
Options or otherwise pursuant to the terms of this Equity Commitment Agreement,
the issuance of the Additional Common Stock will be duly and validly authorized
and will be duly and validly issued, fully paid and non-assessable, and free
and clear of all taxes, liens, preemptive rights, rights of first refusal,
subscription and similar rights.

 

(f)            Except for the Rights,
the Put Options, the New Preferred Stock, the Second Lien Term Loan Offering,
the Put Option Premiums and stock options and restricted stock of the Company’s
employees and directors, there are no outstanding subscription rights, options,
warrants, convertible or exchangeable securities or other rights of any
character whatsoever to which the Company is a party relating to issued or
unissued capital stock of the Company, or any commitments of any character
whatsoever relating to issued or unissued capital stock of the Company or
pursuant to which the Company is or may become bound to issue or grant
additional shares of its capital stock or related subscription rights, options,
warrants, convertible or exchangeable securities or other rights, or to grant
preemptive rights.

 

(g)           All the outstanding
shares of capital stock of each Subsidiary of the Company have been duly and
validly authorized and issued and are fully paid and nonassessable, and all
outstanding shares of capital stock of the Company’s Subsidiaries are owned by
the Company either directly or through wholly owned Subsidiaries free and clear
of any taxes, liens, preemptive rights, rights of first refusal, subscription
and similar rights (except for any liens
that have been or may be granted to lenders in accordance with the First Lien
Credit Agreement, the Second Lien Credit Agreement and the Revolving Credit
Agreement), and there are no outstanding options, warrants, convertible
or exchangeable securities or other rights of any character whatsoever to which
any Subsidiary is a party relating to issued or unissued capital stock of such
Subsidiary, or any commitments of any character whatsoever relating to issued
or unissued capital stock of such Subsidiary or pursuant to which such
Subsidiary is or may become bound to issue or grant additional shares of its
capital stock or related subscription rights, options, warrants, convertible or
exchangeable securities or other rights, or to grant preemptive rights.

 

(h)           Subject to obtaining
the Required Approvals (as defined herein), the approval of an amendment to the certificate of incorporation
of the Company by the board of directors and stockholders of the Company to
increase the number of authorized shares of Common Stock of the Company, and
the filing of a related information 

 

3

 

statement with the SEC and the filing of a certificate of amendment
with the Secretary of State of the State of Delaware pursuant to the Delaware
General Corporation Law (the “Required Certificate Amendment”), and the waiver of rights to request incidental
registration pursuant to the Existing Registration Rights Agreement by the
holders named therein in connection with the filing of the Offering
Registration Statements, none of the distribution of the Rights, the
sale, issuance and delivery of Additional Common Stock, the purchase of the Put
Options by the Company, the execution and delivery by the Company of this
Equity Commitment Agreement, the Put Option Agreements or the other Definitive
Documents, the performance of and compliance by the Company or any of its
Subsidiaries with all of the provisions hereof and thereof and the consummation
of the transactions contemplated herein and therein (including compliance by
the Significant Equityholders with their obligations hereunder and thereunder and
including as a result of any change in ownership of the Company) (i) will
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 in the acceleration, termination, modification or
cancellation 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 result in any
violation of the provisions of the certificate of incorporation or by-laws of
the Company, or any of the equivalent organizational documents of any of its
Subsidiaries, or (iii) will result in any violation of, or any termination
or material impairment of any rights under, any statute, license, authorization,
injunction, judgment, order, decree, rule or regulation of any court,
governmental agency or body, or arbitration or similar tribunal having
jurisdiction over the Company or any of its Subsidiaries or any of their
respective properties.

 

(i)            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 respective properties is required for the distribution
of the Rights, the sale, issuance and delivery of Additional Common Stock, the
purchase of the Put Options by the Company, the execution and delivery by the
Company of this Equity Commitment Agreement, the Put Option Agreements or the
other Definitive Documents, the performance of and compliance by the Company or
any of its Subsidiaries with all of the provisions hereof and thereof and the
consummation of the transactions contemplated herein and therein, except the
filing and effectiveness of the Offering Registration Statements and state
securities and blue sky filings and registrations (the “Required Approvals”)
and the obtaining and filing of the Required Certificate Amendment.

 

(j)            The audited
consolidated financial statements of the Company as of and for the year ended December 31,
2006 and filed on April 2, 2007 with the SEC as part of the Company’s
annual report on Form 10-K, and the unaudited consolidated financial
statements of the Company as of and for the three months ended April 1,
2007, the six months ended July 1, 2007 and the nine months ended September 30,
2007 and 

 

4

 

filed with the SEC on May 14, 2007, August 10, 2007 and November 13,
2007, respectively, as part of the Company’s quarterly reports on Form 10-Q,
present fairly in all material respects, in each case together with the related
notes, the financial position of the Company and its consolidated Subsidiaries
at the dates indicated and the statements of operations, stockholders’ equity
and cash flows of the Company and its consolidated Subsidiaries for the periods
specified, except that the unaudited financial statements are subject to normal
and recurring year-end adjustments that are not expected to be material in
amount; such financial statements have been prepared in conformity with
generally accepted accounting principles in the United States, except as
otherwise noted in such financial statements or related notes, applied on a
consistent basis throughout the periods involved and with past practices, and
in conformity with the rules and regulations of the SEC.

 

(k)           Neither the Company nor
any of its Subsidiaries is in violation or default of (i) any of the terms
or provisions of 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, and no event has occurred which, with notice or lapse of time or
both, would constitute such a violation or default, in each case, except as
would not reasonably be expected to have a Material Adverse Effect and except
as will not be cured by the Company’s entry into this Equity Commitment
Agreement (after taking into account the
proceeds available to the Company pursuant to the Equity Cure Letters),
or (ii) any of the provisions of the certificate of incorporation or
by-laws of the Company, or any of the equivalent organizational documents of
any of its Subsidiaries.  Each of the
Company and its Subsidiaries is in compliance in all material respects with all
laws, statutes, ordinances, rules, regulations, orders, judgments and decrees
of any court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their respective properties, and
none of the Company or any of its Subsidiaries has received written notice of
any alleged material violation of any of the foregoing.  Each of the Company and its Subsidiaries
holds all licenses, franchises, permits, consents, registrations, certificates
and other governmental and regulatory permits, authorizations and approvals
required for the operation of the business as presently conducted by it and for
the ownership, lease or operation of its assets, in each case, except as would
not reasonably be expected to have a Material Adverse Effect.

 

(l)            All written
information and other materials concerning the Company and its Subsidiaries
(the “Information”) which has been, or is hereafter, prepared by, or on
behalf of, the Company and delivered to the Significant Equityholders is, or
when delivered will be, when considered as a whole, complete and correct in all
material respects and does not, or will not when delivered, contain any untrue
statement of material fact or omit to state a material fact necessary in order
to make the statements contained therein not misleading in light of the
circumstances under which such statements have been made.  To
the extent that any such Information contains projections, such projections
were prepared in good faith on the basis of (i) assumptions, 

 

5

 

methods and tests which are believed by the Company and its
Subsidiaries to be reasonable and (ii) information believed by the Company
and its Subsidiaries to have been accurate based upon the information available
to the Company and its Subsidiaries at the time such projections were furnished
to the Significant Equityholders.

 

(m)          Each of the Offering
Registration Statements, on the date and time that it becomes effective (the “Effective
Time”), will, and each of the prospectuses relating to the shares of Common
Stock registered thereunder that is first filed pursuant to Rule 424(b) under
the Securities Act of 1933, as amended (the “Securities Act”), after the
Effective Time (the “Prospectuses”), as of its date and on the Closing
Date, will, comply in all material respects with the applicable requirements of
the Securities Act and the rules thereunder; on the Effective Date,
neither of the Offering Registration Statements will contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on its date and on the Closing Date, neither of the
Prospectuses (together with any supplement thereto) will include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.  Any
reference in the Definitive Documents to the Offering Registration Statements
and the Prospectuses shall be deemed to refer to and include the documents
incorporated by reference therein.

 

(n)           The Company agrees
that, unless it has or shall have obtained the prior written consent of the
Significant Equityholders, it has not made and will not make any offer relating
to the Additional Common Stock that would constitute a “free writing prospectus”
(as defined in Rule 405 under the Securities Act) required to be filed by
the Company with the SEC or retained by the Company under Rule 433 under
the Securities Act.

 

(o)           There is no broker, finder or other party that is entitled to receive
from the Company or any of its Subsidiaries any brokerage or finder’s fee or
other fee or commission as a result of any transactions contemplated by the
Definitive Documents, except for Houlihan, Lokey, Howard & Zukin, Inc.
and Banc of America Securities LLC.

 

(p)           Each of the
Company and its Subsidiaries has timely filed or caused to be filed all federal
and other material tax returns and reports required to have been filed by it
and has paid or caused to be paid all material taxes required to have been paid
by it, except taxes that are being contested in good faith by appropriate
proceedings and for which the Company or the applicable Subsidiary has set
aside on its books adequate reserves.  No
material tax liens have been filed and no material claims have been asserted in
writing with respect to any such taxes. 
None of the Company nor any of its Subsidiaries has participated in a “reportable
transaction” within the meaning of Section 1.6011-4(b) of the
Treasury Regulations promulgated under the Internal Revenue Code of 1986, as
amended (the “Code”).

 

(q)           Except as set forth on
the litigation schedule prepared by the Company and attached hereto as Schedule
A (the “Litigation Schedule”), there is no 

 

6

 

material suit, action, claim or legal, administrative, arbitration or
other alternative dispute resolution, proceeding or investigation (a “Proceeding”)
pending or, to the knowledge of the Company, threatened by, against or
involving the Company or any of its Subsidiaries or any of their respective
properties, or, to the knowledge of the Company, no circumstances reasonably
likely to give rise to such Proceeding, including any disputes or
disagreements, whether threatened or actual, with respect to any agreement to
which the Company or any of its Subsidiaries is a party that would be
material.  Neither the Company nor any of
its Subsidiaries is subject to any material judgment, decree, injunction, rule or
order of any governmental entity.

 

(r)            Except as set forth on
the environmental schedule prepared by the Company and attached hereto as Schedule
B (the “Environmental Schedule”):

 

(i)            There
are no pending or, to the knowledge of the Company, threatened material
Environmental, Health or Safety Claims against or affecting the Company or any
of its Subsidiaries, and the Company is not aware of any facts or
circumstances, including without limitation the current or former presence,
Release or threatened Release of or exposure to any Hazardous Materials,
whether or not located on the Premises, which could reasonably be expected to
form the basis for any such material Environmental, Health or Safety Claim.

 

(ii)           To
the knowledge of the Company, no Premises is currently or was formerly used for
the handling, storage, treatment, disposal, manufacture, processing or
generation of Hazardous Materials and no Hazardous Materials currently are or
formerly were present in, on, about or migrating to or from any Premises,
except, in either case, (A) in material compliance with applicable
Environmental, Health or Safety Laws and (B) as would not reasonably be
anticipated to result in material liabilities or obligations to the Company or
its Subsidiaries, including requirements for notification, investigation or
remediation, pursuant to Environmental, Health or Safety Laws.

 

(iii)          Each of the Company and its Subsidiaries
holds all material Environmental Permits necessary to the conduct of its
businesses.

 

(iv)          Each
of the Company and its Subsidiaries has been and is in material compliance with
all applicable Environmental Permits and Environmental, Health or Safety Laws.

 

(v)           No
Premises is a current, or to the knowledge of the Company, a proposed
Environmental Clean-up Site, and the Company has not received any notice that
it has or potentially might have liability respecting an Environmental Clean-up
Site.

 

(vi)          To
the knowledge of the Company, there are no underground storage tanks (active or
abandoned), asbestos or asbestos-containing materials, or polychlorinated
biphenyls located at any Premises in a condition that would 

 

7

 

reasonably be anticipated to result in material liabilities or
obligations to the Company pursuant to Environmental, Health or Safety Laws.

 

(vii)         There have been no material environmental,
health or safety investigations, studies, audits, tests, reviews or other
analyses conducted by, or on behalf of, and which are in the possession of, the
Company or any of its Subsidiaries with respect to any Premises that have not
been delivered to the Significant Equityholders.

 

(viii)        As used herein:

 

(A)          “Environment”
means any surface or subsurface water, groundwater, water vapor, surface or
subsurface land, air (including indoor, workplace and ambient air), fish,
wildlife, microorganisms and all other natural resources.

 

(B)           “Environmental
Clean-up Site” means any location that is listed or proposed for listing on
the National Priorities List, the Comprehensive Environmental Response, Compensation
and Liability Information System or on any similar state list of sites
requiring investigation or cleanup.

 

(C)           “Environmental,
Health or Safety Claim” means any and all administrative or judicial
actions, suits, orders, claims, liens, notices, notices of violations,
investigations, complaints, requests for information, proceedings and other
written communications, whether criminal or civil, pursuant to or relating to
any applicable Environmental, Health or Safety Law by any person (including, but
not limited to, any court, governmental agency or body, private person and
citizens’ group) based upon, alleging, asserting or claiming any actual or
potential (i) violation of or liability under any Environmental, Health or
Safety Law, (ii) violation of any Environmental Permit or (iii) liability
for investigatory costs, cleanup costs, removal costs, remedial costs, response
costs, natural resource damages, damage, property damage, personal injury,
fines or penalties arising out of, based on, resulting from or related to the
presence, Release or threatened Release of or exposure to any Hazardous
Materials at any location, including, but not limited to, any Premises or any
location other than any Premises to which Hazardous Materials or materials
containing Hazardous Materials were sent for handling, storage, treatment or
disposal.

 

(D)          “Environmental,
Health or Safety Laws” means any and all applicable federal, state, local,
municipal and foreign laws, rules, orders, regulations, statutes, ordinances,
codes, common law doctrines, decrees and enforceable requirements of any court
or governmental agency or body regulating, relating to, or imposing liability
or standards of conduct concerning, any Hazardous Material or protection of the
Environment or human or worker health and safety, as now or at any time
hereafter in effect, including, without limitation, the Clean Water Act also
known as the Federal Water Pollution Control Act (“FWPCA”), 33 U.S.C.
§§ 1251 et seq., the Clean Air Act (“CAA”), 42 U.S.C. §§ 7401
et seq., the Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”),
7 U.S.C. §§ 136 et seq., the Surface Mining Control and Reclamation Act (“SMCRA”),
30 U.S.C. §§ 1201 et seq., the Comprehensive Environmental 

 

8

 

Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C.
§§ 9601 et seq., the Superfund Amendment and Reauthorization Act of 1986 (“SARA”),
Public Law 99-499, 100 Stat. 1613, the Emergency Planning and Community Right
to Know Act (“EPCRA”), 42 U. S. C. § § 11001 et seq., the
Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. §§ 6901
et seq., the Occupational Safety and Health Act as amended (“OSHA”), 29
U.S.C. §§ 655 and 657, together, in each case, with any amendment thereto,
and the regulations adopted and the publications promulgated thereunder and all
substitutions thereof.

 

(E)           “Environmental
Permit” means any federal, state, local, provincial, or foreign permits,
licenses, approvals, consents or authorizations required by any court or
governmental agency or body under or in connection with any Environmental,
Health or Safety Law.

 

(F)           “Hazardous Materials”
means any hazardous, toxic or deleterious chemicals, materials, substances or
wastes in any amount or concentration, including without limitation petroleum,
petroleum hydrocarbons or petroleum products, petroleum by-products,
radioactive materials, asbestos or asbestos-containing materials, gasoline,
diesel fuel, pesticides, radon, urea formaldehyde, lead or lead-containing
materials, polychlorinated biphenyls, and any other chemicals, materials,
substances or wastes which are defined as or included in the definition of “hazardous
substances,” “hazardous materials,” “hazardous wastes,” “extremely
hazardous wastes,” “restricted hazardous wastes,” “toxic
substances,” “toxic pollutants,” “pollutants,” “regulated
substances,” “solid wastes” or “contaminants” or words of
similar import, under any Environmental, Health or Safety Law.

 

(G)           “Premises” means
any real property currently or formerly owned, leased or operated by the
Company or any of its Subsidiaries, including, but not limited to, the
Environment, buildings and structures thereat.

 

(H)          “Release” means
any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, disposing, or other release of any
Hazardous Materials, including, without limitation, the migration of any
Hazardous Materials, the abandonment or discard of barrels, containers, tanks
or other receptacles containing or previously containing any Hazardous
Materials, or any “release”, “emission” or “discharge” as those terms are
defined in any applicable Environmental, Health or Safety Laws.

 

(s)           Except in each case as
would not have a Material Adverse Effect: 
(i) With respect to each Company Benefit Plan (as defined
below):  (A) if intended to qualify
under Section 401(a), 401(k) or 403(a) of the Code or under any
law or regulation of any foreign jurisdiction or regulatory agency, such plan
so qualifies, its trusts (if any) are exempt from taxation under Section 501(a) of
the Code (or the comparable provisions of any law or regulation of any foreign
jurisdiction or regulatory agency) and the consummation of the transactions
contemplated by the Definitive Documents will not 

 

9

 

adversely affect such qualification or exemption; (B) it has been
operated and administered in material compliance with its terms and all
applicable laws and regulations (including but not limited to the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), the Code
and any relevant foreign laws and regulations); (C) except as set forth on
Schedule A hereto, there are no pending or threatened claims against, by
or on behalf of any Company Benefit Plans or the assets, fiduciaries or
administrators thereof (other than routine claims for benefits); (D) no
breaches of fiduciary duty under which the Company or a fiduciary could
reasonably be expected to incur a material liability have occurred; (E) no
non-exempt prohibited transaction within the meaning of Section 406 of
ERISA or Section 4975 of the Code has occurred; (F) no lien imposed
under the Code, ERISA or any foreign law exists; and (G) all
contributions, premiums and expenses to or in respect of such Company Benefit
Plan have been timely paid in full or, to the extent not yet due, have been
adequately accrued on the Company’s consolidated financial statements.

 

(ii)           With respect to each “employee
pension benefit plan” (within the meaning of Section 3(2) of ERISA)
as to which either the Company or any Subsidiary may incur any liability under,
or which is subject to, Section 302 or Title IV of ERISA or Section 412
of the Code: (i) no such plan is a “multiemployer plan” (within the
meaning of Section 3(37) of ERISA) or a “multiple employer plan” (within
the meaning of Section 413(c) of the Code); (ii) no such plan
has been terminated so as to result, directly or indirectly, in any material
liability, contingent or otherwise, of either the Company or any Subsidiary
under Title IV of ERISA; (iii) no complete or partial withdrawal from such
plan has been made by the Company or any Subsidiary of the Company, or by any
other person, so as to result in any material liability to the Company or any
Subsidiary, whether such liability is contingent or otherwise; (iv) no
proceeding has been initiated by any person (including the Pension Benefit
Guaranty Corporation (the “PBGC”))
to terminate any such plan or to appoint a trustee for any such plan; (v) no
condition or event currently exists or currently is expected to occur that
could result, directly or indirectly, in any material liability of the Company
or any Subsidiary under Title IV of ERISA, whether to the PBGC or otherwise, on
account of the termination of any such plan; (vi) if any such plan were to
be terminated as of the date hereof or if any person were to withdraw from such
plan, neither the Company nor any Subsidiary of the Company would incur,
directly or indirectly, any material liability under Title IV of ERISA; (vii) no
“reportable event” (as defined in Section 4043 of ERISA) has occurred with
respect to any such plan, nor has notice of any such event or similar notice to
any foreign regulatory agency been required to be filed for any Company Benefit
Plan within the past 12 months nor will any such notice be required to be filed
as a result of the transactions contemplated by this Agreement; (ix) no
such plan has incurred any “accumulated funding deficiency” (as defined in Section 302
of ERISA and section 412 of the Code, respectively), whether or not waived, and
neither the Company nor any of its Subsidiaries has provided, or is required to
provide, security to any Company Benefit Plan pursuant to Section 401(a)(29)
of the Code; and (x) the transactions contemplated by the Definitive
Documents will not result in any event described in Section 4062(e) of
ERISA.

 

10

 

(iii)          Neither the execution
and delivery of this Equity Commitment Agreement, nor the consummation of the
transactions contemplated by the Definitive Documents, either alone or in
combination with another event (whether contingent or otherwise) will (i) entitle
any current or former employee, consultant (except for Houlihan, Lokey, Howard & Zukin, Inc. and
Banc of America Securities LLC) or director of the
Company or any of its Subsidiaries or any group of such employees, consultants
or directors to any payment; (ii) increase the amount of compensation or
benefits due to any such employee, consultant or director; (iii) accelerate
the vesting, funding or time of payment of any compensation, equity award or
other benefit; (iv) result in any “parachute payment” under Section 280G
of the Code (whether or not such payment is considered to be reasonable
compensation for services rendered); or (v) cause any compensation to fail
to be deductible under Section 162(m) of the Code, or any other
provision of the Code or any similar foreign law or regulation.

 

(iv)          Except as set forth on Schedule
C hereto, neither the Company nor any of its Subsidiaries is a party to any
collective bargaining agreements, and there are no labor unions or other
organizations representing, purporting to represent or attempting to represent,
any employee of the Company or any of its Subsidiaries.  Neither the Company nor any of its
Subsidiaries has any knowledge of any strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of the
Company or any of its Subsidiaries.

 

(v)           As used herein, “Company
Benefit Plan” means each employment, consulting, severance, termination,
retirement, profit sharing, bonus, incentive or deferred compensation,
retention or change in control plan, program, arrangement, agreement or
commitment, or bonus, pension, stock option, restricted stock or other
equity-based, profit sharing, savings, life, health, disability, accident,
medical, insurance, vacation, other welfare fringe benefit or other employee
compensation or benefit plan, program, arrangement, agreement, fund or
commitment, including any “employee benefit plan” as defined in Section 3(3) of
ERISA (“Benefit Plans”) providing benefits to any current or former
employee, consultant or director of the Company or any of its Subsidiaries or
with respect to which the Company or any of its Subsidiaries may otherwise have
any liability.

 

(t)            Each of the Company
and its Subsidiaries is, and assuming consummation of the transactions
contemplated by the Definitive Documents will be, Solvent.  As used in this paragraph, the term “Solvent”
means, with respect to a particular date, that on such date (i) the
present fair market value (or present fair saleable value) of the assets of
each of the Company and its Subsidiaries is not less than the total amount required
to pay the liabilities of each of the Company and its Subsidiaries on its
respective total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured; (ii) each of the Company
and its Subsidiaries is able to realize upon its assets and pay its respective
debts and other liabilities, contingent obligations and commitments as they
mature and become due in the normal course of business; (iii) assuming
consummation of the transactions contemplated by the Definitive Documents, each
of the Company and its Subsidiaries is not incurring debts or liabilities
beyond its respective ability to pay as such debts and liabilities mature; (iv) each
of the 

 

11

 

Company and its Subsidiaries is not engaged in any business or
transaction, and does not propose to engage in any business or transaction, for
which its respective property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
the Company or such Subsidiary is engaged; and (v) neither the Company nor
any of its Subsidiaries is a defendant in any civil action that could result in
a judgment that the Company or such Subsidiary is or would become unable to
satisfy.

 

(u)           The Company and each of
its Subsidiaries maintain a system 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.

 

(v)           There is and has been
no failure on the part of the Company and, to the Company’s knowledge, any of
the Company’s directors or officers, in their capacities as such, to comply in
all material respects with any provision of the Sarbanes-Oxley Act of 2002 and
the rules and regulations promulgated in connection therewith, including Section 402
related to loans and Sections 302 and 906 related to certifications.

 

(w)          The Company is not and,
after giving effect to the sale of the Additional Common Stock and the
application of the proceeds thereof as described in the Prospectuses, will not
be an “investment company” as defined in the Investment Company Act of 1940, as
amended.

 

(x)            The Company is not,
and after giving effect to the sale of the Additional Common Stock and the
application of the proceeds thereof as described in the Prospectuses, will not
be a “passive foreign investment
company” as defined in the Code.

 

(y)           None of the Company or
any of its Subsidiaries has, directly or through any agent, sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of, any “security”
(as defined in the Securities Act) that is or will be integrated with the sale
of the shares of Additional Common Stock in a manner that would require
registration under the Securities Act of the sale of the shares of Additional
Common Stock to the Significant Equityholders.

 

(z)            There are no business
relationships or related-party transactions involving the Company or any
Subsidiary or any other person required to be described in the Prospectuses
that will not be described as required.

 

3.             Representations
and Warranties of the Significant Equityholders.  Solely with respect to itself, each of the
Significant Equityholders, severally and not 

 

12

 

jointly, represents and warrants to, and agrees with, the Company as
set forth below.  Each representation,
warranty and agreement made in this Section 3 is made as of the date
hereof:

 

(a)           The Significant
Equityholder has been duly organized and is validly existing and in good
standing under the laws of its respective jurisdiction of organization.

 

(b)           The Significant
Equityholder has the requisite corporate, limited liability company or limited
partnership power and authority to enter into, execute and deliver this Equity
Commitment Agreement and the Put Option Agreements and to perform its
obligations hereunder and thereunder and has taken all necessary action
required for the due authorization, execution, delivery and performance by it
of this Equity Commitment Agreement and the Put Option Agreements.

 

(c)           This Equity Commitment
Agreement has been duly and validly executed and delivered by the Significant
Equityholder, and constitutes its valid and binding obligation, enforceable
against it in accordance with its terms. 
The Put Option Agreement to which such Significant Equityholder is a
party will be duly authorized and validly executed and delivered by the
Significant Equityholder and will constitute a valid and binding obligation of
the Significant Equityholder enforceable against the Significant Equityholder
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization and similar laws affecting the rights of
creditors generally and the availability of equitable remedies (regardless of
whether such enforceability is considered in a proceeding at equity or at law).

 

(d)           Any Additional Common
Stock that may be acquired by the Significant Equityholder is solely for its
own account, for investment and not with a view toward resale or other
distribution within the meaning of the Securities Act; provided, however,
that the disposition of the Significant Equityholder’s respective property will
at all times be under its control and the Significant Equityholders and the Company
shall enter into a registration rights agreement, as further described in the
Term Sheet.  No Additional Common Stock
will be offered for sale, sold or otherwise transferred by the Significant
Equityholder 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)           The Significant
Equityholder has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of its investment
in any Additional Common Stock that may be acquired by it.  The Significant Equityholder is an “accredited
investor” within the meaning of Rule 501(a) under the Securities Act
or a “qualified institutional buyer” within the meaning of Rule 144A under
the Securities Act.  The Significant
Equityholder understands and is able to bear any economic risks associated with
such investment.

 

13

 

(f)            The Significant Equityholder
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 Significant Equityholder for breach thereof or the making of
misleading statements or the omission of material facts in connection with the
transactions contemplated herein.

 

(g)           Subject to obtaining the Required
Approvals, compliance by the Significant Equityholder with its obligations
hereunder and the Put Option Agreements will not, other than such conflicts,
violations or defaults that would not have a material adverse effect on the
ability of the Significant Equityholder to consummate the transactions
contemplated hereunder, (i) 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 in the
acceleration, termination, modification or cancellation of, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Significant Equityholder is a party or by which the Significant
Equityholder is bound or to which any of the property or assets of the
Significant Equityholder are subject, (ii) result in any violation of the
provisions of the organizational documents of the Significant Equityholder or (iii) result
in any violation of any statute, license, authorization, injunction, judgment,
order, decree, rule or regulation of any court or governmental agency or
body having jurisdiction over the Significant Equityholder or any of its
respective properties.

 

(h)           No consent, approval, authorization,
order, registration or qualification of or with any court or governmental
agency or body having jurisdiction over the Significant Equityholder or any of
its properties is required for the compliance by the Significant Equityholder
with all of the provisions hereof and of the Put Option Agreements or the
consummation of the transactions contemplated herein or therein, except the
Required Approvals and any other consent, approval, authorization, order,
registration or qualification that would not have a material adverse effect on
the Significant Equityholder’s ability to consummate the transactions
contemplated hereunder.

 

(i)            The Significant Equityholder has
available to it the funds required to fulfill in full its obligations hereunder
and under the Put Option Agreements.

 

4.             Fees and Expenses.  Subject to the provisos below, so long as
this Equity Commitment Agreement shall continue to be in full force and effect
and has not been terminated or otherwise expired by its terms, and the
Significant Equityholders are not otherwise in material breach of any material
obligation hereunder and under the Put Option Agreements, the Company shall be
obligated to pay the reasonable, documented, out-of-pocket fees and expenses
incurred since September 1, 2007 through the earlier of such termination
or expiration date and the Closing Date, for the Professionals (as defined in
the Term Sheet) in connection with the negotiation, preparation, execution and 

 

14

 

delivery of the Definitive Documents, the Equity Cure Letters and the
Indication of Interest Letters, subject to an aggregate monthly cap of $200,000
for reasonable and documented legal fees and expenses (with the excess in any
given month capable of being carried forward and applied in a subsequent
month(s)) (such fees and
expenses, the “Expenses”); provided, however, that any
Expenses that remain unpaid (including any Expenses that exceeded the aggregate
monthly cap in any month) as of the earlier of such termination or expiration
date and the Closing Date, as the case may be, shall be paid by the Company as
provided in the following paragraph (but the period to object to the
reasonableness of the amounts requested under the following paragraph shall be
thirty calendar days after such termination or expiration date or the Closing
Date, as applicable); provided, further, that the Company shall
not be obligated to pay total Expenses for Cadwalader, Wickersham &
Taft LLP, as legal advisor to Chilton, and Willkie Farr & Gallagher
LLP, as legal advisor to Sigma, in excess of $20,000 each.

 

All invoices for which
reimbursement is sought from the Company shall be sent via email and regular
mail to the Company.  Subject to the
preceding paragraph, the Company shall have ten (10) calendar days from
the delivery of such invoices to object to the reasonableness of the amounts
requested.  If no objections are raised
during the objection period, the Company shall make such payments
promptly.  If an objection is raised and
cannot be resolved consensually, the parties shall resolve such objection in
accordance with the terms hereof.

 

5.             Indemnification and Damages.  The Company agrees to indemnify and hold
harmless the Significant Equityholders and their respective affiliates, and
each of their respective directors, officers, partners, members, employees,
agents, counsel, financial advisors and assignees (including affiliates of such assignees), in their capacities as
such (each an “Indemnified Party”), from and against any and all losses,
claims, damages, liabilities or other expenses to which such Indemnified Party
may become subject from third-party claims (including claims by other
stockholders), insofar as such losses, claims, damages, liabilities (or actions
or other proceedings commenced or threatened in respect thereof) or other
expenses arise out of or in any way relate to or result from this Equity
Commitment Agreement or any other Definitive Document, and the Company agrees
to reimburse (on an as-incurred monthly basis) each Indemnified Party for any
reasonable legal or other reasonable expenses incurred in connection with investigating,
defending or participating in any such loss, claim, damage, liability or action
or other proceeding (whether or not such Indemnified Party is a party to any
action or proceeding out of which indemnified expenses arise), but excluding
therefrom all expenses, losses, claims, damages and liabilities of the
Significant Equityholders that are finally judicially determined (not subject
to appeal) to have resulted solely from (i) the gross negligence or
willful misconduct of such Indemnified Party or (ii) statements or
omissions in a registration statement, free writing prospectus or prospectus or
any amendment or supplement thereto made in reliance upon or in conformity with
the information relating to the Significant Equityholders or their affiliates
furnished to the Company in writing by or on behalf of the Significant
Equityholders expressly for use in a registration statement, free writing
prospectus or prospectus or any amendment or 

 

15

 

supplement thereto.  In the event
of any litigation or dispute involving this Equity Commitment Agreement or any
other Definitive Document, subject to the foregoing, the Significant
Equityholders shall not be responsible or liable to the Company for any
special, indirect, consequential, incidental or punitive damages.  The obligations of the Company under this
paragraph (the “Indemnification Obligations”) shall remain effective
whether or not any of the transactions contemplated in this Equity Commitment
Agreement are consummated or any other Definitive Documents are executed and
notwithstanding any termination of this Equity Commitment Agreement.

 

6.             Additional Covenants of the Company.  The Company agrees with the Significant
Equityholders as set forth below:

 

(a)           Any press release, public statement
or other document that relates or refers to the Equity Commitment Agreement or
any other Definitive Document or any transactions contemplated hereby or
thereby shall be provided to counsel to the Significant Equityholders in draft
form for review prior to its being made public. 
Except as otherwise
required by law, regulation or judicial proceeding, no such materials
may be made public without the prior written consent of each of the Significant
Equityholders (through their counsel), which consent shall not be unreasonably
withheld or delayed.

 

(b)           The Company will use its reasonable
best efforts to consummate the transactions contemplated by the Definitive Documents.

 

(c)           The Company shall provide to the
Significant Equityholders and their advisors and representatives reasonable
access during normal business hours to all books, records, documents,
properties and personnel of the Company and its Subsidiaries.  In addition, the Company shall promptly
provide written notification to counsel to the Significant Equityholders of any
claim or litigation, arbitration or administrative proceeding that is
threatened or filed against the Company from the date hereof until the earlier
of the (i) Closing Date and (ii) termination or expiration of this
Equity Commitment Agreement.  The Company
shall promptly provide written notice to counsel to the Significant
Equityholders of any change in any of the information contained in the
representations or warranties, including, without limitation, related
schedules, made by the Company herein and shall promptly furnish any
information that a Significant Equityholder may reasonably request in relation
to such changes.

 

7.             Additional Covenants of
the Significant Equityholders. 
Solely with respect to itself, each Significant Equityholder agrees,
severally and not jointly, with the Company:

 

(a)           To use reasonable best efforts
to consummate the transactions contemplated by the Definitive Documents.

 

(b)           Not to exercise the rights to request
incidental registration pursuant to the Existing Registration Rights Agreement
in connection with the filing of the Offering Registration Statements.

 

16

 

8.             Acknowledgements and Agreements of the Company.  Notwithstanding anything herein to the
contrary, the Company acknowledges and agrees that (a) the transactions
contemplated hereby are arm’s-length commercial transactions between the
Company, on the one hand, and each of the Significant Equityholders, on the
other, (b) in connection therewith and with the processes leading to such
transactions, each Significant Equityholder is acting solely as a principal and
not the agent or fiduciary of the Company, its Subsidiaries or their estates, (c) no
Significant Equityholder has assumed an advisory or fiduciary responsibility in
favor of the Company, its Subsidiaries or their estates with respect to such
transactions or the processes leading thereto (irrespective of whether such
Significant Equityholder has advised or is currently advising the Company or
its Subsidiaries on other matters or whether any officer or employee of such
Significant Equityholder is a member of the Company’s or any of its
Subsidiaries’ board of directors) and (d) the Company and its Subsidiaries
have consulted their own legal and financial advisors to the extent they have
deemed appropriate.  The Company and its
Subsidiaries agree that they will not claim that any Significant Equityholder
has rendered advisory services of any nature or respect, or owes a fiduciary or
similar duty to the Company, its Subsidiaries or their estates, in connection
with such transactions or the processes leading thereto.

 

9.             Survival of Representations and Warranties.  All representations and warranties made in
this Equity Commitment Agreement will survive the execution and delivery of
this Equity Commitment Agreement and any termination thereof, but will
terminate and be of no further force and effect on March 31, 2009.

 

10.           Obligations of Significant
Equityholders.  Notwithstanding
anything else to the contrary set forth in this Equity Commitment Agreement
(including the Term Sheet), the Put Option Agreements or the other Definitive
Documents, the obligations of the Significant Equityholders under this Equity
Commitment Agreement (including the Term Sheet), the Put Option Agreements and
the other Definitive Documents or in respect of the transactions contemplated
by any of the foregoing, shall be several, not joint and several.

 

11.           Termination.  This Equity Commitment Agreement shall
terminate on the earlier of (i) the occurrence of any of the Termination
Events in accordance with the terms set forth in the Term Sheet and (ii) March 31,
2009, and be of no further force and effect; provided, however,
that all representations and warranties made in this Equity Commitment
Agreement will survive as set forth in Section 9 and the provisions of
Sections 5 and 15 and the right of the Significant Equityholders to receive any
premiums, fees or expenses to which they are entitled in accordance with the
terms hereof will survive the termination of this Equity Commitment Agreement.

 

12.           Treatment of Options.  The parties hereto agree to treat the Put Options as options for U.S.
federal income tax purposes.

 

13.           Miscellaneous.  This Equity Commitment Agreement, including
the attached Term Sheet and Put Option Agreements, (a) supersedes all
prior discussions, 

 

17

 

agreements, commitments, arrangements, negotiations or understandings,
whether oral or written, of the Significant Equityholders and the Company with
respect hereto and thereto (except for the Equity Cure Letters); (b) shall
be governed by the laws of the State of New York, without giving effect to the
conflict of laws provisions thereof; (c) shall not be assignable by the
Company without the prior written consent of each of the Significant
Equityholders (and any purported assignment without such consent shall be null
and void); (d) shall not be assignable by the Significant Equityholders
except to such of their designees as may be reasonably acceptable to the Company; (e) is
intended to be solely for the benefit of the parties hereto and the Indemnified
Parties and is not intended to confer any benefits upon, or create any rights
in favor of, any person other than the parties hereto and the Indemnified
Parties; and (f) may not be amended or waived except by an instrument in
writing signed by the Company and each of the Significant Equityholders.

 

14.           Incorporation.  The failure to include any provision of the
Term Sheet or the Put Option Agreements in this Equity Commitment Agreement
shall not affect the enforceability of such provision.  The terms and conditions set forth in the
Term Sheets and the Put Option Agreements are incorporated in their entirety as
if set forth in this Equity Commitment Agreement.

 

15.           Jurisdiction.  (a)  To the fullest extent permitted by
applicable law, each party hereto (i) agrees that any claim, action or
proceeding by such party seeking any relief whatsoever arising out of, or in
connection with, this Equity Commitment Agreement and the Put Option Agreements
or the transactions contemplated hereby and thereby shall be brought only in
the United States District Court for the Southern District of New York and in
any New York State court located in the Borough of Manhattan and not in any
other State or Federal court in the United States of America or any court in
any other country, (ii) agrees to submit to the exclusive jurisdiction of
such courts located in the State of New York for purposes of all legal
proceedings arising out of, or in connection with, this Equity Commitment
Agreement and the Put Option Agreements or the transactions contemplated hereby
and thereby and  (iii) irrevocably
waives any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum.

 

(b)           The
parties hereto hereby irrevocably waive, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Equity Commitment Agreement and the Put
Option Agreements and the transactions contemplated hereby and thereby.

 

16.           Counterparts.  This Equity Commitment Agreement may be
executed in any number of counterparts, each of which shall be an original, and
all of which, when taken together, shall constitute one agreement.  Delivery of an executed signature page of
this Equity Commitment Agreement by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof.

 

18

 

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

 

18.           Notices.  Any notice, request, demand, instruction or
other document to be given or served hereunder or under any document or instrument
executed pursuant thereto shall be in writing and shall be delivered personally
by a receipt requested therefor, by electronic mail (with a return receipt
obtained), by facsimile transmission (with a delivery confirmation obtained) or
sent by a recognized overnight courier service or by the United States
registered or certified mail, return receipt requested, postage prepaid and
addressed to the parties at their respective addresses set forth below, and the
same shall be effective (a) upon receipt or refusal if delivered
personally or by facsimile or electronic mail transmission; (b) one (1) business
day after deposit with such an overnight courier service or (c) two (2) business
days after deposit in the mails if mailed. 
A party may change its address for receipt of notices by service of a
notice of change in accordance herewith. 
All notices by electronic mail and by facsimile transmission shall be
subsequently confirmed by U.S. certified or registered mail.

 

	
  If to the Significant Equityholders:

  	
   

  	
  D. E. Shaw Laminar Portfolios, L.L.C.

  
	
   

  	
   

  	
  c/o D. E. Shaw & Co., L.P.

  
	
   

  	
   

  	
  120 West 45th Street, 39th Floor

  
	
   

  	
   

  	
  New York, New York 10036

  
	
   

  	
   

  	
  Attention: Maureen Knoblauch

  
	
   

  	
   

  	
  Telephone No.: (212) 478-0628

  
	
   

  	
   

  	
  Facsimile No.: (212) 845-1628

  
	
   

  	
   

  	
  E-mail: Maureen.Knoblauch@deshaw.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Sigma Capital Associates, LLC

  
	
   

  	
   

  	
  540 Madison Avenue

  
	
   

  	
   

  	
  New York, New York 10022

  
	
   

  	
   

  	
  Attention: Peter Nussbaum

  
	
   

  	
   

  	
  Fascimile: (203)
  614-2393

  
	
   

  	
   

  	
  Telephone No.: (203) 614-2094

  
	
   

  	
   

  	
  E-mail: petern@saccapital.com

  

 

	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
  John Reilly

  
	
   

  	
   

  	
  Facsimile No.: (203) 890-6678

  
	
   

  	
   

  	
  Telephone No.: (212) 756-1568

  
	
   

  	
   

  	
  E-mail: johnre@sigmacapny.com

  

 

19

 

	
   

  	
   

  	
   

  	
   

  	
  CGDO, LLC (as agent on behalf of Chilton

  
	
   

  	
   

  	
   

  	
   

  	
  Global Distressed Opportunities Master

  
	
   

  	
   

  	
   

  	
   

  	
  Fund, L.P.) and Q Funding III, L.P.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  c/o Chilton
  Capital Management, LLC

  
	
   

  	
   

  	
   

  	
   

  	
  1266 East Main Street, 7th Floor

  
	
   

  	
   

  	
   

  	
   

  	
  Stamford, Connecticut 06902

  
	
   

  	
   

  	
   

  	
   

  	
  Attention: Montes Piard

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile No.: (203) 352-4078

  
	
   

  	
   

  	
   

  	
   

  	
  Phone: (203) 352-4077

  
	
   

  	
   

  	
   

  	
   

  	
  E-mail: mpiard@chiltoninc.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
   

  	
  Cleary Gottlieb
  Steen & Hamilton LLP

  
	
   

  	
   

  	
   

  	
   

  	
  One Liberty
  Plaza

  
	
   

  	
   

  	
   

  	
   

  	
  New York, New
  York 10006

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:
  Richard J. Cooper

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile No.:
  (212) 225-3999

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone No.:
  (212) 225-2000

  
	
   

  	
   

  	
   

  	
   

  	
  E-mail: rcooper@cgsh.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  If to the
  Company:

  	
   

  	
  Foamex
  International Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  1000 Columbia
  Avenue

  
	
   

  	
   

  	
   

  	
   

  	
  Linwood,
  Pennsylvania 19061

  
	
   

  	
   

  	
   

  	
   

  	
  Attention: Andrew R.
  Prusky, Esq.

  
	
   

  	
   

  	
   

  	
   

  	
  Vice President and Deputy General Counsel

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile No.: (610)
  859-3024

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone No.:
  (610) 859-3000

  
	
   

  	
   

  	
   

  	
   

  	
  E-mail: aprusky@foamex.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
   

  	
  Paul, Weiss,
  Rifkind, Wharton & Garrison 

  
	
   

  	
   

  	
   

  	
   

  	
  LLP

  
	
   

  	
   

  	
   

  	
   

  	
  1285 Avenue of
  the Americas

  
	
   

  	
   

  	
   

  	
   

  	
  New York, New
  York 10019

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:
  Judith R. Thoyer, Esq.

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile No.: (212)
  492-0002

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone No.:
  (212) 373-3002

  
	
   

  	
   

  	
   

  	
   

  	
  E-mail: jthoyer@paulweiss.com

  
						

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

20

 

If the foregoing
correctly sets forth our agreement, please indicate your acceptance of the
terms hereof and of the Term Sheet by returning to us executed counterparts
hereof.

 

	
  Very truly yours,

  	
   

  
	
   

  	
   

  
	
  D. E. SHAW LAMINAR
  PORTFOLIOS, L.L.C.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Daniel
  Posner

  	
   

  
	
   

  	
  Name: Daniel Posner

  	
   

  
	
   

  	
  Title: Authorized
  Signatory

  	
   

  
	
   

  	
   

  
	
  SIGMA CAPITAL ASSOCIATES,
  LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Peter A.
  Nussbaum

  	
   

  
	
   

  	
  Name: Peter A. Nussbaum

  	
   

  
	
   

  	
  Title: Authorized
  Signatory

  	
   

  
	
   

  	
   

  
	
  CGDO, LLC as agent and on
  behalf of Chilton

  Global Distressed Opportunities Master Fund, LP

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  Chilton Investment
  Company, LLC

  	
   

  
	
   

  	
  Managing Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ James
  Steinthal

  	
   

  
	
   

  	
  Name: James Steinthal

  	
   

  
	
   

  	
  Title: Managing Director

  	
   

  
	
   

  	
   

  
	
  Q FUNDING III, L.P.

  	
   

  
	
   

  	
   

  
	
  By: Prufrock Onshore,
  L.P., its general partner

  	
   

  
	
   

  	
   

  
	
  By: J Alfred Onshore, LLC,
  its general partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Noel
  Nesser

  	
   

  
	
   

  	
  Name: Noel Nesser

  	
   

  
	
   

  	
  Title: CFO &
  Treasurer

  	
   

  
				

 

 

	
  Agreed and accepted on
  this

         1st day of April, 2008:

  	
   

  
	
   

  	
   

  
	
  FOAMEX INTERNATIONAL INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ John G.
  Johnson, Jr.

  	
   

  
	
   

  	
  Name: John G.
  Johnson, Jr.

  	
   

  
	
   

  	
  Title: President and Chief
  Executive Officer

  	
   

  

 

 

EXHIBIT
A

 

Term
Sheet

 

This Term Sheet (the “Term Sheet”) is part of an equity
commitment agreement, dated April 1, 2008 (the “Equity Commitment
Agreement”), addressed to Foamex International Inc. (the “Company”)
by the Significant Equityholders (as defined below) and is subject to the terms
and conditions of the Equity Commitment Agreement.  Capitalized terms used herein shall have the
meanings set forth in the Equity Commitment Agreement unless otherwise defined
herein.

 

	
  ISSUER:

  	
   

  	
  Foamex International Inc.

  
	
   

  	
   

  	
   

  
	
  SIGNIFICANT EQUITYHOLDERS:

  	
   

  	
  D. E. Shaw Laminar
  Portfolios, L.L.C. (“D. E. Shaw”), Sigma Capital Associates, LLC (“Sigma”),
  CGDO, LLC (as agent and on behalf of Chilton Global Distressed Opportunities
  Master Fund, L.P.) (“CGDO”) and Q Funding III, L.P. (“Q Funding III”
  and, together with CGDO, “Chilton”), or their respective designees
  that are reasonably acceptable to the Company (collectively, the “Significant Equityholders”).

  
	
   

  	
   

  	
   

  
	
  PUT OPTIONS:

  	
   

  	
  Each of the Significant Equityholders and the
  Company will enter into put option agreements on the same date as the Equity
  Commitment Agreement (the “Put Option Agreements”) pursuant to which each of the Significant Equityholders will
  sell, and the Company will purchase, put options (the “Put Options”)
  under which the Company, subject to the Put Option Conditions (as defined
  below), may require each of the Significant Equityholders to purchase a
  number of shares of Additional Common Stock (as defined below) up to such
  Significant Equityholder’s Firm Commitment Amount (as defined below) to the
  extent such Significant Equityholder did not exercise its Rights (as defined
  below) in the Rights Offering (as defined below) or participate in the Second
  Lien Term Loan Offering (as defined below) for a price per share equal to the
  Additional Common Stock Purchase Price (as defined below). 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The terms and conditions
  of the Put Options shall be more fully set out in the Put Option Agreements.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  As consideration for the Put Options, the Company
  will pay the Significant Equityholders an aggregate amount of $8,625,000 (the “Put Option Premiums”), which will be in the form of shares of
  Common Stock (as defined below) based on the Additional Common Stock Purchase
  Price, to be allocated among the Significant Equityholders in accordance with
  the terms of the Put Option Agreements and payable on the earliest of
  (i) the occurrence of a Termination Event (as defined below),
  (ii) the Closing Date (as defined below) and (iii) March 31,
  2009; provided that the Put Option Premium to which any Significant
  Equityholder is entitled shall be reduced by the amount of any premium
  that has been paid to such Significant Equityholder pursuant to the Equity
  Cure Letter entered into by such Significant Equityholder with the Company.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Put Options shall expire on the earlier of
  (i) seven business days following the Expiration Time (as defined below)
  and (ii) March 31, 2009

  

 

 

 

	
   

  	
   

  	
  (the “Put Option Expiration Date”), unless
  terminated as provided herein. For the avoidance of doubt, the obligations
  under the Put Option Agreements shall not terminate until all required
  funding has occurred in accordance with the terms thereof. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To the extent that the Company exercises its rights
  under the Equity Cure Letters prior to the Expiration Time and does not
  receive gross cash proceeds of at least $15.0 million as a result, each of D.
  E. Shaw and Sigma will exercise a sufficient number of Rights it receives in
  the Rights Offering to ensure that the Company receives Net Cash Offering
  Proceeds (as defined in the Credit Facility Amendment relating to the First
  Lien Credit Agreement) as a result of such exercise in an amount equal to its
  respective pro rata proportion (based on their relative respective Firm
  Commitment Amounts) of the difference between $15.0 million and the amount
  actually raised by the Company pursuant to such exercise of the Company’s
  rights under the Equity Cure Letters; provided that if the Rights Offering
  does not close, then each of D. E. Shaw and Sigma instead shall purchase for
  cash shares of Additional Common Stock from the Company in an amount equal to
  such difference (based on the Additional Common Stock Purchase Price), with
  such purchase closing on the same date as the relevant Special Second Lien
  Term Loan Offering (as defined below) (the “Minimum Cash Consideration
  Commitment”).

  
	
   

  	
   

  	
   

  
	
  CUTBACKS:

  	
   

  	
  Notwithstanding the foregoing, to the extent that
  Sigma or Chilton (or its respective assignee, if such assignee is an
  affiliate), as applicable, is entitled to shares of Additional Common Stock
  pursuant to the exercise of Rights or a Put Option, participation in the
  Second Lien Term Loan Offering, in connection with the payment of Put Option
  Premium or in connection with the payment of the Minimum Cash Consideration
  Commitment, such shares of Common Stock issuable pursuant to the exercise of
  Rights or a Put Option, participation in the Second Lien Term Loan Offering
  or payment of the Minimum Cash Consideration Commitment shall not be issued
  to Sigma or Chilton (or its respective assignee, if such assignee is an
  affiliate), as applicable, to the extent (but only to the extent) such
  issuance would result in the total beneficial ownership by Sigma or Chilton
  (as applicable), together with its respective affiliates, being equal to or
  in excess of the Applicable Percentage (as defined below) of the total
  outstanding shares of Common Stock. In such event, the Firm Commitment Amount
  of Sigma or Chilton (or its respective assignee, if such assignee is an
  affiliate) (as applicable) shall be reduced so that such exercise of Rights
  or a Put Option, participation in the Second Lien Term Loan Offering or
  payment of the Minimum Cash Consideration Commitment, after taking into
  account the shares of Additional Common Stock received or to be received in
  connection with the payment of the relevant Put Option Premium, would not
  result in the beneficial ownership of Sigma or Chilton, as applicable,
  together with its respective affiliates, equaling or 

  

 

 

2

 

 

	
   

  	
   

  	
  exceeding the Applicable Percentage.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The application of the foregoing provisions is
  subject to the application of the reductions set forth below under “NOL
  Limitations” first being taken into account to the extent applicable.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To the extent Sigma’s Minimum Cash Consideration
  Commitment is greater than zero and any reduction is required in the case of
  Sigma pursuant to the provisions set forth in “Cutbacks,” it shall be applied
  first toward any shares of Additional Common Stock that Sigma would otherwise
  be acquiring using Second Lien Term Loans and then toward any shares of
  Additional Common Stock that Sigma would otherwise be required to acquire for
  cash pursuant to the Minimum Cash Consideration Commitment. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To the extent the issuance of shares of Additional
  Common Stock to Sigma or Chilton is reduced below their respective Firm
  Commitment Amounts pursuant to the provisions set forth above under
  “Cutbacks,” the Firm Commitment Amount of D. E. Shaw shall be increased
  to the same extent. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For purposes of the provisions under “Cutbacks,” the
  term “beneficial ownership” shall be deemed to have the meaning accorded to
  such term pursuant to Section 13 of the United States Securities
  Exchange Act of 1934, as amended, and the rules and regulations
  promulgated thereunder.

  
	
   

  	
   

  	
   

  
	
  EQUITY RIGHTS OFFERING:

  	
   

  	
  A rights offering (the “Rights Offering”)
  shall be made in an amount equal to $115.0 million, with each Equityholder
  (as defined below) being offered a Right to purchase up to a specified number
  of shares of Additional Common Stock for each share of existing Common Stock
  owned by such holder on the Record Date (as defined below), in exchange for a
  cash payment equal to the Additional Common Stock Purchase Price. Such
  specified number shall be equal to (i) $115.0 million divided by $0.65,
  divided by (ii) the number of outstanding shares of Common Stock on the
  Record Date. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Rights Offering shall expire at 5:00 p.m.,
  New York City time, on the date that is 30 days from the Rights Offering
  Commencement Date (as defined below), or on such other date to be determined
  jointly by the Company and the Significant Equityholders (the “Expiration
  Time”). 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Each Equityholder will receive such number of Rights
  that, if exercised by such holder, would allow such holder to maintain its
  equity ownership percentage in the Company as of the Record Date, other than
  due to dilution as a result of (a) the issuance of any shares of Common
  Stock or options to purchase Common Stock under the Management Incentive Plan
  (as defined below); (b) the exercise of any
  employee stock options for Common Stock outstanding on and as of the Record Date; (c) the issuance of Additional Common Stock in payment of Put
  Option Premiums; (d) the issuance of Additional Common Stock 

  

 

 

3

 

 

	
   

  	
   

  	
  pursuant to the Second Lien Term Loan Offering; (e) the issuance
  of Common Stock upon conversion of Series D Preferred Stock (as defined
  below); and (f) the other transactions contemplated hereby.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Rights shall not be transferable and shall be
  exercisable only by the Equityholder of record on the Record Date. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Company will appoint BNY Mellon Shareowner
  Services as rights agent and also will appoint a subscription agent to
  facilitate the Rights Offering and the Second Lien Term Loan Offering,
  respectively. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fractional shares shall not be issued and no
  compensation shall be paid in respect of fractional shares. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Unexercised Rights will expire without compensation
  at the Expiration Time.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Shares of Additional Common Stock issued in
  connection with the Rights Offering and as a result of the exercise, if any,
  of the Put Options shall be issued on the Closing Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Any participation by Equityholders in the Rights
  Offering is subject to the reductions set forth under “Cutbacks” above and
  “NOL Limitations” below.

  
	
   

  	
   

  	
   

  
	
  SECOND LIEN TERM LOAN OFFERING:

  	
   

  	
  The Company shall offer the Second Lien Term Loan
  Lenders (as defined below) shares of Additional Common Stock at the
  Additional Common Stock Purchase Price, with the purchase price of such
  Additional Common Stock subscribed for being satisfied by an assignment of all or a portion of the principal amount of outstanding Second Lien Term
  Loans at par, on a dollar-for-dollar basis, to the Company (the “Second
  Lien Term Loan Offering”). The Second Lien Term Loan Offering shall
  commence on the Rights Offering Commencement Date, expire at the Expiration
  Time and close on the Closing Date, and shall be subject to the Rights
  Offering also closing prior to the closing of such Second Lien Term Loan
  Offering or concurrently therewith. On the next Interest Payment Date (as
  defined in the Second Lien Credit Agreement) to occur after the Closing Date
  (provided that the Company shall cause Interest Periods (as defined in the
  Second Lien Credit Agreement) to be selected such that the next Interest
  Payment Date will occur no later than one month after the Closing Date), the
  accrued and unpaid interest on Second Lien Term Loans assigned pursuant to
  the Second Lien Term Loan Offering up to, but not including, the Closing Date
  shall be paid in cash. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Any participation by the Second Lien Term Loan
  Lenders in the Second Lien Term Loan Offering is subject to the reductions
  set forth under “Cutbacks” above and “NOL Limitations” below; provided, however, that any such reductions pursuant to the
  provisions set forth under “NOL Limitations” shall be applied pro rata among
  all Second Lien Term Loan Lenders participating in the Second Lien Term Loan
  Offering based on 

  

 

 

4

 

 

	
   

  	
   

  	
  their respective principal amounts of Second Lien
  Term Loans submitted for assignment unless such Second Lien Term Loan Lender
  otherwise agrees to a greater reduction with respect to itself only.

  
	
   

  	
   

  	
   

  
	
  EARLY PARTICIPATION SHARES:

  	
   

  	
  In both the Rights Offering and the Second Lien Term
  Loan Offering, the Company shall issue additional shares of Additional Common
  Stock (“Early Participation Shares”) to holders of Rights and holders
  of Second Lien Term Loans (in each case other than Significant Equityholders)
  that irrevocably exercise their Rights or irrevocably submit their Second
  Lien Term Loans for participation, respectively, within the first seven days
  that the Rights Offering and the Second Lien Term Loan Offering are open,
  respectively. The number of such Early Participation Shares to be issued
  shall be equal to 2% of the shares of Additional Common Stock being acquired
  by each such holder pursuant to the exercise of such Rights in the Rights
  Offering or the submission of such Second Lien Term Loans in the Second Lien
  Term Loan Offering during such period (provided that no fractional shares
  shall be issued and no compensation shall be paid in respect of fractional
  shares). Notwithstanding the foregoing, after consultation with the
  Significant Equityholders, the Company may increase the number of Early
  Participation Shares to which such holders are entitled (provided that the
  Company shall not increase the number of such Early Participation Shares
  issued to any holder to more than 5% of the shares of Additional Common Stock
  being acquired pursuant to the exercise of such Rights in the Rights Offering
  or the submission of such Second Lien Term Loans in the Second Lien Term Loan
  Offering by such holder), increase the length of the period during the Rights
  Offering and the Second Lien Term Loan Offering during which holders may be
  entitled to such shares or otherwise alter the terms and conditions relating
  to the issuance of the Early Participation Shares in favor of the holders. To
  the extent that any such increases or alterations are made, they shall apply
  retroactively such that all holders entitled to Early Participation Shares
  are entitled to such shares on the same terms and conditions.

  
	
   

  	
   

  	
   

  
	
  NOL LIMITATIONS:

  	
   

  	
  Notwithstanding any other provision herein to the
  contrary: 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i) neither the Rights of any Equityholder nor
  the Put Options granted by any Significant Equityholder, in each case who is,
  or is part of a group of persons that is, not a Five Percent Stockholder as
  of the date hereof, shall be exercisable, to the extent (but only to the
  extent) such exercise, after taking into account the shares of Additional
  Common Stock acquired by such Equityholder or Significant Equityholder
  pursuant to the Second Lien Term Loan Offering (including as Early
  Participation Shares) and in connection with the payment of Put Option
  Premium, would result in the percentage stock ownership of such person or group
  of persons exceeding 4.9% for purposes of Section 382 of the Internal
  Revenue Code of 1986, as 

  

 

 

5

 

 

	
   

  	
   

  	
   

  	
  amended (the “Code”); and 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (ii) the shares of Additional Common Stock
  shall not be issued to the Second Lien Term Loan Lenders pursuant to the
  Second Lien Term Loan Offering, to the extent (but only to the extent) such
  exercise or issuance, after taking into account the shares of Additional
  Common Stock acquired in the Rights Offering (including as Early
  Participation Shares) or by Significant Equityholders in connection with the
  payment of Put Option Premiums, would result in the Company undergoing a
  cumulative “owner shift,” within the meaning of Section 382 of the Code
  (an “Owner Shift”), in excess of 49.5%; provided, however,
  that the foregoing limitation set forth in this clause (ii) shall not
  apply to the extent that it would cause the Rights Offering and the Second
  Lien Term Loan Offering to result in gross proceeds to the Company of less
  than $135.0 million (including, for the avoidance of doubt, the principal
  amount of outstanding Second Lien Term Loans assigned to the Company in the
  Second Lien Term Loan Offering). 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To the extent the issuance of shares of Additional
  Common Stock to Significant Equityholders is reduced pursuant to foregoing
  clauses (i) or (ii), the Firm Commitment Amount of the relevant
  Significant Equityholder shall be reduced accordingly; provided, however,
  that to the extent the issuance of shares of Additional Common Stock to Sigma
  or Chilton, as applicable, is reduced pursuant to clause (i) above, the
  Firm Commitment Amount of D. E. Shaw shall be increased to the same extent.

  
	
   

  	
   

  	
   

  
	
  SEC REGISTRATION:

  	
   

  	
  The Company shall file a registration statement (the
  “Rights Offering Registration Statement”) with the SEC (as defined
  below) under the Securities Act of 1933, as amended (the “Securities Act”),
  registering the offer and sale of the Rights, if necessary, the Additional
  Common Stock underlying the Rights and the Early Participation Shares that
  may be issued in the Rights Offering. The Company shall also file a
  registration statement (the “Second Lien Term Loan Offering Registration
  Statement” and, together with the Rights Offering Registration Statement,
  the “Offering Registration Statements”) with the SEC under the
  Securities Act registering the offer and sale of the Additional Common Stock
  issuable pursuant to the Second Lien Term Loan Offering and the Early
  Participation Shares that may be issued in the Second Lien Term Loan
  Offering. The Company shall provide the Significant Equityholders and their
  counsel with drafts of the Offering Registration Statements for their review,
  and shall reflect therein the reasonable comments made by the Significant
  Equityholders and their counsel.

  
	
   

  	
   

  	
   

  
	
  USES OF PROCEEDS:

  	
   

  	
  The Company shall utilize the cash proceeds from the sale of Additional Common Stock to
  reduce the debt levels of the Company and for general 

  

 

 

6

 

 

	
   

  	
   

  	
  corporate purposes.

  
	
   

  	
   

  	
   

  
	
  REGISTRATION RIGHTS:

  	
   

  	
  On or prior to the Closing Date, the Company shall
  enter into a registration rights agreement with each of the Significant
  Equityholders in form and substance reasonably satisfactory to each of the
  Significant Equityholders and in terms substantially similar to the Existing
  Registration Rights Agreement (as defined below).

  
	
   

  	
   

  	
   

  
	
  TERMINATION EVENTS:

  	
   

  	
  “Termination Event,” wherever used herein,
  means the occurrence of a Bankruptcy Event (as defined below) with respect to
  the Company or any of its Subsidiaries.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  All obligations of the Significant Equityholders
  pursuant to the Put Options shall terminate upon the occurrence of any
  Termination Event.

  
	
   

  	
   

  	
   

  
	
  CONDITIONS PRECEDENT TO PUT OPTION OBLIGATIONS:

  	
   

  	
  The obligations of the Significant Equityholders
  under the Put Options shall be subject to satisfaction of each of the
  following conditions precedent (the “Put Option Conditions”):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)   all of the Company’s
  representations and warranties set forth in the Equity Commitment Agreement
  shall have been true and correct as of the date of execution of the Equity
  Commitment Agreement.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)   Foamex L.P. shall be in
  compliance with its obligation (determined as of the time notice of exercise
  of the Put Options is delivered) to deliver financial statements under
  Section 6.01(a) and (b) under the First Lien Credit Agreement
  and the Second Lien Credit Agreement and Section 5.1(a) and
  (b) of the Revolving Credit Agreement;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)   the Offering Registration
  Statements shall have become effective and no stop order suspending the
  effectiveness of either such registration statement or any notice objecting
  to the use of either such registration statement shall have been issued and
  no proceeding for such purpose shall have been threatened or instituted by
  the SEC or any state securities commission or authority and all of the Rights
  shall have been issued in the Rights Offering, and the Expiration Time shall
  have passed; provided, however, that the Company may exercise
  the Put Options (i) notwithstanding the failure of the foregoing
  conditions in this clause (c) to be satisfied if the Company determines
  in good faith, after consultation with the Significant Equityholders, that
  the Rights Offering cannot be closed by the Closing Date, as set forth in the
  prospectus for the Rights Offering, in which case the Closing Date for
  purposes of the exercise of a Put Option shall be three business days
  following delivery of an Exercise Notice to the relevant Significant
  Equityholder; and (ii) notwithstanding the satisfaction of all or any of
  the foregoing conditions in this clause (c) if the Closing Date shall
  not occur prior the end of any fiscal quarter of the Company that falls
  during the 

  

 

 

7

 

 

	
   

  	
   

  	
   

  	
  Exercise Period (as defined in the Put Option
  Agreements) and in respect of which quarter the Company reasonably expects
  the conditions set forth in Put Option Condition (d)(i) and
  (d)(ii) below will be satisfied, in which case the last business day of
  such fiscal quarter shall be deemed to be the “Closing Date” solely for
  purposes of the exercise of the Put Options and the Company shall deliver any
  Exercise Notices to the relevant Significant Equityholders no later than two
  business days prior to such Closing Date;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (d)   to the extent one or more Put
  Options is being exercised and the Rights Offering shall not have closed, the
  Company shall (i) reasonably expect that (without taking the exercise of
  the Put Options into account) it will not satisfy the Leverage Ratio
  Covenants with respect to the fiscal quarter in, or with respect to, which
  the Company exercises such Put Options and the Company shall reasonably
  expect being able to satisfy the Leverage Ratio Covenants in, or with respect
  to, such fiscal quarter, and the Company shall set forth in reasonable detail
  the basis for this expectation (including, without limitation, either using
  any available equity cure cash proceeds or by repayment or cancellation of
  indebtedness) in an Officer’s Certificate (as defined below) provided to the
  Significant Equityholders prior to such exercise; and (ii) the funds
  then available under the Equity Cure Letters shall be (x) exhausted,
  (y) not available or (z) not sufficient to cure the anticipated
  default referred to in the preceding clause (i);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (e)   solely
  with respect to the put options associated with the Rights Offering and the
  Second Lien Term Loan Offering, to the extent the Rights Offering and the
  Second Lien Term Loan Offering are commenced, all necessary governmental,
  regulatory and third-party approvals, waivers and/or consents in connection
  with the Rights Offering and Second Lien Term Loan Offering, respectively,
  shall have been obtained and remain in full force and effect;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (f)   the
  Company shall have paid in full the Expenses (as defined in the Equity
  Commitment Agreement) then due for the Professionals (as defined below)
  pursuant to the Equity Commitment Agreement;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (g)   subject to the Minimum Cash
  Consideration Commitment of each Significant Equityholder, the Company shall
  permit each of the Significant Equityholders to satisfy all of its payment
  obligations pursuant to the Put Options by assigning the
  principal amount of outstanding Second Lien Term Loans at par on a
  dollar-for-dollar basis and shall carry out the Second Lien Term Loan
  Offering or, to the extent required by the Credit Agreements or otherwise,
  allow all other holders of outstanding Second Lien Term Loans to assign such
  loans to the Company or one of its Subsidiaries on the same terms and
  conditions as the Significant Equityholders (a “Special Second Lien Term
  Loan Offering”);

  

 

 

8

 

 

	
   

  	
   

  	
   

  	
  (h)   there shall not be any Event of
  Default (as defined in the respective Credit Agreements) under the Credit
  Agreements that cannot be cured (as estimated in good faith by the Company)
  after taking into account the proceeds resulting from the exercise of the Put
  Options and the proceeds from the issuance of New Preferred Stock pursuant to
  the Equity Cure Letters;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i)   the exercise of the Put Options would not result in a violation of
  law, regulation, judicial, regulatory or governmental order or any similar
  legal or regulatory restriction; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (j)   after taking into account the proceeds available to the Company
  pursuant to the Equity Cure Letters and the entry into the Equity Commitment
  Agreement, the Company shall have cured any default (or event that would
  constitute a default with or without notice or lapse of time, or both) existing on the date of the Equity Commitment
  Agreement, or any event or condition existing on such date that would result
  in the acceleration, termination, modification or cancellation of, or
  the creation of any lien under, any indenture, mortgage, deed of trust, loan
  agreement (including the Credit Agreements) 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.

  
	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS:

  	
   

  	
  “Additional Common Stock” means the Common
  Stock to be issued to (i) Equityholders in connection with Rights that
  are exercised as part of the Rights Offering and as Early Participation
  Shares in the Rights Offering, (ii) Significant Equityholders, pursuant
  to the Put Options, if exercised, (iii) Significant Equityholders as payment of the Put Option
  Premiums, (iv) Significant Equityholders in connection with the payment
  of Minimum Cash Consideration and (v) Second Lien Term Loan Lenders
  pursuant to the Second Lien Term Loan Offering, including as Early
  Participation Shares.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Additional Common Stock Purchase Price”
  means $0.65 per share of Additional Common Stock. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Applicable Percentage” means (i) in the case
  of Sigma, 10%, and (ii) in the case of Chilton, 5%;  provided that, by written notice to the Company, Sigma or
  Chilton, as applicable, may from time to time increase the Applicable
  Percentage to any other percentage specified in such notice; provided,
  further, that any such increase will not be effective until the
  sixty-first (61st) day after such notice is delivered to the Company. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Bankruptcy Event” means (i) the entry
  by a court of (A) a decree or order for relief in respect of the Company
  or any of its Subsidiaries in an involuntary case or proceeding under any
  applicable federal, state or 

  

 

 

9

 

 

	
   

  	
   

  	
  other bankruptcy, insolvency, reorganization or
  other similar law or (B) a decree or order adjudging the Company or any
  of its Subsidiaries a bankrupt or insolvent, or approving as properly filed a
  petition seeking reorganization, arrangement, adjustment or composition of or
  in respect of the Company or any of its Subsidiaries under any applicable
  federal, state or other law, or appointing a custodian, receiver, liquidator,
  assignee, trustee, sequestrator or other similar official of the Company or
  any of its Subsidiaries or of any substantial part of its property, or
  ordering the winding up or liquidation of its affairs; or (ii) the
  commencement by the Company or any of its Subsidiaries of a voluntary case or
  proceeding under any applicable federal, state or other bankruptcy,
  insolvency, reorganization or other similar law or of any other case or
  proceeding to be adjudicated a bankrupt or insolvent, or the consent by the
  Company or any of its Subsidiaries to the entry of a decree or order for
  relief in respect of the Company or any of its Subsidiaries in an involuntary
  case or proceeding under any applicable federal, state or other bankruptcy,
  insolvency, reorganization or other similar law or to the commencement of any
  bankruptcy or insolvency case or proceeding against the Company or any of its
  Subsidiaries, or the filing by the Company or any of its Subsidiaries of a
  petition or answer or consent seeking reorganization or relief under any
  applicable federal, state or other law, or the consent by the Company or any
  of its Subsidiaries to the filing of such petition or to the appointment of
  or taking possession by a custodian, receiver, liquidator, assignee, trustee,
  sequestrator or similar official of the Company or any of its Subsidiaries or
  of any substantial part of the Company’s or any of its Subsidiaries’
  property, or the making by the Company or any of its Subsidiaries of an
  assignment for the benefit of creditors, or the admission by the Company or
  any of its Subsidiaries in writing of its or their inability to pay its or
  their debts generally as they become due, or the taking of corporate action
  by the Company or any of its Subsidiaries in furtherance of any such action. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “business day” means a day on which banks are
  not required or authorized to close in New York City. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Closing Date” means the date and time that
  Additional Common Stock is delivered pursuant to the exercise of Rights in
  the Rights Offering, and which shall be ten business days following the
  Expiration Time unless otherwise agreed by the Company and the Significant
  Equityholders. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Common Stock” means common stock, par value
  $0.01, of the Company. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Credit Agreements” means the First Lien
  Credit Agreement, the Second Lien Credit Agreement and the Revolving Credit
  Agreement. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Credit Facility Amendments” means the required amendments to the Credit
  Agreements and the consent from the lender parties thereto to 

  

 

 

10

 

 

	
   

  	
   

  	
  allow for implementation of the Rights Offering and
  transactions related thereto, as set forth in the Definitive Documents,
  including as set forth above under “Second
  Lien Term Loan Offering.”  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Definitive Documents” means the Equity
  Commitment Agreement, the Term Sheet, the Put Option Agreements, the Offering
  Registration Statements and any and all other documentation in connection
  with the transactions contemplated hereby and thereby. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Equity Cure Letters” means the letters
  entered into between the Company and each of D. E. Shaw, Sigma and
  Goldman, Sachs & Co. 

  
	
   

  	
   

  	
  (“Goldman Sachs”) on February 13, 2007 in connection
  with the potential cure of certain defaults under the Credit Agreements. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Equityholder” means a holder of the existing
  Common Stock as of the Record Date and includes the Significant
  Equityholders. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Existing Registration Rights Agreement”
  means the registration rights agreement, dated as of February 12, 2007,
  among the Company, D. E. Shaw, Goldman Sachs, Sigma, Par IV Master Fund, Ltd.
  and Sunrise Partners Limited Partnership.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Firm Commitment Amounts” means (i) in
  the case of D. E. Shaw, $80.0 million; (ii) in the case of Sigma, $12.5 million; and (iii) in the
  case of Chilton, $5.5
  million from CGDO and $2.0 million from Q Funding III, subject to
  adjustment as provided under “Cutbacks” and “NOL Limitations.” 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “First Lien Credit Agreement” means the first
  lien term credit agreement, dated as of February 12, 2007, among Foamex
  L.P., as Borrower, the Company, as Parent Guarantor, Bank of America, N.A.,
  as Administrative Agent and Collateral Agent, and the lender parties thereto,
  as amended or modified from time to time. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Five Percent Stockholder” means any person
  or group of persons that, at any time during the three-year period ending on
  the date hereof, has owned 5% or more of the outstanding Common Stock. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Indication of Interest Letters” means
  letters signed by certain of the Significant Equityholders in
  November 2007 indicating interest in purchasing the New Preferred Stock.
  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Leverage Ratio Covenants” means the
  financial covenants of Foamex L.P. and the Company under
  Section 7.12(a) of the First Lien Credit Agreement and the Second
  Lien Credit Agreement. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Management Incentive Plan” means the Foamex
  International Inc. 2007 Management Incentive Plan. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “New Preferred Stock” means any Series D
  Preferred Stock or Series E Preferred Stock of the Company issued
  pursuant to the Equity Cure Letters. 

  

 

 

11

 

 

	
   

  	
   

  	
  “Officer’s Certificate” means a certificate
  executed by a Responsible Officer (as defined below) in his or her official
  (and not individual) capacity. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Professionals” means Cleary Gottlieb
  Steen & Hamilton LLP and Skadden, Arps, Slate, Meagher &
  Flom LLP, as legal advisors to the Significant Equityholders, Cadwalader,
  Wickersham & Taft LLP, as legal advisor to Chilton, and Willkie
  Farr & Gallagher LLP, as legal advisor to Sigma. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Record Date” means a date prior to the
  Rights Offering Commencement Date on which the rights are granted to Equityholders
  of record on such date, which date shall be selected by the Company. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Responsible Officer” means the chief
  executive officer, president, chief operating officer, chief financial
  officer, treasurer or assistant treasurer of the Company or any other officer
  having substantially the same authority and responsibility. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Revolving Credit Agreement” means the
  Revolving Credit Agreement, dated as of February 12, 2007, by and among
  Foamex L.P., as Borrower, the Company, as Parent Guarantor, Bank of America,
  N.A., as Administrative Agent and Collateral Agent, and the lender parties
  thereto, as amended or modified from time to time.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Right” means the right to purchase
  Additional Common Stock pursuant to the Rights Offering as contemplated
  herein. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Rights Offering Commencement Date” means a
  date, after the SEC declares the Offering Registration Statements effective,
  on which the Rights Offering shall commence and the Rights shall become
  exercisable, which date shall be selected by the Company. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “SEC” means the United States Securities and
  Exchange Commission. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Second Lien Credit Agreement” means the
  second lien term credit agreement, dated as of February 12, 2007, among
  Foamex L.P., as Borrower, the Company, as Parent Guarantor, Bank of America,
  N.A., as Administrative Agent and Collateral Agent, and the lender parties
  thereto, as amended or modified from time to time. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Second Lien Term Loan Lenders” means the
  Lenders (as defined in the Second Lien Credit Agreement) of the Second Lien
  Term Loans. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Second Lien Term Loans” means the senior
  secured second lien term loans outstanding under
  the Second Lien Credit Agreement. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Series D Preferred Stock” means the
  Series D Preferred Stock of the Company with the terms and conditions
  set forth in the certificate of designation attached to the Equity Cure
  Letters. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Series E Preferred Stock” means the
  Series E Preferred Stock of the Company with the terms and conditions
  set forth in the certificate of designation attached to the Equity Cure
  Letters.

  

 

 

12

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