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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-3 FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER THE TRUST INDENTURE ACT OF 1939 Momentive Performance Materials Inc. (Name of applicant) (For co-registrants/subsidiary guarantors, please see Item 1 hereto) 260 Hudson River Road Waterford, New York 12188 (Address of principal executive offices) SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED TITLE OF CLASS AMOUNT Second-Priority Senior Secured Notes due 2022 $257.6 million approximate aggregate principal amount (1) (1) As described in Item 2 herein, subject to acceptance of and pursuant to the Plan described herein and certain other conditions, the notes described herein will be issued in consideration for the cancellation of all amounts payable in respect of the issuer’s existing 10% Senior Secured Notes due 2020. The $257.6 million amount listed as the approximate aggregate principal amount above represents the estimated total outstanding principal amount of, plus accrued and unpaid interest on, the 10% Senior Secured Notes due 2020 as of August 4, 2014. This amount will be increased such that the actual aggregate principal amount of the notes described herein will reflect all amounts that may be payable in respect of the 10% Senior Secured Notes due 2020 as of the Effective Date of the Plan, including additional accrued interest and any make-whole or other amounts that may be payable. Approximate date of proposed public offering: On, or as soon as practicable following the effective date under the Joint Plan of Reorganization of Momentive Performance Materials Inc. and its Debtor Affiliates under Chapter 11 of the Bankruptcy Code Name and address of agent for service: Momentive Performance Materials Inc. 260 Hudson River Road Waterford, New York 12188 Facsimile: (614) 225-4127 Attention: Douglas A. Johns With a Copy to: Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, NY 10019 Facsimile: (212) 728-8111 Attention: Matthew Feldman Cristopher Greer The Applicant hereby amends this application for qualification on such date or dates as may be necessary to delay its effectiveness until (i) the 20th day after the filing of an amendment which specifically states that it shall supersede this application for qualification, or (ii) such date as the Securities and Exchange Commission, acting pursuant to section 307(c) of the Trust Indenture Act of 1939, may determine upon the written request of the Applicant. GENERAL 1. General information. Furnish the following as to the applicant (a) form of organization and (b) state or other sovereign power under the laws of which organized . Applicant Momentive Performance Materials Inc. (the “Company”) Momentive Performance Materials Worldwide Inc. (1) Momentive Performance Materials USA Inc. (1) Juniper Bond Holdings I LLC Juniper Bond Holdings II LLC Form of Organization Corporation Corporation Corporation Limited Liability Company Jurisdiction of Organization Delaware Delaware Delaware Delaware Limited Liability Company Delaware Juniper Bond Holdings III LLC Limited Liability Company Delaware Juniper Bond Holdings IV LLC Limited Liability Company Delaware Corporation Delaware Momentive Performance Materials Quartz, Inc. MPM Silicones, LLC Limited Liability Company New York Corporation Delaware Corporation Delaware Momentive Performance Materials South America Inc. Momentive Performance Materials China SPV Inc. (1) This entity is anticipated to be converted into a limited liability company at the Effective Date. Except for the Company, the foregoing entities and any other entities that will act as a guarantor under the Indenture (as defined below) are referred to herein collectively as the “Guarantors”. The Company and the Guarantors are referred to herein as the “Applicants”. 2. Securities Act exemption applicable. State briefly the facts relied upon by the applicant as a basis for the claim that registration of the indenture securities under the Securities Act of 1933 is not required. On April 13, 2014 (the “Petition Date”), the Applicants filed voluntary petitions for reorganization under Chapter 11 of title 11 (“ Chapter 11 ”) of the U.S. Bankruptcy Code (the “ Code ”) in the U.S. Bankruptcy Court for the Southern District of New York, White Plains (the “ Court ”) with respect to a financial restructuring of the Company and each of its direct and indirect subsidiaries (the “ Restructuring ”). On June 23, 2014, the Applicants filed with the Court the Joint Plan of Reorganization for Momentive Performance Materials Inc. and its Affiliated Debtors (as amended or supplemented from time to time, the “ Plan ”), which is attached hereto as Exhibit T3E-1, and the Disclosure Statement for the Plan (as amended or supplemented from time to time, the “ Disclosure Statement ”), which is attached hereto as Exhibit T3E-2. Under Chapter 11 of the Code, certain claims against the Company in existence before the filing of the petitions for relief under the federal bankruptcy laws were stayed while the Company continued business operations as a debtor-in-possession. Subject to acceptance of and pursuant to the Plan, the Company will issue, and the Guarantors will guarantee, First-Priority Senior Secured Notes due 2021 (the “ Notes ”) under an indenture, to be in substantially the form filed as Exhibit T3C (the “ Indenture ”). If certain terms and conditions are met, including the acceptance of the Plan, the Notes will be issued in consideration for the cancellation of the then outstanding 10% Senior Secured Notes due 2020 (the “ Old Notes ”) totaling approximately $257.6 million, which included accrued interest as of August 4, 2014. Subject to acceptance of and pursuant to the Plan described herein and certain other conditions, the Notes will be issued in consideration for the cancellation of all amounts payable in respect of the Company’s Old Notes. The $257.6 million amount listed as the approximate aggregate principal amount above represents the estimated total outstanding principal amount of, plus accrued and unpaid interest on, the Old Notes as of August 4, 2014. This 1 amount will be increased such that the actual aggregate principal amount of the notes described herein will reflect all amounts that may be payable in respect of the Old Notes as of the Effective Date of the Plan, including additional accrued interest and any make-whole or other amounts that may be payable. The Applicants believe that the issuance of the Notes is exempt from the registration requirements of the Securities Act of 1933, as amended (the “ Securities Act ”), and state securities and “blue sky” laws pursuant to Section 1145(a)(1) of the Bankruptcy Code. Generally, Section 1145(a)(1) of the Bankruptcy Code exempts the issuance of securities from the registration requirements of the Securities Act and equivalent state securities and “blue sky” laws if the following conditions are satisfied: (i) the securities are issued by a debtor, an affiliate participating in a joint plan of reorganization with the debtor, or a successor of the debtor under a plan of reorganization, (ii) the recipient of the securities holds a claim against, an interest in, or a claim for an administrative expense against, the debtor, and (iii) the securities are issued entirely in exchange for the recipient’s claim against or interest in the debtor or are issued principally in such exchange and partly for cash or property. The Applicants believe that the issuance of the Notes as contemplated by the Plan satisfies the aforementioned requirements and, therefore, such issuance will be exempt from the registration requirements referred to above. AFFILIATIONS 3. Affiliates. Furnish a list or diagram of all affiliates of the applicant and indicate the respective percentages of voting securities or other bases of control. (a) The following describes the Company’s current, wholly-owned direct, or wholly-owned indirect, subsidiaries and joint ventures: Name of Entity Record Owner Ownership MPM Escrow LLC Momentive Performance Materials Inc. 100% MPM Finance Escrow Corp. MPM Escrow LLC 100% Momentive Performance Materials Worldwide Inc. (2) Momentive Performance Materials Inc. 100% Momentive Performance Materials USA Inc. (2) Momentive Performance Materials Inc. 100% Juniper Bond Holdings I LLC Momentive Performance Materials Inc. 100% Juniper Bond Holdings II LLC Momentive Performance Materials Inc. 100% Juniper Bond Holdings III LLC Momentive Performance Materials Inc. 100% Juniper Bond Holdings IV LLC Momentive Performance Materials Inc. 100% Momentive Performance Materials Quartz, Inc. Momentive Performance Materials USA Inc. 100% MPM Silicones, LLC Momentive Performance Materials USA Inc. 100% Momentive Performance Materials South America Inc. Momentive Performance Materials USA Inc. 100% Momentive Performance Materials China SPV Inc. Momentive Performance Materials Inc. 100% MPM AR LLC Momentive Performance Materials USA Inc. 100% Momentive Performance Materials Industria de Silicones Ltda Momentive Performance Materials Worldwide Inc. 99.9999% (3) Momentive Performance Materials Nova Scotia ULC Momentive Performance Materials Worldwide Inc. 100% Momentive Performance Materials S. de R.L. de C.V. Momentive Performance Materials Worldwide Inc. 99.9999% (3) Momentive Performance Materials Shanghai Co Ltd Nautilus Pacific Two Pte Ltd; TA Holding Pte Ltd 51%, 49% 2 Name of Entity Record Owner Ownership Momentive Performance Materials (Nantong) Co Ltd Nautilus Pacific Two Pte Ltd; TA Holding Pte Ltd 51%, 49% Wuxi Momentive Performance Materials Co Ltd Nautilus Pacific Four Pte Ltd 100% Momentive Performance Materials Hong Kong Ltd Nautilus Pacific Two Pte Ltd 100% Momentive Performance Materials Japan LLC Momentive Performance Materials Worldwide Inc. 100% Ohta Kako LLC Momentive Performance Materials Japan LLC 100% Momentive Performance Materials Korea Co Ltd Momentive Performance Materials Asia Pacific Pte Ltd 100% Momentive Performance Materials Pte Ltd Momentive Performance Materials Worldwide Inc. 100% Momentive Services S. de R.L. de C.V. Momentive Performance Materials Worldwide Inc. 99.9999% (3) Momentive Performance Materials Ltd. Momentive Performance Materials GmbH 100% Momentive Performance Materials Commercial Services GmbH Momentive Performance Materials GmbH 100% Momentive Performance Materials Commercial Services GmbH; Momentive Performance Materials Suisse Sarl 99.998%, Momentive Performance Materials Rus LLC 0.002% Momentive Performance Materials Kimya Sanayi Ve Ticaret Limited Sirketi Momentive Performance Materials Commercial Services GmbH 100% Momentive Performance Materials (Pty) Ltd. Momentive Performance Materials Commercial Services GmbH 100% Momentive Performance Materials (Shanghai) Management Co., Ltd. Momentive Performance Materials Pte Ltd 100% Momentive Performance Materials (Shanghai) Trading Co., Ltd. Momentive Performance Materials Pte Ltd 100% Nautilus Pacific Two Pte Ltd Momentive Performance Materials Worldwide Inc. 100% Nautilus Pacific Four Pte Ltd Momentive Performance Materials China SPV Inc. 100% Momentive Performance Materials Asia Pacific Pte Ltd Momentive Performance Materials Worldwide Inc. 100% Momentive Performance Materials (Thailand) Ltd Nautilus Pacific Two Pte Ltd 100% (4) TA Holdings Pte Ltd Nautilus Pacific Two Pte Ltd 100% Momentive Performance Materials Benelux BVBA Momentive Performance Materials GmbH; Momentive Performance Materials Specialties Srl 99.9%, 0.1% Momentive Performance Materials France Sarl Momentive Performance Materials Quartz GmbH 100% Momentive Performance Materials GmbH Momentive Performance Materials Worldwide Inc. 100% Momentive Performance Materials Quartz GmbH Momentive Performance Materials GmbH 100% Momentive Performance Materials (India) Private Limited Momentive Performance Materials GmbH 100% Momentive Performance Materials Italy Srl Momentive Performance Materials GmbH 100% Momentive Performance Materials Specialties Srl Momentive Performance Materials Italy Srl 100% Momentive Performance Materials Silicones BV Momentive Performance Materials GmbH 100% Momentive Performance Materials Suisse Sarl Momentive Performance Materials GmbH 100% Zheijang Xinan Momentive Performance Materials Co Ltd Momentive Performance Materials Ptd Ltd; Zheijang Xinan Chemical Industrial Group Co Ltd. 49%, 51% 3 (2) This entity is anticipated to be converted into a limited liability company at the Effective Date. (3) Nominal shareholder is Momentive Performance Materials China SPV Inc. (4) Nominal share held by each of TA Holding Ptd Ltd and Momentive Performance Materials Pte Ltd. Following effective date under the Plan (the “Effective Date”), it is expected that each of the subsidiaries listed above will continue to exist in the ownership structure described above. (b) Prior to the Effective Date, Momentive Performance Material Holdings Inc. (“Holdings Inc.”) may be deemed an affiliate of the Applicants in its capacity as the owner of 100% of the outstanding common stock of the Company. MPM TopCo LLC (“ TopCo ”) may be deemed an affiliate of the Applicants in its capacity as the owner of 100% of the outstanding common stock of Holdings Inc. Momentive Performance Materials Holdings LLC (“ MPM Holdings ”) may be deemed an affiliate of the Applicants in its capacity as the owner of 100% of the outstanding common stock of TopCo. Following the Effective Date, it is expected that each of the entities listed in this section (b) will continue to exist. Additional entities may be formed in connection with the consummation of the Plan or thereafter. (c) Prior to the Effective Date, Momentive Specialty Chemicals Holdings LLC (“MSC Holdings”) may be deemed an affiliate of the Applicants in its capacity as a wholly-owned subsidiary of MPM Holdings. Momentive Specialty Chemicals Inc. (“ MSC ”) may be deemed an affiliate of the Applicants in its capacity as a wholly-owned subsidiary of MSC Holdings. Each of the following subsidiaries and joint ventures of MSC may be deemed an affiliate of the Applicants in its capacity as a direct or indirect wholly-owned subsidiary or joint venture of MSC: Name of Entity State of Organization Aegir Limited UK Borden Chemical Finance Limited UK Borden Chemical Foundry, LLC Delaware Borden Chemical Holdings (Panama) S.A. Panama Borden Chemical Resinas Panama, S.R.L. Panama Borden Chemical UK Limited UK Borden International Holdings Limited UK Borden Luxembourg S.a r.l. Luxembourg Combined Composite Technologies Limited UK Danlinvest Holdings Ltda. Brazil HA-International, LLC Delaware Hexion 2 Nova Scotia Finance, ULC Nova Scotia Hexion 2 U.S. Finance Corp. Delaware Hexion Escrow Corporation Delaware Hexion Finance Escrow LLC Delaware Hexion IAR Holdings (HK) Limited Hong Kong Hexion Nova Scotia Finance, ULC Nova Scotia, Canada Hexion Shchekinoazot Holding B.V. Netherlands Hexion Shchekinoazot OOO Russia Hexion Specialty Chemicals Holding Germany Gmbh Germany Hexion Specialty Chemicals Lda. Portugal Momentive Specialty Chemicals Management (Shanghai) Co., Ltd. China 4 Hexion U.S. Finance Corp. Delaware HSC Capital Corporation Delaware InfraTec Duisburg GmbH Germany J E Ridnell Pty Ltd Australia Lawter International Inc. Delaware MicroBlend Colombia S.A.S. Colombia Momentive Brazil Coöperatief U.A. Netherlands Momentive Shanxi Holdings Limited Hong Kong Momentive CI Holding Company (China) LLC Delaware Momentive Industria e Comercio de Epoxi Ltda. Brazil Momentive International Holdings Coöperatief U.A. Netherlands Momentive International Inc. Delaware Momentive Performance Materials Canada Ltd. Canada Momentive Quimica do Brasil Ltda. Brazil Momentive Quimica S. A. Panama Momentive Quimica Uruguay S.A. Uruguay Momentive Shanxi Holdings Limited Hong Kong Momentive Specialty Chemicals (Caojing) Limited Hong Kong Momentive Specialty Chemicals (N.Z.) Limited New Zealand Momentive Specialty Chemicals Asua S.L. Spain Momentive Specialty Chemicals Australia Finance Pty Ltd Australia Momentive Specialty Chemicals Australia General Partner Pty Ltd Australia Momentive Specialty Chemicals Australia Limited Partnership Australia Momentive Specialty Chemicals Australia Pty Ltd. Australia Momentive Specialty Chemicals B.V. Netherlands Momentive Specialty Chemicals Barbastro S.A. Spain Momentive Specialty Chemicals Canada Inc. Canada Momentive Specialty Chemicals Europe B.V. Netherlands Momentive Specialty Chemicals Finance B.V. Netherlands Momentive Specialty Chemicals Forest Products GmbH Germany Momentive Specialty Chemicals France SAS France Momentive Specialty Chemicals GmbH Germany Momentive Specialty Chemicals Holding B.V. Netherlands Momentive Specialty Chemicals Holdings (China) Limited Hong Kong Momentive Specialty Chemicals Iberica S.A. Spain Momentive Specialty Chemicals Investments Inc. Delaware Momentive Specialty Chemicals Italia S.P.A. Italy Momentive Specialty Chemicals Korea Company Limited Korea Momentive Specialty Chemicals Leuna GmbH & Co. Kg Germany 5 Momentive Specialty Chemicals (Mumbai) Private Limited India Momentive Specialty Chemicals Oy Finland Momentive Specialty Chemicals Pty Ltd Australia Momentive Specialty Chemicals Research Belgium SA Belgium Momentive Specialty Chemicals S.A.S. France Momentive Specialty Chemicals Sg. Petani Sdn. Bhd. Malaysia Momentive Specialty Chemicals S.r.l. Italy Momentive Specialty Chemicals Singapore Pte. Ltd. Singapore Momentive Specialty Chemicals Somersby Ptd Ltd Australia Momentive Specialty Chemicals Stanlow Limited UK Momentive Specialty Chemicals Stuttgart GmbH Germany Momentive Specialty Chemicals (Thailand) Limited Thailand Momentive Specialty Chemicals UK Limited UK Momentive Specialty Chemicals Wesseling GmbH Germany Momentive Specialty Chemicals, a.s. Czech Republic Momentive Specialty UV Coatings (Shanghai) Limited Hong Kong Momentive Union Specialty Chemicals Limited Hong Kong Momentive UV Coating (Shanghai) Co. Ltd. China National Borden Chemical Germany GmbH Germany New Nimbus GmbH & Co Kg Germany Nimbus Merger Sub Inc. Delaware NL Coop Holdings LLC Delaware North American Sugar Industries Incorporated New Jersey Oilfield Technology Group, Inc. Delaware PT Momentive Specialty Chemicals Indonesia Quimica Borden Argentina S.A. Argentina Resinite Limited UK Resolution Research Nederland B.V. Netherlands Resolution Specialty Materials Rotterdam B.V. Netherlands RPC Foods, Ltd. UK Sanwei Momentive Chemicals Company Limited China Servicios Factoria Barbastro, S.A. Spain The Cuban American Mercantile Corporation. New Jersey The West India Company New Jersey Tianjin Hexion Specialty Chemicals Co., Ltd. China Vanguard Plastics Limited UK Zhengjiang Momentive Union Specialty Chemicals Ltd. China 6 (d) As of August 4, 2014, 278,426,128.30 common units, or 90.4%, of MPM Holdings is held by (i) Apollo Investment Fund VI, L.P. (“ AIF VI ”), holding 102,454,557 common units; (ii) AP Momentive Holdings LLC (“ AP Momentive Holdings ”), holding 94,365,980 common units; (iii) AIF Hexion Holdings, L.P. (“ AIF Hexion Holdings ”) holding 75,154,788.30 common units; and (iv) AIF Hexion Holdings II, L.P. (“ AIF Hexion Holdings II ”) holding 6,450,803 common units, (AIF Hexion Holdings II, together with AIF VI, AP Momentive Holdings and AIF Hexion Holdings, the “ Apollo Funds ”). Apollo Advisors VI, L.P. (“ Advisors VI ”) is the general partner of AIF VI, and Apollo Capital Management VI, LLC (“ ACM VI ”) is the general partner of Advisors VI. AIF IV Hexion GP, LLC (“ AIF IV Hexion GP ”) and AIF V Hexion GP, LLC (“ AIF V Hexion GP ”) are the general partners of AIF Hexion Holdings. AIF Hexion Holdings II GP, LLC (“ Hexion Holdings II GP ”) is the general partner of AIF Hexion Holdings II. Apollo Investment Fund IV, L.P. and its parallel investment vehicle (collectively, the “ AIF IV Funds ”) are the members of AIF IV Hexion GP. Apollo Advisors IV, L.P. (“ Advisors IV ”) is the general partner or managing general partner of each of the AIF IV Funds, and Apollo Capital Management IV, Inc. (“ ACM IV ”) is the general partner of Advisors IV. Apollo Investment Fund V, L.P. and its parallel investment vehicles (collectively, the “ AIF V Funds ”) are the members of AIF V Hexion GP and of Hexion Holdings II GP. Apollo Advisors V, L.P. (“ Advisors V ”) is the general partner, managing general partner or managing limited partner of each of the AIF V Funds, and Apollo Capital Management V, Inc. (“ ACM V ”) is the general partner of Advisors V. Apollo Principal Holdings I, L.P. (“ Principal Holdings I ”) is the sole stockholder or sole member, as applicable, of each of ACM IV, ACM V and ACM VI. Apollo Principal Holdings I GP, LLC (“ Principal Holdings I GP ”) is the general partner of Principal Holdings I. Following the Effective Date, it is anticipated that Apollo will no longer be the majority owner of MPM Holdings, but will continue to hold approximately 40% of MPM Holdings. (e) For purposes of this application only, each of the executive officers and directors of the Applicants named in response to Item 4 hereof and the principal owners of the Applicants’ voting securities named in response to Item 5 hereof may be deemed affiliates by virtue of their positions with the Applicants or their holdings. MANAGEMENT AND CONTROL 4. Directors and executive officers. List the names and complete mailing addresses of all directors and executive officers of the applicant and all persons chosen to become directors or executive officers. Indicate all offices with the applicant held or to be held by each person named. The Company The following table sets forth the names of and offices held by all current directors and executive officers of the Company. Unless otherwise noted below, the address for each director and executive officer of the Company is c/o Momentive Performance Materials Inc., 260 Hudson River Road, Waterford, NY 12188. Name Craig O. Morrison William H. Carter Scott M. Kleinman David B. Sambur Julian Markby Lee C. Stewart Judith A. Sonnett Douglas A. Johns Nathan E. Fisher Anthony B. Greene Karen E. Koster George F. Knight Position Director, Chairman, President and Chief Executive Officer Director, Executive Vice President and Chief Financial Officer Director Director Director Director Executive Vice President, Human Resources Executive Vice President, General Counsel and Secretary Executive Vice President, Procurement Executive Vice President, Business Development and Strategy Executive Vice President, Environmental, Health & Safety Senior Vice President, Finance and Treasurer On the Effective Date, in accordance with the Plan, new directors and officers will be appointed and the current directors and officers will no longer serve in that capacity unless reappointed pursuant to the Plan. 7 The Guarantors The directors and executive officers of the Guarantors are set forth in the table attached to this Form T-3 as Exhibit 99.1, which is incorporated herein by reference. On the Effective Date, in accordance with the Plan, new directors and officers of the Guarantors will be appointed and the current directors and officers of the Guarantors will no longer serve in that capacity unless reappointed pursuant to the Plan. 5. Principal owners of voting securities. Furnish the following information as to each person owning ten percent or more of the voting securities of the applicant. The Company As of the date of this filing, the following persons owned 10 percent or more of the voting securities of the Company. Name & Address Momentive Performance Materials Holdings Inc. Title of Class Owned Amount % Common Stock 100 100 260 Hudson River Road Waterford, NY 12188 On the Effective Date, the reorganized Company is authorized to issue or cause to be issued common stock, par value $0.01 per share, of the Company (the “ New Common Stock ”) for distribution in accordance with the terms of the Plan and the Amended and Restated Certificate of Incorporation of the reorganized Company. As soon as reasonably practicable following the Effective Date, but effective as of the Effective Date, and without any further action or consent required by any holder of New Common Stock or any other person (i) each share of New Common Stock will automatically be exchanged for one share of common stock of a newly formed Delaware corporation (“ Top HoldCo ”), and (ii) Top HoldCo, as the resulting holder of the shares of New Common Stock will contribute such shares of New Common Stock to a newly formed Delaware corporation (“ Intermediate HoldCo ”) for common stock of Intermediate HoldCo. The Guarantors As of the date of this filing, the persons owning 10 percent or more of the voting securities of the Guarantors are set forth in the table attached to this Form T-3 as Exhibit 99.1, which is incorporated herein by reference. The state of organization of each Guarantor is set forth therein. Following the confirmation of the Plan, the ownership of the Guarantors is expected to continue as set forth on Exhibit 99.1. 8 UNDERWRITERS 6. Underwriters. Give the name and complete mailing address of (a) each person who, within three years prior to the date of filing the application, acted as an underwriter of any securities of the obligor which were outstanding on the date of filing the application, and (b) each proposed principal underwriter of the securities proposed to be offered. As to each person specified in (a), give the title of each class of securities underwritten. (a) (b) The following sets forth each person who has acted as an underwriter of any securities of the obligor which were outstanding on the date hereof: (1) In May 2012, J.P. Morgan Securities LLC, BMO Capital Markets Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co., Morgan Stanley & Co. LLC and UBS Securities LLC, c/o J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179, acted as joint book-running managers and Apollo Global Securities, LLC acted as co-manager in the private offering of $250 million aggregate principal amount of the Company’s 10% Senior Secured Notes due 2020. (2) On October 25, 2012, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co., UBS Securities LLC, BMO Capital Markets Corp., Morgan Stanley & Co. LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, c/o J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179, acted as joint book-running managers and Apollo Global Securities, LLC acted as co-manager in the private offering of $1.1 billion aggregate principal amount of the Company’s 8.875% First-Priority Senior Secured Notes due 2020. No person is acting, or proposed to be acting, as principal underwriter of the securities proposed to be offered pursuant to the Indenture. CAPITAL SECURITIES 7. Capitalization. (a) Furnish the following information as to each authorized class of securities of the applicant. The Company As of August 4, 2014 Title of Class Amount Authorized Amount Outstanding Common Stock, par value $0.01 per share 100 100 8.875% First-Priority Senior Secured Notes due 2020 $1,100,000,000 $1,100,000,000 (5) 9 Title of Class Amount Authorized Amount Outstanding 10% Senior Secured Notes due 2020 $250,000,000 $250,000,000 (5) 9% Second-Priority Springing Lien Notes due 2021 $1,161,000,000 $1,161,000,000 (5) 9.5% Second-Priority Springing Lien Notes due 2021 €133,000,000 €133,000,000 (5) 11.5% Senior Subordinated Notes due 2016 $382,000,000 $382,000,000 (5) (5) Reflects principal amount outstanding and does not include accrued and unpaid interest. After the Effective Date, the Company’s capital structure will consist of (i) the New Common Stock, (ii) First-Priority Senior Secured Notes due 2021 (the “ Replacement 1L Notes ”) and (iii) Second-Priority Senior Secured Notes due 2022 (the “ Replacement 1.5L Notes ”). The amounts authorized and outstanding will be decided in connection with the confirmation of the Plan. The Guarantors Capitalization information regarding the Guarantors as of the date of this filing and as expected to continue following the Effective Date is set forth in the table attached to this Form T-3 as Exhibit 99.1, which is incorporated herein by reference. (b) Give a brief outline of the voting rights of each class of voting securities referred to in paragraph (a) above. Except as otherwise provided by law, each holder of common stock of the Company shall have one vote, and the common stock shall vote together as a single class. Holders of the Company’s 8.875% First-Priority Senior Secured Notes due 2020, 10% Senior Secured Notes due 2020, 9% Second-Priority Springing Lien Notes due 2021, 9.5% Second-Priority Springing Lien Notes due 2021 and 11.5% Senior Subordinated Notes due 2016 have no voting rights. Except as otherwise set forth in such Guarantor’s certificate of incorporation, certificate of formation, limited liability company agreement or by-laws, as applicable, holders of membership interests of each Guarantor that is a limited liability company are entitled to one vote per each interest registered in such holder’s name and holders of common stock of each Guarantor that is a corporation are entitled to one vote per each share registered in such holder’s name. 10 INDENTURE SECURITIES 8. Analysis of indenture provisions. Insert at this point the analysis of indenture provisions required under section 305(a)(2) of the Trust Indenture Act of 1939 (the “1939 Act”). The following is a general description of certain provisions of the Indenture governing the Notes (the “ Indenture ”). The following is a general description of certain provisions of the Indenture, and the description is qualified in its entirety by reference to the form of Indenture filed as Exhibit T3C herewith. Capitalized terms used below and not defined herein have the meanings ascribed to them in the Indenture. The Applicants have not entered into the Indenture as of the date of this filing, and the terms of the Indenture are subject to change prior to its execution. (a) Events of Default. The term “Event of Default” with respect to the Notes includes any of the following events: (i) there is a default in any payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 days, (ii) there is a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise, (iii) the Company fails to comply with its obligations under Section 5.01 of the Indenture, (iv) the Company or any Restricted Subsidiary fails to comply with any of its other agreements contained in the Notes or the Indenture (other than those referred to in clause (a), (b) or (c) above) and such failure continues for 60 days after the notice specified below, (v) the Company or any Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Company or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $50.0 million or its foreign currency equivalent, (vi) the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (a) commences a voluntary case; (b) consents to the entry of an order for relief against it in an involuntary case; (c) consents to the appointment of a Custodian of it or for any substantial part of its property; or (d) makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency, 11 (vii) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for relief against the Company or any Significant Subsidiary in an involuntary case; (b) appoints a Custodian of the Company or any Significant Subsidiary or for any substantial part of its property; or (c) orders the winding up or liquidation of the Company or any Significant Subsidiary; or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days, (viii) the Company or any Significant Subsidiary fails to pay final judgments aggregating in excess of $50.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days following the entry thereof, (ix) any Note Guarantee of a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or any Guarantor denies or disaffirms its obligations under this Indenture or any Note Guarantee and such Default continues for 10 days, (x) unless such Liens have been released in accordance with the provisions of the Security Documents, the Intercreditor Agreements, and the Indenture, the Liens with respect to all or substantially all of the Collateral cease to be valid or enforceable, or the Company shall assert or any Guarantor shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable and, in the case of any such Person that is a Subsidiary of the Company, the Company fails to cause such Subsidiary to rescind such assertions within 30 days after the Company has actual knowledge of such assertions, or (xi) the failure by the Company or any Guarantor to comply for 60 days after notice with its other agreements contained in the Security Documents except for a failure that would not be material to the holders of the Notes and would not materially affect the value of the Collateral taken as a whole. If an Event of Default (other than an Event of Default specified in clauses (vi) or (vii) above with respect to the Company) shall occur and be continuing and has not been waived, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes may declare the principal of and premium, if any and accrued interest on all the Notes to be due and payable by notice in writing to the Company. If an Event of Default specified in clauses (vi) or (vii) above with respect to the Company occurs and is continuing, then the principal of, premium, if any, and interest on all of the outstanding Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. 12 The Holders of a majority in principal amount of outstanding Notes by notice to the Trustee may rescind any such acceleration with respect to the Notes and its consequences. Provided the Notes are not then due and payable by reason of a declaration of acceleration, the Holders of a majority in principal amount of the Notes may waive any existing Default under the Indenture, and its consequences, except a Default in the payment of the principal of or interest on any Notes, a Default arising from the failure to redeem or purchase any Note when required pursuant to the terms of the Indenture or a Default in respect of a provision that under Section 9.02 of the Indenture cannot be amended without the consent of each Holder affected. (b) Authentication and Delivery of the Notes; Application of Proceeds. The Notes to be issued under the Indenture may from time to time be executed on behalf of the Company by manual or facsimile signature by one of its proper officers and delivered to the Trustee for authentication and delivery in accordance with the Company’s order and the Indenture. Each Note shall be dated the date of its authentication, and no Note shall be valid unless authenticated by manual signature of the Trustee, and such signature shall be conclusive evidence that such Note has been duly authenticated under the Indenture. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof, provided that the Notes may be issued in denominations of less than $1,000 solely to accommodate the book-entry positions that have been created by the Depository in denominations of less than $1,000. The Trustee may appoint one or more authenticating agents reasonably acceptable to the Company to authenticate Notes. Unless otherwise provided in the appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in the Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an agent to deal with the Company and Affiliates of the Company. The Notes will be issued to Holders of the Old Notes pursuant to the Plan. As a result the Company will not realize any proceeds from the issuance of the Notes. (c) Release of Collateral. Pursuant to Section 11.04 of the Indenture, subject to certain subsections of Section 11.04 of the Indenture, Collateral may be released from the First Priority Liens created by the Security Documents at any time or from time to time in accordance with the provisions of the Indenture, the Security Documents and the Intercreditor Agreements. In addition, upon the request of the Company pursuant to an Officer’s Certificate certifying that all conditions precedent under the Indenture have been met, the Collateral Agent shall execute, deliver or acknowledge such instruments or releases to evidence the release of any Collateral permitted to be released pursuant to the Indenture or the Security Documents or the Intercreditor Agreements. (d) Satisfaction and Discharge of the Indenture. The Company may terminate its obligations under the Indenture when (i) either (a) all outstanding Notes that have been authenticated and issued have been delivered (other than destroyed, lost or stolen Notes that have been replaced or paid) to the Trustee for cancellation or (b) all of the Notes (x) have become due and payable, (y) will become due and payable at their Stated Maturity within one year or (z) if redeemable at the option of the Company, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company and the Company has irrevocably deposited with the Trustee cash or 13 government obligations in an amount sufficient to pay and discharge the entire Indebtedness on the Notes, (ii) the Company has paid all sums payable by the Company under the Indenture and (iii) the Company has delivered to the Trustee an officer’s certificate and an opinion of counsel, each stating that the foregoing conditions precedent have been complied with. (e) Evidence of Compliance with Conditions and Covenants. The Indenture requires that the Company will deliver to the Trustee within 120 days after the end of each fiscal year, an Officer’s Certificate stating that in the course of the performance by the signer of his or her duties as an Officer of the Issuer he or she would normally have knowledge of any Default and whether or not the signer knows of any Default that occurred during such period. If he or she does, the certificate shall describe the Default, its status and what action the Company is taking or proposes to take with respect thereto. 9. Other obligors. Give the name and complete mailing address of any person, other than the applicant, who is an obligor upon the indenture securities. Other than the Applicants, no other person is an obligor with respect to the Notes. Contents of application for qualification. This application for qualification comprises: (a) Pages numbered 1 to 15, consecutively (and Exhibit Index). (b) The statement of eligibility and qualification of each trustee under the indenture to be qualified. The statement of eligibility and qualification on Form T-1 of the Trustee will be filed subsequently with the Securities and Exchange Commission. 14 (c) The following Exhibits are filed herewith or incorporated herein by reference: Exhibit Number Description Exhibit T3A(1) Certificate of Incorporation, as amended, of Momentive Performance Materials Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(2) Certificate of Incorporation, as amended, of Momentive Performance Materials Worldwide Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(3) Certificate of Incorporation, as amended, of Momentive Performance Materials USA Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(4) Certificate of Formation of Juniper Bond Holdings I LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3A(5) Certificate of Formation of Juniper Bond Holdings II LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3A(6) Certificate of Formation of Juniper Bond Holdings III LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3A(7) Certificate of Formation of Juniper Bond Holdings IV LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3A(8) Certificate of Incorporation, as amended, of Momentive Performance Materials Quartz, Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(9) Articles of Organization, as amended, of MPM Silicones, LLC (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(10) Certificate of Incorporation , as amended, of Momentive Performance Materials South America Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(11) Certificate of Incorporation, as amended, of Momentive Performance Materials China SPV Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(1) Amended and Restated By-laws of Momentive Performance Materials, Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(2) Amended and Restated By-laws of Momentive Performance Materials Worldwide Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 15 Exhibit Number Description Exhibit T3B(3) Amended and Restated By-laws of Momentive Performance Materials USA Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(4) Operating Agreement of Juniper Bond Holdings I LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3B(5) Operating Agreement of Juniper Bond Holdings II LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3B(6) Operating Agreement of Juniper Bond Holdings III LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3B(7) Operating Agreement of Juniper Bond Holdings IV LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3B(8) Amended and Restated By-laws of Momentive Performance Materials Quartz, Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(9) Amended and Restated Operating Agreement of MPM Silicones, LLC (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(10) Amended and Restated By-laws of Momentive Performance Materials South America Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(11) Amended and Restated By-laws of Momentive Performance Materials China SPV Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3C* Form of Indenture to be qualified. Exhibit T3E(1)* Joint Chapter 11 Plan of Reorganization, dated June 23, 2014, of Momentive Performance Materials Inc. and its affiliated debtors, as amended. Exhibit T3E(2)* Notice of Filing of Plan Supplement, dated July 18, 2014, relating to the Joint Chapter 11 Plan of Reorganization of Momentive Performance Materials Inc. and its affiliated debtors. Exhibit T3E(3)* Disclosure Statement, dated June 23, 2014, to the Joint Chapter 11 Plan of Reorganization of Momentive Performance Materials Inc. and its affiliated debtors, as amended. Exhibit T3E(4)* Supplement, dated July 18, 2014, to Disclosure Statement to the Joint Chapter 11 Plan of Reorganization of Momentive Performance Materials Inc. and its affiliated debtors. Exhibit T3F Cross-reference sheet showing the location in the Indenture of the provisions inserted therein pursuant to Sections 310 through 318(a), inclusive of the Act (included as part of Exhibit T3C). 16 Exhibit Number Description Exhibit 99.1* Guarantors * Filed herewith. 17 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the applicant, Momentive Performance Materials Inc., a corporation organized and existing under the laws of the State of Delaware, has duly caused this application to be signed on its behalf by the undersigned, thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the city of Columbus, and State of Ohio, on the 22nd day of August, 2014. [Seal] MOMENTIVE PERFORMANCE MATERIALS INC. By: /s/ William H. Carter Name: William H. Carter Title: Executive Vice President and Chief Financial Officer Attest: /s/ Joyce Johnson Name: Joyce Johnson Title: Executive Assistant SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the below co-applicants have duly caused this application to be signed on its behalf by the undersigned, thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the city of Columbus, and State of Ohio, on the 22nd day of August, 2014. [Seal] Momentive Performance Materials Worldwide Inc. Momentive Performance Materials USA Inc. Juniper Bond Holdings I LLC Juniper Bond Holdings II LLC Juniper Bond Holdings III LLC Juniper Bond Holdings IV LLC Momentive Performance Materials Quartz, Inc. MPM Silicones, LLC Momentive Performance Materials South America Inc. Momentive Performance Materials China SPV Inc. By: /s/ Douglas A. Johns Name: Title: Attest: /s/ Ellen German Berndt Name: Ellen German Berndt Title: Associate General Counsel Douglas A. Johns Executive Vice President and General Counsel EXHIBIT INDEX Exhibit Number Description Exhibit T3A(1) Certificate of Incorporation, as amended, of Momentive Performance Materials Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(2) Certificate of Incorporation, as amended, of Momentive Performance Materials Worldwide Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(3) Certificate of Incorporation, as amended, of Momentive Performance Materials USA Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(4) Certificate of Formation of Juniper Bond Holdings I LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3A(5) Certificate of Formation of Juniper Bond Holdings II LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3A(6) Certificate of Formation of Juniper Bond Holdings III LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3A(7) Certificate of Formation of Juniper Bond Holdings IV LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3A(8) Certificate of Incorporation, as amended, of Momentive Performance Materials Quartz, Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(9) Articles of Organization, as amended, of MPM Silicones, LLC (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(10) Certificate of Incorporation , as amended, of Momentive Performance Materials South America Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3A(11) Certificate of Incorporation, as amended, of Momentive Performance Materials China SPV Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(1) Amended and Restated By-laws of Momentive Performance Materials, Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(2) Amended and Restated By-laws of Momentive Performance Materials Worldwide Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) EXHIBIT INDEX Exhibit Number Description Exhibit T3B(3) Amended and Restated By-laws of Momentive Performance Materials USA Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(4) Operating Agreement of Juniper Bond Holdings I LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3B(5) Operating Agreement of Juniper Bond Holdings II LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3B(6) Operating Agreement of Juniper Bond Holdings III LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3B(7) Operating Agreement of Juniper Bond Holdings IV LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Exhibit T3B(8) Amended and Restated By-laws of Momentive Performance Materials Quartz, Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(9) Amended and Restated Operating Agreement of MPM Silicones, LLC (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(10) Amended and Restated By-laws of Momentive Performance Materials South America Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3B(11) Amended and Restated By-laws of Momentive Performance Materials China SPV Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) Exhibit T3C* Form of Indenture to be qualified. Exhibit T3E(1)* Joint Chapter 11 Plan of Reorganization, dated June 23, 2014, of Momentive Performance Materials Inc. and its affiliated debtors, as amended. Exhibit T3E(2)* Notice of Filing of Plan Supplement, dated July 18, 2014, relating to the Joint Chapter 11 Plan of Reorganization of Momentive Performance Materials Inc. and its affiliated debtors. Exhibit T3E(3)* Disclosure Statement, dated June 23, 2014, to the Joint Chapter 11 Plan of Reorganization of Momentive Performance Materials Inc. and its affiliated debtors, as amended. Exhibit T3E(4)* Supplement, dated July 18, 2014, to Disclosure Statement to the Joint Chapter 11 Plan of Reorganization of Momentive Performance Materials Inc. and its affiliated debtors. EXHIBIT INDEX Exhibit Number Description Exhibit T3F Cross-reference sheet showing the location in the Indenture of the provisions inserted therein pursuant to Sections 310 through 318(a), inclusive of the Act (included as part of Exhibit T3C). Exhibit 99.1* Guarantors * Filed herewith. EXHIBIT T3C MOMENTIVE PERFORMANCE MATERIALS INC., as Issuer, EACH OF THE NOTE GUARANTORS PARTY HERETO and [ ], as Trustee $[] [] % Second-Priority Senior Secured Notes due 2022 INDENTURE Dated as of [ ], 2014 TABLE OF CONTENTS Page ARTICLE I. Section 1.01. Section 1.02. Section 1.03. Section 1.04. ARTICLE II. Section 2.01. Section 2.02. Section 2.03. Section 2.04. Section 2.05. Section 2.06. Section 2.07. Section 2.08. Section 2.09. Section 2.10. Section 2.11. Section 2.12. Section 2.13. Section 2.14. ARTICLE III. Section 3.01. Section 3.02. Section 3.03. Section 3.04. Section 3.05. Section 3.06. Section 3.07. Section 3.08. ARTICLE IV. Section 4.01. Section 4.02. Section 4.03. Section 4.04. Section 4.05. Section 4.06. DEFINITIONS AND INCORPORATION BY REFERENCE 1 Definitions Other Definitions Incorporation by Reference of Trust Indenture Act Rules of Construction 1 39 40 40 THE NOTES 41 Amount of Notes Form and Dating Execution and Authentication Registrar and Paying Agent Paying Agent to Hold Money in Trust Holder Lists Transfer and Exchange Replacement Notes Outstanding Notes Temporary Notes Cancellation Defaulted Interest CUSIP Numbers, ISINs, etc. Calculation of Principal Amount of Notes 41 42 42 43 44 44 44 45 45 46 46 46 46 46 REDEMPTION 47 Redemption Applicability of Article Notices to Trustee Selection of Notes to Be Redeemed Notice of Optional Redemption Effect of Notice of Redemption Deposit of Redemption Price Notes Redeemed in Part 47 47 47 47 48 48 49 49 COVENANTS 49 Payment of Notes Reports and Other Information 49 49 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock Limitation on Restricted Payments Dividend and Other Payment Restrictions Affecting Subsidiaries Asset Sales 51 57 62 64 i Section 4.07. Section 4.08. Section 4.09. Section 4.10. Section 4.11. Section 4.12. Section 4.13. Section 4.14. Section 4.15. Section 4.16. Section 4.17. ARTICLE V. Section 5.01. ARTICLE VI. Section 6.01. Section 6.02. Section 6.03. Section 6.04. Section 6.05. Section 6.06. Section 6.07. Section 6.08. Section 6.09. Section 6.10. Section 6.11. Section 6.12. ARTICLE VII. Section 7.01. Section 7.02. Section 7.03. Section 7.04. Section 7.05. Section 7.06. Section 7.07. Section 7.08. Section 7.09. Section 7.10. Section 7.11. ARTICLE VIII. Section 8.01. Transactions with Affiliates Change of Control Compliance Certificate Further Instruments and Acts Future Note Guarantors Liens After-Acquired Property Maintenance of Office or Agency [Reserved] [Reserved] Suspension of Certain Covenants 67 69 71 71 71 71 72 73 73 73 73 SUCCESSOR ISSUER 75 When MPM May Merge or Transfer Assets 75 DEFAULTS AND REMEDIES 76 Events of Default Acceleration Other Remedies Waiver of Past Defaults Control by Majority Limitation on Suits Rights of the Holders to Receive Payment Collection Suit by Trustee Trustee May File Proofs of Claim Priorities Undertaking for Costs Waiver of Stay or Extension Laws 76 78 79 79 79 80 80 80 80 81 81 81 TRUSTEE 82 Duties of Trustee Rights of Trustee Individual Rights of Trustee Trustee’s Disclaimer Notice of Defaults Reports by Trustee to the Holders Compensation and Indemnity Replacement of Trustee Successor Trustee by Merger Eligibility; Disqualification Preferential Collection of Claims Against the Issuer 82 83 84 84 85 85 85 86 87 87 87 DISCHARGE OF INDENTURE; DEFEASANCE 88 Discharge of Liability on Notes; Defeasance 88 ii Section 8.02. Section 8.03. Section 8.04. Section 8.05. Section 8.06. ARTICLE IX. Section 9.01. Section 9.02. Section 9.03. Section 9.04. Section 9.05. Section 9.06. Section 9.07. Section 9.08. Section 9.09. ARTICLE X. Section 10.01. ARTICLE XI. Section 11.01. Section 11.02. Section 11.03. Section 11.04. Section 11.05. Section 11.06. Section 11.07. Section 11.08. ARTICLE XII. Section 12.01. Section 12.02. Section 12.03. Section 12.04. Section 12.05. Section 12.06. Section 12.07. ARTICLE XIII. Section 13.01. Section 13.02. Section 13.03. Conditions to Defeasance Application of Trust Money Repayment to Issuer Indemnity for Government Obligations Reinstatement 89 90 90 90 90 AMENDMENTS AND WAIVERS 91 Without Consent of the Holders With Consent of the Holders Compliance with Trust Indenture Act Revocation and Effect of Consents and Waivers Notation on or Exchange of Notes Trustee and Collateral Agent to Sign Amendments Payment for Consent Additional Voting Terms; Calculation of Principal Amount Providing Evidence of Amendments to Trustee 91 92 93 93 94 94 94 94 94 RANKING OF NOTE LIENS 95 Relative Rights 95 COLLATERAL 96 Security Documents Collateral Agent Authorization of Actions to Be Taken Release of Collateral Filing, Recording and Opinions [Reserved] Release Upon Termination of the Issuer’s Obligations Designations 96 97 99 100 101 102 102 103 NOTE GUARANTEES 103 Note Guarantees Limitation on Liability Successors and Assigns No Waiver Modification Execution of Supplemental Indenture for Future Note Guarantors Non-Impairment 103 105 106 106 106 106 107 MISCELLANEOUS 107 Trust Indenture Act Controls Notices Communication by the Holders with Other Holders 107 107 107 iii Section 13.04. Section 13.05. Section 13.06. Section 13.07. Section 13.08. Section 13.09. Section 13.10. Section 13.11. Section 13.12. Section 13.13. Section 13.14. Section 13.15. Section 13.16. Section 13.17. Appendix A - Certificate and Opinion as to Conditions Precedent Statements Required in Certificate or Opinion When Notes Disregarded Rules by Trustee, Paying Agent and Registrar Legal Holidays GOVERNING LAW No Recourse Against Others Successors Multiple Originals Table of Contents; Headings Indenture Controls Severability Force Majeure Waiver of Jury Trial Provisions Relating to the Notes EXHIBIT INDEX Exhibit A — Exhibit B — Form of Note Form of Supplemental Indenture iv 108 108 108 108 109 109 109 109 109 109 109 109 109 110 CROSS-REFERENCE TABLE Indenture Section TIA Section 310(a)(1) (a)(2) (a)(3) (a)(4) (b) (c) 311(a) (b) (c) 312(a) (b) (c) 313(a) (b)(1) (b)(2) (c) (d) 314(a) (b) (c)(1) (c)(2) (c)(3) (d) (e) (f) 315(a) (b) (c) (d) (e) 316(a)(last sentence) (a)(1)(A) (a)(1)(B) (a)(2) (b) 317(a)(1) (a)(2) (b) 318(a) 7.10 7.10 N.A. N.A. 7.08; 7.10 N.A. 7.11 7.11 N.A. 2.06 13.03 13.03 7.06 N.A. 7.06 7.06 4.02; 4.09 4.02; 409 11.05 11.05, 13.04 13.04 11.05 11.05 13.05 4.10 7.01 7.05 7.01 7.01 6.11 13.06 6.05 6.04 N.A. 6.07 6.08 6.09 2.05 13.01 N.A. Means Not Applicable. Note: This Cross-Reference Table shall not, for any purposes, be deemed to be part of this Indenture. v INDENTURE dated as of [ ], 2014 among Momentive Performance Materials Inc., a Delaware corporation (the “ Issuer ”), the Note Guarantors party hereto and [ ], as trustee (the “ Trustee ”). Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of (a) $[ ] aggregate principal amount of the Issuer’s [ ]% Second-Priority Senior Secured Notes due 2022 issued on the date hereof (the “ Original Notes ”) and (b) any Additional Notes (as defined herein) that may be issued after the date hereof (all such notes in clauses (a) and (b) being referred to collectively as the “ Notes ”). Subject to the conditions and compliance with the covenants set forth herein, the Issuer may issue an unlimited aggregate principal amount of Additional Notes. ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions. “ABL Facility” means (i) the Senior Secured Debtor-in-Possession and Exit Amended and Restated Asset-Based Revolving Credit Agreement, dated as of April 15, 2014, among Momentive Performance Materials Holdings Inc., Momentive Performance Materials Inc., Momentive Performance Materials USA Inc., as U.S. Borrower, Momentive Performance Materials GMBH, as Germany Silicone Borrower, Momentive Performance Materials Quarts GMBH, as Germany Quarts Borrower, Momentive Performance Materials Nova Scotia ULC, as Canadian Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent, and the other lenders and parties from time to time party thereto, as amended, restated, supplemented, waived, replaced (whether or not upon termination and whether with the original lenders or otherwise), restricted, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof, and (ii) whether or not the facility referred to in clause (i) remains outstanding, if designated by the Issuer to be included in the definition of “ABL Facility,” one or more asset-based (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuer and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time. “ABL Facility Collateral Agent” means the “Collateral Agent” (or similar entity) under the ABL Facility Documents and any successor thereto in such capacity. “ABL Facility Documents” means the agreements and other instruments governing the ABL Facility, together with any guarantees thereof and any security documents, other collateral documents and other instruments relating thereto (including documents and instruments governing Hedging Obligations required by the ABL Facility or relating to ABL Obligations). “ABL Obligations” means the Obligations of the borrowers and other obligors (including the Issuer and the Note Guarantors) under the ABL Facility or any of the other ABL Facility Documents, to pay principal, premium, if any, and interest (including any interest accruing after the commencement of bankruptcy or insolvency proceedings, whether or not allowed or allowable as a claim in such proceedings) when due and payable, and all other amounts due or to become due under or in connection with the ABL Facility Documents and the performance of all other Obligations of the obligors thereunder to the lenders and agents under the ABL Facility Documents, according to the respective terms thereof, which Obligations, in the case of Indebtedness, are secured by Liens on the Collateral ranking senior to the Liens securing the Notes and the Note Guarantees. “ABL Obligors” means the Issuer and each subsidiary of the Issuer that is a borrower under or a guarantor of the ABL Obligations under an ABL Facility. “Acquired Indebtedness” means, with respect to any specified Person: (1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person; and (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. “Additional First Priority Lien Secured Party” means the holders of any Other First Priority Lien Obligations that are Incurred after the Issue Date. “Additional Notes” means additional Notes (other than the Original Notes) issued from time to time under the terms of this Indenture subsequent to the Issue Date. “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. “Asset Sale” means: (1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale/Leaseback Transaction) outside the ordinary course of business of MPM or any Restricted Subsidiary (each referred to in this definition as a “ disposition ”) or 2 (2) the issuance or sale of Equity Interests (other than directors’ qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to MPM or another Restricted Subsidiary) (whether in a single transaction or a series of related transactions), in each case other than: (a) a disposition of Cash Equivalents or Investment Grade Securities or damaged, obsolete or worn out property or equipment or disposals of equipment in connection with reinvestment in or replacement of equipment, in each case, in the ordinary course of business; (b) the disposition of all or substantially all of the assets of MPM in a manner permitted pursuant to Section 5.01 or any disposition that constitutes a Change of Control; (c) any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.04; (d) any disposition of assets of MPM or any Restricted Subsidiary or issuance or sale of Equity Interests of any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value of less than $12.5 million; (e) any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to MPM or by MPM or a Restricted Subsidiary to a Restricted Subsidiary; (f) any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of MPM and the Restricted Subsidiaries as a whole, as determined in good faith by MPM; (g) foreclosure on assets of MPM or any of the Restricted Subsidiaries; (h) any disposition of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary; (i) the lease, assignment or sublease of any real or personal property in the ordinary course of business; (j) any disposition of inventory or other assets in the ordinary course of business; (k) any grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property; 3 (l) any disposition of accounts receivable and related assets of the type specified in the definition of “Receivables Financing” to a Receivables Subsidiary in a Qualified Receivables Financing or in factoring or similar transactions; (m) any swap of assets, or any lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of MPM and the Restricted Subsidiaries taken as a whole, as determined in good faith by MPM; provided, that any cash or Cash Equivalents received must be applied in accordance with Section 4.06; (n) any financing transaction with respect to property built or acquired by MPM or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted under this Indenture; (o) any surrender or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind; (p) a transfer of accounts receivable and related assets of the type specified in the definition of “Receivables Financing” (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing; (q) any agreement or arrangement involving, relating to or otherwise facilitating, (i) requirements contracts, (ii) tolling arrangements or (iii) the reservation or presale of production capacity of MPM or any of its Restricted Subsidiaries by one or more third parties; (r) the sale of any property in a Sale/Leaseback Transaction within six months of the acquisition of such property; (s) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements; (t) the sale of any intellectual property and other assets primarily related to the production of gallium nitride, including any interests in joint ventures relating thereto; (u) dispositions in connection with Permitted Liens; and (v) any Sale/Leaseback Transaction pursuant to which the Issuer or any Restricted Subsidiaries receives with respect to such transaction aggregate consideration of less than $15.0 million. “Bank Indebtedness” means any and all amounts payable under or in respect of any Credit Agreement or the other Credit Agreement Documents as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of any Credit Agreement), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in 4 bankruptcy or for reorganization relating to MPM whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof. “Bankruptcy Code” means Title 11 of the United States Code. “Board of Directors” means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof. “Borrowing Base” shall mean, as of any date, the sum of (w) 85% of the book value of the inventory of the Issuer and the ABL Obligors as of the end of the most recent fiscal quarter preceding such date, (x) 90% of the book value of the accounts receivable of the Issuer and the ABL Obligors as of the end of the most recent fiscal quarter preceding such date, (y) to the extent machinery and equipment is an element of the Borrowing Base under an ABL Facility, up to 90% of the book value of the machinery and equipment of the ABL Obligors (that are foreign subsidiaries of the Issuer) as of the end of the most recent fiscal quarter preceding such date and (z) 100% of the Unrestricted Cash of the Issuer and the ABL Obligors as of the end of the most recent fiscal quarter preceding such date, in each case calculated on a consolidated basis in accordance with GAAP (calculated on a pro forma basis to give effect to any Investment, acquisition, disposition, mergers, consolidations and discontinued operation, in each case with such pro forma adjustments as are consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio). “Business Day” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the city in which the Trustee’s principal office is located. “Capital Stock” means: (1) in the case of a corporation, corporate stock or shares; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. “Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP. 5 “Cash Equivalents” means: (1) U.S. Dollars, pounds sterling, euros, the national currency of any member state in the European Union or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business; (2) securities issued or directly and fully guaranteed or insured by the U.S. government, Australia, Great Britain, Canada, Netherlands or any other country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition; (3) in the case of any Foreign Subsidiary, securities issued or directly and fully guaranteed or insured by the government of the jurisdiction of such Foreign Subsidiary, or any agency or instrumentality thereof, in each case with maturities not exceeding 270 days after the date of acquisition and held by it from time to time in the ordinary course of business; (4) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year and overnight bank deposits and demand deposits (in their respective local currencies), in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency); (5) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above; (6) commercial paper issued by a corporation (other than an Affiliate of the Issuer) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition; (7) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; (8) Indebtedness issued by Persons with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s in each case with maturities not exceeding two years from the date of acquisition; (9) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (8) above; and 6 (10) instruments equivalent to those referred to in clauses (1) through (9) above denominated in euros or any other foreign currency comparable in credit quality and tenor to those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction. “Change of Control” means the occurrence of any of the following events: (i) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of MPM and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or (ii) MPM becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(l) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of MPM. “Code” means the Internal Revenue Code of 1986, as amended. “Collateral” means all property subject or purported to be subject, from time to time, to a Lien under any of the Security Documents. “Collateral Agent” means the party serving in such capacity under this Indenture until a successor replaces it and, thereafter, means the successor. “Collateral Agreement” means the collateral agreement dated as of the date hereof among the Issuer, the Note Guarantors and the Collateral Agent, as it may be amended, restated, supplemented or otherwise modified from time to time thereafter in accordance with this Indenture. “Commission” means the Securities and Exchange Commission. “Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication, of: (1) consolidated interest expense of such Person and the Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and expensing of any bridge commitment or other financing fees); plus 7 (2) consolidated capitalized interest of such Person and the Restricted Subsidiaries for such period, whether paid or accrued; plus (3) commissions, discounts, yield and other fees and charges Incurred in connection with any Receivables Financing which are payable to Persons other than MPM and the Restricted Subsidiaries; minus (4) interest income for such period. For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. “Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and the Restricted Subsidiaries for such period, on a consolidated basis; provided, however, that: (1) any net after-tax extraordinary, nonrecurring or unusual gains or losses or income, expenses or charges (less all fees and expenses relating thereto), including, without limitation, (i) severance expenses, expenses related to any reconstruction, decommissioning or reconfiguration of fixed assets for alternate uses, fees, expenses or charges relating to new product lines, plant shutdown costs and acquisition integration costs and (ii) any fees, expenses or charges related to any Equity Offering, Permitted Investment, acquisition or Indebtedness permitted to be Incurred by this Indenture (in each case, whether or not successful); (2) any increase in amortization or depreciation or any one-time non-cash charges or increases or reductions in Net Income, in each case resulting from purchase accounting in connection with any acquisition that is consummated after the Issue Date shall be excluded; (3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period; (4) any net after-tax income or loss from abandoned, closed or discontinued operations and any net after-tax gains or losses on disposal of abandoned, closed or discontinued operations shall be excluded; (5) any net after-tax gains or losses, or any subsequent charges or expenses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of MPM) shall be excluded; 8 (6) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness, Hedging Obligations or other derivative instruments shall be excluded; (7) the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period; (8) solely for the purpose of determining the amount available for Restricted Payments under clause (A) of the definition of “Cumulative Credit,” the Net Income for such period of any Restricted Subsidiary (other than any Note Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that (without duplication) the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein; (9) an amount equal to the amount of Tax Distributions actually made to any parent of such Person in respect of such period in accordance with Section 4.04(b)(xii) shall be included as though such amounts had been paid as income taxes directly by such Person for such period; (10) any impairment charges or asset write-offs and amortization of intangibles in each case arising pursuant to the application of GAAP shall be excluded; (11) any non-cash expense realized or resulting from employee benefit plans or post-employment benefit plans, grants and sales of stock, stock appreciation or similar rights, stock options or other rights shall be excluded; (12) any (a) severance or relocation costs or expenses, (b) one-time non-cash compensation charges, (c) costs and expenses after the Issue Date related to employment of terminated employees, (e) costs or expenses realized in connection with, resulting from or in anticipation of the Transactions or (e) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Issue Date of officers, directors and employees, in each case of such Person or any of the Restricted Subsidiaries, shall be excluded; 9 (13) accruals and reserves that are established or adjusted, in each case as a result of the Transactions within 12 months after the Issue Date, and that are so required to be established or adjusted in accordance with GAAP, and changes in accruals and reserves as a result of the adoption or modification of accounting policies in connection with the Transactions, shall be excluded; (14) solely for purposes of calculating EBITDA, (a) the Net Income of any Person and the Restricted Subsidiaries shall be calculated without deducting the income attributable to, or adding the losses attributable to, the minority equity interests of third parties in any non-wholly-owned Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties and (b) any ordinary course dividend, distribution or other payment paid in cash and received from any Person in excess of amounts included in clause (7) above shall be included; (15) (a) (i) the non-cash portion of “straight-line” rent expense shall be excluded and (ii) the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by Statement of Financial Accounting Standards No. 133 shall be excluded; (16) any currency translation gains and losses related to currency remeasurements of indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded; and (17) non-cash charges for deferred tax asset valuation allowances shall be excluded. Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries or a Restricted Subsidiary to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under clauses (D) and (E) of the definition of “Cumulative Credit.” “Consolidated Non-cash Charges” means, with respect to any Person for any period, the aggregate depreciation, amortization and other non-cash expenses of such Person and the Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP, but excluding any such charge which consists of or requires an accrual of, or cash reserve for, anticipated cash charges for any future period. “Consolidated Secured Debt Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness of MPM and its Restricted Subsidiaries on the date of determination that constitutes ABL Obligations, First Priority Lien Obligations or the Notes to (b) 10 the aggregate amount of EBITDA for the then most recent four fiscal quarters for which internal financial statements of MPM and its Restricted Subsidiaries are available in each case with such pro forma adjustments to Consolidated Total Indebtedness and EBITDA as are consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio; provided, however, that solely for purposes of the calculation of the Consolidated Secured Debt Ratio, in connection with the incurrence of any Lien pursuant to clause (8)(B) of the definition of “Permitted Liens,” MPM or its Restricted Subsidiaries may elect, pursuant to an Officer’s Certificate delivered to the Trustee, to treat all or any portion of the commitment under any Indebtedness (including any Bank Indebtedness) which is to be secured by such Lien as being Incurred at such time and any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time. “Consolidated Taxes” means provision for taxes based on income, profits or capital, including, without limitation, state, franchise and similar taxes and any Tax Distributions taken into account in calculating Consolidated Net Income. “Consolidated Total Indebtedness” means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate amount of all outstanding Indebtedness of MPM and its Restricted Subsidiaries (excluding any undrawn letters of credit) consisting of Capitalized Lease Obligations, bankers’ acceptances, Indebtedness for borrowed money and Indebtedness in respect of the deferred purchase price of property or services, plus (2) the aggregate amount of all outstanding Disqualified Stock of MPM and its Restricted Subsidiaries and all Preferred Stock of Restricted Subsidiaries of MPM, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences, minus (3) the lesser of the aggregate amount of all Unrestricted Cash on the consolidated balance sheet of MPM and its Restricted Subsidiaries as of such date of determination, in each case determined on a consolidated basis in accordance with GAAP. “Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“ primary obligations ”) of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent: (1) to purchase any such primary obligation or any property constituting direct or indirect security therefor; (2) to advance or supply funds: (a) for the purchase or payment of any such primary obligation; or (b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or (3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof. 11 “Credit Agreement” means, collectively, if designated by MPM to be included in the definition of “Credit Agreement,” one or more (a) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (b) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (c) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time. “Credit Agreement Documents” means the collective reference to any “Credit Agreement,” any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time. “Cumulative Credit” means the sum of (without duplication): (A) 50% of the Consolidated Net Income of MPM for the period (taken as one accounting period, the “ Reference Period ”) from April 1, 2012 to the end of MPM’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus (B) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received by MPM after the Issue Date (other than net proceeds to the extent such net proceeds have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (xix) of Section 4.03(b)), from the issue or sale of Equity Interests of MPM (excluding Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions and Disqualified Stock), including Equity Interests issued upon conversion of Indebtedness or Disqualified Stock or upon exercise of warrants or options (other than an issuance or sale to a Restricted Subsidiary), plus (C) 100% of the aggregate amount of contributions to the capital of MPM received in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash after the Issue Date (other than Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions, Disqualified Stock and contributions to the extent such contributions have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (xix) of Section 4.03(b)), plus (D) the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of MPM or any Restricted Subsidiary issued after the Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in MPM (other than Disqualified Stock) or any direct or indirect parent of MPM ( provided that, in the case of any parent, such Indebtedness or Disqualified Stock is retired or extinguished), plus 12 (E) 100% of the aggregate amount received by MPM or any Restricted Subsidiary in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received by MPM or any Restricted Subsidiary, in each case subsequent to the Issue Date, from: (I) the sale or other disposition (other than to MPM or a Restricted Subsidiary) of Restricted Investments made by MPM and the Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from MPM and the Restricted Subsidiaries by any Person (other than MPM or any of the Restricted Subsidiaries) and from repayments of loans or advances (including the release of any guarantee that constituted a Restricted Investment when made) that constituted Restricted Investments (other than, in each case, to the extent that the Restricted Investment was made pursuant to clause (vii) or (x) of Section 4.04(b)), (II) the sale (other than to MPM or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or (III) a distribution or dividend from an Unrestricted Subsidiary, plus (F) in the event any Unrestricted Subsidiary of MPM has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, MPM or a Restricted Subsidiary, in each case subsequent to the Issue Date, the Fair Market Value (as determined in accordance with the next succeeding sentence) of the Investment of MPM in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable), after taking into account any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (vii) or (x) of Section 4.04(b) or constituted a Permitted Investment). The Fair Market Value of property, other than cash, covered by clauses (B), (C), (D), (E) and (F) of this definition of “Cumulative Credit” shall be determined in good faith by MPM and (x) in the case of property with a Fair Market Value in excess of $15.0 million, shall be set forth in an Officer’s Certificate, (y) in the case of property with a Fair Market Value in excess of $25.0 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors of MPM, or (z) in the case of property with a Fair Market Value in excess of $50.0 million, shall be set forth in writing by an Independent Financial Advisor. 13 “Default” means any event which is, or after notice or passage of time or both would be, an Event of Default. “Designated Credit Agreement” means, if MPM incurs any Credit Agreement hereunder, any Credit Agreement designated by the Issuer to be the Designated Credit Agreement hereunder. For the avoidance of doubt, an ABL Facility may not be a Designated Credit Agreement. “Designated Non-cash Consideration” means the Fair Market Value of non-cash consideration received by the Issuer or one of the Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration. “Designated Preferred Stock” means Preferred Stock of MPM or any direct or indirect parent of MPM, as applicable (other than Disqualified Stock), that is issued for cash (other than to MPM or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate, on the issuance date thereof. “Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event: (1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the Notes and any purchase requirement triggered thereby may not become operative until compliance with the asset sale and change of control provisions applicable to the Notes (including the purchase of any Notes tendered pursuant thereto)), (2) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person or any of its Restricted Subsidiaries, or (3) is redeemable at the option of the holder thereof, in whole or in part, in each case prior to 91 days after the maturity date of the Notes; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of MPM or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by MPM in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided 14 further, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock. “Domestic Subsidiary” means a Restricted Subsidiary that is not a Foreign Subsidiary. “DTC” means The Depository Trust Company, a New York corporation. “EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income: (1) Consolidated Taxes; plus (2) Fixed Charges; provided, however, such amount will be included in EBITDA notwithstanding that such amount was not deducted in calculating Consolidated Net Income; plus (3) Consolidated Non-cash Charges; plus (4) business optimization expenses and other restructuring charges or expenses (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory optimization programs, plant closures, retention, severance, systems establishment costs and excess pension charges); plus (5) [Reserved]; (6) impairment charges, including the write down of Investments; plus (7) non-operating expenses; plus (8) the cost (or amortization of prior service cost) of subsidizing coverage for persons affected by amendments to medical benefit plans implemented prior to the Issue Date; provided, however, such amount will be included in EBITDA notwithstanding that such amount was not deducted in calculating Consolidated Net Income; less, without duplication, (9) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period and any items for which cash was received in a prior period, including the amortization of employee benefit plans prior service costs); minus (10) non-operating income. 15 “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). “Equity Offering” means any public or private sale after the Issue Date of common stock or Preferred Stock of MPM or any direct or indirect parent of MPM, as applicable (other than Disqualified Stock), other than: (1) public offerings with respect to MPM or such direct or indirect parent’s common stock registered on Form S-8; and (2) any such public or private sale that constitutes an Excluded Contribution. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder. “Excluded Assets” means the property and other assets of the Issuer and the Note Guarantors that is excluded from the grant of security interest in favor of the Collateral Agent, on behalf of the holders of the Notes, pursuant to the terms of this Indenture and the Security Documents. “Excluded Contributions” means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by senior management or the Board of Directors of MPM) received by MPM after the Issue Date from: (1) contributions to its common equity capital; and (2) the sale (other than to a Subsidiary of MPM or to any Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of MPM; in each case designated as Excluded Contributions pursuant to an Officer’s Certificate executed on or promptly after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be. “Existing First Lien Notes” means MPM’s $[ ] []% First-Priority Senior Secured Notes due 2021, or such other first-priority notes issued by MPM on the Issue Date in connection with the Joint Chapter 11 Plan of Reorganization for Momentive Performance Materials Inc. and its affiliated debtors, dated [ ], 2014. “Existing First Lien Notes Indenture” means the Indenture dated as of [ ] pursuant to which the Existing First Lien Notes were issued, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time thereafter. 16 “Existing First Lien Notes Documents” means, collectively, the Existing First Lien Notes Indenture, the Existing First Lien Notes and all guarantees in respect thereof, the Existing First Lien Notes Security Documents and all other documents and instruments executed and delivered in connection herewith, in each case as such agreements may be amended, restated, supplemented or otherwise modified from time to time. “Existing First Lien Notes Obligations” means the Obligations of the Issuer and any other obligor under the Existing First Lien Notes Indenture or any of the other Existing First Lien Notes Documents, including any guarantor in respect thereof, to pay principal, premium, if any, and interest (including any interest accruing after the commencement of bankruptcy or insolvency proceedings, whether or not allowed or allowable as a claim in such proceedings) when due and payable, and all other amounts due or to become due under or in connection with the Existing First Lien Notes Documents and the performance of all other Obligations of the Issuer and such guarantors in respect of the Existing First Lien Notes. “Existing First Lien Notes Security Documents” means the collateral agreement, security agreements, pledge agreements, collateral assignments, mortgages and related agreements, creating the security interests in the collateral as contemplated by the Existing First Lien Notes Indenture, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time thereafter. “Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. “First Lien Collateral Agent” shall mean [ ], in its capacity as collateral agent for the First Priority Lien Secured Parties, together with its successors and permitted assigns or other persons acting in such capacity (including, [NAME OF TRUSTEE]) under the Existing First Lien Notes Indenture and the First Lien Security Documents exercising substantially the same rights and powers; provided that if such First Lien Collateral Agent is not [ ], such First Lien Collateral Agent shall have become a party to the Intercreditor Agreement and the other applicable First Lien Security Documents. “First Lien Security Documents” means the Existing First Lien Notes Security Documents and any other agreement, document or instrument pursuant to which a Lien is granted or purported to be granted securing First Priority Lien Obligations or under which rights or remedies with respect to such Liens are governed. “First Priority After-Acquired Property” means any property of MPM or any Note Guarantor, other than Excluded Assets, that secures any First Priority Lien Obligations that is not already subject to the Lien under the Security Documents. “First Priority Lien Secured Parties” means (a) the “secured parties” (or any comparable term) as defined in any Credit Agreement (b) the holders of the First Priority Lien Obligations and (c) any Additional First Priority Lien Secured Parties. 17 “First Priority Liens” means all Liens that secure the First Priority Lien Obligations. “First Priority Lien Obligations” means (i) all Obligations in respect of Secured Bank Indebtedness, (ii) all Existing First Lien Notes Obligations, (iii) all Other First Priority Lien Obligations and (iv) all other Obligations of MPM or any of its Restricted Subsidiaries in respect of Hedging Obligations or Obligations in respect of cash management services, in each case that are secured by Liens granted pursuant to any Credit Agreement Document. “Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that MPM or any of the Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of revolving credit borrowings or revolving advances under any Qualified Receivables Financing, in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “ Calculation Date ”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period (including in the case of any Incurrence or issuance a pro forma application of the net proceeds therefrom). For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business realignment projects or initiatives, restructurings or reorganizations that MPM or any of the Restricted Subsidiaries has either determined to make or made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (each, for purposes of this definition, a “ pro forma event ”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations, operational changes, business realignment projects or initiatives, restructurings and reorganizations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into MPM or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, discontinued operation, operational change, business realignment projects or initiatives, restructurings or reorganizations, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, consolidation, operational change, business realignment projects or initiatives, restructurings or reorganizations had occurred at the beginning of the applicable four-quarter period. 18 For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of MPM. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of MPM as set forth in an Officer’s Certificate, to reflect (1) operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable pro forma event (including, to the extent applicable, from the Transactions), and (2) all adjustments of the nature used in connection with the calculation of “Adjusted EBITDA” as set forth in MPM’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 to the extent such adjustments, without duplication, continue to be applicable to such four-quarter period. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of twelve months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as MPM may designate. “Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of: (1) Consolidated Interest Expense of such Person for such period; and (2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and the Restricted Subsidiaries. “Flow Through Entity” means an entity that is treated as a partnership not taxable as a corporation, a grantor trust or a disregarded entity for U.S. federal income tax purposes or subject to treatment on a comparable basis for purposes of state, local or foreign tax law. “Foreign Subsidiary” means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state or territory thereof or the District of Columbia and any direct or indirect Subsidiary of such Restricted Subsidiary. “GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which were in effect as of 19 December 4, 2006. For the purposes of this Indenture, the term “consolidated” with respect to any Person shall mean such Person consolidated with the Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary shall be accounted for as an Investment. “Government Obligations” means securities that are: (1) direct obligations of the United States of America or a member of the European Union, for the timely payment of which its full faith and credit is pledged; or (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America or a member of the European Union, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America or such member of the European Union; which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Government Obligations or a specific payment of principal of or interest on any such Government Obligations held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligations or the specific payment of principal of or interest on the Government Obligations evidenced by such depository receipt. “guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations. “Hedging Obligations” means, with respect to any Person, the obligations of such Person under: (1) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and (2) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices. “Holder” means the Person in whose name a Note is registered on the Registrar’s books. “Incur” means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary. 20 “Indebtedness” means, with respect to any Person: (1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP), which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; (2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); (3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person; and (4) to the extent not otherwise included, with respect to MPM and the Restricted Subsidiaries, the amount then outstanding ( i.e., advanced, and received by, and available for use by, MPM or any of the Restricted Subsidiaries) under any Receivables Financing (as set forth in the books and records of MPM or any Restricted Subsidiary and confirmed by the agent, trustee or other representative of the institution or group providing such Receivables Financing); provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations Incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; or (4) Obligations under or in respect of Qualified Receivables Financing. Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial 21 Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture. “Indenture” means this Indenture as amended or supplemented from time to time. “Independent Financial Advisor” means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is, in the good faith determination of MPM, qualified to perform the task for which it has been engaged. “Intercreditor Agreement” means (i) the intercreditor agreement dated as of the Issue Date among the Issuer, the Note Guarantors, the Trustee, the ABL Collateral Agent, the First Lien Collateral Agent, the Collateral Agent and the Junior Priority Collateral Agent (if any), as may be amended, restated, supplemented or otherwise modified from time to time in accordance with this Indenture or (ii) any replacement thereof that contains terms not materially less favorable to the holders of the Notes than the intercreditor agreement referred to in clause (i). “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency. “Investment Grade Securities” means: (1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents); (2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody’s or BBB- (or equivalent) by S&P, or an equivalent rating by any other Rating Agency, but excluding any debt securities or loans or advances between and among MPM and its Subsidiaries; (3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2), which fund may also hold immaterial amounts of cash pending investment and/or distribution; and (4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition. “Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, 22 Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of MPM in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.04: (1) “Investments” shall include the portion (proportionate to MPM’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of MPM at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, MPM shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to: (a) MPM’s “Investment” in such Subsidiary at the time of such redesignation; less (b) the portion (proportionate to MPM’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and (2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the Board of Directors of MPM. “Issue Date” means [ ], 2014, the date on which the Original Notes are issued. “Junior Lien Obligations” means all Obligations with respect to Indebtedness permitted to be incurred under this Indenture which is by its terms intended to be secured on a basis junior to the Liens securing the Notes. “Junior Priority Collateral Agent” means the Person acting in its capacity as collateral agent in respect of Junior Lien Obligations, together with its successors in such capacity. “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided that in no event shall an operating lease be deemed to constitute a Lien. “Management Group” means the group consisting of the directors, executive officers and other management personnel of MPM or any direct or indirect parent of MPM, as the case may be, on the Issue Date together with (1) any new directors whose election by such boards of directors or whose nomination for election by the shareholders of MPM or any direct or indirect parent of MPM, as applicable, was approved by (x) a vote of a majority of the directors of MPM or any direct or indirect parent of MPM, as applicable, then still in office who were either directors 23 on the Issue Date or whose election or nomination was previously so approved or (y) the Permitted Holders and (2) executive officers and other management personnel of MPM or any direct or indirect parent of MPM, as applicable, hired at a time when the directors on the Issue Date together with the directors so approved constituted a majority of the directors of MPM or any direct or indirect parent of MPM, as applicable. “Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof. “MPM” means Momentive Performance Materials Inc., together with its successors and assigns. “Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends. “Net Proceeds” means the aggregate cash proceeds received by MPM or any of the Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements related thereto), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to Section 4.06(b)(i)) to be paid as a result of such transaction (including to obtain any required consent therefore), and any deduction of appropriate amounts to be provided by MPM as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by MPM after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction. “Note Documents” means, collectively, this Indenture, the Notes, the Note Guarantees, the Security Documents and all other documents and instruments executed and delivered in connection herewith, in each case as such agreements may be amended, restated, supplemented or otherwise modified from time to time. “Note Guarantee” means any guarantee of the obligations of the Issuer under this Indenture and the Notes by any Note Guarantor in accordance with the provisions of this Indenture. “Note Guarantor” means any Person that Incurs a Note Guarantee; provided that upon the release or discharge of such Person from its Note Guarantee with respect to the Notes in accordance with this Indenture, such Person ceases to be a Note Guarantor with respect to the Notes. 24 “Note Obligations” means the Obligations of the Issuer and any other obligor under this Indenture or any of the other Note Documents, including any Note Guarantor, to pay principal, premium, if any, and interest (including any interest accruing after the commencement of bankruptcy or insolvency proceedings, whether or not allowed or allowable as a claim in such proceedings) when due and payable, and all other amounts due or to become due under or in connection with the Note Documents and the performance of all other Obligations of the Issuer and the Note Guarantors. “Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Notes shall not include fees or indemnifications in favor of the Trustee and other third parties other than the Holders of the Notes. “Officer” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Issuer or a Note Guarantor, as applicable. “Officer’s Certificate” means a certificate signed on behalf of the Issuer by an Officer of the Issuer or on behalf of a Note Guarantor by an Officer of such Note Guarantor, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer or such Note Guarantor, as applicable, that meets the requirements set forth in this Indenture. “Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer or the Trustee. “Other First Priority Lien Obligations” means any First Priority Lien Obligations that are Incurred after the Issue Date and secured by the collateral pursuant to the Existing First Lien Notes Security Documents on a pari passu basis with the Liens securing the Existing First Lien Notes Obligations. “Other Pari Passu Obligations” means Obligations with respect to the other Indebtedness of MPM and its Restricted Subsidiaries permitted to be incurred under this Indenture which is by its terms intended to be secured equally and ratably with the Notes and is designated by MPM as an Other Pari Passu Obligation. “Pari Passu Indebtedness” means: (1) with respect to the Issuer, the Notes and any Indebtedness which ranks pari passu in right of payment to the Notes; and (2) with respect to any Note Guarantor, its Note Guarantee and any Indebtedness which ranks pari passu in right of payment to such Note Guarantor’s Note Guarantee. 25 “Permitted Holders” means, at any time, each of (i) [Apollo], [Oaktree] and [ ],1 (ii) the Management Group, (iii) any Person that has no material assets other than Capital Stock of MPM and, directly or indirectly, holds or acquires 100% of the total voting power of the Voting Stock of MPM, and of which no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than any of the other Permitted Holders specified in clauses (i) and (ii) above, holds more than 50% of the total voting power of the Voting Stock thereof, and (iv) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any of the Permitted Holders specified in clauses (i) and (ii) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of MPM (a “ Permitted Holder Group ”), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member and (2) no Person or other “group” (other than Permitted Holders specified in clauses (i) and (ii) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder. “Permitted Investments” means: (1) any Investment in MPM or any Restricted Subsidiary; (2) any Investment in Cash Equivalents or Investment Grade Securities; (3) any Investment by MPM or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, MPM or a Restricted Subsidiary; (4) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 4.06 or any other disposition of assets not constituting an Asset Sale; (5) any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date; 1 Add other Permitted Holders, if any. 26 provided, that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under this Indenture; (6) advances to directors, officers or employees not in excess of $25.0 million outstanding at any one time in the aggregate; (7) any Investment acquired by MPM or any of the Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by MPM or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, or (b) as a result of a foreclosure by MPM or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; (8) Hedging Obligations permitted under Section 4.03(b)(x); (9) any Investment by MPM or any of the Restricted Subsidiaries in a Similar Business having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (9) that are at that time outstanding, not to exceed the greater of (x) $150.0 million and (y) 4.5% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary; (10) additional Investments by MPM or any of the Restricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the greater of (x) $150.0 million and (y) 4.5% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); (11) loans and advances to officers, directors and employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business; (12) Investments the payment for which consists of Equity Interests of MPM (other than Disqualified Stock) or any direct or indirect parent of MPM, as applicable; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under clause (C) of the definition of “Cumulative Credit;” 27 (13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.07(b) (except transactions described in clauses (ii), (vi), (vii), (xi)(b), (xvii) and (xviii) of such Section); (14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons; (15) guarantees issued in accordance with Sections 4.03 and 4.11; (16) Investments consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services and equipment or purchases of contract rights or licenses or leases of intellectual property; (17) any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness; provided, however, that any Investment in a Receivables Subsidiary is in the form of a Purchase Money Note, contribution of additional receivables or an equity interest; (18) Investments resulting from the receipt of non-cash consideration in an Asset Sale received in compliance with Section 4.06; (19) additional Investments in joint ventures of MPM or any of the Restricted Subsidiaries in an aggregate amount outstanding not to exceed $50.0 million; (20) any Investment in an entity which is not a Restricted Subsidiary to which a Restricted Subsidiary sells accounts receivable pursuant to a Qualified Receivables Financing; and (21) Investments of a Restricted Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with MPM or a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation. “Permitted Liens” means, with respect to any Person: (1) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business; 28 (2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review; (3) Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings; (4) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit (or deposits to secure letters of credit or surety bonds for the same purpose) issued pursuant to the request of and for the account of such Person in the ordinary course of its business; (5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person; (6) Liens securing Indebtedness (including Capitalized Lease Obligations) Incurred to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or Capital Stock of any Person owning such assets) of such Person; provided, however, that the Lien may not extend to any other property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is Incurred (other than assets and property affixed or appurtenant thereto and except for customary cross collateral arrangements with respect to property or equipment financed by the same financing source pursuant to the same financing scheme), and the Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more than 270 days after the latest of the (i) acquisition of the property subject to the Lien, (ii) completion of construction, repair, improvement or addition of the property subject to the Lien and (iii) commencement of full operation of the property subject to the Lien; (7) Liens securing Indebtedness of a Foreign Subsidiary permitted to be Incurred pursuant to Section 4.03; provided, however, that such Liens do not extend to the property or assets of MPM or any Domestic Subsidiary; (8) Liens on the Collateral (and Excluded Assets) incurred to secure: (A) the Notes (other than Additional Notes) and the Note Guarantees, 29 (B) Indebtedness Incurred pursuant to Section 4.03(a) or clauses (i)(1)(x), (i)(2) or (xii) (or (xiii) to the extent it guarantees any such Indebtedness) of Section 4.03(b) to the extent such Lien is incurred pursuant to this clause (8)(B) as designated by the Issuer; provided, however, that, other than with respect to Liens incurred to secure Indebtedness Incurred pursuant to clauses (i) or (xii) (or (xiii) to the extent it guarantees such Indebtedness) of Section 4.03(b), at the time of incurrence and after giving pro forma effect thereto (including a pro forma application of the net proceeds therefrom), (i) in the case of Other Pari Passu Obligations or in any other case not subject to clause (ii), the Consolidated Secured Debt Ratio would be no greater than 5.5 to 1.0 and (ii) in the case of First Priority Lien Obligations, the Consolidated Secured Debt Ratio (excluding the Notes and Other Pari Passu Obligations from such calculation) would be no greater than 4.0 to 1.0; provided further, however, that the immediately preceding proviso shall not apply to any Lien which is deemed to be incurred under this clause (8)(B) by reason of the second proviso to clause (22) of this definition of “Permitted Liens” (except to the extent such Lien also secures Indebtedness in addition to the Indebtedness permitted to be secured thereby under clause (22)), and (C) Junior Lien Obligations; provided that, in the case of this clause (C), if the Liens are not on Collateral, a Lien on such asset is granted to secure the Notes or the applicable Note Guarantee on a basis ranking senior to the Lien securing such Junior Lien Obligations; (9) Liens existing on the Issue Date (excluding, for the avoidance of doubt, Liens securing Bank Indebtedness Incurred or deemed Incurred pursuant to clause (i) of Section 4.03(b) on the Issue Date); (10) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, however, that such Liens may not extend to any other property owned by MPM or any Restricted Subsidiary (other than such Person becoming a Subsidiary and Subsidiaries of such Person); (11) Liens on assets or property at the time MPM or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into MPM or any Restricted Subsidiary; provided, however, that such Liens (other than Liens to secure Indebtedness Incurred pursuant to clause (xv) of Section 4.03(b)) are not created or Incurred in connection with, or in contemplation of, such acquisition; provided, further, however, that the Liens (other than Liens to secure Indebtedness Incurred pursuant to clause (xv) of Section 4.03(b)) may not extend to any other property owned by MPM or any Restricted Subsidiary (other than pursuant to after acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition); 30 (12) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to MPM or another Restricted Subsidiary permitted to be Incurred in accordance with Section 4.03; (13) Liens securing Hedging Obligations not incurred in violation of this Indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness; (14) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; (15) licenses, sublicenses and leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of MPM or any of the Restricted Subsidiaries; (16) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by MPM and the Restricted Subsidiaries in the ordinary course of business; (17) Liens in favor of MPM or any Note Guarantor or Liens on assets of a Restricted Subsidiary of MPM that is not a Note Guarantor in favor solely of another Restricted Subsidiary of MPM that is not a Note Guarantor; (18) Liens on accounts receivable and related assets of the type specified in the definition of “Receivables Financing” Incurred in connection with a Qualified Receivables Financing; (19) deposits made in the ordinary course of business to secure liability to insurance carriers; (20) Liens on the Equity Interests of Unrestricted Subsidiaries; (21) grants of software and other technology licenses in the ordinary course of business; (22) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10) and (11); provided, however, that (x) such new Lien shall be limited to all or part of the same property (including any after acquired property to the extent it would have been subject to the original Lien) that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not 31 increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10) and (11) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; provided further, however, that in the case of any Liens to secure any refinancing, refunding, extension or renewal of Indebtedness secured by a Lien referred to in clause (8)(B) or (8)(D), the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension or renewal shall be deemed secured by a Lien under clause (8)(B) or (8)(D) and not this clause (22) for purposes of determining the principal amount of Indebtedness outstanding under clause (8)(B) or (8)(D) and for purposes of the definition of Secured Bank Indebtedness and the Consolidated Secured Debt Ratio; (23) Liens on equipment of MPM or any Restricted Subsidiary granted in the ordinary course of business to MPM’s or such Restricted Subsidiary’s client at which such equipment is located; (24) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made; (25) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with importation of goods; (26) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business; (27) Liens securing insurance premium financing arrangements; provided that such Lien is limited to the applicable insurance carriers; (28) Liens incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business; (29) Liens arising by virtue of any statutory or common law provisions relating to banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution; (30) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement; 32 (31) any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of MPM or any Restricted Subsidiary; and (32) other Liens securing obligations in an aggregate principal amount not to exceed $30.0 million at any one time outstanding. Any provider of additional extensions of credit shall be entitled to rely on the determination of an Officer that Liens incurred satisfy clause (8) above if such determination is set forth in an Officer’s Certificate delivered to such provider; provided, however, that such determination will not affect whether such Lien actually was incurred as permitted by clause (8). “Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. “Preferred Stock” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up. “Presumed Tax Rate” means the highest effective marginal statutory combined U.S. federal, state and local income tax rate prescribed for an individual residing in New York City (taking into account (i) the deductibility of state and local income taxes for U.S. federal income tax purposes, assuming the limitation of Section 68(a)(2) of the Code applies and taking into account any impact of Section 68(f) of the Code, and (ii) the character (long-term or short-term capital gain, dividend income or other ordinary income) of the applicable income). “Purchase Money Note” means a promissory note of a Receivables Subsidiary evidencing a line of credit, which may be irrevocable, from MPM or any Subsidiary of MPM to a Receivables Subsidiary in connection with a Qualified Receivables Financing, which note is intended to finance that portion of the purchase price that is not paid by cash or a contribution of equity. “Qualified Receivables Financing” means any Receivables Financing of a Receivables Subsidiary that meets the following conditions: (1) the Board of Directors of MPM shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to MPM and the Receivables Subsidiary; (2) all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by the Issuer); and (3) the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the Issuer) and may include Standard Securitization Undertakings. 33 The grant of a security interest in any accounts receivable of the Issuer or any of the Restricted Subsidiaries (other than a Receivables Subsidiary) to secure Bank Indebtedness, Indebtedness in respect of the Notes or any Indebtedness Incurred to refinance the Notes shall not be deemed a Qualified Receivables Financing. “Rating Agency” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases to rate the Notes for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-l(c)(2)(vi)(F) under the Exchange Act selected by the Issuer or any direct or indirect parent of the Issuer as a replacement agency for Moody’s or S&P, as the case may be. “Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing. “Receivables Financing” means any transaction or series of transactions that may be entered into by MPM or any of its Subsidiaries pursuant to which MPM or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by MPM or any of its Subsidiaries); and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of MPM or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by MPM or any such Subsidiary in connection with such accounts receivable. “Receivables Repurchase Obligation” means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller. 34 “Receivables Subsidiary” means a Wholly Owned Restricted Subsidiary (or another Person formed for the purposes of engaging in Qualified Receivables Financing with MPM in which MPM or any Subsidiary of MPM makes an Investment and to which MPM or any Subsidiary of MPM transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of MPM and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of MPM (as provided below) as a Receivables Subsidiary and: (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by MPM or any other Subsidiary of MPM (excluding guarantees of obligations (other than the principal of and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates MPM or any other Subsidiary of MPM in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of MPM or any other Subsidiary of MPM, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings; (b) with which neither MPM nor any other Subsidiary of MPM has any material contract, agreement, arrangement or understanding other than on terms which MPM reasonably believe to be no less favorable to MPM or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of MPM; and (c) to which neither MPM nor any other Subsidiary of MPM has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Board of Directors of MPM shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of MPM giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing conditions. “Restricted Investment” means an Investment other than a Permitted Investment. “Restricted Subsidiary” means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of MPM. “Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired by MPM or a Restricted Subsidiary whereby MPM or a Restricted Subsidiary transfers such property to a Person and MPM or such Restricted Subsidiary leases it from such Person, other than leases between MPM and a Restricted Subsidiary or between Restricted Subsidiaries. “S&P” means Standard & Poor’s Ratings Group or any successor to the rating agency business thereof. “Second Priority Lien” means the Liens securing (i) the Obligations of the Issuer and the Note Guarantors in respect of the Notes and this Indenture and (ii) any Other Pari Passu Obligations. “Secured Bank Indebtedness” means any Bank Indebtedness that is secured by a Permitted Lien incurred or deemed incurred pursuant to clause (8) of the definition of “Permitted Lien.” “Secured Indebtedness” means any Indebtedness secured by a Lien. 35 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. “Security Documents” means the Collateral Agreement, security agreements, pledge agreements, collateral assignments, mortgages and related agreements, creating the security interests in the Collateral as contemplated by this Indenture, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time thereafter. “Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of MPM within the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission. “Similar Business” means a business, the majority of whose revenues are derived from the activities of MPM and its Subsidiaries as of the Issue Date or any business or activity that is reasonably similar or complementary thereto or a reasonable extension, development or expansion thereof or ancillary thereto. “Standard Securitization Undertakings” means representations, warranties, covenants, indemnities and guarantees of performance entered into by MPM or any Subsidiary of MPM which MPM has determined in good faith to be customary in a Receivables Financing including without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking. “Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred). “Subordinated Indebtedness” means (a) with respect to MPM, any Indebtedness of MPM which is by its terms subordinated in right of payment to the Notes, and (b) with respect to any Note Guarantor, any Indebtedness of such Note Guarantor which is by its terms subordinated in right of payment to its Note Guarantee. “Subsidiary” means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity. 36 “Tax Distributions” means any distributions described in Section 4.04(b)(xii). “TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture. “Total Assets” means the total consolidated assets of MPM and the Restricted Subsidiaries, as shown on the most recent balance sheet of MPM. “Transactions” refers to (i) the offering of the Original Notes, (ii) the offering of the Existing First Lien Notes, (iii) entering into the ABL Facility and (iv) the transactions contemplated by that certain Joint Chapter 11 Plan of Reorganization for Momentive Performance Materials Inc. and its Affiliated Debtors, dated [ ], 2014 filed in the jointly administered proceedings commenced by the Issuer and certain of its debtor affiliates, styled In re MPM Silicones, LLC, et al., Case No. 14-22503 under Title 11 of the United States Code, 11 U.S.C. §§ 101-1532 in the United States Bankruptcy Court for the Southern District of New York, White Plains, and the other transactions entered into in connection therewith. “Treasury Rate” means the yield to maturity of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Issue Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Issue Date to the stated maturity of the Notes; provided , that , that if no published maturity exactly corresponds with such period, then the Treasury Rate shall be interpolated or extrapolated on a straight-line basis from the arithmetic mean of the yields for the next shortest and next longest published maturities. “Trust Officer” means: (1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject, and (2) who shall have direct responsibility for the administration of this Indenture. “Trustee” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. “Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to time. 37 “Unrestricted Cash” means cash or Cash Equivalents of MPM or any of its Restricted Subsidiaries that would not appear as “restricted” on a consolidated balance sheet of MPM or any of its Restricted Subsidiaries. “Unrestricted Subsidiary” means: (1) any Subsidiary of MPM that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below; and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of MPM may designate any Subsidiary of MPM (including any newly acquired or newly formed Subsidiary of MPM) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, MPM or any other Subsidiary of MPM that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of MPM or any of the Restricted Subsidiaries; provided, further, however, that either: (a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or (b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.04. The Board of Directors of MPM may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation: (x) (1) MPM could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a) or (2) the Fixed Charge Coverage Ratio for MPM and the Restricted Subsidiaries would be greater than such ratio for MPM and the Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and (y) no Event of Default shall have occurred and be continuing. Any such designation by the Board of Directors of MPM shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of MPM giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions. Notwithstanding anything to the contrary herein, and without any further condition, qualification or action hereunder, Subsidiaries designated as Unrestricted Subsidiaries as of the Issue Date under the Existing First Lien Notes Indenture will be Unrestricted Subsidiaries. 38 “Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. “Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified Stock, as the case may be, at any date, the quotient obtained by dividing (a) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock multiplied by the amount of such payment, by (b) the sum of all such payments. “Wholly Owned Restricted Subsidiary” is any Wholly Owned Subsidiary that is a Restricted Subsidiary. “Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares required to be held by Foreign Subsidiaries) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person. Section 1.02. Other Definitions. Term Section ABL Transaction Affiliate Transaction Agent Members Asset Sale Offer Bankruptcy Law Calculation Date Change of Control Offer Collateral Agent covenant defeasance option Custodian disposition Event of Default Excess Proceeds Guaranteed Obligations incorporated provision Increased Amount Issuer legal defeasance option Mortgage Deliverables Notes Notice of Default Offer Period Original Notes Paying Agent Permitted Holder Group 11.03 4.07(a) Appendix A 4.06(b)(iii) 6.01 1.01 4.08(b) 1.01 8.01(c) 6.01 1.01 6.01 4.06(b) 12.01(a) 13.01 4.12 Preamble 8.01(c) 11.01(b) Preamble 6.01 4.06(d) Preamble 2.04 1.01 39 Term Section Pledgors primary obligations primary obligor pro forma event protected purchaser Reference Period Refinancing Indebtedness Refunding Capital Stock Registrar Restricted Payments Retired Capital Stock Reversion Date Securities Act Successor Issuer Successor Note Guarantor Suspended Covenants Suspension Date Suspension Period Transfer Trustee 1.01 1.01 1.01 1.01 2.08 1.01 4.03(b)(xiv) 4.04(b)(ii) 2.04 4.04(a)(iv) 4.04(b)(ii) 4.17(b) Appendix A 5.01(a)(i) 5.01(b)(i) 4.17(a)(2) 4.17(a) 4.17(b) 5.01(b)(ii) Preamble Section 1.03. Incorporation by Reference of Trust Indenture Act. This Indenture incorporates by reference certain provisions of the TIA. The following TIA terms have the following meanings: “Commission” means the SEC. “indenture securities” means the Notes and the Note Guarantees. “indenture security holder” means a Holder. “indenture to be qualified” means this Indenture. “indenture trustee” or “institutional trustee” means the Trustee. “obligor” on the indenture securities means the Issuer, the Note Guarantors and any other obligor on the Notes. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by the Commission rule have the meanings assigned to them by such definitions. Section 1.04. Rules of Construction. Unless the context otherwise requires: (a) a term has the meaning assigned to it; 40 (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (c) “or” is not exclusive; (d) “including” means including without limitation; (e) words in the singular include the plural and words in the plural include the singular; (f) unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness; (g) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP; (h) the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater; (i) unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP; and (j) “$” and “U.S. Dollars” each refer to United States dollars, or such other money of the United States of America that at the time of payment is legal tender for payment of public and private debts. ARTICLE II. THE NOTES Section 2.01. Amount of Notes. The aggregate principal amount of Original Notes which may be authenticated and delivered under this Indenture on the Issue Date is $[ ]. All Notes shall be substantially identical except as to denomination. The Issuer may from time to time after the Issue Date issue Additional Notes under this Indenture in an unlimited principal amount, so long as (i) the Incurrence of the Indebtedness represented by such Additional Notes is at such time permitted by Section 4.03 and the Liens thereon are permitted by Section 4.12 and (ii) such Additional Notes are issued in compliance with the other applicable provisions of this Indenture. With respect to any Additional Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.07, 2.08, 2.10, 3.08, 4.06(e), 4.08(c) or the Appendix), there shall be (a) established in or pursuant to a resolution of the Board of Directors of the Issuer and (b) (i) set forth or determined in the manner provided in an Officer’s Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes: (1) the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture; 41 (2) the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes shall accrue; and (3) if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Exhibit A hereto hereto, and any circumstances in addition to or in lieu of those set forth in Section 2.2 of the Appendix in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof. If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors of the Issuer, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Issuer and delivered to the Trustee at or prior to the delivery of the Officer’s Certificate or the indenture supplemental hereto setting forth the terms of the Additional Notes. The Original Notes and any Additional Notes, shall all be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. Any Additional Notes that are not fungible with the existing Notes for U.S. federal income tax purposes shall bear a separate CUSIP number. Section 2.02. Form and Dating. Provisions relating to the Original Notes are set forth in the Appendix, which is hereby incorporated in and expressly made a part of this Indenture. The (i) Original Notes and the Trustee’s certificate of authentication and (ii) any Additional Notes (if issued as Transfer Restricted Definitive Notes) and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer or any Note Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered form without interest coupons and in denominations of $2,000 and any integral multiples of $1,000 in excess thereof, provided that the Notes may be issued in denominations of less than $1,000 solely to accommodate the book-entry positions that have any been created by the Depository in denominations of less than $1,000. Section 2.03. Execution and Authentication. The Trustee shall authenticate and make available for delivery upon a written order of the Issuer signed by one Officer (a) Original Notes for original issue on the date hereof in an aggregate principal amount of $[ ], and (b) subject to the terms of this Indenture, Additional Notes in an aggregate principal amount to be determined at the time of issuance and specified therein. Such order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be 42 authenticated. Notwithstanding anything to the contrary in this Indenture or the Appendix, any issuance of Additional Notes after the Issue Date shall be in a principal amount of at least $2,000 and integral multiples of $1,000 in excess of $2,000. One Officer shall sign the Notes for the Issuer by manual or facsimile signature. If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless. A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture. The Trustee may appoint one or more authenticating agents reasonably acceptable to the Issuer to authenticate the Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuer. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands. Section 2.04. Registrar and Paying Agent. (a) The Issuer shall maintain (i) one or more paying agents (each, a “ Paying Agent ”) for the Notes in the United States of America where Notes may be presented for payment and (ii) a registrar (the “ Registrar ”) with offices in the United States of America where the Notes may be presented for registration of transfer or for exchange. The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuer may have one or more additional co-registrars and one or more additional paying agents. The term “Registrar” includes the Registrar and any additional co-registrars. The term “Paying Agent” includes the Paying Agent and any additional paying agents. The Issuer initially appoints the Trustee as Registrar, Paying Agent and the Notes Custodian with respect to the Global Notes representing the Notes. (b) The Issuer may enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Trustee of the name and address of any such agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Issuer or any of its Wholly Owned Subsidiaries may act as Paying Agent or Registrar. (c) The Issuer may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Issuer and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Issuer and the Trustee; provided, however, that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08. 43 Section 2.05. Paying Agent to Hold Money in Trust. Prior to each due date of the principal of and interest on any Note, the Issuer shall deposit with each Paying Agent (or if the Issuer or a Wholly Owned Subsidiary is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Issuer shall require each Paying Agent (other than the Trustee) to agree in writing that a Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by a Paying Agent for the payment of principal of and interest on the Notes, and shall notify the Trustee of any default by the Issuer in making any such payment. If the Issuer or a Wholly Owned Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it in trust for the benefit of the Persons entitled thereto. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section, a Paying Agent shall have no further liability for the money delivered to the Trustee. Section 2.06. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Issuer shall furnish, or cause the Registrar to furnish, to the Trustee, in writing annually at least five Business Days before December 4 and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders. Section 2.07. Transfer and Exchange. The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with the Appendix. When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met. When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of the same type of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Notes at the Registrar’s request. The Issuer may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section. The Issuer shall not be required to make, and the Registrar need not register, transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in part, the portion thereof not to be redeemed) or of any Notes for a period of 15 days before a selection of Notes to be redeemed. Prior to the due presentation for registration of transfer of any Notes, the Issuer, the Note Guarantors, the Trustee, the Paying Agent and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, any Note Guarantor, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary. 44 Any Holder of a beneficial interest in a Global Note shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Note may be effected only through a book-entry system maintained by (a) the Holder of such Global Note (or its agent) or (b) any Holder of a beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry. All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange. Section 2.08. Replacement Notes. If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Note of the same type if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (a) satisfies the Issuer or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuer or the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “ protected purchaser ”) and (c) satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Issuer, such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee or the Issuer to protect the Issuer, the Trustee, a Paying Agent and the Registrar from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge the Holder for their expenses in replacing a Note (including without limitation, attorneys’ fees and disbursements in replacing such Note). In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuer in its discretion may pay such Note instead of issuing a new Note in replacement thereof. Every replacement Note is an additional obligation of the Issuer. The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes. Section 2.09. Outstanding Notes. Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. Subject to Section 13.06, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note. If a Note is replaced pursuant to Section 2.08 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.08. If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case 45 may be, and no Paying Agent is prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue. Section 2.10. Temporary Notes. In the event that Definitive Notes are to be issued under the terms of this Indenture, until such Definitive Notes are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of Definitive Notes of the appropriate type but may have variations that the Issuer considers appropriate for temporary Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate Definitive Notes of the same type and make them available for delivery in exchange for temporary Notes upon surrender of such temporary Notes at the office or agency of the Issuer, without charge to the Holder. Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as Definitive Notes. Section 2.11. Cancellation. The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and each Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures. The Issuer may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture. Section 2.12. Defaulted Interest. If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay the defaulted interest then borne by the Notes (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. The Issuer shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly deliver or cause to be delivered to each affected Holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. Section 2.13. CUSIP Numbers, ISINs, etc. The Issuer in issuing the Notes may use CUSIP numbers and ISINs (if then generally in use) and, if so, the Trustee shall use CUSIP numbers and ISINs in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Notes or as contained in any notice of a redemption that reliance may be placed only on the other identification numbers printed on the Notes and that any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer shall advise the Trustee of any change in the CUSIP numbers and ISINs. Section 2.14. Calculation of Principal Amount of Notes. The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the Holders of which have so 46 consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.09 and Section 13.06 of this Indenture. Any such calculation made pursuant to this Section 2.14 shall be made by the Issuer and delivered to the Trustee pursuant to an Officer’s Certificate. ARTICLE III. REDEMPTION Section 3.01. Redemption. The Notes may be redeemed, in whole, or from time to time in part, subject to the conditions set forth in paragraph 5 of the form of Notes set forth in Exhibit A hereto, which are hereby incorporated by reference and made a part of this Indenture, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to the redemption date. Section 3.02. Applicability of Article. Redemption of Notes at the election of the Issuer or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article. Section 3.03. Notices to Trustee. If the Issuer elects to redeem Notes pursuant to the optional redemption provisions of paragraph 5 of the Notes, it shall notify the Trustee in writing of (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price. The Issuer shall give notice to the Trustee provided for in this paragraph at least 40 days but not more than 60 days before a redemption date if the redemption is pursuant to paragraph 5 of the applicable Note, unless a shorter period is acceptable to the Trustee. Such notice shall be accompanied by an Officer’s Certificate and Opinion of Counsel from the Issuer to the effect that such redemption will comply with the conditions herein. If fewer than all the Notes are to be redeemed, the record date relating to such redemption shall be selected by the Issuer and given to the Trustee, which record date shall be not fewer than 15 days after the date of notice to the Trustee. Any such notice may be canceled at any time prior to notice of such redemption being delivered to any Holder and shall thereby be void and of no effect. Section 3.04. Selection of Notes to Be Redeemed. In the case of any partial redemption of Notes, the Trustee will select the Notes to be redeemed (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed, (b) on a pro rata basis to the extent practicable or (c) by lot or such other similar method in accordance with the procedures of DTC; provided that no Notes of $2,000 or less shall be redeemed in part. The Trustee shall make the selection from outstanding Notes not previously called for redemption. The Trustee may select for redemption portions of the principal of Notes that have denominations larger than $2,000. Notes and portions of them the Trustee selects shall be in amounts of $2,000 or any integral multiple of $1,000. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Trustee shall notify the Issuer promptly of the Notes or portions of Notes to be redeemed. 47 Section 3.05. Notice of Optional Redemption. (a) At least 30 days but not more than 60 days before a redemption date pursuant to paragraph 5 of the applicable Note, the Issuer shall deliver or cause to be delivered by electronic transmission or mailed by first-class mail a notice of redemption to each Holder whose Notes are to be redeemed. Any such notice shall identify the Notes to be redeemed and shall state: (i) the redemption date; (ii) the redemption price equal to 100% of the principal amount thereof and the amount of accrued interest to the redemption date; (iii) the name and address of the Paying Agent; (iv) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price, plus accrued interest; (v) if fewer than all of the outstanding Notes are to be redeemed, the certificate numbers and principal amounts of the particular Notes to be redeemed, the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption; (vi) that, unless the Issuer defaults in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date; (vii) the CUSIP number, ISIN or “Common Code” number, if any, printed on the Notes being redeemed; and (viii) that no representation is made as to the correctness or accuracy of the CUSIP number, ISIN or “Common Code”, if any, listed in such notice or printed on the Notes. (b) At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at the Issuer’s expense. In such event, the Issuer shall provide the Trustee with the information required by this Section at least one Business Day prior to the date such notice is to be provided to Holders and such notice may not be canceled. Section 3.06. Effect of Notice of Redemption. Once notice of redemption is delivered in accordance with Section 3.05, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued interest, to, but not including, the redemption date; provided, however, that if the redemption date is after a regular record date and on or prior to the interest payment date, the accrued interest shall be payable to the Holder of the redeemed Notes registered on the relevant record date. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. 48 Section 3.07. Deposit of Redemption Price. With respect to any Notes, prior to 10:00 a.m., New York City time, on the redemption date, the Issuer shall deposit with the Paying Agent (or, if the Issuer or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuer to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuer has deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest on, the Notes to be redeemed. Section 3.08. Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the Issuer shall execute and the Trustee shall authenticate for the Holder (at the Issuer’s expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered. ARTICLE IV. COVENANTS Section 4.01. Payment of Notes. The Issuer shall promptly pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture. An installment of principal of or interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds, as of 12:00 p.m. New York City time, money sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture. The Issuer shall pay interest on overdue principal at the rate specified therefor in the Notes, and it shall pay interest on overdue installments of interest at the same rate borne by the Notes to the extent lawful. Section 4.02. Reports and Other Information. (a) So long as any Notes are outstanding, the Issuer will provide to the Trustee and, upon request, the Holders, a copy of all of the information and reports referred to below: (i) within 120 days after the end of each fiscal year (or such shorter period as may be required by the Commission, or such longer period as may be permitted by Rule 12b-25 of the Exchange Act), annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form); provided , that , if the Issuer is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Issuer shall provide audited annual consolidated financial statements and such other information that would have been required to be contained in a Form 10-K (or any successor or comparable form) if it were subject to Section 13 or 15(d) of the Exchange Act, (ii) within 90 days after the end of each of the first three fiscal quarters of each fiscal year (or such shorter period as may be required by the Commission, or such 49 longer period as may be permitted by Rule 12b-25 of the Exchange Act), reports on Form 10-Q (or any successor or comparable form); provided , that , if the Issuer is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Issuer shall provide unaudited quarterly consolidated financial statements and such other information that would have been required to be contained in a Form 10-Q (or any successor or comparable form) if it were subject to Section 13 or 15(d) of the Exchange Act, (iii) promptly from time to time after the occurrence of an event required to be therein reported (and in any event within 15 days following the time period specified for filing current reports on Form 8-K by the Commission), such other reports on Form 8-K (or any successor or comparable form); provided , that , if the Issuer is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Issuer shall provide such information that would have been required to be contained in a Form 8-K (or any successor or comparable form) if it were subject to Section 13 or 15(d) of the Exchange Act, and (iv) any other information, documents and other reports which MPM would be required to file with the Commission if it were subject to Section 13 or 15(d) of the Exchange Act. (b) In the event that: (i) the rules and regulations of the Commission permit MPM and any direct or indirect parent of MPM to report at such parent entity’s level on a consolidated basis and such parent entity is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the Capital Stock of MPM, or (ii) any direct or indirect parent of MPM becomes a Note Guarantor, MPM shall be permitted to satisfy its foregoing obligations with respect to financial information relating to MPM by furnishing financial information relating to such parent; provided that such financial information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent and any of its Subsidiaries other than MPM and its Subsidiaries, on the one hand, and the information relating to MPM, the Note Guarantors, if any, and the other Subsidiaries on a standalone basis, on the other hand. (c) MPM shall, for so long as any Notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the Commission with certain information pursuant to Rule 12g3-2(b) of the Exchange Act, furnish to the Holders of the Notes, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Notwithstanding the foregoing, MPM will be deemed to have furnished such reports referred to above to the Trustee and the Holders if MPM has filed such reports with the Commission via the EDGAR filing system and such reports are publicly available. 50 Section 4.03. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) MPM shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) MPM shall not permit any of the Restricted Subsidiaries (other than a Note Guarantor) to issue any shares of Preferred Stock; provided, however, that MPM and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of MPM for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period. (b) The limitations set forth in Section 4.03(a) shall not apply to: (1) the Incurrence by MPM or the Restricted Subsidiaries of Indebtedness (including under any Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $1,500.0 million plus an aggregate additional principal amount of Consolidated Total Indebtedness constituting First Priority Lien Obligations outstanding at any one time that does not cause the Consolidated Secured Debt Ratio of MPM to exceed 3.75 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom); (ii) the Incurrence by the Company and the Note Guarantors of Indebtedness represented by the Notes (not including any Additional Notes) and the Note Guarantees; (iii) Indebtedness existing on the Issue Date (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)), including the Existing First Lien Notes and the guarantees thereof; (iv) (a) Indebtedness (including Capitalized Lease Obligations) Incurred by MPM or any of the Restricted Subsidiaries, Disqualified Stock issued by MPM or any of the Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (b) Acquired Indebtedness; in an aggregate principal amount that, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $150.0 million and 5.0% of Total Assets at the time of Incurrence; 51 (v) Indebtedness Incurred by MPM or any of the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; (vi) Indebtedness arising from agreements of MPM or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with any acquisition or disposition of any business, assets or a Subsidiary of MPM in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; (vii) Indebtedness of MPM to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is not a Note Guarantor is subordinated in right of payment to the obligations of MPM under the Notes; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to MPM or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness; (viii) shares of Preferred Stock of a Restricted Subsidiary issued to MPM or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to MPM or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock; (ix) Indebtedness of a Restricted Subsidiary to MPM or another Restricted Subsidiary; provided that if a Note Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Note Guarantor, such Indebtedness is subordinated in right of payment to the Note Guarantee of such Note Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to MPM or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness; (x) Hedging Obligations that are not Incurred for speculative purposes and are either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales; 52 (xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds, including surety bonds issued in respect of workers’ compensation claims, and completion guarantees provided by MPM or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice; (xii) Indebtedness or Disqualified Stock of MPM or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, as applicable, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $150.0 million and 5.0% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which MPM, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii)); (xiii) any guarantee by MPM or any of its Restricted Subsidiaries of Indebtedness or other obligations of MPM or any of the Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by MPM or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Note Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Note Guarantor’s Note Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable; (xiv) the Incurrence by MPM or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii), (iv), (xiv), (xv), and/or (xx) of this Section 4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including, in each case, any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “ Refinancing Indebtedness ”); provided, however, that such Refinancing Indebtedness: (1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased and (y) the Weighted Average Life to 53 Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes; (2) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or defeased or (y) 91 days following the maturity date of the Notes; (3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock; (4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, expenses, costs and fees Incurred in connection with such refinancing; (5) shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Note Guarantor that refinances Indebtedness of MPM or a Restricted Subsidiary that is a Note Guarantor (unless such Restricted Subsidiary is an obligor with respect to such Indebtedness being refinanced), or (y) Indebtedness of MPM or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and (6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xx) of this Section 4.03(b); provided, further, that subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of (A) the Notes and (B) any Bank Indebtedness constituting First Priority Lien Obligations. (xv) Indebtedness, Disqualified Stock or Preferred Stock of (x) MPM or any of the Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by MPM or any of the Restricted Subsidiaries or merged or amalgamated with or into MPM or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving effect to such acquisition, merger or amalgamation and the Incurrence of such Indebtedness either: (1) MPM would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of Section 4.03(a); or (2) the Fixed Charge Coverage Ratio would be equal to or greater than immediately prior to such acquisition, merger or amalgamation; 54 (xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to MPM or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings); (xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its Incurrence; (xviii) Indebtedness of MPM or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit; (xix) Indebtedness or Disqualified Stock of MPM or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference not exceeding at any time outstanding 200% of the net cash proceeds received by MPM and the Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of MPM or any direct or indirect parent entity of MPM (which proceeds are contributed to MPM or a Restricted Subsidiary) or cash contributed to the capital of MPM (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, MPM or any of its Subsidiaries), as determined in accordance with clauses (B) and (C) of the definition of Cumulative Credit, to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof); (xx) Indebtedness of Foreign Subsidiaries for working capital purposes or any other purposes; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx), other than for working capital purposes, when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of $150.0 million and 5.0% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (xx) shall cease to be deemed Incurred or outstanding for purposes of this clause (xx) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which the Foreign Subsidiary could have Incurred such Indebtedness under Section 4.03(a), and the other provisions of this Indenture, without reliance upon this clause (xx)); (xxi) Indebtedness of MPM or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; 55 (xxii) Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of MPM or any Restricted Subsidiary not in excess, at any one time outstanding, of $7.5 million; and (xxiii) Indebtedness issued by MPM or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of MPM or any of its direct or indirect parent companies to the extent permitted pursuant to clause (iv) of Section 4.04(b). For purposes of determining compliance with this Section 4.03, (A) Indebtedness need not be Incurred solely by reference to one category of permitted Indebtedness described in clauses (i) through (xxiii) above or pursuant to Section 4.03(a) but is permitted to be Incurred in part under any combination thereof and (B) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Indebtedness described in clauses (i) through (xxiii) above or is entitled to be Incurred pursuant to Section 4.03(a), MPM shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 4.03 and will only be required to include the amount and type of such item of Indebtedness in one of the above clauses and such item of Indebtedness will be treated as having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a). Accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in the form of common stock of MPM, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of “ Indebtedness ” shall not be deemed to be an Incurrence of Indebtedness or an issuance of Disqualified Stock or Preferred Stock for purposes of this Section 4.03. Note Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03. Any Indebtedness Incurred under an ABL Facility pursuant to Section 4.03(b)(i) shall be deemed for purposes of this covenant to have been Incurred on the date such Indebtedness was first Incurred until such Indebtedness is actually repaid. For purposes of determining compliance with any U.S. Dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. Dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange 56 rate in effect on the date of such refinancing, such U.S. Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 4.03, the maximum amount of Indebtedness that MPM and its Restricted Subsidiaries may Incur pursuant to this Section 4.03 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing. Section 4.04. Limitation on Restricted Payments. (a) MPM shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make any distribution on account of MPM’s or any of the Restricted Subsidiaries’ Equity Interests, including any payment with respect to such Equity Interests made in connection with any merger, amalgamation or consolidation involving MPM (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of MPM; or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any Equity Interests issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, MPM or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its ownership percentage of such Equity Interests); (ii) purchase or otherwise acquire or retire for value any Equity Interests of MPM or any direct or indirect parent of MPM; (iii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of MPM or any of the Note Guarantors (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses (vii) and (ix) of Section 4.03(b)); or (iv) make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “ Restricted Payments ”), unless, at the time of such Restricted Payment: (1) no Default shall have occurred and be continuing or would occur as a consequence thereof; 57 (2) immediately after giving effect to such transaction on a pro forma basis, MPM could Incur $1.00 of additional Indebtedness under Section 4.03(a); (3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by MPM and the Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (i), (iv) (only to the extent of one-half of the amounts paid pursuant to such clause), (vi) and (viii) of Section 4.04(b)), but excluding all other Restricted Payments permitted by Section 4.04(b), is less than the amount equal to the Cumulative Credit. (b) The provisions of Section 4.04(a) shall not prohibit: (i) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture; (ii) (1) the redemption, repurchase, retirement or other acquisition of any Equity Interests (“Retired Capital Stock ”) or Subordinated Indebtedness of MPM, any direct or indirect parent of MPM or any Note Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of Equity Interests of MPM or any direct or indirect parent of MPM or contributions to the equity capital of MPM (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of MPM) (collectively, including any such contributions, “ Refunding Capital Stock ”); and (2) the declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of MPM) of Refunding Capital Stock; (iii) the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Indebtedness of MPM or any Note Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of MPM or a Note Guarantor that is Incurred in accordance with Section 4.03 so long as: (1) the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired plus any tender premiums, defeasance costs or other fees and expenses incurred in connection therewith), (2) such Indebtedness is subordinated to the Notes or the related Note Guarantees, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value, 58 (3) such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) 91 days following the maturity date of the Notes, and (4) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of(x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes; (iv) a Restricted Payment to pay for the redemption, repurchase, retirement or other acquisition for value of Equity Interests of MPM or any direct or indirect parent of MPM held by any future, present or former employee, director or consultant of MPM or any direct or indirect parent of MPM or any Subsidiary of MPM pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided, however, that the aggregate amounts paid under this clause (iv) do not exceed $15.0 million in any calendar year (with unused amounts in any calendar year being permitted to be carried over for the two succeeding calendar years; provided, further, however, that such amount in any calendar year may be increased by an amount not to exceed: (1) the cash proceeds received by MPM or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of MPM or any direct or indirect parent of MPM (to the extent contributed to MPM) to members of management, directors or consultants of MPM and the Restricted Subsidiaries or any direct or indirect parent of MPM that occurs after the Issue Date ( provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend shall not increase the amount available for Restricted Payments under Section 4.04(a)(iv)(4)); plus (2) the cash proceeds of key man life insurance policies received by MPM or any direct or indirect parent of MPM (to the extent contributed to MPM) or the Restricted Subsidiaries after the Issue Date; provided that MPM may elect to apply all or any portion of the aggregate increase contemplated by clauses (1) and (2) above in any calendar year and, to the extent any payment described under this clause (iv) is made by delivery of Indebtedness and not in cash, such payment shall be deemed to occur only when, and to the extent, the obligor on such Indebtedness makes payments with respect to such Indebtedness; (v) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of MPM or any of the Restricted Subsidiaries issued or Incurred in accordance with Section 4.03; 59 (vi) (a) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date, (b) a Restricted Payment to any direct or indirect parent of MPM, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of MPM issued after the Issue Date and (c) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (ii) of this Section 4.04(b); provided, however, that (A) for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or Refunding Capital Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis (including a pro forma application of the net proceeds therefrom), MPM would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (B) the aggregate amount of dividends declared and paid pursuant to subclauses (a) and (b) of this clause (vi) does not exceed the net cash proceeds actually received by MPM from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; (vii) Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (vii), that are at that time outstanding, not to exceed the greater of $40.0 million and 1.0% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); (viii) the payment of dividends on MPM’s common stock (or a Restricted Payment to any direct or indirect parent of MPM to fund the payment by such direct or indirect parent of MPM of dividends on such entity’s common stock) of up to 6% per annum of the net proceeds received by MPM from any public offering of common stock of MPM or any direct or indirect parent of MPM; (ix) Restricted Payments that are made with Excluded Contributions; (x) other Restricted Payments in an aggregate amount not to exceed the greater of $50.0 million and 1.0% of Total Assets at the time made; (xi) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to MPM or a Restricted Subsidiary by, Unrestricted Subsidiaries; (xii) (1) with respect to each tax year or portion thereof that any direct or indirect parent of MPM qualifies as a Flow Through Entity, the distribution by MPM to the holders of Capital Stock of such direct or indirect parent of MPM of an amount equal to the product of (x) the amount of aggregate net taxable income of MPM allocated to the holders of Capital Stock of MPM for such period and (y) the Presumed Tax Rate for such period; and (2) with respect to any tax year or portion thereof that any direct or indirect parent company of MPM does not qualify as a Flow Through Entity, the payment of 60 dividends or other distributions to any direct or indirect parent of MPM that files a consolidated U.S. federal tax return that includes MPM and its subsidiaries in an amount not to exceed the amount that MPM and its Restricted Subsidiaries would have been required to pay in respect of federal, state or local taxes (as the case may be) in respect of such year if MPM and its Restricted Subsidiaries paid such taxes directly as a stand-alone taxpayer (or stand-alone group); (xiii) the payment of any Restricted Payment, if applicable: (1) in amounts required for any direct or indirect parent of MPM, if applicable, to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of MPM, if applicable, and general corporate overhead expenses of any direct or indirect parent of MPM, if applicable, in each case to the extent such fees, expenses, salaries, bonuses, benefits and indemnities are attributable to the ownership or operation of MPM, if applicable, and its Subsidiaries; (2) in amounts required for any direct or indirect parent of MPM, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to MPM or any of the Restricted Subsidiaries and that has been guaranteed by, or is otherwise considered Indebtedness of, MPM Incurred in accordance with Section 4.03; and (3) in amounts required for any direct or indirect parent of MPM to pay fees and expenses, related to any equity or debt offering of such parent; (xiv) Restricted Payments used to fund the Transactions or in respect of amounts owed by MPM or any direct or indirect parent of MPM, as the case may be, or Restricted Subsidiaries to Affiliates, in each case to the extent permitted by Section 4.07; (xv) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants; (xvi) purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and the payment or distribution of Receivables Fees; (xvii) Restricted Payments by MPM or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person; (xviii) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those described under Sections 4.06 and 4.08; provided that all Notes tendered by Holders in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value; 61 (xix) any payments made, including any such payments made to any direct or indirect parent of MPM to enable it to make payments, in connection with the consummation of the Transactions (other than payments to any Permitted Holder (other than [Oaktree]) or any Affiliate thereof); and (xx) cash dividends or other distributions in respect of MPM’s Capital Stock used to, or the making of loans to any direct or indirect parent of MPM in order to, fund the payment of expenses of the type and in the amount described in clauses (iii) and (v) of Section 4.07(b) to the extent that such amounts are not paid directly by MPM or any its Subsidiaries. provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clause (vi), (vii), (x) or (xi) of this Section 4.04(b), no Default shall have occurred and be continuing or would occur as a consequence thereof. (c) MPM shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by MPM and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation shall only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Section 4.05. Dividend and Other Payment Restrictions Affecting Subsidiaries. MPM shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to: (a) (i) pay dividends or make any other distributions to MPM or any of the Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to MPM or any of the Restricted Subsidiaries; (b) make loans or advances to MPM or any of the Restricted Subsidiaries; or (c) sell, lease or transfer any of its properties or assets to MPM or any of the Restricted Subsidiaries; except in each case for such encumbrances or restrictions existing under or by reason of: (1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Existing First Lien Notes and the guarantees thereof and the indentures relating thereto; (2) this Indenture, the Notes (and any guarantees thereof), the Security Documents and the Intercreditor Agreement; 62 (3) applicable law or any applicable rule, regulation or order; (4) any agreement or other instrument of a Person acquired by MPM or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or its Subsidiaries, or the property or assets of the Person or its Subsidiaries, so acquired; (5) contracts or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; (6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Sections 4.03 and 4.12 that limit the right of the debtor to dispose of the assets securing such Indebtedness; (7) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; (8) customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business; (9) purchase money obligations and Capitalized Lease Obligations, in each case for property acquired or leased in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired or leased; (10) customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property subject to such lease; (11) any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided, however, that such restrictions apply only to such Receivables Subsidiary; (12) other Indebtedness, Disqualified Stock or Preferred Stock (i) of MPM or any Restricted Subsidiary of MPM (x) that is Incurred subsequent to the Issue Date pursuant to Section 4.03 and (y) in the case of a Restricted Subsidiary that is not a Note Guarantor, an Officer reasonably determines in good faith that any such encumbrance or restriction will not materially adversely affect MPM’s ability to make anticipated principal or interest payments on the Notes, or (ii) that is Incurred by a Foreign Subsidiary of MPM subsequent to the Issue Date pursuant to Section 4.03; (13) any Restricted Investment not prohibited by Section 4.04 and any Permitted Investment; or 63 (14) any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (13) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of MPM, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing. For purposes of determining compliance with this Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to MPM or a Restricted Subsidiary to other Indebtedness Incurred by MPM or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances. Section 4.06. Asset Sales. (a) MPM shall not, and shall not permit any of the Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) MPM or any of the Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by MPM) of the assets sold or otherwise disposed of, and (y) at least 75% of the consideration therefor received by MPM or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided that the amount of: (i) any liabilities (as shown on MPM’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of MPM or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets, (ii) any notes or other obligations or other securities or assets received by MPM or such Restricted Subsidiary from such transferee that are converted by MPM or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received), and (iii) any Designated Non-cash Consideration received by MPM or any of the Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed the greater of 3.0% of Total Assets and $70.0 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value) shall be deemed to be Cash Equivalents for the purposes of this Section 4.06(a). 64 (b) Within 365 days after MPM’s or any Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, MPM or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its option to any one or more of the following: (i) to repay (A) any First Priority Lien Obligations, (B) Indebtedness of a Restricted Subsidiary that is not a Note Guarantor; (C) the Notes; or (D) Pari Passu Indebtedness (provided that if MPM or any Note Guarantor shall so reduce Obligations under Pari Passu Indebtedness pursuant to this clause (D), MPM shall equally and ratably reduce Obligations under the Notes as provided pursuant to Article III, through open market purchases (provided that such purchases are at or above 100% of the principal amount thereof) and/or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, the pro rata principal amount of the Notes; (ii) to make an investment in any one or more businesses (provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of MPM or, if such Person is a Restricted Subsidiary of MPM, in an increase in the percentage ownership of such Person by MPM or any Restricted Subsidiary of MPM), assets, or property or capital expenditures, in each case used or useful in a Similar Business; or (iii) to make an investment in any one or more businesses (provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of MPM or, if such Person is a Restricted Subsidiary of MPM, in an increase in the percentage ownership of such Person by MPM or any Restricted Subsidiary of MPM), properties or assets that replace the properties and assets that are the subject of such Asset Sale. In the case of Sections 4.06(b)(ii) and (iii), a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment; provided that in the event such binding commitment is later canceled or terminated for any reason before such Net Proceeds are so applied, MPM or such Restricted Subsidiary may satisfy its obligation as to any Net Proceeds by entering into another binding commitment within nine months of such cancellation or termination of the prior binding commitment; provided, further that MPM or such Restricted Subsidiary may only enter into such a commitment under the foregoing provision one time with respect to each Asset Sale. Pending the final application of any such Net Proceeds, MPM or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not otherwise prohibited by this Indenture. Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the first sentence of this Section 4.06(b) (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in clause (i) of this Section 4.06(b), shall be deemed to have been invested whether or not such offer is accepted) shall be deemed to constitute “ Excess Proceeds. ” When the aggregate amount of Excess Proceeds exceeds $20.0 million, MPM shall make an offer to all Holders of Notes (and, at the option of MPM, to 65 holders of any Pari Passu Indebtedness) (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes (Pari Passu Indebtedness), that is at least $2,000 and an integral multiple of $1,000, that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or, in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Section 4.06. MPM shall commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceeds $20.0 million by electronically delivering, or mailing by first class mail, the notice required pursuant to the terms of Section 4.06(f), with a copy to the Trustee. To the extent that the aggregate amount of Notes (and such Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, MPM may use any remaining Excess Proceeds for general corporate purposes. If the aggregate principal amount of Notes (and such Pari Passu Indebtedness, as applicable) surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased in the manner described in Section 4.06(e). Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. (c) MPM shall comply with the requirements of Rule 14e-l under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, MPM shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof. (d) Not later than the date upon which written notice of an Asset Sale Offer is delivered to the Trustee as provided above, MPM shall deliver to the Trustee an Officer’s Certificate as to (i) the amount of the Excess Proceeds, (ii) the allocation of the Net Proceeds from the Asset Sales pursuant to which such Asset Sale Offer is being made and (iii) the compliance of such allocation with the provisions of Section 4.06(b). On such date, MPM shall also irrevocably deposit with the Trustee or with a paying agent (or, if MPM or a Wholly Owned Subsidiary is acting as the Paying Agent, segregate and hold in trust) an amount equal to the Excess Proceeds to be invested in Cash Equivalents, as directed in writing by MPM, and to be held for payment in accordance with the provisions of this Section 4.06. Upon the expiration of the period for which the Asset Sale Offer remains open (the “ Offer Period ”), MPM shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted by MPM. The Trustee (or the Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each tendering Holder in the amount of the purchase price. In the event that the Excess Proceeds delivered by MPM to the Trustee are greater than the purchase price of the Notes tendered, the Trustee shall deliver the excess to MPM immediately after the expiration of the Offer Period for application in accordance with this Section 4.06. (e) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to MPM at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or MPM receive not later than one Business Day prior to the purchase date, 66 a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered by the Holder for purchase and a statement that such Holder is withdrawing his election to have such Note purchased. If at the end of the Offer Period more Notes (and Pari Passu Indebtedness, as applicable) are tendered pursuant to an Asset Sale Offer than MPM are required to purchase, the principal amount of Notes (and Pari Passu Indebtedness) to be purchased will be determined pro rata based on the principal amounts so tendered and the selection of the actual Notes of each series for purchase will be made by the Trustee on a pro rata basis to the extent practicable; provided that no Notes of $2,000 or less shall be purchased in part. Selection of such Pari Passu Indebtedness shall be made pursuant to the terms of such Indebtedness. (f) Notices of an Asset Sale Offer shall be delivered electronically or mailed by first class mail, postage prepaid, at least 30 but not more than 60 days before the purchase date to each Holder of Notes at such Holder’s registered address. If any Note is to be purchased in part only, any notice of purchase that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased. Section 4.07. Transactions with Affiliates. (a) MPM shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of MPM (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate consideration in excess of $7.5 million, unless: (i) such Affiliate Transaction is on terms that are not materially less favorable to MPM or the relevant Restricted Subsidiary than those that could reasonably have been obtained in a comparable transaction by MPM or such Restricted Subsidiary with an unaffiliated Person; and (ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25.0 million, MPM deliver to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of MPM approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (i) above. (b) The provisions of Section 4.07(a) shall not apply to the following: (i) transactions between or among MPM and/or any of the Restricted Subsidiaries (or an entity that becomes a Restricted Subsidiary as a result of such transaction) and any merger, consolidation or amalgamation of MPM and any direct parent of MPM; provided that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of MPM and such merger, consolidation or amalgamation is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose; 67 (ii) Restricted Payments permitted by Section 4.04 and Permitted Investments; (iii) [Reserved]; (iv) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of MPM or any Restricted Subsidiary or any direct or indirect parent of MPM; (v) [Reserved]; (vi) transactions in which MPM or any of the Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to MPM or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (i) of Section 4.07(a); (vii) payments or loans (or cancellation of loans) to directors, officers, employees or consultants that are approved by a majority of the Board of Directors of MPM in good faith; (viii) the existence of, or the performance by MPM or any of its Restricted Subsidiaries under the terms of, any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the Holders of the Notes in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by senior management or the Board of Directors of MPM; (ix) the existence of, or the performance by MPM or any of the Restricted Subsidiaries of their obligations under the terms of, any stockholders agreement or investors rights agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any agreement described in MPM’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (including the documents incorporated therein by reference), and, in each case, any amendment thereto or similar agreements that it may enter into thereafter; provided, however, that the existence of, or the performance by MPM or any of the Restricted Subsidiaries of their obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (ix) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or any such new agreement are not otherwise more disadvantageous to the Holders of the Notes in any material respect than the original agreement as in effect on the Issue Date; (x) the execution of the Transactions and the payment of all fees and expenses related to the Transactions; (xi) (A) transactions with customers, clients, suppliers, toll manufacturers or purchasers or sellers of goods or services, in each case in the ordinary 68 course of business and otherwise in compliance with the terms of this Indenture, which are fair to MPM and the Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of MPM, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (B) transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business; (xii) any transaction effected as part of a Qualified Receivables Financing; (xiii) the issuance of Equity Interests (other than Disqualified Stock) of MPM to any Person; (xiv) the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of MPM or any direct or indirect parent of MPM or of a Restricted Subsidiary, as appropriate, in good faith; (xv) the entering into of any tax sharing agreement or arrangement and any payments permitted by Section 4.04(b)(xii); (xvi) any contribution to the capital of MPM; (xvii) transactions permitted by, and complying with, Section 5.01; (xviii) transactions between MPM or any of the Restricted Subsidiaries and any Person, a director of which is also a director of MPM or any direct or indirect parent of MPM; provided, however, that such director abstains from voting as a director of MPM or such direct or indirect parent, as the case may be, on any matter involving such other Person; (xix) pledges of Equity Interests of Unrestricted Subsidiaries; (xx) any employment agreements entered into by MPM or any of the Restricted Subsidiaries in the ordinary course of business; and (xxi) intercompany transactions undertaken in good faith (as certified by a responsible financial or accounting officer of MPM in an Officer’s Certificate) for the purpose of improving the consolidated tax efficiency of MPM and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture. Section 4.08. Change of Control. (a) Upon a Change of Control, each Holder shall have the right to require the Issuer to repurchase all or any part of such Holder’s Notes at a purchase price in cash equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant record date to receive 69 interest due on the relevant interest payment date), in accordance with the terms contemplated in this Section 4.08; provided, however, that notwithstanding the occurrence of a Change of Control, the Issuer shall not be obligated to purchase any Notes pursuant to this Section 4.08 in the event that the Issuer has exercised its right to redeem such Notes in accordance with Article III of this Indenture. (b) Within 30 days following any Change of Control, except to the extent that the Issuer has exercised its right to redeem the Notes by delivery of a notice of redemption in accordance with Article III of this Indenture, the Issuer shall electronically deliver or mail by first-class mail a notice (a “ Change of Control Offer ”) to each Holder with a copy to the Trustee stating: (i) that a Change of Control has occurred and that such Holder has the right to require the Issuer to repurchase such Holder’s Notes at a repurchase price in cash equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant record date to receive interest on the relevant interest payment date); (ii) the circumstances and relevant facts and financial information regarding such Change of Control; (iii) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is electronically delivered or mailed by first-class mail); and (iv) the instructions determined by the Issuer, consistent with this Section 4.08, that a Holder must follow in order to have its Notes purchased. (c) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the purchase date. The Holders shall be entitled to withdraw their election if the Trustee or the Issuer receive not later than one Business Day prior to the purchase date a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Note purchased. Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered. (d) On the purchase date, all Notes purchased by the Issuer under this Section shall be delivered to the Trustee for cancellation, and the Issuer shall pay the purchase price plus accrued and unpaid interest, if any, to the Holders entitled thereto. (e) A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer. (f) Notwithstanding the foregoing provisions of this Section, the Issuer shall not be required to make a Change of Control Offer upon a Change of Control if a third party 70 makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.08 applicable to a Change of Control Offer made by the Issuer and purchases all Notes properly tendered and not withdrawn under such Change of Control Offer. (g) At the time the Issuer delivers Notes to the Trustee which are to be accepted for purchase, the Issuer shall also deliver an Officer’s Certificate stating that such Notes are to be accepted by the Issuer pursuant to and in accordance with the terms of this Section 4.08. A Note shall be deemed to have been accepted for purchase at the time the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering Holder. (h) Prior to any Change of Control Offer, the Issuer shall deliver to the Trustee an Officer’s Certificate stating that all conditions precedent contained herein to the right of the Issuer to make such offer have been complied with. (i) The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.08, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations under this Section by virtue thereof. Section 4.09. Compliance Certificate. The Issuer shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuer, beginning with the fiscal year ending on December 31, 2014, an Officer’s Certificate stating that in the course of the performance by the signer of his or her duties as an Officer of the Issuer he or she would normally have knowledge of any Default and whether or not the signer knows of any Default that occurred during such period. If he or she does, the certificate shall describe the Default, its status and what action the Issuer is taking or proposes to take with respect thereto. The Issuer also shall comply with Section 314(a)(4) of the TIA. Section 4.10. Further Instruments and Acts. Upon request of the Trustee, the Issuer shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. Section 4.11. Future Note Guarantors. MPM shall cause each Restricted Subsidiary that is a Domestic Subsidiary (unless such Subsidiary is a (a) Receivables Subsidiary or (b) Subsidiary of a Foreign Subsidiary) that guarantees any Indebtedness of MPM or any of the Note Guarantors to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit B hereto pursuant to which such Subsidiary shall guarantee the Issuer’s Obligations under the Notes and this Indenture. Section 4.12. Liens. MPM shall not, and shall not permit any Note Guarantor to, directly or indirectly, create, incur, assume or suffer to exist any Lien (except Permitted Liens) that secures any Indebtedness on any asset or property of MPM or any Note Guarantor, other than Liens on Collateral securing Indebtedness that are junior in priority to the Liens on such property or assets securing the Notes pursuant to the terms of the Intercreditor Agreement or an intercreditor agreement not materially less favorable to the holders of the Notes than the Intercreditor Agreement. 71 For purposes of determining compliance with this Section 4.12, (A) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens described in clauses (1) through (32) of the definition of “Permitted Liens” but may be permitted in part under any combination thereof and (B) in the event that a Lien securing an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens described in clauses (1) through (32) of the definition of “Permitted Liens”, MPM shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 4.12 and will only be required to include the amount and type of such Lien or such item of Indebtedness secured by such Lien in one of the clauses of the definition of “Permitted Liens” and such Lien securing such item of Indebtedness will be treated as being Incurred or existing pursuant to only one of such clauses. With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The “Increased Amount” of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in the form of common stock of MPM, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of “Indebtedness.” Section 4.13. After-Acquired Property. Subject to Section 11.01 of this Indenture, the Intercreditor Agreement, and the Security Documents, if at any time after the Issue Date MPM or any Note Guarantor own any First Priority After-Acquired Property, MPM or such Note Guarantor shall, as promptly as practicable after such property is acquired or such Subsidiary becomes a Note Guarantor, execute and deliver such mortgages, deeds of trust, deeds to secure debt, security instruments, financing statements and certificates or such other documentation as shall be reasonably necessary to vest in the Collateral Agent, for the benefit of the Holders and the Trustee, a perfected Lien (with the priority required hereunder and under the Security Documents), subject only to Permitted Liens, in such First Priority After-Acquired Property and to have such First Priority After-Acquired Property added to the Collateral, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such First Priority After-Acquired Property to the same extent and with the same force and effect; provided, however, that if granting a security interest in such property, including property acquired in connection with an Asset Sale involving non-cash consideration, requires the consent of a third party, MPM will use commercially reasonable efforts to obtain such consent with respect to such security interest in favor of the Collateral Agent for the benefit of the Holders and the Trustee; provided further, however, that if such party does not consent to the granting of such security interest after the use of such commercially reasonable efforts, the applicable entity will not be required to provide such security interest. 72 Section 4.14. Maintenance of Office or Agency. (a) The Issuer shall maintain one or more offices or agencies where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the corporate trust office of the Trustee as set forth in Section 13.02. (b) The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency for such purposes. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. (c) The Issuer hereby designates the corporate trust office of the Trustee or its Agent as such office or agency of the Issuer in accordance with Section 2.04. Section 4.15. [Reserved]. Section 4.16. [Reserved]. Section 4.17. Suspension of Certain Covenants. (a) Following the first day (the “Suspension Date”) that: (1) the Notes have an Investment Grade Rating from both of the Rating Agencies, and the Issuer has delivered written notice of such Investment Grade Ratings to the Trustee, and (2) no Default has occurred and is continuing hereunder, MPM and the Restricted Subsidiaries will not be subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.11 and Section 5.01(a)(4) (collectively, the “ Suspended Covenants ”). In addition, in such event, the Issuer may also elect to release any or all of the Collateral from the Liens securing the Notes and the Note Guarantees by electronically delivering or mailing by first-class mail a notice of such election to the Collateral Agent. (b) In the event that MPM and the Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the foregoing, and on any subsequent date (the “ Reversion Date ”) (1) one or both of the Rating Agencies withdraws their Investment Grade Rating or downgrades the rating assigned to the Notes below an Investment Grade Rating and/or (2) MPM or any of its Affiliates enters into an agreement to effect a transaction that would result in a Change of Control and one or more of the Rating Agencies indicate that if consummated, such transaction (alone or together with any related recapitalization or refinancing 73 transactions) would cause such Rating Agency to withdraw its Investment Grade Rating or downgrade the ratings assigned to the Notes below an Investment Grade Rating, then MPM and its Restricted Subsidiaries shall thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events, including, without limitation, a proposed transaction described in clause (b)(2) above, and any Collateral that was released from Liens securing the Notes and Note Guarantees as a result of the suspension of covenants, as well as any Collateral acquired since the Suspension Date, will be restored and pledged to secure the Notes and Note Guarantees, as applicable. The period of time between the Suspension Date and the Reversion Date is referred to herein as the “ Suspension Period .” (c) Notwithstanding that the Suspended Covenants may be reinstated, no Default or Event of Default shall be deemed to have occurred as a result of a failure to comply with the Suspended Covenants during the Suspension Period. During any Suspension Period, the Issuer shall not designate any Subsidiary to be an Unrestricted Subsidiary unless the Issuer would have been permitted to designate such Subsidiary to be an Unrestricted Subsidiary if a Suspension Period had not been in effect for any period. (d) On the Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period shall be classified to have been Incurred or issued pursuant to Section 4.03(a) or one of the clauses set forth in Section 4.03(b) (to the extent such Indebtedness or Disqualified Stock or Preferred Stock would be permitted to be Incurred or issued thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred or issued prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or Preferred Stock would not be so permitted to be Incurred or issued pursuant to Section 4.03(a) or Section 4.03(b), such Indebtedness or Disqualified Stock or Preferred Stock shall be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under Section 4.03(b)(iii). For purposes of Section 4.11, all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period and outstanding on the Reversion Date by any Restricted Subsidiary that is not a Note Guarantor will be deemed to have been Incurred on the Reversion Date. Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.04 shall be made as though Section 4.04 had been in effect since the Issue Date and throughout the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period shall reduce the amount available to be made as Restricted Payments under Section 4.04(a) and the items specified in clauses (A) through (F) of the definition of “Cumulative Credit” shall increase the amount available to be made as Restricted Payments under Section 4.04(a). For purposes of determining compliance with Section 4.06 on the Reversion Date, the Net Proceeds from all Asset Sales not applied in accordance with Section 4.06 shall be deemed to be reset to zero. 74 ARTICLE V. SUCCESSOR ISSUER Section 5.01. When MPM May Merge or Transfer Assets. (a) MPM shall not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not MPM is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless: (i) MPM is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than MPM) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (MPM or such Person, as the case may be, being herein called the “ Successor Issuer ”); provided that in the case where the surviving Person is not a corporation, a co-obligor of the Notes is a corporation; (ii) the Successor Issuer (if other than MPM) expressly assumes all the obligations of MPM under this Indenture and the Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee; (iii) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Issuer or any of the Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Issuer or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing; and (iv) MPM shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures (if any) comply with this Indenture. The Successor Issuer (if other than MPM) shall succeed to, and be substituted for, MPM under this Indenture and the Notes, and in such event MPM will automatically be released and discharged from their obligations under this Indenture and the Notes. Notwithstanding the foregoing clauses (iii) and (iv) of this Section 5.01, (x) subject to the restrictions on Note Guarantors described in Section 5.0l(b), any Restricted Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to MPM or to another Restricted Subsidiary, and (y) MPM may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating MPM in another state of the United States, the District of Columbia or any territory of the United States or may convert into a limited liability company, so long as the amount of Indebtedness of MPM and the Restricted Subsidiaries is not increased thereby. This Article V will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among MPM and the Restricted Subsidiaries. 75 (b) Subject to the provisions of Section 12.02(b) (which govern the release of a Note Guarantee upon the sale or disposition of a Restricted Subsidiary that is a Note Guarantor), each Note Guarantor shall not, and MPM shall not permit any Note Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Note Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless: (i) either (A) such Note Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Note Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Note Guarantor or such Person, as the case may be, being herein called the “ Successor Note Guarantor ”) and the Successor Note Guarantor (if other than such Note Guarantor) expressly assumes all the obligations of such Note Guarantor under this Indenture and such Note Guarantor’s Note Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.06; and (ii) the Successor Note Guarantor (if other than such Note Guarantor) shall have delivered or caused to be delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture. Except as otherwise provided in this Indenture, the Successor Note Guarantor (if other than such Note Guarantor) will succeed to, and be substituted for, such Note Guarantor under this Indenture and such Note Guarantor’s Note Guarantee, and such Note Guarantor will automatically be released and discharged from its obligations under this Indenture and such Note Guarantor’s Note Guarantee. Notwithstanding the foregoing, (1) a Note Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Note Guarantor in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness of the Note Guarantor is not increased thereby and (2) a Note Guarantor may merge, amalgamate or consolidate with another Note Guarantor or MPM. In addition, notwithstanding the foregoing, any Note Guarantor may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “ Transfer ”) to, (x) MPM or any Note Guarantor or (y) any Restricted Subsidiary that is not a Note Guarantor; provided that at the time of each such Transfer pursuant to clause (y) the aggregate amount of all such Transfers since the Issue Date shall not exceed 5.0% of Total Assets as shown on the most recent available balance sheet of MPM and the Restricted Subsidiaries after giving effect to each such Transfer and including all Transfers occurring from and after the Issue Date. ARTICLE VI. DEFAULTS AND REMEDIES Section 6.01. Events of Default. An “Event of Default” occurs if: (a) there is a default in any payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 days, 76 (b) there is a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise, (c) MPM fails to comply with its obligations under Section 5.01, (d) MPM or any Restricted Subsidiary fails to comply with any of its other agreements contained in the Notes or this Indenture (other than those referred to in clause (a), (b) or (c) above) and such failure continues for 60 days after the notice specified below, (e) MPM or any Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to MPM or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $50.0 million or its foreign currency equivalent, (f) MPM or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case; (ii) consents to the entry of an order for relief against it in an involuntary case; (iii) consents to the appointment of a Custodian of it or for any substantial part of its property; or (iv) makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency, (g) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against MPM or any Significant Subsidiary in an involuntary case; (ii) appoints a Custodian of MPM or any Significant Subsidiary or for any substantial part of its property; or (iii) orders the winding up or liquidation of MPM or any Significant Subsidiary; or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days, (h) MPM or any Significant Subsidiary fails to pay final judgments aggregating in excess of $50.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days following the entry thereof, 77 (i) any Note Guarantee of a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or any Note Guarantor denies or disaffirms its obligations under this Indenture or any Note Guarantee and such Default continues for 10 days, (j) unless such Liens have been released in accordance with the provisions of the Security Documents, the Intercreditor Agreement, and this Indenture, the Liens with respect to all or substantially all of the Collateral cease to be valid or enforceable, or MPM shall assert or any Note Guarantor shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable and, in the case of any such Person that is a Subsidiary of MPM, MPM fails to cause such Subsidiary to rescind such assertions within 30 days after MPM has actual knowledge of such assertions, or (k) the failure by MPM or any Note Guarantor to comply for 60 days after notice with its other agreements contained in the Security Documents except for a failure that would not be material to the holders of the Notes and would not materially affect the value of the Collateral taken as a whole. (l) [Reserved]. Each of the foregoing shall constitute an Event of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. The term “Bankruptcy Law” means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term “ Custodian ” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. A Default under clause (d) or (k) above shall not constitute an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the outstanding Notes notify the Issuer and the Trustee of the Default and the Issuer does not cure such Default within the time specified in clause (d) or (k) above after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “ Notice of Default. ” The Issuer shall deliver to the Trustee, within five (5) Business Days after the occurrence thereof, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto. Section 6.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) with respect to MPM) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes, by notice to the Issuer may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(f) or (g) with respect to 78 MPM occurs, the principal of, premium, if any, and interest on all the Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. The Holders of a majority in principal amount of outstanding Notes by notice to the Trustee may rescind any such acceleration with respect to the Notes and its consequences. In the event of any Event of Default specified in Section 6.01(e), such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders of the Notes, if within 20 days after such Event of Default arose the Issuer delivers an Officer’s Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the Default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes as described above be annulled, waived or rescinded upon the happening of any such events. Section 6.03. Other Remedies. If an Event of Default occurs and is continuing, subject to the terms of the Intercreditor Agreement, the Trustee may pursue any available remedy at law or in equity to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes, this Indenture or the Security Documents. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. To the extent required by law, all available remedies are cumulative. Section 6.04. Waiver of Past Defaults. Provided the Notes are not then due and payable by reason of a declaration of acceleration, the Holders of a majority in principal amount of the Notes by written notice to the Trustee may waive an existing Default and its consequences except (a) a Default in the payment of the principal of or interest on a Note, (b) a Default arising from the failure to redeem or purchase any Note when required pursuant to the terms of this Indenture or (c) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder affected. When a Default is waived, it is deemed cured and the Issuer, the Trustee and the Holders will be restored to their former positions and rights under this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. Section 6.05. Control by Majority. The Holders of a majority in principal amount of the Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability. Prior to taking any action under this Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. 79 Section 6.06. Limitation on Suits. (a) Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Notes unless: (i) the Holder gives to the Trustee written notice stating that an Event of Default is continuing; (ii) the Holders of at least 25% in principal amount of the outstanding Notes make a written request to the Trustee to pursue the remedy; (iii) such Holder or Holders offer to the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense; (iv) the Trustee does not comply with such request within 60 days after receipt of the request and the offer of security or indemnity; and (v) the Holders of a majority in principal amount of the outstanding Notes do not give the Trustee a direction inconsistent with such request during such 60-day period. (b) A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. Section 6.07. Rights of the Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Notes held by such Holder, on or after the respective due dates expressed or provided for in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. Section 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.0l(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer or any other obligor on the Notes for the whole amount then due and owing (together with interest on overdue principal and (to the extent lawful) on any unpaid interest at the rate provided for in the Notes) and the amounts provided for in Section 7.07. Section 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim, statements of interest and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses disbursements and advances of the Trustee (including counsel, accountants, experts or such other professionals as the Trustee deems necessary, advisable or appropriate)) and the Holders allowed in any judicial proceedings relative to the Issuer or any Note Guarantor, their creditors or their property, shall be entitled to participate as a member, 80 voting or otherwise, of any official committee of creditors appointed in such matters and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. Section 6.10. Priorities. Subject to the terms of the Intercreditor Agreement and the Security Documents, if the Trustee or the Collateral Agent, as the case may be, collects any money or property pursuant to this Article VI (including proceeds from the exercise of any remedies on the Collateral), they shall pay out the money or property in the following order: FIRST: to the payment of all amounts due to the Trustee under Section 7.07 and the Collateral Agent under Section 11.02; SECOND: to the Holders for payment of amounts due and unpaid on the Notes for principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal; and THIRD: the balance, if any, to the Issuer or, to the extent the Trustee or the Collateral Agent, as the case may be, collects any amount for any Note Guarantor, to such Note Guarantor. The Trustee or the Collateral Agent, as the case may be, may fix a record date and payment date for any payment to the Holders pursuant to this Section. At least 15 days before such record date, the Trustee or the Collateral Agent, as the case may be, shall deliver to each Holder and the Issuer a notice that states the record date, the payment date and amount to be paid. Section 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Notes. Section 6.12. Waiver of Stay or Extension Laws. Neither the Issuer nor any Note Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer and each Note Guarantor (to the extent that it may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. 81 ARTICLE VII. TRUSTEE Section 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. (b) Except during the continuance of an Event of Default: (i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee (it being agreed that the permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty); and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee shall be under no duty to make any investigation as to any statement contained in any such instance, but may accept the same as conclusive evidence of the truth and accuracy of such statement or the correctness of such opinions. However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05; and (iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. 82 (e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. (f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the TIA. Section 7.02. Rights of Trustee. (a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officer’s Certificate or Opinion of Counsel. The Trustee may request that the Issuer and any Note Guarantor deliver a certificate setting forth the names of individuals and/or titles of officers (with specimen signatures) authorized at such times to take specific actions pursuant to this Indenture, which certificate may be signed by any person specified as so authorized in any such certificate previously delivered and not superseded. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee’s conduct does not constitute willful misconduct or negligence. (e) The Trustee may consult with counsel of its own selection and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the Holders of not less than a majority in principal amount of the Notes at the time outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney, at the expense of the Issuer and shall incur no liability of any kind by reason of such inquiry or investigation. (g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. 83 (h) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder. (i) The Trustee shall not be liable for any action taken or omitted by it in good faith at the direction of the Holders of not less than a majority in principal amount of the Notes as to the time, method and place of conducting any proceedings for any remedy available to the Trustee or the exercising of any power conferred by this Indenture. (j) Any action taken, or omitted to be taken, by the Trustee in good faith pursuant to this Indenture upon the request or authority or consent of any person who, at the time of making such request or giving such authority or consent, is the Holder of any Note shall be conclusive and binding upon future Holders of Notes and upon Notes executed and delivered in exchange therefor or in place thereof. (k) In no event shall the Trustee be responsible for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. (l) The permissive rights of the Trustee enumerated herein shall not be construed as duties. Section 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent or Registrar may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. Section 7.04. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, any Note Guarantee or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer or any Note Guarantor in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of authentication. The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e), (h), (i), (j) or (k) or of the identity of any Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall have received written notice thereof in accordance with Section 13.02 hereof from the Issuer, any Note Guarantor or any Holder. Delivery of reports to the Trustee pursuant to Section 4.03 hereof shall not constitute actual knowledge of, or notice to, the Trustee of the information contained therein. In accepting the trust hereby created, the Trustee acts solely as Trustee for the Holders of the Notes and not in its individual capacity and all Persons, including without limitation the Holders of Notes and the Issuer having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein. 84 Section 7.05. Notice of Defaults. If a Default occurs and is continuing and if it is actually known to the Trustee, the Trustee shall deliver to each Holder notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, or interest on, any Note, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of the Holders. Section 7.06. Reports by Trustee to the Holders. Within 60 days after each June 30 beginning with June 30, 2015, and in any event prior to August 31 in each year, the Trustee shall deliver to each Holder a brief report dated as of such June 30 that complies with Section 313(a) of the TIA if and to the extent required thereby. The Trustee shall also comply with Section 313(b) of the TIA. A copy of each report at the time of its delivery to the Holders shall be filed by the Issuer with the Commission and each stock exchange (if any) on which the Notes are listed. The Issuer agrees to notify promptly the Trustee whenever the Notes become listed on any stock exchange and of any delisting thereof. Section 7.07. Compensation and Indemnity. The Issuer shall pay to the Trustee from time to time reasonable compensation for its services. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts. The Issuer and each Note Guarantor, jointly and severally shall indemnify the Trustee against any and all loss, liability, claim, damage or expense (including reasonable attorneys’ fees and expenses) incurred by or in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture or Note Guarantee against the Issuer or a Note Guarantor (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by the Issuer, any Note Guarantor, any Holder or any other Person). The obligation to pay such amounts shall survive the payment in full or defeasance of the Notes or the removal or resignation of the Trustee. The Trustee shall notify the Issuer of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any failure so to notify the Issuer shall not relieve the Issuer or any Note Guarantor of its indemnity obligations hereunder. The Issuer shall defend the claim and the indemnified party shall provide reasonable cooperation at the Issuer’s expense in the defense. Such indemnified parties may have separate counsel and the Issuer and the Note Guarantors, as applicable shall pay the fees and expenses of such counsel; provided, however, that the Issuer shall not be required to pay such fees and expenses if it assumes such indemnified parties’ defense and, in such indemnified parties’ reasonable judgment, there is no conflict of interest between the Issuer and the Note Guarantors, as applicable, and such parties in connection with such defense. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by an indemnified party through such party’s own willful misconduct, negligence or bad faith. 85 To secure the Issuer’s and the Note Guarantors’ payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes. The Issuer’s and the Note Guarantors’ payment obligations pursuant to this Section shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any Bankruptcy Law or the resignation or removal of the Trustee. Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(f) or (g) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law. No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if repayment of such funds or adequate indemnity against such risk or liability is not assured to its satisfaction. Section 7.08. Replacement of Trustee. (a) The Trustee may resign at any time by so notifying the Issuer. The Holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuer shall remove the Trustee if: (i) the Trustee fails to comply with Section 7.10; (ii) the Trustee is adjudged bankrupt or insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee otherwise becomes incapable of acting. (b) If the Trustee resigns, is removed by the Issuer or by the Holders of a majority in principal amount of the Notes and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee. (c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall deliver a notice of its succession to the Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07. 86 (d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Notes may petition at the expense of the Issuer any court of competent jurisdiction for the appointment of a successor Trustee. (e) If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is stayed as provided in Section 310(b) of the TIA, any Holder who has been a bona fide holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (f) Notwithstanding the replacement of the Trustee pursuant to this Section, the Issuer’s obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. Section 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have. Section 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA. The Trustee shall have a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. The Trustee shall comply with Section 310(b) of the TIA, subject to its right to apply for a stay of its duty to resign under the penultimate paragraph of Section 310(b) of the TIA; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the TIA any series of securities issued under this Indenture and any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA are met. Section 7.11. Preferential Collection of Claims Against the Issuer. The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated. 87 ARTICLE VIII. DISCHARGE OF INDENTURE; DEFEASANCE Section 8.01. Discharge of Liability on Notes; Defeasance. This Indenture shall be discharged and shall cease to be of further effect as to all outstanding Notes when: (a) either (i) all the Notes theretofore authenticated and delivered (other than Notes pursuant to Section 2.08 that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee for cancellation or (ii) all of the Notes (a) have become due and payable, (b) will become due and payable at their Stated Maturity within one year or (c) if redeemable at the option of the Issuer, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee cash in U.S. Dollars, U.S. Dollar-denominated Government Obligations or a combination thereof, in an amount sufficient in the written opinion of a firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Dollar-denominated Government Obligations have been so deposited) to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, and interest on the Notes to the date of deposit together with irrevocable instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be; (b) the Issuer and/or the Note Guarantors have paid all other sums payable under this Indenture; and (c) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with. Subject to Sections 8.01(c) and 8.02, the Issuer at any time may terminate (i) all of its obligations under the Notes, this Indenture (with respect to such Notes) and the Security Documents (“ legal defeasance option ”) or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.11, 4.12 and 4.13 and the operation of Section 5.01 and Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f) (with respect to Significant Subsidiaries of MPM only), 6.01(g) (with respect to Significant Subsidiaries of MPM only), 6.0l(h), 6.01(i), 6.01(j) and 6.01(k) (“ covenant defeasance option ”). The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. In the event that the Issuer terminates all of its obligations under the Notes and this Indenture (with respect to such Notes) by exercising its legal defeasance option or its covenant defeasance option, the obligations of each Note Guarantor with respect to the Notes, this Indenture and the Security Documents shall be terminated simultaneously with the termination of such obligations. If the Issuer exercises its legal defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default. If the Issuer exercises its covenant defeasance option with respect to the Notes, payment of the Notes so defeased may not be 88 accelerated because of an Event of Default specified in Section 6.01(c), 6.01(d), 6.01(e), 6.01(f) (with respect to Significant Subsidiaries of the Issuer only), 6.01(g) (with respect to Significant Subsidiaries of the Issuer only), 6.01(h), 6.01(i), 6.01(j) or 6.01(k) or because of the failure of the Issuer to comply with Section 5.01(a)(4). Upon satisfaction of the conditions set forth herein and upon request of the Issuer, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuer terminates. (d) Notwithstanding clauses (a) and (b) above, the Issuer’s obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08 and in this Article VIII shall survive until the Notes have been paid in full. Thereafter, the Issuer’s obligations in Sections 7.07, 8.05 and 8.06 shall survive such satisfaction and discharge. Section 8.02. Conditions to Defeasance. (a) The Issuer may exercise its legal defeasance option or its covenant defeasance option only if: (i) the Issuer irrevocably deposits in trust with the Trustee, cash in U.S. Dollars, U.S. Dollar-denominated Government Obligations or a combination thereof, in an amount sufficient or, in the case of Government Obligations, the principal of and interest on which will be sufficient, to pay the principal of and interest on the Notes when due at maturity or redemption, as the case may be, including interest thereon to maturity or such redemption date; (ii) the Issuer delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Dollar-denominated Government Obligations, plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all the Notes to maturity or redemption, as the case may be; (iii) 123 days pass after the deposit is made and during the 123-day period no Default specified in Section 6.01(f) or (g) with respect to the Issuer occurs which is continuing at the end of the period; (iv) the deposit does not constitute a default under any other agreement binding on the Issuer; (v) in the case of the legal defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling, or (2) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the 89 same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. Notwithstanding the foregoing, the Opinion of Counsel required with respect to a legal defeasance need not be delivered if all Notes not theretofore delivered to the Trustee for cancellation have become due and payable; (vi) in the case of the covenant defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and (vii) the Issuer delivers to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes to be so defeased and discharged as contemplated by this Article VIII have been complied with. (b) Before or after a deposit, the Issuer may make arrangements satisfactory to the Trustee for the redemption of such Notes at a future date in accordance with Article III. Section 8.03. Application of Trust Money. The Trustee shall hold in trust money, U.S. Dollar-denominated Government Obligations (including proceeds thereof) deposited with it pursuant to this Article VIII. It shall apply the deposited money and the money from U.S. Dollar-denominated Government Obligations through each Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes so discharged or defeased. Section 8.04. Repayment to Issuer. Each of the Trustee and each Paying Agent shall promptly turn over to the Issuer upon request any money, U.S. Dollar-denominated Government Obligations held by it as provided in this Article which, in the written opinion of nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Dollar-denominated Government Obligations have been so deposited), are in excess of the amount thereof which would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article. Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Issuer upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Issuer for payment as general creditors, and the Trustee and each Paying Agent shall have no further liability with respect to such monies. Section 8.05. Indemnity for Government Obligations. The Issuer shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited Government Obligations or the principal and interest received on such Government Obligations. Section 8.06. Reinstatement. If the Trustee or any Paying Agent is unable to apply any money or Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority 90 enjoining, restraining or otherwise prohibiting such application, the Issuer’s obligations under this Indenture and the Notes so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or any Paying Agent is permitted to apply all such money, U.S. Dollar-denominated Government Obligations in accordance with this Article VIII; provided, however, that, if the Issuer has made any payment of principal of or interest on, any such Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Obligations held by the Trustee or any Paying Agent. ARTICLE IX. AMENDMENTS AND WAIVERS Section 9.01. Without Consent of the Holders. The Issuer and the Trustee may amend this Indenture, the Notes, the Intercreditor Agreement or any Security Document without notice to or consent of any Holder: (i) to cure any ambiguity, omission, defect, mistake or inconsistency; (ii) to comply with Article V; (iii) to provide for uncertificated Notes in addition to or in place of certificated Notes; provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code; (iv) to add a Note Guarantee with respect to the Notes; (v) to secure the Notes and the Note Guarantees, to add additional assets as Collateral, to release Collateral as permitted under this Indenture, the Security Documents or the Intercreditor Agreement and to add additional secured creditors holding Other First Priority Obligations, Other Pari Passu Obligations, Junior Lien Obligations, ABL Obligations or additional First Priority Lien Obligations so long as such obligations are not prohibited by this Indenture or the Security Documents; (vi) to amend, modify or enter into this Indenture, the Security Documents or the Intercreditor Agreement in connection with the Transactions (including with respect to entry into the ABL Facility); (vii) to add to the covenants of the Issuer for the benefit of the Holders or to surrender any right or power herein conferred upon the Issuer; (viii) to comply with any requirement of (A) the Commission in connection with qualifying, or maintaining the qualification of, this Indenture under the TIA or (B) the Intercreditor Agreement; (ix) to make any change that does not adversely affect the rights of any Holder; or (x) to provide for the issuance of any Additional Notes, which shall have terms substantially identical in all material respects to the Original Notes, and which shall be treated, together with any outstanding Original Notes, as a single issue of securities. 91 In addition, pursuant to the Intercreditor Agreement, any amendment, waiver or consent to any of the collateral documents with respect to ABL Obligations or First Priority Lien Obligations will also apply automatically to the comparable Security Documents with respect to the Notes to the extent set forth therein. After an amendment under this Section 9.01 becomes effective, the Issuer shall electronically deliver or mail by first-class mail to the respective Holders a notice briefly describing such amendment. However, the failure to give such notice to all Holders entitled to receive such notice, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01. Section 9.02. With Consent of the Holders. (a) The Issuer and the Trustee may amend this Indenture, the Notes, the Intercreditor Agreement or the Security Documents with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange for the Notes) and any past Default or compliance with any provisions may be waived with the consent of the Holders of a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange for the Notes). Notwithstanding the foregoing, without the consent of each Holder of an outstanding Note affected, no amendment may: (i) reduce the amount of Notes whose Holders must consent to an amendment, (ii) reduce the rate of or extend the time for payment of interest on any Note, (iii) reduce the principal of or change the Stated Maturity of any Note, (iv) reduce the amount payable upon the redemption of any Note or change the time at which any Note may be redeemed in accordance with Article III, (v) make any Note payable in money other than that stated in such Note, (vi) expressly subordinate the Notes or any Note Guarantees to any other Indebtedness of the Issuer or any Note Guarantor, (vii) impair the right of any Holder to receive payment of principal of, and interest on, such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes, (viii) make any change in Section 6.04 or 6.07 or the second sentence of this Section 9.02, or (ix) except as otherwise expressly permitted under this Indenture, modify any Note Guarantee in any manner adverse in any material respect to the Holders. 92 In addition, subject to the terms of the Intercreditor Agreement, without the consent of the Holders of at least 66 2/3% in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a tender offer or exchange for the Notes), no amendment or waiver may (i) release all or substantially all of the Collateral from the Lien of this Indenture and the Security Documents with respect to the Notes, subject to the terms of the Intercreditor Agreement or (ii) make any change in the provisions in the Intercreditor Agreement or this Indenture or any material change in the provisions in the Security Documents, in each case dealing with the application of proceeds of Collateral upon the exercise of remedies with respect to such Collateral that would adversely affect the Holders of the Notes. It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. After an amendment under this Section 9.02 becomes effective, the Issuer shall deliver to the Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02. Section 9.03. Compliance with Trust Indenture Act. From the date on which this Indenture is qualified under the TIA, every amendment, waiver or supplement to this Indenture or the Notes shall comply with the TIA as then in effect. Section 9.04. Revocation and Effect of Consents and Waivers. (a) A consent to an amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Note or portion of the Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officer’s Certificate from the Issuer certifying that the requisite principal amount of Notes have consented. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the (i) receipt by the Issuer or the Trustee of consents by the Holders of the requisite principal amount of securities, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Issuer and the Trustee. (b) The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date. 93 Section 9.05. Notation on or Exchange of Notes. If an amendment, supplement or waiver changes the terms of a Note, the Issuer may require the Holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment, supplement or waiver. Section 9.06. Trustee and Collateral Agent to Sign Amendments. The Trustee and the Collateral Agent shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee or the Collateral Agent. If it does, the Trustee and the Collateral Agent may but need not sign it. In signing such amendment, the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and shall be provided with, and (subject to Section 7.01) shall be fully protected in relying upon, an Officer’s Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer and the Note Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03). Section 9.07. Payment for Consent. Neither the Issuer nor any Affiliate of the Issuer shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. Section 9.08. Additional Voting Terms; Calculation of Principal Amount. All Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote) as one class and no Notes will have the right to vote or consent as a separate class on any matter. Determinations as to whether Holders of the requisite aggregate principal amount of Notes have concurred in any direction, waiver or consent shall be made in accordance with this Article IX and Section 2.14. Section 9.09. Providing Evidence of Amendments to Trustee. In the event of any amendments, supplements, modifications, extensions, renewals or restatements to any Credit Agreement or any of the Senior Collateral Documents (as such term is defined in the Intercreditor Agreement) that in each case impacts the Note Documents pursuant to Section 5.3(b) of the Intercreditor Agreement, the Issuer shall promptly provide the documentation evidencing such change to the Trustee. 94 ARTICLE X. RANKING OF NOTE LIENS Section 10.01. Relative Rights. The Intercreditor Agreement will define the relative rights of holders of junior Liens and holders of Liens securing Note Obligations, First Priority Lien Obligations and ABL Obligations. Nothing in this Indenture or the Intercreditor Agreement will: (a) impair, as between the Issuer and Holders of Notes, the obligation of the Issuer, which is absolute and unconditional, to pay principal of, and interest on, Notes in accordance with their terms or to perform any other obligation of the Issuer or any other obligor under this Indenture, the Notes, the Note Guarantees and the Security Documents; (b) restrict the right of any Holder to sue for payments that are then due and owing, in a manner not inconsistent with the provisions of the Intercreditor Agreement; (c) prevent the Trustee, the Collateral Agent or any Holder from exercising against the Issuer or any other obligor any of its other available remedies upon a Default or Event of Default (other than as provided in the Intercreditor Agreement); or (d) restrict the right of the Trustee, the Collateral Agent or any Holder (in each case except as provided in the Intercreditor Agreement): (i) to file and prosecute a petition seeking an order for relief in an involuntary bankruptcy case as to any obligor or otherwise to commence, or seek relief commencing, any insolvency or liquidation proceeding involuntarily against any obligor; (ii) to make, support or oppose any request for an order for dismissal, abstention or conversion in any insolvency or liquidation proceeding; (iii) to make, support or oppose, in any insolvency or liquidation proceeding, any request for an order extending or terminating any period during which the debtor (or any other Person) has the exclusive right to propose a plan of reorganization or other dispositive restructuring or liquidation plan therein; (iv) to seek the creation of, or appointment to, any official committee representing creditors (or certain of the creditors) in any insolvency or liquidation proceedings and, if appointed, to serve and act as a member of such committee without being in any respect restricted or bound by, or liable for, any of the obligations under this Article X; (v) to seek or object to the appointment of any professional person to serve in any capacity in any insolvency or liquidation proceeding or to support or object to any request for compensation made by any professional person or others therein; (vi) to make, support or oppose any request for an order appointing a trustee or examiner in any insolvency or liquidation proceedings; or (vii) otherwise to make, support or oppose any request for relief in any insolvency or liquidation proceeding that it is permitted by law to make, support or oppose if it were a holder of unsecured claims; or as to any matter relating to any plan of reorganization or other restructuring or liquidation plan or as to any matter relating to the administration of the estate or the disposition of the case or proceeding. 95 ARTICLE XI. COLLATERAL Section 11.01. Security Documents. (a) The payment of the principal of, and accrued and unpaid interest, if any, on the Notes when due, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise and whether by the Issuer pursuant to the Notes or by a Note Guarantor pursuant to its Note Guarantee, the payment of all other Obligations and the performance of all other obligations of the Issuer and the Note Guarantors under the Note Documents and payment of any Other Pari Passu Obligations, if any, will be secured as provided in the Security Documents (subject to the terms of the Intercreditor Agreement) to be entered into by the Issuer, the Note Guarantors and the Collateral Agent (and, to the extent applicable, the representative of the holders of Other Pari Passu Obligations) as required or permitted by this Indenture. (a) The Issuer shall, and shall cause each Note Guarantor to, and each Note Guarantor shall execute the Collateral Agreement and each other Security Document necessary to create a Lien in all the assets of the Issuer and each Note Guarantor securing First Priority Lien Obligations on the Issue Date (other than Excluded Assets), joinders to the applicable Intercreditor Agreement, and make all filings and take all other actions as are necessary or required by the Security Documents to establish and maintain (at the sole cost and expense of the Issuer and the Note Guarantors) the security interest created by the Security Documents in the Collateral (other than with respect to any Collateral the security interest in which is not required to be perfected under the Security Documents) as a perfected security interest. In the case of real property owned by the Issuer or a Note Guarantor on the Issue Date that is subject to a mortgage that secures the First Priority Lien Obligations other than Excluded Assets, the Issuer or any Note Guarantor, as applicable, shall also deliver (the following, collectively, “ Mortgage Deliverables ”), but, if a Credit Agreement was in effect when mortgages were put in place to secure First Priority Lien Obligations, only to the extent such deliverables were provided to the holders of the First Priority Lien Obligations in connection with their mortgage on such property: (i) a policy or policies or marked-up unconditional binder of lender’s title insurance, paid for by the Issuer and the Note Guarantors, issued by a nationally recognized title insurance company, insuring the Lien of each mortgage as a valid Lien on the mortgaged property described therein, free of any title exceptions and other Liens except Permitted Liens, (ii) an as-is survey of the property subject to any such mortgage certified to the Issuer, Collateral Agent and the title company, meeting minimum standard detail requirements for ALTA/ACSM Land Title Surveys and dated (or redated) not earlier than six months prior to the date of delivery thereof under such Credit Agreement, (iii) a customary Opinion of Counsel addressing such matters as were addressed in the comparable opinion provided to the holders of First Priority Lien Obligations, (iv) evidence of insurance required to be maintained pursuant to the mortgages and this Indenture, and (v) if required by applicable law, flood hazard determination certificates and, if required, notices to the record owner of any improvements in a special flood hazard area, together with evidence of acceptable flood insurance coverage. 96 (b) Notwithstanding the foregoing or the provisions of any other Note Document, (i) if perfected security interests in any property or any applicable Mortgage Deliverables are not provided on the Issue Date, the Issuer and the Note Guarantors need not provide such security interests or applicable Mortgage Deliverables on such date, but shall use commercially reasonable efforts to provide such perfected security interests or Mortgage Deliverables within 120 days from such date and (ii) with respect to any mortgage required to be delivered by Section 11.01(b), such mortgage may be provided in the form of a new instrument and/or amendments to any existing instruments so long as (A) the mortgagee under such existing instrument is the Collateral Agent or has otherwise agreed to act as agent for the holders of the Note Obligations, and (B) the Mortgage Deliverables are delivered in connection with the amendment to such existing instrument, provided if such mortgage is in the form of an amendment, the title policy may be in the form of an endorsement to the existing title insurance policy. (c) If the Issuer or any Note Guarantor acquires any property that is required to be Collateral pursuant to Article IV, or any Restricted Subsidiary becomes a Note Guarantor that is required to pledge its assets as Collateral pursuant to Article IV, the Issuer or such Note Guarantor shall execute a joinder to an existing Security Document or enter into a new Security Document (in each case, to the extent necessary to cause such asset be so pledged), and take all steps necessary to validly perfect such Lien, subject to no prior Liens other than Permitted Liens (including the First Priority Liens on such assets). To the extent that the Issuer or such Note Guarantor are entering into a joinder, entering into a new Security Document, providing Mortgage Deliverables (in the case of real property) or taking other steps to perfect such Lien in order to secure First Priority Lien Obligations or ABL Obligations, the Issuer or such Note Guarantor may take the same steps in connection with this Indenture (with such changes as are appropriate to reflect the applicable priority of the Lien consistent with the terms of the Security Documents and the Liens being created on the Issue Date), which shall satisfy the obligations hereunder, and the Trustee and the Collateral Agent, as applicable, are authorized and directed to execute any documentation consistent therewith. (d) The Issuer and each Note Guarantor shall execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements or amendments or continuation statements in respect thereof), that may be required under any applicable law, to ensure that the Liens of the Security Documents on the Collateral remain perfected with the priority required by the Security Documents, all at the expense of the Issuer and Note Guarantors and provide to the Collateral Agent and the Trustee, from time to time upon reasonable request, evidence reasonably satisfactory to the Collateral Agent and the Trustee as to the perfection and priority of the Liens created or intended to be created by the Security Documents. Section 11.02. Collateral Agent. (a) The Collateral Agent is authorized and empowered to appoint one or more co-Collateral Agents as it deems necessary or appropriate. 97 (b) Subject to Section 7.01, neither the Trustee nor the Collateral Agent nor any of their respective officers, directors, employees, attorneys or agents will be responsible or liable for the existence, genuineness, value or protection of any Collateral, for the legality, enforceability, effectiveness or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency or protection of any Second Priority Lien, or for any defect or deficiency as to any such matters, or for any failure to demand, collect, foreclose or realize upon or otherwise enforce any of the Second Priority Liens or Security Documents or any delay in doing so. (c) The Collateral Agent (subject to the terms of the Intercreditor Agreement) will be subject to such directions as may be given it by the Trustee from time to time (as required or permitted by this Indenture). Except as directed by the Trustee as required or permitted by this Indenture and any other representatives, the Collateral Agent will not be obligated: (i) to act upon directions purported to be delivered to it by any other Person; (ii) to foreclose upon or otherwise enforce any Second Priority Lien; or (iii) to take any other action whatsoever with regard to any or all of the Second Priority Liens, Security Documents or Collateral. (d) The Collateral Agent will be accountable only for amounts that it actually receives as a result of the enforcement of the Second Priority Liens or Security Documents. (e) In acting as Collateral Agent or co-Collateral Agent, the Collateral Agent and each co-Collateral Agent may rely upon and enforce each and all of the rights, powers, immunities, indemnities and benefits of the Trustee under Article VII hereof. (f) The Holders of Notes agree that the Collateral Agent shall be entitled to the rights, privileges, protections, immunities, indemnities and benefits provided to the Collateral Agent by the Security Documents. Furthermore, each Holder of a Note, by accepting such Note, consents to the terms of the Intercreditor Agreement and the Security Documents described herein and authorizes and directs the Trustee and the Collateral Agent to enter into and perform the Intercreditor Agreement and the Security Documents. (g) If the Issuer (i) Incurs First Priority Lien Obligations at any time when no intercreditor agreement is in effect or at any time when Indebtedness constituting First Priority Lien Obligations entitled to the benefit of an existing intercreditor agreement is concurrently retired, and (ii) delivers to the Collateral Agent an Officer’s Certificate so stating and requesting the Collateral Agent to enter into an intercreditor agreement in favor of a designated agent or representative for the holders of the First Priority Lien Obligations so Incurred, the Collateral Agent shall (and is hereby authorized and directed to) enter into such intercreditor agreement bind the Holders on the terms set forth therein and perform and observe its obligations thereunder. If the Issuer (i) Incurs ABL Obligations at any time when no intercreditor agreement is in effect or at any time when Indebtedness constituting ABL Obligations entitled to the benefit of an existing intercreditor agreement is concurrently retired, and (ii) delivers to the Collateral Agent an Officer’s Certificate so stating and requesting the Collateral Agent to enter into an intercreditor agreement in favor of a designated agent or representative for the holders of the ABL Obligations 98 so Incurred, the Collateral Agent shall (and is hereby authorized and directed to) enter into such intercreditor agreement bind the Holders on the terms set forth therein and perform and observe its obligations thereunder. Section 11.03. Authorization of Actions to Be Taken. (a) Each Holder of Notes, by its acceptance thereof, consents and agrees to the terms of each Security Document, the Intercreditor Agreement and authorizes and empowers the Trustee and the Collateral Agent to bind the Holders of Notes and other holders of Obligations as set forth in the Security Documents to which it is a party, and the Intercreditor Agreement and to perform its obligations and exercise its rights and powers thereunder, including by serving as “First Priority Representative” under and as defined in the Intercreditor Agreement, if and when applicable. (b) The Collateral Agent and the Trustee are authorized and empowered to receive for the benefit of the Holders of Notes and the holders of any Other Pari Passu Obligations and/or Junior Lien Obligations any funds collected or distributed under the Security Documents and the Intercreditor Agreement to which the Collateral Agent or Trustee is a party and to make further distributions of such funds to the Holders of Notes, any Other Pari Passu Obligations and/or Junior Lien Obligations, according to the provisions of this Indenture, the Security Documents and the Intercreditor Agreement. (c) Subject to the provisions of Section 7.01, Section 7.02, the Intercreditor Agreements, the Trustee may, in its sole discretion and without the consent of the Holders, direct, on behalf of the Holders, the Collateral Agent to take all actions it deems necessary or appropriate in order to: (i) foreclose upon or otherwise enforce any or all of the Second Priority Liens; (ii) enforce any of the terms of the Security Documents to which the Collateral Agent or Trustee is a party; or (iii) collect and receive payment of any and all Obligations hereunder. Subject to the Intercreditor Agreement, the Trustee is authorized and empowered to institute and maintain, or direct the Collateral Agent to institute and maintain, such suits and proceedings as it may deem expedient to protect or enforce the Second Priority Liens or the Security Documents to which the Collateral Agent or Trustee is a party or to prevent any impairment of Collateral by any acts that may be unlawful or in violation of the Security Documents to which the Collateral Agent or Trustee is a party or this Indenture, and such suits and proceedings as the Trustee or the Collateral Agent may deem expedient to preserve or protect its interests and the interests of the Holders of Notes in the Collateral, including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the Second Priority Liens on the Collateral or be prejudicial to the interests of Holders, the Trustee or the Collateral Agent. 99 Section 11.04. Release of Collateral. (a) Subject to subsections (b) and (c) of this Section 11.04, the Collateral may be released from the Second Priority Liens created by the Security Documents at any time or from time to time in accordance with the provisions of this Indenture, the Security Documents and the Intercreditor Agreement. The applicable assets included in the Collateral shall be released from the Second Priority Liens securing the Notes and the Note Guarantees at the Issuer’s sole cost and expense, under any one or more of the following circumstances: (i) upon the release of all Liens on such property or assets securing First Priority Lien Obligations; provided, however, that if the Company or any Note Guarantor subsequently Incurs First Priority Lien Obligations that are secured by Liens on property or assets of the Company or any Note Guarantor of the type constituting the Collateral and the related Liens are Incurred in reliance on clause (8)(B) of the definition of “Permitted Liens”, then the Company and its Restricted Subsidiaries will be required to reinstitute the security arrangements with respect to the Collateral in favor of the Notes and the Note Guarantees, which will be junior Liens on the Collateral securing such First Priority Lien Obligations (other than Excluded Assets) to the same extent provided under the Security Documents and on the terms and conditions of the security documents relating to such First Priority Lien Obligations, with the junior Lien held either by the administrative agent, collateral agent or other representative for such First Priority Lien Obligations or by a collateral agent or other representative designated by the Company to hold the junior Liens for the benefit of the Holders of the Notes and the Note Guarantees and subject to an intercreditor agreement that provides the administrative agent or collateral agent for such First Priority Lien Obligations substantially the same rights, powers and obligations as afforded under the Intercreditor Agreement; (ii) to enable the Issuer and Note Guarantors to consummate the disposition of such property or assets to the extent not prohibited under the covenant described under Section 4.06; (iii) in respect of the property and assets of a Note Guarantor, upon the designation of such Note Guarantor to be an Unrestricted Subsidiary in accordance with the covenant described under Section 4.04 and the definition of “Unrestricted Subsidiary”; (iv) in respect of the property and assets of a Note Guarantor, upon the release or discharge of the Note Guarantee of such Note Guarantor in accordance with this Indenture; (v) in respect of the property and assets of the Issuer or a Note Guarantor that at any time is not subject to a Lien securing First Priority Lien Obligations at such time,; provided that if such property and assets are subsequently subject to a Lien securing First Priority Lien Obligations (other than Excluded Assets), such property and assets shall subsequently constitute Collateral hereunder; (vi) in the case of a Note Guarantor making a Transfer to any Restricted Subsidiary; provided that such Transfer is permitted by clause (y) of the last paragraph of Section 5.01; 100 (vii) pursuant to an amendment or waiver in accordance with Article IX; (viii) if the Notes have been discharged or defeased pursuant to Section 8.01; and (ix) upon the Issuer’s election to release any Collateral from the Liens securing the Notes and Guarantees pursuant to Section 4.17. Notwithstanding the foregoing, if an Event of Default under this Indenture exists on the date on which the First Priority Lien Obligations are repaid in full and terminated (including all commitments and letters of credit thereunder), the Second Priority Liens on the Collateral securing the Notes will not be released, except to the extent the Collateral or any portion thereof was disposed of in order to repay the First Priority Lien Obligations secured by the Collateral, and thereafter the Trustee or another designated representative (acting at the direction of the holders of a majority of outstanding principal amount of the Notes and Other Pari Passu Obligations) will have the right to direct the First Priority Representative to foreclose upon the Collateral (but in such event, the Liens on the Collateral securing the Notes will be released when such Event of Default and all other Events of Default under this Indenture cease to exist).] Upon the receipt of an Officer’s Certificate from the Issuer, as described in Section 11.04(b) below, if applicable, and any necessary or proper instruments of termination, satisfaction or release prepared by the Issuer, the Collateral Agent shall execute, deliver or acknowledge such instruments or releases to evidence the release of any Collateral permitted to be released pursuant to this Indenture or the Security Documents or the Intercreditor Agreement. (b) Except as provided in the Intercreditor Agreement, in connection with (x) any release of Collateral pursuant to Section 11.04(a)(i), (iii), (iv), (v) or (vi) above, such Collateral may not be released from the Lien and security interest created by the Security Documents and (y) any release of Collateral pursuant to Section 11.04(a)(ii), the Collateral Agent shall not be required to execute, deliver or acknowledge any instruments of termination, satisfaction or release, unless, in either case (x) or (y), an Officer’s Certificate and Opinion of Counsel certifying that all conditions precedent have been met and stating under which of the circumstances set forth in Section 11.04(a) above the Collateral is being released have been delivered to the Collateral Agent on or prior to the date of such release. (c) At any time when a Default or Event of Default has occurred and is continuing and the maturity of the Notes has been accelerated (whether by declaration or otherwise) and the Trustee has delivered a notice of acceleration to the Collateral Agent, no release of Collateral pursuant to the provisions of this Indenture or the Security Documents will be effective as against the Holders, except as otherwise provided in the Intercreditor Agreement or, subject to the terms of the Intercreditor Agreement, in connection with the exercise of remedies by the Collateral Agent. Section 11.05. Filing, Recording and Opinions. (a) The Issuer will comply with the provisions of TIA Sections 314(b), 314(c) and 314(d), in each case following qualification of this Indenture pursuant to the TIA and except to the extent not required as set forth in any Commission regulation or interpretation (including any no-action letter issued by the Staff of the Commission, whether issued to the Issuer or any other Person). Following such qualification, to 101 the extent the Issuer is required to furnish to the Trustee and the Collateral Agent an Opinion of Counsel pursuant to TIA Section 314(b)(2), the Issuer will furnish such opinion not more than 60 but not less than 30 days prior to each December 30. Any release of Collateral permitted by Section 11.04 hereof will be deemed not to impair the Liens under this Indenture and the Security Documents in contravention thereof and any Person that is required to deliver an Officer’s Certificate or Opinion of Counsel pursuant to Section 314(d) of the TIA shall be entitled to rely upon the foregoing as a basis for delivery of such certificate or opinion. The Trustee may, to the extent permitted by Section 7.01 and 7.02 hereof, accept as conclusive evidence of compliance with the foregoing provisions the appropriate statements contained in such documents and Opinion of Counsel. If any Collateral is released in accordance with this Indenture, the Intercreditor Agreement or any Security Document and if the Issuer has delivered the certificates and documents required by the Security Documents and Section 11.04, the Trustee will determine whether it has received all documentation required by TIA Section 314(d) in connection with such release and, based on such determination and the Opinion of Counsel delivered pursuant to Section 11.04, will, upon request, deliver a certificate to the Collateral Agent setting forth such determination. Notwithstanding anything to the contrary herein, the Issuer and its Subsidiaries will not be required to comply with all or any portion of Section 314(d) of the Trust Indenture Act if they determine, in good faith based on advice of counsel, that under the terms of that section and/or any interpretation or guidance as to the meaning thereof of the Commission and its staff, including “no action” letters or exemptive orders, all or any portion of Section 314(d) of the Trust Indenture Act is inapplicable to the released Collateral. Without limiting the generality of the foregoing, certain no action letters issued by the Commission have permitted an indenture qualified under the Trust Indenture Act to contain provisions permitting the release of collateral from Liens under such indenture in the ordinary course of business without requiring the issuer to provide certificates and other documents under Section 314(d) of the Trust Indenture Act. Section 11.06. [Reserved]. Section 11.07. Release Upon Termination of the Issuer’s Obligations. In the event that (i) the Issuer delivers to the Trustee, in form and substance acceptable to it, an Officer’s Certificate and Opinion of Counsel certifying that all the obligations under this Indenture, the Notes and the Security Documents have been satisfied and discharged by the payment in full of the Issuer’s obligations under the Notes, this Indenture and the Security Documents, and all such obligations have been so satisfied, or (ii) a discharge, legal defeasance or covenant defeasance of this Indenture occurs under Article VIII, the Trustee shall deliver to the Issuer and the Collateral Agent a notice stating that the Trustee, on behalf of the Holders, disclaims and gives up any and all rights it has in or to the Collateral, and any rights it has under the Security Documents, and upon receipt by the Collateral Agent of such notice, the Collateral Agent shall be deemed not to hold a Lien in the Collateral on behalf of the Trustee and shall do or cause to be done all acts reasonably necessary to release such Lien as soon as is reasonably practicable. 102 Section 11.08. Designations. Except as provided in the next sentence, for purposes of the provisions hereof, the Intercreditor Agreement requiring the Issuer to designate Indebtedness for the purposes of the terms First Priority Lien Obligations, Other Pari Passu Obligations, Other First Priority Obligations, ABL Obligations, Junior Lien Obligations or any other such designations hereunder or under the Intercreditor Agreement, any such designation shall be sufficient if the relevant designation provides in writing that such First Priority Lien Obligations, Other Pari Passu Obligations, Other First Priority Obligations, ABL Obligations, Junior Lien Obligations or such other designations are permitted under this Indenture and is signed on behalf of the Issuer by an Officer and delivered to the Trustee, the Collateral Agent, the New First Priority Representative and the representative with respect to Junior Lien Obligations. For all purposes hereof and the Intercreditor Agreement, (a) the Issuer hereby designates the Obligations pursuant to the (i) indenture governing the Existing First Lien Notes as in effect on the Issue Date as First Priority Lien Obligations. ARTICLE XII. NOTE GUARANTEES Section 12.01. Note Guarantees. (a) Each Note Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees on a senior basis, as a primary obligor and not merely as a surety, to each Holder and to the Trustee and its successors and assigns (i) the full and punctual payment when due, whether at Stated Maturity, by acceleration, by redemption or otherwise, of all obligations of the Issuer under this Indenture (including obligations to the Trustee) and the Notes, whether for payment of principal of, or interest on, the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuer whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all of the foregoing being hereinafter collectively called the “ Guaranteed Obligations ”). Each Note Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from each such Note Guarantor, and that each such Note Guarantor shall remain bound under this Article XII notwithstanding any extension or renewal of any Guaranteed Obligations. (b) Each Note Guarantor waives presentation to, demand of payment from and protest to the Issuer of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Note Guarantor waives notice of any Default under the Notes or the Guaranteed Obligations. The obligations of each Note Guarantor hereunder shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuer or any other Person under this Indenture, the Notes or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (iv) the release of any security held by the Collateral Agent for the benefit of the Holders and the Trustee for the Guaranteed Obligations or any Note Guarantor; (v) the failure of any Holder or Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of such Note Guarantor, except in each case as provided in Section 12.02(b). 103 (c) Each Note Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Note Guarantors, such that such Note Guarantor’s obligations would be less than the full amount claimed. Each Note Guarantor hereby waives any right to which it may be entitled to have the assets of the Issuer first be used and depleted as payment of the Issuer’s or such Note Guarantor’s obligations hereunder prior to any amounts being claimed from or paid by such Note Guarantor hereunder. Each Note Guarantor hereby waives any right to which it may be entitled to require that the Issuer be sued prior to an action being initiated against such Note Guarantor. (d) Each Note Guarantor further agrees that its Note Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by the Collateral Agent on behalf of the Holders and the Trustee to any security held for payment of the Guaranteed Obligations. (e) Except as expressly set forth in Sections 8.01(b), 12.02 and 12.06, the obligations of each Note Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Note Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Note Guarantor or would otherwise operate as a discharge of any Note Guarantor as a matter of law or equity. (f) Each Note Guarantor agrees that its Note Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. Each Note Guarantor further agrees that its Note Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Issuer or otherwise. (g) In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Note Guarantor by virtue hereof, upon the failure of the Issuer to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Note Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Issuer to the Holders and the Trustee. 104 (h) Each Note Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Note Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of any Note Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article VI, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Note Guarantor for the purposes of this Section 12.01. (i) Each Note Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 12.01. (j) Upon request of the Trustee, each Note Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. Section 12.02. Limitation on Liability. (a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Note Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such Note Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. (b) A Note Guarantee as to any Note Guarantor shall terminate and be of no further force or effect and such Note Guarantor shall be deemed to be released from all obligations under this Article XII upon: (i) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Note Guarantor is no longer a Restricted Subsidiary) or all or substantially all the assets of the applicable Note Guarantor if such sale, disposition or other transfer is made in compliance with this Indenture and such Note Guarantor is released from its guarantees, if any, of, and all pledges and security, if any, granted in connection with, any Credit Agreement and any other Indebtedness of the Issuer or any Note Guarantor, (ii) the Issuer designating such Note Guarantor to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.04 and the definition of “Unrestricted Subsidiary,” (iii) in the case of any Restricted Subsidiary that after the Issue Date is required to guarantee the Notes pursuant to Section 4.11, the release or discharge of the guarantee by such Restricted Subsidiary of Indebtedness or the repayment of the Indebtedness, in each case, which resulted in the obligation to guarantee the Notes, and (iv) the Issuer’s exercise of its defeasance options under Article VIII, or if the Issuer’s obligations under this Indenture are discharged in accordance with the terms of this Indenture. 105 A Note Guarantee also shall be automatically released upon the applicable Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing the ABL Facility or First Priority Lien Obligations or other exercise of remedies in respect thereof. Section 12.03. Successors and Assigns. This Article XII shall be binding upon each Note Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture. Section 12.04. No Waiver. Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article XII shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article XII at law, in equity, by statute or otherwise. Section 12.05. Modification. No modification, amendment or waiver of any provision of this Article XII, nor the consent to any departure by any Note Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Note Guarantor in any case shall entitle such Note Guarantor to any other or further notice or demand in the same, similar or other circumstances. Section 12.06. Execution of Supplemental Indenture for Future Note Guarantors. Each Subsidiary and other Person which is required to become a Note Guarantor pursuant to Section 4.11 on and after the Issue Date shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit B hereto pursuant to which such Subsidiary or other Person shall become a Note Guarantor under this Article XII and shall guarantee the Guaranteed Obligations. Concurrently with the execution and delivery of such supplemental indenture, the Issuer shall deliver to the Trustee an Opinion of Counsel and an Officer’s Certificate to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary or other Person and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors’ rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Note Guarantee of such Note Guarantor is a valid and binding obligation of such Note Guarantor, enforceable against such Note Guarantor in accordance with its terms and/or to such other matters as the Trustee may reasonably request. 106 Section 12.07. Non-Impairment. The failure to endorse a Note Guarantee on any Note shall not affect or impair the validity thereof. ARTICLE XIII. MISCELLANEOUS Section 13.01. Trust Indenture Act Controls. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an “ incorporated provision ”) included in this Indenture by operation of, Sections 310 to 318 of the TIA, inclusive, such imposed duties or incorporated provision shall control. Section 13.02. Notices. (a) Any notice or communication required or permitted hereunder shall be in writing and delivered in person, via facsimile or mailed by first-class mail addressed as follows: if to the Issuer or a Note Guarantor: Momentive Performance Materials Inc. 22 Corporate Woods Blvd. Albany, New York 12211-2374 Attention: Chief Financial Officer Facsimile: 518-533-4609 if to the Trustee: [ [ [ ] ] ] Attention: [ Facsimile: [ ] ] The Issuer or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. (b) Any notice or communication delivered to a Holder shall be delivered electronically or mailed by first-class mail, to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so delivered within the time prescribed. (c) Failure to deliver a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is delivered in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee are effective only if received. Section 13.03. Communication by the Holders with Other Holders. The Holders may communicate pursuant to Section 312(b) of the TIA with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and other Persons shall have the protection of Section 312(c) of the TIA. 107 Section 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer to the Trustee or the Collateral Agent to take or refrain from taking any action under this Indenture, the Issuer shall furnish to the Trustee or the Collateral Agent at the request of the Trustee or the Collateral Agent, as applicable: (a) an Officer’s Certificate in form reasonably satisfactory to the Trustee or the Collateral Agent, as applicable stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (b) an Opinion of Counsel in form reasonably satisfactory to the Trustee or the Collateral Agent, as applicable stating that, in the opinion of such counsel, all such conditions precedent have been complied with. Section 13.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.09) shall include: (a) a statement that the individual making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials. Section 13.06. When Notes Disregarded. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, any Note Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any Note Guarantor shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which the Trustee knows are so owned shall be so disregarded. Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination. Section 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of the Holders. The Registrar and a Paying Agent may make reasonable rules for their functions. 108 Section 13.08. Legal Holidays. If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period. If a regular record date is not a Business Day, the record date shall not be affected. Section 13.09. GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Section 13.10. No Recourse Against Others. No affiliate, director, officer, employee, manager, incorporator or holder of any Equity Interests in the Issuer or of any Note Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of the Issuer or any Note Guarantor under the Notes, this Indenture, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Section 13.11. Successors. All agreements of the Issuer and each Note Guarantor in this Indenture and the Notes shall bind its successors. All agreements of the Trustee and the Collateral Agent in this Indenture shall bind its successors. Section 13.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. Section 13.13. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. Section 13.14. Indenture Controls. If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of this Indenture, such provision of this Indenture shall control. Section 13.15. Severability. In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability. Section 13.16. Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services. 109 Section 13.17. Waiver of Jury Trial. EACH OF THE ISSUER, THE NOTE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, 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 INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. [Remainder of page intentionally left blank] 110 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. ISSUER: MOMENTIVE PERFORMANCE MATERIALS, INC. By: Name: Title: NOTE GUARANTORS: MOMENTIVE PERFORMANCE MATERIALS WORLDWIDE INC. By: Name: Title: MOMENTIVE PERFORMANCE MATERIALS USA INC. By: Name: Title: JUNIPER BOND HOLDINGS I LLC By: Name: Title: JUNIPER BOND HOLDINGS II LLC By: Name: Title: JUNIPER BOND HOLDINGS III LLC By: Name: Title: JUNIPER BOND HOLDINGS IV LLC By: Name: Title: MOMENTIVE PERFORMANCE MATERIALS QUARTZ, INC. By: Name: Title: MPM SILICONES, LLC By: Name: Title: MOMENTIVE PERFORMANCE MATERIALS SOUTH AMERICA INC. By: Name: Title: MOMENTIVE PERFORMANCE MATERIALS CHINA SPV INC. By: Name: Title: TRUSTEE: [ as Trustee ], By: Name: Title: APPENDIX A PROVISIONS RELATING TO THE NOTES 1. Definitions. 1.1 Definitions. For the purposes of this Appendix A the following terms shall have the meanings indicated below: “Clearstream” means Clearstream Banking, société anonyme or any successor or securities clearing agency. “Definitive Note” means a certificated Note that does not include the Global Notes Legend. “Depository” means The Depository Trust Company, its nominees and their respective successors. “Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear Clearance System or any successor securities clearing agency. “Global Notes Legend” means the legend set forth under that caption in Exhibit A to this Indenture. “Notes Custodian” means the custodian with respect to a Global Note (as appointed by the Depository) or any successor person thereto, who shall initially be the Trustee. 1.2 Other Definitions. Term Defined in Section Agent Members Global Notes 2. The Notes. 2.1 Form and Dating; Global Notes. 2.1(b) 2.1(b) (a) The Original Notes will be issued on the date hereof. Additional Notes offered after the date hereof may be offered and sold by the Issuer from time to time pursuant to one or more purchase agreements or exchange offers in accordance with applicable law. (b) Global Notes. (i) In the case of Original Notes, one or more Global Notes in fully registered form without interest coupons and bearing the Global Notes Legend (collectively, the “ Global Notes ”) shall be issued on the Issue Date, deposited with the Notes Custodian, and registered in the name of the Depository or a nominee of the Depository, duly executed by the Issuer and authenticated by the Trustee as provided in the Indenture. Appendix A-1 In the case of Original Notes, the Global Notes initially shall (i) be registered in the name of the Depository or the nominee of such Depository, in each case for credit to an account of an Agent Member and (ii) be delivered to the Trustee as custodian for such Depository. Members of, or direct or indirect participants in, the Depository, Euroclear and Clearstream (“Agent Members ”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository or the Trustee as its custodian or under the Global Notes. The Depository may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of the Global Notes for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository, or impair, as between the Depository, Euroclear or Clearstream and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note. (ii) Transfers of Global Notes shall be limited to transfers in whole, but not in part, to the Depository, its successors or its respective nominees. Interests of beneficial owners in the Global Notes may be transferred or exchanged for Definitive Notes only in accordance with the applicable rules and procedures of the Depository and the provisions of Section 2.2. In addition, a Global Note shall be exchangeable for Definitive Notes if (x) in the case of Initial Notes, the Depository (a) notifies the Issuer that it is unwilling or unable to continue as depository for such Global Note or (b) has ceased to be a clearing agency registered under the Exchange Act and in each case a successor depository is not appointed, (y) the Issuer, at its option and subject to the procedures of the Depository, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes or (z) there shall have occurred and be continuing an Event of Default with respect to the Notes. In all cases, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depository in accordance with its customary procedures. (iii) In connection with the transfer of a Global Note as an entirety to beneficial owners pursuant to subsection (i) of this Section 2.1(b), such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, to each beneficial owner identified by the Depository in writing in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. (iv) The Holder of any Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes. 2.2 Transfer and Exchange. (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except as set forth in Section 2.1(b). Global Notes will not be exchanged by the Issuer for Definitive Notes except under the circumstances described in Section 2.1(b)(ii). Appendix A-2 Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.08 and 2.10 of this Indenture. Beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.2(b) or 2.2(g). (b) Transfer and Exchange of Beneficial Interests in Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depository, in accordance with the provisions of this Indenture and the applicable rules and procedures of the Depository. Beneficial interests in Global Notes shall be transferred or exchanged only for beneficial interests in Global Notes. Transfers and exchanges of beneficial interests in the Global Notes also shall require compliance with subparagraph (i) below as well as one or more of the other following subparagraphs, as applicable: (i) Transfer of Beneficial Interests in the Same Global Note. In connection with all transfers and exchanges of beneficial interests in any Global Note, the transferor of such beneficial interest must deliver to the Registrar (1) a written order from an Agent Member given to the Depository in accordance with the applicable rules and procedures of the Depository, directing the Registrar to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the applicable rules and procedures of the Depository, containing information regarding the Agent Member account to be credited with such increase. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note pursuant to Section 2.2(g). (c) Transfer and Exchange of Beneficial Interests in Global Notes for Definitive Notes. A beneficial interest in a Global Note may not be exchanged for a Definitive Note except under the circumstances described in Section 2.l(b)(ii). A beneficial interest in a Global Note may not be transferred to a Person who takes delivery thereof in the form of a Definitive Note except under the circumstances described in Section 2.1(b)(ii). (d) Transfer and Exchange of Definitive Notes for Beneficial Interests in Global Notes. Transfers and exchanges of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) below: (i) A Holder of a Definitive Note may exchange such Definitive Note for a beneficial interest in a Global Note or transfer such Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Global Notes. If any such transfer or exchange is effected pursuant to this subparagraph (i) at a time when a Global Note has not yet been issued, the Issuer shall issue and, upon receipt of a written order of the Issuer in the form of an Officer’s Certificate, the Trustee shall authenticate one or more Global Notes in an aggregate principal amount equal to the aggregate principal amount of Definitive Notes transferred or exchanged pursuant to this subparagraph (i). Appendix A-3 (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.2(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information required pursuant to the following provisions of this Section 2.2(e). (i) A Holder of a Definitive Note may transfer such Definitive Notes to a Person who takes delivery thereof in the form of a Definitive Note at any time. Upon receipt of a request to register such a transfer, the Registrar shall register the Definitive Notes pursuant to the instructions from the Holder thereof. (f) [Reserved]. (g) Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 of this Indenture. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such increase. (h) Obligations with Respect to Transfers and Exchanges of Notes. (i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Registrar’s request. (ii) No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this Indenture). (iii) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee, a Paying Agent or the Registrar may deem and treat the Person in Appendix A-4 whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary. (iv) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange. (i) No Obligation of the Trustee. (i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository, Euroclear or Clearstream or any other Person with respect to the accuracy of the records of the Depository, Euroclear or Clearstream or any nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to the Holders under the Notes shall be given or made only to the registered Holders (which shall be the Depository or any nominee thereof in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository, subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to any members, participants and any beneficial owners thereof. (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among participants, members or beneficial owners of the Depository, Euroclear or Clearstream, as applicable, in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. Appendix A-5 EXHIBIT A [FORM OF FACE OF NOTE] Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“ DTC ”), New York, New York, to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co., or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. Transfers of this Global Note shall be limited to transfers in whole, but not in part, to DTC, to nominees of DTC or to a successor thereof or such successor’s nominee and transfers of portions of this Global Note shall be limited to transfers made in accordance with the restrictions set forth in the indenture referred to on the reverse hereof. Exhibit A-1 MOMENTIVE PERFORMANCE MATERIALS INC. []% Second-Priority Senior Secured Notes due 2022 CUSIP No. [ ISIN No. [ ] ] $[ No. [ ] MOMENTIVE PERFORMANCE MATERIALS, INC., a Delaware corporation, promises to pay to Cede & Co., or its registered assigns, the principal sum of [ ] Dollars, as the same may be revised from time to time on the schedule of increases or decreases in Global Note attached hereto, on [ ], 2022. Interest Payment Dates: April 15 and October 15 Record Dates: April 1 and October 1 Additional provisions of this Note are set forth on the other side of this Note. Exhibit A-2 ] IN WITNESS WHEREOF, the undersigned has caused this instrument to be duly executed. MOMENTIVE PERFORMANCE MATERIALS, INC. By: Name: Title: Exhibit A-3 TRUSTEE’S CERTIFICATE OF AUTHENTICATION [ ], as Trustee, certifies that this is one of the Notes referred to in the Indenture. By: Authorized Signatory Dated: */ If the Note is to be issued in global form, add the Global Notes Legend and the attachment from Exhibit A captioned “[TO BE ATTACHED TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE”. Exhibit A-4 [FORM OF REVERSE SIDE OF NOTE] []% Second-Priority Senior Secured Notes due 2022 1. Interest Momentive Performance Materials, Inc., a Delaware corporation (such Person, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “ Issuer ”), promises to pay interest on the principal amount of this Note at the rate per annum shown above. The Issuer shall pay interest semiannually on April 15 and October 15 of each year, commencing October 15, 2014. Interest on the Notes shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from [ ], 2014 until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Issuer shall pay interest on overdue principal at the rate borne by the Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 2. Method of Payment The Issuer shall pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders at the close of business on the April 1 or October 1 next preceding the interest payment date even if Notes are canceled after the record date and on or before the interest payment date (whether or not a Business Day). Holders must surrender Notes to the Paying Agent to collect principal payments. The Issuer shall pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor depositary. The Issuer shall make all payments in respect of a certificated Note (including principal and interest) at the office of the Paying Agent, except that, at the option of the Issuer, payment of interest may be made by mailing a check to the registered address of each Holder thereof; provided , however , that payments on the Notes may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar Initially, [ ] (the “Trustee”), will act as Paying Agent and Registrar. The Issuer may appoint and change any Paying Agent or Registrar without notice. The Issuer or any of its Wholly Owned Subsidiaries may act as Paying Agent or Registrar. 4. Indenture The Issuer issued the Notes under an Indenture dated as of [ Trustee. The terms of the Notes include those stated in the Exhibit A-5 ], 2014 (the “Indenture”), among the Issuer and the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “ TIA ”). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all terms and provisions of the Indenture, and the Holders (as defined in the Indenture) are referred to the Indenture and the TIA for a statement of such terms and provisions. The Notes are senior secured obligations of the Issuer. This Note is one of the Original Notes referred to in the Indenture. The Indenture imposes certain limitations on the ability of the Issuer and the Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of Capital Stock of the Issuer and such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or incur Liens and make Asset Sales. The Indenture also imposes limitations on the ability of the Issuer and each Note Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property. To guarantee the due and punctual payment of the principal and interest on the Notes and all other amounts payable by the Issuer under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, the Note Guarantors have, jointly and severally, unconditionally guaranteed the Guaranteed Obligations on a senior secured basis pursuant to the terms of the Indenture. 5. Optional Redemption The Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice delivered electronically or mailed by first-class mail to each Holder’s registered address, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if any, to the applicable redemption date (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date). 6. Sinking Fund; Mandatory Redemption The Notes are not subject to any sinking fund or mandatory redemption. 7. Notice of Redemption Notice of redemption will be delivered electronically or mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at his, her or its registered address. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption. Exhibit A-6 8. Repurchase of Notes at the Option of the Holders upon Change of Control and Asset Sales Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuer to repurchase all or any part of such Holder’s Notes at a purchase price in cash equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date), as provided in, and subject to the terms of, the Indenture. 9. Ranking and Collateral The indebtedness evidenced by the Notes and the applicable Note Guarantees, respectively, is senior Indebtedness of the Issuer and the Note Guarantors, respectively, ranks (i) equal in right of payment with all existing and future senior Indebtedness of the Issuer and the Note Guarantors, as applicable, (ii) senior in right of payment to all existing and future Subordinated Indebtedness of the Issuer and Note Guarantors and (iii) structurally subordinated to all existing and future indebtedness and other liabilities of Subsidiaries that do not guarantee the Notes. The Notes and the Note Guarantees will have the benefit of a security interest in the Collateral with the priority required by the Indenture subject to Permitted Liens and the exceptions provided in the Security Documents. 10. Denominations; Transfer; Exchange The Notes are in registered form, without coupons, in denominations of $2,000 and any integral multiple of $1,000. A Holder shall register the transfer of or exchange of Notes in accordance with the Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or to transfer or exchange any Notes for a period of 15 days prior to a selection of Notes to be redeemed. 11. Persons Deemed Owners The registered Holder of this Note shall be treated as the owner of it for all purposes. 12. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee and a Paying Agent shall pay the money back to the Issuer at its written request unless an abandoned property law designates another Person. After any such payment, the Holders entitled to the money must look to the Issuer for payment as general creditors and the Trustee and a Paying Agent shall have no further liability with respect to such monies. Exhibit A-7 13. Discharge and Defeasance Subject to certain conditions, the Issuer at any time may terminate some of or all its obligations under the Notes and the Indenture if the Issuer deposits with the Trustee cash in U.S. Dollars, U.S. Dollar-denominated Government Obligations or a combination thereof for the payment of principal and interest on the Notes to redemption or maturity, as the case may be. 14. Amendment; Waiver Subject to certain exceptions set forth in the Indenture, (i) the Indenture, Notes, the Intercreditor Agreement or the Security Documents may be amended with the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Notes (voting as a single class) (which consents may be obtained in connection with a tender offer or exchange for the Notes) and (ii) any past default or compliance with any provisions may be waived with the written consent of the Holders of at least a majority in principal amount of the outstanding Notes (which consents may be obtained in connection with a tender offer or exchange for the Notes). Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Issuer and the Trustee may amend the Indenture, the Notes, the Intercreditor Agreement or any Security Document (i) to cure any ambiguity, omission, defect, mistake or inconsistency; (ii) to comply with Article V of the Indenture; (iii) to provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code); (iv) to add Note Guarantees with respect to the Notes; (v) to secure the Notes, to add additional assets as Collateral, to release Collateral as permitted under the Indenture, the Security Documents or the Intercreditor Agreement, to add additional secured creditors holding ABL Obligations, Other First Priority Lien Obligations, Junior Lien Obligations or First Priority Lien Obligations so long as such obligations are not prohibited by the Indenture or the Security Documents; (vi) to amend, modify or enter into the Indenture, the Security Documents or the Intercreditor Agreement in connection with the Transactions; (vii) to add additional covenants of the Issuer for the benefit of the Holders or to surrender rights and powers conferred on the Issuer; (viii) to comply with the requirements of (A) the Commission in order to effect or maintain the qualification of the Indenture under the TIA or (B) the Intercreditor Agreement; (ix) to make any change that does not adversely affect the rights of any Holder; or (x) to provide for the issuance of Additional Notes. Without the consent of the Holders of at least 66 2/3% in aggregate principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange for the Notes), no amendment or waiver may (i) release all or substantially all of the Collateral from the Lien of the Indenture and the Security Documents with respect to the Notes, subject to the terms of the Intercreditor Agreement or (ii) make any change in the provisions in the Intercreditor Agreement or the Indenture or any material change in the provisions in the Security Documents, in each case dealing with the application of proceeds of Collateral upon the exercise of remedies with respect to such Collateral that would adversely affect the holders of the Notes. 15. Defaults and Remedies If an Event of Default occurs (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer) and is continuing, the Trustee or Exhibit A-8 the Holders of at least 25% in principal amount of the outstanding Notes, in each case, by notice to the Issuer, may declare the principal of, and accrued but unpaid interest on, all the Notes to be due and payable. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer occurs, the principal of, and interest on, all the Notes shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences. If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense and certain other conditions are complied with. Except to enforce the right to receive payment of principal or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Notes unless (i) such Holder has previously given the Trustee notice that an Event of Default is continuing, (ii) the Holders of at least 25% in principal amount of the outstanding Notes have requested the Trustee in writing to pursue the remedy, (iii) such Holders have offered the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity and (v) the Holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the Holders of a majority in principal amount of the outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. 16. Trustee Dealings with the Issuer Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. 17. No Recourse Against Others No affiliate, director, officer, employee, manager, incorporator or holder of any Equity Interests in the Issuer or of any Note Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of the Issuer or the Note Guarantors under the Notes, the Indenture, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. Exhibit A-9 18. Authentication This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note. 19. Abbreviations Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 20. Governing Law This Note shall be governed by, and construed in accordance with, the laws of the state of New York, without regard to principles of conflicts of law. 21. CUSIP Numbers; ISINs The Issuer has caused CUSIP numbers, ISINs and “Common Code” numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers, ISINs and “Common Code” numbers in notices of redemption as a convenience to the Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Issuer will furnish to any Holder of Notes upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Note. Exhibit A-10 ASSIGNMENT FORM To assign this Note, fill in the form below: I or we assign and transfer this Note to: (Print or type assignee’s name, address and zip code) (Insert assignee’s soc. sec. or tax I.D. No.) and irrevocably appoint him. Date: agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for Your Signature: Sign exactly as your name appears on the other side of this Note. Signature Guarantee: Date: Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee Exhibit A-11 Signature of Signature Guarantee [TO BE ATTACHED TO GLOBAL NOTES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE The initial principal amount of this Global Note is $ . The following increases or decreases in this Global Note have been made: Date of Exchange Amount of decrease in Principal Amount of this Global Note Exhibit A-12 Amount of increase in Principal Amount of this Global Note Principal amount of this Global Note following such decrease or increase Signature of authorized signatory of Trustee or Notes Custodian OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the box: Asset Sale Change of Control If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, state the amount ($2,000 or any integral multiple of $1,000): $ Date: Your Signature (Sign exactly as your name appears on the other side of this security) Signature Guarantee: Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee Exhibit A-13 EXHIBIT B [FORM OF SUPPLEMENTAL INDENTURE] SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of [ ], among [NOTE GUARANTOR] (the “ New Note Guarantor ”), a subsidiary of MOMENTIVE PERFORMANCE MATERIALS INC. (or its successor), a Delaware corporation (the “ Issuer ”) and [ ], as trustee (the “ Trustee ”) under the indenture referred to below. WITNESSETH: WHEREAS, Momentive Performance Materials, Inc., a Delaware corporation (the “Guarantor”), has heretofore executed and delivered to the Trustee an indenture (as amended, supplemented or otherwise modified, the “ Indenture ”) dated as of [ ], 2014, providing for the issuance of the Company’s [ ]% Second-Priority Senior Secured Notes due 2022 (the “ Notes ”); WHEREAS, Section 4.11 of the Indenture provides that under certain circumstances the Issuer is required to cause the New Note Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Note Guarantor shall unconditionally guarantee all the Issuer’s Obligations under the Notes and the Indenture pursuant to a Notes Guarantee on the terms and conditions set forth herein; and WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee, the Issuer and the existing Note Guarantors are authorized to execute and deliver this Supplemental Indenture. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Note Guarantor, the Company and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows: 1. Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “ Holders ” in this Supplemental Indenture shall refer to the term “ Holders ” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such Holders. The words “ herein, ” “ hereof ” and “ hereby ” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof. 2. Agreement to Guarantee. The New Note Guarantor hereby agrees, jointly and severally with all existing Note Guarantors (if any), to unconditionally guarantee the Issuer’s Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article XII of the Indenture and to be bound by all other applicable provisions of the Indenture and the Notes and to perform all of the obligations and agreements of a Note Guarantor under the Indenture. 3. Notices. All notices or other communications to the New Note Guarantor shall be given as provided in Section 13.02 of the Indenture. Exhibit B-1 4. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby. 5. Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the state of New York, without regard to principles of conflicts of law. 6. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. 7. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 8. Effect of Headings. The Section headings herein are for convenience only and shall not effect the construction thereof. Exhibit B-2 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written. [NEW NOTE GUARANTOR] By: Name: Title: [ ], as Trustee By: Name: Title: Exhibit B-3 EXHIBIT T3E(1) UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re MPM Silicones, LLC, etal.,1 Debtors. : : : : : x Chapter 11 Case No. 14-22503 (RDD) (Jointly Administered) JOINT CHAPTER 11 PLAN OF REORGANIZATION FOR MOMENTIVE PERFORMANCE MATERIALS INC. AND ITS AFFILIATED DEBTORS Dated: New York, New York June 23, 2014 WILLKIE FARR & GALLAGHER LLP Counsel for the Debtors and Debtors in Possession 787 Seventh Avenue New York, New York 10019 (212) 728-8000 1 The last four digits of the taxpayer identification numbers of the Debtors follow in parentheses: (i) Juniper Bond Holdings I LLC (9631); (ii) Juniper Bond Holdings II LLC (9692); (iii) Juniper Bond Holdings III LLC (9765); (iv) Juniper Bond Holdings IV LLC (9836); (v) Momentive Performance Materials China SPV Inc. (8469); (vi) Momentive Performance Materials Holdings Inc. (8246); (vii) Momentive Performance Materials Inc. (8297); (viii) Momentive Performance Materials Quartz, Inc. (9929); (ix) Momentive Performance Materials South America Inc. (4895); (x) Momentive Performance Materials USA Inc. (8388); (xi) Momentive Performance Materials Worldwide Inc. (8357); and (xii) MPM Silicones, LLC (5481). The Debtors’ executive headquarters are located at 260 Hudson River Road, Waterford, NY 12188. TABLE OF CONTENTS Page ARTICLE I. DEFINITIONS AND INTERPRETATION ARTICLE II. CERTAIN INTER-CREDITOR AND INTER-DEBTOR ISSUES 1 20 2. 1 . Settlement of Certain Inter-Creditor Issues. 20 2 . Formation of Debtor Groups for Convenience Purposes. 21 2. 2. 3 . Intercompany Claims. ARTICLE III. ADMINISTRATIVE EXPENSE CLAIMS, FEE CLAIMS, U.S. TRUSTEE FEES AND PRIORITY TAX CLAIMS 21 21 3. 1 . DIP Claims. 22 2 . Administrative Expense Claims. 22 3 . Fee Claims. 24 4 . U.S. Trustee Fees. 25 3. 3. 3. 3. 5 . Priority Tax Claims. ARTICLE IV. CLASSIFICATION OF CLAIMS AND INTERESTS 25 25 4. 1 . Classification of Claims and Interests. 25 2 . Unimpaired Classes of Claims. 26 3 . Impaired Classes of Claims. 26 4. 4. 4. 4 . Separate Classification of Other Secured Claims. ARTICLE V. TREATMENT OF CLAIMS AND INTERESTS 26 27 5. 1 . Priority Non-Tax Claims (Class 1). 27 2 . Other Secured Claims (Class 2). 27 3 . Cash Flow Facility Claims (Class 3). 28 4 . First Lien Note Claims (Class 4). 28 5. 5. 5. 5. 5 . 1.5 Lien Note Claims (Class 5) 29 6 . Second Lien Note Claims (Class 6). 30 7 . General Unsecured Claims (Class 7). 30 8 . Senior Subordinated Note Claims (Class 8). 31 9 . Holdings PIK Note Claims (Class 9). 31 1 0 . Existing Securities Law Claims (Class 10). 32 1 1 . Existing Interests (Class 11). 32 5. 5. 5. 5. 5. 5. ARTICLE VI. ACCEPTANCE OR REJECTION OF THE PLAN; EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS OR INTERESTS 32 6 . 1 . Class Acceptance Requirement. 32 . 2 . Tabulation of Votes on a Non-Consolidated Basis. 32 . 3 . Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code or “Cramdown.” 33 . 4 . Elimination of Vacant Classes. 33 . 5 . Voting Classes; Deemed Acceptance by Non-Voting Classes. 33 6 6 6 6 6 . 6 . Confirmation of All Cases. ARTICLE VII. MEANS FOR IMPLEMENTATION 33 33 7 . 1 . Continued Corporate Existence and Vesting of Assets in Reorganized Debtors. 33 . 2 . Plan Funding. 34 . 3 . Cancellation of Existing Securities and Agreements. 35 . 4 . Boards of Directors. 35 . 5 . Management. 36 . 6 . Corporate Action. 36 . 7 . Registration Rights Agreement. 37 . 8 Authorization, Issuance and Delivery of Top HoldCo Common Stock. 37 7 7 7 7 7 7 7 . 7 . 9 . New First Lien Term Loan Facility, New ABL Facility and Incremental Facility. 38 . 1 0 . Rights Offerings. 38 . 1 1 . Intercompany Interests. 40 . 1 2 . Insured Claims. 40 7 7 7 7 . 1 3 . Comprehensive Settlement of Claims and Controversies. ARTICLE VIII. DISTRIBUTIONS 41 41 8 . 1 . Distributions. 41 . 2 . No Postpetition Interest on Claims. 42 . 3 . Date of Distributions. 42 . 4 . Distribution Record Date. 42 . 5 . Disbursing Agent. 42 8 8 8 8 -ii- 8 . 6 . Delivery of Distribution. 43 . 7 . Unclaimed Property. 44 . 8 . Satisfaction of Claims. 44 . 9 . Manner of Payment Under Plan. 44 . 1 0 . Fractional Shares/De Minimis Cash Distributions. 44 . 1 1 . No Distribution in Excess of Amount of Allowed Claim. 45 . 1 2 . Exemption from Securities Laws. 45 . 1 3 . Setoffs and Recoupments. 45 . 1 4 . Withholding and Reporting Requirements. 46 8 8 8 8 8 8 8 8 8 . 1 5 . Hart-Scott Rodino Antitrust Improvements Act. ARTICLE IX. PROCEDURES FOR RESOLVING CLAIMS 46 47 9 . 1 . Objections to Claims. 47 . 2 . Amendment to Claims. 47 . 3 . Disputed Claims. 47 9 9 9 . 4 . Estimation of Claims. 47 9 . 5 . Expenses Incurred On or After the Effective Date. ARTICLE X. EXECUTORY CONTRACTS AND UNEXPIRED LEASES 48 48 1 0 . 1 . General Treatment. 48 0 . 2 . Claims Based on Rejection of Executory Contracts or Unexpired Leases. 48 0 . 3 . Cure of Defaults for Assumed Executory Contracts and Unexpired Leases. 49 0 . 4 . Compensation and Benefit Programs. 50 0 . 5 . Amended Shared Services Agreement. 50 0 . 6 . Existing Management Agreement. 50 1 1 1 1 1 1 0 . 7 . Warranty Obligations. ARTICLE XI. CONDITIONS PRECEDENT TO CONSUMMATION OF THE PLAN 50 51 1 1 . 1 . Conditions Precedent to the Effective Date. 51 1 . 2 . Satisfaction and Waiver of Conditions Precedent. 53 1 1 1 . 3 . Effect of Failure of Conditions. ARTICLE XII. EFFECT OF CONFIRMATION 53 53 1 2 . 1 . Binding Effect. 53 2 . 2 . Discharge of Claims Against and Interests in the Debtors. 54 1 -iii- 1 2 . 3 . Term of Pre-Confirmation Injunctions or Stays. 54 2 . 4 . Injunction. 54 2 . 5 . Releases. 55 2 . 6 . Exculpation and Limitation of Liability. 57 2 . 7 . Injunction Related to Releases and Exculpation. 57 2 . 8 . Retention of Causes of Action/Reservation of Rights. 57 1 1 1 1 1 1 2 . 9 . Indemnification Obligations. ARTICLE XIII. RETENTION OF JURISDICTION ARTICLE XIV. MISCELLANEOUS PROVISIONS 57 58 59 1 4 . 1 . Exemption from Certain Transfer Taxes. 59 4 . 2 . Retiree Benefits. 60 4 . 3 . Defined Benefit Pension Plan. 60 4 . 4 . Dissolution of Creditors’ Committee. 60 4 Termination of Professionals. 61 1 1 1 1 . 5 . 1 4 . 6 . Amendments. 61 4 . 7 . Revocation or Withdrawal of this Plan. 61 4 . 8 . Allocation of Plan Distributions Between Principal and Interest. 61 4 . 9 . Severability. 62 4 . 1 0 . Governing Law. 62 4 . 1 1 . Section 1125(e) of the Bankruptcy Code. 62 4 . 1 2 . Inconsistency. 62 4 . 1 3 . Time. 63 4 . 1 4 . Exhibits. 63 4 . 1 5 . Notices. 63 4 . Filing of Additional Documents. 63 1 1 1 1 1 1 1 1 1 1 1 6 . 1 4 . 1 7 . 63 Reservation of Rights. -iv- INTRODUCTION2 Momentive Performance Materials Inc. and the other debtors and debtors in possession in the above-captioned cases propose the following joint chapter 11 plan of reorganization for the resolution of the Claims against and Interests in the Debtors. Reference is made to the Disclosure Statement accompanying this Plan, including the exhibits and supplements thereto, for a discussion of the Debtors’ history, business, properties and operations, projections for those operations, risk factors, a summary and analysis of this Plan, and certain related matters including, among other things, certain tax matters, and the securities and other consideration to be issued and/or distributed under this Plan. Subject to certain restrictions and requirements set forth in 11 U.S.C. § 1127, Fed. R. Bankr. P. 3019 and Sections 14.6 and 14.7 of this Plan, the Debtors, with the consent of the Requisite Investors, reserve the right to alter, amend, modify, revoke or withdraw this Plan prior to its substantial consummation. The only Persons that are entitled to vote on this Plan are the holders of 1.5 Lien Note Claims, First Lien Note Claims, Second Lien Note Claims, and Holdings PIK Note Claims. Such Persons are encouraged to read the Plan and the Disclosure Statement and their respective exhibits and schedules in their entirety before voting to accept or reject the Plan. No materials other than the Disclosure Statement, the respective schedules, notices and exhibits attached thereto and referenced therein have been authorized by the Bankruptcy Court for use in soliciting acceptances or rejections of the Plan. ARTICLE I. DEFINITIONS AND INTERPRETATION A. Definitions. The following terms shall have the meanings set forth below (such meanings to be equally applicable to both the singular and plural): 1.1 1.5 Lien Cash Pool means an amount of cash equal to the aggregate Allowed amount of 1.5 Lien Note Claims (excluding any make-whole claim, prepayment penalty, “Applicable Premium” or similar claim) set forth in Section 5.5(a) of the Plan. 1.2 1.5 Lien Note Claims means all Claims (excluding Existing Securities Law Claims) against MPM, as issuer, or any other Debtor as guarantor, arising under the 1.5 Lien Notes and the 1.5 Lien Indenture. 1.3 1.5 Lien Notes mean the 10% Senior Secured Notes due 2020, issued pursuant to the 1.5 Lien Indenture, in the aggregate principal amount of $250 million. 2 All capitalized terms used but not defined herein have the meanings set forth in Article I herein. 1.4 1.5 Lien Indenture means that certain indenture dated as of May 25, 2012 (as amended, modified or supplemented from time to time), between MPM, as issuer, and the 1.5 Lien Indenture Trustee, related to the 1.5 Lien Notes, including all agreements, documents, notes, instruments and any other agreements delivered pursuant thereto or in connection therewith (in each case, as amended, modified or supplemented from time to time). 1.5 1.5 Lien Indenture Trustee means Wilmington Trust, N.A. solely in its capacity as indenture trustee under the 1.5 Lien Indenture. 1.6 1.5 Lien Indenture Trustee Claim means all Claims of the 1.5 Lien Indenture Trustee for reasonable and documented fees and expenses under the terms of the 1.5 Lien Indenture to the extent provided for in the Final DIP Order (including, but not limited to, the reasonable and documented fees, costs and expenses incurred by the 1.5 Lien Indenture Trustee’s professionals). 1.7 4(a)(2) Eligible Holder has the meaning set forth in the 4(a)(2) Rights Offering Procedures and the corresponding subscription agreement and subscription form. 1.8 4(a)(2) Rights Offering means the rights offering of 4(a)(2) Subscription Rights to 4(a)(2) Eligible Holders to purchase 27,065,701 shares of New Common Stock to be issued by Reorganized MPM pursuant to the Plan at a price per share of $17.28, for an aggregate purchase price of the 4(a)(2) Rights Offering Amount, to be conducted in reliance upon the exemption from registration under the Securities Act provided in Section 4(a)(2) of the Securities Act. 1.9 4(a)(2) Rights Offering Amount means $467,695,313.28. 1.10 4(a)(2) Rights Offering Procedures means the procedures governing the 4(a)(2) Rights Offering, which procedures are attached as an exhibit to the Disclosure Statement, and shall be satisfactory to the Debtors and the Requisite Investors. 1.11 4(a)(2) Rights Offering Stock means the 27,065,701 shares of New Common Stock issued pursuant to the 4(a)(2) Rights Offering, including shares issued on account of the Backstop Commitment. The 4(a)(2) Rights Offering Stock shall be subject to dilution from the Management Incentive Plan Securities. 1.12 4(a)(2) Subscription Rights means the non-transferable, non-certificated subscription rights of 4(a)(2) Eligible Holders to purchase shares of 4(a)(2) Rights Offering Stock in connection with the 4(a)(2) Rights Offering on the terms and subject to the conditions set forth in the Plan and the 4(a)(2) Rights Offering Procedures. 1.13 503(b)(9) Claims means Claims that have been timely and properly filed prior to the Bar Date and that are granted administrative expense priority treatment pursuant to section 503(b)(9) of the Bankruptcy Code. 1.14 Ad Hoc Committee of Second Lien Noteholders means the ad hoc committee of certain holders of Second Lien Notes that are signatories to the Backstop Commitment Agreement or RSA represented by Milbank, Tweed, Hadley & McCloy LLP. -2- 1.15 Ad Hoc Committee of Second Lien Noteholders Advisors means Milbank, Tweed, Hadley & McCloy LLP, as counsel to the Ad Hoc Committee of Second Lien Noteholders, Houlihan Lokey Capital, Inc., as financial advisor to the Ad Hoc Committee of Second Lien Noteholders, and other consultants and professionals to the Ad Hoc Committee of Second Lien Noteholders provided for in the Backstop Commitment Agreement or the RSA. 1.16 Administrative Bar Date has the meaning set forth in Section 3.2(a) of this Plan. 1.17 Administrative Expense Claim means any right to payment constituting a cost or expense of administration of the Reorganization Cases of the kind specified in section 503(b) of the Bankruptcy Code and entitled to priority pursuant to sections 328, 330, 363, 364(c)(1), 365, 503(b), 507(a)(2) or 507(b) of the Bankruptcy Code (other than a DIP Claim, Fee Claim or U.S. Trustee Fees) incurred during the period from the Petition Date to the Effective Date, including, without limitation: (a) any actual and necessary costs and expenses of preserving the Estates, any actual and necessary costs and expenses of operating the Debtors’ business, and any indebtedness or obligations incurred or assumed by any of the Debtors during the Reorganization Cases; (b) 503(b)(9) Claims; (c) any payment to be made under this Plan to cure a default under an assumed executory contract or unexpired lease; and (d) an Indenture Trustee Claim. 1.18 Allowed Claim or Allowed Claim (with respect to a specific type of Claim, if specified) means: (a) any Claim (or a portion thereof) as to which no action to dispute, deny or otherwise limit recovery with respect thereto, or alter the priority thereof (including a claim objection), has been timely commenced within the applicable period of limitation fixed by this Plan or applicable law, or, if an action to dispute, deny, equitably subordinate or otherwise limit recovery with respect thereto, or alter priority thereof, has been timely commenced, to the extent such Claim has been allowed (whether in whole or in part) by a Final Order of a court of competent jurisdiction with respect to the subject matter; or (b) any Claim or portion thereof that is allowed (i) in any contract, instrument, or other agreement entered into in connection with the Plan, (ii) pursuant to the terms of the Plan, (iii) by Final Order of the Bankruptcy Court, or (iv) with respect to an Administrative Expense Claim only (x) that was incurred by a Debtor in the ordinary course of business during the Reorganization Cases to the extent due and owing without defense, offset, recoupment or counterclaim of any kind, and (y) that is not otherwise disputed. 1.19 Amended By-Laws means the amended and restated by-laws for the applicable Reorganized Debtor, and the by-laws for Top HoldCo and Intermediate HoldCo, substantially final forms of which will be contained in the Plan Supplement. 1.20 Amended Certificates of Incorporation means the amended and restated certificates of incorporation (or articles of incorporation, as applicable) for the applicable Reorganized Debtor, substantially final forms of which will be contained in the Plan Supplement. 1.21 Amended Shared Services Agreement means (i) the amended and restated Shared Services Agreement or (ii) an amendment to the existing Shared Services Agreement. 1.22 Apollo means Apollo Global Management, LLC and its affiliates that are signatories to the RSA. -3- 1.23 Applicable Premium means (a) with respect to the First Lien Note Claims, “Applicable Premium” as defined in the First Lien Indenture, and (b) with respect to the 1.5 Lien Note Claims, “Applicable Premium” as defined in the 1.5 Lien Indenture. 1.24 Backstop Commitment means the commitment of the Backstop Parties to purchase Unsubscribed Shares as set forth in the Backstop Commitment Agreement. 1.25 Backstop Commitment Agreement means that certain Backstop Commitment Agreement, dated May 9, 2014, by and among the Backstop Parties, MPM and Holdings (on behalf of themselves and the other Debtors) (as amended, modified and/or supplemented from time to time in accordance with the terms therein). 1.26 Backstop Commitment Agreement Order means an order of the Bankruptcy Court authorizing, approving and directing, without limitation, the Debtors’ (a) entry into the Backstop Commitment Agreement and performance of their obligations thereunder, (b) payment of the Commitment Premium (as defined in the Backstop Commitment Agreement) and the expense reimbursement obligations provided for in the Backstop Commitment Agreement, and (c) incurrence of the indemnification obligations provided for in the Backstop Commitment Agreement. 1.27 Backstop Parties means Apollo and the members of the Ad Hoc Committee of Second Lien Noteholders and/or certain of their affiliates, in each case, who are signatories to the Backstop Commitment Agreement (and any Person to whom any Backstop Commitment is transferred in accordance with the terms of the Backstop Commitment Agreement or who otherwise becomes a party to the Backstop Commitment Agreement pursuant to the terms and conditions thereof). 1.28 Ballot means the form approved by the Bankruptcy Court and distributed to holders of impaired Claims entitled to vote on the Plan to be used to indicate their acceptance or rejection of the Plan. 1.29 Bankruptcy Code means title 11 of the United States Code, as amended from time to time, as applicable to the Reorganization Cases. 1.30 Bankruptcy Court means the United States Bankruptcy Court for the Southern District of New York, or any other court exercising competent jurisdiction over the Reorganization Cases or any proceeding therein. 1.31 Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure, as promulgated by the United States Supreme Court under section 2075 of title 28 of the United States Code, as amended from time to time, as applicable to the Reorganization Cases, and any Local Rules of the Bankruptcy Court. 1.32 Bar Date means any deadline for filing proofs of Claim, including, without limitation, Claims arising prior to the Petition Date (including 503(b)(9) Claims) and Administrative Expense Claims, as established by an order of the Bankruptcy Court or under the Plan. -4- 1.33 Business Day means any day other than a Saturday, Sunday, or a “legal holiday,” as defined in Bankruptcy Rule 9006(a). 1.34 Cash means the legal currency of the United States and equivalents thereof. 1.35 Cash Flow Facility means that certain revolving credit facility with maximum aggregate availability of $75 million governed by the Cash Flow Facility Credit Agreement. 1.36 Cash Flow Facility Administrative Agent means JPMorgan Chase Bank, N.A., solely in its capacity as administrative agent under the Cash Flow Facility Credit Agreement. 1.37 Cash Flow Facility Claims means all Claims arising under the Cash Flow Facility Credit Agreement. 1.38 Cash Flow Facility Credit Agreement means that certain Second Amended and Restated Credit Agreement, dated as of April 24, 2013, among Holdings, MPM, Momentive Performance Materials USA Inc., as U.S. Borrower, Momentive Performance Materials GMBH, as German Borrower, Momentive Performance Materials Nova Scotia ULC, as Canadian Borrower, General Electric Capital Corporation as Designated Lender, and the Cash Flow Facility Administrative Agent. 1.39 Causes of Action means any and all actions, causes of action (including causes of action under sections 510, 544, 545, 546, 547, 548, 549, 550 and 553 of the Bankruptcy Code), suits, accounts, controversies, obligations, judgments, damages, demands, debts, rights, agreements, promises, rights to legal remedies, rights to equitable remedies, rights to payment, and claims (as defined in section 101(5) of the Bankruptcy Code), whether known or unknown, reduced to judgment, not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured, unsecured and whether asserted or assertable directly or derivatively, whether arising before, on, or after the Petition Date, in contract or tort, arising in law, equity or otherwise. 1.40 Claim means any “claim” against any Debtor as defined in section 101(5) of the Bankruptcy Code, including, without limitation, any Claim arising after the Petition Date. 1.41 Claims Agent means Kurtzman Carson Consultants LLC, or any other entity approved by the Bankruptcy Court to act as the Debtors’ claims and noticing agent pursuant to 28 U.S.C. §156(c). 1.42 Class means each category of Claims or Interests established under Article IV of the Plan pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code. 1.43 Collateral means any property or interest in property of the estates of the Debtors subject to a Lien to secure the payment or performance of a Claim, which Lien is not subject to avoidance or otherwise invalid under the Bankruptcy Code or applicable non-bankruptcy law. 1.44 Commitment Premium Shares means 1,475,652 shares of New Common Stock to be issued to and allocated among the Backstop Parties in accordance with the Backstop Commitment Agreement pursuant to and as consideration for the obligations under the Backstop Commitment Agreement. -5- 1.45 Competition Laws means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any other competition or merger control law. 1.46 Confirmation Date means the date on which the Clerk of the Bankruptcy Court enters the Confirmation Order on the docket of the Bankruptcy Court. 1.47 Confirmation Hearing means a hearing to be held by the Bankruptcy Court regarding confirmation of this Plan, as such hearing may be adjourned or continued from time to time. 1.48 Confirmation Order means the order of the Bankruptcy Court confirming this Plan pursuant to section 1129 of the Bankruptcy Code. 1.49 Creditors’ Committee means the statutory committee of unsecured creditors appointed in the Reorganization Cases in accordance with section 1102 of the Bankruptcy Code, as the same may be constituted from time to time. 1.50 Creditors’ Committee Parties means (i) the Creditors’ Committee, (ii) each of the Creditors’ Committee’s members acting in their respective capacities as members thereof, and (iii) each of the foregoing parties’ current officers, affiliates, partners, directors, employees, agents, members, representatives, advisors and professionals (including any attorneys, consultants, financial advisors, investment bankers and other professionals retained by the Creditors’ Committee or by any member thereof), together with their respective successors and assigns; provided, however, that such attorneys and professional advisors shall only include those that provided services related to the Reorganization Cases. 1.51 Cure Amount has the meaning set forth in Section 10.3 of this Plan. 1.52 Cure Dispute has the meaning set forth in Section 10.3 of this Plan. 1.53 Cure Schedule has the meaning set forth in Section 10.3 of this Plan. 1.54 Debtor(s) means, individually or collectively, as the context requires: (a) Juniper Bond Holdings I LLC; (b) Juniper Bond Holdings II LLC; (c) Juniper Bond Holdings III LLC; (d) Juniper Bond Holdings IV LLC; (e) Momentive Performance Materials China SPV Inc.; (f) Holdings; (g) MPM; (h) Momentive Performance Materials Quartz, Inc.; (i) Momentive Performance Materials South America Inc.; (j) Momentive Performance Materials USA Inc.; (k) Momentive Performance Materials Worldwide Inc.; and (l) MPM Silicones, LLC. 1.55 DIP ABL Claims means all Claims or obligations held by the DIP Agent and/or the DIP Lenders arising under or pursuant to the DIP ABL Credit Agreement, including, without limitation, Claims for all principal amounts outstanding, interest, fees, reasonable and documented expenses, costs and other charges of the DIP Agent and the DIP Lenders. 1.56 DIP ABL Credit Agreement means that certain senior secured debtor in possession and exit amended and restated asset-based revolving credit agreement, dated April 15, 2014, by and -6- among Holdings, MPM, Momentive Performance Materials USA Inc., as U.S. Borrower, Momentive Performance Materials GMBH, as Germany Silicone Borrower, Momentive Performance Materials Quartz GMBH, as Germany Quartz Borrower, Momentive Performance Materials Nova Scotia ULC, as Canadian Borrower, certain of the other Debtors, as guarantors, the DIP Agent, and the DIP Lenders, including any and all documents and instruments executed in connection therewith (in each case, as it or they may be amended, modified or supplemented from time to time on the terms and conditions set forth therein). 1.57 DIP ABL Facility means the debtor in possession asset-based revolving loan facility provided under the DIP ABL Credit Agreement. 1.58 DIP Agent means JPMorgan Chase Bank, N.A., solely in its capacity as administrative agent under the DIP Credit Agreements, and any of its successors or assigns. 1.59 DIP Claims means the DIP ABL Claims and the DIP Term Loan Claims. 1.60 DIP Credit Agreements means the DIP ABL Credit Agreement and the DIP Term Loan Credit Agreement. 1.61 DIP Lenders means the lenders party to the DIP Credit Agreements from time to time. 1.62 DIP Term Loan Claims means all Claims or obligations held by the DIP Agent and/or the DIP Lenders arising under or pursuant to the DIP Term Loan Credit Agreement, including, without limitation, Claims for all principal amounts outstanding, interest, fees, reasonable and documented expenses, costs and other charges of the DIP Agent and the DIP Lenders. 1.63 DIP Term Loan Credit Agreement means that certain senior secured debtor in possession term loan agreement, dated April 15, 2014, by and among Holdings, MPM, and Momentive Performance Materials USA Inc., as borrower, certain of the other Debtors, as guarantors, the DIP Agent, and the DIP Lenders, including any and all documents and instruments executed in connection therewith (in each case, as it or they may be amended, modified or supplemented from time to time on the terms and conditions set forth therein). 1.64 Disallowed means a finding of the Bankruptcy Court in a Final Order, or provision in the Plan providing, that a Disputed Claim shall not be an Allowed Claim. 1.65 Disbursing Agent means the entity or entities, which may be a Reorganized Debtor, designated by the Debtors or the Reorganized Debtors, as applicable, with the consent of the Requisite Investors, to distribute the Plan Consideration, the Commitment Premium Shares, the Rights Offering Stock and, to the extent applicable, the Replacement First Lien Notes and/or Replacement 1.5 Lien Notes. For the avoidance of doubt, the Indenture Trustees shall serve as Disbursing Agent for holders of Allowed Claims under each respective Indenture. 1.66 Disclosure Statement means the disclosure statement that relates to this Plan, including all exhibits and schedules annexed thereto or referred to therein (in each case, as it or they may be amended, modified, or supplemented from time to time), provided , that the Disclosure Statement shall be in form and substance satisfactory to the Debtors and the Requisite Investors. -7- 1.67 Disclosure Statement Hearing means a hearing held by the Bankruptcy Court to consider approval of the Disclosure Statement as containing adequate information as required by section 1125 of the Bankruptcy Code, as the same may be adjourned or continued from time to time. 1.68 Disclosure Statement Order means an order of the Bankruptcy Court approving the Disclosure Statement as having adequate information in accordance with section 1125 of the Bankruptcy Code. 1.69 Disputed means, with respect to a Claim or Interest, that portion (including, when appropriate, the whole) of such Claim or Interest that: (a) (i) has not been scheduled by the Debtors in their Schedules, or has been scheduled in a lesser amount or priority than the amount or priority asserted by the holder of such Claim or Interest or (ii) has been scheduled as contingent, unliquidated or disputed and for which no proof of claim has been timely filed; (b) is the subject of an objection or request for estimation filed in the Bankruptcy Court which has not been withdrawn or overruled by a Final Order; and/or (c) is otherwise disputed by any of the Debtors or Reorganized Debtors in accordance with applicable law or contract, which dispute has not been withdrawn, resolved, or overruled by Final Order. 1.70 Distribution Date means: (a) with respect to Cash Flow Facility Claims, DIP Claims and Second Lien Note Claims, the Effective Date, (b) with respect to First Lien Note Claims, 1.5 Lien Note Claims and Holdings PIK Note Claims, the Effective Date (or as soon thereafter as reasonably practicable), (c) with respect to Administrative Expense Claims, Priority Non-Tax Claims, U.S. Trustee Fees, Priority Tax Claims, Other Secured Claims, and General Unsecured Claims, the date that is the latest of: (i) the Effective Date (or any date within fifteen (15) days thereafter); (ii) the date such Claim would be due and payable in the ordinary course of business; and (iii) the date that is fifteen (15) days after such Claim becomes an Allowed Claim or otherwise becomes payable under the Plan (or, if such date is not a Business Day, on the next Business Day thereafter), and (d) with respect to Fee Claims, the date (or as soon thereafter as reasonably practicable) that such Claims are allowed by Final Order. 1.71 Distribution Record Date means, with respect to all Classes for which Plan Distributions are to be made, [the third Business Day after the Confirmation Date] or such other later date as shall be established by the Bankruptcy Court in the Confirmation Order. 1.72 DTC means The Depository Trust Company. 1.73 Effective Date means the date specified by the Debtors in a notice filed with the Bankruptcy Court as the date on which the Plan shall take effect, which date shall be the first Business Day on which all of the conditions set forth in Section 11.1 hereof have been satisfied or waived and no stay of the Confirmation Order is in effect. 1.74 ERISA means the Employee Retirement Income Security Act of 1974. 1.75 Estate means each estate created in the Reorganization Cases pursuant to section 541 of the Bankruptcy Code. 1.76 Estimation Order means an order or orders of the Bankruptcy Court estimating for voting and/or distribution purposes (under section 502(c) of the Bankruptcy Code) the allowed -8- amount of any Claim. The defined term Estimation Order includes the Confirmation Order if the Confirmation Order grants the same relief that would have been granted in a separate Estimation Order. 1.77 Existing Holdings Interests means the Interests in Holdings outstanding immediately prior to the Effective Date. 1.78 Existing Interests means the Existing Holdings Interests and the Existing MPM Interests. 1.79 Existing Management Agreement means that certain Management Fee Agreement, dated as of December 14, 2006, by and among Momentive Performance Materials Holdings Inc. and certain affiliates of Apollo. 1.80 Existing MPM Interests means the Interests in MPM outstanding immediately prior to the Effective Date. 1.81 Existing Securities Law Claim means any Claim, whether or not the subject of an existing lawsuit: (a) arising from rescission of a purchase or sale of any debt or equity securities of any Debtor or an affiliate of any Debtor; (b) for damages arising from the purchase or sale of any such security; (c) for violations of the securities laws, misrepresentations, or any similar Claims, including, to the extent related to the foregoing or otherwise subject to subordination under section 510(b) of the Bankruptcy Code, any attorneys’ fees, other charges, or costs incurred on account of the foregoing Claims; or (d) reimbursement, contribution, or indemnification on account of any such Claim. 1.82 Exit Facilities means the New ABL Facility and the New First Lien Term Loan Facility. 1.83 Federal Judgment Rate means the interest rate applicable to a judgment entered on the Petition Date that is subject to 28 U.S.C. § 1961, as determined in accordance with that statute. 1.84 Fee Claim means a Claim by a Professional Person for compensation, indemnification or reimbursement of expenses pursuant to sections 327, 328, 330, 331, 503(b) or 1103(a) of the Bankruptcy Code in connection with the Reorganization Cases, including, without limitation, in connection with final fee applications of such Professional Persons. 1.85 Final DIP Order means that certain Final Order Under 11 U.S.C. §§ 105, 361, 362, 363(c), 363(d), 364(c), 364(d), 364(e) and 507 and Bankruptcy Rules 2002, 4001 and 9014 (I) Authorizing the Debtors to Obtain Postpetition Financing, (II) Authorizing the Debtors to Use Cash Collateral, (III) Granting Adequate Protection to Prepetition Secured Lenders and (IV) Scheduling a Final Hearing Pursuant to Bankruptcy Rules 4001(b) and 4001(c) [Docket No. 253], as amended, modified or supplemented by the Bankruptcy Court from time to time. 1.86 Final Order means an order, ruling or judgment of the Bankruptcy Court (or other court of competent jurisdiction) entered by the Clerk of the Bankruptcy Court on the docket in the Reorganization Cases (or by the clerk of such other court of competent jurisdiction on the docket of such court), which has not been reversed, vacated, or stayed and as to which (i) the time to appeal, petition for certiorari, or move for a new trial, reargument, or rehearing has expired and as to which no appeal, petition for certiorari, or other proceeding for a new trial, reargument, or -9- rehearing shall then be pending or (ii) if an appeal, writ of certiorari, new trial, reargument, or rehearing thereof has been sought, such order or judgment of the Bankruptcy Court shall have been affirmed by the highest court to which such order was appealed, or certiorari shall have been denied, or a new trial, reargument, or rehearing shall have been denied or resulted in no modification of such order, and the time to take any further appeal, petition for certiorari, or move for a new trial, reargument, or rehearing shall have expired; provided , that no order or judgment shall fail to be a Final Order solely because of the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure has been or may be filed with respect to such order or judgment; provided , further , that the susceptibility of a Claim to a challenge under section 502(j) of the Bankruptcy Code shall not render a Final Order not a Final Order. 1.87 First Lien Cash Pool means an amount of cash equal to the aggregate Allowed amount of First Lien Note Claims (excluding any make-whole claim, prepayment penalty, “Applicable Premium” or similar claim) set forth in Section 5.4(a) of the Plan. 1.88 First Lien Note Claims means all Claims (excluding Existing Securities Law Claims) against MPM, as issuer, or any other Debtor as guarantor, arising under the First Lien Notes and the First Lien Indenture. 1.89 First Lien Notes mean the 8.875% First-Priority Senior Secured Notes due 2020, issued pursuant to the First Lien Indenture, in the original aggregate principal amount of $1.1 billion. 1.90 First Lien Indenture means that certain indenture, dated as of October 25, 2012 (as amended, modified or supplemented from time to time), between MPM, as issuer, and the First Lien Indenture Trustee, related to the First Lien Notes, including all agreements, documents, notes, instruments and any other agreements delivered pursuant thereto or in connection therewith (in each case, as amended, modified or supplemented from time to time). 1.91 First Lien Indenture Trustee means BOKF, N.A., solely in its capacity as successor indenture trustee under the First Lien Indenture. 1.92 First Lien Indenture Trustee Claim means all Claims of the First Lien Indenture Trustee for reasonable and documented fees and expenses under the terms of the First Lien Indenture to the extent provided for in the Final DIP Order (including, but not limited to, the reasonable and documented fees, costs and expenses incurred by the First Lien Indenture Trustee’s professionals). 1.93 General Unsecured Claim means any Claim other than: (a) a Secured Claim, including DIP Claims, Other Secured Claims, Cash Flow Facility Claims, First Lien Note Claims, and 1.5 Lien Note Claims; (b) an Administrative Expense Claim; (c) a Fee Claim; (d) a Priority Tax Claim; (e) a Priority Non-Tax Claim; (f) a Senior Subordinated Note Claim; (g) a Holdings PIK Note Claim; (h) an Intercompany Claim; (i) an Existing Securities Law Claim; (j) a Second Lien Note Claim; and (k) U.S. Trustee Fees. 1.94 Holdings means Momentive Performance Materials Holdings Inc. 1.95 Holdings PIK Note means that certain pay-in-kind unsecured 11% Senior Discount Note, dated December 4, 2006, due June 4, 2017, with an original principal amount of $400 million. -10- 1.96 Holdings PIK Note Claims means all Claims arising under the Holdings PIK Note. 1.97 Incremental Facility means either (a) a new second lien secured bridge loan facility of no less than $250 million, or (b) senior second-priority secured notes issued by Reorganized MPM in a Rule 144A or other private placement yielding $250 million in aggregate gross cash proceeds, which the Debtors shall enter into or issue as of the Effective Date to the extent that the 1.5 Lien Note Claims are paid in Cash pursuant to Section 5.5(b)(i) hereof. 1.98 Indebtedness of a Person means (a) indebtedness for borrowed money; (b) liabilities evidenced by bonds, debentures, notes, or other similar instruments or debt securities; (c) liabilities under or in connection with interest rate swaps, collars, caps and similar hedging arrangements; (d) liabilities under or in connection with off balance sheet financing arrangements or synthetic leases; (e) the amount of all capitalized lease obligations of such Person that are required to appear on a balance sheet prepared in accordance with GAAP; and (f) any amounts guaranteed in any manner by such Person (including guarantees in the form of an agreement to repurchase or reimburse) or other amounts for which such Person is indirectly liable as guarantor, surety or otherwise. 1.99 Indenture Trustee Claims means, collectively, all 1.5 Lien Indenture Trustee Claims, First Lien Indenture Trustee Claims, and Second Lien Indenture Trustee Claims. 1.100 Indenture Trustees means collectively, the First Lien Indenture Trustee, the 1.5 Lien Indenture Trustee and the Second Lien Indenture Trustee. 1.101 Indentures means collectively, the First Lien Indenture, the 1.5 Lien Indenture and the Second Lien Indenture. 1.102 Insurance Contracts has the meaning set forth in Section 7.12(b) of this Plan. 1.103 Insured Claims has the meaning set forth in Section 7.12(b) of this Plan. 1.104 Intercompany Claim means any Claim (including an Administrative Expense Claim), Cause of Action, or remedy asserted against a Debtor by (a) another Debtor, or (b) a non-Debtor direct or indirect subsidiary of a Debtor. 1.105 Intercompany Interest means any Interest held by a Debtor in another Debtor, other than an Existing Interest. 1.106 Intermediate HoldCo means a newly formed Delaware corporation which shall be the direct parent of Reorganized MPM following the transactions effectuated pursuant to this Plan. 1.107 Intermediate HoldCo Certificate of Incorporation means the certificate of incorporation of Intermediate HoldCo. 1.108 Intermediate HoldCo Common Stock means shares of common stock in Intermediate HoldCo. -11- 1.109 Interest means the interest (whether legal, equitable, contractual or otherwise) of any holders of any class of equity securities of any of the Debtors represented by shares of common or preferred stock or other instruments evidencing an ownership interest in any of the Debtors, whether or not certificated, transferable, voting or denominated “stock” or a similar security, or any option, warrant or right, contractual or otherwise, to acquire any such interest. 1.110 Lien has the meaning set forth in section 101(37) of the Bankruptcy Code. 1.111 Management Incentive Plan means the management equity incentive plan to be established by the Board of Reorganized MPM, with terms and conditions (including amount) satisfactory to the Requisite Investors, to be established by the Board of Top HoldCo, pursuant to which an amount of up to 7.5% of the Top HoldCo Common Stock, on a fully diluted basis, shall be reserved for issuance. 1.112 Management Incentive Plan Securities means the Top HoldCo Common Stock, or any options, warrants, or other securities convertible into Top HoldCo Common Stock, issued pursuant to the Management Incentive Plan. 1.113 MPM means Momentive Performance Materials Inc., a Delaware corporation. 1.114 MSC means Momentive Specialty Chemicals Inc., a New Jersey corporation. 1.115 Net Debt Amount means the aggregate amount of Indebtedness of Reorganized MPM and its subsidiaries, less the aggregate amount of cash, cash equivalents and marketable securities (other than cash classified as restricted cash in accordance with GAAP) of Reorganized MPM and its subsidiaries, in each case, that are projected to exist as of the time immediately following the Effective Date, calculated within [five (5)] days prior to the Effective Date. 1.116 New ABL Agent means JPMorgan Chase Bank, N.A., solely in its capacity as administrative agent under the New ABL Credit Agreement, and any of its successors or assigns. 1.117 New ABL Credit Agreement means, on and after the Effective Date, that certain senior secured debtor in possession and exit amended and restated asset-based revolving credit agreement, dated April 15, 2014, by and among Holdings, MPM, Momentive Performance Materials USA Inc., as U.S. Borrower, Momentive Performance Materials GMBH, as Germany Silicone Borrower, Momentive Performance Materials Quartz GMBH, as Germany Quartz Borrower, Momentive Performance Materials Nova Scotia ULC, as Canadian Borrower, certain of the other Debtors, as guarantors, the DIP Agent, and the DIP Lenders, including any and all documents and instruments executed in connection therewith (in each case, as it may be amended, modified or supplemented from time to time on the terms and conditions set forth therein). 1.118 New ABL Facility means the exit asset-based revolving loan facility provided under the New ABL Credit Agreement as of the Effective Date. 1.119 New ABL Facility Arrangers means the joint lead arrangers of the New ABL Facility. -12- 1.120 New ABL Lenders means the lenders party to the New ABL Credit Agreement. 1.121 New Common Stock means, collectively, 70,000,000 shares of authorized common stock of Reorganized MPM, par value $0.01, of which an amount equaling the Total Outstanding Shares will be issued by Reorganized MPM in connection with the implementation of, and as authorized by, this Plan, and which will automatically be exchanged for Top HoldCo Common Stock pursuant to Section 7.8(a) of this Plan. 1.122 New First Lien Agent means JPMorgan Chase Bank, N.A., solely in its capacity as the administrative agent under the New First Lien Term Loan Agreement, and any of its successors or assigns. 1.123 New First Lien Lenders means the lenders party to the New First Lien Term Loan Agreement. 1.124 New First Lien Term Loan Agreement means that certain first lien term loan agreement, by and among reorganized Momentive Performance Materials USA Inc., as borrower, those entities identified as “guarantors” in the New First Lien Term Loan Agreement, the New First Lien Agent, and the New First Lien Lenders, including any and all documents and instruments executed in connection therewith, in form and substance reasonably satisfactory to the New First Lien Term Loan Facility Arrangers and the New First Lien Agent (in each case, as it or they may be amended, modified or supplemented from time to time on the terms and conditions set forth therein), to be dated as of the Effective Date, the principal terms of which shall be contained in the Plan Supplement. 1.125 New First Lien Term Loan Facility means the first lien term loan facility, the terms of which shall be set forth in the New First Lien Term Loan Agreement, which shall be in the original principal amount of $1,000,000,000 and shall be funded by the New First Lien Lenders on the Effective Date. 1.126 New First Lien Term Facility Arrangers means the joint lead arrangers of the New First Lien Term Loan Facility. 1.127 Other Secured Claim means any Secured Claim against a Debtor other than DIP Claims, Cash Flow Facility Claims, First Lien Note Claims, 1.5 Lien Note Claims, and Second Lien Note Claims. 1.128 Pension Plan means the Momentive Performance Materials Pension Plan. 1.129 Person means any individual, corporation, partnership, association, indenture trustee, limited liability company, organization, joint stock company, joint venture, estate, trust, governmental unit or any political subdivision thereof, or any other entity or organization of whatever nature. 1.130 Petition Date means April 13, 2014, the date on which the Debtors commenced the Reorganization Cases. 1.131 PBGC means the Pension Benefit Guaranty Corporation. -13- 1.132 Plan means this joint chapter 11 plan proposed by the Debtors, including, without limitation, all applicable exhibits, supplements, appendices and schedules hereto, either in its present form or as the same may be altered, amended or modified from time to time in accordance with the provisions of the Bankruptcy Code, the Bankruptcy Rules and the terms hereof; provided , that the Plan shall be in form and substance satisfactory to the Debtors and the Requisite Investors. 1.133 Plan Consideration means Cash, New Common Stock or Top HoldCo Common Stock, as applicable, or, to the extent applicable, Replacement 1.5 Lien Notes or Replacement First Lien Notes, as the context requires. 1.134 Plan Distribution means the distribution under the Plan of Plan Consideration. 1.135 Plan Documents means the documents, other than the Plan, to be executed, delivered, assumed, and/or performed in connection with the consummation of the Plan, including, without limitation, the documents to be included in the Plan Supplement, the Backstop Commitment Agreement, any and all exhibits to the Plan and the Disclosure Statement; provided , that each of the Plan Documents shall be in form and substance satisfactory to the Debtors and the Requisite Investors. 1.136 Plan Enterprise Value means $2,200,000,000. 1.137 Plan Equity Value means the Plan Enterprise Value minus the Net Debt Amount. 1.138 Plan Supplement means the supplemental appendix to this Plan, to be filed no later than ten (10) calendar days prior to the deadline for Ballots to be received in connection with voting to accept or reject the Plan, which may contain, among other things, draft forms, signed copies, or summaries of material terms, as the case may be, of (i) the New First Lien Term Loan Agreement, (ii) the New ABL Credit Agreement, (iii) the Registration Rights Agreement, (iv) the Amended Certificates of Incorporation, the Top HoldCo Certificate of Incorporation and the Intermediate HoldCo Certificate of Incorporation, (v) the Amended By-laws, (vi) Replacement 1.5 Lien Notes, (vii) the Replacement First Lien Notes, (viii) the list of proposed officers and directors of the Reorganized Debtors, Intermediate HoldCo and Top HoldCo, (ix) the Post-Emergence Incentive Plan and (x) the Schedule of Rejected Contracts and Leases, and additional documents filed with the Bankruptcy Court before the Effective Date as amendments to the Plan Supplement; provided , that each of the documents in the Plan Supplement (whether or not set forth above) shall be in form and substance consistent with the RSA and satisfactory to the Debtors and the Requisite Investors. 1.139 Post-Emergence Incentive Plan means the bonus plan, acceptable to the Requisite Investors, which provides for the payment of certain incentive bonuses to certain employees of the Reorganized Debtors, a description of which will be filed in the Plan Supplement. 1.140 Prepetition Administrative Agent means JPMorgan Chase Bank, N.A. or any successor, in its respective capacities as administrative agent (including as the Cash Flow Facility Administrative Agent), collateral agent, intercreditor agent, designated or authorized representative, or other agent or representative under (i) the Cash Flow Facility Credit Agreement, (ii) the Asset-Based Revolving Credit Agreement, dated as of April 24, 2013 (the -14- “Prepetition ABL Credit Agreement”), among Holdings, MPM, Momentive Performance Materials USA Inc., as U.S. Borrower, Momentive Performance Materials GMBH, as a German Borrower, Momentive Performance Materials Quartz GMBH, as a German Borrower, Momentive Performance Materials Nova Scotia ULC, as Canadian Borrower, the lenders party thereto (the “ Prepetition ABL Lenders ”) and the Prepetition Administrative Agent and (iii) any loan or collateral document or intercreditor agreement related to the Cash Flow Facility Credit Agreement, the Prepetition ABL Credit Agreement, or any other indebtedness of the Debtors as applicable. 1.141 Priority Non-Tax Claim means any Claim, other than an Administrative Expense Claim, a Fee Claim or a Priority Tax Claim, entitled to priority in payment as specified in section 507(a) of the Bankruptcy Code. 1.142 Priority Tax Claim means any Claim of a governmental unit (as defined in section 101(27) of the Bankruptcy Code) of the kind entitled to priority in payment under sections 502(i) and 507(a)(8) of the Bankruptcy Code. 1.143 Professional Person(s) means all Persons retained by order of the Bankruptcy Court in connection with the Reorganization Cases, pursuant to sections 327, 328, 330 or 1103 of the Bankruptcy Code, excluding any ordinary course professionals retained pursuant to order of the Bankruptcy Court. 1.144 Pro Rata Share means with respect to any distribution on account of an Allowed Claim, a distribution equal in amount to the ratio (expressed as a percentage) that the amount of such Allowed Claim bears to the aggregate amount of all Allowed Claims in its Class. 1.145 Registration Rights Agreement means the registration rights agreement with respect to the Top HoldCo Common Stock, substantially in the form contained in the Plan Supplement. 1.146 Reinstated or Reinstatement means (a) leaving unaltered the legal, equitable, and contractual rights to which a Claim entitles the holder of such Claim in accordance with section 1124 of the Bankruptcy Code, or (b) if applicable under section 1124 of the Bankruptcy Code: (i) curing all prepetition and postpetition defaults other than defaults relating to the insolvency or financial condition of the applicable Debtor or its status as a debtor under the Bankruptcy Code; (ii) reinstating the maturity date of the Claim; (iii) compensating the holder of such Claim for damages incurred as a result of its reasonable reliance on a provision allowing the Claim’s acceleration; and (iv) not otherwise altering the legal, equitable or contractual rights to which the Claim entitles the holder thereof. 1.147 Released Parties means, collectively, and each solely in its capacity as such: (a) the Debtors and their respective non-Debtor subsidiaries; (b) the DIP Agent; (c) the DIP Lenders; (d) each of the Backstop Parties; (e) the Ad Hoc Committee of Second Lien Noteholders and each current and former member thereof, including without limitation those entities listed on Schedule 1 to this Plan, which Schedule 1 shall be supplemented with additional entities, if any, in the Plan Supplement or otherwise prior to the Effective Date; (f) each current and former Backstop Party, including without limitation those entities listed on Schedule 1 , which Schedule 1 shall be supplemented with additional entities, if any, in the Plan Supplement or otherwise -15- prior to the Effective Date; (g) Apollo; (h) MSC; (i) Momentive Performance Materials Holdings LLC; (j) the New ABL Facility Arrangers, the New ABL Agent and the New ABL Lenders; (k) the New First Lien Term Loan Facility Arrangers, the New First Lien Agent and the New First Lien Lenders; (l) the Second Lien Indenture Trustee; (m) the Creditors’ Committee Parties; (n) the Prepetition Administrative Agent and the Prepetition ABL Lenders; and (o) each of the foregoing parties’ current officers, affiliates, partners, directors, employees, agents, members, advisors and professionals (including any attorneys, consultants, financial advisors, investment bankers and other professionals retained by such Persons and, for the avoidance of doubt, the Ad Hoc Committee of Second Lien Noteholders Advisors), together with their respective successors and assigns; provided , however , that such attorneys and professional advisors shall only include those that provided services related to the Reorganization Cases and the transactions contemplated by the Plan; provided , further , that no Person shall be a Released Party if it objects to and/or opts out of the releases provided for in Article XII of this Plan. 1.148 Reorganization Cases means the jointly-administered cases under chapter 11 of the Bankruptcy Code commenced by the Debtors on the Petition Date in the Bankruptcy Court and captioned In re MPM Silicones, LLC, et al. , No. 14-22503 (RDD) (Jointly Administered). 1.149 Reorganized Debtor means the applicable reorganized Debtor or any successors thereto by merger, consolidation or otherwise, on and after the Effective Date, after giving effect to the restructuring transactions occurring on the Effective Date in accordance with this Plan. 1.150 Reorganized MPM means MPM on and after the Effective Date. 1.151 Replacement 1.5 Lien Notes means notes that may be issued by the Debtors or Reorganized Debtors to the holders of the 1.5 Lien Note Claims on terms, to be disclosed in the Plan Supplement and otherwise acceptable to the Requisite Investors. 1.152 Replacement First Lien Notes means notes that may be issued by the Debtors or Reorganized Debtors to the holders of the First Lien Note Claims on terms, to be disclosed in the Plan Supplement and otherwise acceptable to the Requisite Investors. 1.153 Requisite Investors means (a) members of the Ad Hoc Committee of Second Lien Noteholders holding at least a majority of the aggregate Backstop Commitments provided by all members of the Ad Hoc Committee of Second Lien Noteholders as of the date on which the consent of such members is solicited; and (b) Apollo; provided that in the case of a consent to changes in respect of Selected Economic Terms (as defined in the Backstop Commitment Agreement), “Requisite Investors” means solely members of the Ad Hoc Committee of Second Lien Noteholders holding a majority of the aggregate of the Backstop Commitments provided by all members of the Ad Hoc Committee of Second Lien Noteholders as of the date on which the consent of such members is solicited; provided further, that for the purposes of this definition, each Backstop Party shall be deemed to hold the Backstop Commitments held by such Backstop Party’s Related Purchasers (as defined in the Backstop Commitment Agreement). 1.154 Rights Exercise Price means the purchase price for each share of Rights Offering Stock, as set forth in the applicable Rights Offering Procedures and approved by the Bankruptcy Court. The Rights Exercise Price for the Rights Offering Stock will be set at $17.28 per share of New Common Stock. -16- 1.155 Rights Offerings means the Section 1145 Rights Offering and the 4(a)(2) Rights Offering. 1.156 Rights Offering Amount means $600 million, consisting of $132,304,682.88, as the Section 1145 Rights Offering Amount, and $467,695,313.28, as the 4(a)(2) Rights Offering Amount. 1.157 Rights Offering Procedures means the Section 1145 Rights Offering Procedures and the 4(a)(2) Rights Offering Procedures. 1.158 Rights Offering Stock means the Section 1145 Rights Offering Stock and the 4(a)(2) Rights Offering Stock. 1.159 RSA means that certain Restructuring Support Agreement dated April 13, 2014, inclusive of all exhibits thereto, by and among the Debtors, Apollo and the members of the Ad Hoc Committee of Second Lien Noteholders and any other Person that may become a party to such agreement pursuant to its terms. 1.160 RSA Order means an order of the Bankruptcy Court authorizing and directing the Debtors to assume the RSA. 1.161 Schedule of Rejected Contracts and Leases means a schedule of the contracts and leases to be rejected pursuant to section 365 of the Bankruptcy Code and Section 10.1 hereof, which shall be contained in the Plan Supplement. 1.162 Schedules means the schedules of assets and liabilities filed in the Reorganization Cases, as amended or supplemented from time to time. 1.163 Second Lien Indenture means that certain indenture dated as of November 5, 2010 (as amended, modified or supplemented from time to time), between MPM, as issuer, and the Second Lien Indenture Trustee, related to the Second Lien Notes, including all agreements, documents, notes, instruments and any other agreements delivered pursuant thereto or in connection therewith (in each case, as amended, modified or supplemented from time to time). 1.164 Second Lien Indenture Trustee means Wilmington Savings Fund Society, FSB, solely in its capacity as indenture trustee under the Second Lien Indenture. 1.165 Second Lien Indenture Trustee Claim means all Claims of the Second Lien Indenture Trustee for reasonable and documented fees and expenses under the terms of the Second Lien Indenture (including, but not limited to, the reasonable and documented fees, costs and expenses incurred by the Second Lien Indenture Trustee’s professionals). 1.166 Second Lien Intercreditor Agreement means that certain intercreditor agreement dated November 16, 2012, to which JPMorgan Chase Bank, N.A. (or any successor agent), and MPM are party. -17- 1.167 Second Lien Note Claims means all Claims (excluding Existing Securities Law Claims) against MPM, as issuer, or any other Debtor as guarantor, arising under the Second Lien Notes and the Second Lien Indenture (and related documents). 1.168 Second Lien Notes mean the $1,161,000,000 of 9% Second-Priority Springing Lien Notes due 2021 and €133,000,000 9.5% Second-Priority Springing Lien Notes due 2021, issued pursuant to the Second Lien Indenture, plus any accrued and unpaid interest arising prior to the Petition Date. 1.169 Second Lien Notes Equity Distribution means New Common Stock to be issued by Reorganized MPM on the Effective Date to the holders of Allowed Second Lien Note Claims pursuant to the Plan, equaling the Total Outstanding Shares, minus the total number of shares constituting the Rights Offering Stock and the Commitment Premium Shares, subject to dilution by the Management Incentive Plan Securities. 1.170 Section 1145 Eligible Holder has the meaning set forth in the Section 1145 Rights Offering Procedures and the corresponding subscription agreement and subscription form. 1.171 Section 1145 Rights Offering means the offering of Section 1145 Subscription Rights to Section 1145 Eligible Holders to purchase 7,656,521 shares of New Common Stock to be issued by Reorganized MPM pursuant to the Plan at a price per share of $17.28, for an aggregate purchase price of the Section 1145 Rights Offering Amount, to be conducted in reliance upon the exemption from registration under the Securities Act provided in section 1145 of the Bankruptcy Code. 1.172 Section 1145 Rights Offering Amount means $132,304,682.88. 1.173 Section 1145 Rights Offering Procedures means the procedures governing the Section 1145 Rights Offering, which procedures are attached as an exhibit to the Disclosure Statement, and shall be satisfactory to the Debtors and the Requisite Investors. 1.174 Section 1145 Rights Offering Stock means the 7,656,521 shares of New Common Stock issued pursuant to the Section 1145 Rights Offering, including shares issued on account of the Backstop Commitment. The Section 1145 Rights Offering Stock shall be subject to dilution from the Management Incentive Plan Securities. 1.175 Section 1145 Subscription Rights means the non-transferable, non-certificated subscription rights of Section 1145 Eligible Holders to purchase shares of Section 1145 Rights Offering Stock in connection with the Section 1145 Rights Offering on the terms and subject to the conditions set forth in the Plan and the Section 1145 Rights Offering Procedures. 1.176 Secured Claim means a Claim: (a) that is secured by a valid, perfected and enforceable Lien on Collateral, to the extent of the value of the Claim holder’s interest in such Collateral as of the Confirmation Date; or (b) to the extent that the holder thereof has a valid right of setoff pursuant to section 553 of the Bankruptcy Code. 1.177 Securities Act means the Securities Act of 1933, as amended. -18- 1.178 Senior Subordinated Indenture means that certain indenture dated as of December 4, 2006 (as amended, modified or supplemented from time to time), between MPM, as issuer, and the Senior Subordinated Indenture Trustee, related to the Senior Subordinated Notes, including all agreements, documents, notes, instruments and any other agreements delivered pursuant thereto or in connection therewith (in each case, as amended, modified or supplemented from time to time). 1.179 Senior Subordinated Indenture Trustee means U.S. Bank National Association, solely in its capacity as indenture trustee under the Senior Subordinated Indenture. 1.180 Senior Subordinated Note Claims means all Claims (excluding Existing Securities Law Claims) against MPM, as issuer, or any other Debtor as guarantor, arising under the Senior Subordinated Notes and the Senior Subordinated Indenture (and related documents). 1.181 Senior Subordinated Notes mean the 11.5% Senior Subordinated Notes due 2016, in an aggregate principal amount of approximately $382 million, issued pursuant to the Senior Subordinated Indenture. 1.182 Shared Services Agreement means that certain Amended and Restated Shared Services Agreement, dated as of March 17, 2011, between MPM and MSC. 1.183 SIR Claim means the unsatisfied portion of any self-insured retention as of the date a Claim is Allowed to the extent the Debtors have insurance with respect to such Claim. 1.184 Subscription Rights means Section 1145 Subscription Rights and the 4(a)(2) Subscription Rights. 1.185 Subsidiary means any corporation, association or other business entity of which at least the majority of the securities or other ownership interest is owned or controlled by a Debtor and/or one or more subsidiaries of the Debtor. 1.186 Top HoldCo means a newly formed Delaware corporation which shall be the direct parent of Intermediate HoldCo following the transactions effectuated pursuant to this Plan. 1.187 Top HoldCo Certificate of Incorporation means the certification of incorporation of Top HoldCo. 1.188 Top HoldCo Common Stock means, collectively, 70,000,000 shares of authorized common stock of Top HoldCo, par value $0.01, of which an amount equaling the Total Outstanding Shares will be issued by Top HoldCo in connection with the implementation of, and as authorized by, this Plan, including Section 7.8(a). 1.189 Total Outstanding Shares means a number of shares, which shall equal the Plan Equity Value, divided by $20.33, rounded to the nearest whole share. 1.190 U.S. Trustee means the United States Trustee for the Southern District of New York. -19- 1.191 U.S. Trustee Fees means fees arising under 28 U.S.C. § 1930(a)(6) and, to the extent applicable, accrued interest thereon arising under 31 U.S.C. § 3717. 1.192 Unsubscribed Shares means shares of Rights Offering Stock that are not timely, duly and validly subscribed and paid for by the holders of Allowed Second Lien Note Claims in accordance with the applicable Rights Offering Procedures. B. Interpretation; Application of Definitions and Rules of Construction. Unless otherwise specified, all section or exhibit references in this Plan are to the respective section in, or exhibit to, this Plan. The words “herein,” “hereof,” “hereto,” “hereunder,” and other words of similar import refer to this Plan as a whole and not to any particular section, subsection, or clause contained therein. Whenever from the context it is appropriate, each term, whether stated in the singular or the plural, will include both the singular and the plural. Any term that is not otherwise defined herein, but that is used in the Bankruptcy Code or the Bankruptcy Rules, shall have the meaning given to that term in the Bankruptcy Code or the Bankruptcy Rules, as applicable. The rules of construction contained in section 102 of the Bankruptcy Code shall apply to the construction of this Plan. The captions and headings in this Plan are for convenience of reference only and shall not limit or otherwise affect the provisions hereof. Any reference to an entity as a holder of a Claim or Interest includes that entity’s successors and assigns. C. Appendices and Plan Documents. All Plan Documents and appendices to the Plan are incorporated into the Plan by reference and are a part of the Plan as if set forth in full herein. The documents contained in the exhibits and Plan Supplement shall be approved by the Bankruptcy Court pursuant to the Confirmation Order. Holders of Claims and Interests may inspect a copy of the Plan Documents, once filed, in the Office of the Clerk of the Bankruptcy Court during normal business hours, or via the Claims Agent’s website at www.kccllc.net/MPM, or obtain a copy of the Plan Documents by a written request sent to the Claims Agent at the following address: Kurtzman Carson Consultants 2335 Alaska Avenue El Segundo, CA 90245 Telephone: 888-249-2792 ARTICLE II. CERTAIN INTER-CREDITOR AND INTER-DEBTOR ISSUES 2.1. Settlement of Certain Inter-Creditor Issues. The treatment of Claims and Interests under this Plan represents, among other things, the settlement and compromise of certain potential inter-creditor disputes. -20- 2.2. Formation of Debtor Groups for Convenience Purposes. The Plan groups the Debtors together solely for purposes of describing treatment under the Plan, confirmation of the Plan and making Plan Distributions in respect of Claims against and Interests in the Debtors under the Plan. Such groupings shall not affect any Debtor’s status as a separate legal entity, change the organizational structure of the Debtors’ business enterprise, constitute a change of control of any Debtor for any purpose, cause a merger or consolidation of any legal entities, nor cause the transfer of any assets; and, except as otherwise provided by or permitted in the Plan, all Debtors shall continue to exist as separate legal entities. 2.3. Intercompany Claims. Notwithstanding anything to the contrary herein, on the Effective Date, with the consent of the Requisite Investors, or after the Effective Date, any and all Intercompany Claims will be reinstated, adjusted (including by contribution, distribution in exchange for new debt or equity, or otherwise), paid, continued, cancelled or discharged to the extent reasonably determined appropriate by the Reorganized Debtors, subject to the terms of the Exit Facilities. Any such transaction may be effected on the Effective Date, with the consent of the Requisite Investors, or subsequent to the Effective Date without any further action by the Bankruptcy Court or by the stockholders of any of the Reorganized Debtors. Notwithstanding the foregoing, any claims of Holdings against any other Debtors shall only be released, cancelled or discharged following payment by Holdings of all amounts required by Section 5.9 of this Plan. ARTICLE III. ADMINISTRATIVE EXPENSE CLAIMS, FEE CLAIMS, U.S. TRUSTEE FEES AND PRIORITY TAX CLAIMS The Plan constitutes a joint plan of reorganization for all of the Debtors. All Claims and Interests, except DIP Claims, Administrative Expense Claims, Fee Claims, U.S. Trustee Fees and Priority Tax Claims, are placed in the Classes set forth in Article IV below. In accordance with section 1123(a)(1) of the Bankruptcy Code, DIP Claims, Administrative Expense Claims, Fee Claims, U.S. Trustee Fees and Priority Tax Claims have not been classified, and the holders thereof are not entitled to vote on this Plan. A Claim or Interest is placed in a particular Class only to the extent that such Claim or Interest falls within the description of that Class and is classified in other Classes to the extent that any portion of the Claim or Interest falls within the description of such other Classes. A Claim or Interest is placed in a particular Class for all purposes, including voting, confirmation and distribution under this Plan and under sections 1122 and 1123(a)(1) of the Bankruptcy Code. However, a Claim or Interest is placed in a particular Class for the purpose of receiving Plan Distributions only to the extent that such Claim or Interest is an Allowed Claim or Allowed Interest and has not been paid, released or otherwise settled prior to the Effective Date. -21- 3.1. DIP Claims. (a) DIP Term Loan Claims. The DIP Term Loan Claims shall be deemed to be Allowed Claims under the Plan. In full satisfaction, settlement, release and discharge of the Allowed DIP Term Loan Claims, on the Effective Date, all Allowed DIP Term Loan Claims shall be paid in full in Cash. Upon payment and satisfaction in full of all Allowed DIP Term Loan Claims, all Liens and security interests granted to secure such obligations, whether Claims in the Reorganization Cases or otherwise, shall be terminated and of no further force or effect. All of the Debtors’ contingent or unliquidated obligations under the DIP Term Loan Credit Agreement, including, without limitation, under Sections 2.15, 2.16, 2.17 and 9.05, to the extent any such obligation has not been paid in full in Cash on the Effective Date, shall survive the Effective Date and shall not be released or discharged pursuant to the Plan or Confirmation Order, notwithstanding any provision hereof or thereof to the contrary. (b) DIP ABL Claims. The DIP ABL Claims shall be deemed to be Allowed Claims under the Plan. The DIP ABL Claims shall be satisfied in full by either: (a) the conversion on the Effective Date of the DIP ABL Facility into the New ABL Facility in accordance with the terms and conditions of the DIP ABL Credit Agreement; or (b) the termination of all commitments, payment in full in Cash of all outstanding obligations and cash collateralization, return or backstopping of all letters of credit issued thereunder in a manner satisfactory to the DIP Agent. If the DIP ABL Claims are satisfied in full pursuant to clause (b) of the immediately preceding sentence, (i) all Liens and security interests granted to secure such obligations, whether Claims in the Reorganization Cases or otherwise, shall be terminated and of no further force or effect and (ii) all of the Debtors’ contingent or unliquidated obligations under the DIP ABL Credit Agreement, including, without limitation, under Section 2.15, 2.16, 2.17 and 9.05, to the extent any such obligation has not been paid in full in Cash on the Effective Date, shall survive the Effective Date and shall not be released or discharged pursuant to the Plan or Confirmation Order, notwithstanding any provision hereof or thereof to the contrary. 3.2. Administrative Expense Claims. (a) Time for Filing Administrative Expense Claims. The holder of an Administrative Expense Claim, other than the holder of: (i) a DIP Claim; (ii) a Fee Claim; (iii) a 503(b)(9) Claim; (iv) an Administrative Expense Claim that has been Allowed on or before the Effective Date; (v) an Administrative Expense Claim for an expense or liability incurred and payable in the ordinary course of business by a Debtor; -22- (vi) an Administrative Expense Claim on account of fees and expenses incurred on or after the Petition Date by ordinary course professionals retained by the Debtors pursuant to an order of the Bankruptcy Court; (vii) an Administrative Expense Claim arising, in the ordinary course of business, out of the employment by one or more Debtors of an individual from and after the Petition Date, but only to the extent that such Administrative Expense Claim is solely for outstanding wages, commissions, accrued benefits, or reimbursement of business expenses; (viii) a claim for adequate protection arising under the Final DIP Order; or (ix) an Indenture Trustee Claim must file with the Bankruptcy Court and serve on the Debtors or Reorganized Debtors (as the case may be), the Claims Agent, and the Office of the U.S. Trustee, proof of such Administrative Expense Claim within thirty (30) days after the Effective Date (the “ Administrative Bar Date ”). Such proof of Administrative Expense Claim must include at a minimum: (i) the name of the applicable Debtor that is purported to be liable for the Administrative Expense Claim and if the Administrative Expense Claim is asserted against more than one Debtor, the exact amount asserted to be owed by each such Debtor; (ii) the name of the holder of the Administrative Expense Claim; (iii) the asserted amount of the Administrative Expense Claim; (iv) the basis of the Administrative Expense Claim; and (v) supporting documentation for the Administrative Expense Claim. FAILURE TO FILE AND SERVE SUCH PROOF OF ADMINISTRATIVE EXPENSE CLAIM TIMELY AND PROPERLY SHALL RESULT IN SUCH CLAIM BEING FOREVER BARRED AND DISCHARGED. (b) Treatment of Administrative Expense Claims. Except to the extent that a holder of an Allowed Administrative Expense Claim agrees to a different treatment, on, or as soon thereafter as is reasonably practicable, the later of the Effective Date and the first Business Day after the date that is thirty (30) calendar days after the date an Administrative Expense Claim becomes an Allowed Claim, the holder of such Allowed Administrative Expense Claim shall receive from the applicable Reorganized Debtor Cash in an amount equal to such Allowed Claim; provided , however , that Allowed Administrative Expense Claims representing liabilities incurred in the ordinary course of business by any of the Debtors, as debtors in possession, shall be paid by the applicable Debtor or Reorganized Debtor in the ordinary course of business, consistent with past practice and in accordance with the terms and subject to the conditions of any orders or agreements governing, instruments evidencing, or other documents relating to, such liabilities. Any Claim related to fees and expenses, contribution or indemnification obligations, payable or owing by the Debtors to Apollo or the Ad Hoc Committee of Second Lien Noteholders, its members or the Backstop Parties under the RSA and Backstop -23- Commitment Agreement shall constitute an Allowed Administrative Expense Claim and shall be paid in Cash on the Effective Date without the need to file a proof of such Claim with the Bankruptcy Court in accordance with Section 3.2(a) hereof and without further order of the Bankruptcy Court. In the case of Indenture Trustee Claims, such Claims will be paid in the ordinary course of business (subject to the Debtors’ prior receipt of invoices and reasonable documentation in connection therewith and without the requirement to file a fee application with the Bankruptcy Court, with copies to be provided to the Backstop Parties) but no later than the Effective Date; provided , that such fees, costs and expenses must be reimbursable under the terms of the applicable indenture; and provided , further , that the applicable indenture trustee will receive payment in the ordinary course of business (subject to the Reorganized Debtors’ prior receipt of invoices and reasonable documentation in connection therewith) for all reasonable fees, costs, and expenses incurred after the Effective Date in connection with the implementation of any provisions of this Plan. In the event of a dispute with respect to all or a portion of an Indenture Trustee Claim, the Debtors shall pay the undisputed amount of such Indenture Trustee Claim, and segregate Cash in the amount of the remaining portion of such Claim until such dispute is resolved by the parties or by the Bankruptcy Court. 3.3. Fee Claims. (a) Time for Filing Fee Claims. Any Professional Person seeking allowance of a Fee Claim shall file, with the Bankruptcy Court, its final application for allowance of compensation for services rendered and reimbursement of expenses incurred prior to the Effective Date and in connection with the preparation and prosecution of such final application no later than forty-five (45) calendar days after the Effective Date. Objections to such Fee Claims, if any, must be filed and served pursuant to the procedures set forth in the Confirmation Order no later than sixty-five (65) calendar days after the Effective Date or such other date as established by the Bankruptcy Court. (b) Treatment of Fee Claims. All Professional Persons seeking allowance by the Bankruptcy Court of a Fee Claim shall be paid in full in Cash in such amounts as are approved by the Bankruptcy Court: (i) upon the later of (x) the Effective Date, and (y) fourteen (14) calendar days after the date upon which the order relating to the allowance of any such Fee Claim is entered, or (ii) upon such other terms as may be mutually agreed upon between the holder of such Fee Claim and the Reorganized Debtors. On the Effective Date, to the extent known, the Reorganized Debtors shall reserve and hold in a segregated account Cash in an amount equal to all accrued but unpaid Fee Claims as of the Effective Date, which Cash shall be disbursed solely to the holders of Allowed Fee Claims with the remainder to be reserved until all Fee Claims have been either Allowed and paid in full or Disallowed by Final Order, at which time any remaining Cash in the segregated account shall become the sole and exclusive property of the Reorganized Debtors. -24- 3.4. U.S. Trustee Fees. The Debtors or Reorganized Debtors, as applicable, shall pay all outstanding U.S. Trustee Fees of a Debtor on an ongoing basis on the date such U.S. Trustee Fees become due, until such time as a final decree is entered closing the applicable Reorganization Case, the applicable Reorganization Case is converted or dismissed, or the Bankruptcy Court orders otherwise. 3.5. Priority Tax Claims. Except to the extent that a holder of an Allowed Priority Tax Claim agrees to different treatment, each holder of an Allowed Priority Tax Claim shall receive, with the consent of the Requisite Investors, in the Debtors’ or Reorganized Debtors’ discretion, either: (a) on, or as soon thereafter as is reasonably practicable, the later of the Effective Date and the first Business Day after the date that is thirty (30) calendar days after the date a Priority Tax Claim becomes an Allowed Claim, Cash in an amount equal to such Claim; or (b) deferred Cash payments following the Effective Date, over a period ending not later than five (5) years after the Petition Date, in an aggregate amount equal to the Allowed amount of such Priority Tax Claim (with any interest to which the holder of such Priority Tax Claim may be entitled calculated in accordance with section 511 of the Bankruptcy Code); provided , however , that all Allowed Priority Tax Claims that are not due and payable on or before the Effective Date shall be paid in the ordinary course of business as they become due. ARTICLE IV. CLASSIFICATION OF CLAIMS AND INTERESTS 4.1. Classification of Claims and Interests. The following table designates the Classes of Claims against and Interests in the Debtors, and specifies which Classes are: (a) impaired or unimpaired by this Plan; (b) entitled to vote to accept or reject this Plan in accordance with section 1126 of the Bankruptcy Code; and (c) deemed to accept or reject this Plan. Class Class 1 Class 2 Designation Impairment Entitled to Vote Priority Non-Tax Claims No No (Deemed to accept) Other Secured Claims No No (Deemed to accept) Cash Flow Facility Claims First Lien Note Claims 1.5 Lien Note Claims Second Lien Note Claims No Yes3 Yes4 Yes No (Deemed to accept) Yes Yes Yes Class 3 Class 4 Class 5 Class 6 3 4 The Debtors reserve the right to assert that the treatment provided to holders of First Lien Note Claims and 1.5 Lien Note Claims pursuant to Sections 5.4 and 5.5 of the Plan renders such holders unimpaired. See footnote 3. -25- Designation Class Class 7 Class 8 Class 9 Class 10 Class 11 Impairment General Unsecured Claims Senior Subordinated Note Claims Holdings PIK Note Claims Existing Securities Law Claims Existing Interests No Yes Yes Yes Yes Entitled to Vote No (Deemed to accept) No (Deemed to reject) Yes No (Deemed to reject) No (Deemed to reject) 4.2. Unimpaired Classes of Claims. The following Classes of Claims are unimpaired and, therefore, deemed to have accepted this Plan and are not entitled to vote on this Plan under section 1126(f) of the Bankruptcy Code: (a) Class 1: Class 1 consists of all Priority Non-Tax Claims. (b) Class 2: Class 2 consists of all Other Secured Claims. (c) Class 3: Class 3 consists of all Cash Flow Facility Claims. (d) Class 7: Class 7 consists of all General Unsecured Claims. 4.3. Impaired Classes of Claims. (a) The following Classes of Claims are impaired and entitled to vote on this Plan: (i) Class 4: Class 4 consists of all First Lien Note Claims. (ii) Class 5: Class 5 consists of all 1.5 Lien Note Claims. (iii) Class 6: Class 6 consists of all Second Lien Note Claims. (iv) Class 9: Class 9 consists of all Holdings PIK Note Claims. (b) The following Classes of Claims and Interests are impaired and deemed to have rejected this Plan and, therefore, are not entitled to vote on this Plan under section 1126(g) of the Bankruptcy Code: (i) Class 8: Class 8 consists of all Senior Subordinated Note Claims. (ii) Class 10: Class 10 consists of all Existing Securities Law Claims. (iii) Class 11: Class 11 consists of all Existing Interests. 4.4. Separate Classification of Other Secured Claims. Although all Other Secured Claims have been placed in one Class for purposes of nomenclature, each Other Secured Claim, to the extent secured by a Lien on Collateral different than that securing any additional Other Secured Claims, shall be treated as being in a separate sub-Class for the purpose of receiving Plan Distributions. -26- ARTICLE V. TREATMENT OF CLAIMS AND INTERESTS 5.1. Priority Non-Tax Claims (Class 1). (a) Treatment: The legal, equitable and contractual rights of the holders of Priority Non-Tax Claims are unaltered by this Plan. Except to the extent that a holder of an Allowed Priority Non-Tax Claim agrees to a different treatment, on the applicable Distribution Date, each holder of an Allowed Priority Non-Tax Claim shall receive Cash from the applicable Reorganized Debtor in an amount equal to such Allowed Claim. (b) Voting: The Priority Non-Tax Claims are not impaired Claims. In accordance with section 1126(f) of the Bankruptcy Code, the holders of Priority Non-Tax Claims are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Allowed Priority Non-Tax Claims. 5.2. Other Secured Claims (Class 2). (a) Treatment: The legal, equitable and contractual rights of the holders of Other Secured Claims are unaltered by this Plan. Except to the extent that a holder of an Allowed Other Secured Claim agrees to a different treatment, on the applicable Distribution Date each holder of an Allowed Other Secured Claim shall receive, at the election of the Reorganized Debtors: (i) Cash in an amount equal to such Allowed Claim; or (ii) such other treatment that will render such Other Secured Claim unimpaired pursuant to section 1124 of the Bankruptcy Code; provided , however , that Other Secured Claims incurred by a Debtor in the ordinary course of business may be paid in the ordinary course of business in accordance with the terms and conditions of any agreements relating thereto, in the discretion of the applicable Debtor or Reorganized Debtor, without further notice to or order of the Bankruptcy Court. Each holder of an Allowed Other Secured Claim shall retain the Liens securing its Allowed Other Secured Claim as of the Effective Date until full and final satisfaction of such Allowed Other Secured Claim is made as provided herein. On the full payment or other satisfaction of each Allowed Other Secured Claim in accordance with the Plan, the Liens securing such Allowed Other Secured Claim shall be deemed released, terminated and extinguished, in each case without further notice to or order of the Bankruptcy Court, act or action under applicable law, regulation, order or rule or the vote, consent, authorization or approval of any Person. (b) Voting: The Other Secured Claims are not impaired Claims. In accordance with section 1126(f) of the Bankruptcy Code, the holders of Other Secured Claims are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Allowed Other Secured Claims. -27- (c) Deficiency Claims: To the extent that the value of the Collateral securing any Other Secured Claim is less than the Allowed amount of such Other Secured Claim, the undersecured portion of such Allowed Claim shall be treated for all purposes under this Plan as an Allowed General Unsecured Claim and shall be classified in Class 7. 5.3. Cash Flow Facility Claims (Class 3). (a) Allowance: On the Effective Date, the Cash Flow Facility Claims shall be deemed Allowed Claims in the amount of $20,700,000, plus any accrued and unpaid counsel or advisors’ fees or accrued and unpaid interest from the Petition Date through the Effective Date at the non-default interest rate provided under the Cash Flow Credit Agreement, and shall not be subject to any avoidance, reductions, setoff, offset, recoupment, recharacterization, subordination (whether equitable, contractual, or otherwise), counterclaims, cross-claims, defenses, disallowance, impairment, objection, or any other challenges under any applicable law or regulation by any Person. (b) Treatment: On the Effective Date, or as soon as practicable thereafter, each holder of an Allowed Cash Flow Facility Claim shall receive, subject to the terms of this Plan, in full satisfaction, settlement, release and discharge of, and in exchange for, such Claim, its Pro Rata Share of Cash in an aggregate amount equal to the Allowed Cash Flow Facility Claims. (c) Voting: The Cash Flow Facility Claims are unimpaired Claims. In accordance with section 1126(f) of the Bankruptcy Code, the holders of Cash Flow Facility Claims are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Allowed Cash Flow Facility Claims. 5.4. First Lien Note Claims (Class 4). (a) On the Effective Date, the First Lien Note Claims shall be deemed Allowed Claims in the amount of $1,100,000,000, plus any accrued and unpaid interest from the Petition Date through the Effective Date at the non-default interest rate provided under the First Lien Indenture, and shall not be subject to any avoidance, reductions, setoff, offset, recoupment, recharacterization, subordination (whether equitable, contractual, or otherwise), counterclaims, cross-claims, defenses, disallowance, impairment, objection, or any other challenges under any applicable law or regulation by any Person. No Applicable Premium, prepayment penalty, “make-whole” or similar claim shall be Allowed with respect to the First Lien Note Claims pursuant to this Section 5.4(a) of the Plan. (b) Treatment: On the Effective Date, or as soon as practicable thereafter, each holder of an Allowed First Lien Note Claim shall receive, subject to the terms of this Plan, in full satisfaction, settlement, release and discharge of, and in exchange for, such Claim, its Pro Rata Share of: (i) If Class 4 votes to accept the Plan or is presumed to have accepted the Plan: Cash in an aggregate amount equal to such holder’s Pro Rata portion of the First Lien Cash Pool. -28- (ii) If Class 4 votes to reject the Plan: Replacement First Lien Notes with a present value equal to the Allowed amount of such holder’s First Lien Note Claim (which may include, in addition to the First Lien Note Claims Allowed pursuant to Section 5.4(a) hereof, any applicable make-whole claim, prepayment penalty, or Applicable Premium to the extent Allowed by the Bankruptcy Court). (c) Voting: The First Lien Note Claims are impaired Claims. Holders of such Claims are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such Allowed First Lien Note Claims; provided that the Debtors reserve the right to assert that the treatment provided to the First Lien Note Claims pursuant to this Section 5.4 renders such Claims unimpaired. 5.5. 1.5 Lien Note Claims (Class 5) (a) On the Effective Date, the 1.5 Lien Note Claims shall be deemed Allowed Claims in the amount of $250,000,000, plus any accrued and unpaid interest from the Petition Date through the Effective Date at the non-default interest rate provided under the 1.5 Lien Indenture, and shall not be subject to any avoidance, reductions, setoff, offset, recoupment, recharacterization, subordination (whether equitable, contractual, or otherwise), counterclaims, cross-claims, defenses, disallowance, impairment, objection, or any other challenges under any applicable law or regulation by any Person. No Applicable Premium, prepayment penalty, “make-whole” or similar claim shall be Allowed with respect to the 1.5 Lien Note Claims pursuant to this Section 5.5(a) of the Plan. (b) Treatment: On the Effective Date, or as soon as practicable thereafter, each holder of an Allowed 1.5 Lien Note Claim shall receive, subject to the terms of this Plan, in full satisfaction, settlement, release and discharge of, and in exchange for, such Claim, its Pro Rata Share of: (i) If Class 5 votes to accept the Plan or is presumed to have accepted the Plan: Cash in an aggregate amount equal to such holder’s Pro Rata portion of the 1.5 Lien Cash Pool. (ii) If Class 5 votes to reject the Plan: Replacement 1.5 Lien Notes with a present value equal to the Allowed amount of such holder’s 1.5 Lien Note Claim (which may include, in addition to the 1.5 Lien Note Claims Allowed pursuant to Section 5.5(a) hereof, any applicable make-whole claim, prepayment penalty, or Applicable Premium to the extent Allowed by the Bankruptcy Court). (c) Voting: The 1.5 Lien Note Claims are impaired Claims. Holders of such Claims are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such Allowed 1.5 Lien Note Claims; provided that the Debtors reserve the right to assert that the treatment provided to the 1.5 Lien Note Claims pursuant to this Section 5.5 renders such Claims unimpaired. -29- 5.6. Second Lien Note Claims (Class 6). (a) Allowance: On the Effective Date, the Second Lien Note Claims shall be deemed Allowed Claims for all purposes in an amount of no less than $1,161,000,000 plus €133,000,000 (plus any accrued and unpaid interest arising prior to the Petition Date), and shall not be subject to any avoidance, reductions, setoff, offset, recoupment, recharacterization, subordination (whether equitable, contractual, or otherwise), counterclaims, cross-claims, defenses, disallowance, impairment, objection, or any other challenges under any applicable law or regulation by any Person. (b) Treatment: On the Effective Date, or as soon thereafter as reasonably practicable, each holder of an Allowed Second Lien Note Claim shall receive, subject to the terms of the Plan and in full satisfaction, settlement, release, and discharge of, and in exchange for, such Claim its Pro Rata Share of: (i) the Second Lien Notes Equity Distribution; and (ii) the Subscription Rights; provided that only 4(a)(2) Eligible Holders shall be entitled to participate in the 4(a)(2) Rights Offering. (c) Voting: The Second Lien Note Claims are impaired Claims. Holders of such Claims are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such Allowed Second Lien Note Claims. (d) Unsecured Amount of Second Lien Note Claims and Turnover: As part of the settlements and compromises set forth in this Plan, the holders of Second Lien Note Claims shall forgo receiving certain value with respect to the unsecured amount of their Second Lien Note Claims, which unsecured amount shall be no less than $991 million. Notwithstanding the foregoing and for the avoidance of doubt, the Plan shall effect, and the holders of Second Lien Note Claims shall not waive, the benefits of any and all subordination and “pay over” provisions set forth in the Senior Subordinated Indenture. In addition, the holders of Second Lien Notes shall retain their right to receive Plan Consideration payable or otherwise distributable as a result of any such subordination and “pay over” provisions and shall retain the right to be paid in full in Cash or otherwise prior to holders of Senior Subordinated Note Claims receiving any payments or distributions from the Debtors or Reorganized Debtors. 5.7. General Unsecured Claims (Class 7). (a) Treatment: Each Allowed General Unsecured Claim shall, at the discretion of the Reorganized Debtors, and to the extent that such Allowed General Unsecured Claim was not previously paid pursuant to an order of the Bankruptcy Court, be: (i) Reinstated as of the Effective Date as an obligation of the applicable Reorganized Debtor, and paid in accordance with the ordinary course terms for such Claim; (ii) paid in full in Cash on the applicable Distribution Date, plus postpetition interest at the rate of (x) the Federal Judgment Rate, computed daily from the Petition Date through the applicable Distribution Date and compounded annually, or (y) to the extent the holder of the General Unsecured Claim notifies the Debtors within five (5) business days prior to the Effective Date, and the Debtors agree or, in the -30- absence of agreement, the Bankruptcy Court determines, that such holder is contractually entitled to an alternate interest rate, then such alternate rate, computed from the Petition Date through the applicable Distribution Date and compounded (if at all) in accordance with the applicable contract; or (iii) receive such other treatment as may be agreed between such holder and the Reorganized Debtors. (b) Voting: The General Unsecured Claims are unimpaired Claims. In accordance with section 1126(f) of the Bankruptcy Code, the holders of General Unsecured Claims are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Allowed General Unsecured Claims. (c) Preference Waiver: Notwithstanding any other provision of the Plan, neither the Debtors, the Reorganized Debtors, nor any other representative of or successor to the Debtors’ Estates shall retain, and each of them is hereby deemed to waive and release, any and all claims, causes of action and other rights against the holders of Class 7 Claims based on section 547 of the Bankruptcy Code or any similar law providing for the avoidance and/or recovery of preferences. 5.8. Senior Subordinated Note Claims (Class 8). (a) Treatment: Pursuant to section 510 of the Bankruptcy Code and the provisions of the Senior Subordinated Indenture, holders of Senior Subordinated Note Claims shall not receive any Plan Distributions on account of such Claims and any Plan Distribution to which they would have otherwise been entitled on account of such Claims, if any, shall constitute a portion of the recovery of holders of Second Lien Note Claims, and be retained by the Reorganized Debtors, in order to augment the value of the New Common Stock to be received by holders of Second Lien Note Claims. (b) Voting: The Senior Subordinated Note Claims are impaired Claims. In accordance with section 1126(g) of the Bankruptcy Code, the holders of Senior Subordinated Note Claims are conclusively presumed to reject this Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Senior Subordinated Note Claims. 5.9. Holdings PIK Note Claims (Class 9). (a) Treatment: On the Effective Date, or as soon thereafter as reasonably practicable, each holder of an Allowed Holdings PIK Note Claim shall receive, subject to the terms of the Plan and in full satisfaction, settlement, release, and discharge of, and in exchange for, such Claim its Pro Rata Share of $8.938 million, minus any amounts attributable to Holdings’ share of Administrative Expense Claims or U.S. Trustee Fees; which amounts shall include 100% of amounts owed by Holdings to advisors of the holders of the Holdings PIK Note Claims (as such amount may be agreed upon by such advisors and the applicable holders of the Holdings PIK Note Claims). -31- (b) Voting: The Holdings PIK Note Claims are impaired Claims. Holders of such Claims are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such Allowed Holdings PIK Note Claims. 5.10. Existing Securities Law Claims (Class 10). (a) Treatment: Holders of Existing Securities Law Claims shall not receive or retain any distribution under the Plan on account of such Existing Securities Law Claims. (b) Voting: The Existing Securities Law Claims are impaired Claims. In accordance with section 1126(g) of the Bankruptcy Code, the holders of Existing Securities Law Claims are conclusively presumed to reject this Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Existing Securities Law Claims. 5.11. Existing Interests (Class 11). (a) Treatment: Existing Interests shall be cancelled and holders thereof shall not receive or retain any distribution under the Plan on account of such Existing Interests. (b) Voting: The Existing Interests are impaired Interests. In accordance with section 1126(g) of the Bankruptcy Code, the holders of Existing Interests are conclusively presumed to reject this Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Existing Interests. ARTICLE VI. ACCEPTANCE OR REJECTION OF THE PLAN; EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS OR INTERESTS 6.1. Class Acceptance Requirement. A Class of Claims shall have accepted the Plan if it is accepted by at least two-thirds (2/3) in dollar amount and more than one-half (1/2) in number of holders of the Allowed Claims in such Class that have voted on the Plan. 6.2. Tabulation of Votes on a Non-Consolidated Basis. All votes on the Plan shall be tabulated on a non-consolidated basis by Class and by Debtor for the purpose of determining whether the Plan satisfies sections 1129(a)(8) and/or (10) of the Bankruptcy Code. Notwithstanding the foregoing, the Debtors, with the consent of the Requisite Investors, reserve the right to seek to substantively consolidate any two or more Debtors, provided that, such substantive consolidation does not materially and adversely impact the amount of the Plan Distributions to any Person. -32- 6.3. Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code or “Cramdown.” Because certain Classes are deemed to have rejected this Plan, the Debtors will request confirmation of this Plan, as it may be modified and amended from time to time, under section 1129(b) of the Bankruptcy Code with respect to such Classes. Subject to Section 14.6 of the Plan, the Debtors, with the consent of the Requisite Investors, reserve the right to alter, amend, modify, revoke or withdraw this Plan or any Plan Document in order to satisfy the requirements of section 1129(b) of the Bankruptcy Code, if necessary. Subject to Sections 14.6 and 14.7 of the Plan (including the consent of the Requisite Investors), the Debtors also reserve the right to request confirmation of the Plan, as it may be modified, supplemented or amended from time to time, with respect to any Class that affirmatively votes to reject the Plan. 6.4. Elimination of Vacant Classes. Any Class of Claims or Interests that does not have a holder of an Allowed Claim or Allowed Interest or a Claim or Interest temporarily Allowed as of the date of the Confirmation Hearing shall be deemed eliminated from the Plan for purposes of voting to accept or reject the Plan and for purposes of determining acceptance or rejection of the Plan pursuant to section 1129(a)(8) of the Bankruptcy Code. 6.5. Voting Classes; Deemed Acceptance by Non-Voting Classes. If a Class contains Claims or Interests eligible to vote and no holders of Claims or Interests eligible to vote in such Class vote to accept or reject the Plan, the Plan shall be deemed accepted by such Class. 6.6. Confirmation of All Cases. Except as otherwise specified herein, the Plan shall not be deemed to have been confirmed unless and until the Plan has been confirmed as to each of the Debtors; provided , however , that, the Debtors may at any time waive this Section 6.6 with the consent of the Requisite Investors. ARTICLE VII. MEANS FOR IMPLEMENTATION 7.1. Continued Corporate Existence and Vesting of Assets in Reorganized Debtors. (a) Except as otherwise provided in this Plan, the Debtors shall continue to exist after the Effective Date as Reorganized Debtors in accordance with the applicable laws of the respective jurisdictions in which they are incorporated or organized and pursuant to the Amended Certificates of Incorporation and Amended By-Laws, for the purposes of satisfying their obligations under the Plan and the continuation of their businesses. On or after the Effective Date, each Reorganized Debtor, in its discretion, may take such action as permitted by applicable law and such Reorganized Debtor’s organizational documents, as such Reorganized Debtor may determine is reasonable and appropriate, including, but not limited to, causing: (i) a -33- Reorganized Debtor to be merged into another Reorganized Debtor, or its Subsidiary and/or affiliate; (ii) a Reorganized Debtor to be dissolved; (iii) the legal name of a Reorganized Debtor to be changed; or (iv) the closure of a Reorganized Debtor’s case on the Effective Date or any time thereafter. For the avoidance of doubt, the Amended Certificates of Incorporation, Intermediate HoldCo Certificate of Incorporation and Top HoldCo Certificate of Incorporation shall, among other things, prohibit the issuance of non-voting equity securities to the extent required by section 1123(a)(6) of the Bankruptcy Code. (b) Except as otherwise provided in this Plan, on and after the Effective Date, all property of the Estates, including all claims, rights and Causes of Action and any property acquired by the Debtors under or in connection with this Plan, shall vest in each respective Reorganized Debtor free and clear of all Claims, Liens, charges, other encumbrances and Interests. Subject to Section 7.1(a) hereof, on and after the Effective Date, the Reorganized Debtors may operate their businesses and may use, acquire and dispose of property and prosecute, compromise or settle any Claims (including any Administrative Expense Claims) and Causes of Action without supervision of or approval by the Bankruptcy Court and free and clear of any restrictions of the Bankruptcy Code or the Bankruptcy Rules other than restrictions expressly imposed by this Plan or the Confirmation Order. Without limiting the foregoing, the Reorganized Debtors may pay the charges that they incur on or after the Effective Date for Professional Persons’ fees, disbursements, expenses or related support services without application to the Bankruptcy Court. (c) On the Effective Date or as soon as reasonably practicable thereafter, the Reorganized Debtors may take all actions that may be necessary or appropriate to effectuate any transaction described in, approved by, contemplated by, or necessary to effectuate the Plan, including: (1) the execution and delivery of appropriate agreements or other documents of merger, consolidation, restructuring, conversion, disposition, transfer, dissolution or liquidation containing terms that are consistent with the terms of the Plan and that satisfy the requirements of applicable law and any other terms to which the applicable entities may agree; (2) the execution and delivery of appropriate instruments of transfer, assignment, assumption or delegation of any asset, property, right, liability, debt or obligation on terms consistent with the terms of the Plan and having other terms for which the applicable parties agree; (3) the filing of appropriate certificates or articles of incorporation, reincorporation, merger, consolidation, conversion or dissolution pursuant to applicable state law; and (4) all other actions that the applicable entities determine to be necessary or appropriate, including making filings or recordings that may be required by applicable law. 7.2. Plan Funding. The Plan Distributions to be made in Cash under the terms of this Plan shall be funded from: (a) the Debtors’ Cash on hand as of the Effective Date; (b) the proceeds of the New First Lien Term Loan Facility; (c) the proceeds of the Rights Offerings; (d) the proceeds of the New ABL Facility and (e) the proceeds of the Incremental Facility, to the extent necessary. -34- 7.3. Cancellation of Existing Securities and Agreements. Except for the purpose of evidencing a right to distribution under this Plan, including the enforcement of any subordination and “pay over” provisions in the Senior Subordinated Notes Indenture, and except as otherwise set forth herein, on the Effective Date all agreements, instruments, and other documents evidencing, related to or connected with any Claim or Interest (including the Second Lien Notes Intercreditor Agreement), other than Intercompany Interests, and any rights of any holder in respect thereof, shall be deemed cancelled, discharged and of no force or effect. The holders of or parties to such cancelled instruments, securities and other documentation will have no rights arising from or relating to such instruments, securities and other documentation or the cancellation thereof, except the rights provided for pursuant to this Plan. Notwithstanding anything to the contrary herein, each of the First Lien Indenture, 1.5 Lien Indenture, Second Lien Indenture and the Senior Subordinated Indenture shall continue in effect solely to the extent necessary to: (a) permit holders of Allowed First Lien Note Claims, Allowed 1.5 Lien Note Claims and Allowed Second Lien Note Claims, respectively, to receive Plan Distributions in accordance with the terms of this Plan; (b) effectuate and preserve any subordination and “pay over” provisions set forth in the Senior Subordinated Indenture; (c) permit the Reorganized Debtors, the First Lien Indenture Trustee, the 1.5 Lien Indenture Trustee and the Second Lien Indenture Trustee to make Plan Distributions on account of the Allowed First Lien Note Claims, Allowed 1.5 Lien Note Claims and Allowed Second Lien Note Claims, respectively, and deduct therefrom such compensation, fees, and expenses due thereunder or incurred in making such distributions, including by effectuating any charging liens permitted under the First Lien Indenture, 1.5 Lien Indenture and the Second Lien Indenture, respectively; and (d) permit the First Lien Indenture Trustee, the 1.5 Lien Indenture Trustee, and the Second Lien Indenture Trustee, respectively, to seek compensation and/or reimbursement of fees and expenses in accordance with the terms of this Plan. Except as provided pursuant to this Plan, upon the satisfaction of the Allowed First Lien Note Claims, Allowed 1.5 Lien Note Claims and Allowed Second Lien Note Claims, each of the First Lien Indenture Trustee, 1.5 Lien Indenture Trustee, the Second Lien Indenture Trustee and the Senior Subordinated Indenture Trustee and their respective agents, successors and assigns shall be discharged of all of their obligations associated with the First Lien Notes, 1.5 Lien Notes, Second Lien Notes and Senior Subordinated Notes, respectively. For the avoidance of doubt and notwithstanding any provision of the Plan to the contrary, nothing herein shall be deemed to impair or negatively impact any charging lien permitted under the Indentures. 7.4. Boards of Directors. (a) On the Effective Date, the initial board of directors of each of the Reorganized Debtors, Intermediate HoldCo and Top HoldCo shall consist of those individuals identified in the Plan Supplement, selected in accordance with the terms set forth in the RSA. (b) Unless reappointed pursuant to Section 7.4(a) of the Plan, the members of the board of directors of each Debtor prior to the Effective Date shall have no continuing obligations to the Reorganized Debtors in their capacities as such on and after the Effective Date and each such member shall be deemed to have resigned or shall otherwise cease to be a director of the applicable Debtor on the Effective Date. Commencing on the Effective Date, each of the directors of each of the Reorganized Debtors shall serve pursuant to the terms of the applicable organizational documents of such Reorganized Debtor and may be replaced or removed in accordance with such organizational documents. -35- 7.5. Management. (a) New Management. As of the Effective Date, the Chief Executive Officer, Chief Financial Officer, General Counsel and other management positions, if any, to be determined with the consent of the Requisite Investors, of the Reorganized Debtors shall consist of those individuals selected by and acceptable to the Requisite Investors, as set forth in the Plan Supplement. The compensation arrangement for any insider of the Debtors that shall become an officer of a Reorganized Debtor shall be in form and substance acceptable to the Requisite Investors and disclosed in the Plan Supplement to be filed with the Bankruptcy Court on or before the date of the Confirmation Hearing. (b) Management Incentive Plan. The board of directors of Top HoldCo will adopt the Management Incentive Plan as of the Effective Date. The Management Incentive Plan Securities shall dilute all other Top HoldCo Common Stock to be issued pursuant to this Plan. (c) Post-Emergence Incentive Plan. Top HoldCo and the Reorganized Debtors shall adopt the Post-Emergence Incentive Plan, effective as of the Effective Date. 7.6. Corporate Action. (a) The Reorganized Debtors shall serve on the U.S. Trustee quarterly reports of the disbursements made by each Reorganized Debtor on an entity-by-entity basis until such time as a final decree is entered closing the applicable Reorganization Case or the applicable Reorganization Case is converted or dismissed, or the Bankruptcy Court orders otherwise. Any deadline for filing Administrative Expense Claims shall not apply to U.S. Trustee Fees. (b) On the Effective Date, the Amended Certificates of Incorporation and Amended By-Laws, and any other applicable amended and restated corporate organizational documents of each of the Reorganized Debtors shall be deemed authorized in all respects. (c) On or prior to the Effective Date, the Debtors shall cause Intermediate HoldCo and Top HoldCo to be incorporated under the laws of Delaware. (d) Any action under the Plan to be taken by or required of the Debtors, the Reorganized Debtors, Intermediate HoldCo or Top HoldCo, including, without limitation, the adoption or amendment of certificates of incorporation and by-laws, the issuance of securities and instruments, the implementation of the Management Incentive Plan, or the selection of officers or directors, shall be authorized and approved in all respects, without any requirement of further action by any of the Debtors’, Reorganized Debtors’, Intermediate HoldCo’s or Top HoldCo’s stockholders, sole members, boards of directors or boards of managers, or similar body, as applicable. (e) The Debtors, the Reorganized Debtors, Intermediate HoldCo and Top HoldCo shall be authorized to execute, deliver, file, and record such documents (including the Plan Documents), contracts, instruments, releases and other agreements and take such other -36- action as may be necessary to effectuate and further evidence the terms and conditions of the Plan, without the necessity of any further Bankruptcy Court, corporate, board or shareholder approval or action. In addition, the selection of the Persons who will serve as the initial directors, officers and managers of the Reorganized Debtors, Intermediate HoldCo and Top HoldCo as of the Effective Date shall be deemed to have occurred and be effective on and after the Effective Date without any requirement of further action by the board of directors, board of managers, or stockholders of the applicable Reorganized Debtor, Intermediate HoldCo or Top HoldCo. 7.7. Registration Rights Agreement. On and as of the Effective Date, Top HoldCo shall enter into and deliver the Registration Rights Agreement to each entity that is intended to be a party thereto and such agreement shall be deemed to be valid, binding and enforceable in accordance with its terms, and each party thereto shall be bound thereby, in each case without the need for execution by any party thereto other than Top HoldCo. 7.8. Authorization, Issuance and Delivery of Top HoldCo Common Stock. (a) As soon as reasonably practicable following the Effective Date, but effective as of the Effective Date, and without any further action or consent required by any holder of New Common Stock or any other Person (i) each share of New Common Stock will automatically be exchanged for one share of Top HoldCo Common Stock and (ii) Top HoldCo, as the resulting holder of the shares of New Common Stock, will contribute such shares of New Common Stock to Intermediate HoldCo for Intermediate HoldCo Common Stock. (b) As of the Effective Date, after the automatic exchange of New Common Stock for Top HoldCo Common Stock, but subject to the terms of the Registration Rights Agreement, the Top HoldCo Common Stock shall not be registered under the Securities Act, and shall not be listed for public trading on any securities exchange. Distribution of Top HoldCo Common Stock may be made by delivery of one or more certificates representing such shares as described herein, by means of book-entry registration on the books of the transfer agent for shares of Top HoldCo Common Stock or by means of book-entry exchange through the facilities of DTC in accordance with the customary practices of DTC, as and to the extent practicable, as provided in Section 8.5 hereof. (c) In the period following the Effective Date and pending distribution of the Top HoldCo Common Stock to any holder entitled pursuant to this Plan to receive Top HoldCo Common Stock, such holder shall be entitled to exercise any voting rights and receive any dividends or other distributions payable in respect of such holder’s Top HoldCo Common Stock (including receiving any proceeds of permitted transfers of such Top HoldCo Common Stock) and to exercise all other rights in respect of the Top HoldCo Common Stock (so that such holder shall be deemed for tax purposes to be the owner of the Top HoldCo Common Stock). (d) On the Effective Date, each of Reorganized MPM, Intermediate HoldCo and Top HoldCo is authorized to issue or cause to be issued the equity securities contemplated by this Plan, including the New Common Stock, the Top HoldCo Common Stock and any equity -37- interests in Intermediate HoldCo, for distribution in accordance with the terms of this Plan and the Amended Certificate of Incorporation of Reorganized MPM, the Top HoldCo Certificate of Incorporation and the Intermediate HoldCo Certificate of Incorporation, as applicable, without the need for any further corporate, judicial or shareholder action. (e) As soon as reasonably practicable after the Effective Date and, in any event, within seventy-five (75) days of the Effective Date, Top HoldCo shall file, and shall use its reasonable best efforts to cause to be declared effective as promptly as practicable, a registration statement registering for resale all of the shares of Top HoldCo Common Stock issued to the Backstop Parties and holders of Second Lien Notes pursuant to this Plan and the Rights Offerings. (f) The receipt by holders of Second Lien Notes pursuant to the Plan of New Common Stock and the right to participate in the Rights Offerings is intended to be treated as a recapitalization pursuant to Section 368(a)(1)(E) of the Internal Revenue Code of 1986, and that the transfer of the New Common Stock to Top HoldCo in exchange for Top HoldCo Common Stock is intended to be treated as a reorganization within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986. It is intended that this Plan be treated as a plan of reorganization within the meaning of United States Treasury Regulations sections 1.368-2(g) and 1.368-3 in respect of both transactions. 7.9. New First Lien Term Loan Facility, New ABL Facility and Incremental Facility. On the Effective Date, without any requirement of further action by stockholders or directors of the Debtors, each of the Reorganized Debtors shall be authorized to enter into the New First Lien Term Loan Facility, the New ABL Facility, and, to the extent necessary, the Incremental Facility, as well as any notes, documents or agreements in connection therewith, including, without limitation, any documents required in connection with the creation or perfection of the Liens on any Collateral securing the New First Lien Term Loan Facility, New ABL Facility and the Incremental Facility. 7.10. Rights Offerings. (a) Purpose. The proceeds of the sale of the Rights Offering Stock shall be used to provide an aggregate of $600 million in capital to the Reorganized Debtors, which shall be available to fund payments required under this Plan and for ordinary course operations and general corporate purposes of the Reorganized Debtors. The Rights Offering Stock will be issued pursuant to the Section 1145 Rights Offering and the 4(a)(2) Rights Offering. (b) Rights Offerings. (i) Section 1145 Rights Offering. In accordance with the Section 1145 Rights Offering Procedures and the Backstop Commitment Agreement, each Section 1145 Eligible Holder shall receive Section 1145 Subscription Rights to acquire its respective Pro Rata Share of Section 1145 Rights Offering Stock pursuant to the terms set forth in this Plan and in the Section 1145 Rights Offering -38- Procedures. Each Section 1145 Subscription Right shall represent the right to acquire one share of Section 1145 Rights Offering Stock for the Rights Exercise Price. The total number of shares of Section 1145 Rights Offering Stock to be issued in connection with the Section 1145 Rights Offering (including shares issued on account of the Backstop Commitment) will be 7,656,521. (ii) 4(a)(2) Rights Offering. In accordance with the 4(a)(2) Rights Offering Procedures and the Backstop Commitment Agreement, each 4(a)(2) Eligible Holder shall receive 4(a)(2) Subscription Rights to acquire its respective Pro Rata Share of 4(a)(2) Rights Offering Stock pursuant to the terms set forth in this Plan and in the 4(a)(2) Rights Offering Procedures. Each 4(a)(2) Subscription Right shall represent the right to acquire one share of 4(a)(2) Rights Offering Stock for the Rights Exercise Price. The total number of shares of 4(a)(2) Rights Offering Stock to be issued in connection with the 4(a)(2) Rights Offering (including shares issued on account of the Backstop Commitment) will be 27,065,701. (c) Backstop Commitment. Subject to the terms, conditions and limitations set forth in the Backstop Commitment Agreement, and as further described below, upon exercise of its put option, Reorganized MPM will have the right to require the Backstop Parties, severally and not jointly, to purchase their applicable portion of the Unsubscribed Shares (as set forth in the Backstop Commitment Agreement). Notwithstanding anything to the contrary in the Plan or Confirmation Order, (i) the Debtors’ obligations under the Backstop Commitment Agreement shall remain unaffected and shall survive following the Effective Date in accordance with the terms thereof, (ii) any such obligations shall not be discharged under the Plan, and (iii) none of the Reorganized Debtors shall terminate any such obligations. (d) In the event that eligible holders have not subscribed to purchase Rights Offering Stock representing the entire Rights Offering Amount, upon exercise of its put option, Reorganized MPM will have the right to require to each Backstop Party to purchase up to the amount of Rights Offering Stock representing its Backstop Commitment, allocated pro rata among all Backstop Parties based upon their respective Backstop Commitments. (e) Commitment Premium. In consideration for the obligations described in Section 7.10(c) above, on the Effective Date, Reorganized MPM shall issue to the Backstop Parties the Commitment Premium Shares (without payment of any additional consideration therefor) pursuant to the terms of the Backstop Commitment Agreement. For the avoidance of doubt, the Commitment Premium shall be payable in Cash under certain circumstances set forth in Section 9.4 of the Backstop Commitment Agreement. (f) Securities Law. The Section 1145 Rights Offering Stock will be exempt from the registration requirements of the Securities Act pursuant to section 1145 of the Bankruptcy Code. The 4(a)(2) Rights Offering Stock will be exempt from the registration requirements of the Securities Act pursuant to section 4(a)(2) of the Securities Act. Only 4(a)(2) -39- Eligible Holders that are “accredited investors” (as defined in Rule 501(a) promulgated under Regulation D under the Securities Act) will receive 4(a)(2) Subscription Rights and be eligible to participate in the 4(a)(2) Rights Offering. The 4(a)(2) Rights Offering Stock will be “restricted securities” (within the meaning of Rule 144 under the Securities Act), subject to the transfer restrictions applicable thereto. 7.11. Intercompany Interests. No Intercompany Interests shall be cancelled pursuant to this Plan, and all Intercompany Interests shall be unaffected by the Plan and continue in place following the Effective Date, solely for the administrative convenience of maintaining the existing corporate structure of the Debtors and the Reorganized Debtors. 7.12. Insured Claims. (a) Notwithstanding anything to the contrary contained herein, to the extent the Debtors have insurance with respect to any Allowed General Unsecured Claim or Allowed Existing Securities Law Claim, the holder of such Allowed Claim shall (i) have an Allowed Claim in its applicable Class for any SIR Claim, (ii) be paid any amount in excess of any SIR Claim from the proceeds of insurance to the extent that the Claim is insured, and (iii) to the extent not duplicative of (i), receive the treatment provided for in this Plan to the extent the applicable insurance policy does not provide coverage with respect to any portion of the Claim. (b) Notwithstanding anything to the contrary in the Disclosure Statement, the Plan, the Plan Documents, the Plan Supplement, the Confirmation Order, any other document related to any of the foregoing or any other order of the Bankruptcy Court (including, without limitation, any other provision that purports to be preemptory or supervening or grants an injunction or release, including, but not limited to, the injunctions set forth in Article XII of the Plan): (i) on the Effective Date, the Reorganized Debtors shall assume all insurance policies issued at any time to the Debtors, their affiliates or predecessors of any of the foregoing and all agreements related thereto (collectively, the “ Insurance Contracts ”); (ii) nothing in the Disclosure Statement, the Plan, the Plan Documents, the Plan Supplement or the Confirmation Order alters, modifies or otherwise amends the terms and conditions of (or the coverage provided by) any of the Insurance Contracts, except that as of the Effective Date, the Reorganized Debtors shall become and remain liable for all of the Debtors’ obligations and liabilities thereunder regardless of whether such obligations and liabilities arise before or after the Effective Date; (iii) nothing in the Disclosure Statement, the Plan, the Plan Documents, Plan Supplement, the Confirmation Order, any prepetition or administrative claim bar date order (or notice) or claim objection order alters or modifies the duty, if any, that the insurers or third party administrators have to pay claims covered by the Insurance Contracts and their right to seek payment or reimbursement from the Debtors (or after the Effective Date, the Reorganized Debtors) or draw on any collateral or security therefor; (iv) insurers and third party administrators shall not need to nor be required to file or serve a Cure Dispute or a request, application, claim, proof of claim or motion for payment and shall not be subject to the any Bar Date or similar deadline governing Cure Amounts or Claims; and (v) the automatic stay of section 362(a) of the Bankruptcy Code and the injunctions set forth in Article XII of the Plan, if and to the extent applicable, shall be deemed lifted without further order of the Bankruptcy Court, solely to permit: (A) claimants with -40- valid claims covered by any of the Insurance Contracts (“Insured Claims”) to proceed with their claims; (B) insurers and/or third party administrators to administer, handle, defend, settle, and/or pay, in the ordinary course of business and without further order of the Bankruptcy Court, (1) all Insured Claims, and (2) all costs in relation to each of the foregoing; (C) the insurers and/or third party administrators to draw against any or all of any collateral or security provided by or on behalf of the Debtors (or the Reorganized Debtors, as applicable) at any time and to hold the proceeds thereof as security for the obligations of the Debtors (and the Reorganized Debtors, as applicable) to the applicable insurers and/or third party administrators and/or apply such proceeds to the obligations of the Debtors (and the Reorganized Debtors, as applicable) under the Insurance Contracts, in such order as the applicable insurers and/or third party administrators may determine, but solely in accordance with the terms of such Insurance Contracts; and (D) the insurers and/or third party administrators to (1) cancel any policies under the Insurance Contracts, and (2) take other actions relating thereto, to the extent permissible under applicable non-bankruptcy law, each in accordance with the terms of the Insurance Contracts. For the avoidance of doubt, no holder of an Insured Claim that did not file a proof of claim prior to the applicable Bar Date (unless otherwise subject to an exception in the order governing Bar Dates) shall be deemed to have an Allowed Claim, including a SIR Claim, against the Debtors arising from this provision. 7.13. Comprehensive Settlement of Claims and Controversies. Pursuant to Bankruptcy Rule 9019 and in consideration for the Plan Distributions and other benefits provided under this Plan, the provisions of this Plan will constitute a good faith compromise and settlement of all Claims and controversies relating to the rights that a holder of a Claim or Interest may have with respect to any Allowed Claim or Allowed Interest or any Plan Distribution on account thereof. The entry of the Confirmation Order will constitute the Bankruptcy Court’s approval, as of the Effective Date, of the compromise or settlement of all such claims or controversies and the Bankruptcy Court’s finding that all such compromises or settlements are: (a) in the best interest of the Debtors, the Estates, the Reorganized Debtors, and their respective property and stakeholders; and (b) fair, equitable and reasonable. ARTICLE VIII. DISTRIBUTIONS 8.1. Distributions. The Disbursing Agent shall make all Plan Distributions to the appropriate holders of Allowed Claims in accordance with the terms of this Plan. Distributions to holders of Allowed First Lien Note Claims, Allowed 1.5 Lien Note Claims and Allowed Second Lien Note Claims shall be made by the applicable Indenture Trustee and, with the consent of the Reorganized Debtors and the Requisite Investors, deemed completed when made to the applicable Indenture Trustee as Disbursing Agent. For the avoidance of doubt, distributions made by the Indenture Trustees the record holders of First Lien Note Claims, 1.5 Lien Note Claims and Second Lien Note Claims shall be made (as it relates to the identity of recipients) in accordance with the applicable Indenture and the policies and procedures of DTC, to the extent applicable. -41- 8.2. No Postpetition Interest on Claims. Other than as specifically provided in the Plan for DIP Claims, Cash Flow Facility Claims, First Lien Note Claims, 1.5 Lien Note Claims and General Unsecured Claims, or as otherwise specifically provided for in the Plan, Confirmation Order or other order of the Bankruptcy Court, or required by applicable bankruptcy or non-bankruptcy law, postpetition interest shall not accrue or be paid on any prepetition Claim, and no holder of a prepetition Claim shall be entitled to interest accruing on such Claim on or after the Petition Date. 8.3. Date of Distributions. Unless otherwise provided herein, any Plan Distributions and deliveries to be made hereunder shall be made on the applicable Distribution Date, provided that the Reorganized Debtors may utilize periodic distribution dates to the extent that use of a periodic distribution date does not delay payment of the Allowed Claim more than thirty (30) days. In the event that any payment or act under this Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on or as soon as reasonably practicable after the next succeeding Business Day, but shall be deemed to have been completed as of the required date. 8.4. Distribution Record Date. As of the close of business on the Distribution Record Date, the various lists of holders of Claims in each of the Classes, as maintained by the Debtors, or their agents, shall be deemed closed and there shall be no further changes in the record holders of any of the Claims after the Distribution Record Date. Neither the Debtors nor the Disbursing Agent shall have any obligation to recognize any transfer of Claims occurring after the close of business on the Distribution Record Date. Additionally, with respect to payment of any Cure Amounts or any Cure Disputes in connection with the assumption and/or assignment of the Debtors’ executory contracts and unexpired leases, neither the Debtors nor the Disbursing Agent shall have any obligation to recognize or deal with any party other than the non-Debtor party to the applicable executory contract or unexpired lease, even if such non-Debtor party has sold, assigned or otherwise transferred its Claim for a Cure Amount. 8.5. Disbursing Agent. (a) Powers of Disbursing Agent. The Disbursing Agent shall be empowered to: (i) effectuate all actions and execute all agreements, instruments, and other documents necessary to perform its duties under this Plan; (ii) make all applicable Plan Distributions or payments contemplated hereby; (iii) employ professionals to represent it with respect to its responsibilities; and (iv) exercise such other powers as may be vested in the Disbursing Agent by order of the Bankruptcy Court (including any order issued after the Effective Date), pursuant to this Plan, or as deemed by the Disbursing Agent to be necessary and proper to implement the provisions hereof. -42- (b) Expenses Incurred on or After the Effective Date. Except as otherwise ordered by the Bankruptcy Court, and subject to the written agreement of the Reorganized Debtors, with the consent of the Requisite Investors, the amount of any reasonable and documented fees and expenses incurred by the Disbursing Agent on or after the Effective Date (including, without limitation, taxes) and any reasonable compensation and expense reimbursement Claims (including, without limitation, reasonable attorney and other professional fees and expenses) of the Disbursing Agent shall be paid in Cash by the Reorganized Debtors and will not be deducted from Plan Distributions made to holders of Allowed Claims by the applicable Disbursing Agent. The foregoing fees and expenses shall be paid in the ordinary course, upon presentation of invoices to the Reorganized Debtors and the Backstop Parties and without the need for approval by the Bankruptcy Court, as set forth in Section 3.2(b) of this Plan. In the event that the applicable Disbursing Agent, the Reorganized Debtors and the Backstop Parties are unable to resolve a dispute with respect to the payment of the applicable Disbursing Agent’s fees, costs and expenses, the applicable Disbursing Agent may elect to submit any such dispute to the Bankruptcy Court for resolution. (c) Bond. The Disbursing Agent shall not be required to give any bond or surety or other security for the performance of its duties unless otherwise ordered by the Bankruptcy Court and, in the event that the Disbursing Agent is so otherwise ordered, all costs and expenses of procuring any such bond or surety shall be borne by the Reorganized Debtors. Furthermore, any such entity required to give a bond shall notify the Bankruptcy Court and the U.S. Trustee in writing before terminating any such bond that is obtained. (d) Cooperation with Disbursing Agent. The Reorganized Debtors shall use all commercially reasonable efforts to provide the Disbursing Agent with the amount of Claims and the identity and addresses of holders of Claims, in each case, as set forth in the Debtors’ and/or Reorganized Debtors’ books and records. The Reorganized Debtors will cooperate in good faith with the Disbursing Agent to comply with the reporting and withholding requirements outlined in Section 8.14 hereof. 8.6. Delivery of Distribution. Subject to the provisions contained in this Article VIII, the applicable Disbursing Agent will issue, or cause to be issued, and authenticate, as applicable, all Plan Consideration, and subject to Bankruptcy Rule 9010, make all Plan Distributions or payments to any holder of an Allowed Claim as and when required by this Plan at: (a) the address of such holder on the books and records of the Debtors or their agents; or (b) at the address in any written notice of address change delivered to the Debtors or the applicable Disbursing Agent, including any addresses included on any filed proofs of Claim or transfers of Claim filed with the Bankruptcy Court. In the event that any Plan Distribution to any holder is returned as undeliverable, no distribution or payment to such holder shall be made unless and until the applicable Disbursing Agent has been notified of the then current address of such holder, at which time or as soon as reasonably practicable thereafter such Plan Distribution shall be made to such holder without interest, provided , however , such Plan Distributions or payments shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code at the expiration of the later of one year from: (i) the Effective Date; and (ii) the first Distribution Date after such holder’s Claim is first Allowed. -43- With respect to the New Common Stock or Top HoldCo Common Stock, as applicable, to be distributed to holders of Allowed Second Lien Note Claims, all of the shares of the New Common Stock or Top HoldCo Common Stock, as applicable, shall, to the extent such shares are permitted to be held through DTC’s book-entry system, be issued in the name of such holder or its nominee(s) in accordance with DTC’s book-entry exchange procedures; provided that to the extent such shares of New Common Stock or Top HoldCo Common Stock, as applicable, are not eligible for distribution in accordance with DTC’s customary practices, Reorganized MPM or Top HoldCo, as applicable, will take all such reasonable actions as may be required to cause distributions of New Common Stock or Top HoldCo Common Stock, as applicable, to holders of Allowed Second Lien Note Claims, such distributions to be made by delivery of one or more certificates representing such shares as described herein or by means of book-entry registration on the books of the transfer agent for shares of New Common Stock or Top HoldCo Common Stock, as applicable. 8.7. Unclaimed Property. One year from the later of: (i) the Effective Date, and (ii) the date that a Claim is first Allowed, all unclaimed property or interests in property distributable hereunder on account of such Claim shall revert to the Reorganized Debtors or the successors or assigns of the Reorganized Debtors, and any claim or right of the holder of such Claim to such property or interest in property shall be discharged and forever barred. The Reorganized Debtors and the Disbursing Agent shall have no obligation to attempt to locate any holder of an Allowed Claim other than by reviewing the Debtors’ books and records, and the proofs of Claim filed against the Debtors, as reflected on the claims register maintained by the Claims Agent. 8.8. Satisfaction of Claims. Unless otherwise provided herein, any Plan Distributions and deliveries to be made on account of Allowed Claims hereunder shall be in complete settlement, satisfaction and discharge of such Allowed Claims. 8.9. Manner of Payment Under Plan. Except as specifically provided herein, at the option of the Reorganized Debtors, any Cash payment to be made hereunder may be made by a check or wire transfer or as otherwise required or provided in applicable agreements or customary practices of the Debtors or Reorganized Debtors. 8.10. Fractional Shares/De Minimis Cash Distributions. Neither the Reorganized Debtors, Top HoldCo nor the Disbursing Agent shall have any obligation to make a Plan Distribution that is less than one (1) share of New Common Stock or Top HoldCo Common Stock, as applicable, or $50.00 in Cash. No fractional shares of New Common Stock or Top HoldCo Common Stock, as applicable, shall be distributed. When any Plan Distribution would otherwise result in the issuance of a number of shares of New -44- Common Stock or Top HoldCo Common Stock, as applicable, that is not a whole number, the shares of the New Common Stock or Top HoldCo Common Stock, as applicable, subject to such Plan Distribution will be rounded to the next higher or lower whole number as follows: (i) fractions equal to or greater than 1 ⁄ 2 will be rounded to the next higher whole number; and (ii) fractions less than 1 ⁄ 2 will be rounded to the next lower whole number; provided , that the foregoing shall not apply to any rounding of the Rights Offering Stock, the distribution of which shall be governed by the applicable Rights Offering Procedures and Section 7.10 of this Plan. The total number of shares of New Common Stock or Top HoldCo Common Stock, as applicable, to be distributed on account of Allowed Claims will be adjusted as necessary to account for the rounding provided for in this Plan. No consideration will be provided in lieu of fractional shares that are rounded down. Fractional shares of New Common Stock or Top HoldCo Common Stock, as applicable, that are not distributed in accordance with this Section 8.10 shall be cancelled. 8.11. No Distribution in Excess of Amount of Allowed Claim. Notwithstanding anything to the contrary herein, no holder of an Allowed Claim shall, on account of such Allowed Claim, receive a Plan Distribution of a value in excess of the Allowed amount of such Claim plus any postpetition interest on such Claim, to the extent such interest is permitted by Section 8.2 of this Plan. 8.12. Exemption from Securities Laws. The issuance of and the distribution under the Plan of the New Common Stock and Top HoldCo Common Stock and the exchange of New Common Stock for Top HoldCo Common Stock (a) with respect to the Second Lien Notes Equity Distribution, the Section 1145 Rights Offering Stock and the Section 1145 Subscription Rights will be exempt from registration under the Securities Act and any other applicable securities laws pursuant to section 1145 of the Bankruptcy Code and (b) with respect to the 4(a)(2) Subscription Rights, the 4(a)(2) Rights Offering Stock and the Commitment Premium Shares will be exempt from registration under the Securities Act and any other applicable securities laws pursuant to Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder. Subject to any transfer restrictions contained in the Top HoldCo Certificate of Incorporation, (a) the Top HoldCo Common Stock issued in exchange for (i) Section 1145 Rights Offering Stock and (ii) New Common Stock issued pursuant to the Second Lien Notes Equity Distribution may be resold by the holders thereof without restriction, except to the extent that any such holder is deemed to be an “underwriter” as defined in section 1145(b)(1) of the Bankruptcy Code (in which case, such Top HoldCo Common Stock may be resold by the holders thereof pursuant to registration under, or applicable exemptions from registration under, the Securities Act), and (b) the Top HoldCo Common Stock issued in exchange for the 4(a)(2) Rights Offering Stock and the Commitment Premium Shares may be resold by the holders thereof pursuant to registration under, or applicable exemptions from registration under, the Securities Act. 8.13. Setoffs and Recoupments. Except as expressly provided in this Plan, each Reorganized Debtor may, pursuant to section 553 of the Bankruptcy Code set off and/or recoup against any Plan -45- Distributions to be made on account of any Allowed Claim, any and all claims, rights and Causes of Action that such Reorganized Debtor may hold against the holder of such Allowed Claim to the extent such setoff or recoupment is either (a) agreed in amount among the relevant Reorganized Debtor(s) and holder of Allowed Clam or (b) otherwise adjudicated by the Bankruptcy Court or another court of competent jurisdiction; provided , however , that neither the failure to effectuate a setoff or recoupment nor the allowance of any Claim hereunder shall constitute a waiver or release by a Reorganized Debtor or its successor of any and all claims, rights and Causes of Action that such Reorganized Debtor or its successor may possess against the applicable holder; provided , further that the Reorganized Debtors shall be deemed to waive and shall have no right of setoff or recoupment against the holders of the Second Lien Note Claims. 8.14. Withholding and Reporting Requirements. In connection with this Plan and all Plan Distributions hereunder, the Reorganized Debtors shall comply with all withholding and reporting requirements imposed by any federal, state, local or foreign taxing authority, and all Plan Distributions hereunder shall be subject to any such withholding and reporting requirements. The Reorganized Debtors shall be authorized to take any and all actions that may be necessary or appropriate to comply with such withholding and reporting requirements, including, without limitation, liquidating a portion of any Plan Distribution to generate sufficient funds to pay applicable withholding taxes or establishing any other mechanisms the Debtors, Reorganized Debtors or the Disbursing Agent believe are reasonable and appropriate, including requiring a holder of a Claim to submit appropriate tax and withholding certifications. Notwithstanding any other provision of this Plan: (a) each holder of an Allowed Claim that is to receive a Plan Distribution under this Plan shall have sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed by any governmental unit, including income, withholding and other tax obligations on account of such distribution; and (b) no Plan Distributions shall be required to be made to or on behalf of such holder pursuant to this Plan unless and until such holder has made arrangements satisfactory to the Reorganized Debtors for the payment and satisfaction of such tax obligations or has, to the Reorganized Debtors’ satisfaction, established an exemption therefrom. 8.15. Hart-Scott Rodino Antitrust Improvements Act. Any New Common Stock or Top HoldCo Common Stock, as applicable, to be distributed under the Plan to an entity required to file a Premerger Notification and Report Form under the Competition Laws shall not be distributed until the notification and waiting periods applicable under such Competition Laws to such entity shall have expired or been terminated or any applicable authorizations, approvals, clearances or consents have been obtained. In the event any applicable notification or filing is made and any authorization, approval, clearance, consent or expiration of any applicable waiting period is not obtained, their agent shall, in their sole discretion, be entitled to sell such entity’s shares of New Common Stock or Top HoldCo Common Stock, as applicable, that were to be distributed under the Plan to such entity, and thereafter shall distribute the proceeds of the sale to such entity. -46- ARTICLE IX. PROCEDURES FOR RESOLVING CLAIMS 9.1. Objections to Claims. Other than with respect to Fee Claims, only the Reorganized Debtors shall be entitled to object to Claims after the Effective Date. Any objections to those Claims (other than Administrative Expense Claims), shall be served and filed on or before the later of: (a) the date that is 180 days after the Effective Date; and (b) such other date as may be fixed by the Bankruptcy Court, whether fixed before or after the date specified in clause (a) hereof. Any Claims filed after the Bar Date or Administrative Bar Date, as applicable, shall be deemed disallowed and expunged in their entirety without further order of the Bankruptcy Court or any action being required on the part of the Debtors or the Reorganized Debtors, unless the Person wishing to file such untimely Claim has received the Bankruptcy Court’s authorization to do so. Notwithstanding any authority to the contrary, an objection to a Claim shall be deemed properly served on the claimant if the objecting party effects service in any of the following manners: (a) in accordance with Federal Rule of Civil Procedure 4, as modified and made applicable by Bankruptcy Rule 7004; (b) by first class mail, postage prepaid, on the signatory on the proof of claim as well as all other representatives identified in the proof of claim or any attachment thereto; or (c) if counsel has agreed to or is otherwise deemed to accept service, by first class mail, postage prepaid, on any counsel that has appeared on the claimant’s behalf in the Reorganization Cases (so long as such appearance has not been subsequently withdrawn). From and after the Effective Date, the Reorganized Debtors may settle or compromise any Disputed Claim without approval of the Bankruptcy Court. 9.2. Amendment to Claims. From and after the Effective Date, no proof of Claim may be amended to increase or assert additional claims not reflected in a previously timely filed Claim (or Claim scheduled on the applicable Debtor’s Schedules, unless superseded by a filed Claim), and any such Claim shall be deemed disallowed and expunged in its entirety without further order of the Bankruptcy Court or any action being required on the part of the Debtors or the Reorganized Debtors unless the claimant has obtained the Bankruptcy Court’s prior approval to file such amended or increased Claim. 9.3. Disputed Claims. Disputed Claims shall not be entitled to any Plan Distributions unless and until they become Allowed Claims. 9.4. Estimation of Claims. The Debtors and/or Reorganized Debtors may request that the Bankruptcy Court enter an Estimation Order with respect to any Claim, pursuant to section 502(c) of the Bankruptcy Code, for purposes of determining the Allowed amount of such Claim regardless of whether any Person has previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction to estimate any -47- Claim at any time (including during the pendency of any appeal with respect to the allowance or disallowance of such Claims). In the event that the Bankruptcy Court estimates any contingent or unliquidated Claim for allowance purposes, that estimated amount will constitute either the Allowed amount of such Claim or a maximum limitation on such Claim, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on such Claim, the objecting party may elect to pursue any supplemental proceedings to object to any ultimate allowance of such Claim. All of the objection, estimation, settlement, and resolution procedures set forth in the Plan are cumulative and not exclusive of one another. Claims may be estimated and subsequently compromised, settled, resolved or withdrawn by any mechanism approved by the Bankruptcy Court. 9.5. Expenses Incurred On or After the Effective Date. Except as otherwise ordered by the Bankruptcy Court, and subject to the written agreement of the Reorganized Debtors, the amount of any reasonable fees and expenses incurred by any Professional Person or the Claims Agent on or after the Effective Date in connection with implementation of this Plan, including without limitation, reconciliation of, objection to, and settlement of Claims, shall be paid in Cash by the Reorganized Debtors. ARTICLE X. EXECUTORY CONTRACTS AND UNEXPIRED LEASES 10.1. General Treatment. As of and subject to the occurrence of the Effective Date and the payment of any applicable Cure Amount, all executory contracts and unexpired leases of the Debtors shall be deemed assumed, except that: (a) any executory contracts and unexpired leases that previously have been assumed or rejected pursuant to a Final Order of the Bankruptcy Court shall be treated as provided in such Final Order; (b) any executory contracts and unexpired leases listed on the Schedule of Rejected Contracts and Leases, shall be deemed rejected as of the Effective Date; and (c) all executory contracts and unexpired leases that are the subject of a separate motion to assume or reject under section 365 of the Bankruptcy Code pending on the Effective Date shall be treated as provided for in the Final Order resolving such motion. Subject to the occurrence of the Effective Date, entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of the assumptions and rejections described in this Section 10.1 pursuant to sections 365(a) and 1123 of the Bankruptcy Code. Each executory contract and unexpired lease assumed pursuant to this Section 10.1 shall revest in and be fully enforceable by the applicable Reorganized Debtor in accordance with its terms, except as modified by the provisions of the Plan, or any order of the Bankruptcy Court authorizing and providing for its assumption, or applicable federal law. 10.2. Claims Based on Rejection of Executory Contracts or Unexpired Leases. Except as otherwise explicitly set forth in the Plan, all Claims arising from the rejection of executory contracts or unexpired leases, if evidenced by a timely filed proof of claim, will be treated as General Unsecured Claims. Upon receipt of the Plan Distribution -48- provided in Section 5.7 of the Plan, all such Claims shall be discharged as of the Effective Date, and shall not be enforceable against the Debtors, the Estates, the Reorganized Debtors or their respective properties or interests in property. In the event that the rejection of an executory contract or unexpired lease by any of the Debtors pursuant to the Plan results in damages to the other party or parties to such contract or lease, a Claim for such damages, if not evidenced by a timely filed proof of claim, shall be forever barred and shall not be enforceable against the Debtors or the Reorganized Debtors, or their respective properties or interests in property as agents, successors or assigns, unless a proof of claim is filed with the Bankruptcy Court and served upon counsel for the Debtors and the Reorganized Debtors on or before the date that is thirty (30) days after the effective date of such rejection (which may be the Effective Date, the date on which the Debtors reject the applicable contract or lease as provided in Section 10.3(c) below, or pursuant to an order of the Bankruptcy Court). 10.3. Cure of Defaults for Assumed Executory Contracts and Unexpired Leases. (a) Except to the extent that less favorable treatment has been agreed to by the non-Debtor party or parties to each such executory contract or unexpired lease to be assumed pursuant to the Plan, any monetary defaults arising under such executory contract or unexpired lease shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the appropriate amount (the “ Cure Amount ”) in full in Cash on the later of thirty (30) days after: (i) the Effective Date; or (ii) the date on which any Cure Dispute relating to such Cure Amount has been resolved (either consensually or through judicial decision). (b) No later than ten (10) calendar days prior to the commencement of the Confirmation Hearing, the Debtors shall file a schedule (the “ Cure Schedule ”) setting forth the Cure Amount, if any, for each executory contract and unexpired lease to be assumed pursuant to Section 10.1 of the Plan, and serve such Cure Schedule on each applicable counterparty. Any party that fails to object to the applicable Cure Amount listed on the Cure Schedule within fifteen (15) calendar days of the filing thereof, shall be forever barred, estopped and enjoined from disputing the Cure Amount set forth on the Cure Schedule (including a Cure Amount of $0.00) and/or from asserting any Claim against the applicable Debtor or Reorganized Debtor arising under section 365(b)(1) of the Bankruptcy Code except as set forth on the Cure Schedule. (c) In the event of a dispute (each, a “Cure Dispute”) regarding: (i) the Cure Amount; (ii) the ability of the applicable Reorganized Debtor to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under the contract or lease to be assumed; or (iii) any other matter pertaining to the proposed assumption, the cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order resolving such Cure Dispute and approving the assumption. To the extent a Cure Dispute relates solely to the Cure Amount, the applicable Debtor may assume and/or assume and assign the applicable contract or lease prior to the resolution of the Cure Dispute provided that such Debtor reserves Cash in an amount sufficient to pay the full amount asserted as the required cure payment by the non-Debtor party to such contract or lease (or such smaller amount as may be fixed or estimated by the Bankruptcy Court). To the extent the Cure Dispute is resolved or determined against the applicable Debtor or Reorganized Debtor, as applicable, such Debtor or Reorganized Debtor, as applicable, may reject the applicable executory contract or unexpired lease after such determination, and the counterparty may thereafter file a proof of claim in the manner set forth in Section 10.2 hereof. -49- 10.4. Compensation and Benefit Programs. (a) Except as otherwise expressly provided hereunder, in a prior order of the Bankruptcy Court or to the extent subject to a motion pending before the Bankruptcy Court as of the Effective Date, with the consent of the Requisite Investors, all employment and severance policies, and all compensation and benefit plans, policies, and programs of the Debtors applicable to their respective employees, retirees and non-employee directors including, without limitation, all savings plans, unfunded retirement plans, healthcare plans, disability plans, severance benefit plans, incentive plans, and life, accidental death and dismemberment insurance plans are treated as executory contracts under the Plan and on the Effective Date will be assumed pursuant to the provisions of sections 365 and 1123 of the Bankruptcy Code. Each of the Reorganized Debtors may, prior to the Effective Date and with the consent of the Requisite Investors, enter into employment agreements with employees that become effective on or prior to the Effective Date and survive consummation of this Plan. Any such agreements (or a summary of the material terms thereof) shall be in form and substance acceptable to the Requisite Investors and be included in the Plan Supplement or otherwise filed with the Bankruptcy Court on or before the date of the Confirmation Hearing. For the avoidance of doubt, all workers’ compensation policies issued at any time to the Debtors, their affiliates or predecessors of any of the foregoing and all agreements related thereto shall be treated in accordance with Section 7.12 of the Plan. (b) All collective bargaining agreements to which one or more of the Debtors is a party shall be treated as executory contracts under this Plan and on the Effective Date will be assumed by the applicable Reorganized Debtors pursuant to the provisions of section 365 of the Bankruptcy Code. 10.5. Amended Shared Services Agreement. The Shared Services Agreement, as amended, shall be assumed pursuant to this Plan, with such assumption being deemed effective upon and contingent on the occurrence of the Effective Date. On the Effective Date, Reorganized MPM and MSC shall enter into the Amended Shared Services Agreement. 10.6. Existing Management Agreement. The Existing Management Agreement shall be terminated as of the Petition Date or as soon thereafter as practicable by mutual agreement of the parties thereto. Any Claims thereunder shall be waived and no payments or distributions shall be made on account of such Claims. 10.7. Warranty Obligations. All obligations of a Debtor to its customers pursuant to ordinary course written warranty agreements with such customers shall be expressly assumed by the applicable Reorganized Debtor as of the Effective Date, regardless of whether such customer filed a proof of claim form against the Debtors by the relevant Bar Date. -50- ARTICLE XI. CONDITIONS PRECEDENT TO CONSUMMATION OF THE PLAN 11.1. Conditions Precedent to the Effective Date. The occurrence of the Effective Date is subject to: (a) the RSA having not been terminated and remaining in full force and effect and the RSA Order, in form and substance acceptable to the Debtors and the Requisite Investors, having become a Final Order and remaining in full force and effect; (b) the Backstop Commitment Agreement having not been terminated and remaining in full force and effect and the Backstop Commitment Agreement Order, in form and substance acceptable to the Debtors and the Requisite Investors, having become a Final Order; (c) the Disclosure Statement Order, in form and substance acceptable to the Debtors and the Requisite Investors, having been entered by the Bankruptcy Court and remaining in full force and effect; (d) the Confirmation Order, in form and substance acceptable to the Debtors and the Requisite Investors, having become a Final Order and remaining in full force and effect; (e) the Allowed amount of the 1.5 Lien Note Claims having been determined by Final Order of the Bankruptcy Court and any settlement with respect to the Allowed amount or treatment of the 1.5 Lien Note Claims pursuant to the Plan being satisfactory in form and substance to the Debtors and the Requisite Investors; (f) the Allowed amount of the First Lien Note Claims having been determined by Final Order of the Bankruptcy Court and any settlement with respect to the Allowed amount or treatment of the First Lien Note Claims pursuant to the Plan being satisfactory in form and substance to the Debtors and the Requisite Investors; (g) the Plan Documents, including the Plan Supplement, in form and substance satisfactory to the Debtors and the Requisite Investors, being executed and delivered, and any conditions (other than the occurrence of the Effective Date or certification by a Debtor that the Effective Date has occurred) contained therein, including the conditions precedent set forth in the Backstop Commitment Agreement, having been satisfied or waived in accordance therewith; (h) an Event of Default under the DIP ABL Facility or DIP Term Loan Facility (that has not otherwise been cured or waived in accordance with the terms thereof) having not occurred; (i) an acceleration of the obligations or termination of commitments under the DIP ABL Facility and DIP Term Loan Facility having not occurred; -51- (j) a chapter 11 trustee, a responsible officer, or an examiner with enlarged powers relating to the operation of the businesses of any of the Debtors (powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code) not having been appointed in any of the Debtors’ chapter 11 cases; (k) all fees and expenses payable or owed by the Debtors under the RSA and Backstop Commitment Agreement having been paid; (l) all material governmental, regulatory and third party approvals, authorizations, certifications, rulings, no-action letters, opinions, waivers and/or consents required in connection with the Plan, if any, having been obtained and remaining in full force and effect, and there existing no claim, action, suit, investigation, litigation or proceeding, pending or threatened in any court or before any arbitrator or governmental instrumentality, which would prohibit the consummation of the Plan; (m) the New First Lien Term Loan Agreement (to the extent the Replacement First Lien Notes are not issued), the Incremental Facility (to the extent the Replacement 1.5 Lien Notes are not issued) and the New ABL Credit Agreement and all related documents provided for therein or contemplated thereby, in each case in form and substance satisfactory to the Debtors and the Requisite Investors, having been duly and validly executed and delivered by all parties thereto and consummated, and being in full force and effect (with all conditions precedent to such agreement having occurred or otherwise been satisfied or waived); (n) the Amended Certificates of Incorporation, in form and substance satisfactory to the Debtors and the Requisite Investors, shall have been filed with the applicable authorities of the relevant jurisdictions of incorporation and shall have become effective in accordance with such jurisdictions’ corporation laws; (o) the global certificate representing the Top HoldCo Common Stock having been delivered to DTC; (p) the transactions that are contemplated by the Backstop Commitment Agreement and Rights Offerings having been consummated; and (q) the Shared Services Agreement having been assumed pursuant to this Plan and the Amended Shared Services Agreement, in form and substance satisfactory to the Debtors and the Requisite Investors, having been duly and validly executed and delivered by all parties thereto and consummated, and being in full force and effect (with all conditions precedent to such agreement having occurred or otherwise been satisfied or waived); and (r) the Debtors’ good faith estimate (in consultation with the Backstop Parties and the Creditors’ Committee) of the ultimate amount of interest payable pursuant to Section 5.7(a) of the Plan to holders of General Unsecured Claims which will ultimately be Allowed equaling no more than $400,000. -52- 11.2. Satisfaction and Waiver of Conditions Precedent. Except as otherwise provided herein, any actions taken on the Effective Date shall be deemed to have occurred simultaneously and no such action shall be deemed to have occurred prior to the taking of any other such action. Any of the conditions set forth in Sections 11.1, other than 11.1(p) may be waived in whole or part by the Debtors, with the consent of the Requisite Investors, without notice and a hearing, and the Debtors’ benefits under the “mootness doctrine” shall be unaffected by any provision hereof. The failure to satisfy or waive any condition may be asserted by the Debtors regardless of the circumstances giving rise to the failure of such condition to be satisfied (including, without limitation, any act, action, failure to act or inaction by the Debtors). The failure of the Debtors to assert the non-satisfaction of any such conditions shall not be deemed a waiver of any other rights hereunder, and each such right shall be deemed an ongoing right that may be asserted or waived (as set forth herein) at any time or from time to time. 11.3. Effect of Failure of Conditions. If all of the conditions to effectiveness have not been satisfied or duly waived (as provided in Section 11.2 above) and the Effective Date has not occurred on or before the first Business Day that is more than 60 days after the Confirmation Date, or by such later date as set forth by the Debtors in a notice filed with the Bankruptcy Court prior to the expiration of such period, then the Debtors, with the consent of the Requisite Investors, may file a motion to vacate the Confirmation Order. Notwithstanding the filing of such a motion, the Confirmation Order shall not be vacated if all of the conditions to consummation set forth in Section 11.1 hereof are either satisfied or duly waived before the Bankruptcy Court enters an order granting the relief requested in such motion. If the Confirmation Order is vacated pursuant to this Section 11.3, this Plan shall be null and void in all respects, the Confirmation Order shall be of no further force or effect, no Plan Distributions shall be made, the Debtors and all holders of Claims and Interests shall be restored to the status quo ante as of the day immediately preceding the Confirmation Date as though the Confirmation Date had never occurred, and upon such occurrence, nothing contained in this Plan shall: (a) constitute a waiver or release of any Claims against or Interests in the Debtors; (b) prejudice in any manner the rights of the holder of any Claim against or Interest in the Debtors; or (c) constitute an admission, acknowledgment, offer or undertaking by any Debtor or any other Person with respect to any matter set forth in the Plan. ARTICLE XII. EFFECT OF CONFIRMATION 12.1. Binding Effect. Except as otherwise provided in section 1141(d)(3) of the Bankruptcy Code and subject to the occurrence of the Effective Date, on and after the Confirmation Date, the provisions of this Plan shall bind any holder of a Claim against, or Interest in, the Debtors and inure to the benefit of and be binding on such holder’s respective successors and assigns, whether or not the Claim or Interest of such holder is impaired under this Plan and whether or not such holder has accepted this Plan. -53- 12.2. Discharge of Claims Against and Interests in the Debtors. Upon the Effective Date and in consideration of the Plan Distributions, except as otherwise provided herein or in the Confirmation Order, each Person that is a holder (as well as any trustees and agents on behalf of such Person) of a Claim or Interest shall be deemed to have forever waived, released, and discharged the Debtors, to the fullest extent permitted by section 1141 of the Bankruptcy Code, of and from any and all Claims, Interests, rights, and liabilities that arose prior to the Effective Date. Except as otherwise provided herein, upon the Effective Date, all such holders of Claims and Interests shall be forever precluded and enjoined, pursuant to sections 105, 524, 1141 of the Bankruptcy Code, from prosecuting or asserting any such discharged Claim against or terminated Interest in any Debtor or any Reorganized Debtor. 12.3. Term of Pre-Confirmation Injunctions or Stays. Unless otherwise provided herein, all injunctions or stays arising prior to the Confirmation Date in accordance with sections 105 or 362 of the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date, shall remain in full force and effect until the Effective Date. 12.4. Injunction. (a) Except as otherwise provided in this Plan or the Confirmation Order, as of the Confirmation Date, but subject to the occurrence of the Effective Date, all Persons who have held, hold or may hold Claims against or Interests in the Debtors or the Estates are, with respect to any such Claims or Interests, permanently enjoined after the Confirmation Date from: (i) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind (including, without limitation, any proceeding in a judicial, arbitral, administrative or other forum) against or affecting the Debtors, the Reorganized Debtors, the Estates or any of their property, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Persons or any property of any such transferee or successor; (ii) enforcing, levying, attaching (including, without limitation, any pre-judgment attachment), collecting or otherwise recovering by any manner or means, whether directly or indirectly, any judgment, award, decree or order against the Debtors, the Reorganized Debtors, or the Estates or any of their property, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Persons, or any property of any such transferee or successor; (iii) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance of any kind against the Debtors, the Reorganized Debtors, or the Estates or any of their property, or any direct or indirect transferee of any property of, or successor in interest to, any of the foregoing Persons (iv) acting or proceeding in any manner, in any place whatsoever, that does not conform to or comply with the provisions of this Plan to the full extent permitted by applicable law; and (v) commencing or continuing, in any manner or in any place, any action that does not comply with or is inconsistent with the provisions of this Plan; provided , however , that nothing contained herein shall preclude such Persons from exercising their rights, or obtaining benefits, pursuant to and consistent with the terms of this Plan. (b) By accepting Plan Distributions, each holder of an Allowed Claim or Interest will be deemed to have specifically consented to the Injunctions set forth in this Section. -54- 12.5. Releases. (a) Releases by the Debtors. For good and valuable consideration, the adequacy of which is hereby confirmed, and except as otherwise provided in this Plan or the Confirmation Order, as of the Effective Date, the Debtors and Reorganized Debtors, in their individual capacities and as debtor in possession, shall be deemed to forever release, waive and discharge all claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action and liabilities (other than the rights of the Debtors or Reorganized Debtors to enforce this Plan and the contracts, instruments, releases, indentures and other agreements or documents delivered thereunder) against the Released Parties, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Reorganized Debtors, the parties released pursuant to this Section 12.5, the Reorganization Cases, or this Plan or the Disclosure Statement, and that could have been asserted by or on behalf of the Debtors or their Estates or Reorganized Debtors, whether directly, indirectly, derivatively or in any representative or any other capacity, other than claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action and liabilities arising out of or relating to any act or omission of a Released Party or a former officer or director of the Debtors that constitutes gross negligence, fraud, willful misconduct or breach of fiduciary duty (if any). (b) Releases by Holders of Claims and Interests. Except as otherwise provided in this Plan or the Confirmation Order, on the Effective Date: (i) each of the Released Parties; (ii) each holder of a Claim or Interest entitled to vote on this Plan that did not “opt out” of the releases provided in Section 12.5 of the Plan in a timely submitted Ballot; and (iii) to the fullest extent permissible under applicable law, as such law may be extended or interpreted subsequent to the Effective Date, all holders of Claims and Interests, in consideration for the obligations of the Debtors and Reorganized Debtors under this Plan, the Plan Consideration and other contracts, instruments, releases, agreements or documents executed and delivered in connection with this Plan, and each entity (other than the Debtors) that has held, holds or may hold a Claim or Interest, as applicable, will be deemed to have consented to this Plan for all purposes and the restructuring embodied herein and deemed to forever release, waive and discharge all claims, demands, debts, rights, Causes of Action or liabilities (other than the right to enforce the obligations of any party under this Plan and the contracts, instruments, releases, agreements and documents delivered under or in connection with this Plan) against the Released Parties, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act or omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Reorganized Debtors, the Reorganization Cases, or this Plan or the Disclosure Statement. (c) Notwithstanding anything to the contrary contained herein: (i) except to the extent permissible under applicable law, as such law may be extended or interpreted -55- subsequent to the Effective Date, the releases provided for in this Section 12.5 of the Plan shall not release any non-Debtor entity from any liability arising under (x) the Internal Revenue Code or any state, city or municipal tax code, or (y) any criminal laws of the United States or any state, city or municipality; and (ii) the releases set forth in this Section 12.6 shall not release any (x) any claims against any Person to the extent such Person asserts a crossclaim, counterclaim and/or claim for setoff which seeks affirmative relief against a Debtor or any of its officers, directors, or representatives and (y) claims against any Person arising from or relating to such Person’s gross negligence, fraud, willful misconduct or breach of fiduciary duty (if any), each as determined by a Final Order of the Bankruptcy Court. (d) As to the United States of America, its agencies, departments, or agents (collectively, the “United States ”), nothing in the Plan or Confirmation Order shall limit or expand the scope of discharge, release or injunction to which the Debtors or Reorganized Debtors are entitled under the Bankruptcy Code, if any. The discharge, release and injunction provisions contained in the Plan and Confirmation Order are not intended and shall not be construed to bar the United States from, subsequent to the Confirmation Order, pursuing any police or regulatory action, except to the extent those discharge and injunctive provisions bar a Governmental Unit (as defined by section 101(27) of the Bankruptcy Code) from pursuing Claims. (e) Accordingly, notwithstanding anything contained in the Plan or Confirmation Order to the contrary, nothing in the Plan or Confirmation Order shall discharge, release, impair or otherwise preclude: (1) any liability to the United States that is not a “claim” within the meaning of section 101(5) of the Bankruptcy Code; (2) any Claim of the United States arising on or after the Confirmation Date; (3) any valid right of setoff or recoupment of the United States against any of the Debtors; or (4) any liability of the Debtors or Reorganized Debtors under environmental law to any Governmental Unit (as defined by section 101(27) of the Bankruptcy Code) as the owner or operator of property that such entity owns or operates after the Confirmation Date, except those obligations to reimburse costs expended or paid by a Governmental Unit before the Petition Date or to pay penalties owing to a Governmental Unit for violations of environmental laws or regulations that occurred before the Petition Date. Nor shall anything in the Plan or Confirmation Order: (i) enjoin or otherwise bar the United States or any Governmental Unit from asserting or enforcing, outside the Bankruptcy Court, any liability described in the preceding sentence; or (ii) divest any court of jurisdiction to determine whether any liabilities asserted by the United States or any Governmental Unit are discharged or otherwise barred by the Plan, Confirmation Order, or the Bankruptcy Code. (f) Moreover, nothing in the Plan or Confirmation Order shall release or exculpate any non-debtor, including any Released Parties, from any liability to the United States, including but not limited to any liabilities arising under the Internal Revenue Code, the environmental laws, or the criminal laws against the Released Parties, nor shall anything in the Plan or Confirmation Order enjoin the United States from bringing any claim, suit, action or other proceeding against the Released Parties for any liability whatsoever; provided, however, that the foregoing sentence shall not limit the scope of discharge granted to the Debtors under sections 524 and 1141 of the Bankruptcy Code. -56- 12.6. Exculpation and Limitation of Liability. To the extent permissible under applicable law, none of the Released Parties shall have or incur any liability to any holder of any Claim or Interest or any other Person for any act or omission in connection with, or arising out of the Debtors’ restructuring, including without limitation, the negotiation, implementation and execution of this Plan, the Reorganization Cases, the Disclosure Statement, the solicitation of votes for and the pursuit of confirmation of this Plan, the consummation of this Plan, or the administration of this Plan or the property to be distributed under this Plan, including, without limitation, all documents ancillary thereto, all decisions, actions, inactions and alleged negligence or misconduct relating thereto and all activities leading to the promulgation and confirmation of this Plan except for gross negligence or willful misconduct, each as determined by a Final Order of the Bankruptcy Court. 12.7. Injunction Related to Releases and Exculpation. The Confirmation Order shall permanently enjoin the commencement or prosecution by any Person or entity, whether directly, derivatively or otherwise, of any claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action or liabilities released pursuant to this Plan, including but not limited to the claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action or liabilities released in Sections 12.5 and 12.6 of this Plan. 12.8. Retention of Causes of Action/Reservation of Rights. Subject to Section 12.5 of this Plan and except as expressly set forth herein (including Section 5.7(c) herein), nothing contained in this Plan or the Confirmation Order shall be deemed to be a waiver or relinquishment of any rights, claims or Causes of Action, rights of setoff, or other legal or equitable defenses that the Debtors had immediately prior to the Effective Date on behalf of the Estates or of themselves in accordance with any provision of the Bankruptcy Code or any applicable non-bankruptcy law. The Reorganized Debtors shall have, retain, reserve, and be entitled to assert all such claims, Causes of Action, rights of setoff, or other legal or equitable defenses as fully as if the Reorganization Cases had not been commenced, and all of the Debtors’ legal and/or equitable rights respecting any Claim left unimpaired, as set forth in Section 4.2 herein, may be asserted after the Confirmation Date to the same extent as if the Reorganization Cases had not been commenced. 12.9. Indemnification Obligations. Notwithstanding anything to the contrary contained herein, including Section 10.1 of the Plan, subject to the occurrence of the Effective Date, the obligations of the Debtors to indemnify, defend, reimburse, exculpate, advance fees and expenses to, or limit the liability of directors or officers who were directors or officers of any of the Debtors at any time after the Petition Date, against any Causes of Action, remain unaffected thereby after the Effective Date and are not discharged. On and after the Effective Date, none of the Reorganized Debtors shall terminate or otherwise reduce the coverage under any directors’ and officers’ insurance policies in effect on the Petition Date, and all directors and officers of the Debtors at any time shall be entitled to the full benefits of any such policy for the full term of such policy, regardless of whether such directors and/or officers remain in such positions after the Effective Date. -57- ARTICLE XIII. RETENTION OF JURISDICTION Pursuant to sections 105(c) and 1142 of the Bankruptcy Code and notwithstanding entry of the Confirmation Order and the occurrence of the Effective Date, on and after the Effective Date, the Bankruptcy Court shall retain exclusive jurisdiction, pursuant to 28 U.S.C. §§ 1334 and 157, over all matters arising in, arising under, or related to the Reorganization Cases for, among other things, the following purposes: (a) To hear and determine applications for the assumption or rejection of executory contracts or unexpired leases and the Cure Disputes resulting therefrom; (b) To determine any motion, adversary proceeding, application, contested matter, and other litigated matter pending on or commenced after the Confirmation Date; (c) To hear and resolve any disputes arising from or relating to (i) any orders of the Bankruptcy Court granting relief under Bankruptcy Rule 2004, or (ii) any protective orders entered by the Bankruptcy Court in connection with the foregoing; (d) To ensure that Plan Distributions to holders of Allowed Claims are accomplished as provided herein; (e) To consider Claims or the allowance, classification, priority, compromise, estimation, or payment of any Claim, including any Administrative Expense Claim; (f) To enter, implement, or enforce such orders as may be appropriate in the event the Confirmation Order is for any reason stayed, reversed, revoked, modified, or vacated; (g) To issue and enforce injunctions, enter and implement other orders, and take such other actions as may be necessary or appropriate to restrain interference by any Person with the consummation, implementation, or enforcement of this Plan, the Confirmation Order, or any other order of the Bankruptcy Court; (h) To hear and determine any application to modify this Plan in accordance with section 1127 of the Bankruptcy Code, to remedy any defect or omission or reconcile any inconsistency in this Plan, the Disclosure Statement, or any order of the Bankruptcy Court, including the Confirmation Order, in such a manner as may be necessary to carry out the purposes and effects thereof; (i) To hear and determine all Fee Claims; (j) To resolve disputes concerning any reserves with respect to Disputed Claims or the administration thereof; -58- (k) To hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of this Plan, the Confirmation Order, any transactions or payments contemplated hereby, or any agreement, instrument, or other document governing or relating to any of the foregoing; (l) To take any action and issue such orders, including any such action or orders as may be necessary after occurrence of the Effective Date and/or consummation of the Plan, as may be necessary to construe, enforce, implement, execute, and consummate this Plan, including any release or injunction provisions set forth herein, or to maintain the integrity of this Plan following consummation; (m) To determine such other matters and for such other purposes as may be provided in the Confirmation Order; (n) To hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code; (o) To hear and determine any other matters related hereto and not inconsistent with the Bankruptcy Code and title 28 of the United States Code; (p) To resolve any disputes concerning whether a Person had sufficient notice of the Reorganization Cases, the Disclosure Statement Hearing, the Confirmation Hearing, any applicable Bar Date, or the deadline for responding or objecting to a Cure Amount, for the purpose of determining whether a Claim or Interest is discharged hereunder, or for any other purpose; (q) To recover all assets of the Debtors and property of the Estates, wherever located; and (r) To enter a final decree closing each of the Reorganization Cases. As of the Effective Date, notwithstanding anything in this Article XIII to the contrary, the Exit Facilities shall be governed by the respective jurisdictional provisions therein. ARTICLE XIV. MISCELLANEOUS PROVISIONS 14.1. Exemption from Certain Transfer Taxes. To the fullest extent permitted by applicable law, all sale transactions consummated by the Debtors and approved by the Bankruptcy Court on and after the Confirmation Date through and including the Effective Date, including any transfers effectuated under this Plan, the sale by the Debtors of any owned property pursuant to section 363(b) of the Bankruptcy Code, and any assumption, assignment, and/or sale by the Debtors of their interests in unexpired leases of non-residential real property or executory contracts pursuant to section 365(a) of the Bankruptcy Code, shall constitute a “transfer under a plan” within the purview of section 1146 of the Bankruptcy Code, and shall not be subject to any stamp, real estate transfer, mortgage recording, or other similar tax. -59- 14.2. Retiree Benefits. On and after the Effective Date, pursuant to section 1129(a)(13) of the Bankruptcy Code, the Reorganized Debtors shall continue to pay all retiree benefits (within the meaning of, and subject to the limitations of, section 1114 of the Bankruptcy Code), if any, at the level established in accordance with section 1114 of the Bankruptcy Code, at any time prior to the Confirmation Date, for the duration of the period for which either Debtor had obligated itself to provide such benefits. Nothing herein shall: (a) restrict the Debtors’ or the Reorganized Debtors’ right to modify the terms and conditions of the retiree benefits, if any, as otherwise permitted pursuant to the terms of the applicable plans, non-bankruptcy law, or section 1114(m) of the Bankruptcy Code; or (b) be construed as an admission that any such retiree benefits are owed by the Debtors. 14.3. Defined Benefit Pension Plan. (a) The Pension Plan shall not be modified (absent consent) or affected by any provision of the Plan and shall be continued by Reorganized MPM after the Effective Date in accordance with its terms. Nothing herein or in the Confirmation Order shall relieve or discharge any requirement that MPM or Reorganized MPM (i) satisfy the minimum funding standards pursuant to 26 U.S.C. §§ 412, 430, and 29 U.S.C. § 1082, 1083, (ii) is liable for the payment of PBGC premiums in accordance with 29 U.S.C. §§ 1306 and 1307 subject to any and all applicable rights and defenses of MPM, and (iii) administer the Pension Plan in accordance with the provisions of ERISA and the Internal Revenue Code. In the event that the Pension Plan terminates after the Effective Date, Reorganized MPM and each of its controlled group members will be responsible, subject to any and all applicable rights and defenses, for the liabilities imposed by Title IV of ERISA to the extent set forth therein. (b) Notwithstanding any provision of the Plan or the Confirmation Order to the contrary, including but not limited to the releases set forth in Article XII of the Plan, neither the Plan nor the Confirmation Order will release, discharge or exculpate the Debtors, the Reorganized Debtors, or any Person, in any capacity, from any liability or responsibility with respect to the Pension Plan, subject to any and all applicable rights and defenses of such parties, under ERISA or the Internal Revenue Code. Subsequent to the Effective Date, the PBGC and the Pension Plan shall not be enjoined or precluded from enforcing such liability or responsibility by any of the provisions of the Plan or the Confirmation Order. 14.4. Dissolution of Creditors’ Committee. The Creditors’ Committee shall be automatically dissolved on the Effective Date and, on the Effective Date, each member of the Creditors’ Committee (including each officer, director, employee, agent, consultant or representative thereof) and each Professional Person retained by the Creditors’ Committee shall be released and discharged from all rights, duties, responsibilities and obligations arising from, or related to, the Debtors, their membership on the Creditors’ Committee, the Plan or the Reorganization Cases, except with respect to any matters concerning any Fee Claims held or asserted by any Professional Persons retained by the Creditors’ Committee. -60- 14.5. Termination of Professionals. On the Effective Date, the engagement of each Professional Person retained by the Debtors and the Creditors’ Committee, if any, shall be terminated without further order of the Bankruptcy Court or act of the parties; provided , however , such Professional Persons shall be entitled to prosecute their respective Fee Claims and represent their respective constituents with respect to applications for allowance and payment of such Fee Claims and the Reorganized Debtors shall be responsible for the reasonable and documented fees, costs and expenses associated with the prosecution of such Fee Claims. Nothing herein shall preclude any Reorganized Debtor from engaging a former Professional Person on and after the Effective Date in the same capacity as such Professional Person was engaged prior to the Effective Date. 14.6. Amendments. This Plan may be amended, modified, or supplemented by the Debtors, with the consent of the Requisite Investors, in the manner provided for by section 1127 of the Bankruptcy Code or as otherwise permitted by law, without additional disclosure pursuant to section 1125 of the Bankruptcy Code, except as otherwise ordered by the Bankruptcy Court. In addition, after the Confirmation Date, so long as such action does not materially and adversely affect the treatment of holders of Allowed Claims pursuant to this Plan, the Debtors may, with the consent of the Requisite Investors, make appropriate technical adjustments, remedy any defect or omission or reconcile any inconsistencies in this Plan, the Plan Documents and/or the Confirmation Order, with respect to such matters as may be necessary to carry out the purposes and effects of this Plan, and any holder of a Claim or Interest that has accepted this Plan shall be deemed to have accepted this Plan as amended, modified, or supplemented. 14.7. Revocation or Withdrawal of this Plan. The Debtors reserve the right, with the consent of the Requisite Investors, to revoke or withdraw this Plan prior to the Effective Date. If the Debtors revoke or withdraw this Plan, in accordance with the preceding sentence, prior to the Effective Date as to any or all of the Debtors, or if confirmation or consummation as to any or all of the Debtors does not occur, then, with respect to such Debtors: (a) this Plan shall be null and void in all respects; (b) any settlement or compromise embodied in this Plan (including the fixing or limiting to an amount certain any Claim or Interest or Class of Claims or Interests), assumption or rejection of executory contracts or leases affected by this Plan, and any document or agreement executed pursuant to this Plan shall be deemed null and void; and (c) nothing contained in this Plan shall (i) constitute a waiver or release of any Claims by or against, or any Interests in, such Debtors or any other Person, (ii) prejudice in any manner the rights of such Debtors or any other Person or (iii) constitute an admission of any sort by the Debtors or any other Person. 14.8. Allocation of Plan Distributions Between Principal and Interest. To the extent that any Allowed Claim entitled to a distribution under the Plan consists of indebtedness and other amounts (such as accrued but unpaid interest thereon), such -61- distribution shall be allocated first to the principal amount of the Claim (as determined for federal income tax purposes) and then, to the extent the consideration exceeds the principal amount of the Claim, to such other amounts. 14.9. Severability. If, prior to the entry of the Confirmation Order, any term or provision of this Plan is held by the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court, at the request of the Debtors (and subject to the consent of the Requisite Investors) shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void, or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration, or interpretation, the remainder of the terms and provisions of this Plan will remain in full force and effect and will in no way be affected, impaired, or invalidated by such holding, alteration, or interpretation. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of this Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its terms. 14.10. Governing Law. Except to the extent that the Bankruptcy Code or other U.S. federal law is applicable, or to the extent a Plan Document or exhibit or schedule to the Plan provides otherwise, the rights, duties, and obligations arising under this Plan and the Plan Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to the principles of conflict of laws thereof to the extent such principles would result in the application of the laws of any other jurisdiction. 14.11. Section 1125(e) of the Bankruptcy Code. The Debtors have, and upon confirmation of this Plan shall be deemed to have, solicited acceptances of this Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code, and the Debtors and the Backstop Parties (and each of their respective affiliates, agents, directors, officers, employees, advisors, and attorneys) participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code in the offer, issuance, sale, solicitation and/or purchase of the securities offered and sold under this Plan, and therefore are not, and on account of such offer, issuance, sale, solicitation, and/or purchase will not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of this Plan or offer, issuance, sale, or purchase of the securities offered and sold under this Plan. 14.12. Inconsistency. In the event of any inconsistency among the Plan, the Disclosure Statement, the Plan Documents, any exhibit to the Plan or any other instrument or document created or executed pursuant to the Plan, the provisions of the Plan shall govern. -62- 14.13. Time. In computing any period of time prescribed or allowed by this Plan, unless otherwise set forth herein or determined by the Bankruptcy Court, the provisions of Bankruptcy Rule 9006 shall apply. 14.14. Exhibits. All exhibits to this Plan are incorporated and are a part of this Plan as if set forth in full herein. 14.15. Notices. In order to be effective, all notices, requests, and demands to or upon the Debtors shall be in writing (including by facsimile transmission) and, unless otherwise provided herein, shall be deemed to have been duly given or made only when actually delivered or, in the case of notice by facsimile transmission, when received and telephonically confirmed, addressed as follows: Momentive Performance Materials Inc. 260 Hudson River Road Waterford, New York 12188 Attn: Douglas A. Johns, Esq. Telephone: (518) 233-3933 Facsimile: (614) 225-4127 -andWillkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019-6099 Attn: Matthew A. Feldman, Esq. Jennifer J. Hardy, Esq. Telephone: (212) 728-8000 Facsimile: (212) 728-8111 Counsel to the Debtors 14.16. Filing of Additional Documents. On or before substantial consummation of the Plan, the Debtors shall file with the Bankruptcy Court such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan. 14.17. Reservation of Rights. Except as expressly set forth herein, the Plan shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation Order. None of the filing of this Plan, any -63- statement or provision contained herein, or the taking of any action by the Backstop Parties or the Debtors with respect to this Plan shall be or shall be deemed to be, an admission or waiver of any rights of the Backstop Parties or the Debtors with respect to any Claims or Interests prior to the Effective Date. -64- Dated: , 2014 Waterford, New York Respectfully submitted, Momentive Performance Materials Inc. on behalf of itself and its affiliated Debtors By: William H. Carter Director, Chief Financial Officer, and Executive Vice President of Momentive Performance Materials Inc. and Momentive Performance Holdings Inc. Counsel: WILLKIE FARR & GALLAGHER LLP Matthew A. Feldman, Esq. Rachel C. Strickland, Esq. Jennifer J. Hardy, Esq. 787 Seventh Avenue New York, NY 10019 (212) 728-8000 Counsel for the Debtors and Debtors in Possession -65- Schedule 1 Ares Management LLC Aristeia Capital, LLC Carlson Capital, L.P. GSO Capital Partners LP Oaktree Capital Management, L.P. Pentwater Capital Management, LP Third Avenue Management LLC Fortress Investment Group LLC D.E. Shaw Galvanic Portfolios, L.L.C. Napier Park Global Capital US L.P. EXHIBIT T3E(2) Matthew A. Feldman Rachel C. Strickland Jennifer J. Hardy WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, New York 10019 Telephone: (212) 728-8000 Facsimile: (212) 728-8111 Counsel for the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re MPM Silicones, LLC, etal.,1 Debtors. : : : : : x Chapter 11 Case No. 14-22503 (RDD) (Jointly Administered) NOTICE OF FILING OF PLAN SUPPLEMENT RELATING TO JOINT CHAPTER 11 PLAN OF REORGANIZATION FOR MOMENTIVE PERFORMANCE MATERIALS INC. AND ITS AFFILIATED DEBTORS PLEASE TAKE NOTICE that, as contemplated by the Joint Chapter 11 Plan of Reorganization for Momentive Performance Materials Inc. and Its Affiliated Debtors [Docket No. 515] (as amended, modified, and/or supplemented from time to time, the “ Plan ”), the above-captioned debtors and debtors in possession (collectively, the “ Debtors ”) hereby file certain draft forms, signed copies or summaries of material terms of certain documents relating to the Plan and/or to be executed, delivered, assumed and/or performed in connection with the consummation of the Plan on the Effective Date 2 (collectively, the “ Plan Documents ”), which comprise this Plan Supplement (the “ Plan Supplement ”). 1 The last four digits of the taxpayer identification numbers of the Debtors follow in parentheses: (i) Juniper Bond Holdings I LLC (9631); (ii) Juniper Bond Holdings II LLC (9692); (iii) Juniper Bond Holdings III LLC (9765); (iv) Juniper Bond Holdings IV LLC (9836); (v) Momentive Performance Materials China SPV Inc. (8469); (vi) Momentive Performance Materials Holdings Inc. (8246); (vii) Momentive Performance Materials Inc. (8297); (viii) Momentive Performance Materials Quartz, Inc. (9929); (ix) Momentive Performance Materials South America Inc. (4895); (x) Momentive Performance Materials USA Inc. (8388); (xi) Momentive Performance Materials Worldwide Inc. (8357); and (xii) MPM Silicones, LLC (5481). The Debtors’ executive headquarters are located at 260 Hudson River Road, Waterford, NY 12188. 2 Capitalized terms used but not defined herein have the meanings assigned to them in the Plan. PLEASE TAKE FURTHER NOTICE that the Plan Supplement is comprised of the following Plan Documents: 1. New ABL Credit Agreement (Exhibit A) 2. Commitment Letter with Respect to the New First Lien Term Loan Facility (Exhibit B) 3. Commitment Letter with Respect to the Incremental Facility (Exhibit C) 4. Registration Rights Agreement (Exhibit D) 5. Amended and Restated Certificate of Incorporation for Reorganized Debtor Subsidiaries (Exhibit E) 6. Amended By-Laws for Reorganized Debtor Subsidiaries (Exhibit F) 7. Amended and Restated LLC Agreement of MPM Silicones, LLC (Exhibit G) 8. Amended and Restated LLC Agreement for Reorganized Debtor Subsidiary (Exhibit H) 9. Top HoldCo Certificate of Incorporation (Exhibit I) 10. Top HoldCo By-Laws (Exhibit J) 11. Intermediate HoldCo Certificate of Incorporation (Exhibit K) 12. Intermediate HoldCo By-Laws (Exhibit L) 13. Indenture for Replacement First Lien Notes (Exhibit M) 14. Indenture for Replacement 1.5 Lien Notes (Exhibit N) 15. Summary of Post-Emergence Incentive Plan (Exhibit O) 16. Schedule of Rejected Executory Contracts and Unexpired Leases (Exhibit P) 17. List of Proposed Officers and Directors of the Reorganized Debtors (Exhibit Q) 18. Schedule 1 of the Plan (Certain Unenumerated Released Parties) (Exhibit R) 2 PLEASE TAKE FURTHER NOTICE that copies of the Plan Supplement may be obtained free of charge at the website maintained by the Debtors’ claims agent, http://www.kccllc.net/mpm, or on the Court’s Internet Website at http://www.nysb.uscourts.gov (a login and password to the Court’s Public Access to Court Electronic Records (“ PACER ”) are required to access this information and can be obtained through the PACER Service Center at http://www.pacer.psc.uscourts.gov). A copy of the Plan Supplement may also be examined between the hours of 9:00 a.m. and 4:30 p.m., Monday through Friday, at the Office of the Clerk of the Bankruptcy Court, 300 Quarropas Street, Room 118, White Plains, New York 10601-4140. PLEASE TAKE FURTHER NOTICE that a copy of the Plan Supplement may also be obtained from the Debtors’ claims agent through written request to: Momentive Performance Materials Ballot Processing Center c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 or by calling (888) 249-2792 or (310) 751-2607 for international calls. PLEASE TAKE FURTHER NOTICE that the Debtors hereby reserve all rights to amend, revise or supplement any of the documents contained in the Plan Supplement at any time before the Effective Date of the Plan, or any such other date as may be permitted by the Plan or by Order of the Court. PLEASE TAKE FURTHER NOTICE that the documents contained in the Plan Supplement are integral to, and part of, the Plan, and, if the Plan is confirmed, the Plan Supplement shall be deemed approved in the order confirming the Plan. 3 Dated: New York, New York July 18, 2014 WILLKIE FARR & GALLAGHER LLP By: /s/ Matthew A. Feldman Matthew A. Feldman Rachel C. Strickland Jennifer J. Hardy 787 Seventh Avenue New York, New York 10019 (212) 728-8000 Counsel for Debtors and Debtors in Possession 4 EXHIBIT T3E(3) UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re MPM Silicones, LLC, etal.,1 Debtors. : : : : : x Chapter 11 Case No. 14-22503 (RDD) (Jointly Administered) DISCLOSURE STATEMENT FOR JOINT CHAPTER 11 PLAN OF REORGANIZATION FOR MOMENTIVE PERFORMANCE MATERIALS INC. AND ITS AFFILIATED DEBTORS Dated: New York, New York June 23, 2014 WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, New York 10019 (212) 728-8000 Counsel for the Debtors and Debtors in Possession 1 The last four digits of the taxpayer identification numbers of the Debtors follow in parentheses: (i) Juniper Bond Holdings I LLC (9631); (ii) Juniper Bond Holdings II LLC (9692); (iii) Juniper Bond Holdings III LLC (9765); (iv) Juniper Bond Holdings IV LLC (9836); (v) Momentive Performance Materials China SPV Inc. (8469); (vi) Momentive Performance Materials Holdings Inc. (8246); (vii) Momentive Performance Materials Inc. (8297); (viii) Momentive Performance Materials Quartz, Inc. (9929); (ix) Momentive Performance Materials South America Inc. (4895); (x) Momentive Performance Materials USA Inc. (8388); (xi) Momentive Performance Materials Worldwide Inc. (8357); and (xii) MPM Silicones, LLC (5481). The Debtors’ executive headquarters are located at 260 Hudson River Road, Waterford, NY 12188. IMPORTANT NOTICE THIS DISCLOSURE STATEMENT AND ITS RELATED DOCUMENTS ARE THE ONLY DOCUMENTS AUTHORIZED BY THE BANKRUPTCY COURT TO BE USED IN CONNECTION WITH THE SOLICITATION OF VOTES TO ACCEPT THE JOINT CHAPTER 11 PLAN OF REORGANIZATION FOR MOMENTIVE PERFORMANCE MATERIALS INC. AND ITS AFFILIATED DEBTORS (THE “ PLAN ”). NO REPRESENTATIONS HAVE BEEN AUTHORIZED BY THE BANKRUPTCY COURT CONCERNING THE DEBTORS, THEIR BUSINESS OPERATIONS OR THE VALUE OF THEIR ASSETS, EXCEPT AS EXPLICITLY SET FORTH IN THIS DISCLOSURE STATEMENT. THE DEBTORS URGE YOU TO READ THIS DISCLOSURE STATEMENT CAREFULLY FOR A DISCUSSION OF VOTING INSTRUCTIONS, RECOVERY INFORMATION, CLASSIFICATION OF CLAIMS, THE HISTORY OF THE DEBTORS AND THE REORGANIZATION CASES, THE DEBTORS’ BUSINESSES, PROPERTIES AND RESULTS OF OPERATIONS, HISTORICAL AND PROJECTED FINANCIAL RESULTS AND A SUMMARY AND ANALYSIS OF THE PLAN. ALL CAPITALIZED TERMS IN THIS DISCLOSURE STATEMENT NOT OTHERWISE DEFINED HEREIN HAVE THE MEANINGS GIVEN TO THEM IN THE PLAN, A COPY OF WHICH IS ATTACHED TO THIS DISCLOSURE STATEMENT AS EXHIBIT 1 . INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THE DEBTORS RESERVE THE RIGHT, WITH THE CONSENT OF THE REQUISITE INVESTORS, TO FILE AN AMENDED PLAN AND RELATED DISCLOSURE STATEMENT FROM TIME TO TIME, SUBJECT TO THE TERMS OF THE PLAN. THIS DISCLOSURE STATEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY, NOR WILL THERE BE ANY DISTRIBUTION OF ANY OF THE SECURITIES DESCRIBED HEREIN UNTIL THE EFFECTIVE DATE OF THE PLAN. THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125 OF THE BANKRUPTCY CODE AND RULE 3016(c) OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE. THE PLAN AND THIS DISCLOSURE STATEMENT WERE NOT REQUIRED TO BE PREPARED IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER APPLICABLE NONBANKRUPTCY LAW. DISSEMINATION OF THIS DISCLOSURE STATEMENT IS CONTROLLED BY BANKRUPTCY RULE 3017. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS DISCLOSURE STATEMENT WAS PREPARED TO PROVIDE PARTIES IN INTEREST IN THESE CASES WITH “ADEQUATE INFORMATION” (AS DEFINED IN SECTION 1125 OF THE BANKRUPTCY CODE) SO THAT THOSE CREDITORS WHO ARE ENTITLED TO VOTE WITH RESPECT TO THE PLAN CAN MAKE AN INFORMED JUDGMENT REGARDING SUCH VOTE ON THE PLAN. THIS DISCLOSURE STATEMENT CONTAINS ONLY A SUMMARY OF THE PLAN. THIS DISCLOSURE STATEMENT IS NOT INTENDED TO REPLACE A CAREFUL AND DETAILED REVIEW AND ANALYSIS OF THE PLAN; RATHER THIS DISCLOSURE STATEMENT IS INTENDED ONLY TO AID AND SUPPLEMENT SUCH REVIEW. THIS DISCLOSURE STATEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PLAN, THE PLAN SUPPLEMENT (WHICH WILL BE FILED NO LATER THAN 10 CALENDAR DAYS PRIOR TO THE VOTING DEADLINE (DEFINED BELOW)), AND THE EXHIBITS ATTACHED THERETO AND THE AGREEMENTS AND DOCUMENTS DESCRIBED THEREIN. IF THERE IS A CONFLICT BETWEEN THE PLAN AND THIS DISCLOSURE STATEMENT, THE PROVISIONS OF THE PLAN WILL GOVERN. YOU ARE ENCOURAGED TO REVIEW THE FULL TEXT OF THE PLAN AND PLAN SUPPLEMENT AND TO READ CAREFULLY THE ENTIRE DISCLOSURE STATEMENT, INCLUDING ALL EXHIBITS, BEFORE DECIDING HOW TO VOTE WITH RESPECT TO THE PLAN. THE VOTING DEADLINE TO ACCEPT OR REJECT THE PLAN IS 4:00 P.M. (PREVAILING EASTERN TIME) ON JULY 28, 2014, UNLESS EXTENDED BY THE DEBTORS (THE “ VOTING DEADLINE ”). TO BE COUNTED, BALLOTS MUST BE RECEIVED BY THE VOTING AGENT (AS DEFINED HEREIN) ON OR BEFORE THE VOTING DEADLINE. THE EFFECTIVENESS OF THE PLAN IS SUBJECT TO MATERIAL CONDITIONS PRECEDENT. THERE IS NO ASSURANCE THAT THESE CONDITIONS WILL BE SATISFIED OR WAIVED. IF THE PLAN IS CONFIRMED BY THE BANKRUPTCY COURT AND THE EFFECTIVE DATE OCCURS, ALL HOLDERS OF CLAIMS AGAINST, AND HOLDERS OF INTERESTS IN, THE DEBTORS (INCLUDING, WITHOUT LIMITATION, THOSE HOLDERS OF CLAIMS OR INTERESTS WHO DO NOT SUBMIT BALLOTS TO ACCEPT OR REJECT THE PLAN OR WHO ARE NOT ENTITLED TO VOTE ON THE PLAN) WILL BE BOUND BY THE TERMS OF THE PLAN AND THE TRANSACTIONS CONTEMPLATED THEREBY. THIS DISCLOSURE STATEMENT HAS NOT BEEN FILED WITH OR REVIEWED BY, AND THE SECURITIES TO BE ISSUED ON OR AFTER THE EFFECTIVE DATE WILL NOT HAVE BEEN THE SUBJECT OF, OR REGISTERED PURSUANT TO, A REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “ SEC ”) UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR WITH ANY OTHER SECURITIES REGULATORY AUTHORITY OF ANY STATE UNDER ANY STATE SECURITIES OR “BLUE SKY” LAWS. THE PLAN HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY OTHER SECURITIES REGULATORY AUTHORITY, OR ANY STATE SECURITIES COMMISSION, AND NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED. THE DEBTORS BELIEVE THAT THE SOLICITATION OF VOTES ON THE PLAN MADE BY THIS DISCLOSURE STATEMENT, AND THE OFFER OF CERTAIN NEW SECURITIES THAT MAY BE DEEMED TO BE MADE PURSUANT TO THE SOLICITATION, ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND RELATED STATE STATUTES BY REASON OF THE EXEMPTION PROVIDED BY SECTION 1145(a)(1) OF THE BANKRUPTCY CODE AND THAT CERTAIN OTHER NEW SECURITIES ARE EXEMPT PURSUANT TO SECTION 4(A)(2) OF THE SECURITIES ACT, AND EXPECT THAT THE OFFER AND ISSUANCE OF THE SECURITIES UNDER THE PLAN WILL BE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND RELATED STATE STATUTES BY REASON OF THE APPLICABILITY OF SECTION 1145(a)(1) OF THE BANKRUPTCY CODE AND SECTION 4(A)(2) OF THE SECURITIES ACT. EXCEPT AS OTHERWISE SET FORTH HEREIN, THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE BY THE DEBTORS AS OF THE DATE HEREOF, AND THE DELIVERY OF THIS DISCLOSURE STATEMENT WILL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO THE DATE HEREOF OR CREATE ANY DUTY TO UPDATE SUCH INFORMATION. NO PERSON HAS BEEN AUTHORIZED BY THE DEBTORS IN CONNECTION WITH THE PLAN OR THE SOLICITATION TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS DISCLOSURE STATEMENT, THE PLAN AND THE EXHIBITS, NOTICES AND SCHEDULES ATTACHED TO OR INCORPORATED BY REFERENCE OR REFERRED TO IN THIS DISCLOSURE STATEMENT AND/OR THE PLAN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE DEBTORS. IT IS THE DEBTORS’ POSITION THAT THIS DISCLOSURE STATEMENT MAY NOT BE RELIED ON FOR ANY PURPOSE OTHER THAN TO DETERMINE WHETHER TO VOTE TO ACCEPT OR REJECT THE PLAN, AND NOTHING STATED HEREIN SHALL CONSTITUTE AN ADMISSION OF ANY FACT OR LIABILITY BY ANY PERSON, OR BE ADMISSIBLE IN ANY PROCEEDING INVOLVING THE DEBTORS OR ANY OTHER PERSON, OR BE DEEMED CONCLUSIVE EVIDENCE OF THE TAX OR OTHER LEGAL EFFECTS OF THE PLAN ON THE DEBTORS OR HOLDERS OF CLAIMS OR INTERESTS. EXCEPT WHERE SPECIFICALLY NOTED, THE FINANCIAL INFORMATION CONTAINED HEREIN HAS NOT BEEN AUDITED BY A CERTIFIED PUBLIC ACCOUNTANT AND HAS NOT BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. HOLDERS OF CLAIMS OR INTERESTS SHOULD NOT CONSTRUE THE CONTENTS OF THIS DISCLOSURE STATEMENT AS PROVIDING ANY LEGAL, BUSINESS, FINANCIAL OR TAX ADVICE. EACH HOLDER SHOULD CONSULT WITH ITS OWN LEGAL, BUSINESS, FINANCIAL AND TAX ADVISOR(S) WITH RESPECT TO ANY SUCH MATTERS CONCERNING THIS DISCLOSURE STATEMENT, THE SOLICITATION OF VOTES TO ACCEPT THE PLAN, THE PLAN, THE PLAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. FORWARD-LOOKING STATEMENTS: THIS DISCLOSURE STATEMENT CONTAINS FORWARD-LOOKING STATEMENTS BASED PRIMARILY ON THE CURRENT EXPECTATIONS OF THE DEBTORS AND PROJECTIONS ABOUT FUTURE EVENTS AND FINANCIAL TRENDS AFFECTING THE FINANCIAL CONDITION OF THE DEBTORS’ AND THE REORGANIZED DEBTORS’ BUSINESSES. IN PARTICULAR, STATEMENTS USING WORDS SUCH AS “BELIEVE,” “MAY,” “ESTIMATE,” “CONTINUE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS IDENTIFY THESE FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS, UNCERTAINTIES AND ASSUMPTIONS, INCLUDING THOSE DESCRIBED BELOW UNDER ARTICLE XI. IN LIGHT OF THESE RISKS AND UNCERTAINTIES, THE FORWARD-LOOKING EVENTS AND CIRCUMSTANCES DISCUSSED IN THE DISCLOSURE STATEMENT MAY NOT OCCUR, AND ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THE FORWARD-LOOKING STATEMENTS. CONSEQUENTLY, THE PROJECTED FINANCIAL INFORMATION AND OTHER FORWARD-LOOKING STATEMENTS CONTAINED HEREIN SHOULD NOT BE REGARDED AS REPRESENTATIONS BY ANY OF THE DEBTORS, THE REORGANIZED DEBTORS, THEIR ADVISORS OR ANY OTHER PERSON THAT THE PROJECTED FINANCIAL CONDITIONS OR RESULTS OF OPERATIONS CAN OR WILL BE ACHIEVED. EXCEPT AS OTHERWISE REQUIRED BY LAW, NEITHER THE DEBTORS NOR THE REORGANIZED DEBTORS UNDERTAKE ANY OBLIGATION TO UPDATE OR REVISE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE FOLLOWING APPROVAL OF THIS DISCLOSURE STATEMENT BY THE BANKRUPTCY COURT. THE DEBTORS AND THE PLAN SUPPORT PARTIES SUPPORT CONFIRMATION OF THE PLAN, AND URGE ALL HOLDERS OF CLAIMS WHOSE VOTES ARE BEING SOLICITED TO ACCEPT THE PLAN. TABLE OF CONTENTS Page ARTICLE I. 1.1. 1.2. 1.3. 1.4. 1.5. ARTICLE II. 2.1. 2.2. 2.3. INTRODUCTION 1 General The Confirmation Hearing Classification of Claims and Interests Voting; Holders of Claims Entitled to Vote Important Matters 1 3 4 4 8 SUMMARY OF PLAN AND CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS THEREUNDER 9 General Summary of Treatment of Claims and Interests Under the Plan Timing of Distributions to Holders of General Unsecured Claims 9 10 17 BUSINESS DESCRIPTION; HISTORICAL INFORMATION 17 The Debtors’ Businesses Employees Related Party Transactions Debtors’ Prepetition Capital Structure 17 23 24 26 ARTICLE IV. EVENTS LEADING TO CHAPTER 11 FILING 28 ARTICLE V. REASONS FOR THE SOLICITATION; RECOMMENDATION 30 ARTICLE VI. THE PLAN 31 Overview of Chapter 11 Resolution of Certain Inter-Creditor and Inter-Debtor Issues Overview of the Plan Acceptance or Rejection of the Plan; Effect of Rejection by One or More Classes of Claims or Interests Optional Redemption Premium Adversary Proceedings Summary of Capital Structure of Reorganized Debtors Means for Implementation Treatment of Executory Contracts and Unexpired Leases Binding Effect Discharge of Claims Against and Interests in the Debtors Term of Pre-Confirmation Injunctions or Stays Injunction Releases Exculpation and Limitation of Liability Injunction Related to Releases and Exculpation Retention of Causes of Action/Reservation of Rights Indemnification Obligations 31 32 32 42 43 44 48 56 59 59 59 59 60 62 63 63 63 ARTICLE III. 3.1. 3.2. 3.3. 3.4. 6.1. 6.2. 6.3. 6.4. 6.5. 6.6. 6.7. 6.8. 6.9. 6.10. 6.11. 6.12. 6.13. 6.14. 6.15. 6.16. 6.17. i ARTICLE VII. CONFIRMATION OF THE PLAN OF REORGANIZATION 64 Confirmation Hearing Confirmation Standards Applicable to Releases Classification of Claims and Interests Consummation Exemption from Certain Transfer Taxes Retiree Benefits Defined Benefit Pension Plan Dissolution of Creditors’ Committee Termination of Professionals Amendments Revocation or Withdrawal of the Plan Post-Confirmation Jurisdiction of the Bankruptcy Court 64 65 70 72 72 72 73 73 73 74 74 74 74 ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN 76 Liquidation Under Chapter 7 of the Bankruptcy Code Alternative Plan(s) of Reorganization Dismissal of the Reorganization Cases 76 76 77 ARTICLE IX. SUMMARY OF VOTING PROCEDURES 78 ARTICLE X. DESCRIPTION AND HISTORY OF CHAPTER 11 CASES 78 General Case Background Retention of Professionals Employment Obligations Continuing Supplier and Customer Relations Motion for Authorization to Pay Prepetition Common Carrier, Warehouse Provider, Freight Forwarder and Related Obligations Cash Management System Utilities Insurance Obligations Tax Motion Schedules and Statements Bar Dates The DIP Facilities Restructuring Support Agreement and Backstop Commitment Agreement Appointment of a Creditors’ Committee Adversary Proceedings 78 79 79 80 CERTAIN RISK FACTORS TO BE CONSIDERED 85 Certain Bankruptcy Considerations Risks Relating to the Capital Structure of the Reorganized Debtors Risks Relating to Tax and Accounting Consequences of the Plan Risks Associated with the Company’s Businesses 85 89 93 93 7.1. 7.2. 7.3. 7.4. 7.5. 7.6. 7.7. 7.8. 7.9. 7.10. 7.11. 7.12. 7.13. ARTICLE VIII. 8.1. 8.2. 8.3. 10.1. 10.2. 10.3. 10.4. 10.5. 10.6. 10.7. 10.8. 10.9. 10.10. 10.11. 10.12. 10.13. 10.14. 10.15. ARTICLE XI. 11.1. 11.2. 11.3. 11.4. ii 80 80 81 81 81 81 81 82 82 82 83 ARTICLE XII. RIGHTS OFFERING PROCEDURES 100 12.1. 12.2. 12.3. Overview of Rights Offerings The Rights Offering Procedures Calculation of Total Outstanding Shares 100 101 102 ARTICLE XIII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN 13.1. Introduction 13.2. Federal Income Tax Consequences to the Debtors 13.3. Federal Income Tax Consequences to Holders of Certain Claims ARTICLE XIV. SECURITIES LAW MATTERS 14.1. 14.2. 14.3. ARTICLE XV. 15.1. 15.2. 15.3. 15.4. 15.5. 15.6. 15.7. 15.8. 15.9. 15.10. 15.11. 15.12. 15.13. 15.14. 15.15. 104 104 105 107 110 Rights to Purchase in the Rights Offering Section 1145 Securities 4(a)(2) Securities 110 111 113 PROCEDURES FOR DISTRIBUTIONS UNDER THE PLAN 115 Distributions No Postpetition Interest on Claims Date of Distributions Distribution Record Date Disbursing Agent Delivery of Distribution Unclaimed Property Satisfaction of Claims Manner of Payment Under Plan Fractional Shares/De Minimis Cash Distributions No Distribution in Excess of Amount of Allowed Claim Exemption From Securities Laws Setoffs and Recoupments Withholding and Reporting Requirements Hart-Scott Rodino Antitrust Improvements Act 115 115 116 116 116 117 118 118 118 118 119 119 119 120 120 ARTICLE XVI. PROCEDURES FOR RESOLVING CLAIMS 16.1. Objections to Claims 16.2. Amendment to Claims 16.3. Disputed Claims 16.4. Estimation of Claims 16.5. Expenses Incurred On or After the Effective Date iii 120 120 121 121 121 122 Annexed as exhibits (the “Exhibits”) to this Disclosure Statement are copies of the following documents: • Plan (Exhibit 1) • Liquidation Analysis (Exhibit 2) • Reorganized Debtors’ Projected Financial Information (Exhibit 3) • Disclosure Statement Order (without exhibits) (Exhibit 4) • Section 1145 Rights Offering Procedures, Subscription Agreement and Beneficial Holder Subscription Form (Exhibit 5-A) • 4(a)(2) Rights Offering Procedures, Subscription Agreement and Beneficial Holder Subscription Form (Exhibit 5-B) • Valuation Analysis (Exhibit 6) • Replacement First Lien Notes Term Sheet (Exhibit 7) • Replacement 1.5 Lien Notes Term Sheet (Exhibit 8) • Illustrative Pro Forma Capital Structure (Exhibit 9) iv ARTICLE I. INTRODUCTION 1.1. General. Momentive Performance Materials Inc. and certain of its affiliates as debtors and debtors in possession (collectively, the “ Debtors ”), 2 in chapter 11 cases pending before the United States Bankruptcy Court for the Southern District of New York (the “ Bankruptcy Court ”), hereby transmit this disclosure statement (as may be amended, supplemented or otherwise modified from time to time, the “ Disclosure Statement ”), pursuant to section 1125 of title 11 of the United States Code (the “ Bankruptcy Code ”), in connection with the Debtors’ solicitation of votes to confirm the Joint Chapter 11 Plan of Reorganization for Momentive Performance Materials Inc. and its Affiliated Debtors, dated as of June 23, 2014 (the “ Plan ”). All Plan Documents are subject to revision and modification from time to time prior to the Effective Date (subject to the terms of the Plan and with the consent of the Requisite Investors), which may result in material changes to the terms of the Plan Documents. On the Effective Date, the Plan, all Plan Documents and all other agreements entered into or instruments issued in connection with the Plan and any Plan Document, shall become effective and binding in accordance with their respective terms and conditions upon the parties thereto and shall be deemed to become effective simultaneously. The purpose of this Disclosure Statement is to set forth information: (i) regarding the history of the Debtors and their businesses; (ii) describing the Reorganization Cases; (iii) concerning the Plan; (iv) advising the holders of Claims and Interests of their rights under the Plan; (v) providing information regarding eligibility and participation in the Rights Offerings for New Common Stock; and (vi) assisting the holders of Claims entitled to vote on the Plan in making an informed judgment regarding whether they should vote to accept or reject the Plan. On June 23, 2014, after notice and a hearing, the Bankruptcy Court entered an order [Docket No. 508] (the “ Disclosure Statement Order ”), which, among other things: (i) approved this Disclosure Statement as containing “adequate information” to enable a hypothetical, reasonable investor typical of holders of Claims against or Interests in the Debtors to make an informed judgment as to whether to accept or reject the Plan; and (ii) authorized the Debtors to use this Disclosure Statement in connection with the solicitation of votes to accept or reject the Plan. The Disclosure Statement Order establishes July 28, 2014 at 4:00 p.m. (prevailing Eastern Time) as the voting deadline for the return of Ballots accepting or rejecting the Plan (the “ Voting Deadline ”). APPROVAL OF THIS DISCLOSURE STATEMENT DOES NOT, HOWEVER, CONSTITUTE A DETERMINATION BY THE BANKRUPTCY COURT AS TO THE FAIRNESS OR MERITS OF THE PLAN. 2 This Disclosure Statement and the proposed Joint Plan of Reorganization for MPM Silicones, LLC and Its Affiliated Debtors relate to the following debtors and debtors-in-possession: (i) Juniper Bond Holdings I LLC; (ii) Juniper Bond Holdings II LLC; (iii) Juniper Bond Holdings III LLC; (iv) Juniper Bond Holdings IV LLC; (v) Momentive Performance Materials China SPV Inc.; (vi) Momentive Performance Materials Holdings Inc.; (vii) Momentive Performance Materials Inc.; (viii) Momentive Performance Materials Quartz, Inc.; (ix) Momentive Performance Materials South America Inc.; (x) Momentive Performance Materials USA Inc.; (xi) Momentive Performance Materials Worldwide Inc.; and (xii) MPM Silicones, LLC. 1 The Disclosure Statement Order sets forth in detail the deadlines, procedures and instructions for voting to accept or reject the Plan and participating in the Rights Offerings, and for filing objections to confirmation of the Plan, the record date for voting purposes and the applicable standards for tabulating Ballots. In addition, detailed voting instructions accompany each Ballot. Each holder of a Claim entitled to vote on the Plan should read this Disclosure Statement and the Exhibits hereto, including the Plan and the Disclosure Statement Order, as well as the instructions accompanying the Ballot in their entirety before voting on the Plan. These documents contain important information concerning the classification of Claims and Interests for voting purposes and the tabulation of votes. No solicitation of votes may be made except pursuant to this Disclosure Statement and section 1125 of the Bankruptcy Code. In voting on the Plan, holders of Claims entitled to vote should not rely on any information relating to the Debtors and their businesses other than the information contained in this Disclosure Statement, the Plan and all Exhibits hereto and thereto. PURSUANT TO THE RSA, THE PLAN SUPPORT PARTIES, REPRESENTING APPROXIMATELY 90% IN DOLLAR AMOUNT OF CLASS 6 CLAIMS, HAVE AGREED TO SUPPORT AND VOTE TO ACCEPT THE PLAN AFTER THE ENTRY OF AN ORDER APPROVING THIS DISCLOSURE STATEMENT AND THE SOLICITATION OF VOTES ON THE PLAN. THE DEBTORS RECOMMEND THAT HOLDERS OF CLAIMS IN CLASSES 4, 5, 6 AND 9 VOTE TO ACCEPT THE PLAN. Additional copies of this Disclosure Statement (including Exhibits) are available upon request to the Debtors’ claims and voting agent, Kurtzman Carson Consultants LLC (“ KCC ”), at the following address: Momentive Performance Materials Ballot Processing Center c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 They may also be obtained by contacting KCC via telephone at (888) 249-2792 or for international calls at (310) 751-2607. Additional copies of this Disclosure Statement (including Exhibits) can also be accessed free of charge from the following website: www.kccllc.net/mpm . A Ballot for voting to accept or reject the Plan is enclosed with this Disclosure Statement for the holders of Claims that are entitled to vote to accept or reject the Plan. If you are a holder of a Claim entitled to vote on the Plan and did not receive a Ballot, received a damaged Ballot or lost your Ballot, or if you have any questions concerning the procedures for voting on the Plan, please contact KCC at the address above. 2 In addition, holders of Class 6 Claims will also receive a subscription form with accompanying instructions for participating in the Rights Offerings. Detailed procedures with respect to the Rights Offerings are attached as Exhibits 5-A and 5-B to this Disclosure Statement and will also be provided separately to parties entitled to participate in the Rights Offerings. The deadline to participate in the Rights Offerings is August 1, 2014 at 5:00 p.m. (prevailing Eastern time). Each holder of a Claim entitled to vote on the Plan should read this Disclosure Statement, the Plan, the other Exhibits attached hereto and the instructions accompanying the Ballots in their entirety before voting on the Plan. These documents contain important information concerning the classification of Claims and Interests for voting purposes and the tabulation of votes. 1.2. The Confirmation Hearing. In accordance with the Disclosure Statement Order and section 1128 of the Bankruptcy Code, a hearing will be held before the Honorable Robert D. Drain, United States Bankruptcy Judge for the Southern District of New York, United States Bankruptcy Court, 300 Quarropas Street, White Plains, New York 10601-4140 on August 18, 2014 at 10:00 a.m. (prevailing Eastern Time) , to consider confirmation of the Plan. The Debtors will request confirmation of the Plan, as it may be modified from time to time, under section 1129(b) of the Bankruptcy Code, and they have reserved the right to modify the Plan to the extent, if any, that confirmation pursuant to section 1129(b) of the Bankruptcy Code requires modification, subject to the terms of the Plan and the consent of the Requisite Investors. Objections, if any, to confirmation of the Plan must be served and filed so that they are received on or before July 28, 2014 at 4:00 p.m. (prevailing Eastern Time) , in the manner set forth in the Disclosure Statement Order. The hearing on confirmation of the Plan may be adjourned from time to time without further notice except for the announcement of the adjourned date and time at the hearing on confirmation or any adjournment thereof or an appropriate filing with the Bankruptcy Court. At the Confirmation Hearing, the Bankruptcy Court will, among other things: • determine whether sufficient majorities in number and amount from each Class entitled to vote have delivered properly executed votes accepting the Plan to approve the Plan; • hear and determine objections, if any, to the Plan and to confirmation of the Plan that have not been previously disposed of; • determine whether the Plan meets the confirmation requirements of the Bankruptcy Code; and • determine whether to confirm the Plan. 3 1.3. Classification of Claims and Interests. The following table designates the Classes of Claims against and Interests in the Debtors, and specifies which Classes are: (a) impaired or unimpaired by the Plan, (b) entitled to vote to accept or reject the Plan in accordance with section 1126 of the Bankruptcy Code, and (c) deemed to accept or reject the Plan. Class Class 1 Class 2 Class 3 Class 4 Class 5 Class 6 Class 7 Class 8 Class 9 Class 10 Class 11 1.4. Designation Impairment Priority Non-Tax Claims Other Secured Claims Cash Flow Facility Claims First Lien Note Claims 1.5 Lien Note Claims Second Lien Note Claims General Unsecured Claims Senior Subordinated Note Claims Holdings PIK Note Claims Existing Securities Law Claims Existing Interests No No No Yes3 Yes4 Yes No Yes Yes Yes Yes Entitled to Vote No (Deemed to accept) No (Deemed to accept) No (Deemed to accept) Yes Yes Yes No (Deemed to accept) No (Deemed to reject) Yes No (Deemed to reject) No (Deemed to reject) Voting; Holders of Claims Entitled to Vote. (a) General Voting Procedures. Pursuant to the provisions of the Bankruptcy Code, only holders of allowed claims or equity interests in classes of claims or equity interests that are “impaired” and that are not deemed to have rejected a chapter 11 plan are entitled to vote to accept or reject such proposed plan. Generally, a claim or interest is “impaired” under a plan if the holder’s legal, equitable or contractual rights are altered under such plan. Classes of claims or equity interests under a chapter 11 plan in which the holders of claims or equity interests are unimpaired are deemed to have accepted such plan and are not entitled to vote to accept or reject the proposed plan. In addition, classes of claims or equity interests in which the holders of claims or equity interests will not receive or retain any property on account of their claims or equity interests are deemed to have rejected the chapter 11 plan and are not entitled to vote to accept or reject such plan. 3 4 The Debtors reserve the right to assert that the treatment provided to holders of First Lien Note Claims and 1.5 Lien Note Claims pursuant to Sections 5.4 and 5.5 of the Plan renders such holders unimpaired. See footnote 3. 4 Under the Plan: • Claims in Classes 4, 5, 6 and 9 are impaired, will receive a distribution on account of such Claims to the extent provided in the Plan and are entitled to vote to accept or reject the Plan; provided , however , that the Debtors reserve the right to assert that the treatment provided to holders of Claims in Classes 4 or 5 renders such Claims unimpaired; • Claims in Classes 1, 2, 3 and 7 are unimpaired and, as a result, holders of such Claims are deemed to have accepted the Plan and are not entitled to vote to accept or reject the Plan; and • Claims and Interests in Classes 8, 10 and 11 are impaired and the holders of such Claims and Interests will not receive any distribution on account of such Claims and Interests. As a result, the holders of Claims and Interests in those Classes are deemed to have rejected the Plan and are not entitled to vote to accept or reject the Plan. The Bankruptcy Code defines “acceptance” of a plan by a class of claims as acceptance by creditors in that class that hold at least two-thirds (2/3) in dollar amount and more than one-half (1/2) in number of the claims that cast ballots for acceptance or rejection of the chapter 11 plan. Your vote on the Plan is important. The Bankruptcy Code requires as a condition to confirmation of a chapter 11 plan that each class that is impaired and entitled to vote under a plan vote to accept such plan, unless the requirements of section 1129(b) of the Bankruptcy Code are satisfied. If a Class of Claims entitled to vote on the Plan rejects the Plan, the Debtors reserve the right, with the consent of the Requisite Investors, to amend the Plan and/or to request confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code with respect to such Class. Section 1129(b) of the Bankruptcy Code permits the confirmation of a chapter 11 plan notwithstanding the non-acceptance of such plan by one or more impaired classes of claims or equity interests, so long as at least one impaired class of claims or interests votes to accept such plan (excluding any votes of insiders). Under that section, a chapter 11 plan may be confirmed by a bankruptcy court if it does not “discriminate unfairly” and is “fair and equitable” with respect to each non-accepting class. If you are entitled to vote to accept or reject the Plan, a Ballot is enclosed for the purpose of voting on the Plan. This Disclosure Statement, the Exhibits attached hereto, the Plan and the related documents are the only materials the Debtors are providing to creditors for their use in determining whether to vote to accept or reject the Plan, and it is the Debtors’ position that such materials may not be relied upon or used for any purpose other than to vote to accept or reject the Plan. 5 Please complete and sign your Ballot(s) and, unless you are sending your Ballot to an Intermediary (as defined below) for inclusion in a master Ballot, return such Ballot to the Debtors’ claims and voting agent (the “ Voting Agent ”) at the applicable address below: Momentive Performance Materials Ballot Processing Center c/o Kurtzman Carson Consultants 1290 Avenue of the Americas, 9th Floor New York, NY 10104 TO BE COUNTED, YOUR ORIGINAL BALLOT INDICATING ACCEPTANCE OR REJECTION OF THE PLAN MUST BE ACTUALLY RECEIVED BY THE VOTING AGENT NO LATER THAN 4:00 P.M., PREVAILING EASTERN TIME, ON JULY 28, 2014, UNLESS EXTENDED BY THE DEBTORS. YOUR BALLOT MAY BE SENT VIA MAIL, OVERNIGHT COURIER OR MESSENGER. FAXED COPIES AND VOTES SENT ON OTHER FORMS WILL NOT BE ACCEPTED EXCEPT IN THE DEBTORS’ SOLE DISCRETION. ALL BALLOTS MUST BE SIGNED. IF YOU ARE SENDING YOUR BALLOT TO AN INTERMEDIARY FOR INCLUSION IN A MASTER BALLOT, THE INTERMEDIARY MUST RECEIVE YOUR PROPERLY COMPLETED BALLOT BY SUCH TIME AND DATE AS SPECIFIED BY THE INTERMEDIARY THAT ALLOWS THE INTERMEDIARY SUFFICIENT TIME TO PROCESS THE BALLOTS. The Ballots have been specifically designed for the purpose of soliciting votes on the Plan from the Classes entitled to vote thereon. Accordingly, in voting on the Plan, please use only the Ballots sent to you with this Disclosure Statement or provided by the Voting Agent. The Debtors have fixed 5:00 p.m. (prevailing Eastern time) on June 19, 2014 (the “Voting Record Date ”) as the time and date for the determination of the Persons who are entitled to receive a copy of this Disclosure Statement and all of the related materials and to vote whether to accept or reject the Plan. Accordingly, only holders of Claims of record as of the Voting Record Date that are entitled to vote on the Plan will receive a Ballot and may vote on the Plan. All properly completed Ballots received prior to the Voting Deadline will be counted for purposes of determining whether a voting Class of impaired Claims has accepted the Plan. Under the Bankruptcy Code, for the Plan to be “accepted,” a specified majority vote is required for each Class of impaired Claims entitled to vote on the Plan. If no votes are received with respect to any Class of impaired Claims entitled to vote on the Plan, then such Class shall be deemed to have accepted the Plan. If any impaired Class fails to have any Allowed Claims or Claims temporarily Allowed by the Court as of the date of the Confirmation Hearing, such Class or Classes will be deemed eliminated from the Plan for all purposes . The Voting Agent will prepare and file with the Bankruptcy Court a certification of the results of the balloting with respect to the Classes entitled to vote. (b) Voting Through Intermediaries. In accordance with Bankruptcy Rule 3017(e), the Debtors will send Ballots to transfer agents, registrars, servicing agents or other intermediaries for, or acting on behalf of, 6 beneficial holders of certain Claims (collectively, the “Intermediaries”). Specifically, the Debtors will send Ballots to Intermediaries for the holders of Claims in Classes 4 (First Lien Note Claims), 5 (1.5 Lien Note Claims) and 6 (Second Lien Note Claims). Each Intermediary will be entitled to receive, upon request to the Debtors, a sufficient number of Ballots to distribute to the beneficial owners of the Claims for which it is an Intermediary. Each Intermediary who will be tabulating votes of beneficial holders in a summary “master” ballot in the form approved by the Bankruptcy Court (the “ Master Ballot ”) will tabulate only those votes of its beneficial holders that are received by such Intermediary by such time and date (as specified by the Intermediary) that would allow it to tabulate and return the results to the Voting Agent by the Voting Deadline. Any Intermediaries submitting Master Ballots must certify that none of its beneficial holders has cast more than one vote with respect to any given Claim, even if such holder holds securities of the same type in more than one account. However, persons who hold Claims in more than one voting Class will be entitled to vote their Claims in each such Class, subject to the applicable voting rules. For more information on voting procedures, please see Article IX of this Disclosure Statement. IMPORTANT - Voting by Intermediary Timing: If your vote is being processed by an Intermediary, please allow sufficient time for transmission of your ballot to your Intermediary for preparation and delivery to the Voting Agent of a Master Ballot reflecting your vote and the votes of the holders of other Claims tabulated by the Intermediary. To be counted, your vote must be received either (a) directly by the Voting Agent on or before the Voting Deadline, or (b) if your vote is processed by an Intermediary, by your Intermediary by such time and date as specified by such Intermediary that allows such Intermediary sufficient time to process your Ballot. Receipt of your Ballot by the Intermediary on or close to the Voting Deadline may not allow sufficient time for the Intermediary to include your vote in the Master Ballot that it must deliver to the Voting Agent by the Voting Deadline. Questions on Voting Procedures: If you have a question concerning the voting procedures, please contact your Intermediary or the Voting Agent. (c) Rights Offerings. The Plan provides for two rights offerings, the Section 1145 Rights Offering and the 4(a)(2) Rights Offering, to raise an aggregate of $600 million through the issuance of Rights Offering Stock. (i) Section 1145 Rights Offering. In accordance with the Section 1145 Rights Offering Procedures and the Backstop Commitment Agreement, each Section 1145 Eligible Holder shall receive 7 Section 1145 Subscription Rights to acquire its respective Pro Rata Share of Section 1145 Rights Offering Stock pursuant to the terms set forth in the Plan and in the Section 1145 Rights Offering Procedures. Each Section 1145 Subscription Right shall represent the right to acquire one share of Section 1145 Rights Offering Stock for the Rights Exercise Price. The total number of shares of Section 1145 Rights Offering Stock to be issued in connection with the Section 1145 Rights Offering will be 7,656,521. For more details on the Section 1145 Rights Offering, please see the Section 1145 Rights Offering Procedures, and the corresponding subscription agreement and subscription form, which are annexed hereto as Exhibit 5-A . (ii) Section 4(a)(2) Rights Offering. In accordance with the 4(a)(2) Rights Offering Procedures and the Backstop Commitment Agreement, each 4(a)(2) Eligible Holder shall receive 4(a)(2) Subscription Rights to acquire its respective Pro Rata Share of 4(a)(2) Rights Offering Stock pursuant to the terms set forth in the Plan and in the 4(a)(2) Rights Offering Procedures. Each 4(a)(2) Subscription Right shall represent the right to acquire one share of 4(a)(2) Rights Offering Stock for the Rights Exercise Price. The total number of shares of 4(a)(2) Rights Offering Stock to be issued in connection with the 4(a)(2) Rights Offering will be 27,065,701. Only 4(a)(2) Eligible Holders who have certified to being an “accredited investor” as defined in Rule 501(a) promulgated under Regulation D of the Securities Act may participate in the 4(a)(2) Rights Offering. For more details on the 4(a)(2) Rights Offering, please see the 4(a)(2) Rights Offering Procedures, and the corresponding subscription agreement and subscription form, which are annexed hereto as Exhibit 5-B . IMPORTANT INFORMATION REGARDING THE RIGHTS OFFERING AND CALCULATION OF THE TOTAL SHARES OF NEW COMMON STOCK ISSUED UNDER THE PLAN IS SET FORTH IN ARTICLE XII OF THIS DISCLOSURE STATEMENT. 1.5. Important Matters. This Disclosure Statement contains projected financial information and certain other forward-looking statements, all of which are based on various estimates and assumptions and will not be updated to reflect events occurring after the date hereof. Such information and statements are subject to inherent uncertainties and to a wide variety of significant business, economic and competitive risks, including, among others, those described herein. Consequently, actual events, circumstances, effects and results may vary significantly from those included in or contemplated by such projected financial information and such other forward-looking statements. The projected financial information contained herein and in the exhibits annexed hereto, therefore, is not necessarily indicative of the future financial condition or results of 8 operations of the Debtors, which in each case may vary significantly from those set forth in such projected financial information. Consequently, the projected financial information and other forward-looking statements contained herein should not be regarded as representations by any of the Debtors, the Reorganized Debtors, their advisors, or any other Person that the projected financial conditions or results of operations can or will be achieved. ARTICLE II. SUMMARY OF PLAN AND CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS THEREUNDER 2.1. General. The overall purpose of the Plan is to provide for the restructuring of the Debtors’ liabilities in a manner designed to maximize recovery to stakeholders and to enhance the financial viability of the Reorganized Debtors. Generally, the Plan provides for: (a) payment in full in Cash to the Debtors’ general unsecured creditors (including trade creditors) and holders of claims arising from the Cash Flow Facility, First Lien Notes, and 1.5 Lien Notes (in each case, including accrued interest, but with regard to First Lien Notes and 1.5 Lien Notes, not including any premium or “make-whole” amount); 5 (b) conversion of the Second Lien Notes into the new equity of Reorganized MPM, pursuant to the terms of the Plan and as described herein, subject to dilution by a management incentive plan and the Rights Offering Stock; (c) subscription rights to holders of Second Lien Notes in the $600 million Rights Offerings, giving such holders the opportunity to purchase a percentage of the new Rights Offering Stock at a price per share determined by using the pro forma capital structure and an enterprise value of $2.2 billion and applying a 15% discount to the equity value thereto; (d) a recovery to holders of the Holdings PIK Note in the amount of the Cash available at Holdings as of the effective date of the Plan, after taking into account administrative expenses; and (e) no recovery to the holders of Senior Subordinated Notes on account of the subordination provisions set forth in the Senior Subordinated Indenture. Pursuant to the Backstop Commitment Agreement, the Backstop Parties6 have agreed to backstop the Rights Offerings in exchange for a fee, payable in Rights Offering Stock (or, if the Backstop Commitment Agreement is terminated under certain circumstances, in Cash), of an additional 5% of the Rights Offering Amount. 5 6 As described further herein and in the Plan, if Classes 4 (First Lien Note Claims) and 5 (1.5 Lien Note Claims) vote to reject the Plan, holders of Allowed First Lien Note Claims and holders of Allowed 1.5 Lien Note Claims will receive Replacement First Lien Notes and Replacement 1.5 Lien Notes. The Backstop Parties consist of holders of approximately 90% of the Second Lien Note Claims, including Apollo and the members of the Ad Hoc Committee of Second Lien Noteholders. 9 2.2. Summary of Treatment of Claims and Interests Under the Plan. The following table classifies Claims against, and Interests in, the Debtors into separate Classes and summarizes the treatment of each Class under the Plan. The table also identifies which Classes are entitled to vote on the Plan based on the provisions of the Bankruptcy Code. Finally, the table indicates the estimated recovery for each Class. The summaries in this table are qualified in their entirety by the description and the treatment of such Claims and Interests in the Plan. As described in Article XI below, the Debtors’ businesses are subject to a number of risks. The uncertainties and risks related to the Reorganized Debtors make it difficult to determine a precise value of the New Common Stock distributed under the Plan. The recoveries and estimates described in the table represent the Debtors’ best estimates given the information available on the date of this Disclosure Statement. All statements relating to the aggregate amount of Claims and Interests in each Class are only estimates based on information known to the Debtors as of the date hereof, and the final amounts of Allowed Claims in any particular Class may vary significantly from these estimates. In accordance with section 1123(a)(1) of the Bankruptcy Code, DIP Claims, Administrative Expense Claims, Fee Claims, U.S. Trustee Fees and Priority Tax Claims have not been classified. Except as specifically noted therein, the Plan does not provide for payment of postpetition interest on any Allowed Claims. Important Note on Estimates The estimates in the tables and summaries in this Disclosure Statement may differ from actual distributions because of variations in the asserted or estimated amounts of Allowed Claims, the existence of Disputed Claims and other factors. Statements regarding projected amounts of Claims or distributions (or the value of such distributions) are estimates by the Debtors based on current information and are not representations as to the accuracy of these amounts. Except as otherwise indicated, these statements are made as of the date of this Disclosure Statement, and the delivery of this Disclosure Statement will not, under any circumstances, imply that the information contained in this Disclosure Statement is correct at any other time. Any estimates of Claims or Interests in this Disclosure Statement may vary from the final amounts of Claims or Interests allowed by the Bankruptcy Court. 10 Class Description N/A (unclassified) Treatment DIP Claims Estimated Amount of Claims in Class 7 Estimated Recovery N/A $373 million 100% N/A $32 million 100% N/A $21.2 million 100% Entitled to Vote On the Effective Date, All Allowed DIP Term Loan Claims shall be paid in full in Cash. The DIP ABL Claims shall be satisfied in full by either: (a) the conversion on the Effective Date of the DIP ABL Facility into the New ABL Facility in accordance with the terms and conditions of the DIP ABL Credit Agreement; or (b) the termination of all commitments, payment in full in Cash of all outstanding obligations and cash collateralization, return or backstopping of all letters of credit issued thereunder in a manner satisfactory to the DIP Agent. N/A (unclassified) N/A (unclassified) Administrative Expense Claims Except to the extent that a holder of an Allowed Administrative Expense Claim agrees to a different treatment, on, or as soon thereafter as is reasonably practicable, the later of the Effective Date and the first Business Day after the date that is thirty (30) calendar days after the date an Administrative Expense Claim becomes an Allowed Claim, the holder of such Allowed Administrative Expense Claim shall receive from the applicable Reorganized Debtor Cash in an amount equal to such Allowed Claim. Fee Claims All Professional Persons seeking allowance by the Bankruptcy Court of a Fee Claim shall be paid in full in Cash in such amounts as are approved by the Bankruptcy Court: (i) upon the later of (x) the Effective Date, and (y) fourteen (14) calendar days after the date upon which the order relating to the allowance of any such Fee Claim is entered, or (ii) upon such other terms as may be mutually agreed upon between the holder of such Fee Claim and the Reorganized Debtors. 7 The amounts set forth in this chart reflect the Debtors’ most current estimates of projected claim amounts, which reflect changes to the Debtors’ assumptions subsequent to the filing of the Debtors’ Schedules and Statements. The Debtors’ Liquidation Analysis and Financial Projections reflect slightly different estimates due to the fact that they were prepared based on assumptions made by the Debtors prior to the completion of their Schedules and Statements. 11 Class N/A (unclassified) N/A (unclassified) Description U.S. Trustee Fees Treatment Entitled to Vote Estimated Amount of Claims in Class7 Estimated Recovery N/A $85,000 100% N/A $0.00 100% No (Deemed to accept) $0.00 100% No (Deemed to accept) $2.25 million (not including accrued interest) 100% The Debtors or Reorganized Debtors, as applicable, shall pay all outstanding U.S. Trustee Fees of a Debtor, including any accrued interest arising under 31 U.S.C. § 3717, on an ongoing basis on the date such U.S. Trustee Fees become due. Priority Tax Claims Except to the extent that a holder of an Allowed Priority Tax Claim agrees to different treatment, each holder of an Allowed Priority Tax Claim shall receive, with the consent of the Requisite Investors, in the Debtors’ or Reorganized Debtors’ discretion, either: (a) on, or as soon thereafter as is reasonably practicable, the later of the Effective Date and the first Business Day after the date that is thirty (30) calendar days after the date a Priority Tax Claim becomes an Allowed Claim, Cash in an amount equal to such Claim; or (b) deferred Cash payments following the Effective Date, over a period ending not later than five (5) years after the Petition Date, in an aggregate amount equal to the Allowed amount of such Priority Tax Claim (with any interest to which the holder of such Priority Tax Claim may be entitled calculated in accordance with section 511 of the Bankruptcy Code). Class 1 Class 2 Priority Non-Tax Claims Other Secured Claims Claims in this Class are not impaired. Except to the extent that a holder of an Allowed Priority Non-Tax Claim agrees to a different treatment, on the applicable Distribution Date, each holder of an Allowed Priority Non-Tax Claim shall receive Cash from the applicable Reorganized Debtor in an amount equal to such Allowed Claim. Claims in this Class are not impaired. Except to the extent that a holder of an Allowed Other Secured Claim agrees to a different treatment, on the applicable Distribution Date each holder of an Allowed Other Secured Claim shall receive, at the election of the Reorganized Debtors: (i) Cash in an amount equal to 12 Class Description Treatment Entitled to Vote Estimated Amount of Claims in Class7 No (Deemed to accept) $20.7 million (not including accrued interest) 100% Yes8 $1.1 billion (not including accrued interest) 100% Estimated Recovery such Allowed Claim; or (ii) such other treatment that will render such Other Secured Claim unimpaired pursuant to section 1124 of the Bankruptcy Code; provided , however , that Other Secured Claims incurred by a Debtor in the ordinary course of business may be paid in the ordinary course of business in accordance with the terms and conditions of any agreements relating thereto, in the discretion of the applicable Debtor or Reorganized Debtor, without further notice to or order of the Bankruptcy Court. Class 3 Class 4 8 Cash Flow Facility Claims First Lien Note Claims Claims in this Class are not impaired. On the Effective Date, or as soon as practicable thereafter, each holder of an Allowed Cash Flow Facility Claim shall receive, subject to the terms of the Plan, in full satisfaction, settlement, release and discharge of, and in exchange for, such Claim, its Pro Rata Share of Cash in an aggregate amount equal to the Allowed Cash Flow Facility Claims. Claims in this Class are impaired. On the Effective Date, or as soon as practicable thereafter, each holder of an Allowed First Lien Note Claim shall receive, subject to the terms of the Plan, in full satisfaction, settlement, release and discharge of, and in exchange for, such Claim, its Pro Rata Share of: (i) if Class 4 votes to accept the Plan or is presumed to have accepted the Plan: Cash in an aggregate amount equal to such holder’s Pro Rata portion of the First Lien Cash Pool, or (ii) if Class 4 votes to reject the Plan: Replacement First Lien Notes with a present value equal to the Allowed amount of such holder’s First Lien Note Claim (which may include, in addition to The Debtors reserve the right to assert that the treatment provided to holders of First Lien Note Claims pursuant to Sections 5.4 of the Plan renders such holders unimpaired. 13 Class Description Entitled to Vote Treatment Estimated Amount of Claims in Class7 Estimated Recovery the First Lien Note Claims Allowed pursuant to Section 5.4(a) of the Plan, any applicable make-whole claim, prepayment penalty, or Applicable Premium to the extent Allowed by the Bankruptcy Court. Class 5 1.5 Lien Note Claims Claims in this Class are impaired. On the Effective Date, or as soon as practicable thereafter, each holder of an Allowed 1.5 Lien Note Claim shall receive, subject to the terms of the Plan, in full satisfaction, settlement, release and discharge of, and in exchange for, such Claim, its Pro Rata Share of: (i) if Class 5 votes to accept the Plan or is presumed to have accepted the Plan: Cash in an aggregate amount equal to such holder’s Pro Rata portion of the 1.5 Lien Cash Pool, or (ii) if Class 5 votes to reject the Plan: Replacement 1.5 Lien Notes with a present value equal to the Allowed amount of such holder’s 1.5 Lien Note Claim (which may include, in addition to the 1.5 Lien Note Claims Allowed pursuant to Section 5.5(a) of the Plan, any applicable make-whole claim, prepayment penalty, or Applicable Premium to the extent Allowed by the Bankruptcy Court. Yes9 $250 million (not including accrued interest) 100% Class 6 Second Lien Note Claims Claims in this Class are impaired. On the Effective Date, or as soon thereafter as reasonably practicable, each holder of an Allowed Second Lien Note Claim shall receive, subject to the terms of the Plan and in full satisfaction, settlement, release, and discharge of, and in exchange for, such Claim its Pro Rata Share of (i) the Second Lien Notes Equity Yes $1.161 billion plus €133 million (not including accrued interest) 12.8% - 28.1%10 9 10 The Debtors reserve the right to assert that the treatment provided to holders of 1.5 Lien Note Claims pursuant to Section 5.5 of the Plan renders such holders unimpaired. The total recovery percentage in connection with the Class 6 Second Lien Note Claims will vary based on the total number of shares of New Common Stock that will be issued on the Effective Date, which will, in turn, depend upon the projected amount of net debt of the Reorganized Debtors and their subsidiaries as of the Effective Date. For additional details on the risks associated with the calculation of the total shares of New Common Stock issued under the Plan, please see Article XI of this Disclosure Statement. 14 Class Description Treatment Estimated Amount of Claims in Class7 Entitled to Vote Estimated Recovery Distribution; and (ii) the Subscription Rights; provided that only 4(a)(2) Eligible Holders shall be entitled to participate in the 4(a)(2) Rights Offering. Class 7 Class 8 11 General Unsecured Claims Claims in this Class are not impaired. Each Allowed General Unsecured Claim shall, at the discretion of the Reorganized Debtors, and to the extent that such Allowed General Unsecured Claim was not previously paid pursuant to an order of the Bankruptcy Court, be: (i) Reinstated as of the Effective Date as an obligation of the applicable Reorganized Debtor, and paid in accordance with the ordinary course terms for such Claim; (ii) paid in full in Cash on the applicable Distribution Date, plus postpetition interest at the rate of (x) the Federal Judgment Rate, computed daily from the Petition Date through the applicable Distribution Date and compounded annually, or (y) to the extent the holder of the General Unsecured Claim notifies the Debtors within five (5) business days prior to the Effective Date, and the Debtors agree, or in the absence of agreement, the Bankruptcy Court determines, that such holder is contractually entitled to an alternate interest rate, then such alternate rate, computed from the Petition Date through the applicable Distribution Date and compounded (if at all) in accordance with the applicable contract; or (iii) receive such other treatment as may be agreed between such holder and the Reorganized Debtors. No (Deemed to accept) $23.5 million Senior Subordinated Note Claims Claims in this Class are impaired. Pursuant to section 510 of the Bankruptcy Code and the provisions of the Senior No (Deemed to reject) $382 million (not including accrued interest) 100% 11 0% As of the date of this Disclosure Statement, the deadlines for filing proof of certain claims against the Debtors that arose on or prior to the Petition Date has not yet expired. Therefore, the amount of General Unsecured Claims ultimately Allowed against the Debtors may be greater than the amount set forth herein. 15 Class Description Treatment Estimated Amount of Claims in Class7 Entitled to Vote Estimated Recovery Subordinated Indenture, holders of Senior Subordinated Note Claims shall not receive any Plan Distributions on account of such Claims and any Plan Distribution to which they would have otherwise been entitled on account of such Claims, if any, shall constitute a portion of the recovery of holders of Second Lien Note Claims, and be retained by the Reorganized Debtors, in order to augment the value of the New Common Stock to be received by holders of Second Lien Note Claims. Class 9 Holdings PIK Note Claims Claims in this Class are impaired. On the Effective Date, or as soon thereafter as reasonably practicable, each holder of an Allowed Holdings PIK Note Claim shall receive, subject to the terms of the Plan and in full satisfaction, settlement, release, and discharge of, and in exchange for, such Claim its Pro Rata Share of $8.938 million, minus any amounts attributable to Holdings’ share of Administrative Expense Claims or U.S. Trustee Fees; which amounts shall include 100% of amounts owed by Holdings to advisors of the holders of the Holdings PIK Note Claims (as such amount may be agreed upon by such advisors and the applicable holders of the Holdings PIK Note Claims). Yes $877 million Less than 1% Class 10 Existing Securities Law Claims Claims in this Class are impaired. Holders of Existing Securities Law Claims shall not receive or retain any distribution under the Plan on account of such Existing Securities Law Claims. No (Deemed to reject) $0 0% Class 11 Existing Interests Interests in this Class are impaired. Existing Interests shall be cancelled and holders thereof shall not receive or retain any distribution under the Plan on account of such Existing Interests. No (Deemed to reject) N/A 0% The recoveries set forth above are estimates and are contingent upon approval of the Plan as proposed. 16 2.3. Timing of Distributions to Holders of General Unsecured Claims Holders of General Unsecured Claims should expect to receive payment on unpaid Allowed General Unsecured Claims that arose prior to April 13, 2014, either (i) within 15 days following the Effective Date, or (ii) if such claim is due on a later date under ordinary trade terms, then on such later date following the Effective Date. The Debtors cannot predict with certainty when the Effective Date will take place, though they are currently projecting an Effective Date of September 30, 2014 for the purposes of the Financial Projections. If the Debtors or Reorganized Debtors dispute the validity of a particular claim asserted against them, then such claim will not be considered an “Allowed Claim,” and payment on such claim will be delayed pending the resolution of the dispute. In such a case, the Reorganized Debtors will have one hundred and eighty (180) days following the Effective Date to file an objection to a disputed claim (which time period can be later extended by the Bankruptcy Court). Payment on such disputed claims will not be made until the Bankruptcy Court can resolve the dispute, or such dispute is resolved consensually among the parties. ARTICLE III. BUSINESS DESCRIPTION; HISTORICAL INFORMATION 3.1. The Debtors’ Businesses. (a) The Debtors. Momentive Performance Materials Inc. (“MPM”), together with its Debtor and non-Debtor subsidiaries (collectively, the “ Company ”), is one of the world’s largest producers of silicones and silicone derivatives, and is a global leader in the development and manufacture of products derived from quartz and specialty ceramics. The Company manufactures products that are used in thousands of applications and are sold into diverse markets, such as industrial, building and construction, transportation, agriculture, electronics, healthcare and personal care, as well as higher growth markets, such as semiconductor and fiber optics. Silicone products are generally used as additives in a wide variety of end products to provide or enhance certain attributes of such products, such as resistance to heat, ultraviolet light or chemicals, or to add or enhance lubrication, adhesion or viscosity. The Company’s silicone products are used in applications as varied as in the production of tires, hair care products, foam mattresses and adhesive labels, to name a few. The Company’s quartz and specialty ceramics products are used in high-technology industries such as semiconductor manufacturing and in lamp lenses for video projectors. The Company currently maintains 22 production sites located around the world, which allows the Company to produce key products in the Americas, Europe and Asia, and efficiently deliver products to more than 4500 customers in over 100 countries. In 2013, approximately 68% of the Company’s net sales originated outside the United States. 17 (b) Company History. The Company has a 70-year history, with its origins as the Advanced Materials business of General Electric Company (“ GE ”). In 2006, investment funds affiliated with Apollo Global Management, LLC and certain of its affiliated funds (collectively “ Apollo ”) acquired the Company from GE. MPM was incorporated in 2006, as a wholly-owned subsidiary of Momentive Performance Holdings Inc. (“ Holdings ”), for the purpose of acquiring the assets and stock of certain subsidiaries of GE that comprised GE’s Advanced Materials business. The acquisition was completed in December 2006, which led to the majority of the Company’s equity being ultimately held by affiliates of Apollo. On October 1, 2010, Holdings became a subsidiary of a new holding company, Momentive Performance Materials Holdings LLC (“ MPM Holdings LLC ”), in combination with the acquisition of Momentive Specialty Chemicals Holdings LLC (formerly known as Hexion Specialty Chemicals, Inc.) (“ MSC ”) by MPM Holdings LLC. Apollo is the majority shareholder of MPM Holdings LLC. In addition, representatives of Apollo comprise a majority of the directors of MPM and Holdings. Neither MPM Holdings LLC nor MSC or any subsidiaries of MSC, are Debtors in these cases. (c) Facilities. The Company maintains twenty-two (22) production facilities and five (5) research and development facilities in the Americas, Europe and Asia, including production facilities in Waterford, New York; Sistersville, West Virginia; Leverkusen, Germany; Ohta, Japan; Termoli, Italy; and Nantong, China. The Company’s research and development facilities are located in Tarrytown, New York; Bangalore, India; Shanghai, China; Kobe, Japan; and Seoul, South Korea. (d) Key Product Lines and Applications. (1) Silicones. In 2013, the Company had approximately $2,197 million in worldwide net silicone sales. Product families within the Company’s silicones business include fluids (used in applications relating to textiles, personal care, home care, agriculture and oil and gas), silanes and resins (used in tires, additives for coatings, masonry water repellents and protective coatings for plastics and rubber), elastomers (used in healthcare and automotive applications), intermediates, specialty coatings, room temperature vulcanizers, urethane additives (polyurethane foam additives) and consumer and construction sealants. Silicones are used in product formulations primarily due to two distinguishing factors: (i) their high degree of inertness ( i.e. , resistance to heat, electricity and chemical reactions); and (ii) their ability during manufacturing to greatly modify their viscosity, enabling production of end-products with a significant variation in levels of lubricity or adhesion. The Company’s various silicones products are developed using separate finishing processes to generate a wide variety of different performance characteristics and are typically used in applications where traditional materials cannot perform under required conditions. Entirely new applications for silicones continue to emerge as a result of their versatility and broad range of properties. 18 The primary raw materials used in the production of silicones include silicon metal, siloxane and methanol. Silicon metal is an inorganic material that is not derived from petrochemicals. The Company purchases silicon metal from suppliers around the world under multi-year, one-year or short-term contracts and in the spot market. Siloxane is a key intermediate product which is required to produce the silicones polymer used in the Company’s products. The Company meets the substantial majority of its siloxane requirements through the production of siloxane for its internal use in the Company’s production plants located in Waterford, New York; Leverkusen, Germany and Ohta, Japan and from a joint venture in Jiande, China. The Company also sources a portion of its siloxane needs from third parties. Methanol, a key raw material needed for the production of chlorosilanes, is purchased by the Company from methanol suppliers pursuant to annual or quarterly contracts. The Company’s silicones product portfolio primarily consists of (i) fluids, (ii) silanes and resins, (iii) intermediates, (iv) silicone elastomers, (v) specialty coatings, (vi) room temperature vulcanizers, (vii) urethrane additives, and (viii) consumer and construction sealants. (i) Silicone Fluids The Company’s silicone fluids products are used primarily in the personal care, home care, auto care, textiles, oil and gas, agriculture and industrial end-markets and are sold under the MPM-owned Magnasoft, Sagtex, Formasil, Silwet, Silsoft, Silshine, Tospearl and Velvesil brands. The addition of the Company’s silicone fluids to end use products, such as shower and bath products, provides benefits such as increasing the richness and creaminess of the lather in shower gels and soaps or enhancing the longevity of fragrances on the skin. Certain of the Company’s silicone fluid can be used as textile enhancers, providing protective coatings to textile and leather. Certain other products may be added to laundry detergents and kitchen and bath cleaners, as well as polishes, waxes and automotive cleaning products in order to enhance properties such as fabric softening, shine and gloss enhancements and improved anti-soil properties. Still others are used as additives for agrochemicals to improve spreading and lower surface tension of spray solutions. Certain other silicone fluids may be added to products such as shampoos, conditioners, antiperspirants, sunscreens, skin lotions, lipsticks and other cosmetics to enhance shine, softening and conditioning, consistent spreading, and silkiness. (ii) Silane and Resin Silane and resin products are used as components in a variety of specialty applications. Resins are used as binders in the production of formulated products such as adhesives, laminates, paints and coatings, and sealants and caulks. They are often used when characteristics such as paintability, high-temperature or harsh environmental resistance are beyond the scope of traditional materials. The Company’s Tospearl resins are also used as light diffusion aids in LCD/LED screens, and as slip agents in plastic packaging materials and paints and coatings. Silanes are used as high-performance coupling agents, adhesion promoters or as reactive intermediates. Silane and resin products are sold into a diverse range of end-markets, including aerospace, construction, coatings and inks, paint, adhesives, electronics, motor vehicles, sealants, rubber and plastics. The Company sells silane and specialty resins under MPM-owned brands including: Silblock, A-Link, Wetlink, Silquest, NXT, Pearlene, SPUR, Tospearl and CoatOSil. 19 (iii) Intermediates Intermediate products are a broad set of by-product materials produced in chemical operation, which are primarily used as inputs for other product portfolios. (iv) Silicone Elastomers Silicone elastomers are blends of silicone polymers and various fillers. Characteristics of silicone elastomers include a broad temperature range, excellent resistance to weathering, low toxicity, good electrical insulation properties and acoustical damping qualities. Silicone elastomers are used in the production of a variety of goods, including gaskets, seals, hoses and tubing, as well as numerous consumer items. Elastomers products are used primarily in the healthcare, consumer products, energy and automotive end-markets and are sold under the MPM-owned brand names Tufel, Ultra Tufel, Silplus, LSR / LIM, Silopren, and Addisil. (v) Specialty Coatings Attributes of Specialty Coatings products include high-temperature resistance, abrasion resistance, pressure sensitive adhesion or release and weatherability. End-markets for Specialty Coatings products include the construction, tape and label, adhesives, electronics and automotive markets. Specialty Coatings products are sold under the MPM-owned brands SilForce, Silgrip, Silblock, and Anchorsil, as well as the Baysilone brand that the Company uses under license from BayerAG. (vi) Room Temperature Vulcanizers Room Temperature Vulcanization (“RTV”) products include highly engineered gels, greases, adhesives, encapsulants and sealants. RTV products are used primarily in micro- and macro-electronics assembly, consumer electronics, automotive, aerospace, consumer goods and industrial sealing applications. The Company’s RTV products are sold under the MPM-owned brand names TSE, SilCool, InvisiSil and SnapSil. Certain of these products are used, for instance in various components of LED lights, including in the fabrication of optical lenses, as LED encapsulants, and as LED die attach, which offer high heat and UV resistant properties. (vii) Urethane Additives Urethane Additive products are used essentially for stabilizing polyurethane foam. Polyurethane applications include furniture, bedding, auto interior, appliances, construction, carpet backing, footwear and synthetic leather. Urethane additive products are sold under the MPM-owned Niax and Geolite brands. For example, Niax additives are used in the production of polyurethane foam in a variety of products, including the slab foam in furniture and bedding, rigid foam used in appliances, and molded foam for automotive interior uses, among others. Application of the Company’s products by foam manufacturers can enhance products by, for example, increasing softness or improving dimensional stability. 20 (viii) Consumer and Construction Sealants Consumer sealants are used by homeowners, builders and contractors for a variety of projects throughout the home including increasing energy efficiency, reducing damaging effects of moisture and protecting the home from pollen, pollution and pests. Construction sealants are used in structural glazing, weather-sealing, and insulated glass applications in new and remedial large-scale commercial building projects. The Company has an exclusive right to use the GE brand for these products pursuant to a licensing arrangement with GE. The Company’s consumer and construction sealant products are also sold under various private labels for a number of hardware and paint retailers. (2) Quartz and Specialty Ceramics. With 2013 worldwide net sales of $201 million, the Company’s Quartz and Specialty Ceramics business is a global leader in the development and manufacturing of fused quartz and ceramic materials. Fused quartz, a man-made glass manufactured principally from quartz sand, is used in processes requiring extreme temperature, high purity and other specific characteristics. Fused quartz and ceramic materials are used in a wide range of industries, including semiconductor, lamp tubing, manufacturing, packaging, cosmetics and fiber optics. The Company is a leading global producer of quartz tubing, ingots and crucibles and high-performance, non-oxide ceramic powders, coatings and solids. The Company’s Quartz products are used as a superior substitute for glass. On a microscopic level, normal glass is filled with impurities, bubbles and other flaws. For this reason, applications that require transparency and a high level of purity or stress-resistance (such as process equipment for semiconductor manufacturing or lamp lenses for video projectors) require the use of quartz. A significant driver of the Company’s Quartz volumes derives from microchip makers adding to or adjusting their manufacturing lines for newly developed products. The manufacture of quartz products for use in the production of semiconductors generated approximately 45% of the Company’s Quartz business’ revenue for the fiscal year ended December 31, 2013 compared to 41% in 2012 and 48% in 2011. Naturally occurring quartz sand is the key raw material for many of the products manufactured by the Quartz business, which is currently available from a limited number of suppliers. A single major producer of natural quartz sand controls a significant portion of the market for this key raw material. As a result, such producer exercises significant control over quartz sand prices, which have been steadily increasing. In recent years, these increases have averaged approximately 3-5% per year. The Company is currently negotiating the terms of a new long term supply agreement with such supplier, which the Company expects to enter into in 2014. Other than Quartz sand, the majority of raw materials used to manufacture Quartz products are readily available in the open market. (e) Customers. Through the Company’s worldwide network of production facilities, it serves more than 4,500 customers in over 100 countries. The Company markets an extensive product line to meet a wide variety of customer needs. The Company focuses on customers who are, or 21 have the potential to be, leaders in their industries and have growth objectives that support the Company’s own growth objectives. Many of the Company’s customers are expanding internationally to serve developing areas in Asia, Eastern Europe, Latin America, India and Russia. Maintaining close proximity to international customers allows the Company to serve them more quickly and efficiently and thus build strong relationships. The Company’s customers include leading companies in their respective industries, such as Procter & Gamble, Avery, Continental Tire, Saint Gobain, Unilever, BASF, The Home Depot and Lowe’s. The Company takes a service-oriented approach to its customers, providing high-quality, reliable products backed by local sales support and technical expertise. An important component of the Company’s strategy is to utilize its broad product capabilities to win high-end specialty business from customers, allowing the Company to become a supplier of choice, utilizing its ability to develop solutions to meet its customers precise needs. In 2013, the Company’s largest customer accounted for less than 3% of its net sales, and the Company’s top twenty customers accounted for approximately 22% of net sales. As part of agreements with certain customers of the Debtors, and as a benefit to and at the request of such customers, the Debtors from time to time enter into accounts receivable sales whereby the Debtors sell the receivables relating to such customers to certain third-party financial institutions which provide extended payment terms to the Debtors’ customers. These transactions are beneficial both to the Debtors — because they receive payment on receivables sooner than they otherwise would — and the Debtors’ customers, who receive extended payment terms from the financial institutions. The Debtors expect to continue such transactions in the ordinary course pursuant to the relevant underlying documentation following the Petition Date. (f) Research and Development. A key aspect of the Company’s success relies on the continued development of new applications for its existing products and additional technologic advances leading to new products, allowing the Company to provide leading edge technology to their customers. The Company maintains its own research and development facilities, and employees engineers and chemists to develop the Company’s products in in-house laboratories. For the year ended December 31, 2013, the Company spent $70 million on research and development, equaling approximately 3% of revenues. (g) Intellectual Property. The Company owns, licenses or has rights to over 3,600 patents, approximately 100 trademarks and various patent and trademark applications and technology licenses around the world. The Company’s current patents will expire between 2014 and 2031. The Company’s rights under such patents and licenses, particularly those relating to the Company’s Velvesil, Silwet, Silsoft, SPUR+, and NXT brands, technologies and products, are material assets of the Company. The Company also relies on unpatented proprietary manufacturing expertise, continuing technological innovation and other trade secrets to develop and maintain its competitive position. 22 (h) Industry Regulatory Matters. Domestic and international laws regulate the production and marketing of chemical substances. Although almost every country has its own legal procedure for registration and import, laws and regulations in the European Union, the United States, and China are the most significant to the Company’s business. These laws typically prohibit the import or manufacture of chemical substances unless the substances are registered or are on the country’s chemical inventory list, such as the European inventory of existing commercial chemical substances and the U.S. Toxic Substances Control Act inventory. Chemicals that are on one or more of these lists can usually be registered and imported without requiring additional testing in countries that do not have such lists, although additional administrative hurdles may exist. Under such laws, countries may also require toxicity testing to be conducted on chemicals in order to register them or may place restrictions on the import, manufacture and/or use of a chemical. (i) Environmental Regulations. The Company’s operations involve the use, handling, processing, storage, transportation and disposal of hazardous materials, and are therefore subject to extensive environmental regulation at the federal, state and international level. In 2013, the Company incurred capital expenditures of $18 million on an aggregate basis to comply with environmental laws and regulations and to make other environmental improvements. The Company estimates that its capital expenditures in 2014 for environmental controls at its facilities will be approximately $31 million. 3.2. Employees. As of December 31, 2013, the Company had approximately 4,500 employees worldwide, including employees of the Debtors’ foreign non-Debtor subsidiaries. Approximately 46% of the Company’s employees are members of a labor union or are represented by workers’ councils that have collective bargaining agreements. Further, the Company sponsors various pension and similar benefit plans worldwide for its employees. The Debtors’ U.S. defined benefit pension plans were underfunded in the aggregate by $59 million as of December 31, 2013, and certain pension plans sponsored by the Debtors’ foreign non-Debtor affiliates are also underfunded. Annually, the Debtors make certain required contributions on a quarterly basis to their U.S. defined benefit pension plans. The Debtors are required to make contributions of $18.3 million in 2014. In addition to the Debtors’ quarterly contributions to the pension plans, the Debtors make, on an annual basis, a “true-up” payment relating to the previous fiscal year. For fiscal year 2013, the Debtors are required to make a “true-up” payment in the amount of approximately $8 million by September 2014. The Company also maintains unfunded post-retirement benefit plans for retired employees. As of December 31, 2013, the aggregate post-retirement benefit obligation with respect to these plans was $81 million. 23 The Company also maintains various other benefit plans and bonus programs for its employees. Bonus programs for the Company’s U.S. employees include annual performance bonuses and individual project level bonuses. 3.3. Related Party Transactions. (a) Shared Services Agreement. In an effort to minimize costs and take advantage of synergies, the Company entered into a Shared Services Agreement with MSC, as amended and restated on March 17, 2011, pursuant to which the Company provides to MSC and MSC provides to the Company, certain services, including, but not limited to, (i) executive and senior management, (ii) administrative support, (iii) human resources, (iv) information technology support, (v) accounting, (vi) finance, (vii) technology development, (viii) legal and (ix) procurement services. The Company has achieved significant cost savings under the Shared Services Agreement with MSC, including savings related to shared services and logistics optimization, best-of-source contractual terms, procurement savings, regional site rationalization, administrative and overhead savings. The Shared Services Agreement establishes certain criteria upon which the costs of such services are allocated between the Company and MSC and requires that a steering committee formed under the Shared Services Agreement meet no less than annually to evaluate and determine an equitable allocation percentage of costs among the Company and MSC. At the origination of the Shared Services Agreement, the allocation percentage was established at 49% for the Company and 51% for MSC. This allocation percentage was further modified in 2013 to 43% for the Company and 57% for MSC. Pursuant to the terms of the Shared Services Agreement, MPM pays to MSC, on a monthly basis, estimated invoices for MPM’s portion of amounts expected to be incurred by MSC on MPM’s behalf. On a quarterly basis, MPM pays to MSC a “true-up” payment, if necessary, reconciling the amounts paid pursuant to the estimated monthly invoices for such quarter with the allocation percentages agreed under the Shared Services Agreement. As of the Petition Date, MPM estimates that it owes MSC approximately $10.5 million for prepetition amounts due under the Shared Services Agreement. As of December 31, 2013, the Company’s total realized savings under the Shared Services Agreement was approximately $64 million. Certain members of the Company’s senior management team who provide substantial services to the Company, act in the same or similar capacities for MSC, and were historically employed by MSC prior to its acquisition by MPM Holdings LLC. Costs related to employees who provide substantial services to both MPM and MSC are allocated among MPM and MSC in accordance with the allocation mechanic described above. The Shared Services Agreement is subject to termination by either MPM or MSC, without cause, on not less than 30 days prior written notice subject to a 180-day transition assistance period, and expires in October 2015 (subject to one-year renewals every year thereafter, absent contrary notice from either party). The Plan contemplates that on the Effective Date, Reorganized MPM and MSC will enter into the Amended Shared Services Agreement pursuant to its terms. For additional details on the Amended Shared Services Agreement, please see Section 6.7(e) of this Disclosure Statement. 24 (b) Additional Transactions with Domestic Non-Debtor Affiliates. Prior to the Petition Date, the Company entered into certain additional transactions with its non-Debtor affiliates, including MPM Holdings LLC and MSC in arm’s-length transactions which were beneficial to the Company. For example, as part of the Company’s strategy to manage its declining liquidity immediately prior to the Petition Date, the Company entered into a transaction involving the sale of the receivables of certain Debtor entities to a non-Debtor subsidiary of MPM Holdings LLC. In the transaction, certain receivables of Debtors Momentive Performance Materials USA Inc. and Momentive Performance Materials Quartz, Inc. were sold to Superholdco Finance Corp., a non-Debtor affiliate and subsidiary of MPM Holdings LLC. The Company believes that this transaction and all relevant agreements were negotiated in an arm’s-length manner, with the Company and MSC each represented by separate advisors. In addition, as part of a cost-savings opportunity and to monetize an asset that would otherwise be unsalable in connection with the wind down of the Company’s Canadian operations, in an all Cash transaction, Momentive Performance Materials Worldwide Inc., a Debtor, sold the stock of one of its Canadian subsidiaries to Momentive Specialty Chemicals Holdings B.V., a subsidiary of MSC. In connection with this transaction, an MSC subsidiary will act as a distributor for certain of the Company’s products in Canada. The Company believes that this transaction and all relevant agreements were negotiated in an arm’s-length manner, with the Company and MSC each represented by separate advisors. Also, MSC and the Company are embarking on a project in Brazil, whereby an MSC entity will co-locate an epoxy manufacturing operation on a site in Itabiba, Brazil owned by a non-Debtor indirect subsidiary of MPM. The project involves a lease of property and a site services agreement between subsidiaries of the Company and MSC. The Company believes that this transaction and all relevant agreements were negotiated in an arm’s-length manner, with the Company and MSC each represented by separate legal counsel. In addition, the Company is subject to a management consulting and advisory services agreement with Apollo for the provision of management and advisory services for an initial term of up to 12 years. Apollo waived the annual management fee provided for by this agreement for 2013. The Plan contemplates that the advisory services agreement will be terminated effective as of the Petition Date. The Company also sells products to, and purchases products from, MSC pursuant to a Master Buy/Sell Agreement dated as of September 6, 2012 (the “ Master Buy/Sell Agreement ”). Prices under the agreement are determined by a formula based upon certain third party sales of the applicable product, or in the event that no qualifying third party sales have taken place, based upon the average contribution margin generated by certain third party sales of products in the same or a similar industry. A subsidiary of MPM also acts as a non-exclusive distributor in India for certain of MSC’s subsidiaries pursuant to Distribution Agreements dated as of September 6, 2012 (the “ Distribution Agreements ”). Prices under the Distribution Agreements are determined by a formula based on the weighted average sales price of the applicable product less a margin. The Master Buy/Sell Agreement and Distribution Agreements have initial terms of 3 years and may be terminated for convenience by either party thereunder 25 upon 30 days’ prior notice in the case of the Master/Buy Sell Agreement and upon 90 days’ prior notice in the case of the Distribution Agreements. Pursuant to these agreements and other purchase orders, during the years ended December 31, 2013 and 2012, the Company sold $9 million and $3 million, respectively, of products to MSC and purchased less than $1 million of products from MSC. As of December 31, 2013 and 2012, the Company had $1 million and less than $1 million, respectively, of accounts receivable from MSC and less than $1 million of accounts payable to MSC related to these agreements. (c) Transactions with Foreign Subsidiaries. As discussed above, the Company is a global business with an extensive foreign manufacturing footprint. The Debtors’ foreign operations are conducted by non-Debtor subsidiaries incorporated in a variety of jurisdictions in Canada, Europe, Asia and South America. The Company’s foreign and domestic operations are highly interdependent, making the Company’s foreign operations essential to the Company’s overall strategy. The foreign operations allow the Company to provide products to its customers in many locations globally. Further, certain foreign operations provide vital products to the Company’s domestic facilities. In the ordinary course of the Company’s businesses prior to the Petition Date, the Company’s domestic Debtor entities and its foreign non-Debtor entities maintained significant business and financial relationships which resulted in intercompany trade receivables and payables arising from the purchase and sale of goods among the various Debtor and non-Debtor foreign entities. In addition, as part of the Company’s global management of Cash, the Company maintains a complex system of intercompany loans among Debtor and non-Debtor entities, allowing the Company to transfer liquidity to where it is needed in the Company’s global operations. The Company tracks each transaction and at any point in time can identify every amount due to and due from in connection with such transactions. In addition to such intercompany loans, $840 million in notes were issued to certain Debtors by their non-Debtor Japanese affiliate, Momentive Performance Materials Japan LLC, in connection with the acquisition of the Company by Apollo. The Debtors also received authority, in connection with the Cash Management Motion (as defined below), from the Court to continue to provide financial support to their foreign subsidiaries during the course of these cases, including, as necessary, the provision of Cash support to foreign affiliates, as well as the discretion to refrain from seeking Cash payment from certain foreign affiliates on account of trade receivables or interest or principal payments due to the Debtors under intercompany loan facilities. 3.4. Debtors’ Prepetition Capital Structure. As of December 31, 2013, the Debtors had $4,114 million of consolidated outstanding indebtedness, including payments due within next twelve months and short-term borrowings. Had it not been for the Debtors’ filing for bankruptcy protection, the Company’s projected 2014 Cash interest expense on its fixed-rate obligations would have been $288 million. The components of the Debtors’ outstanding indebtedness are summarized below. 26 (a) ABL Facility. Certain of the Debtors and their non-Debtor foreign subsidiaries are borrowers under a revolving credit facility with maximum aggregate availability of $270 million (the “ ABL Facility ”) pursuant to that certain Asset-Based Revolving Credit Agreement, dated as of April 24, 2013, among Holdings, MPM, Momentive Performance Materials USA Inc., as U.S. Borrower, Momentive Performance Materials GMBH, as Germany Silicone Borrower, Momentive Performance Materials Quartz GMBH as Germany Quartz Borrower, Momentive Performance Materials Nova Scotia ULC, as Canadian Borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent. Availability under the ABL Facility is subject to a borrowing base based on a specified percentage of eligible accounts receivable and inventory and, in certain foreign jurisdictions, machinery and equipment. As of the Petition Date, the borrowing base reflecting various reserves was determined to be approximately $270 million, and the Company had $71 million of issued and outstanding letters of credit and $166 million of revolver borrowings under the ABL Facility. Additionally, as of the Petition Date, 12.5% of the borrowing base, or $34 million, was unavailable because the Company did not meet the fixed charge coverage ratio required to borrow the full amount of the facility. The ABL Facility was amended and restated as the DIP ABL Facility subsequent to the Petition Date. (b) Cash Flow Facility. Certain of the Debtors and their non-Debtor foreign subsidiaries are also borrowers under a revolving credit facility with maximum aggregate availability of $75 million (the “ Cash Flow Facility ”) pursuant to that certain Second Amended and Restated Credit Agreement, dated as of April 24, 2013, among Holdings, MPM, Momentive Performance Materials USA Inc., as U.S. Borrower, Momentive Performance Materials GMBH, as Germany Silicone Borrower, Momentive Performance Materials Nova Scotia ULC, as Canadian Borrower, General Electric Capital Corporation as Designated Lender, and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent. As of the Petition Date, approximately $20.7 million was currently outstanding under the Cash Flow Facility. (c) First Lien Notes. MPM is an issuer of $1.1 billion of 8.875% First-Priority Senior Secured Notes due 2020 (the “First Lien Notes ”) issued pursuant to an Indenture dated as of October 25, 2012, with The Bank of New York Mellon Trust Company, N.A., as indenture trustee and the other Debtors, other than Holdings, as guarantors. (d) 1.5 Lien Notes. MPM is an issuer of $250 million of 10% Senior Secured Notes due 2020 (the “1.5 Lien Notes”) issued pursuant to an Indenture dated as of May 25, 2012, with the Bank of New York Mellon Trust Company, N.A., as indenture trustee and the other Debtors, other than Holdings, as guarantors. 27 (e) Second Lien Notes. MPM is an issuer of approximately $1.161 billion of 9% Second-Priority Springing Lien Notes due 2021 and €133 million 9.5% Second-Priority Springing Lien Notes due 2021 (collectively, the “ Second Lien Notes ”) issued pursuant to an Indenture dated as of November 5, 2010, with The Bank of New York Mellon Trust Company, N.A., as indenture trustee and the other Debtors, other than Holdings, as guarantors. (f) Senior Subordinated Notes. MPM is an issuer of $382 million in aggregate principal amount of unsecured 11.5% Senior Subordinated Notes due 2016 (the “ Subordinated Notes ”) issued pursuant to an Indenture dated as of December 4, 2006, with Wells Fargo Bank, National Association, as indenture trustee and the other Debtors, other than Holdings, as guarantors. (g) MPM Holdings PIK Note. In connection with the purchase of the Company from GE, on December 4, 2006, Holdings issued a pay-in-kind unsecured 11% Senior Discount Note, due June 4, 2017, with an original principal amount of $400 million (the “ Holdings PIK Note ”). As of December 31, 2013, the aggregate principal amount outstanding on the Holdings PIK Note was $854 million. No other Debtor or non-Debtor entity is a guarantor on the Holdings PIK Note. (h) Equity Ownership. Apollo owns approximately 90.4% of the equity interests in MPM Holdings LLC, the ultimate parent of the Debtors. GE Capital Equity Investments, Inc. holds approximately 6.3% of the equity interests in MPM Holdings LLC, with the remainder held by current or former officers or directors of the Company, MPM Holdings LLC or MSC. ARTICLE IV. EVENTS LEADING TO CHAPTER 11 FILING Before the commencement of these chapter 11 cases, the Debtors faced significant financial challenges. Specifically, the Debtors had substantial indebtedness, leaving them levered at approximately 16 times their 2013 EBITDA. The nearly $300 million in annual interest that the Debtors were required to pay on these obligations meant that the Debtors were free Cash flow negative in 2013 by over $200 million, rapidly draining the Cash available to the Debtors. Ultimately, due to a lack of available funds, the Debtors were unable to make interest payments totaling $62 million due April 14, 2014 on the First Lien Notes and 1.5 Lien Notes, absent additional liquidity from debtor-in-possession financing. Further, one additional potential source of liquidity, the Cash Flow Facility, was scheduled to mature at the end of 2014. The Debtors’ historic lack of available liquidity had already hampered the Debtors’ ability to fund needed capital expenditures and research and development costs for new products, with the potential to erode the Debtors’ position vis-a-vis its competitors. Further, volatility in the global markets, economic softness across the world, lack of consumer confidence and over-capacity in the silicones industry has continued to negatively impact the results of the Debtors’ businesses. 28 Because of these factors and the Debtors’ high amount of leverage, it became apparent to the management and directors of the Debtors that the Debtors’ balance sheet had to be significantly de-levered in order to create a competitive and sustainable Debtors going forward. The Debtors’ business is also cyclical. It is impacted by general economic and industrial conditions, such as the robustness of general industrial production, automotive builds, housing starts, construction activity, consumer spending and semiconductor capital equipment investment. The continued slowdown of global economic growth and increasing over-capacity in the Debtors’ industry have negatively impacted the results of both the silicones and quartz businesses. To cope with these industry-specific and macro-economic trends, the Debtors and their management team have aggressively focused on increasing productivity efficiencies to reduce material costs and improve margins, as well as on managing liquidity and optimizing resources in the Debtors’ manufacturing footprint. In response to the uncertain economic outlook, the Debtors undertook organizational restructuring and cost reduction programs, and continue to evaluate additional actions, as well as productivity measures, that could lead to further cost savings. With this in mind, and facing an impending liquidity crisis, the Debtors retained Moelis & Company (“ Moelis ”) as investment banker in November 2013, and Willkie Farr & Gallagher LLP (“ Willkie ”) as restructuring counsel in December 2013. When it became clear that an out-of-court restructuring was not feasible, the Debtors determined that seeking a reorganization of their operations under chapter 11 protection might be in the best long-term interests of the Debtors and their stakeholders and in February 2014, the Debtors authorized Moelis to initiate the process of securing debtor-in-possession financing to fund a potential chapter 11 filing. The Debtors and Moelis reached out to three parties who were viewed as qualified to provide the Debtors with fully-committed DIP financing (the “ Potential Financing Parties ”). The Potential Financing Parties included institutions familiar with the Debtors and institutions that regularly provide financing in distressed situations. In addition to the Potential Financing Parties, the Debtors requested and obtained an initial proposal for DIP financing from Apollo and held discussions with other current holders of debt regarding DIP financing. Following an extensive, multi-track negotiation process with each of the Potential Financing Parties, the Debtors ultimately determined that the terms proposed by JPMorgan Chase Bank, N.A. (“ JPM ”) provided the most beneficial DIP financing to the Debtors. Ultimately, the other two Potential Financing Parties, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC (collectively with JPM, the “ DIP Lenders ”), agreed to each commit to provide one-third of the DIP financing on the terms initially negotiated with JPM. The negotiations with the DIP Lenders culminated in a commitment letter, dated April 7, 2014, to provide the proposed DIP facilities. The proposed DIP facilities comprise a $270 million asset-based revolving loan and a $300 million term loan. The DIP Lenders have also committed, subject to certain closing conditions, to convert the proposed DIP asset-based revolving loan into a $270 million exit asset-based revolving facility and to provide a new $1 billion exit term loan facility. In addition to commencing a process to obtain debtor-in-possession financing, the Debtors and their advisors initiated a dialogue with certain significant holders of Second Lien Notes and their advisors beginning in January 2014, to negotiate a comprehensive financial 29 restructuring of the Debtors. Certain holders of Second Lien Notes agreed to sign confidentiality agreements with the Debtors and receive material non-public information regarding the Debtors on February 18, 2014. Subsequently, the Debtors’ management, advisors and the advisors and principals of holders of Second Lien Notes, including the Debtors’ ultimate equity holder, Apollo, who owns a significant portion of Second Lien Notes, began negotiating the terms of a potential restructuring of the Debtors. Those negotiations were fruitful, and the Debtors ultimately entered into that certain Restructuring Support Agreement dated April 13, 2014 (as amended, supplemented or otherwise modified, the “ RSA ”) with Apollo and other holders of Second Lien Notes (together, with the additional holders of Second Lien Notes who subsequently entered into the RSA, the “ Plan Support Parties ”), who together hold approximately 90% in dollar amount of Second Lien Notes. Pursuant to the RSA, which serves as the roadmap for the Debtors’ successful emergence from chapter 11, the Plan Support Parties are required to not only vote in favor of the Plan (subject to the requirements and restrictions of applicable law), but are also prohibited from, among other things, opposing confirmation of the Plan. As contemplated by the RSA, on May 9, 2014, the Debtors and the Plan Support Parties entered into that certain Backstop Commitment Agreement, which provides that, subject to the terms therein, the Plan Support Parties will backstop the Rights Offerings contemplated by the Plan. Since commencing these cases, the Debtors have engaged the Plan Support Parties and other key constituents in negotiating the terms of the Plan. The Plan is a product of good faith arm’s-length negotiations. If consummated, the restructuring transactions contemplated in the Plan will substantially de-lever the Debtors while providing additional needed liquidity. The Debtors believe the Plan represents their best option to maximize value for the estates, exit chapter 11 as expeditiously as possible, and provide their reorganized enterprise with the capital needed to implement their post-reorganization business plan. A summary of the terms of the Plan is contained in Article VI of this Disclosure Statement, and the Plan is attached hereto as Exhibit 1 . ARTICLE V. REASONS FOR THE SOLICITATION; RECOMMENDATION Chapter 11 of the Bankruptcy Code provides that unless the terms of section 1129(b) of the Bankruptcy Code are satisfied, for the Bankruptcy Court to confirm the Plan, the holders of Claims in each Class of impaired Claims entitled to vote on the Plan must accept the Plan by the requisite majorities set forth in the Bankruptcy Code. An impaired Class of Claims shall have accepted the Plan if (a) the holders of at least two-thirds (2/3) in amount of the Claims in such Class actually voting on the Plan have voted to accept it, and (b) more than one-half (1/2) in number of the holders of Claims in such Class actually voting on the Plan have voted to accept it (such votes, the “ Requisite Acceptances ”). In light of the significant benefits to be attained by the Debtors and their creditors if the transactions contemplated by the Plan are consummated, the Debtors recommend that all 30 holders of Claims entitled to vote to accept the Plan do so. The Debtors reached this decision after considering available alternatives to the Plan and their likely effect on the Debtors’ business operations, creditors, and shareholders. These alternatives included alternative restructuring options under chapter 11 of the Bankruptcy Code, and liquidation of the Debtors under chapter 7 of the Bankruptcy Code. The Debtors determined, after consulting with their legal and financial advisors, that the Plan, if consummated, will maximize the value of their estates for all stakeholders, as compared to any other chapter 11 reorganization strategy or a liquidation under chapter 7. For all of these reasons, the Debtors support the Plan and urge the holders of Claims entitled to vote on the Plan to accept and support it. The Plan Support Parties also support confirmation of the Plan and urge all holders of Claims in voting Classes to accept the Plan. ARTICLE VI. THE PLAN 6.1. Overview of Chapter 11. Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. Under chapter 11, a debtor is authorized to restructure its business for the benefit of itself, its creditors and its equity interest holders. In addition to permitting the rehabilitation of a debtor, another goal of chapter 11 is to promote equality of treatment for similarly situated creditors and similarly situated equity interest holders with respect to the distribution of a debtor’s assets. The commencement of a chapter 11 case creates an estate that comprises of all of the legal and equitable interests of the debtor as of the bankruptcy filing date. The Bankruptcy Code provides that the debtor may continue to operate its business and remain in possession of its property as a “debtor in possession.” The consummation of a chapter 11 plan is the principal objective of a chapter 11 reorganization case. A chapter 11 plan sets forth the means for satisfying claims against and interests in a debtor. Confirmation of a chapter 11 plan by the bankruptcy court makes that plan binding upon the debtor, any issuer of securities under the plan, any person acquiring property under the plan and any creditor or equity interest holder of the debtor. Subject to certain limited exceptions, the order approving confirmation of a plan discharges a debtor from any debt that arose prior to the date of confirmation of the plan and substitutes them for the obligations specified under the confirmed plan. In general, a chapter 11 plan of reorganization: (a) divides claims and equity interests into separate classes, (b) specifies the property, if any, that each class is to receive under the plan, and (c) contains other provisions necessary to the restructuring of the debtor that are required or permitted by the Bankruptcy Code. Pursuant to section 1125 of the Bankruptcy Code, acceptance or rejection of a chapter 11 plan may not be solicited after the commencement of a chapter 11 case until such time as the court has approved the disclosure statement as containing adequate information. Pursuant to section 1125(a) of the Bankruptcy Code, “adequate information” is information of a 31 kind, and in sufficient detail, to enable a hypothetical reasonable investor to make an informed judgment regarding the chapter 11 plan. To satisfy the applicable disclosure requirements, the Debtors submit this Disclosure Statement to holders of Claims that are impaired and not deemed to have rejected the Plan. 6.2. Resolution of Certain Inter-Creditor and Inter-Debtor Issues. (a) Settlement of Certain Inter-Creditor Issues. The treatment of Claims and Interests under the Plan represents, among other things, the settlement and compromise of certain potential inter-creditor disputes. (b) Formation of Debtor Groups for Convenience Purposes. The Plan groups the Debtors together solely for purposes of describing treatment under the Plan, confirmation of the Plan and making Plan Distributions in respect of Claims against and Interests in the Debtors under the Plan. Such groupings shall not affect any Debtor’s status as a separate legal entity, change the organizational structure of the Debtors’ business enterprise, constitute a change of control of any Debtor for any purpose, cause a merger or consolidation of any legal entities, nor cause the transfer of any assets; and, except as otherwise provided by or permitted in the Plan, all Debtors shall continue to exist as separate legal entities. (c) Intercompany Claims. Notwithstanding anything to the contrary herein or in the Plan, on the Effective Date, with the consent of the Requisite Investors, or after the Effective Date, any and all Intercompany Claims will be reinstated, adjusted (including by contribution, distribution in exchange for new debt or equity, or otherwise), paid, continued, cancelled or discharged to the extent reasonably determined appropriate by the Reorganized Debtors, subject to the terms of the Exit Facilities. Any such transaction may be effected on the Effective Date, with the consent of the Requisite Investors, or subsequent to the Effective Date without any further action by the Bankruptcy Court or by the stockholders of any of the Reorganized Debtors. Notwithstanding the foregoing, any claims of Holdings against any other Debtors shall only be released, cancelled or discharged following payment by Holdings of all amounts required by Section 5.9 of the Plan. 6.3. Overview of the Plan. THE FOLLOWING IS A SUMMARY OF SOME OF THE SIGNIFICANT ELEMENTS OF THE PLAN. THIS DISCLOSURE STATEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED INFORMATION SET FORTH IN THE PLAN AND THE EXHIBITS AND SCHEDULES THERETO. The Plan classifies Claims and Interests separately in accordance with the Bankruptcy Code and provides different treatment for different Classes of Claims and Interests. Claims and Interests shall be included in a particular Class only to the extent such Claims or Interests qualify for inclusion within such Class. The Plan separates the various Claims and Interests (other than those that do not need to be classified) into eleven (11) separate Classes. These Classes take into account the differing nature and priority of Claims against, and Interests in, the Debtors. Unless otherwise indicated, the characteristics and amounts of the Claims or Interests in the following Classes are based on the books and records of the Debtors. 32 This section summarizes the treatment of each of the Classes of Claims and Interests under the Plan and describes other provisions of the Plan. Only holders of Allowed Claims — Claims that are not in dispute, contingent, or unliquidated in amount and are not subject to an objection or an estimation request — are entitled to receive distributions under the Plan. For a more detailed description of the definition of “Allowed,” see Article I of the Plan. Until a Disputed Claim becomes Allowed, no distributions of New Common Stock, Cash or otherwise will be made. The Plan is intended to enable the Debtors to continue present operations without the likelihood of a subsequent liquidation or the need for further financial reorganization. The Debtors believe that they will be able to perform their obligations under the Plan. The Debtors also believe that the Plan permits fair and equitable recoveries. The Confirmation Date will be the date that the Confirmation Order is entered by the Clerk of the Bankruptcy Court. The Effective Date will be the first Business Day on or after the Confirmation Date on which all of the conditions to the Effective Date specified in Section 11.2 of the Plan have been satisfied or waived, including the consummation of the transactions contemplated by the Plan. Resolution of any challenges to the Plan may take time and, therefore, the actual Effective Date cannot be predicted with certainty. Other than as specifically provided in the Plan, the treatment under the Plan of each Claim and Interest will be in full satisfaction, settlement, release and discharge of all Claims or Interests. The Debtors will make all payments and other distributions to be made under the Plan unless otherwise specified. The Plan constitutes a joint plan of reorganization for all of the Debtors. All Claims and Interests, except DIP Claims, Administrative Expense Claims, Fee Claims, U.S. Trustee Fees and Priority Tax Claims, are placed in the Classes set forth in Article IV of the Plan. In accordance with section 1123(a)(1) of the Bankruptcy Code, DIP Claims, Administrative Expense Claims, Fee Claims, U.S. Trustee Fees and Priority Tax Claims have not been classified, and the holders thereof are not entitled to vote on the Plan. A Claim or Interest is placed in a particular Class only to the extent that such Claim or Interest falls within the description of that Class and is classified in other Classes to the extent that any portion of the Claim or Interest falls within the description of such other Classes. A Claim or Interest is placed in a particular Class for all purposes, including voting, confirmation and distribution under the Plan and under sections 1122 and 1123(a)(1) of the Bankruptcy Code. However, a Claim or Interest is placed in a particular Class for the purpose of receiving Plan Distributions only to the extent that such Claim or Interest is an Allowed Claim or Allowed Interest and has not been paid, released or otherwise settled prior to the Effective Date. 33 (a) Unclassified Claims. (i) (1) DIP Claims. DIP Term Loan Claims. The DIP Term Loan Claims shall be deemed to be Allowed Claims under the Plan. In full satisfaction, settlement, release and discharge of the Allowed DIP Term Loan Claims, on the Effective Date, all Allowed DIP Term Loan Claims shall be paid in full in Cash. Upon payment and satisfaction in full of all Allowed DIP Term Loan Claims, all Liens and security interests granted to secure such obligations, whether Claims in the Reorganization Cases or otherwise, shall be terminated and of no further force or effect. All of the Debtors’ contingent or unliquidated obligations under the DIP Term Loan Credit Agreement, including, without limitation, under Sections 2.15, 2.16, 2.17 and 9.05, to the extent any such obligation has not been paid in full in Cash on the Effective Date, shall survive the Effective Date and shall not be released or discharged pursuant to the Plan or Confirmation Order, notwithstanding any provision hereof or thereof to the contrary. (2) DIP ABL Claims. The DIP ABL Claims shall be deemed to be Allowed Claims under the Plan. The DIP ABL Claims shall be satisfied in full by either: (a) the conversion on the Effective Date of the DIP ABL Facility into the New ABL Facility in accordance with the terms and conditions of the DIP ABL Credit Agreement; or (b) the termination of all commitments, payment in full in Cash of all outstanding obligations and cash collateralization, return or backstopping of all letters of credit issued thereunder in a manner satisfactory to the DIP Agent. If the DIP ABL Claims are satisfied in full pursuant to clause (b) of the immediately preceding sentence, (i) all Liens and security interests granted to secure such obligations, whether Claims in the Reorganization Cases or otherwise, shall be terminated and of no further force or effect and (ii) all of the Debtors’ contingent or unliquidated obligations under the DIP ABL Credit Agreement, including, without limitation, under Sections 2.15, 2.16, 2.17 and 9.05, to the extent any such obligation has not been paid in full in Cash on the Effective Date, shall survive the Effective Date and shall not be released or discharged pursuant to the Plan or Confirmation Order, notwithstanding any provision hereof or thereof to the contrary. (ii) Administrative Expense Claims. Time for Filing Administrative Expense Claims: The holder of an Administrative Expense Claim, other than the holder of: (A) a DIP Claim; (B) a Fee Claim; (C) a 503(b)(9) Claim; (D) an Administrative Expense Claim that has been Allowed on or before the Effective Date; (E) an Administrative Expense Claim for an expense or liability incurred and payable in the ordinary course of business by a Debtor; (F) an Administrative Expense Claim on account of fees and expenses incurred on or after the Petition Date by ordinary course professionals retained by the Debtors pursuant to an order of the Bankruptcy Court; (G) an Administrative Expense Claim arising, in the ordinary course of business, out of the employment by one or more Debtors of an individual from and after the Petition Date, but only to the extent that such Administrative Expense Claim is solely for outstanding wages, commissions, accrued benefits, or 34 reimbursement of business expenses; (H) a claim for adequate protection arising under the Final DIP Order; or (I) an Indenture Trustee Claim, must file with the Bankruptcy Court and serve on the Debtors or Reorganized Debtors (as the case may be), the Claims Agent, and the Office of the U.S. Trustee, proof of such Administrative Expense Claim within thirty (30) days after the Effective Date (the “ Administrative Bar Date ”). Such proof of Administrative Expense Claim must include at a minimum: (A) the name of the applicable Debtor that is purported to be liable for the Administrative Expense Claim and if the Administrative Expense Claim is asserted against more than one Debtor, the exact amount asserted to be owed by each such Debtor; (B) the name of the holder of the Administrative Expense Claim; (C) the asserted amount of the Administrative Expense Claim; (D) the basis of the Administrative Expense Claim; and (E) supporting documentation for the Administrative Expense Claim. FAILURE TO FILE AND SERVE SUCH PROOF OF ADMINISTRATIVE EXPENSE CLAIM TIMELY AND PROPERLY SHALL RESULT IN SUCH CLAIM BEING FOREVER BARRED AND DISCHARGED. Treatment of Administrative Expense Claims: Except to the extent that a holder of an Allowed Administrative Expense Claim agrees to a different treatment, on, or as soon thereafter as is reasonably practicable, the later of the Effective Date and the first Business Day after the date that is thirty (30) calendar days after the date an Administrative Expense Claim becomes an Allowed Claim, the holder of such Allowed Administrative Expense Claim shall receive from the applicable Reorganized Debtor Cash in an amount equal to such Allowed Claim; provided , however , that Allowed Administrative Expense Claims representing liabilities incurred in the ordinary course of business by any of the Debtors, as debtors in possession, shall be paid by the applicable Debtor or Reorganized Debtor, in the ordinary course of business, consistent with past practice and in accordance with the terms and subject to the conditions of any orders or agreements governing, instruments evidencing, or other documents relating to, such liabilities. Any Claim related to fees and expenses, contribution or indemnification obligations, payable or owing by the Debtors to Apollo or the Ad Hoc Committee of Second Lien Noteholders, its members or the Backstop Parties under the RSA and Backstop Commitment Agreement shall constitute an Allowed Administrative Expense Claim and shall be paid in Cash on the Effective Date without the need to file a proof of such Claim with the Bankruptcy Court in accordance with Section 3.2(a) of the Plan and without further order of the Bankruptcy Court. In the case of Indenture Trustee Claims, such Claims will be paid in the ordinary course of business (subject to the Debtors’ prior receipt of invoices and reasonable documentation in connection therewith and without the requirement to file a fee application with the Bankruptcy Court, with copies to be provided to the Backstop Parties) but no later than the Effective Date; provided , that such fees, costs and expenses must be reimbursable under the terms of the applicable indenture; and provided , further , that the applicable indenture trustee will receive payment in the ordinary course of business (subject to the Reorganized Debtors’ prior receipt of invoices and reasonable documentation in connection therewith) for all reasonable fees, costs, and expenses incurred after the Effective Date in connection with the implementation 35 of any provisions of the Plan. In the event of a dispute with respect to all or a portion of an Indenture Trustee Claim, the Debtors shall pay the undisputed amount of such Indenture Trustee Claim, and segregate Cash in the amount of the remaining portion of such Claim until such dispute is resolved by the parties or by the Bankruptcy Court. (iii) Fee Claims. Time for Filing Fee Claims: Any Professional Person seeking allowance of a Fee Claim shall file, with the Bankruptcy Court, its final application for allowance of compensation for services rendered and reimbursement of expenses incurred prior to the Effective Date and in connection with the preparation and prosecution of such final application no later than forty-five (45) calendar days after the Effective Date. Objections to such Fee Claims, if any, must be filed and served pursuant to the procedures set forth in the Confirmation Order no later than sixty-five (65) calendar days after the Effective Date or such other date as established by the Bankruptcy Court. Treatment of Fee Claims: All Professional Persons seeking allowance by the Bankruptcy Court of a Fee Claim shall be paid in full in Cash in such amounts as are approved by the Bankruptcy Court: (i) upon the later of (x) the Effective Date, and (y) fourteen (14) calendar days after the date upon which the order relating to the allowance of any such Fee Claim is entered, or (ii) upon such other terms as may be mutually agreed upon between the holder of such Fee Claim and the Reorganized Debtors. On the Effective Date, to the extent known, the Reorganized Debtors shall reserve and hold in a segregated account Cash in an amount equal to all accrued but unpaid Fee Claims as of the Effective Date, which Cash shall be disbursed solely to the holders of Allowed Fee Claims with the remainder to be reserved until all Fee Claims have been either Allowed and paid in full or Disallowed by Final Order, at which time any remaining Cash in the segregated account shall become the sole and exclusive property of the Reorganized Debtors. (iv) U.S. Trustee Fees. The Debtors or Reorganized Debtors, as applicable, shall pay all outstanding U.S. Trustee Fees of a Debtor, including any accrued interest arising under 31 U.S.C. § 3717, on an ongoing basis on the date such U.S. Trustee Fees become due, until such time as a final decree is entered closing the applicable Reorganization Case, the applicable Reorganization Case is converted or dismissed, or the Bankruptcy Court orders otherwise. (v) Priority Tax Claims. Except to the extent that a holder of an Allowed Priority Tax Claim agrees to different treatment, each holder of an Allowed Priority Tax Claim shall receive, with the consent of the Requisite Investors, in the Debtors’ or Reorganized Debtors’ discretion, either: (a) on, or as soon thereafter as is reasonably practicable, the later of the Effective Date and the first Business Day after the date that is thirty (30) calendar days after the date a Priority Tax Claim becomes an Allowed Claim, Cash in an amount equal to such Claim; or (b) deferred Cash payments following the Effective Date, over a period ending not later than five (5) years after the Petition Date, in an aggregate amount equal to the Allowed amount of such Priority Tax Claim 36 (with any interest to which the holder of such Priority Tax Claim may be entitled calculated in accordance with section 511 of the Bankruptcy Code); provided , however , that all Allowed Priority Tax Claims that are not due and payable on or before the Effective Date shall be paid in the ordinary course of business as they become due. (b) Classification and Treatment of Claims and Interests. (i) Priority Non-Tax Claims (Class 1). Treatment: The legal, equitable and contractual rights of the holders of Priority Non-Tax Claims are unaltered by the Plan. Except to the extent that a holder of an Allowed Priority Non-Tax Claim agrees to a different treatment, on the applicable Distribution Date, each holder of an Allowed Priority Non-Tax Claim shall receive Cash from the applicable Reorganized Debtor in an amount equal to such Allowed Claim. Voting: The Priority Non-Tax Claims are not impaired Claims. In accordance with section 1126(f) of the Bankruptcy Code, the holders of Priority Non-Tax Claims are conclusively presumed to accept the Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Allowed Priority Non-Tax Claims. (ii) Other Secured Claims (Class 2). Treatment: The legal, equitable and contractual rights of the holders of Other Secured Claims are unaltered by the Plan. Except to the extent that a holder of an Allowed Other Secured Claim agrees to a different treatment, on the applicable Distribution Date each holder of an Allowed Other Secured Claim shall receive, at the election of the Reorganized Debtors: (i) Cash in an amount equal to such Allowed Claim; or (ii) such other treatment that will render such Other Secured Claim unimpaired pursuant to section 1124 of the Bankruptcy Code; provided , however , that Other Secured Claims incurred by a Debtor in the ordinary course of business may be paid in the ordinary course of business in accordance with the terms and conditions of any agreements relating thereto, in the discretion of the applicable Debtor or Reorganized Debtor, without further notice to or order of the Bankruptcy Court. Each holder of an Allowed Other Secured Claim shall retain the Liens securing its Allowed Other Secured Claim as of the Effective Date until full and final satisfaction of such Allowed Other Secured Claim is made as provided under the Plan. On the full payment or other satisfaction of each Allowed Other Secured Claim in accordance with the Plan, the Liens securing such Allowed Other Secured Claim shall be deemed released, terminated and extinguished, in each case without further notice to or order of the Bankruptcy Court, act or action under applicable law, regulation, order or rule or the vote, consent, authorization or approval of any Person. Voting: The Other Secured Claims are not impaired Claims. In accordance with section 1126(f) of the Bankruptcy Code, the holders of Other Secured Claims are conclusively presumed to accept the Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Allowed Other Secured Claims. Deficiency Claims: To the extent that the value of the Collateral securing any Other Secured Claim is less than the Allowed amount of such Other Secured Claim, the undersecured portion of such Allowed Claim shall be treated for all purposes under the Plan as an Allowed General Unsecured Claim and shall be classified in Class 7. 37 (iii) Cash Flow Facility Claims (Class 3). Allowance: On the Effective Date, the Cash Flow Facility Claims shall be deemed Allowed Claims in the amount of $20,700,000, plus any accrued and unpaid counsel or advisors’ fees or accrued and unpaid interest from the Petition Date through the Effective Date at the non-default interest rate provided under the Cash Flow Credit Agreement, and shall not be subject to any avoidance, reductions, setoff, offset, recoupment, recharacterization, subordination (whether equitable, contractual, or otherwise), counterclaims, cross-claims, defenses, disallowance, impairment, objection, or any other challenges under any applicable law or regulation by any Person. Treatment: On the Effective Date, or as soon as practicable thereafter, each holder of an Allowed Cash Flow Facility Claim shall receive, subject to the terms of the Plan, in full satisfaction, settlement, release and discharge of, and in exchange for, such Claim, its Pro Rata Share of Cash in an aggregate amount equal to the Allowed Cash Flow Facility Claims. Voting: The Cash Flow Facility Claims are unimpaired Claims. In accordance with section 1126(f) of the Bankruptcy Code, the holders of Cash Flow Facility Claims are conclusively presumed to accept the Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Allowed Cash Flow Facility Claims. (iv) First Lien Note Claims (Class 4). Allowance: On the Effective Date, the First Lien Note Claims shall be deemed Allowed Claims in the amount of $1,100,000,000, plus any accrued and unpaid interest from the Petition Date through the Effective Date at the non-default interest rate provided under the First Lien Indenture, and shall not be subject to any avoidance, reductions, setoff, offset, recoupment, recharacterization, subordination (whether equitable, contractual, or otherwise), counterclaims, cross-claims, defenses, disallowance, impairment, objection, or any other challenges under any applicable law or regulation by any Person. No Applicable Premium, prepayment penalty, “make-whole” or similar claim shall be Allowed with respect to the First Lien Note Claims pursuant to Section 5.4(a) of the Plan. Treatment: On the Effective Date, or as soon as practicable thereafter, each holder of an Allowed First Lien Note Claim shall receive, subject to the terms of the Plan, in full satisfaction, settlement, release and discharge of, and in exchange for, such Claim, its Pro Rata Share of: (1) If Class 4 votes to accept the Plan or is presumed to have accepted the Plan: Cash in an aggregate amount equal to such holder’s Pro Rata portion of the First Lien Cash Pool. (2) If Class 4 votes to reject the Plan: Replacement First Lien Notes with a present value equal to the Allowed amount of such holder’s First Lien 38 Note Claim (which may include, in addition to the First Lien Note Claims Allowed pursuant to Section 5.4(a) of the Plan, any applicable make-whole claim, prepayment penalty, or Applicable Premium to the extent Allowed by the Bankruptcy Court. Voting: The First Lien Note Claims are impaired Claims. Holders of such Claims are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such Allowed First Lien Note Claims; provided that the Debtors reserve the right to assert that the treatment provided to the First Lien Note Claims pursuant to this Section 5.4 renders such Claims unimpaired. (v) 1.5 Lien Note Claims (Class 5). Allowance: On the Effective Date, the 1.5 Lien Note Claims shall be deemed Allowed Claims in the amount of $250,000,000, plus any accrued and unpaid interest from the Petition Date through the Effective Date at the non-default interest rate provided under the 1.5 Lien Indenture, and shall not be subject to any avoidance, reductions, setoff, offset, recoupment, recharacterization, subordination (whether equitable, contractual, or otherwise), counterclaims, cross-claims, defenses, disallowance, impairment, objection, or any other challenges under any applicable law or regulation by any Person. No Applicable Premium, prepayment penalty, “make-whole” or similar claim shall be Allowed with respect to the 1.5 Lien Note Claims pursuant to this Section 5.5(a) of the Plan. Treatment: On the Effective Date, or as soon as practicable thereafter, each holder of an Allowed 1.5 Lien Note Claim shall receive, subject to the terms of the Plan, in full satisfaction, settlement, release and discharge of, and in exchange for, such Claim, its Pro Rata Share of: (i) If Class 5 votes to accept the Plan or is presumed to have accepted the Plan: Cash in an aggregate amount equal to such holder’s Pro Rata portion of the 1.5 Lien Cash Pool. (ii) If Class 5 votes to reject the Plan: Replacement 1.5 Lien Notes with a present value equal to the Allowed amount of such holder’s 1.5 Lien Note Claim (which may include, in addition to the 1.5 Lien Note Claims Allowed pursuant to Section 5.5(a) of the Plan, any applicable, make-whole claim, prepayment penalty, or Applicable Premium to the extent Allowed by the Bankruptcy Court. Voting: The 1.5 Lien Note Claims are impaired Claims. Holders of such Claims are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such Allowed 1.5 Lien Note Claims; provided that the Debtors reserve the right to assert that the treatment provided to the 1.5 Lien Note Claims pursuant to Section 5.5 of the Plan renders such Claims unimpaired. 39 (vi) Second Lien Note Claims (Class 6). Allowance: On the Effective Date, the Second Lien Note Claims shall be deemed Allowed Claims for all purposes in an amount of no less than $1,161,000,000 plus €133,000,000 (plus any accrued an unpaid interest arising prior to the Petition Date), and shall not be subject to any avoidance, reductions, setoff, offset, recoupment, recharacterization, subordination (whether equitable, contractual, or otherwise), counterclaims, cross-claims, defenses, disallowance, impairment, objection, or any other challenges under any applicable law or regulation by any Person. Treatment: On the Effective Date, or as soon thereafter as reasonably practicable, each holder of an Allowed Second Lien Note Claim shall receive, subject to the terms of the Plan and in full satisfaction, settlement, release, and discharge of, and in exchange for, such Claim its Pro Rata Share of (i) the Second Lien Notes Equity Distribution; and (ii) the Subscription Rights; provided , that only 4(a)(2) Eligible Holders shall be entitled to participate in the 4(a)(2) Rights Offering. Voting: The Second Lien Note Claims are impaired Claims. Holders of such Claims are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such Allowed Second Lien Note Claims. Unsecured Amount of Second Lien Note Claims and Turnover: As part of the settlements and compromises set forth in the Plan, the holders of Second Lien Note Claims shall forgo receiving certain value with respect to the unsecured amount of their Second Lien Note Claims, which unsecured amount shall be no less than $991 million. Notwithstanding the foregoing and for the avoidance of doubt, the Plan shall effect, and the holders of Second Lien Note Claims shall not waive, the benefits of any and all subordination and “pay over” provisions set forth in the Senior Subordinated Indenture. In addition, the holders of Second Lien Notes shall retain their right to receive Plan Consideration payable or otherwise distributable as a result of any such subordination and “pay over” provisions and shall retain the right to be paid in full in Cash or otherwise prior to holders of Senior Subordinated Note Claims receiving any payments or distributions from the Debtors or Reorganized Debtors. (vii) General Unsecured Claims (Class 7). Treatment: Each Allowed General Unsecured Claim shall, at the discretion of the Reorganized Debtors, and to the extent that such Allowed General Unsecured Claim was not previously paid pursuant to an order of the Bankruptcy Court, be: (i) Reinstated as of the Effective Date as an obligation of the applicable Reorganized Debtor, and paid in accordance with the ordinary course terms for such Claim; (ii) paid in full in Cash on the applicable Distribution Date, plus postpetition interest at the rate of (x) the Federal Judgment Rate, computed daily from the Petition Date through the applicable Distribution Date and compounded annually, or (y) to the extent the holder of the General Unsecured Claim notifies the Debtors within five (5) business days prior to the Effective Date, and the Debtors agree or, in the absence of agreement, the Bankruptcy Court determines, that such holder is contractually entitled to an alternate interest rate, then such alternate rate, computed from the Petition Date through the applicable Distribution Date and compounded (if at all) in accordance with the applicable contract; or (iii) receive such other treatment as may be agreed between such holder and the Reorganized Debtors. 40 Voting: The General Unsecured Claims are unimpaired Claims. In accordance with section 1126(f) of the Bankruptcy Code, the holders of General Unsecured Claims are conclusively presumed to accept the Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Allowed General Unsecured Claims. Preference Waiver: Notwithstanding any other provision of the Plan, neither the Debtors, the Reorganized Debtors, nor any other representative of or successor to the Debtors’ Estates shall retain, and each of them is hereby deemed to waive and release, any and all claims, causes of action and other rights against the holders of Class 7 Claims based on section 547 of the Bankruptcy Code or any similar law providing for the avoidance and/or recovery of preferences. (viii) Senior Subordinated Note Claims (Class 8). Treatment: Pursuant to section 510 of the Bankruptcy Code and the provisions of the Senior Subordinated Indenture, holders of Senior Subordinated Note Claims shall not receive any Plan Distributions on account of such Claims and any Plan Distribution to which they would have otherwise been entitled on account of such Claims, if any, shall constitute a portion of the recovery of holders of Second Lien Note Claims, and be retained by the Reorganized Debtors, in order to augment the value of the New Common Stock to be received by holders of Second Lien Note Claims. Voting: The Senior Subordinated Note Claims are impaired Claims. In accordance with section 1126(g) of the Bankruptcy Code, the holders of Senior Subordinated Note Claims are conclusively presumed to reject the Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Senior Subordinated Note Claims. (ix) Holdings PIK Note Claims (Class 9). Treatment: On the Effective Date, or as soon thereafter as reasonably practicable, each holder of an Allowed Holdings PIK Note Claim shall receive, subject to the terms of the Plan and in full satisfaction, settlement, release, and discharge of, and in exchange for, such Claim its Pro Rata Share of $8.938 million, minus any amounts attributable to Holdings’ share of Administrative Expense Claims or U.S. Trustee Fees; which amounts shall include 100% of amounts owed by Holdings to advisors of the holders of the Holdings PIK Note Claims (as such amount may be agreed upon by such advisors and the applicable holders of the Holdings PIK Note Claims). Voting: The Holdings PIK Note Claims are impaired Claims. Holders of such Claims are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such Allowed Holdings PIK Note Claims. 41 (x) Existing Securities Law Claims (Class 10). Treatment: Holders of Existing Securities Law Claims shall not receive or retain any distribution under the Plan on account of such Existing Securities Law Claims. Voting: The Existing Securities Law Claims are impaired Claims. In accordance with section 1126(g) of the Bankruptcy Code, the holders of Existing Securities Law Claims are conclusively presumed to reject the Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Existing Securities Law Claims. (xi) Existing Interests (Class 11). Treatment: Existing Interests shall be cancelled and holders thereof shall not receive or retain any distribution under the Plan on account of such Existing Interests. Voting: The Existing Interests are impaired Interests. In accordance with section 1126(g) of the Bankruptcy Code, the holders of Existing Interests are conclusively presumed to reject the Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Existing Interests. 6.4. Acceptance or Rejection of the Plan; Effect of Rejection by One or More Classes of Claims or Interests. (a) Class Acceptance Requirement. A Class of Claims shall have accepted the Plan if it is accepted by at least two-thirds (2/3) in dollar amount and more than one-half (1/2) in number of holders of the Allowed Claims in such Class that have voted on the Plan. (b) Tabulation of Votes on a Non-Consolidated Basis. All votes on the Plan shall be tabulated on a non-consolidated basis by Class and by Debtor for the purpose of determining whether the Plan satisfies sections 1129(a)(8) and/or (10) of the Bankruptcy Code. Notwithstanding the foregoing, the Debtors, with the consent of the Requisite Investors, reserve the right to seek to substantively consolidate any two or more Debtors, provided that such substantive consolidation does not materially and adversely impact the amount of the Plan Distributions to any Person. (c) Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code or “Cramdown.” Because certain Classes are deemed to have rejected the Plan, the Debtors will request confirmation of the Plan, as it may be modified and amended from time to time, under section 1129(b) of the Bankruptcy Code with respect to such Classes. Subject to Section 14.5 of the Plan, the Debtors, with the consent of the Requisite Investors, reserve the right to alter, amend, modify, revoke or withdraw the Plan or any Plan Document in order to satisfy the requirements of section 1129(b) of the Bankruptcy Code, if necessary. Subject to Sections 14.5 42 and 14.6 of the Plan (including the consent of the Requisite Investors), the Debtors also reserve the right to request confirmation of the Plan, as it may be modified, supplemented or amended from time to time, with respect to any Class that affirmatively votes to reject the Plan. (d) Elimination of Vacant Classes. Any Class of Claims or Interests that does not have a holder of an Allowed Claim or Allowed Interest or a Claim or Interest temporarily Allowed as of the date of the Confirmation Hearing shall be deemed eliminated from the Plan for purposes of voting to accept or reject the Plan and for purposes of determining acceptance or rejection of the Plan pursuant to section 1129(a)(8) of the Bankruptcy Code. (e) Voting Classes; Deemed Acceptance by Non-Voting Classes. If a Class contains Claims or Interests eligible to vote and no holders of Claims or Interests eligible to vote in such Class vote to accept or reject the Plan, the Plan shall be deemed accepted by such Class. (f) Confirmation of All Cases. Except as otherwise specified in the Plan, the Plan shall not be deemed to have been confirmed unless and until the Plan has been confirmed as to each of the Debtors; provided , however , that, the Debtors may at any time waive Section 6.6 of the Plan with the consent of the Requisite Investors. 6.5. Optional Redemption Premium Adversary Proceedings. The Debtors have instituted adversary proceedings in the Bankruptcy Court against the First Lien and 1.5 Lien Trustees regarding whether “make-whole” premiums are due under the First Lien Indenture (“ First Lien Optional Redemption Premium Adversary Proceeding ”) and the 1.5 Lien Indenture (the “ 1.5 Lien Optional Redemption Premium Adversary Proceeding , and combined with the First Lien Optional Redemption Premium Adversary Proceeding, the “ Optional Redemption Premium Adversary Proceedings ”). See Momentive Performance Materials Inc. v. The Bank of New York Mellon Trust Co., N.A. (In re MPM Silicones, LLC ), Adv. Proc. No. 14-08227 (RDD) (Bankr. S.D.N.Y. May 9, 2014) [Docket No. 1]; Momentive Performance Materials Inc. v. Wilmington Trust, N.A. (In re MPM Silicones, LLC) , Adv. Proc. No. 14-08228 (RDD) (Bankr. S.D.N.Y. May 9, 2014) [Docket No. 1]. The Debtors anticipate that the Optional Redemption Premium Adversary Proceedings will be heard by the Bankruptcy Court contemporaneously with the hearing regarding the confirmation of the Plan, and in no event prior to such confirmation hearing. Therefore, the deadline for holders of First Lien Note Claims and 1.5 Lien Note Claims to vote to accept or reject the Plan will occur prior to the resolution of the Optional Redemption Premium Adversary Proceedings. The Debtors believe that they will be successful in the Optional Redemption Premium Adversary Proceedings and that no make-whole premiums will be due under the First Lien and 1.5 Lien Indentures. In the event that the Debtors are unsuccessful in the Optional Redemption Premium Adversary Proceedings, the make-whole premiums that will be due under the First Lien and 1.5 Lien Indentures are estimated to be approximately $170 million and $40 million, respectively. 43 6.6. Summary of Capital Structure of Reorganized Debtors. (a) Post-Emergence Capital Structure. The following table summarizes the capital structure of the Reorganized Debtors, including the post-Effective Date financing arrangements the Reorganized Debtors expect to enter into to fund their obligations under the Plan and provide for, among other things, their post-Effective Date working capital needs. The summary of the Reorganized Debtors’ capital structure is qualified in its entirety by reference to the Plan and the applicable Plan Documents. Instrument New ABL Facility Description On the Effective Date, the Reorganized Debtors will have the option to convert the DIP ABL Facility into the New ABL Facility in the aggregate principal amount of $270,000,000 with the New ABL Lenders and the New ABL Agent, pursuant to the New ABL Credit Agreement. The commitments under the New ABL Facility will consist of a $200 million last-in, first-out tranche (“ Tranche A Commitments ”) and a $70 million first in, last-out tranche (“ Tranche B Commitments ”). The New ABL Facility will mature five years after the DIP ABL Facility converts into the New ABL Facility. The interest rates under the New ABL Facility will be, at the option of the Reorganized Debtors, (a) Adjusted LIBOR (as such term is defined in the New ABL Credit Agreement) plus 2.00% or Alternate Base Rate (as such term is defined in the New ABL Credit Agreement) plus 1.00% for the Tranche A Commitments and (b) Adjusted LIBOR plus 2.75% or Alternate Base Rate plus 1.75% for the Tranche B Commitments. The effectiveness of the conversion of the DIP ABL Facility into the New ABL Facility is subject to certain conditions, including, but not limited to, the following: (a) the Bankruptcy Court will have entered a final non-appealable order confirming the Plan; (b) the New ABL Agent will have received a customary solvency certificate; (c) all outstanding fees and expenses then due and payable under the DIP ABL Facility will have been paid; and (d) no default will have occurred under the DIP ABL Facility. 44 Instrument Description The proceeds of the New ABL Facility will be used to (a) provide for working capital, (b) fund Plan Distributions, and (c) for fees and expenses and for general corporate purposes. New First Lien Term Loan Facility On the Effective Date, each of the Reorganized Debtors will be authorized to enter into the New First Lien Term Loan Facility in the original principal amount of $1,000,000,000 with the New First Lien Lenders and the New First Lien Agent, pursuant to the New Firm Lien Term Loan Agreement. The New First Lien Term Loan Facility will mature on the date that is seven years after the date of incurrence of the New First Lien Term Loan (the “ New First Lien Closing Date ”), and will amortize in equal quarterly installments (commencing with the end of the first full fiscal quarter ending after the New First Lien Closing Date) in an aggregate amount equal to 1.0% of the original principal amount of the New First Lien Term Loan Facility with the balance payable on the maturity date of the New First Lien Term Loan Facility. The interest rates under the New First Lien Term Loan Facility will be, at the option of the Reorganized Debtors, Adjusted LIBOR (as such term is defined in the New First Lien Term Loan Agreement) plus 4.00% or Alternate Base Rate (as such term is defined in the New First Lien Term Loan Agreement) plus 3.00%. Entry into the New First Lien Term Loan Facility is subject to certain conditions, including, but not limited to, the following: (a) the Bankruptcy Court will have entered a final non-appealable order confirming the Plan; (b) the New First Lien Agent will have received a customary solvency certificate; (c) all outstanding fees and expenses then due and payable under the DIP Credit Facilities will have been paid; and (d) no default will have occurred under the DIP Credit Facilities. The proceeds of the New First Lien Term Loan Facility will be used to (a) repay amounts outstanding under the DIP ABL Facility, (b) refinance the DIP Term Loan Facility, (c) fund Plan Distributions, (d) provide for working capital, and (e) pay fee fees and expenses and for general corporate purposes. 45 Instrument Description OR Replacement First Lien Notes In the event that Class 4 (First Lien Note Claims) votes to reject the Plan, in lieu of the New First Lien Term Loan Facility , the Reorganized Debtors, on the Effective Date, will issue Replacement First Lien Notes to holders of Allowed First Lien Note Claims with a present value equal to the Allowed amount of such holder’s First Lien Note Claim (which may include any make-whole claim, prepayment penalty, or Applicable Premium Allowed by the Bankruptcy Court, if any). The Replacement First Lien Notes will mature on the date that is seven years after the Effective Date, but shall not include any call protection provisions (either in the form of prepayment premiums or “no-call” provisions). The interest rate under the Replacement First Lien Notes will be the Treasury Rate plus 1.50%, or such greater rate determined by the Bankruptcy Court is necessary to satisfy the provisions of the Bankruptcy Code. Such Replacement First Lien Notes will have the same collateral and priority as provided for under the First Lien Notes. For the avoidance of doubt, the Replacement First Lien Notes will not provide for any additional collateral. A term sheet further summarizing the principal terms of the Replacement First Lien Notes is annexed hereto as Exhibit 7 . Incremental Facility On the Effective Date, the Reorganized Debtors will be authorized to either (a) enter into a new second lien secured bridge loan facility in the aggregate principal amount of $250,000,000, or (b) issue senior second-priority secured notes issued by Reorganized MPM in a Rule 144A or other private placement yielding $250,000,000 in aggregate cash proceeds, to the extent that the 1.5 Lien Note Claims are paid in Cash pursuant to Section 5.5(b)(i) of the Plan. Interest for the first three month period commencing on the date on which the Plan is consummated (the “ Closing Date ”) shall be payable at Adjusted LIBOR (as such term is defined in the commitment letter for the Incremental Facility entered into by the applicable lenders and the Debtors on June 13, 2014 (the “ Incremental Facility Commitment Letter ”)) plus 600 basis points per annum (the “ Spread ”). At the end of the three-month period commencing on the Closing Date, and at the end of each three-month period thereafter, the Spread shall increase by an additional 50 basis points. Interest on the Incremental Facility will be payable in cash, quarterly in arrears. 46 Instrument Description On the first anniversary of the Closing Date (the “Conversion Date”), any second lien bridge loan that has not been previously repaid in full will be automatically converted into a senior second-priority secured term loan (each, a “ Second Lien Term Loan ”) due on the date that is eight years after the Closing Date. At any time on or after the Conversion Date, at the option of the applicable lender, such Second Lien Term Loans may be exchanged in whole or in part for senior second-priority secured exchange notes (the “ Second Lien Exchange Notes ”) having an equal principal amount; provided , however , that the Reorganized Debtors may defer the first issuance of Second Lien Exchange Notes until such time as they shall have received requests to issue an aggregate of at least $100 million in principal amount of Second Lien Exchange Notes. The Second Lien Exchange Notes will mature on the date that is eight years after the Closing Date. The proceeds of the Incremental Facility will be used to (a) repay amounts outstanding in connection with the 1.5 Lien Notes and (b) to pay for fees and expenses and for general corporate purposes. The Debtors expect to file the Incremental Facility Commitment Letter and related term sheets with this Court prior to the Confirmation Hearing. OR Replacement 1.5 Lien Notes In the event that Class 5 (1.5 Lien Note Claims) votes to reject the Plan, in lieu of the Incremental Facility , the Reorganized Debtors, on the Effective Date, will issue Replacement 1.5 Lien Notes to holders of Allowed 1.5 Lien Note Claims with a present value equal to the Allowed amount of such holder’s 1.5 Lien Note Claim (which may include any make-whole claim, prepayment penalty, or Applicable Premium Allowed by the Bankruptcy Court, if any). The Replacement 1.5 Lien Notes will mature on the date that is seven years and six months after the Effective Date, but shall not include any call protection provisions (either in the form of prepayment premiums or “no-call” provisions). The interest rate under the Replacement 1.5 Lien Notes will be the Treasury Rate plus 2.00%, or such greater rate determined by the Bankruptcy Court is 47 Instrument Description necessary to satisfy the provisions of the Bankruptcy Code. Such Replacement 1.5 Lien Notes will have the same collateral and priority as provided for under the 1.5 Lien Notes. For the avoidance of doubt, the Replacement 1.5 Lien Notes will not provide for any additional collateral. A term sheet further summarizing the principal terms of the Replacement 1.5 Lien Notes is annexed hereto as Exhibit 8 . New Common Stock and Top HoldCo Common Stock 6.7. On the Effective Date, Reorganized MPM is authorized to issue or cause to be issued the New Common Stock for distribution in accordance with the terms of the Plan and the Amended Certificate of Incorporation of Reorganized MPM, without the need for any further corporate or shareholder action. As soon as reasonably practicable following the Effective Date, but effective as of the Effective Date, and without any further action or consent required by any holder of New Common Stock or any other Person (i) each share of New Common Stock will automatically be exchanged for one share of Top HoldCo Common Stock, and (ii) Top HoldCo, as the resulting holder of the shares of New Common Stock will contribute such shares of New Common Stock to Intermediate HoldCo for Intermediate HoldCo Common Stock. Means for Implementation. (a) Continued Corporate Existence and Vesting of Assets in Reorganized Debtors. Except as otherwise provided in the Plan, the Debtors shall continue to exist after the Effective Date as Reorganized Debtors in accordance with the applicable laws of the respective jurisdictions in which they are incorporated or organized and pursuant to the Amended Certificates of Incorporation and Amended By-Laws, for the purposes of satisfying their obligations under the Plan and the continuation of their businesses. On or after the Effective Date, each Reorganized Debtor, in its discretion, may take such action as permitted by applicable law and such Reorganized Debtor’s organizational documents, as such Reorganized Debtor may determine is reasonable and appropriate, including, but not limited to, causing: (i) a Reorganized Debtor to be merged into another Reorganized Debtor, or its Subsidiary and/or affiliate; (ii) a Reorganized Debtor to be dissolved; (iii) the legal name of a Reorganized Debtor to be changed; or (iv) the closure of a Reorganized Debtor’s case on the Effective Date or any time thereafter. For the avoidance of doubt, the Amended Certificates of Incorporation, Intermediate HoldCo Certificate of Incorporation and Top HoldCo Certificate of Incorporation shall, among other things, prohibit the issuance of non-voting equity securities to the extent required by section 1123(a)(6) of the Bankruptcy Code. 48 Except as otherwise provided in the Plan, on and after the Effective Date, all property of the Estates, including all claims, rights and Causes of Action and any property acquired by the Debtors under or in connection with the Plan, shall vest in each respective Reorganized Debtor free and clear of all Claims, Liens, charges, other encumbrances and Interests. Subject to Section 7.1(a) of the Plan, on and after the Effective Date, the Reorganized Debtors may operate their businesses and may use, acquire and dispose of property and prosecute, compromise or settle any Claims (including any Administrative Expense Claims) and Causes of Action without supervision of or approval by the Bankruptcy Court and free and clear of any restrictions of the Bankruptcy Code or the Bankruptcy Rules other than restrictions expressly imposed by the Plan or the Confirmation Order. Without limiting the foregoing, the Reorganized Debtors may pay the charges that they incur on or after the Effective Date for Professional Persons’ fees, disbursements, expenses or related support services without application to the Bankruptcy Court. On the Effective Date or as soon as reasonably practicable thereafter, the Reorganized Debtors may take all actions that may be necessary or appropriate to effectuate any transaction described in, approved by, contemplated by, or necessary to effectuate the Plan, including: (1) the execution and delivery of appropriate agreements or other documents of merger, consolidation, restructuring, conversion, disposition, transfer, dissolution or liquidation containing terms that are consistent with the terms of the Plan and that satisfy the requirements of applicable law and any other terms to which the applicable entities may agree; (2) the execution and delivery of appropriate instruments of transfer, assignment, assumption or delegation of any asset, property, right, liability, debt or obligation on terms consistent with the terms of the Plan and having other terms for which the applicable parties agree; (3) the filing of appropriate certificates or articles of incorporation, reincorporation, merger, consolidation, conversion or dissolution pursuant to applicable state law; and (4) all other actions that the applicable entities determine to be necessary or appropriate, including making filings or recordings that may be required by applicable law. (b) Plan Funding. The Plan Distributions to be made in Cash under the terms of the Plan shall be funded from: (a) the Debtors’ Cash on hand as of the Effective Date; (b) the proceeds of the New First Lien Term Loan Facility; (c) the proceeds of the Rights Offerings; (d) the proceeds of the New ABL Facility and (e) the proceeds of the Incremental Facility, to the extent necessary. (c) Cancellation of Existing Securities and Agreements. Except for the purpose of evidencing a right to distribution under the Plan, including the enforcement of any subordination and “pay over” provisions in the Senior Subordinated Notes Indenture, and except as otherwise set forth in the Plan, on the Effective Date all agreements, instruments, and other documents evidencing, related to or connected with any Claim or Interest (including the Second Lien Notes Intercreditor Agreement), other than Intercompany Interests, and any rights of any holder in respect thereof, shall be deemed cancelled, discharged and of no force or effect. The holders of or parties to such cancelled instruments, securities and other documentation will have no rights arising from or relating to such instruments, securities and other documentation or the cancellation thereof, except the 49 rights provided for pursuant to the Plan. Notwithstanding anything to the contrary herein, each of the First Lien Indenture, 1.5 Lien Indenture, Second Lien Indenture and the Senior Subordinated Indenture shall continue in effect solely to the extent necessary to: (a) permit holders of Allowed First Lien Note Claims, Allowed 1.5 Lien Note Claims and Allowed Second Lien Note Claims, respectively, to receive Plan Distributions in accordance with the terms of this Plan; (b) effectuate and preserve any subordination and “pay over” provisions set forth in the Senior Subordinated Indenture; (b) permit the Reorganized Debtors, the First Lien Indenture Trustee, the 1.5 Lien Indenture Trustee and the Second Lien Indenture Trustee to make Plan Distributions on account of the Allowed First Lien Note Claims, Allowed 1.5 Lien Note Claims and Allowed Second Lien Note Claims, respectively, and deduct therefrom such compensation, fees, and expenses due thereunder or incurred in making such distributions, including by effectuating any charging liens permitted under the First Lien Indenture, 1.5 Lien Indenture and the Second Lien Indenture, respectively; and (c) permit the First Lien Indenture Trustee, the 1.5 Lien Indenture Trustee, and the Second Lien Indenture Trustee, respectively, to seek compensation and/or reimbursement of fees and expenses in accordance with the terms of the Plan. Except as provided pursuant to the Plan, upon the satisfaction of the Allowed First Lien Note Claims, Allowed 1.5 Lien Note Claims and Allowed Second Lien Note Claims, each of the First Lien Indenture Trustee, 1.5 Lien Indenture Trustee, the Second Lien Indenture Trustee and the Senior Subordinated Indenture Trustee and their respective agents, successors and assigns shall be discharged of all of their obligations associated with the First Lien Notes, 1.5 Lien Notes, Second Lien Notes and Senior Subordinated Notes, respectively. For the avoidance of doubt and notwithstanding any provision of the Plan to the contrary, nothing in the Plan shall be deemed to impair or negatively impact any charging lien permitted under the Indentures. (d) Boards of Directors. On the Effective Date, the initial board of directors of each of the Reorganized Debtors, Intermediate HoldCo and Top HoldCo shall consist of those individuals identified in the Plan Supplement, selected in accordance with the terms set forth in the RSA. Unless reappointed pursuant to Section 7.4(a) of the Plan, the members of the board of directors of each Debtor prior to the Effective Date shall have no continuing obligations to the Reorganized Debtors in their capacities as such on and after the Effective Date and each such member shall be deemed to have resigned or shall otherwise cease to be a director of the applicable Debtor on the Effective Date. Commencing on the Effective Date, each of the directors of each of the Reorganized Debtors shall serve pursuant to the terms of the applicable organizational documents of such Reorganized Debtor and may be replaced or removed in accordance with such organizational documents. (e) Management. New Management: As of the Effective Date, the Chief Executive Officer, Chief Financial Officer, General Counsel and other management positions, if any, to be determined with the consent of the Requisite Investors, of the Reorganized Debtors shall consist of those individuals selected by and acceptable to the Requisite Investors, as set forth in the Plan Supplement. The compensation arrangement for any insider of the Debtors that shall become an officer of a Reorganized Debtor shall be in form and substance acceptable to the Requisite Investors and disclosed in the Plan Supplement to be filed with the Bankruptcy Court on or before the date of the Confirmation Hearing. 50 Management Incentive Plan: The board of directors of Top HoldCo will adopt the Management Incentive Plan as of the Effective Date. The Management Incentive Plan Securities shall dilute all other Top HoldCo Common Stock to be issued pursuant to the Plan. Post-Emergence Incentive Plan: Top HoldCo and the Reorganized Debtors shall adopt the Post-Emergence Incentive Plan, effective as of the Effective Date. (f) Corporate Action. The Reorganized Debtors shall serve on the U.S. Trustee quarterly reports of the disbursements made by each Reorganized Debtor on an entity-by-entity basis until such time as a final decree is entered closing the applicable Reorganization Case or the applicable Reorganization Case is converted or dismissed, or the Bankruptcy Court orders otherwise. Any deadline for filing Administrative Expense Claims shall not apply to U.S. Trustee Fees. On the Effective Date, the Amended Certificates of Incorporation and Amended By-Laws, and any other applicable amended and restated corporate organizational documents of each of the Reorganized Debtors shall be deemed authorized in all respects. On or prior to the Effective Date, the Debtors shall cause Intermediate HoldCo and Top HoldCo to be incorporated under the laws of Delaware. Any action under the Plan to be taken by or required of the Debtors, the Reorganized Debtors, Intermediate HoldCo or Top HoldCo, including, without limitation, the adoption or amendment of certificates of incorporation and by-laws, the issuance of securities and instruments, the implementation of the Management Incentive Plan, or the selection of officers or directors, shall be authorized and approved in all respects, without any requirement of further action by any of the Debtors’, Reorganized Debtors’, Intermediate HoldCo’s or Top HoldCo’s stockholders, sole members, boards of directors or boards of managers, or similar body, as applicable. The Debtors, the Reorganized Debtors, Intermediate HoldCo and Top HoldCo shall be authorized to execute, deliver, file, and record such documents (including the Plan Documents), contracts, instruments, releases and other agreements and take such other action as may be necessary to effectuate and further evidence the terms and conditions of the Plan, without the necessity of any further Bankruptcy Court, corporate, board or shareholder approval or action. In addition, the selection of the Persons who will serve as the initial directors, officers and managers of the Reorganized Debtors, Intermediate HoldCo and Top HoldCo as of the Effective Date shall be deemed to have occurred and be effective on and after the Effective Date without any requirement of further action by the board of directors, board of managers, or stockholders of the applicable Reorganized Debtor, Intermediate HoldCo or Top HoldCo. 51 (g) Registration Rights Agreement. On and as of the Effective Date, Top HoldCo shall enter into and deliver the Registration Rights Agreement to each entity that is intended to be a party thereto and such agreement shall be deemed to be valid, binding and enforceable in accordance with its terms, and each party thereto shall be bound thereby, in each case without the need for execution by any party thereto other than Top HoldCo. (h) Authorization, Issuance and Delivery of Top HoldCo Common Stock. As soon as reasonably practicable following the Effective Date, but effective as of the Effective Date, and without any further action or consent required by any holder of New Common Stock of any other Person (i) each share of New Common Stock will automatically be exchanged for one share of Top HoldCo Common Stock, and (ii) Top HoldCo, as the resulting holder of the shares of New Common Stock will contribute such shares of New Common Stock to Intermediate HoldCo for Intermediate HoldCo Common Stock. As of the Effective Date, after the automatic exchange of New Common Stock for Top HoldCo Common Stock, but subject to the terms of the Registration Rights Agreement, the Top HoldCo Common Stock shall not be registered under the Securities Act, and shall not be listed for public trading on any securities exchange. Distribution of Top HoldCo Common Stock may be made by delivery of one or more certificates representing such shares as described in the Plan, by means of book-entry registration on the books of the transfer agent for shares of Top HoldCo Common Stock or by means of book-entry exchange through the facilities of DTC in accordance with the customary practices of DTC, as and to the extent practicable, as provided in Section 8.5 of the Plan. In the period following the Effective Date and pending distribution of the Top HoldCo Common Stock to any holder entitled pursuant to the Plan to receive Top HoldCo Common Stock, such holder shall be entitled to exercise any voting rights and receive any dividends or other distributions payable in respect of such holder’s Top HoldCo Common Stock (including receiving any proceeds of permitted transfers of such Top HoldCo Common Stock) and to exercise all other rights in respect of the Top HoldCo Common Stock (so that such holder shall be deemed for tax purposes to be the owner of the Top HoldCo Common Stock). On the Effective Date, each of Reorganized MPM, Intermediate HoldCo and Top HoldCo is authorized to issue or cause to be issued the equity securities contemplated by the Plan, including the New Common Stock, the Top HoldCo Common Stock and any equity interests in Intermediate HoldCo, for distribution in accordance with the terms of the Plan and the Amended Certificate of Incorporation of Reorganized MPM, the Top HoldCo Certificate of Incorporation and the Intermediate HoldCo Certificate of Incorporation, as applicable, without the need for any further corporate, judicial or shareholder action. As soon as reasonably practicable after the Effective Date and, in any event, within seventy-five (75) days of the Effective Date, Top HoldCo shall file, and shall use its reasonable best efforts to cause to be declared effective as promptly as practicable, a registration statement registering for resale all of the shares of Top HoldCo Common Stock issued to the Backstop Parties and holders of Second Lien Notes pursuant to the Plan and the Rights Offerings. 52 The receipt by holders of Second Lien Notes pursuant to the Plan of New Common Stock and the right to participate in the Rights Offerings is intended to be treated as a recapitalization pursuant to Section 368(a)(1)(E) of the Internal Revenue Code of 1986, and that the transfer of the New Common Stock to Top HoldCo in exchange for Top HoldCo Common Stock is intended to be treated as a reorganization within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986. It is intended that the Plan be treated as a plan of reorganization within the meaning of United States Treasury Regulations sections 1.368-2(g) and 1.368-3 in respect of both transactions. (i) New First Lien Term Loan Facility, New ABL Facility and Incremental Facility. On the Effective Date, without any requirement of further action by stockholders or directors of the Debtors, each of the Reorganized Debtors shall be authorized to enter into the New First Lien Term Loan Facility, the New ABL Facility, and, to the extent necessary, the Incremental Facility, as well as any notes, documents or agreements in connection therewith, including, without limitation, any documents required in connection with the creation or perfection of the Liens on any Collateral securing the New First Lien Term Loan Facility, New ABL Facility and the Incremental Facility. (j) Rights Offerings. Purpose. The proceeds of the sale of the Rights Offering Stock shall be used to provide an aggregate of $600 million in capital to the Reorganized Debtors, which shall be available to fund payments required under the Plan and for ordinary course operations and general corporate purposes of the Reorganized Debtors. The Rights Offering Stock will be issued pursuant to the Section 1145 Rights Offering and the 4(a)(2) Rights Offering. Section 1145 Rights Offering. In accordance with the Section 1145 Rights Offering Procedures and the Backstop Commitment Agreement, each Section 1145 Eligible Holder shall receive Section 1145 Subscription Rights to acquire its respective Pro Rata Share of Section 1145 Rights Offering Stock pursuant to the terms set forth in the Plan and in the Section 1145 Rights Offering Procedures. Each Section 1145 Subscription Right shall represent the right to acquire one share of Section 1145 Rights Offering Stock for the Rights Exercise Price. The total number of shares of Section 1145 Rights Offering Stock to be issued in connection with the Section 1145 Rights Offering (including shares issued to the Backstop Parties in the Section 1145 Rights Offering on account of the commitment of the Backstop Parties to fully subscribe for their portion of the Section 1145 Rights Offering) will be 7,656,521. 4(a)(2) Rights Offering. In accordance with the 4(a)(2) Rights Offering Procedures and the Backstop Commitment Agreement, each 4(a)(2) Eligible Holder shall receive 4(a)(2) Subscription Rights to acquire its respective Pro Rata Share of 4(a)(2) Rights Offering Stock pursuant to the terms set forth in the Plan and in the 4(a)(2) Rights Offering Procedures. Each 4(a)(2) Subscription Right shall represent the right to acquire one share of 4(a)(2) Rights 53 Offering Stock for the Rights Exercise Price. The total number of shares of 4(a)(2) Rights Offering Stock to be issued in connection with the 4(a)(2) Rights Offering (including shares issued to the Backstop Parties in the Section 4(a)(2) Rights Offering on account of the commitment of the Backstop Parties to fully subscribe for their portion of the Section 4(a)(2) Rights Offering) will be 27,065,701. (k) Backstop Commitment. Subject to the terms, conditions and limitations set forth in the Backstop Commitment Agreement, and as further described below, upon exercise of its put option, Reorganized MPM will have the right to require the Backstop Parties, severally and not jointly, to purchase their applicable portion of the Unsubscribed Shares (as set forth in the Backstop Commitment Agreement). Notwithstanding anything to the contrary in the Plan or Confirmation Order, (i) the Debtors’ obligations under the Backstop Commitment Agreement shall remain unaffected and shall survive following the Effective Date in accordance with the terms thereof, (ii) any such obligations shall not be discharged under the Plan, and (iii) none of the Reorganized Debtors shall terminate any such obligations. In the event that eligible holders have not subscribed to purchase Rights Offering Stock representing the entire Rights Offering Amount, upon exercise of its put option, Reorganized MPM will have the right to require to each Backstop Party to purchase up to the amount of Rights Offering Stock representing its Backstop Commitment, allocated pro rata among all Backstop Parties based upon their respective Backstop Commitments. Commitment Premium. In consideration for the obligations described in Section 7.10(c) of the Plan, on the Effective Date, Reorganized MPM shall issue to the Backstop Parties the Commitment Premium Shares (without payment of any additional consideration therefor) pursuant to the terms of the Backstop Commitment Agreement. For the avoidance of doubt, the Commitment Premium shall be payable in Cash under certain circumstances set forth in Section 9.4 of the Backstop Commitment Agreement. Securities Law. The Section 1145 Rights Offering Stock will be exempt from the registration requirements of the Securities Act pursuant to section 1145 of the Bankruptcy Code. The 4(a)(2) Rights Offering Stock will be exempt from the registration requirements of the Securities Act pursuant to section 4(a)(2) of the Securities Act. Only 4(a)(2) Eligible Holders that are “accredited investors” (as defined in Rule 501(a) promulgated under Regulation D under the Securities Act) will receive 4(a)(2) Subscription Rights and be eligible to participate in the 4(a)(2) Rights Offering. The 4(a)(2) Rights Offering Stock will be “restricted securities” (within the meaning of Rule 144 under the Securities Act), subject to the transfer restrictions applicable thereto. (l) Intercompany Interests. No Intercompany Interests shall be cancelled pursuant to the Plan, and all Intercompany Interests shall be unaffected by the Plan and continue in place following the Effective Date, solely for the administrative convenience of maintaining the existing corporate structure of the Debtors and the Reorganized Debtors. 54 (m) Insured Claims. Notwithstanding anything to the contrary contained in the Plan, to the extent the Debtors have insurance with respect to any Allowed General Unsecured Claim or Allowed Existing Securities Law Claim, the holder of such Allowed Claim shall (a) have an Allowed Claim in its applicable Class for any SIR Claim, (b) be paid any amount in excess of any SIR Claim from the proceeds of insurance to the extent that the Claim is insured, and (c) to the extent not duplicative of (a), receive the treatment provided for in the Plan to the extent the applicable insurance policy does not provide coverage with respect to any portion of the Claim. Notwithstanding anything to the contrary in the Disclosure Statement, the Plan, the Plan Documents, the Plan Supplement, the Confirmation Order, any other document related to any of the foregoing or any other order of the Bankruptcy Court (including, without limitation, any other provision that purports to be preemptory or supervening or grants an injunction or release, including, but not limited to, the injunctions set forth in Article XII of the Plan): (i) on the Effective Date, the Reorganized Debtors shall assume all insurance policies issued at any time to the Debtors, their affiliates or predecessors of any of the foregoing and all agreements related thereto (collectively, the “ Insurance Contracts ”); (ii) nothing in the Disclosure Statement, the Plan, the Plan Documents, the Plan Supplement or the Confirmation Order alters, modifies or otherwise amends the terms and conditions of (or the coverage provided by) any of the Insurance Contracts, except that as of the Effective Date, the Reorganized Debtors shall become and remain liable for all of the Debtors’ obligations and liabilities thereunder regardless of whether such obligations and liabilities arise before or after the Effective Date; (iii) nothing in the Disclosure Statement, the Plan, the Plan Documents, Plan Supplement, the Confirmation Order, any prepetition or administrative claim bar date order (or notice) or claim objection order alters or modifies the duty, if any, that the insurers or third party administrators have to pay claims covered by the Insurance Contracts and their right to seek payment or reimbursement from the Debtors (or after the Effective Date, the Reorganized Debtors) or draw on any collateral or security therefor; (iv) insurers and third party administrators shall not need to nor be required to file or serve a Cure Dispute or a request, application, claim, proof of claim or motion for payment and shall not be subject to the any Bar Date or similar deadline governing Cure Amounts or Claims; and (v) the automatic stay of section 362(a) of the Bankruptcy Code and the injunctions set forth in Article XII of the Plan, if and to the extent applicable, shall be deemed lifted without further order of the Bankruptcy Court, solely to permit: (A) claimants with valid claims covered by any of the Insurance Contracts (“ Insured Claims ”) to proceed with their claims; (B) insurers and/or third party administrators to administer, handle, defend, settle, and/or pay, in the ordinary course of business and without further order of the Bankruptcy Court, (1) all Insured Claims, and (2) all costs in relation to each of the foregoing; (C) the insurers and/or third party administrators to draw against any or all of any collateral or security provided by or on behalf of the Debtors (or the Reorganized Debtors, as applicable) at any time and to hold the proceeds thereof as security for the obligations of the Debtors (and the Reorganized Debtors, as applicable) to the applicable insurers and/or third party administrators and/or apply such proceeds to the obligations of the Debtors (and the Reorganized Debtors, as applicable) under the Insurance Contracts, in such order as the applicable insurers and/or third party administrators may determine, but solely in accordance with the terms of such Insurance Contracts; and (D) the insurers and/or third party administrators to (1) cancel any policies under the Insurance Contracts, and (2) take other actions relating thereto, to the extent permissible under applicable 55 non-bankruptcy law, each in accordance with the terms of the Insurance Contracts. For the avoidance of doubt, no holder of an Insured Claim that did not file a proof of claim prior to the applicable Bar Date (unless otherwise subject to an exception in the order governing Bar Dates) shall be deemed to have an Allowed Claim, including a SIR Claim, against the Debtors arising from this provision. (n) Comprehensive Settlement of Claims and Controversies. Pursuant to Bankruptcy Rule 9019 and in consideration for the Plan Distributions and other benefits provided under the Plan, the provisions of the Plan will constitute a good faith compromise and settlement of all Claims and controversies relating to the rights that a holder of a Claim or Interest may have with respect to any Allowed Claim or Allowed Interest or any Plan Distribution on account thereof. The entry of the Confirmation Order will constitute the Bankruptcy Court’s approval, as of the Effective Date, of the compromise or settlement of all such claims or controversies and the Bankruptcy Court’s finding that all such compromises or settlements are: (i) in the best interest of the Debtors, the Estates, the Reorganized Debtors, and their respective property and stakeholders; and (ii) fair, equitable and reasonable. 6.8. Treatment of Executory Contracts and Unexpired Leases. (a) General Treatment. As of and subject to the occurrence of the Effective Date and the payment of any applicable Cure Amount, all executory contracts and unexpired leases of the Debtors shall be deemed assumed, except that: (a) any executory contracts and unexpired leases that previously have been assumed or rejected pursuant to a Final Order of the Bankruptcy Court shall be treated as provided in such Final Order; (b) any executory contracts and unexpired leases listed on the Schedule of Rejected Contracts and Leases, shall be deemed rejected as of the Effective Date; and (c) all executory contracts and unexpired leases that are the subject of a separate motion to assume or reject under section 365 of the Bankruptcy Code pending on the Effective Date shall be treated as provided for in the Final Order resolving such motion. Subject to the occurrence of the Effective Date, entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of the assumptions and rejections described in Section 10.1 of the Plan pursuant to sections 365(a) and 1123 of the Bankruptcy Code. Each executory contract and unexpired lease assumed pursuant to Section 10.1 of the Plan shall revest in and be fully enforceable by the applicable Reorganized Debtor in accordance with its terms, except as modified by the provisions of the Plan, or any order of the Bankruptcy Court authorizing and providing for its assumption, or applicable federal law. (b) Claims Based on Rejection of Executory Contracts or Unexpired Leases. Except as otherwise explicitly set forth in the Plan, all Claims arising from the rejection of executory contracts or unexpired leases, if evidenced by a timely filed proof of claim, will be treated as General Unsecured Claims. Upon receipt of the Plan Distribution provided in Section 5.7 of the Plan, all such Claims shall be discharged as of the Effective Date, and shall not be enforceable against the Debtors, the Estates, the Reorganized Debtors or their respective properties or interests in property. In the event that the rejection of an executory 56 contract or unexpired lease by any of the Debtors pursuant to the Plan results in damages to the other party or parties to such contract or lease, a Claim for such damages, if not evidenced by a timely filed proof of claim, shall be forever barred and shall not be enforceable against the Debtors or the Reorganized Debtors, or their respective properties or interests in property as agents, successors or assigns, unless a proof of claim is filed with the Bankruptcy Court and served upon counsel for the Debtors and the Reorganized Debtors on or before the date that is thirty (30) days after the effective date of such rejection (which may be the Effective Date, the date on which the Debtors reject the applicable contract or lease as provided in Section 10.3(c) of the Plan, or pursuant to an order of the Bankruptcy Court). (c) Cure of Defaults for Assumed Executory Contracts and Unexpired Leases. Except to the extent that less favorable treatment has been agreed to by the non-Debtor party or parties to each such executory contract or unexpired lease to be assumed pursuant to the Plan, any monetary defaults arising under such executory contract or unexpired lease shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the appropriate amount (the “ Cure Amount ”) in full in Cash on the later of thirty (30) days after: (i) the Effective Date; or (ii) the date on which any Cure Dispute relating to such Cure Amount has been resolved (either consensually or through judicial decision). No later than ten (10) calendar days prior to the commencement of the Confirmation Hearing, the Debtors shall file a schedule (the “ Cure Schedule ”) setting forth the Cure Amount, if any, for each executory contract and unexpired lease to be assumed pursuant to Section 10.1 of the Plan, and serve such Cure Schedule on each applicable counterparty. Any party that fails to object to the applicable Cure Amount listed on the Cure Schedule within fifteen (15) calendar days of the filing thereof, shall be forever barred, estopped and enjoined from disputing the Cure Amount set forth on the Cure Schedule (including a Cure Amount of $0.00) and/or from asserting any Claim against the applicable Debtor or Reorganized Debtor arising under section 365(b)(1) of the Bankruptcy Code except as set forth on the Cure Schedule. In the event of a dispute (each, a “Cure Dispute”) regarding: (i) the Cure Amount; (ii) the ability of the applicable Reorganized Debtor to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under the contract or lease to be assumed; or (iii) any other matter pertaining to the proposed assumption, the cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order resolving such Cure Dispute and approving the assumption. To the extent a Cure Dispute relates solely to the Cure Amount, the applicable Debtor may assume and/or assume and assign the applicable contract or lease prior to the resolution of the Cure Dispute provided that such Debtor reserves Cash in an amount sufficient to pay the full amount asserted as the required cure payment by the non-Debtor party to such contract or lease (or such smaller amount as may be fixed or estimated by the Bankruptcy Court). To the extent the Cure Dispute is resolved or determined against the applicable Debtor or Reorganized Debtor, as applicable, such Debtor or Reorganized Debtor, as applicable, may reject the applicable executory contract or unexpired lease after such determination, and the counterparty may thereafter file a proof of claim in the manner set forth in Section 10.2 of the Plan. 57 (d) Compensation and Benefit Programs. Except as otherwise expressly provided hereunder, in a prior order of the Bankruptcy Court or to the extent subject to a motion pending before the Bankruptcy Court as of the Effective Date, with the consent of the Requisite Investors, all employment and severance policies, and all compensation and benefit plans, policies, and programs of the Debtors applicable to their respective employees, retirees and non-employee directors including, without limitation, all savings plans, unfunded retirement plans, healthcare plans, disability plans, severance benefit plans, incentive plans, and life, accidental death and dismemberment insurance plans are treated as executory contracts under the Plan and on the Effective Date will be assumed pursuant to the provisions of sections 365 and 1123 of the Bankruptcy Code. Each of the Reorganized Debtors may, prior to the Effective Date and with the consent of the Requisite Investors, enter into employment agreements with employees that become effective on or prior to the Effective Date and survive consummation of the Plan. Any such agreements (or a summary of the material terms thereof) shall be in form and substance acceptable to the Requisite Investors and be included in the Plan Supplement or otherwise filed with the Bankruptcy Court on or before the date of the Confirmation Hearing. For the avoidance of doubt, all workers’ compensation policies issued at any time to the Debtors, their affiliates or predecessors of any of the foregoing and all agreements related thereto shall be treated in accordance with Section 7.12 of the Plan. All collective bargaining agreements to which one or more of the Debtors is a party shall be treated as executory contracts under the Plan and on the Effective Date will be assumed by the applicable Reorganized Debtors pursuant to the provisions of section 365 of the Bankruptcy Code. (e) Amended Shared Services Agreement. The Shared Services Agreement, as amended, shall be assumed pursuant to the Plan, with such assumption being deemed effective upon and contingent on the occurrence of the Effective Date. On the Effective Date, Reorganized MPM and MSC shall enter into the Amended Shared Services Agreement. (f) Existing Management Agreement. The Existing Management Agreement shall be terminated as of the Petition Date or as soon thereafter as practicable by mutual agreement of the parties thereto. Any Claims thereunder shall be waived and no payments or distributions shall be made on account of such Claims. (g) Warranty Obligations. All obligations of a Debtor to its customers pursuant to ordinary course written warranty agreements with such customers shall be expressly assumed by the applicable Reorganized Debtor as of the Effective Date, regardless of whether such customer filed a proof of claim form against the Debtors by the relevant Bar Date. 58 6.9. Binding Effect. Except as otherwise provided in section 1141(d)(3) of the Bankruptcy Code and subject to the occurrence of the Effective Date, on and after the Confirmation Date, the provisions of the Plan shall bind any holder of a Claim against, or Interest in, the Debtors and inure to the benefit of and be binding on such holder’s respective successors and assigns, whether or not the Claim or Interest of such holder is impaired under the Plan and whether or not such holder has accepted the Plan. 6.10. Discharge of Claims Against and Interests in the Debtors. Upon the Effective Date and in consideration of the Plan Distributions, except as otherwise provided in the Plan or in the Confirmation Order, each Person that is a holder (as well as any trustees and agents on behalf of such Person) of a Claim or Interest shall be deemed to have forever waived, released, and discharged the Debtors, to the fullest extent permitted by section 1141 of the Bankruptcy Code, of and from any and all Claims, Interests, rights, and liabilities that arose prior to the Effective Date. Except as otherwise provided in the Plan, upon the Effective Date, all such holders of Claims and Interests shall be forever precluded and enjoined, pursuant to sections 105, 524, 1141 of the Bankruptcy Code, from prosecuting or asserting any such discharged Claim against or terminated Interest in any Debtor or any Reorganized Debtor. 6.11. Term of Pre-Confirmation Injunctions or Stays. Unless otherwise provided in the Plan, all injunctions or stays arising prior to the Confirmation Date in accordance with sections 105 or 362 of the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date, shall remain in full force and effect until the Effective Date. 6.12. Injunction. Except as otherwise provided in the Plan or the Confirmation Order, as of the Confirmation Date, but subject to the occurrence of the Effective Date, all Persons who have held, hold or may hold Claims against or Interests in the Debtors or the Estates are, with respect to any such Claims or Interests, permanently enjoined after the Confirmation Date from: (i) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind (including, without limitation, any proceeding in a judicial, arbitral, administrative or other forum) against or affecting the Debtors, the Reorganized Debtors, the Estates or any of their property, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Persons or any property of any such transferee or successor; (ii) enforcing, levying, attaching (including, without limitation, any pre-judgment attachment), collecting or otherwise recovering by any manner or means, whether directly or indirectly, any judgment, award, decree or order against the 59 Debtors, the Reorganized Debtors, or the Estates or any of their property, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Persons, or any property of any such transferee or successor; (iii) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance of any kind against the Debtors, the Reorganized Debtors, or the Estates or any of their property, or any direct or indirect transferee of any property of, or successor in interest to, any of the foregoing Persons (iv) acting or proceeding in any manner, in any place whatsoever, that does not conform to or comply with the provisions of the Plan to the full extent permitted by applicable law; and (v) commencing or continuing, in any manner or in any place, any action that does not comply with or is inconsistent with the provisions of the Plan; provided , however , that nothing contained in the Plan shall preclude such Persons from exercising their rights, or obtaining benefits, pursuant to and consistent with the terms of the Plan. By accepting Plan Distributions, each holder of an Allowed Claim or Interest will be deemed to have specifically consented to the Injunctions set forth in Section 12.4 of the Plan. 6.13. Releases. (a) Released Parties. The Plan contains certain release and exculpation provisions applicable to certain Released Parties. As used herein and in the Plan, the term “Released Parties” means, collectively, and each solely in its capacity as such: (a) the Debtors and their respective non-Debtor subsidiaries; (b) the DIP Agent; (c) the DIP Lenders; (d) each of the Backstop Parties; (e) the Ad Hoc Committee of Second Lien Noteholders and each current and former member thereof, including without limitation those entities listed on Schedule 1 to the Plan, which Schedule 1 shall be supplemented with additional entities, if any, in the Plan Supplement or otherwise prior to the Effective Date; (f) each current and former Backstop Party, including without limitation those entities listed on Schedule 1 to the Plan, which Schedule 1 shall be supplemented with additional entities, if any, in the Plan Supplement or otherwise prior to the Effective Date; (g) Apollo; (h) MSC; (i) Momentive Performance Materials Holdings LLC; (i) the New ABL Facility Arrangers, the New ABL Agent and the New ABL Lenders; (k) the New First Lien Term Loan Facility Arrangers, the New First Lien Agent and the New First Lien Lenders; (l) the Second Lien Indenture Trustee; (m) the Creditors’ Committee Parties; (n) the Prepetition Administrative Agent and the Prepetition ABL Lenders; and (o) each of the foregoing parties’ current officers, affiliates, partners, directors, employees, agents, members, advisors and professionals (including any attorneys, consultants, financial advisors, investment bankers and other professionals retained by such Persons and, for the avoidance of doubt, the Ad Hoc Committee of Second Lien Noteholders Advisors), together with their respective successors and assigns; provided , however , that such attorneys and professional advisors shall only include those that provided services related to the Reorganization Cases and the transactions contemplated by the Plan; provided , further , that no Person shall be a Released Party if it objects to and/or opts out of the releases provided for in Article XII of the Plan. (b) Releases by the Debtors. For good and valuable consideration, the adequacy of which is hereby confirmed, and except as otherwise provided in the Plan or the Confirmation Order, as of the Effective Date, the Debtors and Reorganized Debtors, in their individual capacities and as debtor in possession, shall be deemed to forever release, waive and discharge all claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action and liabilities (other than 60 the rights of the Debtors or Reorganized Debtors to enforce the Plan and the contracts, instruments, releases, indentures and other agreements or documents delivered thereunder) against the Released Parties, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Reorganized Debtors, the parties released pursuant to this Section 12.5, the Reorganization Cases, or the Plan or the Disclosure Statement, and that could have been asserted by or on behalf of the Debtors or their Estates or Reorganized Debtors, whether directly, indirectly, derivatively or in any representative or any other capacity, other than claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action and liabilities arising out of or relating to any act or omission of a Released Party or a former officer or director of the Debtors that constitutes gross negligence, fraud, willful misconduct or breach of fiduciary duty (if any). (c) Releases by Holders of Claims and Interests. Except as otherwise provided in the Plan or the Confirmation Order, on the Effective Date: (i) each of the Released Parties; (ii) each holder of a Claim or Interest entitled to vote on the Plan that did not “opt out” of the releases provided in Section 12.5 of the Plan in a timely submitted Ballot; and (iii) to the fullest extent permissible under applicable law, as such law may be extended or interpreted subsequent to the Effective Date, all holders of Claims and Interests, in consideration for the obligations of the Debtors and Reorganized Debtors under the Plan, the Plan Consideration and other contracts, instruments, releases, agreements or documents executed and delivered in connection with the Plan, and each entity (other than the Debtors) that has held, holds or may hold a Claim or Interest, as applicable, will be deemed to have consented to the Plan for all purposes and the restructuring embodied in the Plan and deemed to forever release, waive and discharge all claims, demands, debts, rights, Causes of Action or liabilities (other than the right to enforce the obligations of any party under the Plan and the contracts, instruments, releases, agreements and documents delivered under or in connection with the Plan) against the Released Parties, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act or omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Reorganized Debtors, the Reorganization Cases, or the Plan or the Disclosure Statement. (d) Inapplicability of Releases. Notwithstanding anything to the contrary contained in the Plan: (i) except to the extent permissible under applicable law, as such law may be extended or interpreted subsequent to the Effective Date, the releases provided for in Section 12.5 of the Plan shall not release any non-Debtor entity from any liability arising under (x) the Internal Revenue Code or any state, city or municipal tax code, or (y) any criminal laws of the United States or any state, city or municipality; and (ii) the releases set forth in Section 12.5 of the Plan shall not release any (x) any claims against any Person to the extent such Person asserts a crossclaim, counterclaim and/or claim for setoff which seeks affirmative relief against a Debtor or any of its officers, 61 directors, or representatives and (y) claims against any Person arising from or relating to such Person’s gross negligence, fraud, willful misconduct or breach of fiduciary duty (if any), each as determined by a Final Order of the Bankruptcy Court. As to the United States of America, its agencies, departments, or agents (collectively, the “United States ”), nothing in the Plan or Confirmation Order shall limit or expand the scope of discharge, release or injunction to which the Debtors or Reorganized Debtors are entitled under the Bankruptcy Code, if any. The discharge, release and injunction provisions contained in the Plan and Confirmation Order are not intended and shall not be construed to bar the United States from, subsequent to the Confirmation Order, pursuing any police or regulatory action, except to the extent those discharge and injunctive provisions bar a Governmental Unit (as defined by section 101(27) of the Bankruptcy Code) from pursuing Claims. Accordingly, notwithstanding anything contained in the Plan or Confirmation Order to the contrary, nothing in the Plan or Confirmation Order shall discharge, release, impair or otherwise preclude: (1) any liability to the United States that is not a “claim” within the meaning of section 101(5) of the Bankruptcy Code; (2) any Claim of the United States arising on or after the Confirmation Date; (3) any valid right of setoff or recoupment of the United States against any of the Debtors; or (4) any liability of the Debtors or Reorganized Debtors under environmental law to any Governmental Unit (as defined by section 101(27) of the Bankruptcy Code) as the owner or operator of property that such entity owns or operates after the Confirmation Date, except those obligations to reimburse costs expended or paid by a Governmental Unit before the Petition Date or to pay penalties owing to a Governmental Unit for violations of environmental laws or regulations that occurred before the Petition Date. Nor shall anything in the Plan or Confirmation Order: (i) enjoin or otherwise bar the United States or any Governmental Unit from asserting or enforcing, outside the Bankruptcy Court, any liability described in the preceding sentence; or (ii) divest any court of jurisdiction to determine whether any liabilities asserted by the United States or any Governmental Unit are discharged or otherwise barred by the Plan, Confirmation Order, or the Bankruptcy Code. Moreover, nothing in the Plan or Confirmation Order shall release or exculpate any non-debtor, including any Released Parties, from any liability to the United States, including but not limited to any liabilities arising under the Internal Revenue Code, the environmental laws, or the criminal laws against the Released Parties, nor shall anything in the Plan or Confirmation Order enjoin the United States from bringing any claim, suit, action or other proceeding against the Released Parties for any liability whatsoever; provided, however, that the foregoing sentence shall not limit the scope of discharge granted to the Debtors under sections 524 and 1141 of the Bankruptcy Code. 6.14. Exculpation and Limitation of Liability. To the extent permissible under applicable law, none of the Released Parties shall have or incur any liability to any holder of any Claim or Interest or any other Person for any act or omission in connection with, or arising out of the Debtors’ restructuring, including without limitation, the negotiation, implementation and execution of the Plan, the Reorganization Cases, the Disclosure Statement, the solicitation of votes for and the pursuit of confirmation of the Plan, 62 the consummation of the Plan, or the administration of the Plan or the property to be distributed under the Plan, including, without limitation, all documents ancillary thereto, all decisions, actions, inactions and alleged negligence or misconduct relating thereto and all activities leading to the promulgation and confirmation of the Plan except for gross negligence or willful misconduct, each as determined by a Final Order of the Bankruptcy Court. 6.15. Injunction Related to Releases and Exculpation. The Confirmation Order shall permanently enjoin the commencement or prosecution by any Person or entity, whether directly, derivatively or otherwise, of any claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action or liabilities released pursuant to the Plan, including but not limited to the claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action or liabilities released in Sections 12.5 and 12.6 of the Plan. 6.16. Retention of Causes of Action/Reservation of Rights. Subject to Section 12.5 of the Plan, except as expressly set forth in the Plan (including Section 5.7(c) of the Plan), nothing contained in the Plan or the Confirmation Order shall be deemed to be a waiver or relinquishment of any rights, claims or Causes of Action, rights of setoff, or other legal or equitable defenses that the Debtors had immediately prior to the Effective Date on behalf of the Estates or of themselves in accordance with any provision of the Bankruptcy Code or any applicable non-bankruptcy law. The Reorganized Debtors shall have, retain, reserve, and be entitled to assert all such claims, Causes of Action, rights of setoff, or other legal or equitable defenses as fully as if the Reorganization Cases had not been commenced, and all of the Debtors’ legal and/or equitable rights respecting any Claim left unimpaired, as set forth in Section 4.2 of the Plan, may be asserted after the Confirmation Date to the same extent as if the Reorganization Cases had not been commenced. 6.17. Indemnification Obligations. Notwithstanding anything to the contrary contained in the Plan, including Section 10.1 of the Plan, subject to the occurrence of the Effective Date, the obligations of the Debtors to indemnify, defend, reimburse, exculpate, advance fees and expenses to, or limit the liability of directors or officers who were directors or officers of any of the Debtors at any time after the Petition Date, against any Causes of Action, remain unaffected thereby after the Effective Date and are not discharged. On and after the Effective Date, none of the Reorganized Debtors shall terminate or otherwise reduce the coverage under any directors’ and officers’ insurance policies in effect on the Petition Date, and all directors and officers of the Debtors at any time shall be entitled to the full benefits of any such policy for the full term of such policy, regardless of whether such directors and/or officers remain in such positions after the Effective Date. 63 ARTICLE VII. CONFIRMATION OF THE PLAN OF REORGANIZATION 7.1. Confirmation Hearing. Section 1128(a) of the Bankruptcy Code requires the bankruptcy court, after appropriate notice, to hold a hearing on confirmation of a chapter 11 plan. The Confirmation Hearing with respect to the Plan is scheduled to commence on August 18, 2014 at 10:00 a.m. (prevailing Eastern Time). The hearing may be adjourned or continued from time to time by the Debtors or the Bankruptcy Court without further notice except for an announcement of the adjourned or continued date made at the Confirmation Hearing (or an appropriate filing with the Bankruptcy Court) or any subsequent adjourned or continued Confirmation Hearing. Section 1128(b) of the Bankruptcy Code provides that any party in interest may object to confirmation of a chapter 11 plan of reorganization. Any objection to confirmation of the Plan must be in writing, must conform to the Bankruptcy Rules, must set forth the name of the objector, the nature and amount of Claims or Interests held or asserted by the objector against the particular Debtor or Debtors, the basis for the objection and the specific grounds therefor, and must be filed with the Clerk of the Bankruptcy Court electronically using the Bankruptcy Court’s Case Management/Electronic Case File (“ CM/ECF ”) System at https://ecf.nysb.uscourts.gov (a CM/ECF password will be required), 12 and by mailing a hard copy of such objection to the chambers of the Honorable Robert D. Drain, United States Bankruptcy Judge for the Southern District of New York, United States Bankruptcy Court, 300 Quarropas Street, White Plains, New York 10601-4140, together with proof of service, and served upon: (i) Willkie Farr & Gallagher LLP, counsel for the Debtors, 787 Seventh Avenue, New York, NY 10019 (Attn: Matthew A. Feldman, Esq., Jennifer J. Hardy, Esq., and Ji Hun Kim, Esq.); (ii) Office of the United States Trustee for the Southern District of New York, 201 Varick Street, Suite 1006, New York, NY 10014 (Attn: Brian S. Matsumoto, Esq. and Richard W. Fox, Esq.); (iii) counsel to the official committee of unsecured creditors, Klee, Tuchin, Bogdanoff & Stern LLP, 1999 Avenue of the Stars, Los Angeles, CA 90067 (Attn: Lee R. Bogdanoff, Esq. and Whitman L. Holt, Esq.); (iv) counsel to the administrative agent under the Debtors’ postpetition credit agreement, Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, NY 10017 (Attn: Steven M. Fuhrman, Esq. and Nicholas Baker, Esq.); (v) counsel to General Electric Capital Corporation, Bingham McCutchen LLP (Attn: Stephen M. Miklus, Esq. and Julia Frost-Davies, Esq.); (vi) counsel to the Ad Hoc Committee of Second Lien Noteholders, Milbank, Tweed, Hadley & McCloy LLP, 1 Chase Manhattan Plaza, New York, NY 10005 (Attn: Dennis F. Dunne, Esq. and Samuel A. Khalil, Esq.); (vii) counsel to Apollo Global Management, LLC and certain affiliated funds, Akin Gump Strauss Hauer & Feld LLP, One Bryant Park, New York, NY 10036 (Attn: Ira S. Dizengoff, Esq. and Philip C. Dublin, Esq.); and (viii) counsel to Momentive Performance Materials Holdings LLC, Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of Americas, New York, NY 10019 (Attn: Alan W. Kornberg, Esq. and Elizabeth R. McColm, Esq.). Bankruptcy Rule 9014 governs 12 A CM/ECF password may be obtained via the Bankruptcy Court’s CM/ECF website at https://ecf.nysb.uscourts.gov. 64 objections to confirmation of the Plan. UNLESS AN OBJECTION TO CONFIRMATION IS TIMELY SERVED AND FILED, IT MAY NOT BE CONSIDERED BY THE BANKRUPTCY COURT. 7.2. Confirmation. At the Confirmation Hearing, the Bankruptcy Court will determine whether the requirements of section 1129(a) of the Bankruptcy Code have been satisfied with respect to the Plan. (a) Confirmation Requirements. Confirmation of a chapter 11 plan under section 1129(a) of the Bankruptcy Code requires, among other things, that: • the plan complies with the applicable provisions of the Bankruptcy Code; • the proponent of the plan has complied with the applicable provisions of the Bankruptcy Code; • the plan has been proposed in good faith and not by any means forbidden by law; • any plan payment made or to be made by the proponent under the plan for services or for costs and expenses in, or in connection with, the chapter 11 case, or in connection with the plan and incident to the case, has been approved by, or is subject to the approval of, the Bankruptcy Court as reasonable; • the proponent has disclosed the identity and affiliations of any individual proposed to serve, after confirmation of the plan, as a director, officer, or voting trustee of the debtor, an affiliate of the debtor participating in the plan with the debtor, or a successor to the debtor under the plan. The appointment to, or continuance in, such office by such individual must be consistent with the interests of creditors and equity security holders and with public policy and the proponent must have disclosed the identity of any insider that the reorganized debtor will employ or retain, and the nature of any compensation for such insider; • with respect to each impaired class of claims or interests, either each holder of a claim or interest of such class has accepted the plan, or will receive or retain under the plan, on account of such claim or interest, property of a value, as of the effective date of the plan, that is not less than the amount that such holder would receive or retain if the debtor were liquidated on such date under chapter 7 of the Bankruptcy Code; 65 • subject to the “cramdown” provisions of section 1129(b) of the Bankruptcy Code, each class of claims or interests has either accepted the plan or is not impaired under the plan; • except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the plan provides that allowed administrative expenses and priority claims will be paid in full on the effective date (except that holders of priority tax claims may receive deferred Cash payments of a value, as of the effective date of the plan, equal to the allowed amounts of such claims and that holders of priority tax claims may receive on account of such claims deferred Cash payments, over a period not exceeding 5 years after the date of assessment of such claims, of a value, as of the effective date, equal to the allowed amount of such claims); • if a class of claims is impaired, at least one (1) impaired class of claims has accepted the plan, determined without including any acceptance of the plan by any insider holding a claim in such class; and • confirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the debtor or any successor to the debtor under the plan, unless such liquidation or reorganization is proposed in the plan. The Debtors believe that: • the Plan satisfies all of the statutory requirements of chapter 11 of the Bankruptcy Code; • the Debtors, as the proponents of the Plan, have complied or will have complied with all of the requirements of chapter 11 of the Bankruptcy Code; and • the Plan has been proposed in good faith. Set forth below is a summary of certain relevant statutory confirmation requirements. (i) Acceptance. Claims in Classes 4, 5, 6 and 9 are impaired under the Plan and are entitled to vote to accept or reject the Plan; provided , however , that the Debtors reserve the right to assert that the treatment provided to holders of Claims in Classes 4 and 5 render such Claims unimpaired. Classes 1, 2, 3 and 7 are unimpaired and, therefore, are conclusively presumed to have voted to accept the Plan pursuant to section 1126(f) of the Bankruptcy Code. Classes 8, 10 and 11 are impaired and not receiving any property under the Plan, and thus are deemed to have rejected the Plan. 66 Because certain Classes are deemed to have rejected the Plan, the Debtors will request confirmation of the Plan under section 1129(b) of the Bankruptcy Code. The Debtors reserve the right to alter, amend, modify, revoke or withdraw the Plan, any exhibit, or schedule thereto or any Plan Document, with the consent of the Requisite Investors, in order to satisfy the requirements of section 1129(b) of the Bankruptcy Code, if necessary. The Debtors believe that the Plan satisfies the “cramdown” requirements of section 1129(b) of the Bankruptcy Code with respect to Claims and Interests in Classes 8, 10 and 11. The Debtors also will seek confirmation of the Plan over the objection of any individual holders of Claims who are members of an accepting Class. There can be no assurance, however, that the Bankruptcy Court will determine that the Plan meets the requirements of section 1129(b) of the Bankruptcy Code. (ii) Unfair Discrimination and Fair and Equitable Test. To obtain nonconsensual confirmation of the Plan, it must be demonstrated to the Bankruptcy Court that the Plan “does not discriminate unfairly” and is “fair and equitable” with respect to each impaired, non-accepting Class. The Bankruptcy Code provides a non-exclusive definition of the phrase “fair and equitable” for, respectively, secured creditors, unsecured creditors and holders of equity interests. In general, section 1129(b) of the Bankruptcy Code permits confirmation notwithstanding non-acceptance by an impaired class if that class and all junior classes are treated in accordance with the “absolute priority” rule, which requires that the dissenting class be paid in full before a junior class may receive anything under the plan. A chapter 11 plan does not “discriminate unfairly” with respect to a non-accepting class if the value of the Cash and/or securities to be distributed to the non-accepting class is equal to, or otherwise fair when compared to, the value of the distributions to other classes whose legal rights are the same as those of the non-accepting class. The Debtors believe the Plan will not discriminate unfairly against any non-accepting Class. (iii) Feasibility; Financial Projections. The Bankruptcy Code permits a plan to be confirmed only if confirmation is not likely to be followed by liquidation or the need for further financial reorganization of the Debtors or any successor to the Debtors, unless such liquidation or reorganization is proposed in the Plan. For purposes of determining whether the Plan meets this requirement, the Debtors have analyzed the ability of the Reorganized Debtors to meet their obligations under the Plan and retain sufficient liquidity and capital resources to conduct their business. Under the terms of the Plan, the Allowed Claims potentially being paid in whole or in part in Cash are the DIP Claims, Allowed Administrative Expense Claims, Allowed Fee Claims, Allowed Priority Tax Claims, Allowed Priority Non-Tax Claims, Allowed Other Secured Claims, Allowed Cash Flow Facility Claims, Allowed First Lien Note Claims, Allowed 1.5 Lien Note Claims, Allowed General Unsecured Claims, and Allowed Holdings PIK Note Claims. The Debtors have estimated the total amount of these Cash payments to be approximately $1.6 billion and expect sufficient liquidity from the New First Lien Term Loan, the New ABL Facility, the Rights Offerings, the Incremental Facility (to the extent necessary), and post-Effective Date operations to fund these Cash payments as and when they become due. 67 In connection with developing the Plan, the Debtors have prepared detailed financial projections (the “Financial Projections ”), attached as Exhibit 3 hereto, which detail, among other things, the financial feasibility of the Plan. The Financial Projections indicate, on a pro forma basis, that the projected level of Cash flow is sufficient to satisfy all of the Reorganized Debtors’ future debt and debt related interest cost, research and development, capital expenditure and other obligations during this period. Accordingly, the Debtors believe that confirmation of the Plan is not likely to be followed by the liquidation or further reorganization of the Reorganized Debtors. THE FINANCIAL PROJECTIONS, INCLUDING THE UNDERLYING ASSUMPTIONS, SHOULD BE CAREFULLY REVIEWED IN EVALUATING THE PLAN. WHILE MANAGEMENT BELIEVES THE ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS, WHEN CONSIDERED ON AN OVERALL BASIS, WERE REASONABLE WHEN PREPARED IN LIGHT OF CURRENT CIRCUMSTANCES AND EXPECTATIONS, NO ASSURANCE CAN BE GIVEN THAT THE FINANCIAL PROJECTIONS WILL BE REALIZED. THE DEBTORS MAKE NO REPRESENTATION OR WARRANTY AS TO THE ACCURACY OF THE FINANCIAL PROJECTIONS. THE PROJECTIONS ARE SUBJECT TO A NUMBER OF RISKS, UNCERTAINTIES AND ASSUMPTIONS, INCLUDING THOSE DESCRIBED BELOW UNDER ARTICLE XI. IN LIGHT OF THESE RISKS AND UNCERTAINTIES, ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THE FINANCIAL PROJECTIONS. The Debtors prepared the Financial Projections based upon certain assumptions that they believe to be reasonable under the circumstances. The Financial Projections have not been examined or compiled by independent accountants. Moreover, such information is not prepared in accordance with accounting principles generally accepted in the United States (“ GAAP ”). The Debtors make no representation as to the accuracy of the Financial Projections or their ability to achieve the projected results. Many of the assumptions on which the Financial Projections are based are inherently subject to significant economic and competitive uncertainties and contingencies beyond the control of the Debtors and their management. Inevitably, some assumptions will not materialize and unanticipated events and circumstances may affect the actual financial results. Therefore, the actual results achieved may vary from the projected results and the variations may be material. All holders of Claims that are entitled to vote to accept or reject the Plan are urged to examine carefully all of the assumptions on which the Financial Projections are based in connection with their evaluation of the Plan. (b) Valuation of the Debtors. In conjunction with formulating the Plan, the Debtors determined it was necessary to estimate the going concern value of the Reorganized Debtors (the “ Valuation Analysis ”). The Valuation Analysis, performed by Moelis, the Debtors’ investment banker, is set forth in Exhibit 6 . THE VALUATION ANALYSIS SET FORTH IN EXHIBIT 6 REPRESENTS A HYPOTHETICAL VALUATION OF THE REORGANIZED DEBTORS, WHICH ASSUMES THAT SUCH REORGANIZED DEBTORS CONTINUE AS AN OPERATING BUSINESS. THE ESTIMATED VALUE SET FORTH IN THE VALUATION ANALYSIS DOES NOT 68 PURPORT TO CONSTITUTE AN APPRAISAL OR NECESSARILY REFLECT THE ACTUAL MARKET VALUE THAT MIGHT BE REALIZED THROUGH A SALE OR LIQUIDATION OF THE REORGANIZED DEBTORS, THEIR SECURITIES OR THEIR ASSETS, WHICH MAY BE MATERIALLY DIFFERENT THAN THE ESTIMATE SET FORTH IN THE VALUATION ANALYSIS. ACCORDINGLY, SUCH ESTIMATED VALUE IS NOT NECESSARILY INDICATIVE OF THE PRICES AT WHICH ANY SECURITIES OF THE REORGANIZED DEBTOR MAY TRADE AFTER GIVING EFFECT TO THE TRANSACTIONS SET FORTH IN THE PLAN. ANY SUCH PRICES MAY BE MATERIALLY DIFFERENT THAN INDICATED BY THE VALUATION ANALYSIS. (c) Best Interests Test. The “best interests” test requires that the Bankruptcy Court find either: • that all members of each impaired class have accepted the plan; or • that each holder of an allowed claim or interest in each impaired class of claims or interests will receive or retain under the plan on account of such claim or interest, property of a value, as of the effective date of the plan, that is not less than the amount such holder would receive or retain if the debtor were liquidated under chapter 7 of the Bankruptcy Code on such date. To determine what the holders of Claims and Interests in each impaired Class would receive if the Debtors were liquidated under chapter 7 on the Confirmation Date, the Bankruptcy Court must determine the dollar amount that would have been generated from the liquidation of the Debtors’ assets and properties in a liquidation under chapter 7 of the Bankruptcy Code. The Cash that would be available for satisfaction of Claims and Interests would consist of the proceeds from the disposition of the assets and properties of the Debtors, augmented by the Cash held by the Debtors. Such Cash amount would be: (i) first, reduced by the amount of the Allowed DIP Claims and the secured portion of the Allowed Other Secured Claims, Allowed Cash Flow Facility Claims, Allowed First Lien Note Claims, Allowed 1.5 Lien Note Claims, and Allowed Second Lien Note Claims; (ii) second, reduced by the costs and expenses of liquidation under chapter 7 (including the fees payable to a chapter 7 trustee and the fees payable to professionals that such trustee might engage) and such additional administrative claims that might result from the termination of the Debtors’ business; and (iii) third, reduced by the amount of the Allowed Administrative Expense Claims, U.S. Trustee Fees, Allowed Priority Tax Claims, and Allowed Priority Non-Tax Claims. Any remaining net Cash would be allocated to creditors and stakeholders in strict order of priority contained in section 726 of the Bankruptcy Code. Additional claims would arise by reason of the breach or rejection of obligations under unexpired leases and executory contracts. To determine if the Plan is in the best interests of each impaired Class, the present value of the distributions from the proceeds of a liquidation of the Debtors’ assets and properties, after subtracting the amounts discussed above, must be compared with the value of the property offered to each such Class of Claims under the Plan. 69 After considering the effects that a chapter 7 liquidation would have on the ultimate proceeds available for distribution to creditors in the Reorganization Cases, the Debtors have determined that confirmation of the Plan will provide each holder of an Allowed Claim with a recovery that is not less than such holder would have received pursuant to the liquidation of the Debtors under chapter 7. Moreover, the Debtors believe that the value of distributions to each Class of Allowed Claims in a chapter 7 case would be materially less than the value of distributions under the Plan and any distribution in a chapter 7 case would not occur for a substantial period of time. It is likely that a liquidation of the Debtors’ assets could take more than a year to complete, and distribution of the proceeds of the liquidation could be delayed for up to six months after the completion of such liquidation to resolve claims and prepare for distributions. In the likely event litigation was necessary to resolve claims asserted in the chapter 7 case, the delay could be prolonged. The Debtors, with the assistance of their advisors, have prepared a liquidation analysis that summarizes the Debtors’ best estimate of recoveries by creditors and equity interest holders in the event of liquidation as of September 30, 2014 (the “ Liquidation Analysis ”), which is attached hereto as Exhibit 2 . The Liquidation Analysis provides: (a) a summary of the liquidation values of the Debtors’ assets, assuming a chapter 7 liquidation in which a trustee appointed by the Bankruptcy Court would liquidate the assets of the Debtors’ estates, and (b) the expected recoveries of the Debtors’ creditors and equity interest holders under the Plan. The Liquidation Analysis contains a number of estimates and assumptions that, although developed and considered reasonable by the Debtors’ management, are inherently subject to significant economic and competitive uncertainties and contingencies beyond the control of the Debtors and their management. The Liquidation Analysis also is based on assumptions with regard to liquidation decisions that are subject to change and significant economic and competitive uncertainties and contingencies beyond the control of the Debtors and their management. Accordingly, the values reflected might not be realized. The chapter 7 liquidation period is assumed to last 12 to 18 months following the appointment of a chapter 7 trustee, allowing for, among other things, the discontinuation and wind-down of operations, the sale of the operations as going concerns or as individual assets, the collection of receivables and the finalization of tax affairs. All holders of Claims that are entitled to vote to accept or reject the Plan are urged to examine carefully all of the assumptions on which the Liquidation Analysis is based in connection with their evaluation of the Plan. 7.3. Standards Applicable to Releases. Article XII of the Plan provides for releases for certain claims against non-Debtors in consideration of services provided to the Debtors and the contributions made by the Released Parties to the Debtors’ chapter 11 cases. The Released Parties are: (a) the Debtors and their respective non-Debtor subsidiaries; (b) the DIP Agent; (c) the DIP Lenders; (d) each of the Backstop Parties; (e) the Ad Hoc Committee of Second Lien Noteholders and each current and former member thereof, including without limitation those entities listed on Schedule 1 to the Plan; (f) each current and former Backstop Party, including without limitation those entities listed on Schedule 1 to the Plan; (g) Apollo; (h) MSC; (i) Momentive Performance Materials 70 Holdings LLC; (j) the New ABL Facility Arrangers, the New ABL Agent and the New ABL Lenders; (k) the New First Lien Term Loan Facility Arrangers, the New First Lien Agent and the New First Lien Lenders; (l) the Second Lien Indenture Trustee; (m) the Creditors’ Committee Parties; (n) the Prepetition Administrative Agent and the Prepetition ABL Lenders; and (o) each of the foregoing parties’ current officers, affiliates, partners, directors, employees, agents, members, advisors and professionals (including any attorneys, consultants, financial advisors, investment bankers and other professionals retained by such Persons and, for the avoidance of doubt, the Ad Hoc Committee of Second Lien Noteholders Advisors), together with their respective successors and assigns; provided , however , that such attorneys and professional advisors shall only include those that provided services related to the Reorganization Cases and the transactions contemplated by the Plan; provided , further , that no Person shall be a Released Party if it objects to and/or opts out of the releases provided for in Article XII of the Plan. As set forth in the Plan, the releases are given by (i) the Debtors; (ii) each of the Released Parties; (iii) each holder of a Claim or Interest entitled to vote on the Plan that did not “opt out” of the releases provided in Section 12.5 of the Plan in a timely submitted Ballot; and (iv) to the fullest extent permissible under applicable law, as such law may be extended or interpreted subsequent to the Effective Date, all holders of Claims and Interests. The released claims and exculpated claims are limited to those claims or causes of action that may have arisen in connection with, related to or arising out of the Plan, this Disclosure Statement, the Plan Supplement, any other Plan Document, the Debtors or the Debtors’ chapter 11 cases. The Debtors believe that the releases set forth in the Plan are appropriate because, among other things, the releases are narrowly tailored to the Debtors’ restructuring proceedings, and each of the Released Parties has provided value to the Debtors and aided in the reorganization process, including, with respect to certain Released Parties, by entry into the RSA, which facilitated the Debtors’ ability to propose and pursue confirmation of the Plan. The Debtors believe that each of the Released Parties has played an integral role in these chapter 11 cases and has expended significant time and resources analyzing and negotiating the issues presented by the Debtors’ prepetition capital structure. The United States Court of Appeals for the Second Circuit has determined that releases of non-debtors may be approved as part of a chapter 11 plan of reorganization if there are “unusual circumstances” that render the release terms important to the success of the plan. Deutsche Bank AG v. Metromedia Fiber Network Inc. (In re Metromedia Fiber Network, Inc.) , 416 F.3d 136, 143 (2d Cir. 2005). Courts have approved releases of non-debtors when, for example, (a) the estate received substantial consideration; (b) the enjoined claims were channeled to a settlement fund rather than extinguished; (c) the enjoined claims would indirectly impact the reorganization by way of indemnity or contribution; (d) the plan otherwise provided for the full payment of the enjoined claims; and (e) the affected creditors consented to the release. Id. at 142. Before a determination can be made as to whether releases are appropriate as warranted by “unusual circumstances,” a court must address the threshold jurisdictional question of whether a court has subject matter jurisdiction to grant such releases. In re Johns-Manville Corp. , 517 F.3d 52, 65 (2d Cir. 2008); see also In re Dreier LLP , 429 B.R. 112, 132 (Bankr. S.D.N.Y. 2010) (finding no jurisdiction to approve releases of claims that did not affect the estate); In re Metcalf & Mansfield Alternative Investments , 421 B.R. 685, 695 (Bankr. S.D.N.Y. 2010) (discussing and approving releases in a case under chapter 15 of the Bankruptcy Code). 71 Courts have jurisdiction over a third party cause of action or claim if it will “directly and adversely impact the reorganization.” Dreier , 429 B.R. at 132. Conversely, the court may lack jurisdiction if the released claim is one that would “not affect the property of the estate or the administration of the estate.” Id. at 133. Here, each of the non-Debtor Released Parties contributed significantly to the Debtors’ reorganization process, including, among other things, through entry into the RSA. Absent execution of the RSA, the Debtors could not have filed for chapter 11 protection with a clear path to reorganization and emergence. Additionally, parties entitled to vote on the Plan may elect to opt-out of providing non-Debtor releases consistent with applicable law. Accordingly, the Debtors contends that the circumstances of the Debtors’ chapter 11 cases satisfy the Metromedia requirements. Further, the Debtors are not aware of any cognizable claims of any material value against the Released Parties that the Debtors or their estates would be releasing in connection with Section 12.5(a) of the Plan. As part of such releases, the Debtors will release all claims against Apollo, its current majority equity holder, to the extent set forth in Section 12.5(a) of the Plan. Apollo and Holdings are party to the Existing Management Agreement, which provides for the payment by the Debtors to Apollo of management fees on an annual basis. While Apollo waived the payment of management fees under the Existing Management Agreement for 2013, the Debtors paid management fees to Apollo in the amount of $3.5 million annually, plus out of pocket expenses, in each of 2012, 2011 and 2010. 7.4. Classification of Claims and Interests. The Debtors believe that the Plan complies with the classification requirements of the Bankruptcy Code, which require that a chapter 11 plan place each claim and interest into a class with other claims or interests that are “substantially similar.” 7.5. Consummation. The Plan will be consummated on the Effective Date. The Effective Date will occur on the first Business Day on which the conditions precedent to the effectiveness of the Plan, as set forth in Section 11.2 of the Plan, have been satisfied or waived pursuant to the Plan. The Plan is to be implemented pursuant to its terms, consistent with the provisions of the Bankruptcy Code. 7.6. Exemption from Certain Transfer Taxes. To the fullest extent permitted by applicable law, all sale transactions consummated by the Debtors and approved by the Bankruptcy Court on and after the Confirmation Date through and including the Effective Date, including any transfers effectuated under the Plan, the sale by the Debtors of any owned property pursuant to section 363(b) of the Bankruptcy Code, and any assumption, assignment, and/or sale by the Debtors of their interests in unexpired leases of non-residential real property or executory contracts pursuant to section 365(a) of the Bankruptcy Code, shall constitute a “transfer under a plan” within the purview of section 1146 of the Bankruptcy Code, and shall not be subject to any stamp, real estate transfer, mortgage recording, or other similar tax. 72 7.7. Retiree Benefits. On and after the Effective Date, pursuant to section 1129(a)(13) of the Bankruptcy Code, the Reorganized Debtors shall continue to pay all retiree benefits (within the meaning of, and subject to the limitations of, section 1114 of the Bankruptcy Code), if any, at the level established in accordance with section 1114 of the Bankruptcy Code, at any time prior to the Confirmation Date, for the duration of the period for which either Debtor had obligated itself to provide such benefits. Nothing herein shall: (a) restrict the Debtors’ or the Reorganized Debtors’ right to modify the terms and conditions of the retiree benefits, if any, as otherwise permitted pursuant to the terms of the applicable plans, non-bankruptcy law, or section 1114(m) of the Bankruptcy Code; or (b) be construed as an admission that any such retiree benefits are owed by the Debtors. 7.8. Defined Benefit Pension Plan. The Pension Plan shall not be modified (absent consent) or affected by any provision of the Plan and shall be continued by Reorganized MPM after the Effective Date in accordance with its terms. Nothing herein or in the Confirmation Order shall relieve or discharge any requirement that MPM or Reorganized MPM (i) satisfy the minimum funding standards pursuant to 26 U.S.C. §§ 412, 430, and 29 U.S.C. § 1082, 1083, (ii) is liable for the payment of PBGC premiums in accordance with 29 U.S.C. §§ 1306 and 1307 subject to any and all applicable rights and defenses of MPM, and (iii) administer the Pension Plan in accordance with the provisions of ERISA and the Internal Revenue Code. In the event that the Pension Plan terminates after the Effective Date, Reorganized MPM and each of its controlled group members will be responsible, subject to any and all applicable rights and defenses, for the liabilities imposed by Title IV of ERISA to the extent set forth therein. Notwithstanding any provision of the Plan or the Confirmation Order to the contrary, including but not limited to the releases set forth in Article XII of the Plan, neither the Plan nor the Confirmation Order will release, discharge or exculpate the Debtors, the Reorganized Debtors, or any Person, in any capacity, from any liability or responsibility with respect to the Pension Plan, subject to any and all applicable rights and defenses of such parties, under ERISA or the Internal Revenue Code. Subsequent to the Effective Date, the PBGC and the Pension Plan shall not be enjoined or precluded from enforcing such liability or responsibility by any of the provisions of the Plan or the Confirmation Order. 7.9. Dissolution of Creditors’ Committee. The Creditors’ Committee shall be automatically dissolved on the Effective Date and, on the Effective Date, each member of the Creditors’ Committee (including each officer, director, employee or agent thereof) and each Professional Person retained by the Creditors’ Committee shall be released and discharged from all rights, duties, responsibilities and obligations arising from, or related to, the Debtors, their membership on the Creditors’ Committee, the Plan or the Reorganization Cases, except with respect to any matters concerning any Fee Claims held or asserted by any Professional Persons retained by the Creditors’ Committee. 73 7.10. Termination of Professionals. On the Effective Date, the engagement of each Professional Person retained by the Debtors and the Creditors’ Committee, if any, shall be terminated without further order of the Bankruptcy Court or act of the parties; provided , however , such Professional Persons shall be entitled to prosecute their respective Fee Claims and represent their respective constituents with respect to applications for payment of such Fee Claims and the Reorganized Debtors shall be responsible for the reasonable and documented fees, costs and expenses associated with the prosecution of such Fee Claims. Nothing in the Plan shall preclude any Reorganized Debtor from engaging a former Professional Person on and after the Effective Date in the same capacity as such Professional Person was engaged prior to the Effective Date. 7.11. Amendments. The Plan may be amended, modified, or supplemented by the Debtors, with the consent of the Requisite Investors, in the manner provided for by section 1127 of the Bankruptcy Code or as otherwise permitted by law, without additional disclosure pursuant to section 1125 of the Bankruptcy Code, except as otherwise ordered by the Bankruptcy Court. In addition, after the Confirmation Date, so long as such action does not materially and adversely affect the treatment of holders of Allowed Claims pursuant to the Plan, the Debtors may, with the consent of the Requisite Investors, make appropriate technical adjustments, remedy any defect or omission or reconcile any inconsistencies in the Plan, the Plan Documents and/or the Confirmation Order, with respect to such matters as may be necessary to carry out the purposes and effects of the Plan, and any holder of a Claim or Interest that has accepted the Plan shall be deemed to have accepted the Plan as amended, modified, or supplemented. 7.12. Revocation or Withdrawal of the Plan. The Debtors reserve the right, with the consent of the Requisite Investors, to revoke or withdraw the Plan prior to the Effective Date. If the Debtors revoke or withdraw the Plan, in accordance with the preceding sentence, prior to the Effective Date as to any or all of the Debtors, or if confirmation or consummation as to any or all of the Debtors does not occur, then, with respect to such Debtors: (a) the Plan shall be null and void in all respects; (b) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain any Claim or Interest or Class of Claims or Interests), assumption or rejection of executory contracts or leases affected by the Plan, and any document or agreement executed pursuant to the Plan shall be deemed null and void; and (c) nothing contained in the Plan shall (i) constitute a waiver or release of any Claims by or against, or any Interests in, such Debtors or any other Person, (ii) prejudice in any manner the rights of such Debtors or any other Person or (iii) constitute an admission of any sort by the Debtors or any other Person. 7.13. Post-Confirmation Jurisdiction of the Bankruptcy Court. Pursuant to sections 105(c) and 1142 of the Bankruptcy Code and notwithstanding entry of the Confirmation Order and the occurrence of the Effective Date, on and after the Effective Date, the Bankruptcy Court shall retain exclusive jurisdiction, pursuant to 28 U.S.C. §§ 1334 and 157, over all matters arising in, arising under, or related to the Reorganization Cases for the following purposes: (a) To hear and determine applications for the assumption or rejection of executory contracts or unexpired leases and the Cure Disputes resulting therefrom; 74 (b) To determine any motion, adversary proceeding, application, contested matter, and other litigated matter pending on or commenced after the Confirmation Date; (c) To hear and resolve any disputes arising from or relating to (i) any orders of the Bankruptcy Court granting relief under Bankruptcy Rule 2004, or (ii) any protective orders entered by the Bankruptcy Court in connection with the foregoing; (d) To ensure that Plan Distributions to holders of Allowed Claims are accomplished as provided in the Plan; (e) To consider Claims or the allowance, classification, priority, compromise, estimation, or payment of any Claim, including any Administrative Expense Claim; (f) To enter, implement, or enforce such orders as may be appropriate in the event the Confirmation Order is for any reason stayed, reversed, revoked, modified, or vacated; (g) To issue and enforce injunctions, enter and implement other orders, and take such other actions as may be necessary or appropriate to restrain interference by any Person with the consummation, implementation, or enforcement of the Plan, the Confirmation Order, or any other order of the Bankruptcy Court; (h) To hear and determine any application to modify the Plan in accordance with section 1127 of the Bankruptcy Code, to remedy any defect or omission or reconcile any inconsistency in the Plan, the Disclosure Statement, or any order of the Bankruptcy Court, including the Confirmation Order, in such a manner as may be necessary to carry out the purposes and effects thereof; (i) To hear and determine all Fee Claims; (j) To resolve disputes concerning any reserves with respect to Disputed Claims or the administration thereof; (k) To hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of the Plan, the Confirmation Order, any transactions or payments contemplated by the Plan, or any agreement, instrument, or other document governing or relating to any of the foregoing; (l) To take any action and issue such orders, including any such action or orders as may be necessary after occurrence of the Effective Date and/or consummation of the Plan, as may be necessary to construe, enforce, implement, execute, and consummate the Plan, including any release or injunction provisions set forth in the Plan, or to maintain the integrity of the Plan following consummation; 75 (m) To determine such other matters and for such other purposes as may be provided in the Confirmation Order; (n) To hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code; (o) To hear and determine any other matters related hereto and not inconsistent with the Bankruptcy Code and title 28 of the United States Code; (p) To resolve any disputes concerning whether a Person had sufficient notice of the Reorganization Cases, the Disclosure Statement Hearing, the Confirmation Hearing, any applicable Bar Date, or the deadline for responding or objecting to a Cure Amount, for the purpose of determining whether a Claim or Interest is discharged hereunder, or for any other purpose; (q) To recover all assets of the Debtors and property of the Estates, wherever located; and (r) To enter a final decree closing each of the Reorganization Cases. ARTICLE VIII. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN If the Plan is not consummated, the Debtors’ capital structure will remain over-leveraged and the Debtors will be unable to satisfy in full their debt obligations. Accordingly, if the Plan is not confirmed and consummated, the alternatives include: 8.1. Liquidation Under Chapter 7 of the Bankruptcy Code. The Debtors could be liquidated under chapter 7 of the Bankruptcy Code. A discussion of the effect a chapter 7 liquidation would have on the recoveries of the holders of Claims is set forth in Article VII of this Disclosure Statement. The Debtors believe that liquidation would result in lower aggregate distributions being made to creditors than those provided for in the Plan, which is demonstrated by the Liquidation Analysis set forth in Article VII and attached as Exhibit 2 to this Disclosure Statement. 8.2. Alternative Plan(s) of Reorganization. The Debtors believe that failure to confirm the Plan will lead inevitably to expensive and protracted Reorganization Cases, whereas the Plan will enable the Debtors to emerge from chapter 11 successfully and expeditiously, preserving their business and allowing creditors to realize the highest recoveries under the circumstances. In a liquidation under chapter 11 of the Bankruptcy Code, the assets of the Debtors would be sold in an orderly fashion over a more extended period of time than in a liquidation under chapter 7, and a trustee need not be appointed. Accordingly, creditors would receive greater recoveries than in a chapter 7 liquidation. Although a chapter 11 liquidation may be preferable to a chapter 7 liquidation, the Debtors believe that a liquidation under chapter 11 is a much less attractive alternative to holders of Claims and Interests than the Plan because the Plan provides for a greater return to holders of Claims and Interests. 76 Moreover, the prolonged continuation of the Reorganization Cases is likely to adversely affect the Debtors’ business and operations. So long as the Reorganization Cases continue, senior management of the Debtors will be required to spend a significant amount of time and effort dealing with the Debtors’ reorganization instead of focusing exclusively on business operations. Prolonged continuation of the Reorganization Cases will also make it more difficult to attract and retain management and other key personnel necessary to the success and growth of the Debtors’ business. In addition, the longer the Reorganization Cases continue, the more likely it is that the Debtors’ customers, suppliers, distributors, and agents will lose confidence in the Debtors’ ability to reorganize their business successfully and will seek to establish alternative commercial relationships. Furthermore, so long as the Reorganization Cases continue, the Debtors will be required to incur substantial costs for professional fees and other expenses associated with the Reorganization Cases. The Debtors believe that not only does the Plan fairly adjust the rights of various Classes of Claims, but also that the Plan provides superior recoveries over any alternative capable of rational consideration (such as a chapter 7 liquidation), thus enabling stakeholders to maximize their returns. Rejection of the Plan in favor of some alternative method of reconciling the Claims and Interests will require, at the very least, an extensive and time-consuming process (including the possibility of protracted and costly litigation) and will not result in a better recovery for any Class of Claims or Interests. THE DEBTORS BELIEVE THAT CONFIRMATION OF THE PLAN IS PREFERABLE TO ANY ALTERNATIVE BECAUSE THE PLAN MAXIMIZES THE AMOUNT OF DISTRIBUTIONS TO ALL HOLDERS OF CLAIMS AND ANY ALTERNATIVE TO CONFIRMATION OF THE PLAN WILL RESULT IN SUBSTANTIAL DELAYS IN THE DISTRIBUTION OF ANY RECOVERIES. THEREFORE, THE DEBTORS RECOMMEND THAT ALL HOLDERS OF IMPAIRED CLAIMS ENTITLED TO VOTE ON THE PLAN VOTE TO ACCEPT THE PLAN. 8.3. Dismissal of the Reorganization Cases. Dismissal of the Reorganization Cases would have the effect of restoring (or attempting to restore) all parties to the status quo ante . Upon dismissal of the Reorganization Cases, the Debtors would lose the protection of the Bankruptcy Code, thereby requiring, at the very least, an extensive and time consuming process of negotiations with their creditors, possibly resulting in costly and protracted litigation in various jurisdictions. Moreover, holders of Secured Claims may be permitted to foreclose upon the assets that are subject to their Liens, which is likely all of the Debtors’ assets, including all of their Cash. Dismissal may also permit certain unpaid unsecured creditors to obtain and enforce judgments against the Debtors. The Debtors believe that these actions would seriously undermine their ability to obtain financing and could lead ultimately to the liquidation of the Debtors under chapter 7 of the Bankruptcy Code. Therefore, the Debtors believe that dismissal of the Reorganization Cases is not a viable alternative to the Plan. 77 ARTICLE IX. SUMMARY OF VOTING PROCEDURES This Disclosure Statement, including all exhibits hereto and the related materials included herewith, is being furnished to the holders of Claims in Classes 4, 5, 6 and 9, which are the only Claims entitled to vote on the Plan. All votes to accept or reject the Plan must be cast by using the Ballot(s) enclosed with this Disclosure Statement (or, with respect to the beneficial holders of Claims in Classes 4 (First Lien Note Claims), 5 (1.5 Lien Note Claims) and 6 (Second Lien Note Claims) provided to such holders by their respective Intermediaries). No other votes will be counted. Consistent with the provisions of Bankruptcy Rule 3018, the Debtors have fixed June 19, 2014, at 5:00 p.m. (prevailing Eastern Time) as the Voting Record Date. Ballots must be RECEIVED by the Voting Agent no later than the Voting Deadline, 4:00 p.m. (prevailing Eastern Time) on July 28, 2014 , unless the Debtors, at any time, in their sole discretion, extend such date by oral or written notice to the Voting Agent, in which event the period during which Ballots will be accepted will terminate at 4:00 p.m. (prevailing Eastern Time) on such extended date. See Section 1.4 “ Voting; Holders of Claims Entitled to Vote ” above for additional disclosures regarding voting, including voting by an Intermediary. Ballots previously delivered may be withdrawn or revoked at any time prior to the Voting Deadline by the claimant who completed the original Ballot (or such claimant’s nominee). A Ballot may be revoked or withdrawn either by submitting a superseding Ballot or by providing written notice to the Voting Agent. To be effective, notice of revocation or withdrawal must: (a) be received on or before the Voting Deadline by the Voting Agent at its address specified in Section 1.4 above; (b) specify the name of the holder of the Claim whose vote on the Plan is being withdrawn or revoked; (c) contain the description of the Claim as to which a vote on the Plan is withdrawn or revoked; and (d) be signed by the holder of the Claim in the same manner as such holder signed the original Ballot. The foregoing procedures should also be followed with respect to a person entitled to vote on the Plan who wishes to change (rather than revoke or withdraw) its vote. For the avoidance of doubt, the Debtors reserve the right to assert that the treatment provided to holders of Claims in Classes 4 or 5 render such Claims unimpaired. ARTICLE X. DESCRIPTION AND HISTORY OF CHAPTER 11 CASES 10.1. General Case Background. On April 13, 2014, each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. On April 14, 2014, the Bankruptcy Court entered an order [Docket No. 26] authorizing the joint administration of the Reorganization Cases, for procedural purposes only, under Case No. 14-22503. The Honorable Robert D. Drain is presiding over the Reorganization Cases. The Debtors continue to operate their businesses and manage their 78 properties as debtors and debtors in possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. On April 22, 2014, a statutory committee of unsecured creditors was appointed in these cases. As of the date hereof, no request has been made for the appointment of a trustee or examiner in these cases. The following is a brief description of certain significant events that have occurred during the pendency of the Reorganization Cases. 10.2. Retention of Professionals. To assist them in carrying out their duties as debtors in possession, and to otherwise represent their interests in the Reorganization Cases, the Debtors, on April 28, 2014, filed with the Bankruptcy Court applications seeking entry of orders authorizing the Debtors to retain: (a) AlixPartners, LLP as restructuring advisor [Docket No. 99]; and (b) Moelis as investment banker and financial advisor [Docket No. 101]. On May 16, 2014, the Bankruptcy Court entered orders [Docket Nos. 210 and 219, respectively] approving the applications. On May 27, 2014, the Debtors also filed an application with the Bankruptcy Court seeking to retain Willkie as restructuring counsel [Docket No. 261], which was approved by the Bankruptcy Court on June 10, 2014 [Docket No. 358]. In addition, on the Petition Date, the Debtors filed with the Bankruptcy Court an application seeking entry of an order, pursuant to 28 U.S.C. § 156(c), authorizing the Debtors to retain KCC as the Debtors’ claims and noticing agent [Docket No. 3], which was approved by the Bankruptcy Court on April 15, 2014 [Docket No. 36]. On April 28, 2014, the Debtors also filed an application with the Bankruptcy Court, pursuant to section 327(a) of the Bankruptcy Code, authorizing the Debtors to retain KCC as administrative agent for the Debtors [Docket No. 100], which was approved by the Bankruptcy Court on May 16, 2014 [Docket No. 216]. Additionally, on April 28, 2014, the Debtors filed with the Bankruptcy Court a motion seeking authority, pursuant to section 327(e) of the Bankruptcy Code, to employ certain additional professionals, utilized in the ordinary course, to assist the Debtors in their day-to-day business operations [Docket No. 98]. On May 16, 2014, the Bankruptcy Court entered an order [Docket No. 211] approving the motion. 10.3. Employment Obligations. The Debtors believe that they have a valuable asset in their workforce, and that the efforts of the Debtors’ employees are critical to a successful reorganization. On the Petition Date, the Debtors filed with the Bankruptcy Court a motion for an order authorizing the Debtors to pay certain prepetition employee wage and benefit obligations [Docket No. 10] (the “ Employee Wage Motion ”). In the Employee Wage Motion, the Debtors requested to, among other things, satisfy certain of their prepetition obligations to their current employees, reimburse employees for prepetition travel and other business expenses that were incurred on behalf of the Debtors, pay prepetition payroll-related taxes and withholdings associated with the Debtors’ employee wage claims and the employee benefit obligations, and other similar tax obligations, continue any severance policies for employees, and to continue any employee benefit programs in place as of the Petition Date (including satisfying any prepetition obligations associated with 79 such programs). On April 15, 2014 and May 16, 2014, the Bankruptcy Court entered orders granting interim and final approval of the Employee Wage Motion, respectively [Docket Nos. 28 and 215]. 10.4. Continuing Supplier and Customer Relations. The Debtors believe that maintaining good relationships with their vendors, suppliers and customers is necessary to the continuity of the Debtors’ business operations during the Reorganization Cases. Accordingly, on the Petition Date, the Debtors filed with the Bankruptcy Court a motion seeking entry of an order authorizing the Debtors to pay, in the ordinary course of business, prepetition claims of certain critical vendors (both domestic and foreign) of goods and services, including certain claims of suppliers of goods entitled to priority pursuant to section 503(b)(9) of the Bankruptcy Code [Docket No. 12] (the “ Critical Vendor Motion ”). On April 15, 2014 and May 16, 2014, the Bankruptcy Court entered orders granting interim and final approval of the Critical Vendor Motion, respectively [Docket Nos. 30 and 218]. In addition, on the Petition Date, the Debtors filed with the Bankruptcy Court a motion seeking entry of an order authorizing the Debtors to continue certain prepetition customer programs, including, but not limited to, warranty programs, return policies, rebate programs and a channel marketing program, and to satisfy, in the ordinary course of business, certain prepetition claims arising from such programs [Docket No. 7] (the “ Customer Programs Motion ”). On April 15, 2014 and May 16, 2014, the Bankruptcy Court entered orders granting interim and final approval of the Customer Programs Motion, respectively [Docket Nos. 33 and 217]. 10.5. Motion for Authorization to Pay Prepetition Common Carrier, Warehouse Provider, Freight Forwarder and Related Obligations. On the Petition Date, the Debtors filed with the Bankruptcy Court a motion requesting authority to pay, in their discretion, any prepetition claims held by the Debtors’ common carriers, warehouse providers, freight forwarders, toll processors and mechanics as well as the Debtors’ logistics administrator [Docket No. 9] (the “ Service Providers Motion ”). On April 15, 2014 and May 19, 2014, the Bankruptcy Court entered orders granting interim and final approval of the Service Providers Motion, respectively [Docket Nos. 32 and 226]. 10.6. Cash Management System. The Debtors believe it would be disruptive to their operations if they were forced to change significantly their Cash management system upon the commencement of the Reorganization Cases. Accordingly, on the Petition Date, the Debtors filed with the Bankruptcy Court a motion seeking entry of an order authorizing the Debtors to maintain their current Cash management system as well as to authorize certain intercompany transactions [Docket No. 11] (the “ Cash Management Motion ”). On April 15, 2014 and May 16, 2014, the Bankruptcy Court entered orders granting interim and final approval of the Cash Management Motion, respectively [Docket Nos. 29 and 222]. 80 10.7. Utilities. On April 28, 2014, the Debtors filed with the Bankruptcy Court a motion for an order: (a) prohibiting utilities from altering or discontinuing services; (b) providing utility companies with adequate assurance of payment; and (c) establishing procedures for resolving requests for additional assurance of payment [Docket No. 97]. The Bankruptcy Court entered an order [Docket No. 220] approving the motion on May 16, 2014. 10.8. Insurance Obligations. On April 28, 2014, the Debtors filed with the Bankruptcy Court a motion seeking an order authorizing the Debtors to continue honoring their obligations pursuant to certain prepetition insurance premium finance agreements [Docket No. 95]. The Bankruptcy Court entered an order [Docket No. 212] approving the motion on May 16, 2014. 10.9. Tax Motion. On the Petition Date, the Debtors filed with the Bankruptcy Court a motion seeking entry of an order authorizing them to pay various prepetition sales and use, property and other taxes to various federal, state and local authorities, and certain licensing, permitting and regulatory fees to certain federal, state and local government agencies on a periodic basis, in each case, as and when such obligations become due [Docket No. 8] (the “ Tax Motion ”). On April 15, 2014 and May 16, 2014, the Bankruptcy Court entered orders granting interim and final approval of the Tax Motion, respectively [Docket Nos. 31 and 213]. 10.10. Schedules and Statements. By order of the Bankruptcy Court dated April 15, 2014 [Docket No. 35], the Debtors obtained an extension of time to file their Schedules of Assets and Liabilities and Statements of Financial Affairs (collectively, the “ Schedules ”) until June 12, 2014. On June 4, 2014, each Debtor filed with the Bankruptcy Court its Schedules. The Schedules are available electronically free of charge at www.kccllc.net/mpm. 10.11. Bar Dates. On May 27, 2014, the Debtors filed with the Bankruptcy Court a motion (the “Bar Date Motion”) seeking an order establishing the deadlines (each, a “ Bar Date ”) for filing proof of certain claims against the Debtors that arose on or prior to the Petition Date and approving the form and manner of notice of each Bar Date [Docket No. 263]. Pursuant to the Bar Date Motion, within five business days after the entry of an order approving the Bar Date Motion, the Debtors will serve the bar date notice and a proof of claim form upon all known entities holding potential claims. On June 6, 2014, the Bankruptcy Court entered an order approving the Bar Date Motion [Docket No. 329] and fixing 5:00 p.m. (prevailing Eastern Time) on July 17, 2014 as the Bar Date to file proofs of claim for all creditors other than governmental units, and October 10, 2014 as the Bar Date for governmental units. 81 10.12. The DIP Facilities. On April 14, 2014, the Bankruptcy Court entered an interim order [Docket No. 27] authorizing, on an interim basis, the Debtors to enter into the debtor-in-possession financing facilities (the “ DIP Credit Facilities ”) and to obtain postpetition financing and use Cash collateral. On May 23, 2014, the Bankruptcy Court entered an order [Docket No. 253] approving the DIP Credit Facilities on a final basis. The DIP Credit Facilities comprise a $270 million asset-based revolving loan and a $300 million term loan. The lenders under the DIP Credit Facilities have also committed, subject to certain closing conditions, to convert the proposed DIP asset-based revolving loan into a $270 million exit asset-based revolving facility and to provide a new $1 billion exit term loan facility to the Debtors upon the Effective Date. 10.13. Restructuring Support Agreement and Backstop Commitment Agreement. As discussed in Article IV, the RSA is the lynchpin of the Debtors’ restructuring. In the period leading up to the Petition Date, the Debtors negotiated the terms of the Plan with the Plan Support Parties, who together hold approximately 90% of the Second Lien Notes who ultimately entered into the RSA. Pursuant to the RSA, the Debtors and the Plan Support Parties agreed to support a pre-negotiated plan of reorganization, consistent with the term sheet annexed to the RSA, which served as the basis for the Plan. The RSA was designed to implement a comprehensive balance sheet restructuring that will solve the Debtors’ liquidity issues, significantly reduce the Debtors’ funded indebtedness, and allow the Debtors to navigate through their reorganization process efficiently and expeditiously. In conjunction with the RSA, the Plan Support Parties and the Debtors entered into the Backstop Commitment Agreement, whereby the Plan Support Parties have agreed to backstop the Rights Offerings for the Debtors’ New Common Stock, subject to the terms therein. A motion seeking authority for the Debtors to assume the RSA and enter into the Backstop Commitment Agreement was filed on May 9, 2014 [Docket No. 147]. A hearing to consider entry of an order granting the relief requested in the motion was held on June 19, 2014. On June 23, 2014, the Bankruptcy Court entered orders approving the Debtors’ (a) assumption of the RSA [Docket No. 507]; and (b) entry into the Backstop Commitment Agreement [Docket No. 509]. 10.14. Appointment of a Creditors’ Committee. The Creditors’ Committee was appointed by the United States Trustee pursuant to section 1102(a)(1) of the Bankruptcy Code on April 2, 2014 to represent the interests of the Debtors’ unsecured creditors, as reflected on the Bankruptcy Court’s docket [Docket Nos. 73, 92 and 113]. On May 27, 2014, the Creditors’ Committee filed with the Bankruptcy Court applications seeking entry of an order authorizing the Creditors’ Committee to retain Klee, Tuchin, Bogdanoff & Stern LLP as its legal advisor [Docket No. 256], FTI Consulting, Inc. as its financial advisor [Docket No. 257], and Jefferies LLC as its investment banker [Docket No. 258]. On June 10, 2014, the Bankruptcy Court entered orders [Docket Nos. 354, 355 and 360, respectively] approving the applications. 82 The current members of the Creditors’ Committee are set forth below: US Bank National Association, Global Corporate Trust Services 100 Wall Street, Suite 1600 New York, New York 10005 Attention: James E. Murphy BlueMountain Credit Alternatives Master Fund L.P. 280 Park Avenue – 12th Floor New York, New York 10017 Attention: Mark P. Kronfeld Aurelius Capital Partners, LP 535 Madison Avenue – 22nd Floor New York, New York 10022 Attention: Dan Gropper Unimin Corporation 258 Elm Street New Canaan, Connecticut 06840 Attention: Chris Goodwin Fischback USA Inc. 900 Peterson Drive Elizabethtown, Kentucky 42701 Attention: Kirk Chadwick Pension Benefit Guaranty Corporation 1200 K Street, N.W. Washington, D.C. 20005 Attention: Christopher Gran IUE-CWA, AFL-CIO P.O. Box 24366 Rochester, New York 14624 Attention: Joseph Giffi 10.15. Adversary Proceedings. On May 9, 2014, the Debtors instituted separate adversary proceedings against the First Lien Indenture Trustee and the 1.5 Lien Indenture Trustee regarding whether the “make-whole” premiums are due under either First Lien Indenture or 1.5 Lien Indenture, respectively. The Debtors allege in each adversary proceeding that the make-whole premiums are not due because the maturity dates of the First Lien Notes and 1.5 Lien Notes were automatically accelerated by the Debtors’ filing of voluntary bankruptcy petitions. See Momentive Performance Materials Inc. v. The Bank of New York Mellon Trust Co., N.A. ( In re MPM Silicones, LLC ), Adv. Proc. No. 14-08227 (RDD) (Bankr. S.D.N.Y. May 9, 2014) [Docket No. 1]; Momentive Performance Materials Inc. v. Wilmington Trust, N.A. ( In re MPM Silicones, LLC ), Adv. Proc. No. 14-08228 (RDD) (Bankr. S.D.N.Y. May 9, 2014) [Docket No. 1]. 83 In the First Lien Optional Redemption Premium Adversary Proceeding, a pre-trial conference is set for July 18, 2014 at 10:00 a.m. Momentive Performance Materials Inc. v. The Bank of New York Mellon Trust Co., N.A. ( In re MPM Silicones, LLC ), Adv. Proc. No. 14-08227 (RDD) (Bankr. S.D.N.Y. May 9, 2014) [Docket No. 2]. On June 18, 2014, the First Lien Indenture Trustee filed its answer, affirmative defenses, and counterclaims. [Docket No. 21] (the “ First Lien Answe r.”) In the First Lien Answer, the First Lien Indenture Trustee asserts the following affirmative defenses: (a) the Debtors have failed to state a claim; (b) the Debtors’ claims are barred by the doctrine of unclean hands; and (c) the Debtors’ claims are barred because of a violation of the implied covenant of good faith and fair dealing. The First Lien Answer’s counterclaims principally seek a declaratory judgment that a make-whole premium is due. Apollo and the Ad Hoc Committee of Second Lien Noteholders each filed a motion to intervene in the First Lien Optional Redemption Premium Adversary Proceeding [Docket Nos. 9 and 10], which were granted at a hearing on June 19, 2014. In the 1.5 Lien Optional Redemption Premium Adversary Proceeding, pre-trial conference is set for July 18, 2014 at 10 a.m. Momentive Performance Materials Inc. v. Wilmington Trust, N.A. ( In re MPM Silicones, LLC ), Adv. Proc. No. 14-08228 (RDD) (Bankr. S.D.N.Y. May 9, 2014) [Docket No. 2]. On June 18, 2014, the 1.5 Lien Indenture Trustee filed its answer, affirmative defenses, and counterclaims. [Docket No. 24] (the “ 1.5 Lien Answe r.”) In the 1.5 Lien Answer, the 1.5 Lien Indenture Trustee asserts the following affirmative defenses: (a) the Debtors have failed to state a claim; (b) the Debtors’ claims are barred by the doctrine of unclean hands; (c) the Debtors’ claims are barred because of a violation of the implied covenant of good faith and fair dealing; (d) the Debtors’ claims are barred by the doctrine of unjust enrichment; and (e) the Debtors’ claims are barred by the doctrines of waiver and estoppel. The 1.5 Lien Answer’s counterclaims principally seek a declaratory judgment that a make-whole premium is due. Apollo and the Ad Hoc Committee of Second Lien Noteholders each filed a motion to intervene in the 1.5 Lien Optional Redemption Premium Adversary Proceeding [Docket Nos. 11 and 12], which were granted at a hearing on June 19, 2014. The Subordinated Notes Indenture Trustee filed a complaint against the Debtors and the Second Lien Indenture Trustee seeking, among other things, a declaratory judgment that the Subordinated Notes are pari passu in right of payment with the Second Lien Notes. U.S. Bank Nat’l Assoc. v. Wilmington Savings Fund Society, FSB ( In re MPM Silicones, LLC ), Adv. Proc. No. 14-08238 (RDD) (Bankr. S.D.N.Y. May 30, 2014) [Docket No. 1]. The primary contention of the Subordinated Notes Indenture Trustee is that the Second Lien Notes are not “Senior Indebtedness” (as such term is defined in the Subordinated Notes Indenture) and therefore the Subordinated Notes should not be subordinated to the Second Lien Notes. The Debtors anticipate that the issues raised by each of the adversary proceedings will not be resolved by the Bankruptcy Court prior to the Confirmation Hearing. 84 ARTICLE XI. CERTAIN RISK FACTORS TO BE CONSIDERED Important Risks to Be Considered Holders of Claims should read and consider carefully the following risk factors and the other information in this Disclosure Statement, the Plan, the Plan Supplement and the other documents delivered or incorporated by reference in this Disclosure Statement and the Plan, before voting to accept or reject the Plan. These risk factors should not, however, be regarded as constituting the only risks involved in connection with the Plan and its implementation. 11.1. Certain Bankruptcy Considerations. (a) General. Although the Plan is designed to implement the restructuring transactions contemplated thereby and provide distributions to creditors in an expedient and efficient manner, it is impossible to predict with certainty the amount of time that the Debtors may spend in bankruptcy or to assure parties in interest that the Plan will be confirmed. If the Debtors are unable to obtain confirmation of the Plan on a timely basis because of a challenge to confirmation of the Plan or a failure to satisfy the conditions to consummation of the Plan, they may be forced to operate in bankruptcy for an extended period while they try to develop a different chapter 11 plan that can be confirmed. Such a scenario could jeopardize the Debtors’ relationships with their key vendors and suppliers, customers and employees, which, in turn, would have an adverse effect on the Debtors’ operations. A material deterioration in the Debtors’ operations likely would diminish recoveries under any subsequent chapter 11 plan. Further, in such event, the Debtors may not have sufficient liquidity to operate in bankruptcy for such an extended period. (b) Failure to Receive Requisite Acceptances. Claims in Classes 4, 5, 6 and 9 are the only Claims that are entitled to vote to accept or reject the Plan. Although the Debtors believe they will receive the requisite acceptances, the Debtors cannot provide assurances that the requisite acceptances to confirm the Plan will be received for at least one of these Classes. If the requisite acceptances are not received for at least one of these Classes, the Debtors will not be able to seek confirmation of the Plan under section 1129(b) of the Bankruptcy Code because at least one impaired Class will not have voted in favor of the Plan as required by section 1129(a)(10) of the Bankruptcy Code. In such a circumstance, the Debtors may seek to accomplish an alternative restructuring of their capitalization and obligations to creditors and obtain acceptances of an alternative plan of reorganization for the Debtors, or otherwise, that may not have the support of the Plan Support 85 Parties and/or may be required to liquidate these estates under chapter 7 or 11 of the Bankruptcy Code. There can be no assurance that the terms of any such alternative restructuring arrangement or plan would be similar to, or as favorable to the Debtors’ creditors as, those proposed in the Plan. (c) Failure to Secure Confirmation of the Plan. Even if the requisite acceptances are received, the Debtors cannot provide assurances that the Bankruptcy Court will confirm the Plan. A non-accepting creditor or equity security holder of the Debtors might challenge the balloting procedures and results as not being in compliance with the Bankruptcy Code or the Bankruptcy Rules. Even if the Bankruptcy Court determined that the Disclosure Statement and the balloting procedures and results were appropriate, the Bankruptcy Court could still decline to confirm the Plan if it found that any of the statutory requirements for confirmation had not been met. Section 1129 of the Bankruptcy Code sets forth the requirements for confirmation and requires, among other things, a finding by the Bankruptcy Court that the confirmation of the Plan is not likely to be followed by a liquidation or a need for further financial reorganization and that the value of distributions to non-accepting holders of claims and interests within a particular class under the Plan will not be less than the value of distributions such holders would receive if the debtor were liquidated under chapter 7 of the Bankruptcy Code. While the Debtors cannot provide assurances that the Bankruptcy Court will conclude that these requirements have been met, the Debtors believe that the Plan will not be followed by a need for further financial reorganization and that non-accepting holders within each Class under the Plan will receive distributions at least as great as would be received following a liquidation under chapter 7 of the Bankruptcy Code when taking into consideration all administrative claims and the costs and uncertainty associated with any such chapter 7 case. If the Plan is not confirmed, the Plan will need to be revised and it is unclear whether a restructuring of the Debtors could be implemented and what distribution holders of Claims ultimately would receive with respect to their Claims. If an alternative reorganization could not be agreed to, it is possible that the Debtors would have to liquidate their assets, in which case it is likely that holders of Claims would receive substantially less favorable treatment than they would receive under the Plan. There can be no assurance that the terms of any such alternative restructuring arrangement or plan would be similar to or as favorable to the Debtors’ creditors as those proposed in the Plan. (d) Failure to Consummate the Plan. Section 11.1 of the Plan contains various conditions to consummation of the Plan, including the Confirmation Order having become final and non-appealable, the Debtors having entered into the Plan Documents, in form and substance satisfactory to the Requisite Investors, and all conditions precedent to effectiveness of such agreements having been satisfied or waived in accordance with the terms thereof. As of the date of this Disclosure Statement, there can be no assurance that these or the other conditions to consummation will be satisfied or waived. Accordingly, even if the Plan is confirmed by the Bankruptcy Court, there can be no assurance that the Plan will be consummated and the restructuring completed. If the Plan is not consummated and the restructuring completed, these Reorganization Cases will be prolonged and the Debtors may lack sufficient liquidity to effect a successful restructuring under chapter 11 of the Bankruptcy Code. 86 Moreover, the Plan is predicated on, among other things, receipt of the Rights Offering Amount. Notwithstanding the Backstop Commitment Agreement, because the Rights Offerings have not been completed, there can be no assurance that the Debtors will receive any or all of the Rights Offering Amount. In addition, under the Backstop Commitment Agreement, the Backstop Parties have the contractual right to terminate the Backstop Commitment Agreement if, among other reasons, the deadlines set forth in such agreement or the various conditions precedent are not satisfied. Similarly, the Plan is predicated on, among other things, the support and consideration described in the RSA. In conjunction with the RSA and to guard against the possibility that the Debtors are unable to obtain sufficient commitments to purchase the full amount of the Rights Offering Stock, the Debtors and the Backstop Parties entered into the Backstop Commitment Agreement, whereby the Backstop Parties have agreed to backstop the Rights Offerings for the Debtors’ New Common Stock, subject to the terms therein. A motion seeking authority for the Debtors to assume the RSA and enter into the Backstop Commitment Agreement was filed on May 9, 2014 [Docket No. 147]. A hearing to consider entry of an order granting the relief requested in the motion was held on June 19, 2014. On June 23, 2014, the Bankruptcy Court entered orders approving the Debtors’ (a) assumption of the RSA [Docket No. 507] and (b) entry into the Backstop Commitment Agreement [Docket No. 509]. In addition, under the RSA and Backstop Commitment Agreement, the Plan Support Parties and Backstop Parties, respectively, have the contractual right to terminate the RSA and Backstop Commitment Agreement if, among other reasons, the deadlines set forth in such agreements or the various conditions precedent to the enforcement of the obligations of the parties thereto are not satisfied. If the RSA or Backstop Commitment Agreement are terminated, the Debtors may not be able to consummate the Plan in its current form. Moreover, in consideration for their commitment to backstop the Rights Offerings, the Backstop Parties will receive a backstop premium equal to 5% of the Rights Offering Amount (or $30 million), which is payable in New Common Stock upon the Effective Date. However, should the Backstop Commitment Agreement be terminated, such amount shall be payable in cash in certain circumstances. (e) Subordination Dispute. On May 30, 2014, the Senior Subordinated Indenture Trustee filed an adversary proceeding against the Debtors and the Second Lien Indenture Trustee 13 seeking a declaratory judgment that the Second Lien Notes do not constitute “Senior Indebtedness” under the terms of the Senior Subordinated Indenture, and therefore, that any unsecured deficiency claim arising from the Second Lien Notes should be treated as pari passu in right of payment with the Senior Subordinated Notes under the Plan. Should the Senior Subordinated Indenture Trustee succeed, the Plan would not be confirmable in its current form, and would likely require material revisions 13 SeeU.S. Bank National Association v. Wilmington Savings Fund Society, FSB (In re MPM Silicones, LLC), Adv. Proc. No. 14-08238 (RDD) (Bankr. S.D.N.Y. May 30, 2014) [Docket No. 1]. 87 to the treatment of Second Lien Notes and Senior Subordinated Notes, and potentially other Classes, under the Plan. While it is possible that the Senior Subordinated Indenture Trustee will succeed, the Debtors and the Backstop Parties do not believe that such outcome is likely, and believe that the Plan is confirmable as proposed. (f) Intercreditor Dispute. On June 19, 2014, the First Lien Indenture Trustee initiated litigation (the “Intercreditor Litigation”) in the Supreme Court of the State of New York, County of New York against (1) JPMorgan Chase Bank, N.A., as intercreditor agent under the Second Lien Intercreditor Agreement, (2) the Second Lien Indenture Trustee and (3) holders of Second Lien Notes (collectively, the “ Defendants ”). The First Lien Indenture Trustee principally alleges that the Plan Support Parties violated the Second Lien Intercreditor Agreement by executing the RSA, because the RSA requires them to support the Plan, which provides for payments in respect of the Second Lien Notes prior to payment in full in cash of the First Lien Notes and the 1.5 Lien Notes. The First Lien Indenture Trustee also asserts that it is entitled to enjoin holders of the Second Lien Notes from receiving, and to compel holders of the Second Lien Notes to turn over, any distributions received under the Plan to satisfy the obligations under the First Lien Notes and the 1.5 Lien Notes in accordance with the Second Lien Intercreditor Agreement. While it is possible that the First Lien Indenture Trustee will succeed, the Debtors and the Backstop Parties do not expect the Intercreditor Litigation to be sustained and the Backstop Parties are likely to assert counterclaims against the First Lien Indenture Trustee. (g) Objections to Treatment of Claims. Section 1129(b) of the Bankruptcy Code provides that a plan of reorganization must not discriminate unfairly with respect to each class of Claims or Interests. Holders of Claims or Interests may argue that the Plan discriminates unfairly with respect to their Claims or Interests. The Debtors believe that the treatment of each class of Claims or Interests complies with the requirements set forth in the Bankruptcy Code. There can be no assurance, however, that the Bankruptcy Court will reach the same conclusion. (h) Objections to Classification of Claims. Section 1122 of the Bankruptcy Code provides that a plan of reorganization may place a claim or an interest in a particular class only if such claim or interest is substantially similar to the other claims or interests in such class. The Debtors believe that the classification of Claims and Interests under the Plan complies with the requirements set forth in the Bankruptcy Code. There can be no assurance, however, that the Bankruptcy Court will reach the same conclusion. (i) The Debtors May Object to the Amount or Classification of Your Claim. The Debtors reserve the right to object to the amount or classification of any Claim. It is the Debtors’ position that the estimates set forth in this Disclosure Statement cannot be relied on by any creditor whose Claim or Interest is subject to an objection. Any such Claim holder may not receive its specified share of the estimated distributions described in this Disclosure Statement. 88 (j) The Debtors May Adjourn Certain Deadlines. In certain circumstances, the Debtors may deem it appropriate to adjourn either or both of the Voting Deadline and/or the Confirmation Hearing. While the Debtors estimate that the Effective Date will occur in or around September 2014, they cannot provide assurances that applicable dates related to the foregoing will not be extended and the Effective Date will not be delayed. 11.2. Risks Relating to the Capital Structure of the Reorganized Debtors. (a) Variances from Financial Projections. The Financial Projections included as Exhibit 3 to this Disclosure Statement reflect numerous assumptions, which involve significant levels of judgment and estimation concerning the anticipated future performance of the Reorganized Debtors, as well as assumptions with respect to the prevailing market, economic and competitive conditions, which are beyond the control of the Reorganized Debtors, and which may not materialize, particularly given the current difficult economic environment. Any significant differences in actual future results versus estimates used to prepare the Financial Projections, such as lower sales, lower volume, lower pricing, increases in production costs, technological changes, environmental or safety issues, workforce disruptions, competition or changes in the regulatory environment, could result in significant differences from the Financial Projections. The Debtors believe that the assumptions underlying the Financial Projections are reasonable. However, unanticipated events and circumstances occurring subsequent to the preparation of the Financial Projections may affect the Debtors’ and the Reorganized Debtors’ ability to initiate the endeavors and meet the financial benchmarks contemplated by the Plan. Therefore, the actual results achieved throughout the period covered by the Financial Projections necessarily will vary from the projected results, and these variations may be material and adverse. (b) Leverage. Although the Reorganized Debtors will have less indebtedness than the Debtors, the Reorganized Debtors will still have a significant amount of secured indebtedness. On the Effective Date, after giving effect to the transactions contemplated by the Plan, in addition to payment of Claims, if any, that require payment beyond the Effective Date and ordinary course debt, the Reorganized Debtors will, on a consolidated basis, have approximately $1,292,000,000 in secured indebtedness in addition to the undrawn $270 million New ABL Facility. The degree to which the Reorganized Debtors will be leveraged could have important consequences because: • it could affect the Reorganized Debtors’ ability to satisfy their obligations under their secured indebtedness following the Effective Date; 89 • a portion of the Reorganized Debtors’ Cash flow from operations will be used for debt service and unavailable to support operations, or for working capital, capital expenditures, expansion, acquisitions or general corporate or other purposes; • the Reorganized Debtors’ ability to obtain additional debt financing or equity financing in the future may be limited; and • the Reorganized Debtors’ operational flexibility in planning for, or reacting to, changes in their businesses may be severely limited. (c) Ability to Service Debt. Although the Reorganized Debtors will have less indebtedness than the Debtors, the Reorganized Debtors will still have significant interest expense and principal repayment obligations. The Reorganized Debtors’ ability to make payments on and to refinance their debt will depend on their future financial and operating performance and their ability to generate cash in the future. This, to a certain extent, is subject to general economic, business, financial, competitive, legislative, regulatory and other factors that are beyond the control of the Reorganized Debtors. Although the Debtors believe the Plan is feasible, there can be no assurance that the Reorganized Debtors will be able to generate sufficient cash flow from operations or that sufficient future borrowings will be available to pay off the Reorganized Debtors’ debt obligations. The Reorganized Debtors may need to refinance all or a portion of their debt on or before maturity; however, there can be no assurance that the Reorganized Debtors will be able to refinance any of their debt on commercially reasonable terms or at all. (d) Obligations Under Certain Financing Agreements. The Reorganized Debtors’ obligations under certain financing agreements, including, but not limited to, the New ABL Credit Agreement, the New First Lien Term Loan Agreement and, if applicable, the Incremental Facility, will be secured by liens on substantially all of the assets of the Reorganized Debtors (subject to certain exclusions set forth therein). If the Reorganized Debtors become insolvent or are liquidated, or if there is a default under certain financing agreements, including, but not limited to, the New ABL Credit Agreement and the New First Lien Term Loan Agreement, and payment on any obligation thereunder is accelerated, the lenders under the New ABL Credit Agreement and the New First Lien Term Loan Agreement would be entitled to exercise the remedies available to a secured lender under applicable law, including foreclosure on the collateral that is pledged to secure the indebtedness thereunder, and they would have a claim on the assets securing the obligations under the applicable facility that would be superior to any claim of the holders of unsecured debt. Moreover, in the event that Class 4 (First Lien Note Claims) votes to reject the Plan, in lieu of the New First Lien Term Loan, the Reorganized Debtors, on the Effective Date, will issue Replacement First Lien Notes to holders of Allowed First Lien Note Claims with a present value equal to the Allowed amount of such holder’s First Lien Note Claim (which may include any make-whole claim, prepayment penalty, or Applicable Premium Allowed by the 90 Bankruptcy Court, if any). Similarly, in the event that Class 5 (1.5 Lien Note Claims) votes to reject the Plan, in lieu of the Incremental Facility, the Reorganized Debtors, on the Effective Date, will issue Replacement 1.5 Lien Notes to holders of Allowed 1.5 Lien Note Claims with a present value equal to the Allowed amount of such holder’s 1.5 Lien Note Claim (which may include any make-whole claim, prepayment penalty, or Applicable Premium Allowed by the Bankruptcy Court, if any). The terms of such replacement notes may include the obligations and restrictions described above. (e) Restrictive Covenants. The financing agreements governing the Reorganized Debtors’ indebtedness will contain various covenants that may limit the discretion of the Reorganized Debtors’ management by restricting the Reorganized Debtors’ ability to, among other things, incur additional indebtedness, incur liens, pay dividends or make certain restricted payments, consummate certain asset sales, enter into certain transactions with affiliates, merge, consolidate and/or sell or dispose of all or substantially all of their assets. In addition, it is expected that such agreements will require the Reorganized Debtors to meet certain financial covenants. As a result of these covenants, the Reorganized Debtors will be limited in the manner in which they conduct their business and they may be unable to engage in favorable business activities or finance future operations or capital needs. Any failure to comply with the restrictions of the financing agreements may result in an event of default. An event of default may allow the creditors to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies. If the Reorganized Debtors are unable to repay amounts outstanding under their financing agreements when due, the lenders thereunder could, subject to the terms of the financing agreements, seek to foreclose on the collateral that is pledged to secure the indebtedness outstanding under such facility. (f) Lack of a Trading Market. It is anticipated that Reorganized MPM will be a private company and that there will be no active trading market for the New Common Stock. Pursuant to the terms of the Registration Rights Agreement, the Debtors have agreed to file a registration statement registering for resale the New Common Stock within 75 days of the Effective Date. There can be no assurance, however, that any market will develop for the New Common Stock or as to the liquidity of any market that may develop for any such securities. Consequently, holders of the New Common Stock may bear certain risks associated with holding securities for an indefinite period of time, including, but not limited to, the risk that the New Common Stock will lose some or all of its value. (g) The Implied Valuation of New Common Stock is Not Intended to Represent the Trading Value of the New Common Stock. The valuation of the Reorganized Debtors is not intended to represent the trading values of New Common Stock in public or private markets and is subject to additional uncertainties and contingencies, all of which are difficult to predict. Actual market prices of 91 such securities at issuance will depend upon, among other things: (1) prevailing interest rates; (2) conditions in the financial markets; (3) the anticipated initial securities holdings of prepetition creditors, some of which may prefer to liquidate their investment rather than hold it on a long term basis; and (4) other factors that generally influence the prices of securities. Actual market prices of the New Common Stock also may be affected by the Reorganization Cases or by other factors not possible to predict. Accordingly, the implied value stated herein and the Plan of the securities to be issued does not necessarily reflect, and should not be construed as reflecting, values that will be attained for the New Common Stock in the public or private markets. (h) Variance in Amount of Shares of New Common Stock Issued. The number of shares of New Common Stock to be issued under the Plan has not been fixed and could vary from the Debtors’ projections. While the number of shares issued as the Commitment Premium Shares and the Rights Offering Stock has been fixed at 36,197,874 collectively, the number of shares issued in connection with the Second Lien Notes Equity Distribution will vary depending on the Net Debt Amount, and such variance may be material. Such variance could depend on, among other things, whether (i) the amount of cash held by the Debtors as of the Effective Date is different than projected for any reason, including that the Debtors generated less cash than expected from their business operations, (ii) the amount outstanding under the DIP ABL Facility on the Effective Date varies from the Debtors’ projections, (iii) the Debtors are required to include any portion of a “make-whole” premium in the recovery to holders of First Lien Notes and/or 1.5 Lien Notes, (iv) the total amount of Allowed Claims against the Debtors is materially higher than projected, and/or (v) the amount of administrative claims against the Debtors, including professional fees, are higher than are currently anticipated. To the extent that the Total Outstanding Shares issued is greater than anticipated, a greater number of shares will be issued as the Second Lien Notes Equity Distribution, giving rise to a lower percentage of equity ownership on account of the Commitment Premium Shares and the Rights Offering Stock than is currently projected. To the extent that the Total Outstanding Shares issued is lower than anticipated, a smaller number of shares will be issued as the Second Lien Notes Equity Distribution, giving rise to a larger percentage of equity ownership on account of the Commitment Premium Shares and the Rights Offering Stock than is currently projected. For more information, see Article XII of the Disclosure Statement. (i) The 4(a)(2) Securities and Certain Section 1145 Securities Will Be Subject to Resale Restrictions and Thus the Holders of these Securities May Be Required to Bear the Financial Risk of an Investment in these Securities for an Indefinite Period of Time. The 4(a)(2) Subscription Rights and the 4(a)(2) Securities (as defined below) are being issued and sold pursuant to an exemption from registration under the applicable securities laws. Accordingly, the 4(a)(2) Securities and shares of Top HoldCo Common Stock issued in exchange therefor will be subject to resale restrictions and may be resold, exchanged, assigned or otherwise transferred only pursuant to registration, or an applicable exemption from registration, under the Securities Act and other applicable law. In addition, Holders of Section 1145 Securities (as defined below) and shares of Top HoldCo Common Stock issued in exchange 92 therefor who are deemed to be “underwriters” under Section 1145(b) of the Bankruptcy Code will also be subject to resale restrictions. The 4(a)(2) Eligible Holders participating in the 4(a)(2) Rights Offering and the Holders of Section 1145 Securities and shares of Top HoldCo Common Stock issued in exchange therefor who are deemed to be “underwriters” should be aware that they may be required to bear the financial risk of an investment in the 4(a)(2) Securities and the Section 1145 Securities and shares of Top HoldCo Common Stock issued in exchange therefor for an indefinite period of time. 11.3. Risks Relating to Tax and Accounting Consequences of the Plan. (a) Certain Tax Consequences of the Plan Raise Unsettled and Complex Legal Issues and Involve Factual Determinations. The federal income tax consequences of the Plan are complex and are subject to significant uncertainties. The Debtors currently do not intend to seek any ruling from the Internal Revenue Service (“ IRS ”) on the tax consequences of the Plan. Thus, there can be no assurance that the IRS will not challenge the various positions the Debtors have taken, or intend to take, with respect to the tax treatment in the Plan, or that a court would not sustain such a challenge. (b) Use of Historical Financial Information. As a result of the consummation of the Plan and the transactions contemplated thereby, the Reorganized Debtors believe they will be subject to the fresh-start accounting rules. Fresh-start accounting allows for the assessment of every balance sheet account for possible fair value adjustment, resulting in the emergence of a new company recapitalized and revalued. This process is guided by purchase price allocation standards under GAAP. 11.4. Risks Associated with the Company’s Businesses. THE FOLLOWING PROVIDES A SUMMARY OF CERTAIN OF THE RISKS ASSOCIATED WITH THE COMPANY’S BUSINESSES. HOWEVER, THIS SECTION IS NOT INTENDED TO BE EXHAUSTIVE. ADDITIONAL RISK FACTORS CONCERNING THE COMPANY’S BUSINESSES ARE CONTAINED IN THE COMPANY’S PREVIOUSLY-FILED ANNUAL FORM 10-K REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013. (a) The New Management May Not Agree with the Post-Reorganization Business Plan Set Forth in the Financial Projections. The RSA requires that as of the Effective Date, the Chief Executive Officer, Chief Financial Officer, General Counsel and potentially other management positions (combined, the “ New Management ”) of the Reorganized Debtors consist of those individuals selected by and acceptable to the Requisite Investors. The process of selecting the New Management has not yet been completed, therefore the New Management has not yet been identified. While the Company’s current management team believes that the strategies and assumptions in the post-reorganization business plan set forth in the Financial Projections are reasonable and in the Company’s best interest, there is no guarantee that the New Management will agree with all such strategies and assumptions. 93 (b) The Debtors’ Reorganization Cases May Negatively Impact the Company’s Future Operations. While the Debtors believe that they will be able to emerge from chapter 11 relatively expeditiously, there can be no assurance as to timing for approval of the Plan or the Debtors’ emergence from chapter 11. Additionally, notwithstanding the support of the Plan Support Parties, the Reorganization Cases may adversely affect the Company’s ability to retain existing customers and suppliers, attract new customers and maintain contracts that are critical to its operations. (c) Fluctuations in Direct or Indirect Raw Material Costs Could Have an Adverse Impact on the Company’s Businesses. The prices of the Company’s direct and indirect raw materials have been, and the Company expects them to continue to be, volatile. Though the Company’s business plan contemplates some incremental price increases to offset the cost of raw material increases, if the cost of direct or indirect raw materials increases significantly, the Company may be unable to fully offset the increased costs with higher selling prices and profitability will decline. Increases in prices for the Company’s products could also hurt the Company’s ability to remain both competitive and profitable in the markets in which the Company competes. Although some of the Company’s materials contracts include competitive price clauses that allow the Company to buy outside the contract if market pricing falls below contract pricing, and certain contracts have minimum-maximum monthly volume commitments that allow the Company to take advantage of spot pricing, the Company may be unable to purchase raw materials at market prices. In addition, some of the Company’s customer contracts have fixed prices for a certain term, and as a result, the Company may not be able to pass on raw material price increases to customers immediately, if at all. Due to differences in timing of the pricing trigger points between the Company’s sales and purchase contracts, there is often a “lead-lag” impact that can negatively impact the Company’s margins in the short term in periods of rising raw material prices and positively impact them in the short term in periods of falling raw material prices. Future raw material prices may be impacted by new laws or regulations, suppliers’ allocations to other purchasers, changes in the Company’s supplier manufacturing processes as some of the Company’s products are byproducts of these processes, interruptions in production by suppliers, natural disasters, volatility in the price of crude oil and related petrochemical products and changes in exchange rates. (d) The Supply of Direct or Indirect Raw Materials Could Affect Profitability. The Company’s manufacturing operations require adequate supplies of raw materials on a timely basis. The loss of a key source or a delay in shipments could have a material adverse effect on the Company’s businesses and negatively affect profitability. Raw material availability may be subject to curtailment or change due to, among other things, new or existing laws or regulations, suppliers’ allocations to other purchasers, interruptions in production by suppliers, and natural disasters. 94 Furthermore, many of the Company’s raw materials and intermediate products are available in the required quantities from a limited number of suppliers. Should any of the Company’s key suppliers fail to deliver the required raw materials or intermediate products or no longer supply the Company, the Company may be unable to purchase these materials in necessary quantities, which could adversely affect the Company’s volumes, or may not be able to purchase them at prices that would allow them to remain competitive. The Company’s suppliers may experience force majeure events rendering them unable to deliver all, or a portion of, the contracted-for raw materials. If this were to occur, the Company could be forced to purchase replacement raw materials in the open market at significantly higher costs or place customers on an allocation of the Company’s products. In addition, the Company cannot predict whether new regulations or restrictions may be imposed in the future on silicon metal, siloxane or other key materials, which may result in reduced supply or further increases in prices. The Company cannot assure investors that the Company will be able to renew the Company’s current materials contracts or enter into replacement contracts on commercially acceptable terms, or at all. Fluctuations in the price of these or other raw materials or intermediate products, the loss of a key source of supply or any delay in the supply could result in a material adverse effect on the Company’s businesses. (e) Environmental Obligations and Liabilities Could Have a Substantial Negative Impact on Financial Condition. The Company’s operations involve the use, handling, processing, storage, transportation and disposal of hazardous materials and are subject to extensive and complex U.S. federal, state, local and non-U.S. supra-national, national, provincial, and local environmental, health and safety laws and regulations. These environmental laws and regulations include those that govern the discharge of pollutants into the air and water, the generation, use, storage, transportation, treatment and disposal of hazardous materials and wastes, the cleanup of contaminated sites, occupational health and safety and those requiring permits, licenses, or other government approvals for specified operations or activities. The Company’s products are also subject to a variety of international, national, regional, state, and provincial requirements and restrictions applicable to the manufacture, import, export or subsequent use of such products. In addition, the Company is required to maintain, and may be required to obtain in the future, environmental, health and safety permits, licenses, or government approvals to continue current operations at most of the Company’s manufacturing and research facilities throughout the world. While the Company fully intends to be in compliance with all environmental obligations, compliance with environmental, health and safety laws and regulations, and maintenance of permits, can be costly and complex. If the Company is unable to comply with environmental, health and safety laws and regulations, or maintain the Company’s permits, the Company could incur substantial costs, including fines and civil or criminal sanctions, third party property damage or personal injury claims or costs associated with upgrades to the Company’s facilities or changes in the Company’s manufacturing processes in order to achieve and maintain compliance, and may also be required to halt permitted activities or operations until any necessary permits can be obtained or complied with. In addition, future developments or 95 increasingly stringent regulations could require the Company to make additional unforeseen environmental expenditures, which could have a material adverse effect on the Company’s business. Actual and alleged environmental violations have been identified at the Company’s facility in Waterford, New York. The Company is cooperating with the New York State Department of Environmental Conservation (the “ NYSDEC ”) and the U.S. Environmental Protection Agency (the “ USEPA ”) and the U.S. Department of Justice in their respective investigations of that facility’s compliance with certain applicable environmental requirements, including certain requirements governing the operation of the facility’s hazardous waste incinerators. Although the Company does not believe that the costs and potential penalties associated with these investigations will have a material adverse impact on the Company’s business, these investigations may result in administrative, civil or criminal enforcement by the State of New York and/or the United States and resolution of such enforcement actions will likely require payment of a monetary penalty and/or the imposition of other civil or criminal sanctions. Environmental, health and safety requirements change frequently and have tended to become more stringent over time. The Company cannot predict what environmental, health and safety laws and regulations or permit requirements will be enacted or amended in the future, how existing or future laws or regulations will be interpreted or enforced or the impact of such laws, regulations or permits on future production expenditures, supply chain or sales. The Company’s costs of compliance with current and future environmental, health and safety requirements could be material. (f) Future Chemical Regulatory Actions May Decrease Profitability. Several governmental entities have enacted, are considering or may consider in the future, regulations that may impact the Company’s ability to sell certain chemical products in certain geographic areas. If the Company fails to comply with such regulations or other similar laws, the Company may be subject to penalties or other enforcement actions, including fines, injunctions, recalls or seizures, which would have a material adverse effect on the Company’s financial condition, Cash flows, and profitability. The Company participates with other companies in trade associations and regularly contributes to the research and study of the safety and environmental impact of the Company’s products and raw materials, including siloxanes. These programs are part of a program to review the environmental impacts, safety and efficacy of the Company’s products. In addition, government and academic institutions periodically conduct research on potential environmental and health concerns posed by various chemical substances, including substances the Company manufactures and sells. These research results are periodically reviewed by state, national and international regulatory agencies and potential customers. Such research could result in future regulations restricting the manufacture or use of the Company’s products, liability for adverse environmental or health effects linked to the Company’s products, and/or de-selection of the Company’s products for specific applications. These restrictions, liability, and product de-selection could have a material adverse effect on the Company’s business, the Company’s financial condition and/or liquidity. 96 Products the Company has made or used could be the focus of legal claims based upon allegations of harm to human health. While the Company cannot predict the outcome of suits and claims, the Company believes that it maintains adequate reserves to address litigation and is adequately insured to cover foreseeable future claims. However, an unfavorable outcome in these litigation matters could have a material adverse effect on the Company’s business, financial condition and/or profitability and cause its reputation to decline. As a result of the hazardous nature of some of the products the Company produces and uses, the Company may face claims relating to incidents that involve its customers’ improper handling, storage and use of its products. Additionally, the Company may face lawsuits alleging personal injury or property damage by neighbors living near its production facilities. These lawsuits could result in substantial damage awards against the Company, which in turn could encourage additional lawsuits and could cause the Company to incur significant legal fees to defend such lawsuits, either of which could have a material adverse effect on the Company’s business, financial condition and/or profitability. In addition, the activities of environmental action groups could result in litigation or damage to the Company’s reputation. (g) Manufacturing and Use of Hazardous Materials. The Company produces hazardous chemicals that require care in handling and use that are subject to regulation by many U.S. and non-U.S. national, supra-national, state and local governmental authorities. In some circumstances, these authorities must review and, in some cases approve, the Company’s products and/or manufacturing processes and facilities before the Company may manufacture and sell some of these chemicals. To be able to manufacture and sell certain new chemical products, the Company may be required, among other things, to demonstrate to the relevant authority that the product does not pose an unreasonable risk during its intended uses and/or that we are capable of manufacturing the product in compliance with current regulations. The process of seeking any necessary approvals can be costly, time consuming and subject to unanticipated and significant delays. Approvals may not be granted to the Company on a timely basis, or at all. Any delay in obtaining, or any failure to obtain or maintain, these approvals would adversely affect the Company’s ability to introduce new products and to generate revenue from those products. New laws and regulations may be introduced in the future that could result in additional compliance costs, bans on product sales or use, seizures, confiscation, recall or monetary fines, any of which could prevent or inhibit the development, distribution or sale of the Company’s products and could increase the Company’s customers’ efforts to find less hazardous substitutes for the Company’s products. The Company is subject to ongoing reviews of the Company’s products and manufacturing processes. (h) Increased Energy Costs. Natural gas and electricity are essential to the Company’s manufacturing processes, which are energy-intensive. Oil and natural gas prices have fluctuated greatly over the past several years and the Company anticipates that they will continue to do so. The Company’s operating expenses will increase if its energy prices increase. Increased energy prices may also result in greater raw materials costs. If the Company cannot pass these costs through to its customers, the Company’s profitability may decline. In addition, increased energy costs may also negatively affect the Company’s customers and the demand for products. 97 (i) Increased Competition. The markets that the Company operates in are highly competitive, and this competition could harm its results of operations, Cash flows and financial condition. The Company’s competitors include major international producers as well as smaller regional competitors. The Company may be forced to lower its selling price based on its competitors’ pricing decisions, which would reduce profitability. This risk has been further magnified by the impact of the recent global economic downturn, as companies have focused more on price to retain business and market share. In addition, the Company faces competition from a number of products that are potential substitutes for the Company’s products. Growth in substitute products could adversely affect the Company’s market share, net sales and profit margins. There is also a trend in the Company’s industries toward relocating manufacturing facilities to lower cost regions, such as Asia, which may permit some of the Company’s competitors to lower their costs and improve their competitive position. Furthermore, there has been an increase in new competitors based in these regions. Some of the Company’s competitors are larger, have greater financial resources, have a lower cost structure, and/or have less debt than the Company does. As a result, those competitors may be better able to withstand a change in conditions within the Company’s industry and in the economy as a whole. If the Company does not compete successfully, its operating margins, financial condition, Cash flows and profitability could be adversely affected. Furthermore, if the Company does not have adequate capital to invest in technology, including expenditures for research and development, its technology could be rendered uneconomical or obsolete, negatively affecting its ability to remain competitive. (j) The Company Depends on Its Intellectual Property Rights. The Company’s success depends in part on the ability to protect its intellectual property rights, and the Company’s inability to enforce these rights could have a material adverse effect on competitive position. The Company relies on the patent, trademark, copyright, and trade-secret laws of the United States and the countries where it does business to protect its intellectual property rights. The Company may be unable to prevent third parties from using its intellectual property without proper authorization. The unauthorized use of its intellectual property could reduce any competitive advantage the Company has developed, reduce market share, or otherwise harm business. In the event of unauthorized use of the Company’s intellectual property, litigation to protect or enforce the Company’s rights could be costly, and the Company may not prevail. (k) The Company’s Pending Trademark Applications May Not Be Approved. The Company’s pending trademark applications may not be approved by the responsible governmental authorities and, even if these trademark applications are granted, third parties may seek to oppose or otherwise challenge these trademark applications. A failure to obtain trademark registrations in the United States and in other countries could limit the Company’s ability to protect its products and its associated trademarks and impede marketing efforts in those jurisdictions. 98 (l) The Loss of One or More of the Company’s Key Personnel Could Disrupt Operations and Adversely Affect Financial Results. The Company is highly dependent upon the availability and performance of its executive officers. Accordingly, the loss of services of any of the Company’s executive officers could materially adversely affect the Company’s business, financial condition and operating results. (m) Continued Weakness or Worsening of Economic Conditions Could Continue to Adversely Affect the Reorganized Company’s Financial Performance and Liquidity. The global economic environment and declines in consumption in the Company’s end markets have adversely affected sales of the Company’s products. This environment and decline was a factor leading to these chapter 11 cases. Further, global financial markets have been experiencing volatility. Economic conditions could accelerate the continuing decline in demand for the Company’s products, which could also place pressure on its results of operations and liquidity. There is no guarantee that anticipated economic growth levels in markets that have experienced some economic recovery will continue in the future, or that the Company will succeed in expanding sales in these markets. If the global economic weakness and tightness in credit markets continue for a greater period of time than anticipated or worsen, the Company’s profitability and related Cash generation capability could be adversely affected and, therefore, affect the Reorganized Company’s ability to meet its anticipated Cash needs or impair its liquidity. (n) Legal Matters. The Company is party to routine litigation incidental to its businesses. It is not anticipated that any current or pending lawsuit, either individually or in the aggregate, is likely to have a material adverse effect on the Company’s financial condition. No assurance can be provided, however, that the Company will be able to successfully defend or settle all pending or future purported claims, and the Company’s failure to do so may have a material adverse effect on the Reorganized Company. (o) Labor Matters. Certain of the Company’s employees are subject to collective bargaining agreements. If the Company is unable to renew expiring collective bargaining agreements, it is possible that the affected unions could take action in the form of strikes or work stoppages. Such actions, higher costs in connection with renegotiated collective bargaining agreements, or significant labor disputes could adversely affect the Company’s businesses. 99 ARTICLE XII. RIGHTS OFFERING PROCEDURES14 12.1. Overview of Rights Offerings. In connection with the transactions contemplated by the Plan, the Second Lien Noteholders will have the opportunity to participate in the Rights Offerings whereby such holders will have the right to purchase shares of New Common Stock issued by the reorganized company in an aggregate amount of $600 million at a price per share of $17.28, which represents a 15% discount of the implied value of each share of $20.33. Proceeds of the Rights Offerings will be used to fund payments required under the Plan and for ordinary course operations and general corporate purposes of the Reorganized Debtors. Although the Debtors will offer all holders of Second Lien Notes the opportunity to participate in the Rights Offerings, the Debtors may be unable to obtain sufficient commitments from such holders to purchase the full amount of the Rights Offering Stock. To guard against this possibility, the Plan Support Parties have agreed, pursuant to the Backstop Commitment Agreement, to backstop the Rights Offerings and to purchase any of the Rights Offering Stock that are not subscribed for by the Second Lien Noteholders. Because the scope of section 1145 of the Bankruptcy Code is limited, and only a limited amount of equity subscription rights may be offered pursuant thereto, the Plan contemplates two concurrent but separate Rights Offerings, one Rights Offering which is exempt from registration required by applicable securities laws pursuant to section 1145 of the Bankruptcy Code, and another Rights Offering which is exempt from registration required by applicable securities laws pursuant to section 4(a)(2) of the Securities Act. Only “accredited investors” that are holders of an Allowed Second Lien Note Claim as of the Record Date may participate in the 4(a)(2) Rights Offering due to restrictions under the Securities Act. However, by providing for the Section 1145 Rights Offering, the Plan ensures that holders of Second Lien Notes that are not “accredited investors” will have the opportunity to participate to some extent in the Rights Offerings. Both Rights Offerings will expire on August 1, 2014 at 5:00 p.m. (prevailing Eastern time) (the “Subscription Expiration Deadline ”). Pursuant to the Section 1145 Rights Offering, the Debtors will offer holders of Allowed Second Lien Note Claims the opportunity to purchase each holder’s pro rata share of 7,656,521 shares of New Common Stock (the “ 1145 Rights Offering Shares ”) at the price per share of $17.28. The rights to purchase shares of New Common Stock pursuant to the Section 1145 Rights Offering will be distributed and issued only to a Person that is a holder of an 14 Capitalized terms used in this Section not otherwise defined herein or in the Plan shall have the meanings ascribed to them in the applicable Rights Offering Procedures. In addition, this Section is only intended to provide a summary of the Rights Offering Procedures. To the extent of any inconsistency between this summary and the applicable Rights Offering Procedures, the applicable Rights Offering Procedures shall govern. Copies of the Rights Offering Procedures, and corresponding subscription agreements and subscription forms, are annexed hereto as Exhibits 5-A and 5-B . 100 Allowed Second Lien Note Claim as of the Record Date. The rights to purchase shares of New Common Stock pursuant to the Section 1145 Rights Offering are not transferable after the Record Date or detachable from the Second Lien Note Claims. Except with respect to any Person that is an “underwriter” as defined in section 1145(b) of the Bankruptcy Code, the 1145 Rights Offering Shares will be exempt from registration under section 5 of the Securities Act and under any State or local law requiring registration for offer or sale of a security pursuant to section 1145 of the Bankruptcy Code. The Subscription Rights that will be issued pursuant to the 4(a)(2) Rights Offering will only be available to holders of Second Lien Note Claims which are “accredited investors” (as defined in Rule 501(a) promulgated under Regulation D under the Securities Act) as of the Record Date. Eligible holders of such Subscription Rights will have the opportunity to participate in a private placement of 27,065,701 shares of New Common Stock at the price per share of $17.28 (the “ 4(a)(2) Rights Offering Shares ”). The rights to purchase shares of New Common Stock pursuant to the 4(a)(2) Rights Offering are not transferable or detachable from the Second Lien Note Claims. In addition, if any portion of an Allowed Second Lien Note Claim is or has been transferred after the Record Date, the corresponding 4(a)(2) Subscription Rights will be cancelled, and neither the transferor nor the transferee of such Second Lien Note Claim will receive any shares of Rights Offering Stock in connection with such transferred Second Lien Note Claims. The Debtors believe that the 4(a)(2) Rights Offering Shares are issuable without registration under the Securities Act in reliance upon the exemption from registration provided under section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. The Debtors have designated KCC as the “Subscription Agent” for the Rights Offerings. 12.2. The Rights Offering Procedures. The Rights Offering Procedures, and corresponding subscription agreements and subscription forms, set forth the specific requirements and procedures pursuant to which the Rights Offerings will be conducted. Generally, the Rights Offering Procedures provide, among other things, that: 1. To facilitate the exercise of the Subscription Rights, beginning on the Subscription Commencement Date, the Debtors will send a Subscription Agreement to each Eligible Holder, or its nominee, together with appropriate instructions for completion, execution and timely delivery of the Subscription Agreement and the payment of the purchase price for the Rights Offering Stock. 2. In order to validly exercise the Subscription Rights, on or prior to August 1, 2014, or any earlier date provided by a holder’s Nominee, each Eligible Holder must: a. return a duly executed Subscription Agreement to the Subscription Agent, or its Nominee; b. return a duly completed and executed “Beneficial Holder Subscription Form” to the Subscription Agent, or its Nominee; 101 c. return the IRS Form W-9 or IRS Form W-8, as applicable, to the Subscription Agent, or its Nominee; d. Eligible Holders participating in the 4(a)(2) Rights Offering must also complete the Accredited Investor Questionnaire, annexed as Exhibit A to the 4(a)(2) Beneficial Holder Subscription Form; and e. pay, or arrange for the payment of, the applicable Purchase Price to the Subscription Agent by wire transfer ONLY of immediately available funds in accordance with the instructions included in Item 3 of the Beneficial Holder Subscription Form, on or before the Subscription Expiration Deadline. 3. Instructions for completing the Beneficial Holder Subscription Form are included in the Rights Offering Procedures. 4. Cash remitted to the Subscription Agent as the Purchase Price in accordance with the Rights Offerings will be deposited and held by the Subscription Agent in a segregated escrow account until administered in connection with the settlement of the Rights Offering on the Effective Date. The Subscription Agent may not use such funds for any other purpose prior to such Effective Date and may not encumber or permit such funds to be encumbered with any lien or similar encumbrance. Such funds held by the Subscription Agent shall not be deemed part of the Debtors’ bankruptcy estate. 5. If the Rights Offerings are not consummated, any cash paid to the Subscription Agent will be returned, without interest, to the Eligible Holders as soon as reasonably practicable, but in any event within six (6) business days, after the earlier of (a) a request from the Eligible Holder made after October 1, 2014 and (b) the date on which the applicable Rights Offering is terminated. 12.3. Calculation of Total Outstanding Shares. While the number of shares issued in connection with the Rights Offering and as the Commitment Premium Shares has been fixed by the Debtors, the total number of shares of New Common Stock that will be issued and outstanding on the Effective Date has not been fixed by the Debtors at this time. Such amount of total shares will be calculated shortly prior to the Effective Date, and will depend upon the projected amount of net debt (referred to as the Net Debt Amount under the Plan) of the Reorganized Debtors and their subsidiaries as of the Effective Date, calculated so that each share of New Common Stock will have an implied equity value of $20.33 per share. The Net Debt Amount could be greater than the Debtors currently project, depending on, among other things if, (i) the amount of cash held by the Debtors as of the Effective Date is lower than projected for any reason, including that the Debtors generated less cash than expected from their business operations, (ii) the amount outstanding under the DIP ABL Facility is greater on the Effective Date than is projected, (iii) the Debtors are required to include any portion of a “make-whole” premium in the recovery to holders of First Lien Notes and/or 1.5 Lien Notes, (iv) the total amount of Allowed Claims against the Debtors is materially higher than projected, and/or (v) the amount of administrative claims against the Debtors, including professional fees, are higher than are currently anticipated. 102 If the Net Debt Amount is greater than is currently projected, then the total equity value of the Reorganized Debtors will be lower than currently anticipated. In such a case, the Debtors will issue fewer total shares of New Common Stock than currently anticipated in order to maintain an implied equity value of $20.33 per share. Accordingly, the Rights Offering Shares will comprise a greater percentage of the total number of shares of New Common Stock issued on the Effective Date. Conversely, if the Net Debt Amount is lower than is currently projected, the total equity value of the Reorganized Debtors will be greater than currently anticipated. In such case, the Debtors will issue a greater number of total shares of New Common Stock. Accordingly, the Rights Offering Shares will comprise of a lower percentage of the total number of shares of New Common Stock issued on the Effective Date. On the Effective Date, the Debtors will issue 34,722,222 shares as Rights Offering Stock and 1,475,652 as Commitment Premium Shares. The remaining number of shares which are not issued as Rights Offering Stock or Commitment Premium Shares will be issued directly to holders of Second Lien Notes as the Second Lien Note Equity Distribution. The Debtors estimate that the number of shares issued pursuant to the Second Lien Note Equity Distribution will equal approximately 13.8 million shares, representing approximately 27.6% of the equity ownership of the Reorganized Debtors as of the Effective Date. However, should the Debtors be required to include 100% of the “make-whole” premium in the recovery to the holders of First Lien Notes and/or 1.5 Lien Notes, the Reorganized Debtors may issue as few as approximately 3.5 million shares of New Common Stock as the Second Lien Note Equity Distribution, representing approximately 8.7% of the equity ownership of the Reorganized Debtors as of the Effective Date. Other factors described above could also affect the number of shares issued in connection with the Second Lien Note Equity Distribution. Attached as Exhibit 9 is an illustrative analysis of the number of shares expected to be issued pursuant to the Rights Offerings and the Second Lien Note Equity Distribution illustrating two possible scenarios. Both scenarios assume that the Debtors’ cash and debt immediately prior to the Effective Date will be substantially consistent with the Financial Projections. However, in the first scenario, under the column entitled “Projected (No make-whole payment),” the Debtors illustrate the pro forma capital structure of the Reorganized Debtors to the extent that the First Lien Notes and the 1.5 Lien Notes are paid in full in Cash with no “make-whole” premium. The second scenario, included under the column “Illustrative $210 mm make-whole payments” sets forth the pro form capital structure of the Reorganized Debtors in the event that the First Lien Notes and 1.5 Lien Notes vote to reject the Plan, and therefore receive the Replacement First Lien Notes and the Replacement 1.5 Lien Notes, respectively, on account of their claims. This column further assumes that the Bankruptcy Court determines that the principal amount of the Replacement First Lien Notes and Replacement 1.5 Lien Notes must include the full amount of the Applicable Premium for the First Lien Notes and the 1.5 Lien Notes, constituting approximately $170 million and $40 million, respectively. While this is a scenario that the Debtors believe is unlikely, such a circumstance would result in only 8.7% of the New Common Stock being issued in connection with the Second Lien Note 103 Equity Distribution. These are not the only two possible scenarios. As discussed above, the Net Debt Amount may vary for many reasons that are independent of the payment of any “make-whole” premium. This example has been included for illustrative purposes only, and the actual number of shares of New Common Stock issued on the Effective Date may vary materially from the amounts set forth on Exhibit 9. ARTICLE XIII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN 13.1. Introduction. The following discussion summarizes certain federal income tax consequences expected to result from the consummation of the Plan. This discussion is only for general information purposes and only describes the expected federal income tax consequences to U.S. Holders (as defined below) entitled to vote on the Plan. It is not a complete analysis of all potential federal income tax consequences and does not address any tax consequences arising under any state, local or foreign tax laws or federal estate or gift tax laws, and does not address the Medicare tax on net investment income. This discussion is based on the Internal Revenue Code of 1986, as amended (“ IRC ”), Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the IRS, all as in effect on the date of this Disclosure Statement. These authorities may change, possibly retroactively, resulting in federal income tax consequences different from those discussed below. No ruling has been or will be sought from the IRS, and no legal opinion of counsel will be rendered, with respect to the matters discussed below. There can be no assurance that the IRS will not take a contrary position regarding the federal income tax consequences resulting from the consummation of the Plan or that any contrary position would not be sustained by a court. As used in this summary, a “U.S. Holder” means any beneficial owner of a Claim, New Common Stock or Top HoldCo Common Stock (as the case may be) that is, for U.S. federal income tax purposes: (i) a U.S. citizen or a resident alien for U.S. federal income tax purposes, (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any State thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust which (a) is subject to the primary supervision of a court within the United States and for which one or more U.S. persons have authority to control all substantial decisions, or (b) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. This discussion assumes that U.S. Holders have held their Claims and will hold any property received for such Claims as “capital assets” within the meaning of IRC Section 1221 (generally, property held for investment). In addition, this discussion assumes that the Debtors’ obligations under the Claims will be treated as debt for federal income tax purposes. This discussion does not address all federal income tax considerations that may be relevant to a particular holder in light of that holder’s particular circumstances or to holders subject to special rules under the federal income tax laws, such as financial institutions, 104 insurance companies, brokers, dealers or traders in securities, commodities or currencies, tax-exempt organizations, tax-qualified retirement plans, holders other than U.S. Holders, holders subject to the alternative minimum tax, holders holding Claims as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment, holders who have a functional currency other than the U.S. dollar and holders that acquired the Claims in connection with the performance of services. In addition, this discussion does not address the treatment of any fees to be paid pursuant to the Plan. U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF THE CONSUMMATION OF THE PLAN AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL OR FOREIGN TAX LAWS, OR ANY OTHER FEDERAL TAX LAWS. TO COMPLY WITH INTERNAL REVENUE SERVICE CIRCULAR 230, TAXPAYERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS DISCLOSURE STATEMENT IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED BY ANY TAXPAYER, FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON A TAXPAYER UNDER THE INTERNAL REVENUE CODE, (B) ANY SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN, AND (C) TAXPAYERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR. 13.2. Federal Income Tax Consequences to the Debtors. (a) Cancellation of Indebtedness and Reduction of Tax Attributes. The Debtors generally should realize cancellation of indebtedness income (“COD Income”) to the extent the sum of (i) Cash and the fair market value of any property received by holders is less than (ii) the sum of (x) the adjusted issue price of any debt exchanged for Cash or other property pursuant to the Plan, and (y) the amount of any unpaid accrued interest on such debt to the extent previously deducted by the Debtors. The Debtors expect that the amount of COD Income realized upon consummation of the Plan will be significant; however, the ultimate amount of COD Income realized by the Debtors is uncertain because, among other things, it will depend on the fair market value of the New Common Stock on the Effective Date. Estimated recoveries for the Debtors’ various Claims are set forth in Article II above. COD Income realized by a Debtor will be excluded from income if the discharge of debt occurs in a case brought under the Bankruptcy Code, the debtor is under the court’s jurisdiction in such case and the discharge is granted by the court or is pursuant to a chapter 11 plan approved by the court (the “ Bankruptcy Exception ”). Because the Bankruptcy Exception will apply to the transactions consummated pursuant to the Plan, the Debtors will not be required to recognize any COD Income realized as a result of the implementation of the Plan. 105 A debtor that does not recognize COD Income under the Bankruptcy Exception generally must reduce certain tax attributes by the amount of the excluded COD Income. Attributes subject to reduction include net operating losses (“ NOLs ”), NOL carryforwards and certain other losses, credits and carryforwards, and the debtor’s tax basis in its assets (including stock of subsidiaries). NOLs for the taxable year of the discharge and NOL carryovers to such year generally are the first attributes subject to reduction. However, a debtor may elect under IRC Section 108(b)(5) (the “Section 108(b)(5) Election”) to reduce its basis in its depreciable property first. If the debtor is a member of a consolidated group, the debtor may treat stock in another group member as depreciable property for purposes of the Section 108(b)(5) Election, provided the lower-tier member consents to a corresponding reduction in its basis in its depreciable property. If a debtor makes a Section 108(b)(5) Election, the limitation on reducing the debtor’s basis in its assets below the amount of its remaining liabilities, discussed below, does not apply. The Debtors currently do not intend to make a Section 108(b)(5) Election. The Debtors believe that, for federal income tax purposes, the Debtors’ consolidated group had substantial consolidated NOL and NOL carryforwards as of the Petition Date. Although the amount of the Debtors’ NOLs will not be determined until the Debtors prepare their consolidated federal income tax returns for 2013 and the portion of 2014 ending on the consummation of the Plan, the Debtors currently anticipate that after application of the attribute reduction rules the NOL carryforwards will be reduced to zero. The attribute reduction rules provide that the reduction in basis of assets shall not exceed the excess of the basis in the taxpayer’s assets held immediately after discharge over the taxpayer’s liabilities immediately after the discharge. This determination is made by reference to the assets and liabilities of only the debtor member and generally does not include the assets and liabilities of other members. The Debtors currently anticipate that although the application of these rules will likely result in some reduction of depreciable asset basis, the amount of reduction will likely not represent a material portion of the Debtor’s consolidated depreciable asset basis in assets held immediately after the discharge. (b) Section 382 Limitation on NOLs. Under IRC Section 382, if a corporation or a consolidated group with NOLs (a “Loss Corporation”) undergoes an “ownership change,” the Loss Corporation’s use of its pre-change NOLs (and certain other tax attributes) generally will be subject to an annual limitation in the post-change period. In general, an “ownership change” occurs if the percentage of the value of the Loss Corporation’s stock owned by one or more direct or indirect “five percent shareholders” increases by more than fifty percentage points over the lowest percentage of value owned by the five percent shareholders at any time during the applicable testing period (an “ Ownership Change ”). Two sets of special provisions (Sections 382(l)(5) and (l)(6)) may be applicable to Ownership Changes occurring under the jurisdiction of a Bankruptcy Court. The Debtors expect the consummation of the Plan will result in an Ownership Change of the Debtors’ consolidated group. However, since the Debtors believe that all pre-change NOLs will be eliminated as result of the reduction of tax attributes discussed above, it is expected that the application of Section 382 will have no effect on the Debtors. 106 13.3. Federal Income Tax Consequences to Holders of Certain Claims. (a) Tax Securities. The tax consequences of the Plan to a U.S. Holder of a Claim may depend in part upon: (1) whether such Claim is based on an obligation that constitutes a “security” for federal income tax purposes, and (2) whether all or a portion of the consideration received for such Claim is an obligation that constitutes a “security” for federal income tax purposes. The determination of whether a debt obligation constitutes a security for federal tax purposes is complex and depends on the facts and circumstances surrounding the origin and nature of the claim. Generally, obligations arising out of the extension of trade credit have been held not to be tax securities, while corporate debt obligations evidenced by written instruments with original maturities of ten years or more have been held to be tax securities. The Debtors expect to treat the Second Lien Notes as securities for federal tax purposes and the following discussion assumes that the Second Lien Notes will be respected as securities for federal tax purposes; however, U.S. Holders are advised to consult their tax advisors with respect to this issue. (b) Exchange of Second Lien Notes for New Common Stock and Subscription Rights. Although the tax treatment is uncertain, assuming that the Second Lien Notes will be treated as securities for federal income tax purposes, we intend to take the position (and the following discussion assumes) that the exchange of Second Lien Notes for New Common Stock and Subscription Rights together with the receipt of Rights Offering Stock pursuant to the Rights Offering will be treated for U.S. federal income tax purposes as the exchange of (i) cash for New Common Stock having a value equal to such cash and (ii) Second Lien Notes for additional New Common Stock. With respect to that portion of the New Common Stock received for Second Lien Notes, the exchange of new Common Stock for Second Lien Notes will constitute a recapitalization. Subject to the rules discussed below under “ Other Considerations—Accrued Interest, ” U.S. Holders of the Second Lien Notes will not recognize gain or loss on the exchange. The U.S. Holder’s holding period in the New Common Stock treated as received in exchange for Second Lien Notes would include the U.S. Holder’s holding period in its Second Lien Notes, and the U.S. Holder would have a basis in that portion of the New Common Stock equal to the U.S. Holder’s basis in its Second Lien Notes. With respect to that portion of the New Common Stock treated as received in exchange for cash, the purchase will not be a taxable event. A U.S. Holder’s basis in the New Common Stock treated as acquired for cash will equal the Rights Exercise Price. The holding period of any New Common Stock treated as acquired for cash in the Rights Offering will begin on the date after its acquisition. (c) Exchange of New Common Stock for Top HoldCo Stock. The exchange of New Common Stock for Top HoldCo Common Stock will be treated as a tax-free transaction. Subject to the rules discussed below under “ Other Considerations—Accrued Interest, ” U.S. Holders of New Common Stock will not recognize gain 107 or loss on the exchange. The U.S Holder’s holding period in the Top HoldCo Common Stock would include the U.S. Holder’s holding period in the New Common Stock surrendered and the U.S. Holder would have a basis in the Top HoldCo Common Stock equal to the U.S. Holder’s basis in its New Common Stock surrendered, with the holding period and basis in the New Common Stock surrendered determined as described in the preceding paragraph. (d) Distributions on, and Sale or Other Taxable Disposition of, Top HoldCo Common Stock. Distributions. A U.S Holder of Top HoldCo Common Stock generally will be required to include in gross income as ordinary dividend income the amount of any distributions paid on the Top HoldCo Common Stock to the extent such distributions are paid out of Top HoldCo’s current or accumulated earnings and profits as determined for federal income tax purposes. Distributions not treated as dividends for federal income tax purposes will constitute a return of capital and will first be applied against and reduce a U.S Holder’s adjusted tax basis in the Top HoldCo Common Stock, but not below zero. Any excess amount will be treated as capital gain. U.S. Holders that are treated as corporations for federal income tax purposes may be entitled to a dividends received deduction with respect to distributions out of earnings and profits. Sale or Other Taxable Disposition. A U.S. Holder of Top HoldCo Common Stock will recognize capital gain or loss upon the sale or other taxable disposition of Top HoldCo Common Stock equal to the difference between the amount realized upon the disposition and the U.S. Holder’s adjusted tax basis in the Top HoldCo Common Stock. Any such gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period of the Top HoldCo Common Stock exceeds one year as of the date of disposition. U.S. Holders should consult their tax advisors regarding the applicable tax rates and netting rules for capital gains and losses. There are limitations on the deduction of capital losses by both corporate and noncorporate taxpayers. (e) Satisfaction of Claims for Cash. A U.S Holder of a Claim which is satisfied for cash in connection with the Plan generally will recognize gain or loss equal to the difference between (i) the amount of cash received by the U.S. Holder in satisfaction of the Claim (excluding any cash received that is attributable to accrued and unpaid interest) and (ii) the U.S. Holder’s adjusted tax basis. Subject to the market discount rules discussed below, any gain or loss recognized on the satisfaction of a Claim for cash in connection with the Plan generally will be capital gain or loss and will be long-term capital gain or loss if, at the time of the exchange, the U.S. Holder’s holding period is more than one year. The deductibility of capital losses is subject to limitations. (f) Other Considerations. Accrued Interest. There is general uncertainty regarding the extent to which the receipt of cash or other property in exchange for a debt instrument should be treated as attributable to unpaid accrued interest. In accordance with the Plan, the Debtors take the position that property distributed pursuant to the Plan will first be allocable to the principal amount of a U.S. Holder’s Claim and then, to the extent necessary, to any unpaid accrued interest thereon. The IRS, however, could take a contrary position. 108 To the extent any property received pursuant to the Plan is considered attributable to unpaid accrued interest, a U.S. Holder will recognize ordinary income to the extent the value of the property exceeds the amount of unpaid accrued interest previously included in gross income by the holder. A U.S. Holder’s tax basis in such property should be equal to the amount of interest income treated as satisfied by the receipt of the property, and its holding period in the property should begin on the day after the Effective Date. A U.S. Holder generally will be entitled to recognize a loss to the extent any accrued interest previously included in its gross income is not paid in full. U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE EXTENT TO WHICH CONSIDERATION RECEIVED UNDER THE PLAN SHOULD BE TREATED AS ATTRIBUTABLE TO UNPAID ACCRUED INTEREST. Market Discount. A U.S. Holder that acquires a debt instrument at a discount may be subject to the “market discount” rules under the IRC. In general, a U.S. Holder will be considered to have acquired a debt instrument with market discount if its initial tax basis in the debt obligation is less than the principal amount of the obligation by more than a specified de minimis amount. A U.S. Holder of a debt instrument acquired with market discount generally is required to treat any gain realized on the disposition of the instrument as ordinary income to the extent of accrued market discount not previously included in gross income by the U.S. Holder. However, special rules apply to the disposition of a market discount obligation in certain types of non-recognition transactions, such as a recapitalization or other tax-free reorganization. If, consistent with the position that we intend to take, an exchange of Second Lien Notes for New Common Shares pursuant to the Plan is treated as a recapitalization and an exchange of New Common Shares for Top HoldCo Common Stock pursuant to the Plan is treated as a tax-free transaction, any accrued market discount on the Second Lien Notes should not be currently includible in income by a U.S. Holder of Second Lien Notes. Instead, such accrued market discount will generally carry over to any “exchanged basis” property received in the exchange ( i.e ., any New Common Stock or Top HoldCo Common Stock received), such that any gain recognized by the U.S. Holder on a subsequent sale, exchange, redemption, or other taxable disposition of such property will generally be treated as ordinary income to the extent of any accrued market discount on the Second Lien notes not previously included in income by the U.S. Holder. (g) Information Reporting and Backup Withholding. The Debtors (or their paying agent) may be obligated to furnish information to the IRS regarding the consideration received by U.S. Holders (other than corporations and other exempt holders) pursuant to the Plan. U.S. Holders may be subject to backup withholding (currently, at a rate of 28%) on the consideration received pursuant to the Plan. Certain U.S. Holders (including corporations) generally are not subject to backup withholding. A U.S. Holder that is not otherwise exempt generally may avoid backup withholding by furnishing to the Debtors (or their paying agent) its taxpayer identification number and certifying, under penalties of perjury, that the taxpayer identification number provided is correct and that the U.S. Holder has not been notified by the IRS that it is subject to backup withholding. 109 Backup withholding is not an additional tax. Taxpayers may use amounts withheld as a credit against their federal income tax liability or may claim a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. THE FOREGOING DISCUSSION OF FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. EACH U.S. HOLDER SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE PLAN DESCRIBED HEREIN. ARTICLE XIV. SECURITIES LAW MATTERS 14.1. Rights to Purchase in the Rights Offering. The rights to purchase shares of New Common Stock in the Rights Offerings will not be listed or quoted on any public or over-the-counter exchange or quotation system. The rights to purchase shares of New Common Stock pursuant to the Section 1145 Rights Offering (the “ Section 1145 Subscription Rights ”), the rights to purchase shares of New Common Stock pursuant to the 4(a)(2) Rights Offering (the “ 4(a)(2) Subscription Rights ”), and any shares of Rights Offering Stock issuable upon the Effective Date pursuant to the exercise thereof, will be distributed and issued only to Section 1145 Eligible Holders and 4(a)(2) Eligible Holders, as applicable. The Section 1145 Subscription Rights are not detachable from Second Lien Note Claims, and are not transferable after the Record Date, or such later date as the Debtors may determine, with the consent of the Requisite Investors (the “ 1145 Claim Determination Date ”). In addition, if any portion of a Second Lien Note Claim is or has been transferred by an 1145 Eligible Participant after the 1145 Claim Determination Date, the corresponding Section 1145 Subscription Rights will be cancelled, and neither such Section 1145 Eligible Holder nor the transferee of such Second Lien Note Claim will receive any shares of Section 1145 Rights Offering Stock in connection with such transferred Second Lien Note Claims. The Section 1145 Subscription Rights are not exercisable other than by a Section 1145 Eligible Holder. The 4(a)(2) Subscription Rights are not transferable or detachable from Second Lien Note Claims. In addition, if any portion of a Second Lien Note Claim is or has been transferred after the Record Date, or such later date as the Debtors may determine, with the consent of the Requisite Investors, the corresponding 4(a)(2) Subscription Rights will be cancelled, and neither such 4(a)(2) Eligible Holder nor the transferee of such Second Lien Note Claim will receive any shares of 4(a)(2) Rights Offering Stock in connection with such transferred Second Lien Note Claims. The 4(a)(2) Subscription Rights are not exercisable other than by a 4(a)(2) Eligible Holder. 110 14.2. Section 1145 Securities. (a) Issuance. The Plan provides for the offer, issuance, sale or distribution of shares of New Common Stock pursuant to the Second Lien Notes Equity Distribution and shares of Rights Offering Stock in connection with the exercise of the Section 1145 Subscription Rights (such shares, together with the shares of Top HoldCo Common Stock to be received in exchange for the contribution of such shares to Top HoldCo as contemplated by the Plan, the “ Section 1145 Securities ”). The offer, issuance, sale or distribution of the Section 1145 Securities by Reorganized MPM and Top HoldCo will be exempt from registration under section 5 of the Securities Act and under any state or local law requiring registration for offer or sale of a security pursuant to section 1145 of the Bankruptcy Code. Section 1145(a)(1) of the Bankruptcy Code exempts the offer and sale of securities under a plan of reorganization from registration under section 5 of the Securities Act and state or local securities laws if three principal requirements are satisfied: (i) the securities must be offered and sold under a plan of reorganization and must be securities issued by the debtor, an affiliate participating in a joint plan with the debtor, or a successor to the debtor under the plan; (ii) the recipients of the securities must hold prepetition or administrative expense claims against the debtor or interests in the debtor; and (iii) the securities must be issued entirely in exchange for the recipient’s claim against or interest in the debtor, or “principally” in exchange for such claim or interest and “partly” for cash or property. The Debtors believe that the value of the Section 1145 Securities being issued to Section1145 Eligible Holders pursuant to the Plan on account of their Second Lien Note Claims (excluding the Section 1145 Subscription Rights), and thus the value of the interests in any such Second Lien Note Claim to be exchanged pursuant to the Section 1145 Rights Offering, exceeds the value of the capital being raised pursuant to the exercise of the 1145 Subscription Rights. (b) Subsequent Transfers. The Section 1145 Securities may be freely transferred by recipients following the initial issuance under the Plan, and all resales and subsequent transfers of the Section 1145 Securities are exempt from registration under the Securities Act and state securities laws, unless the holder is an “underwriter” with respect to such securities. Section 1145(b) of the Bankruptcy Code defines four types of “underwriters”: (i) a Person who purchases a claim against, an interest in, or a claim for an administrative expense against the debtor with a view to distributing any security received in exchange for such claim or interest; (ii) a Person who offers to sell securities offered or sold under a plan for the holders of such securities; 111 (iii) a Person who offers to buy securities offered or sold under a plan from the holders of such securities, if the offer to buy is: (A) with a view to distributing such securities; and (B) under an agreement made in connection with the plan, the consummation of the plan, or with the offer or sale of securities under the plan; and (iv) a Person who is an “issuer” (as defined in section 2(a)(11) of the Securities Act) with respect to the securities. Under section 2(a)(11) of the Securities Act, an “issuer” includes any Person directly or indirectly controlling or controlled by the issuer, or any Person under direct or indirect common control of the issuer. To the extent that Persons who receive Section 1145 Securities pursuant to the Plan are deemed to be underwriters, resales by such Persons would not be exempted from registration under the Securities Act or other applicable law by section 1145 of the Bankruptcy Code. Persons deemed to be underwriters may, however, be permitted to resell such Section 1145 Securities without registration pursuant to the provisions of Rule 144 under the Securities Act or another available exemption under the Securities Act. In addition, such Persons will also be entitled to resell their Section 1145 Securities in transactions registered under the Securities Act following the effectiveness of the Resale Registration Statement (as defined below). Holders of Section 1145 Securities who are deemed underwriters may resell Section 1145 Securities pursuant to the limited safe harbor resale provision under Rule 144 of the Securities Act. Generally, Rule 144 would permit the public sale of securities received by such Person if, at the time of the sale, certain current public information regarding the issuer is available and only if such Person also complies with the volume, manner of sale and notice requirements of Rule 144 (as described in Section 13.3(b) below). If the issuer is not subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “ Exchange Act ”), adequate current public information as specified under Rule 144 is available if certain company information is made publicly available, as specified in Section (c)(2) of Rule 144. Reorganized MPM will not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. However, the Debtors currently expect that Reorganized MPM will continue to be a voluntary filer and that current public information will be available to allow resales in accordance with Rule 144. Whether or not any particular Person would be deemed to be an underwriter with respect to the Section 1145 Securities or other security to be issued pursuant to the Plan would depend upon various facts and circumstances applicable to that Person. Accordingly, the Debtors express no view as to whether any particular Person receiving Section 1145 Securities or other securities under the Plan would be an underwriter with respect to such Section 1145 Securities or other securities, whether such Person may freely resell such securities or the circumstances under which they may resell such securities. 112 14.3. 4(a)(2) Securities. (a) Issuance. Section 4(a)(2) of the Securities Act provides that the issuance of securities by an issuer in transactions not involving a public offering are exempt from registration under the Securities Act. Regulation D is a non-exclusive safe harbor from registration promulgated by the Securities and Exchange Commission (“ SEC ”) under section 4(a)(2) of the Securities Act. The Debtors believe that the shares of 4(a)(2) Rights Offering Stock issued in connection with the exercise of the 4(a)(2) Subscription Rights and the Commitment Premium Shares (such shares, together with the shares of Top HoldCo Common Stock to be received in exchange for the contribution of such shares to Top HoldCo as contemplated by the Plan, the “ 4(a)(2) Securities ”) are issuable without registration under the Securities Act in reliance upon the exemption from registration provided under section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. The 4(a)(2) Securities will be subject to resale restrictions and may be resold, exchanged, assigned or otherwise transferred only pursuant to registration, or an applicable exemption from registration, under the Securities Act and other applicable law, as described below. (b) Subsequent Transfers. The 4(a)(2) Securities will be deemed “restricted securities” (as defined by Rule 144 of the Securities Act) that may not be offered, sold, exchanged, assigned or otherwise transferred unless they are registered under the Securities Act, or an exemption from registration under the Securities Act is available. Reorganized MPM has agreed to file with the SEC, as soon as reasonably practicable after the Effective Date and in any event within 75 days after the Effective Date, a registration statement registering all of the 4(a)(2) Securities and those Section 1145 Securities that are “control” securities for resale (the “ Resale Registration Statement ”). Reorganized MPM has also agreed to use its reasonable best efforts to cause the Resale Registration Statement to be declared effective as promptly as practicable. Thus, until the Resale Registration Statement has been declared effective, Persons who receive 4(a)(2) Securities will not be permitted to offer, sell or otherwise transfer their 4(a)(2) Securities except pursuant to an available exemption from registration. Rule 144 provides a limited safe harbor for the public resale of restricted securities if certain conditions are met. These conditions vary depending on whether the holder of the restricted securities is an “affiliate” of the issuer. Rule 144 defines an affiliate as “a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such issuer.” A non-affiliate of an issuer that is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and who has not been an affiliate of the issuer during the 90 days preceding such sale may resell restricted securities after a one-year holding period whether or not there is current public information regarding the issuer. 113 An affiliate of an issuer that is not subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act may resell restricted securities after the one-year holding period if at the time of the sale certain current public information regarding the issuer is available. As noted above, the Debtors currently expect that this information requirement will be satisfied. An affiliate must also comply with the volume, manner of sale and notice requirements of Rule 144. First, the rule limits the number of restricted securities (plus any unrestricted securities) sold for the account of an affiliate (and related persons) in any three-month period to the greater of 1% of the outstanding securities of the same class being sold, or, if the class is listed on a stock exchange, the average weekly reported volume of trading in such securities during the four weeks preceding the filing of a notice of proposed sale on Form 144 or if no notice is required, the date of receipt of the order to execute the transaction by the broker or the date of execution of the transaction directly with a market maker. Second, the manner of sale requirement provides that the restricted securities must be sold in a broker’s transaction, directly with a market maker or in a riskless principal transaction (as defined in Rule 144). Third, if the amount of securities sold under Rule 144 in any three month period exceeds 5,000 shares or has an aggregate sale price greater than $50,000, an affiliate must file or cause to be filed with the SEC three copies of a notice of proposed sale on Form 144, and provide a copy to any exchange on which the securities are traded. The Debtors believe that the Rule 144 exemption will not be available with respect to any 4(a)(2) Securities (whether held by non-affiliates or affiliates) until at least one year after the Effective Date. Accordingly, unless the Resale Registration Statement becomes effective sooner, holders of 4(a)(2) Securities will be required to hold their 4(a)(2) Securities for at least one year and, thereafter, to sell them only in accordance with the applicable requirements of Rule 144, pursuant to the Resale Registration Statement or pursuant to another available exemption from the registration requirements of applicable securities laws. Each certificate representing, or issued in exchange for or upon the transfer, sale or assignment of, any 4(a)(2) Security shall, upon issuance, be stamped or otherwise imprinted with a restrictive legend in substantially the following form: “THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON [DATE OF ISSUANCE], HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY OTHER APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM REGISTRATION THEREUNDER.” Reorganized MPM will reserve the right to require certification, legal opinions or other evidence of compliance with Rule 144 as a condition to the removal of such legend or to any resale of the 4(a)(2) Securities. Reorganized MPM will also reserve the right to stop the transfer of any 4(a)(2) Securities if such transfer is not in compliance with Rule 144, pursuant to the Resale Registration Statement or pursuant to another available exemption from the 114 registration requirements of applicable securities laws. All Persons who receive 4(a)(2) Securities will be required to acknowledge and agree that (a) they will not offer, sell or otherwise transfer any 4(a)(2) Securities except in accordance with an exemption from registration, including under Rule 144 under the Securities Act, if and when available, or pursuant to the Resale Registration Statement, and (b) the 4(a)(2) Securities will be subject to the other restrictions described above. Any Persons receiving restricted securities under the Plan should consult with their own counsel concerning the availability of an exemption from registration for resale of these securities under the Securities Act and other applicable law. BECAUSE OF THE COMPLEX, SUBJECTIVE NATURE OF THE QUESTION OF WHETHER A PARTICULAR PERSON MAY BE AN UNDERWRITER OR AN AFFILIATE AND THE HIGHLY FACT-SPECIFIC NATURE OF THE AVAILABILITY OF EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT, INCLUDING THE EXEMPTIONS AVAILABLE UNDER SECTION 1145 OF THE BANKRUPTCY CODE AND RULE 144 UNDER THE SECURITIES ACT, NONE OF THE DEBTORS MAKE ANY REPRESENTATION CONCERNING THE ABILITY OF ANY PERSON TO DISPOSE OF THE SECURITIES TO BE ISSUED UNDER OR OTHERWISE ACQUIRED PURSUANT TO THE PLAN. THE DEBTORS RECOMMEND THAT POTENTIAL RECIPIENTS OF THE SECURITIES TO BE ISSUED UNDER OR OTHERWISE ACQUIRED PURSUANT TO THE PLAN CONSULT THEIR OWN COUNSEL CONCERNING WHETHER THEY MAY FREELY TRADE SUCH SECURITIES AND THE CIRCUMSTANCES UNDER WHICH THEY MAY RESELL SUCH SECURITIES. ARTICLE XV. PROCEDURES FOR DISTRIBUTIONS UNDER THE PLAN 15.1. Distributions. The Disbursing Agent shall make all Plan Distributions to the appropriate holders of Allowed Claims in accordance with the terms of the Plan. Distributions to holders of Allowed First Lien Note Claims, Allowed 1.5 Lien Note Claims and Allowed Second Lien Note Claims shall be made by the applicable Indenture Trustee and, with the consent of the Reorganized Debtors and the Requisite Investors, deemed completed when made to the applicable Indenture Trustee as Disbursing Agent. For the avoidance of doubt, distributions made by the Indenture Trustees the record holders of First Lien Note Claims, 1.5 Lien Note Claims and Second Lien Note Claims shall be made (as it relates to the identity of recipients) in accordance with the applicable Indenture and the policies and procedures of DTC, to extent applicable. 15.2. No Postpetition Interest on Claims. Other than as specifically provided in the Plan for DIP Claims, Cash Flow Facility Claims, First Lien Note Claims, 1.5 Lien Note Claims and General Unsecured Claims (to the extent required by applicable law) unless otherwise specifically provided for in the Plan, Confirmation Order or other order of the Bankruptcy Court, or required by applicable bankruptcy 115 or non-bankruptcy law, postpetition interest shall not accrue or be paid on any prepetition Claim, and no holder of a prepetition Claim shall be entitled to interest accruing on such Claim on or after the Petition Date. 15.3. Date of Distributions. Unless otherwise provided in the Plan, any Plan Distributions and deliveries to be made hereunder shall be made on the applicable Distribution Date, provided that the Reorganized Debtors may utilize periodic distribution dates to the extent appropriate. In the event that any payment or act under the Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on or as soon as reasonably practicable after the next succeeding Business Day, but shall be deemed to have been completed as of the required date. 15.4. Distribution Record Date. As of the close of business on the Distribution Record Date, the various lists of holders of Claims in each of the Classes, as maintained by the Debtors, or their agents, shall be deemed closed and there shall be no further changes in the record holders of any of the Claims after the Distribution Record Date. Neither the Debtors nor the Disbursing Agent shall have any obligation to recognize any transfer of Claims occurring after the close of business on the Distribution Record Date. Additionally, with respect to payment of any Cure Amounts or any Cure Disputes in connection with the assumption and/or assignment of the Debtors’ executory contracts and unexpired leases, neither the Debtors nor the Disbursing Agent shall have any obligation to recognize or deal with any party other than the non-Debtor party to the applicable executory contract or unexpired lease, even if such non-Debtor party has sold, assigned or otherwise transferred its Claim for a Cure Amount. 15.5. Disbursing Agent. (a) Powers of Disbursing Agent. The Disbursing Agent shall be empowered to: (i) effectuate all actions and execute all agreements, instruments, and other documents necessary to perform its duties under the Plan; (ii) make all applicable Plan Distributions or payments contemplated hereby; (iii) employ professionals to represent it with respect to its responsibilities; and (iv) exercise such other powers as may be vested in the Disbursing Agent by order of the Bankruptcy Court (including any order issued after the Effective Date), pursuant to the Plan, or as deemed by the Disbursing Agent to be necessary and proper to implement the provisions hereof. (b) Expenses Incurred on or After the Effective Date. Except as otherwise ordered by the Bankruptcy Court, and subject to the written agreement of the Reorganized Debtors, with the consent of the Requisite Investors, the amount of any reasonable and documented fees and expenses incurred by the Disbursing Agent on or after the Effective Date (including, without limitation, taxes) and any reasonable compensation and expense reimbursement Claims (including, without limitation, reasonable attorney and other professional fees and expenses) of the Disbursing Agent shall be paid in Cash by the Reorganized Debtors and will not be deducted from Plan Distributions made to holders of Allowed Claims by the applicable Disbursing Agent. The foregoing fees and expenses shall be paid in the ordinary course, upon presentation of invoices to the 116 Reorganized Debtors and the Backstop Parties and without the need for approval by the Bankruptcy Court, as set forth in Section 3.2(b) of the Plan. In the event that the applicable Indenture Trustees, the Reorganized Debtors and the Backstop Parties are unable to resolve a dispute with respect to the payment of the applicable Indenture Trustees’ fees, costs and expenses, the applicable Indenture Trustees may elect to submit any such dispute to the Bankruptcy Court for resolution. (c) Bond. The Disbursing Agent shall not be required to give any bond or surety or other security for the performance of its duties unless otherwise ordered by the Bankruptcy Court and, in the event that the Disbursing Agent is so otherwise ordered, all costs and expenses of procuring any such bond or surety shall be borne by the Reorganized Debtors. Furthermore, any such entity required to give a bond shall notify the Bankruptcy Court and the U.S. Trustee in writing before terminating any such bond that is obtained. (d) Cooperation with Disbursing Agent. The Reorganized Debtors shall use all commercially reasonable efforts to provide the Disbursing Agent with the amount of Claims and the identity and addresses of holders of Claims, in each case, as set forth in the Debtors’ and/or Reorganized Debtors’ books and records. The Reorganized Debtors will cooperate in good faith with the Disbursing Agent to comply with the reporting and withholding requirements outlined in Section 8.14 of the Plan. 15.6. Delivery of Distribution. Subject to the provisions contained in Article VIII of the Plan, the applicable Disbursing Agent will issue, or cause to be issued, and authenticate, as applicable, all Plan Consideration, and subject to Bankruptcy Rule 9010, make all Plan Distributions or payments to any holder of an Allowed Claim as and when required by the Plan at: (a) the address of such holder on the books and records of the Debtors or their agents; or (b) at the address in any written notice of address change delivered to the Debtors or the applicable Disbursing Agent, including any addresses included on any filed proofs of Claim or transfers of Claim filed with the Bankruptcy Court. In the event that any Plan Distribution to any holder is returned as undeliverable, no distribution or payment to such holder shall be made unless and until the applicable Disbursing Agent has been notified of the then current address of such holder, at which time or as soon as reasonably practicable thereafter such Plan Distribution shall be made to such holder without interest, provided, however, such Plan Distributions or payments shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code at the expiration of the later of one year from: (i) the Effective Date; and (ii) the first Distribution Date after such holder’s Claim is first Allowed. With respect to the New Common Stock or Top HoldCo Common Stock, as applicable, to be distributed to holders of Allowed Second Lien Note Claims, all of the shares of the New Common Stock or Top HoldCo Common Stock, as applicable, shall, to the extent such 117 shares are permitted to be held through DTC’s book-entry system, be issued in the name of such holder or its nominee(s) in accordance with DTC’s book-entry exchange procedures; provided that to the extent such shares of New Common Stock or Top HoldCo Common Stock, as applicable, are not eligible for distribution in accordance with DTC’s customary practices, Reorganized MPM or Top HoldCo, as applicable, will take all such reasonable actions as may be required to cause distributions of New Common Stock or Top HoldCo Common Stock, as applicable, to holders of Allowed Second Lien Note Claims, such distributions to be made by delivery of one or more certificates representing such shares as described in the Plan or by means of book-entry registration on the books of the transfer agent for shares of New Common Stock or Top HoldCo Common Stock, as applicable. 15.7. Unclaimed Property. One year from the later of: (i) the Effective Date, and (ii) the date that a Claim is first Allowed, all unclaimed property or interests in property distributable under the Plan on account of such Claim shall revert to the Reorganized Debtors or the successors or assigns of the Reorganized Debtors, and any claim or right of the holder of such Claim to such property or interest in property shall be discharged and forever barred. The Reorganized Debtors and the Disbursing Agent shall have no obligation to attempt to locate any holder of an Allowed Claim other than by reviewing the Debtors’ books and records, and the proofs of Claim filed against the Debtors, as reflected on the claims register maintained by the Claims Agent. 15.8. Satisfaction of Claims. Unless otherwise provided in the Plan, any Plan Distributions and deliveries to be made on account of Allowed Claims under the Plan shall be in complete settlement, satisfaction and discharge of such Allowed Claims. 15.9. Manner of Payment Under Plan. Except as specifically provided in the Plan, at the option of the Reorganized Debtors, any Cash payment to be made under the Plan may be made by a check or wire transfer or as otherwise required or provided in applicable agreements or customary practices of the Debtors or Reorganized Debtors. 15.10. Fractional Shares/De Minimis Cash Distributions. Neither the Reorganized Debtors, Top HoldCo nor the Disbursing Agent shall have any obligation to make a Plan Distribution that is less than one (1) share of New Common Stock or Top HoldCo Common Stock, as applicable, or $50.00 in Cash. No fractional shares of New Common Stock or Top HoldCo Common Stock, as applicable, shall be distributed. When any Plan Distribution would otherwise result in the issuance of a number of shares of New Common Stock or Top HoldCo Common Stock, as applicable, that is not a whole number, the shares of the New Common Stock or Top HoldCo Common Stock, as applicable, subject to such Plan Distribution will be rounded to the next higher or lower whole number as follows: (i) fractions equal to or greater than 1 ⁄ 2 will be rounded to the next higher whole number; and (ii) fractions less than 1 ⁄ 2 will be rounded to the next lower whole number; provided , that the foregoing shall not apply to any rounding of the Rights Offering Stock, the distribution of which 118 shall be governed by the applicable Rights Offering Procedures and Section 7.10 of the Plan. The total number of shares of New Common Stock or Top HoldCo Common Stock, as applicable, to be distributed on account of Allowed Claims will be adjusted as necessary to account for the rounding provided for in the Plan. No consideration will be provided in lieu of fractional shares that are rounded down. Fractional shares of New Common Stock or Top HoldCo Common Stock, as applicable, that are not distributed in accordance with Section 8.10 of the Plan shall be cancelled. 15.11. No Distribution in Excess of Amount of Allowed Claim. Notwithstanding anything to the contrary in the Plan, no holder of an Allowed Claim shall, on account of such Allowed Claim, receive a Plan Distribution of a value in excess of the Allowed amount of such Claim plus any postpetition interest on such Claim, to the extent such interest is permitted by Section 8.2 of the Plan. 15.12. Exemption From Securities Laws. The issuance of and the distribution under the Plan of the New Common Stock and Top HoldCo Common Stock and the exchange of New Common Stock for Top HoldCo Common Stock (a) with respect to the Second Lien Notes Equity Distribution, the Section 1145 Rights Offering Stock and the Section 1145 Subscription Rights will be exempt from registration under the Securities Act and any other applicable securities laws pursuant to section 1145 of the Bankruptcy Code and (b) with respect to the 4(a)(2) Subscription Rights, the 4(a)(2) Rights Offering Stock and the Commitment Premium Shares will be exempt from registration under the Securities Act and any other applicable securities laws pursuant to Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder. Subject to any transfer restrictions contained in the Top HoldCo Certificate of Incorporation, (a) the Top HoldCo Common Stock issued in exchange for (i) Section 1145 Rights Offering Stock and (ii) New Common Stock issued pursuant to the Second Lien Notes Equity Distribution may be resold by the holders thereof without restriction, except to the extent that any such holder is deemed to be an “underwriter” as defined in section 1145(b)(1) of the Bankruptcy Code (in which case, such Top HoldCo Common Stock may be resold by the holders thereof pursuant to registration under, or applicable exemptions from registration under, the Securities Act), and (b) the Top HoldCo Common Stock issued in exchange for the 4(a)(2) Rights Offering Stock and the Commitment Premium Shares may be resold by the holders thereof pursuant to registration under, or applicable exemptions from registration under, the Securities Act. 15.13. Setoffs and Recoupments. Except as expressly provided in the Plan, each Reorganized Debtor may, pursuant to section 553 of the Bankruptcy Code set off and/or recoup against any Plan Distributions to be made on account of any Allowed Claim, any and all claims, rights and Causes of Action that such Reorganized Debtor may hold against the holder of such Allowed Claim; provided, however, that neither the failure to effectuate a setoff or recoupment nor the allowance of any Claim under the Plan shall constitute a waiver or release by a Reorganized Debtor or its successor of any and all claims, rights and Causes of Action that such Reorganized Debtor or its successor may possess against the applicable holder; provided, further that the Reorganized Debtors shall be deemed to waive and shall have no right of setoff or recoupment against the holders of the Second Lien Note Claims. 119 15.14. Withholding and Reporting Requirements. In connection with the Plan and all Plan Distributions thereunder, the Reorganized Debtors shall comply with all withholding and reporting requirements imposed by any federal, state, local or foreign taxing authority, and all Plan Distributions hereunder shall be subject to any such withholding and reporting requirements. The Reorganized Debtors shall be authorized to take any and all actions that may be necessary or appropriate to comply with such withholding and reporting requirements, including, without limitation, liquidating a portion of any Plan Distribution to generate sufficient funds to pay applicable withholding taxes or establishing any other mechanisms the Debtors, Reorganized Debtors or the Disbursing Agent believe are reasonable and appropriate, including requiring a holder of a Claim to submit appropriate tax and withholding certifications. Notwithstanding any other provision of the Plan: (a) each holder of an Allowed Claim that is to receive a Plan Distribution under the Plan shall have sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed by any governmental unit, including income, withholding and other tax obligations on account of such distribution; and (b) no Plan Distributions shall be required to be made to or on behalf of such holder pursuant to the Plan unless and until such holder has made arrangements satisfactory to the Reorganized Debtors for the payment and satisfaction of such tax obligations or has, to the Reorganized Debtors’ satisfaction, established an exemption therefrom. 15.15. Hart-Scott Rodino Antitrust Improvements Act. Any New Common Stock or Top HoldCo Common Stock, as applicable, to be distributed under the Plan to an entity required to file a Premerger Notification and Report Form under the Competition Laws shall not be distributed until the notification and waiting periods applicable under such Competition Laws to such entity shall have expired or been terminated or any applicable authorizations, approvals, clearances or consents have been obtained. In the event any applicable notification or filing is made and any authorization, approval, clearance, consent or expiration of any applicable waiting period is not obtained, their agent shall, in their sole discretion, be entitled to sell such entity’s shares of New Common Stock or Top HoldCo Common Stock, as applicable, that were to be distributed under the Plan to such entity, and thereafter shall distribute the proceeds of the sale to such entity. ARTICLE XVI. PROCEDURES FOR RESOLVING CLAIMS 16.1. Objections to Claims. Other than with respect to Fee Claims, only the Reorganized Debtors shall be entitled to object to Claims after the Effective Date. Any objections to those Claims (other than Administrative Expense Claims), shall be served and filed on or before the later of: (a) the date that is 180 days after the Effective Date; and (b) such other date as may be fixed by the Bankruptcy Court, whether fixed before or after the date specified in clause (a) hereof. Any 120 Claims filed after the Bar Date or Administrative Bar Date, as applicable, shall be deemed disallowed and expunged in their entirety without further order of the Bankruptcy Court or any action being required on the part of the Debtors or the Reorganized Debtors, unless the Person wishing to file such untimely Claim has received the Bankruptcy Court’s authorization to do so. Notwithstanding any authority to the contrary, an objection to a Claim shall be deemed properly served on the claimant if the objecting party effects service in any of the following manners: (a) in accordance with Federal Rule of Civil Procedure 4, as modified and made applicable by Bankruptcy Rule 7004; (b) by first class mail, postage prepaid, on the signatory on the proof of claim as well as all other representatives identified in the proof of claim or any attachment thereto; or (c) if counsel has agreed to or is otherwise deemed to accept service, by first class mail, postage prepaid, on any counsel that has appeared on the claimant’s behalf in the Reorganization Cases (so long as such appearance has not been subsequently withdrawn). From and after the Effective Date, the Reorganized Debtors may settle or compromise any Disputed Claim without approval of the Bankruptcy Court. 16.2. Amendment to Claims. From and after the Effective Date, no proof of Claim may be amended to increase or assert additional claims not reflected in a previously timely filed Claim (or Claim scheduled on the applicable Debtor’s Schedules, unless superseded by a filed Claim), and any such Claim shall be deemed disallowed and expunged in its entirety without further order of the Bankruptcy Court or any action being required on the part of the Debtors or the Reorganized Debtors unless the claimant has obtained the Bankruptcy Court’s prior approval to file such amended or increased Claim. 16.3. Disputed Claims. Disputed Claims shall not be entitled to any Plan Distributions unless and until they become Allowed Claims. 16.4. Estimation of Claims. The Debtors and/or Reorganized Debtors may request that the Bankruptcy Court enter an Estimation Order with respect to any Claim, pursuant to section 502(c) of the Bankruptcy Code, for purposes of determining the Allowed amount of such Claim regardless of whether any Person has previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction to estimate any Claim at any time (including during the pendency of any appeal with respect to the allowance or disallowance of such Claims). In the event that the Bankruptcy Court estimates any contingent or unliquidated Claim for allowance purposes, that estimated amount will constitute either the Allowed amount of such Claim or a maximum limitation on such Claim, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on such Claim, the objecting party may elect to pursue any supplemental proceedings to object to any ultimate allowance of such Claim. All of the objection, estimation, settlement, and resolution procedures set forth in the Plan are cumulative and not exclusive of one another. Claims may be estimated and subsequently compromised, settled, resolved or withdrawn by any mechanism approved by the Bankruptcy Court. 121 16.5. Expenses Incurred On or After the Effective Date. Except as otherwise ordered by the Bankruptcy Court, and subject to the written agreement of the Reorganized Debtors, the amount of any reasonable fees and expenses incurred by any Professional Person or the Claims Agent on or after the Effective Date in connection with implementation of the Plan, including without limitation, reconciliation of, objection to, and settlement of Claims, shall be paid in Cash by the Reorganized Debtors. 122 CONCLUSION The Debtors believe that confirmation and implementation of the Plan is preferable to any of the alternatives described herein because it will provide the greatest recovery to holders of Claims. Other alternatives would involve significant delay, uncertainty and substantial administrative costs and are likely to reduce any return to creditors who hold Claims. The Debtors urge the holders of impaired Claims in Classes 4, 5, 6 and 9 who are entitled to vote on the Plan to vote to accept the Plan and to evidence such acceptance by returning their Ballots to the Voting Agent so that they will be received not later than 4:00 p.m. (prevailing Eastern Time) on July 28, 2014. Dated: June 23, 2014 Waterford, New York Respectfully submitted, Momentive Performance Materials Inc. on behalf of itself and its affiliated Debtors By: /s/ William H. Carter William H. Carter Director, Chief Financial Officer, and Executive Vice President of Momentive Performance Materials Inc. and Momentive Performance Materials Holdings Inc. Counsel: WILLKIE FARR & GALLAGHER LLP Matthew A. Feldman, Esq. Rachel C. Strickland, Esq. Jennifer J. Hardy, Esq. 787 Seventh Avenue New York, NY 10019 (212) 728-8000 Counsel for the Debtors and Debtors in Possession 123 EXHIBIT 1 Plan EXHIBIT 2 Liquidation Analysis EXHIBIT 3 Financial Projections EXHIBIT 4 Disclosure Statement Order EXHIBIT 5-A Section 1145 Rights Offering Procedures, Subscription Agreement and Beneficial Holder Subscription Form EXHIBIT 5-B 4(a)(2) Rights Offering Procedures, Subscription Agreement and Beneficial Holder Subscription Form EXHIBIT 6 Valuation Analysis EXHIBIT 7 Replacement First Lien Notes Term Sheet EXHIBIT 8 Replacement 1.5 Lien Notes Term Sheet EXHIBIT 9 Illustrative Pro Forma Capital Structure EXHIBIT T3E(4) UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re MPM Silicones, LLC, etal.,1 Debtors. : Chapter 11 : : Case No. 14-22503 (RDD) : : (Jointly Administered) x Supplement, dated July 18, 2014, to Disclosure Statement for Joint Chapter 11 Plan of Reorganization for Momentive Performance Materials Inc. and its Affiliated Debtors, dated June 23, 2014 The following information supplements the disclosure provided in Article XII (Rights Offering Procedures) of the Disclosure Statement for Joint Chapter 11 Plan of Reorganization for Momentive Performance Materials Inc. and its Affiliated Debtors, dated June 23, 2014 (the “ Disclosure Statement ”). Capitalized terms used herein but not defined herein have the meanings given to such terms in the Disclosure Statement. The Disclosure Statement provides that the number of shares of New Common Stock that constitute 1145 Rights Offering Shares is 7,656,521. While it is the Debtors’ good faith belief that it is highly unlikely that the Debtors will be required to pay a “make-whole” premium as part of the recovery to the holders of First Lien Notes and/or 1.5 Lien Notes, this 7,656,521 amount was calculated using certain assumptions regarding such “make-whole” premium in order to comply with applicable limitations under Section 1145 of the Bankruptcy Code. However, due to the restrictions under Section 1145 of the Bankruptcy Code, the Debtors will only be able to issue an amount of shares under the Section 1145 Rights Offering which represents a cash contribution by participants that is less than the value of the Second Lien Notes Equity Distribution. Because the value of the Second Lien Notes Equity Distribution will be reduced in the event that the Debtors are required to pay a “make-whole” premium as part of the recovery to the holders of First Lien Notes and/or 1.5 Lien Notes, the amount of such payment may result in the Debtors not being able to issue the full 7,656,521 shares of New Common Stock under the Section 1145 Rights Offering due to the limitations applicable under Section 1145 of the Bankruptcy Code. 1 The last four digits of the taxpayer identification numbers of the Debtors follow in parentheses: (i) Juniper Bond Holdings I LLC (9631); (ii) Juniper Bond Holdings II LLC (9692); (iii) Juniper Bond Holdings III LLC (9765); (iv) Juniper Bond Holdings IV LLC (9836); (v) Momentive Performance Materials China SPV Inc. (8469); (vi) Momentive Performance Materials Holdings Inc. (8246); (vii) Momentive Performance Materials Inc. (8297); (viii) Momentive Performance Materials Quartz, Inc. (9929); (ix) Momentive Performance Materials South America Inc. (4895); (x) Momentive Performance Materials USA Inc. (8388); (xi) Momentive Performance Materials Worldwide Inc. (8357); and (xii) MPM Silicones, LLC (5481). The Debtors’ executive headquarters are located at 260 Hudson River Road, Waterford, NY 12188. To the extent the amount of the “make-whole” premium payment is such that the issuance of 7,656,521 shares of New Common Stock in the 1145 Rights Offering may not be permissible under Section 1145 of the Bankruptcy Code, the 7,656,521 shares of New Common Stock described in the Disclosure Statement as constituting the 1145 Rights Offering Shares will be reduced (a “ Reduction ”) such that the number of shares of New Common Stock that will constitute 1145 Rights Offering Shares will be equal to the quotient of (i) the value of the Second Lien Notes Equity Distribution (as determined by the Debtors on or prior to the Effective Date) minus $100, divided by (ii) $17.28 (such number of shares, the “ Reduced 1145 Rights Offering Shares ”). In the event of a Reduction: (1) the total number of shares of New Common Stock by which 7,656,521 exceeds the Reduced 1145 Rights Offering Shares (such shares, the “ Reallocated Shares ”) shall be deemed to be “Unsubscribed Shares” for purposes of, and as defined in, the Backstop Commitment Agreement and each Backstop Party will purchase the portion of such Reallocated Shares that it is required to purchase under, and subject to the terms and conditions of, the Backstop Commitment Agreement; (2) the number of shares of New Common Stock that each holder of an Allowed Second Lien Note Claim as of the Record Date will be entitled to purchase in the 1145 Rights Offering will be reduced proportionately to give effect to the Reallocated Shares, and will be based on the Reduced 1145 Rights Offering Shares ; provided , that , such holder’s pro rata participation right relative to all such holders will remain unchanged; (3) each holder of an Allowed Second Lien Note Claim as of the Record Date that participates in the 1145 Rights Offering and that desires to subscribe (as set forth in its duly executed and completed Beneficial Holder Subscription Form) for a number of shares of New Common Stock that exceeds the maximum number of shares permitted to be purchased after giving effect to clause (2) above will (a) be deemed to have subscribed for the maximum number of shares permitted to be purchased after giving effect to clause (2) above, and (b) receive a return, without interest, of the aggregate cash purchase price actually paid by such holder to the Subscription Agent in respect of the shares that were subscribed for but that were not permitted to be purchased after giving effect to clause (2) above; (4) each holder described in clause (3) above that is not a Backstop Party shall also be entitled to receive an amount in cash, payable on the Effective Date, equal to the product obtained by multiplying (i) $3.05 2 and (ii) the difference between (x) the 2 This amount reflects the 15% per share discount on the implied value of each share purchased by participants in the Rights Offerings. -2- number of shares of New Common Stock that such holder would have subscribed for in the 1145 Rights Offering had a Reduction not occurred and (y) the maximum number of shares permitted to be purchased after giving effect to clause (2) above, which payment shall be funded from the Debtors’ cash on hand and/or borrowings under the New ABL Facility; (5) the term “1145 Rights Offering Shares” as used in the Disclosure Statement shall be deemed to be the Reduced 1145 Rights Offering Shares as defined above; and (6) corresponding changes will be made to the Plan and/or Confirmation Order in order to reflect the above. -3- Exhibit 99.1 Guarantors1 2 Applicant Form and State of Organization Officers Directors Title of Class of Securities Amount Authorized Amount Outstanding Security Holde r Momentive Performance Materials Worldwide Inc. Corporation; Anthony Greene (CEO, President) Anthony Greene Delaware George F. Knight (CFO, Senior VP, Treasurer) Douglas A. Johns Douglas A. Johns (Executive VP, General Counsel, Secretary) Shares of Common Stock 100 shares of 100 shares Momentive $0.01 par value Performanc e Materials Inc. Momentive Performance Materials USA Inc. Corporation; Anthony Greene (CEO, President) Delaware Brian Berger (CFO, VP) Douglas A. Johns (Executive VP, General Counsel, Secretary) George F. Knight (Treasurer, Senior VP) Nathan E. Fisher (Executive VP – Procurement) Judith A. Sonnett (Executive VP – HR) Raymond Kolberg (Senior VP & General Manager – Formulated Products) Ian Moore (Senior VP & General Manager – Additives) Eric Thaler (Senior VP & General Manager – Basics) Anthony Greene Douglas A. Johns Shares of Common Stock 100 shares of 100 shares Momentive $0.01 par value Performanc e Materials Inc. Juniper Bond Holdings I LLC Limited Liability Company; Delaware Anthony Greene (CEO, President) George F. Knight (CFO, Senior VP – Finance, Treasurer) Douglas A. Johns (Executive VP, General Counsel, Secretary) N/A Membership Interests Undetermined 100% Momentive Performanc e Materials Inc. Juniper Bond Limited Holdings II LLC Liability Company; Delaware Anthony Greene (CEO, President) George F. Knight (CFO, Senior VP – Finance, Treasurer) Douglas A. Johns (Executive VP, General Counsel, Secretary) N/A Membership Interests Undetermined 100% Momentive Performanc e Materials Inc. Juniper Bond Limited Holdings III LLC Liability Company; Delaware Anthony Greene (CEO, President) George F. Knight (CFO, Senior VP – Finance, Treasurer) Douglas A. Johns (Executive VP, General Counsel, Secretary) N/A Membership Interests Undetermined 100% Momentive Performanc e Materials Inc. Juniper Bond Holdings IV LL C Anthony Greene (CEO, President) George F. Knight (CFO, Senior VP – Finance, Treasurer) Douglas A. Johns (Executive VP, General Counsel, Secretary) N/A Membership Interests Undetermined 100% Momentive Performanc e Materials Inc. Limited Liability Company; Delaware Applicant Form and State of Organization Officers Directors Title of Class of Securities Amount Authorized Momentive Performance Materials Quartz, Inc. Corporation; Joseph Reyes (CEO, Delaware President) William Torrence (CFO) Douglas A. Johns (Executive VP, General Counsel, Secretary) George F. Knight (Senior VP, Treasurer) Anthony Greene Douglas A. Johns Joseph Reyes Shares of Common Stock 1,000 shares Momentive Performan ce Materials USA Inc. MPM Silicones, LLC Limited Liability Company; New York N/A Membership Undetermined 100% Interests Momentive Performan ce Materials USA Inc. Momentive Performance Materials South America Inc. Corporation; Anthony Greene (CEO, Delaware President) Brian Berger (CFO, VP) Douglas A. Johns (Executive VP, General Counsel, Secretary) George F. Knight (Senior VP, Treasurer) Anthony Greene Douglas A. Johns Shares of Common Stock 100 shares of $0.01 par value 100 shares Momentive Performan ce Materials USA Inc. Momentive Performance Materials China SPV Inc. Corporation; Anthony Greene (CEO, Delaware President) George F. Knight (CFO, Senior VP, Treasurer) Douglas A. Johns (Executive VP, General Counsel, Secretary) Anthony Greene Douglas A. Johns Shares of Common Stock 100 shares of $0.01 par value 100 shares Momentive Performan ce Materials In
