Exhibit 10.12

Executed Version

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

BACKSTOP COMMITMENT AGREEMENT
AMONG
MOMENTIVE PERFORMANCE MATERIALS HOLDINGS INC.,
MOMENTIVE PERFORMANCE MATERIALS INC.
AND
THE COMMITMENT PARTIES PARTY HERETO
Dated as of May 9, 2014

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

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

TABLE OF CONTENTS

ARTICLE I DEFINITIONS

 
Section 1.1    Definitions

2

Section 1.2    Construction

21

ARTICLE II BACKSTOP COMMITMENT

 
Section 2.1    The Rights Offerings; Subscription Rights

22

Section 2.2    The Backstop Commitment

22

Section 2.3    Commitment Party Default

23

Section 2.4    Subscription Escrow Account Funding

24

Section 2.5    Closing
24

Section 2.6    Designation and Assignment Rights

25

ARTICLE III BACKSTOP COMMITMENT PREMIUM AND EXPENSE REIMBURSEMENT
 
Section 3.1    Premium Payable by the Company

26

Section 3.2    Payment of Premium

27

Section 3.3    Expense Reimbursement

27

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 
Section 4.1    Organization and Qualification

28

Section 4.2    Corporate Power and Authority

29

Section 4.3    Execution and Delivery; Enforceability

29

Section 4.4    Authorized and Issued Capital Stock

30

Section 4.5    Issuance

31

Section 4.6    No Conflict

31

Section 4.7    Consents and Approvals

31

Section 4.8    Arm’s-Length

32

Section 4.9    Financial Statements

32

Section 4.10    MPM SEC Documents and Disclosure Statement

33

Section 4.11    Absence of Certain Changes

33

Section 4.12    No Violation; Compliance with Laws

33

Section 4.13    Legal Proceedings

33

Section 4.14    Labor Relations

34

Section 4.15    Intellectual Property

34

Section 4.16    Title to Real and Personal Property

35

Section 4.17    No Undisclosed Relationships

35

Section 4.18    Licenses and Permits

36

Section 4.19    Environmental

36

Section 4.20    Tax Returns

37

Section 4.21    Employee Benefit Plans
37

Section 4.22    Internal Control Over Financial Reporting

39

Section 4.23    Disclosure Controls and Procedures

39

Section 4.24    Material Contracts

39

Section 4.25    No Unlawful Payments

39

Section 4.26    Compliance with Money Laundering Laws

40

Section 4.27    Compliance with Sanctions Laws

40

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

TABLE OF CONTENTS

Section 4.28    No Broker’s Fees

40

Section 4.29    Takeover Statutes

40

Section 4.30    Investment Company Act

40

Section 4.31    Insurance

40

Section 4.32    Intermediate HoldCo and Top HoldCo Corporate Power and Authority
41

Section 4.33    Authorized and Issued Capital Stock of Top HoldCo

41

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT PARTIES
 
Section 5.1    Incorporation
42

Section 5.2    Corporate Power and Authority
42

Section 5.3    Execution and Delivery
42

Section 5.4    No Conflict
42

Section 5.5    Consents and Approvals
43

Section 5.6    No Registration
43

Section 5.7    Purchasing Intent
43

Section 5.8    Sophistication; Investigation
44

Section 5.9    No Broker’s Fees
44

Section 5.10    Votable Claims
44

Section 5.11    Arm’s-Length
45

ARTICLE VI ADDITIONAL COVENANTS
 
Section 6.1    BCA Consummation Approval Order and Solicitation Order
45

Section 6.2    Confirmation Order; Plan and Disclosure Statement
46

Section 6.3    Conduct of Business
46

Section 6.4    Access to Information; Confidentiality
47

Section 6.5    Financial Information
49

Section 6.6    Reasonable Best Efforts
49

Section 6.7    Transfers and Acquisitions of Votable Claims
50

Section 6.8    Emergence Credit Facilities
51

Section 6.9    New Board of Directors
52

Section 6.10    Registration Rights Agreement; Reorganized Momentive Corporate
Documents; SSA Amendment; Rights Offering Procedures
52

Section 6.11    Form D and Blue Sky
52

Section 6.12    No Integration; No General Solicitation
53

Section 6.13    DTC Eligibility
53

Section 6.14    Use of Proceeds
53

Section 6.15    Share Legend
53

Section 6.16    Withdrawal of Commitment Party
54

Section 6.17    Antitrust Approval
55

Section 6.18    Alternative Transactions
56

Section 6.19    Other Entities; Corporate Form; Internal Reorganization
58

Section 6.20    Bar Date Order
59

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

TABLE OF CONTENTS

ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF THE PARTIES
 
Section 7.1    Conditions to the Obligations of the Commitment Parties
59

Section 7.2    Waiver of Conditions to Obligations of Commitment Parties
62

Section 7.3    Conditions to the Obligations of the Debtors
62

ARTICLE VIII INDEMNIFICATION AND CONTRIBUTION
64

Section 8.1    Indemnification Obligations
65

Section 8.2    Indemnification Procedure
66

Section 8.3    Settlement of Indemnified Claims
66

Section 8.4    Contribution
67

Section 8.5    Treatment of Indemnification Payments
67

Section 8.6    No Survival
67

ARTICLE IX TERMINATION
 
Section 9.1    Consensual Termination
67

Section 9.2    Automatic Termination
67

Section 9.3    Termination by the Company
70

Section 9.4    Effect of Termination
71

ARTICLE X GENERAL PROVISIONS
 
Section 10.1    Notices
73

Section 10.2    Assignment; Third Party Beneficiaries
73

Section 10.3    Prior Negotiations; Entire Agreement
74

Section 10.4    Governing Law; Venue
74

Section 10.5    Waiver of Jury Trial
75

Section 10.6    Counterparts
75

Section 10.7    Waivers and Amendments; Rights Cumulative; Consent
75

Section 10.8    Headings
76

Section 10.9    Specific Performance
76

Section 10.10    Damages
76

Section 10.11    No Reliance
76

Section 10.12    Publicity
76

Section 10.13    Settlement Discussions
77

Section 10.14    Euro Denominated Notes
77

Section 10.15    No Recourse
77

 
 
SCHEDULES
 
Schedule 1    Backstop Commitment Percentages
 
Schedule 2    Votable Claims
 
Schedule 3    Consents
 
Schedule 4    Notice Addresses for Commitment Parties
 

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

BACKSTOP COMMITMENT AGREEMENT
THIS BACKSTOP COMMITMENT AGREEMENT (this “Agreement”), dated as of May 9, 2014,
is made by and among Momentive Performance Materials Holdings Inc. (as a debtor
in possession and a reorganized debtor, as applicable, the “Company”) and
Momentive Performance Materials Inc. (as a debtor in possession and a
reorganized debtor, as applicable, “MPM”) on behalf of themselves and the other
Debtors, on the one hand, and the parties set forth on Schedule 1 hereto (each
referred to herein, individually, as a “Commitment Party” and, collectively, as
the “Commitment Parties”), on the other hand. The Company, MPM and each
Commitment Party is referred to herein, individually, as a “Party” and,
collectively, as the “Parties”.
RECITALS
WHEREAS, on April 13, 2014 (the “Petition Date”), the Company and certain of its
debtor affiliates (each, individually, a “Debtor” and, collectively, the
“Debtors”) commenced jointly administered proceedings (the “Chapter 11
Proceedings”), 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 (the “Bankruptcy
Code”) in the United States Bankruptcy Court for the Southern District of New
York, White Plains (the “Bankruptcy Court”);
WHEREAS, in connection with the Chapter 11 Proceedings, the Debtors have engaged
in good faith negotiations with certain parties in interest regarding the terms
of the Plan, which Plan shall be consistent in all respects with the plan term
sheet setting forth the principal terms to be included in the Plan and attached
as Exhibit A to the RSA (the “Term Sheet”);
WHEREAS, the Debtors intend to seek entry of one or more orders of the
Bankruptcy Court, in each case, in form and substance mutually satisfactory to
the Requisite Commitment Parties and the Company (x) confirming the Plan
pursuant to Section 1129 of the Bankruptcy Code (the “Confirmation Order”) and
(y) authorizing the consummation of the transactions contemplated hereby, which
order is expected to take the form of, and be incorporated into, the
Confirmation Order(the “BCA Consummation Approval Order”);
WHEREAS, pursuant to the Plan and this Agreement, and in accordance with the
Rights Offerings Procedures, MPM will issue subscription rights to holders of
Second Lien Notes (the “Subscription Rights”) and conduct rights offerings for
the Rights Offerings Shares in the Rights Offerings Amount at the Purchase
Price;
WHEREAS, pursuant to the Plan, immediately following the Closing (x) all holders
of New Common Stock will contribute each share of New Common Stock held by them
for one share of common stock of a newly formed Delaware corporation (“Top
HoldCo,” and such shares of Top HoldCo, “Top HoldCo Common Stock”) and (y) Top
HoldCo, as the new holder of the

1

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

shares of New Common Stock will contribute such shares of New Common Stock for
shares of common stock of a newly formed Delaware corporation (“Intermediate
HoldCo,” and such shares of Intermediate HoldCo, “Intermediate HoldCo Common
Stock”) ((x) and (y), collectively, the “Internal Reorganization”);
WHEREAS, the Company, the Commitment Parties, Top HoldCo, Intermediate HoldCo
and MPM intend that 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 be
treated as a recapitalization pursuant to Section 368(a)(1)(E) of the Code, and
that the transfer of the New Common Stock to Top HoldCo in exchange for Top
HoldCo Common Stock be treated as a reorganization within the meaning of Section
368(a)(1)(B) of the Code; and
WHEREAS, subject to the terms and conditions contained in this Agreement, each
Commitment Party has agreed to purchase (on a several and not joint basis) its
Backstop Commitment Percentage of the Unsubscribed Shares, if any.
NOW, THEREFORE, in consideration of the mutual promises, agreements,
representations, warranties and covenants contained herein, each of the Parties
hereby agrees as follows:
ARTICLE I
DEFINITIONS
Section 1.1    Definitions. Except as otherwise expressly provided in this
Agreement, whenever used in this Agreement (including any Exhibits and Schedules
hereto), the following terms shall have the respective meanings specified
therefor below:
“1145 Rights Offering” means the rights offering to be conducted in reliance
upon the exemption from registration under the Securities Act provided in
Section 1145 of the Bankruptcy Code.
“1145 Rights Offering Procedures” means the procedures with respect to the 1145
Rights Offering that are approved by the Bankruptcy Court pursuant to the BCA
Approval Order, which procedures shall be mutually satisfactory to the Requisite
Commitment Parties and the Company.
“1145 Rights Offering Shares” means the shares of New Common Stock issued in the
1145 Rights Offering.
“1.5 Lien Note Claims” means all Claims against MPM, as issuer, or any other
Debtor as guarantor, arising under the 1.5 Lien Notes and the 1.5 Lien
Indenture.

2

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

“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 $250,000,000.
“1.5 Lien Indenture” means that certain indenture dated as of May 25, 2012 (as
amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms thereof), 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, supplemented,
restated or otherwise modified from time to time in accordance with the terms
thereof).
“4(a)(2) Rights Offering” means the rights offering to be conducted in reliance
upon the exemption from registration under the Securities Act or provided in
Section 4(a)(2) of the Securities Act.
“4(a)(2) Rights Offering Procedures” means the procedures with respect to
the 4(a)(2) Rights Offering that are approved by the Bankruptcy Court pursuant
to the BCA Approval Order, which procedures shall be mutually satisfactory to
the Requisite Commitment Parties and the Company.
“4(a)(2) Rights Offering Shares” means the shares of New Common Stock issued in
the 4(a)(2) Rights Offering.
“Ad Hoc Committee” means that certain ad hoc committee of holders of Second Lien
Notes (and certain of their Affiliates) party hereto represented by Milbank,
Tweed, Hadley & McCloy LLP, and any Ultimate Purchaser to which any member
thereof or any of its Affiliates has transferred all or a portion of its
Backstop Commitment pursuant to Section 2.6(b).
“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, such Person
as of the date on which, or at any time during the period for which, the
determination of affiliation is being made (including any Affiliated Funds of
such Person); provided, that for purposes of this Agreement, no Commitment Party
shall be deemed an Affiliate of the Company or any of its Subsidiaries. For
purposes of this definition, the term “control” (including the correlative
meanings of the terms “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 policies of such
Person, whether through the ownership of voting securities, by Contract or
otherwise.
“Affiliated Fund” has the meaning set forth in Section 2.6(b).
“Agreement” has the meaning set forth in the Preamble.

3

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

“Alternative Transaction” means any chapter 11 plan or restructuring transaction
(including, for the avoidance of doubt, a transaction premised on one or more
asset sales under Section 363 of the Bankruptcy Code or pursuant to a plan)
other than the Restructuring, including (a) any chapter 11 plan, reorganization,
restructuring or liquidation involving the Company or any of the other Debtors,
(b) the issuance, sale or other disposition of any equity interest or
indebtedness, or any material assets, of the Company or any of the other
Debtors, or (c) a merger, sale, consolidation, business combination,
recapitalization, refinancing, share exchange, rights offering, debt offering,
equity investment or similar transaction (including the sale of all or
substantially all of the assets of the Company or any of the other Debtors
whether through one or more transactions) involving the Company or any of the
other Debtors.
“Alternative Transaction Agreement” has the meaning set forth in Section 9.2(p).
“Alternative Transaction Proposal” has the meaning set forth in Section 6.18(a).
“Antitrust Authorities” means the United States Federal Trade Commission, the
Antitrust Division of the United States Department of Justice, the attorneys
general of the several states of the United States and any other Governmental
Entity having jurisdiction pursuant to the Antitrust Laws, and “Antitrust
Authority” means any of them.
“Antitrust Laws” mean the Sherman Act, the Clayton Act, the HSR Act, the Federal
Trade Commission Act, and any other Law governing agreements in restraint of
trade, monopolization, pre-merger notification, the lessening of competition
through merger or acquisition or anti-competitive conduct, and any foreign
investment Laws.
“Apollo” means Apollo Global Management, LLC, a Delaware limited liability
company, and those of its Affiliates who hold Second Lien Notes and any Ultimate
Purchaser to which Apollo has transferred all or a portion of its Backstop
Commitment pursuant to Section 2.6(b).
“Applicable Consent” has the meaning set forth in Section 4.7.
“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.
“Assumable Amount” means, with respect to any Transfer of Votable Claims by a
Transferring Commitment Party, an amount equal to the applicable Assumable
Percentage multiplied by such Transferring Commitment Party’s Backstop
Commitment as of the RSA Execution Date.

4

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

“Assumable Percentage” means, with respect to any Transferring Commitment Party,
the ratio (expressed as a percentage) of (a) an amount equal to the difference
between (i) the aggregate principal amount of Votable Claims held by such
Transferring Commitment Party on the Measuring Date and (ii) the aggregate
principal amount of Votable Claims held by such Transferring Commitment Party
immediately following such Transfer to (b) the aggregate principal amount of
Votable Claims held by such Transferring Commitment Party on the RSA Execution
Date; provided, however, that if any Transfer of Votable Claims results in a
Transferring Commitment Party holding (x) more in aggregate principal amount of
Votable Claims than the Trigger Amount, such ratio shall be 0% with respect to
such Transferring Commitment Party or (y) less in aggregate principal amount of
Votable Claims than the Fall Away Amount, such ratio shall be 100% with respect
to such Transferring Commitment Party.
“Assumable Share” means, with respect to any Non-Transferring Commitment Party,
the proportion that the amount of such Non-Transferring Commitment Party’s
Backstop Commitment at the time of the applicable election bears to the
aggregate Backstop Commitments at the time of the applicable election of all
Non-Transferring Commitment Parties.
“Available Shares” means the Unsubscribed Shares that any Commitment Party fails
to purchase as a result of a Commitment Party Default by such Commitment Party.
“Backstop Commitment” has the meaning set forth in Section 2.2.
“Backstop Commitment Percentage” means, with respect to any Commitment Party,
such Commitment Party’s percentage of the Backstop Commitment as set forth
opposite such Commitment Party’s name under the column titled “Backstop
Commitment Percentage” on Schedule 1 (as it may be amended, supplemented or
otherwise modified from time to time in accordance with this Agreement). Any
reference to “Backstop Commitment Percentage” in this Agreement means the
Backstop Commitment Percentage in effect at the time of the relevant
determination.
“Bankruptcy Code” has the meaning set forth in the Recitals.
“Bankruptcy Court” has the meaning set forth in the Recitals.
“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure and the local
rules and general orders of the Bankruptcy Court, as in effect on the Petition
Date, together with all amendments and modifications thereto subsequently made
applicable to the Chapter 11 Proceedings.
“BCA Approval Obligations” means the obligations of the Company under this
Agreement.

5

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

“BCA Approval Order” means an Order entered by the Bankruptcy Court authorizing
the Debtors’ performance of the BCA Approval Obligations in form and substance
mutually satisfactory to the Requisite Commitment Parties and the Company.
“BCA Consummation Approval Order” has the meaning set forth in the Recitals.
“Business Day” means any day, other than a Saturday, Sunday or legal holiday, as
defined in Bankruptcy Rule 9006(a).
“Bylaws” means the amended and restated bylaws of Reorganized Momentive as of
the Closing Date, which shall be consistent with the terms set forth in the Term
Sheet and otherwise be in form and substance mutually satisfactory to the
Requisite Commitment Parties and the Company.
“Cash” means, collectively, cash, cash equivalents and marketable securities,
other than cash classified as restricted cash in accordance with GAAP.
“Certificate of Incorporation” means the amended and restated certificate of
incorporation of Reorganized Momentive as of the Closing Date, which shall be
consistent with the terms set forth in the Term Sheet and otherwise be in form
and substance mutually satisfactory to the Requisite Commitment Parties and the
Company.
“Chapter 11 Proceedings” has the meaning set forth in the Recitals.
“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.
“Closing” has the meaning set forth in Section 2.5(a).
“Closing Date” has the meaning set forth in Section 2.5(a).
“Code” means the Internal Revenue Code of 1986.
“Commitment Party” has the meaning set forth in the Preamble.
“Commitment Party Default” means the failure by any Commitment Party to (a)
deliver and pay the aggregate Purchase Price for such Commitment Party’s
Backstop Commitment Percentage of any Unsubscribed Shares by the Subscription
Escrow Funding Date in accordance with Section 2.4(b) or (b) exercise its
Subscription Rights pursuant to and in accordance with the Plan in accordance
with Section 2.1(b).
“Commitment Party Replacement” has the meaning set forth in Section 2.3(a).

6

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

“Commitment Party Replacement Period” has the meaning set forth in Section
2.3(a).
“Commitment Premium” has the meaning set forth in Section 3.1.
“Company” has the meaning set forth in the Preamble.
“Company Board” has the meaning set forth in Section 6.18(a).
“Company Disclosure Schedules” means the disclosure schedules delivered by the
Company to the Commitment Parties on the date of this Agreement.
“Company Plan” means any employee pension benefit plan, as such term is defined
in Section 3(2) of ERISA, (other than a Multiemployer Plan), subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and (i) sponsored or maintained (at the time of determination or at any
time within the five years prior thereto) by the Company or any of its
Subsidiaries or any ERISA Affiliate, or for which any such entity has liability
or (ii) in respect of which the Company or any of its Subsidiaries or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Confirmation Hearing” means the hearing held by the Bankruptcy Court pursuant
to Section 1128 of the Bankruptcy Code to consider confirmation of the Plan, as
such hearing may be adjourned or continued from time to time with the consent of
the Requisite Commitment Parties.
“Confirmation Order” has the meaning set forth in the Recitals.
“Contract” means any agreement, contract or instrument, including any loan,
note, bond, mortgage, indenture, guarantee, deed of trust, license, franchise,
commitment, lease, franchise agreement, letter of intent, memorandum of
understanding or other obligation, and any amendments thereto, whether written
or oral, but excluding the Plan.
“Debtor” has the meaning set forth in the Recitals.
“Defaulting Commitment Party” means in respect of a Commitment Party Default
that is continuing, the applicable defaulting Commitment Party.
“DIP ABL Agent” means JPMorgan Chase Bank, N.A., as administrative agent and
collateral agent under the DIP ABL Loan.
“DIP ABL Loan” means that certain Senior Secured Debtor-in-Possession and Exit
Amended and Restated Asset Based Revolving Credit Agreement, among Momentive
Performance

7

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

Materials USA Inc., as a borrower, Momentive Performance Materials GmbH, as a
borrower, Momentive Performance Materials Quartz GmbH, as a borrower, Momentive
Performance Materials Nova Scotia ULC, as a borrower, the Company, MPM, each
subsidiary of MPM that is party thereto in its capacity as a guarantor, the
lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent, and J.P. Morgan Securities LLC,
Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC in their
respective capacities as arrangers thereunder (substantially in the form annexed
to the DIP Motion as Exhibit B and as amended, supplemented, restated or
otherwise modified from time to time in accordance with the terms thereof).
“DIP ABL Loan Event of Default” means an “Event of Default” under, and as
defined in, the DIP ABL Loan.
“DIP Loan Event of Default” means either a DIP ABL Loan Event of Default or a
DIP Term Loan Event of Default.
“DIP Loans” means the DIP ABL Loan and the DIP Term Loan.
“DIP Motion” means the Debtors’ Motion for Interim Order Under Sections 105,
361, 362, 363(c), 363(d), 364(c), 364(d), 364(e) and 507 of the Bankruptcy Code
and Rules 2002, 4001 and 9014 of the Bankruptcy Rules (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. 27.
“DIP Term Agent” means JPMorgan Chase Bank, N.A., as administrative agent and
collateral agent under the DIP Term Loan.
“DIP Term Loan” means that certain Senior Secured Debtor-in-Possession Term Loan
Agreement, among Momentive Performance Materials USA Inc., as a borrower, the
Company, MPM, each domestic subsidiary of MPM that is party thereto in its
capacity as a guarantor, the lenders party thereto from time to time, JPMorgan
Chase Bank, N.A., as administrative agent and collateral agent, and J.P. Morgan
Securities LLC, Citigroup Global Markets Inc. and Credit Suisse Securities (USA)
LLC in their respective capacities as arrangers thereunder (substantially in the
form annexed to the DIP Motion as Exhibit C and as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms
thereof).
“DIP Term Loan Event of Default” means an “Event of Default” under, and as
defined in, the DIP Term Loan.

8

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

“Disclosure Statement” means the Disclosure Statement for the Plan approved
pursuant to the Plan Solicitation Order (including all exhibits and schedules
thereto), in form and substance mutually satisfactory to the Requisite
Commitment Parties and the Company and each as may be further amended,
supplemented or otherwise modified from time to time in a manner that is
mutually satisfactory to the Requisite Commitment Parties and the Company.
“Discount to Equity Value” means 0.85.
“Effective Date” means the effective date under the Plan.
“Emergence Credit Facilities” has the meaning set forth in Section 6.8.
“Enterprise Value” means $2,200,000,000.
“Environmental Laws” means all applicable laws (including common law), rules,
regulations, codes, ordinances, orders in council, orders, decrees, treaties,
directives, judgments or legally binding agreements promulgated or entered into
by or with any Governmental Entity, relating in any way to the environment,
preservation or reclamation of natural resources, the generation, management,
Release or threatened Release of, or exposure to, any Hazardous Material or to
health and safety matters (to the extent relating to the environment or
Hazardous Materials).
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Company or any of its Subsidiaries, is treated as a
single employer under Section 414(b) or (c) of the Code, or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
“ERISA Event” means (a) any Reportable Event or the requirements of Section
4043(b) of ERISA apply with respect to a Company Plan; (b) any failure by any
Company Plan to satisfy the minimum funding standards (within the meaning of
Section 412 of the Code or Section 302 of ERISA) applicable to such Company
Plan, whether or not waived, or, prior to the effectiveness of the Pension
Protection Act of 2006, the existence with respect to any Company Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA as in effect prior to the effectiveness of the Pension
Protection Act of 2006); (c) the filing pursuant to Section 412(c) of the Code
or Section 302(c) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Company Plan, the failure to make by its due date a
required installment under Section 430(j) of the Code with respect to any
Company Plan or the failure to make any required contribution to a Multiemployer
Plan; (d) the incurrence by the Company or any of its Subsidiaries or any ERISA
Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Company Plan or Multiemployer Plan; (e) a determination that
any Company Plan is, or is expected to be, in “at-risk” status (within the
meaning of Section

9

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

303 of ERISA or Section 430 of the Code); (f) the receipt by the Company or any
of its Subsidiaries or any ERISA Affiliate from the PBGC or a plan administrator
of any notice relating to an intention to terminate any Company Plan or to
appoint a trustee to administer any Company Plan under Section 4042 of ERISA;
(g) the incurrence by the Company or any of its Subsidiaries or any ERISA
Affiliate of any liability with respect to the withdrawal or partial withdrawal
from any Company Plan or Multiemployer Plan; (h) the receipt by the Company or
any of its Subsidiaries or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Company or any of its Subsidiaries or any ERISA
Affiliate of any notice, concerning the impending imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
“insolvent” (within the meaning of Section 4245 of ERISA), in “reorganization”
(within the meaning of Section 4241 of ERISA), or in “endangered” or “critical
status ” (within the meaning of Section 305 of ERISA or Section 432 of the
Code); (i) the conditions for imposition of a lien under Section 303(k) of ERISA
shall have been met with respect to any Company Plan; or (j) the adoption of an
amendment to a Company Plan requiring the provision of security to such Company
Plan pursuant to Section 307 of ERISA.
“Event” means any event, development, occurrence, circumstance, effect,
condition, result, state of facts or change.
“Exchange Act” means the Securities Exchange Act of 1934.
“Expense Reimbursement” has the meaning set forth in Section 3.3(a).
“Fall Away Amount” means, with respect to any Transferring Commitment Party, an
amount equal to the aggregate principal amount of Votable Claims held by such
Transferring Commitment Party on the RSA Execution Date less $20,000,000.
“Filing Party” has the meaning set forth in Section 6.17(b).
“Final Order” means, as applicable, an Order of the Bankruptcy Court or other
court of competent jurisdiction, which has not been reversed, stayed,
reconsidered, readjudicated, modified or amended, and as to which the time to
appeal or seek certiorari has expired and no appeal or petition for certiorari
has been timely taken, or as to which any appeal that has been taken or any
petition for certiorari that has been or may be filed has been resolved by the
highest court to which the Order could be appealed or from which certiorari
could be sought or the new trial, reargument or rehearing shall have been
denied, resulted in no modification of such Order or has otherwise been
dismissed with prejudice; provided, that the possibility that a motion under
Rule 60 of the Federal Rules of Civil Procedure, as made applicable by Rule 9024
of the Bankruptcy Rules, may be filed relating to such Order shall not cause
such Order to not be a Final Order.
“Financial Reports” has the meaning set forth in Section 6.5(a).

10

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

“Financial Statements” has the meaning set forth in Section 4.9(a).

“First Lien Indenture” means that certain indenture, dated as of October 25,
2012 (as amended, supplemented, restated or otherwise modified from time to time
in accordance with the terms thereof), 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,
supplemented, restated or otherwise modified from time to time in accordance
with the terms thereof).
“First Lien Note Claims” means all Claims against MPM, as issuer, or any other
Debtor as guarantor, arising under the First Lien Notes and the First Lien
Indenture.
“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 $1,100,000,000.
“Foreign Pension Plan” has the meaning set forth in Section 4.21(b).
“Funding Notice” has the meaning set forth in Section 2.4(a).

“GAAP” has the meaning set forth in Section 4.9(a).
“Governmental Entity” means any U.S. or non-U.S. international, regional,
federal, state, municipal or local governmental, judicial, administrative,
legislative or regulatory authority, entity, instrumentality, agency,
department, commission, court or tribunal of competent jurisdiction (including
any branch, department or official thereof).
“Hazardous Materials” means all pollutants, contaminants, wastes, chemicals,
materials, substances and constituents, including explosive or radioactive
substances or petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls or radon gas, of any nature
subject to regulation or which can give rise to liability under any
Environmental Law.
“HoldCo Transaction Agreements” has the meaning set forth in Section 4.32.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
“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 drawn letters of
credit or bankers’ acceptances or similar items; (d) liabilities under or in
connection with interest rate swaps, collars, caps and similar hedging
arrangements; (e) liabilities under or in connection with off balance sheet
financing arrangements or synthetic leases; (f) the amount of all capitalized
lease obligations of such Person that are required

11

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

to appear on a balance sheet prepared in accordance with GAAP; and (g) 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.
“Indemnified Claim” has the meaning set forth in Section 8.2.
“Indemnified Person” has the meaning set forth in Section 8.1.
“Indemnifying Party” has the meaning set forth in Section 8.1.
“Intellectual Property Rights” has the meaning set forth in Section 4.15.
“Intermediate HoldCo” has the meaning set forth in the Recitals.
“Intermediate HoldCo Common Stock” has the meaning set forth in the Recitals.
“Internal Reorganization” has the meaning set forth in the Recitals.
“IRS” means the United States Internal Revenue Service.
“Joint Filing Party” has the meaning set forth in Section 6.17(c).
“Knowledge of the Company” means the actual knowledge, after reasonable inquiry,
of Craig Morrison, William Carter, George Knight, Douglas Johns and Karen E.
Koster.
“Law” means any law (statutory or common), statute, regulation, rule, code or
ordinance enacted, adopted, issued or promulgated by any Governmental Entity.
“Legal Proceedings” has the meaning set forth in Section 4.13.
“Legend” has the meaning set forth in Section 6.15.
“Lien” means any lien, adverse claim, charge, option, right of first refusal,
servitude, security interest, mortgage, pledge, deed of trust, easement,
encumbrance, restriction on transfer, conditional sale or other title retention
agreement, defect in title, lien or judicial lien as defined in Sections 101(36)
and (37) of the Bankruptcy Code or other restrictions of a similar kind.
“Losses” has the meaning set forth in Section 8.1.
“Material Adverse Effect” means any Event after December 31, 2013 which
individually, or together with all other Events, has had or would reasonably be
expected to have a material and adverse effect on (a) the business, assets,
liabilities, finances, properties, results of

12

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

operations or condition (financial or otherwise) of the Company and its
Subsidiaries (or Reorganized Momentive and its Subsidiaries), taken as a whole,
or (b) the ability of the Company and its Subsidiaries (or Reorganized Momentive
and its Subsidiaries), taken as a whole, to perform their obligations under, or
to consummate the transactions contemplated by, the Transaction Agreements,
including the Rights Offerings, in each case, except to the extent such Event
results from, arises out of, or is attributable to, the following (either alone
or in combination): (i) any change after the date hereof in global, national or
regional political conditions (including acts of terrorism or war) or in the
general business, market, financial or economic conditions affecting the
industries, regions and markets in which the Company (or Reorganized Momentive)
and its Subsidiaries operate; (ii) any changes after the date hereof in
applicable Law or GAAP, or in the interpretation or enforcement thereof;
(iii) the execution, announcement or performance of this Agreement or the other
Transaction Agreements or the transactions contemplated hereby or thereby;
(iv) changes in the market price or trading volume of the claims or equity or
debt securities of the Company (or Reorganized Momentive) or any of its
Subsidiaries (but not the underlying facts giving rise to such changes unless
such facts are otherwise excluded pursuant to the clauses contained in this
definition); (v) the departure of officers or directors of the Company (or
Reorganized Momentive) or any of its Subsidiaries (but not the underlying facts
giving rise to such departure unless such facts are otherwise excluded pursuant
to the clauses contained in this definition); (vi) the filing or pendency of the
Chapter 11 Proceedings or actions taken in connection with the Chapter 11
Proceedings that are directed by the Bankruptcy Court and made in compliance
with the Bankruptcy Code; or (vii) declarations of national emergencies or
natural disasters; provided, that the exceptions set forth in clauses (i), (ii)
and (vii) shall not apply to the extent that such Event is disproportionately
adverse to the Company (or Reorganized Momentive) and its Subsidiaries, taken as
a whole, as compared to other companies in the industries in which the Company
(or Reorganized Momentive) and its Subsidiaries operate.
“Material Contracts” means all “plans of acquisition, reorganization,
arrangement, liquidation or succession” and “material contracts” (as such terms
are defined in Items 601(b)(2) and 601(b)(10) of Regulation S-K under the
Exchange Act) to which the Company or any of its Subsidiaries is a party.
“Measuring Date” means (a) from the RSA Execution Date until the time
immediately following the first time a Transferring Commitment Party holds less
in aggregate principal amount of Votable Claims than the Trigger Amount, the RSA
Execution Date and (b) thereafter, with respect to any Transfer, the date
following the RSA Execution Date but prior to the time of such Transfer upon
which such Transferring Commitment Party held the least in aggregate principal
amount of Votable Claims.
“Money Laundering Laws” has the meaning set forth in Section 4.26.

13

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

“MPM” has the meaning set forth in the Preamble.
“MPM SEC Documents” means all of the reports, schedules, forms, statements and
other documents (including exhibits and other information incorporated therein)
filed with the SEC by MPM.
“MSC” means Momentive Specialty Chemicals, Inc.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA to which the Company or any of its Subsidiaries or any ERISA Affiliate
(other than one considered an ERISA Affiliate only pursuant to subsection (m) or
(o) of Code Section 414) is making or accruing an obligation to make
contributions, has within any of the preceding six plan years made or accrued an
obligation to make contributions, or each such plan for which any such entity
has liability.
“Net Debt Amount” means the aggregate amount of Indebtedness of Reorganized
Momentive and its Subsidiaries, less the aggregate amount of Cash of Reorganized
Momentive and its Subsidiaries, in each case that are projected to exist as of
the time immediately following the Effective Date as provided in the Plan.
“New Common Stock” means the common stock of MPM.
“Non-Consenting Commitment Party” has the meaning set forth in Section 6.16.
“Non-RSA Breaching Commitment Parties” has the meaning set forth in Section
9.2(j).
“Non-Transferring Commitment Party” has the meaning set forth in Section 6.7(b).
“Order” means any judgment, order, award, injunction, writ, permit, license or
decree of any Governmental Entity or arbitrator of applicable jurisdiction.
“Outside Date” has the meaning set forth in Section 9.2(f).
“Party” has the meaning set forth in the Preamble.
“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.
“Permitted Liens” means (a) Liens for Taxes that (i) are not due and payable or
(ii) are being contested in good faith by appropriate proceedings and for which
adequate reserves have been made with respect thereto; (b) mechanics Liens and
similar Liens for labor, materials or

14

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

supplies provided with respect to any Real Property or personal property
incurred in the ordinary course of business consistent with past practice and as
otherwise not prohibited under this Agreement, for amounts that do not
materially detract from the value of, or materially impair the use of, any of
the Real Property or personal property of the Company or any of its
Subsidiaries; (c) zoning, building codes and other land use Laws regulating the
use or occupancy of any Real Property or the activities conducted thereon that
are imposed by any Governmental Entity having jurisdiction over such Real
Property; provided, that no such zoning, building codes and other land use Laws
prohibit the use or occupancy of such Real Property; (d) easements, covenants,
conditions, restrictions and other similar matters affecting title to any Real
Property and other title defects that do not or would not materially impair the
use or occupancy of such Real Property or the operation of the Company’s or any
of its Subsidiaries’ business; (e) Liens granted in connection with the DIP
Loans; (f) from and after the occurrence of the Effective Date, Liens granted in
connection with the Emergence Credit Facilities; (g) Liens listed on Section 1.1
of the Company Disclosure Schedules; and (h) Liens that, pursuant to the
Confirmation Order, will not survive beyond the Effective Date.
“Person” means an individual, firm, corporation (including any non-profit
corporation), partnership, limited liability company, joint venture, associate,
trust, Governmental Entity or other entity or organization.
“Petition Date” has the meaning set forth in the Recitals.
“Plan” means the Debtors’ Joint Plan of Reorganization, which shall provide for
the release and exculpation of each Commitment Party and its Affiliates and
Representatives, in each case solely in their capacity as such, from liability
in connection with the Chapter 11 Proceedings and the Transaction Agreements,
shall be consistent with the terms set forth in the Term Sheet, shall provide
for the Internal Reorganization to occur automatically immediately following the
Closing and shall otherwise be in form and substance mutually satisfactory to
the Requisite Commitment Parties and the Debtors (as the same may be amended,
supplemented or otherwise modified from time to time in a manner that is
mutually satisfactory to the Requisite Commitment Parties and the Company).
“Plan Solicitation Motion” means the Debtors’ Motion for an Order, in form and
substance mutually satisfactory to the Requisite Commitment Parties and the
Company and among other things, (a) approving the Disclosure Statement and the
Rights Offerings Procedures; (b) establishing a voting record date for the Plan;
(c) approving solicitation packages and procedures for the distribution thereof;
(d) approving the forms of ballots; (e) establishing procedures for voting on
the Plan; (f) establishing notice and objection procedures for the confirmation
of the Plan; and (g) establishing procedures for the assumption and/or
assignment of executory Contracts and unexpired leases under the Plan.

15

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

“Plan Solicitation Order” means an Order entered by the Bankruptcy Court,
substantially in the form attached to the Plan Solicitation Motion, which Order
shall, among other things, seek approval of the Disclosure Statement and the
commencement of a solicitation of votes to accept or reject the Plan, and which
Order shall be in form and substance mutually satisfactory to the Requisite
Commitment Parties and the Company.
“Pre-Closing Period” has the meaning set forth in Section 6.3.
“Purchase Price” means a price per share of New Common Stock equal to (a) (i)
the Enterprise Value less (ii) the Net Debt Amount, multiplied by (b) the
Discount to Equity Value, divided by (c) the Total Outstanding Shares.
“Put Election” has the meaning set forth in Section 2.2.
“Put Option” has the meaning set forth in Section 2.2.
“Q1 Financial Statements” has the meaning set forth in Section 4.9(b).
“Real Property” means, collectively, all right, title and interest (including
any leasehold estate) in and to any and all parcels of or interests in real
property owned in fee or leased by the Company or any of its Subsidiaries,
together with, in each case, all easements, hereditaments and appurtenances
relating thereto, all improvements and appurtenant fixtures incidental to the
ownership or lease thereof.
“Registration Rights Agreement” has the meaning set forth in Section 6.10(a).
“Related Party” means, with respect to any Person, (i) any former, current or
future director, officer, agent, Affiliate, employee, general or limited
partner, member, manager or stockholder of such Person and (ii) any former,
current or future director, officer, agent, Affiliate, employee, general or
limited partner, member, manager or stockholder of any of the foregoing.
“Related Purchaser” has the meaning set forth in Section 2.6(a).
“Release” means any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, emanating or migrating in, into, onto or through the environment.
“Reorganized Momentive” means Top HoldCo or, if the Requisite Commitment Parties
determine pursuant to Section 6.19(b) that another entity shall issue its equity
interests to holders of Second Lien Notes (with approval from the Bankruptcy
Court and the lenders under the Emergence Credit Facilities), such other entity.

16

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

“Reorganized Momentive Corporate Documents” means the Bylaws and the Certificate
of Incorporation.
“Replacing Commitment Parties” has the meaning set forth in Section 2.3(a).
“Reportable Event” means any reportable event as defined in Section 4043(c) of
ERISA or the regulations issued thereunder, other than those events as to which
the 30 day notice period referred to in Section 4043(c) of ERISA has been
waived, with respect to a Company Plan (other than a Company Plan maintained by
an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code).
“Representatives” means, with respect to any Person, such Person’s directors,
officers, members, partners, managers, employees, agents, investment bankers,
attorneys, accountants, advisors and other representatives.
“Requisite Commitment Parties” means (a) members of the Ad Hoc Committee holding
at least a majority of the aggregate Backstop Commitments of all members of the
Ad Hoc Committee as of the date on which the consent or approval of such members
is solicited and (b) Apollo; provided, that in the case of a consent or approval
to changes in respect of any Selected Economic Term, “Requisite Commitment
Parties” means solely the members of the Ad Hoc Committee holding a majority of
the aggregate Backstop Commitments provided by all members of the Ad Hoc
Committee as of the date on which the consent or approval of such members is
solicited; and provided, further, that for purposes of this definition, each
Commitment Party shall be deemed to hold the Backstop Commitments held by such
Commitment Party’s Related Purchasers.
“Restructuring” has the meaning set forth in the RSA.
“Returns” has the meaning set forth in Section 4.20.
“Rights Offerings” means, collectively, the 1145 Rights Offering and the 4(a)(2)
Rights Offering.
“Rights Offerings Amount” means an amount equal to $600,000,000.
“Rights Offerings Expiration Time” means the time and the date on which the
rights offering subscription form must be duly delivered to the Rights Offerings
Subscription Agent in accordance with the Rights Offerings Procedures, together
with the applicable Purchase Price.
“Rights Offerings Participants” means those Persons who duly subscribe for
Rights Offerings Shares in accordance with the Rights Offerings Procedures.

17

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

“Rights Offerings Procedures” means, collectively, the 1145 Rights Offering
Procedures and the 4(a)(2) Rights Offering Procedures.
“Rights Offerings Shares” means, collectively, the 4(a)(2) Rights Offering
Shares and the 1145 Rights Offering Shares.
“Rights Offerings Subscription Agent” means Kurtzman Carson Consultants or
another subscription agent appointed by the Company and satisfactory to the
Requisite Commitment Parties.
“RSA” means that certain Restructuring Support Agreement entered into by and
among the Company, MPM, and each of their direct and indirect subsidiaries party
thereto, the Apollo Entities (as defined therein), and the Consenting
Noteholders (as defined therein), dated as of April 13, 2014 (as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms thereof).
“RSA Approval Order” means an Order entered by the Bankruptcy Court, in form and
substance mutually satisfactory to the Requisite Commitment Parties and the
Company, approving the RSA and its assumption by the Company.
“RSA Execution Date” means April 13, 2014.
“Sale Transaction” has the meaning set forth in Section 7.01(h).
“SEC” means the U.S. Securities and Exchange Commission.
“Second Lien Documents” has the meaning set forth in the DIP Motion.
“Second Lien Indenture” means that certain indenture dated as of November 5,
2010 (as amended, supplemented, restated or otherwise modified from time to time
in accordance with the terms thereof), 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,
supplemented, restated or otherwise modified from time to time in accordance
with the terms thereof).
“Second Lien Intercreditor Agreement” has the meaning set forth in the DIP
Motion.
“Second Lien Notes” means those certain notes issued by the Company pursuant to
the Second Lien Indenture.

18

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

“Securities Act” means the Securities Act of 1933.
“Selected Economic Terms” means, collectively, the definitions of Enterprise
Value or Discount to Equity Value (or their application in the definition of
Purchase Price) and the terms of Section 3.1.
“SSA” means that certain Amended and Restated Shared Services Agreement by and
among the Company, MSC and the other persons party thereto, dated as of March
17, 2011 (as amended, supplemented, restated or otherwise modified from time to
time in accordance with the terms thereof).
“SSA Amendment” has the meaning set forth in Section 6.10(b).
“Subscription Escrow Account” has the meaning set forth in Section 2.4(a).
“Subscription Escrow Agreement” has the meaning set forth in Section 2.4(b).
“Subscription Escrow Funding Date” has the meaning set forth in Section 2.4(b).
“Subscription Rights” has the meaning set forth in the Recitals.
“Subsidiary” means, with respect to any Person, any corporation, partnership,
joint venture or other legal entity as to which such Person (either alone or
through or together with any other subsidiary), (a) owns, directly or
indirectly, more than fifty percent (50%) of the stock or other equity
interests, (b) has the power to elect a majority of the board of directors or
similar governing body or (c) has the power to direct the business and policies.
“Superior Transaction” means an Alternative Transaction, which the Company,
after consultation with its outside legal counsel and its independent financial
advisor, determines in good faith, and taking into account all aspects of such
Alternative Transaction and the Company Board’s good-faith estimate of the
likelihood and timing of consummating the Alternative Transaction, to be more
favorable to the bankruptcy estate of the Company and the other Debtors, from a
financial point of view, than the transactions contemplated by this Agreement
and the other Transaction Documents, including providing (a) a higher and better
recovery for the unsecured creditors of the Debtors and (b) a recovery to
holders of Second Lien Notes at least as favorable as the recovery set forth in
the RSA.
“Takeover Statute” means any restrictions contained in any “fair price,”
“moratorium,” “control share acquisition”, “business combination” or other
similar anti-takeover statute or regulation.

19

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

“Taxes” means all taxes, assessments, duties, levies or other mandatory
governmental charges paid to a Governmental Entity, including all federal,
state, local, foreign and other income, franchise, profits, gross receipts,
capital gains, capital stock, transfer, property, sales, use, value-added,
occupation, excise, severance, windfall profits, stamp, payroll, social
security, withholding and other taxes, assessments, duties, levies or other
mandatory governmental charges of any kind whatsoever paid to a Governmental
Entity (whether payable directly or by withholding and whether or not requiring
the filing of a Return), all estimated taxes, deficiency assessments, additions
to tax, penalties and interest thereon and shall include any liability for such
amounts as a result of being a member of a combined, consolidated, unitary or
affiliated group.
“Term Sheet” has the meaning set forth in the Recitals.
“Top HoldCo” has the meaning set forth in the Recitals.
“Top HoldCo Common Stock” has the meaning set forth in the Recitals.
“Total Outstanding Shares” means the total number of shares of Top HoldCo Common
Stock outstanding immediately following the Internal Reorganization as provided
in the Plan, including shares exchanged in the Internal Reorganization for
shares of Top HoldCo Common Stock issued in satisfaction of Votable Claims and
Rights Offerings Shares, and shares issued in accordance with this Agreement
(including those issued as payment of the Commitment Premium).
“Transaction Agreements” has the meaning set forth in Section 4.2(a).
“Transfer” means sell, transfer, assign, pledge, hypothecate, participate,
donate or otherwise encumber or dispose of, directly or indirectly (including
through derivatives, options, swaps, pledges, forward sales or other
transactions in which any Person receives the right to own or acquire any
current or future interest in a Subscription Right, a Votable Claim, a Rights
Offerings Share, a share of New Common Stock or a share of Top HoldCo Common
Stock).
“Transferring Commitment Party” has the meaning set forth in Section 6.7(b).
“Trigger Amount” means, with respect to any Transferring Commitment Party, an
amount equal to the aggregate principal amount of Votable Claims held by such
Transferring Commitment Party on the RSA Execution Date less $5,000,000.
“Ultimate Purchaser” has the meaning set forth in Section 2.6(b).
“Unfunded Pension Liability” means the excess of a Company Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Company Plan’s assets, determined in accordance with the assumptions used for
funding the Company Plan pursuant to Section 412 of the Code for the applicable
plan year.

20

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

“Unlegended Shares” has the meaning set forth in Section 6.13.
“Unsubscribed Shares” means the Rights Offerings Shares that have not been duly
purchased by the Rights Offerings Participants in accordance with the Rights
Offerings Procedures and the Plan.
“Votable Claims” means, collectively, all allowed Claims arising under the
Second Lien Notes.
“willful or intentional breach” has the meaning set forth in Section 9.4.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.2    Construction. In this Agreement, unless the context otherwise
requires:
(a)    references to Articles, Sections, Exhibits and Schedules are references
to the articles and sections or subsections of, and the exhibits and schedules
attached to, this Agreement;
(b)    references in this Agreement to “writing” or comparable expressions
include a reference to a written document transmitted by means of electronic
mail in portable document format (pdf), facsimile transmission or comparable
means of communication;
(c)    words expressed in the singular number shall include the plural and vice
versa; words expressed in the masculine shall include the feminine and neuter
gender and vice versa;
(d)    the words “hereof”, “herein”, “hereto” and “hereunder”, and words of
similar import, when used in this Agreement, shall refer to this Agreement as a
whole, including all Exhibits and Schedules attached to this Agreement, and not
to any provision of this Agreement;
(e)    the term this “Agreement” shall be construed as a reference to this
Agreement as the same may have been, or may from time to time be, amended,
modified, varied, novated or supplemented;
(f)    “include”, “includes” and “including” are deemed to be followed by
“without limitation” whether or not they are in fact followed by such words;
(g)    references to “day” or “days” are to calendar days;
(h)    references to “the date hereof” means the date of this Agreement;

21

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

(i)    unless otherwise specified, references to a statute means such statute as
amended from time to time and includes any successor legislation thereto and any
rules or regulations promulgated thereunder in effect from time to time; and
(j)    references to “dollars” or “$” are to United States of America dollars.
ARTICLE II
BACKSTOP COMMITMENT
Section 2.1    The Rights Offerings; Subscription Rights. On and subject to the
terms and conditions hereof, including entry of the BCA Approval Order by the
Bankruptcy Court, (a) MPM shall conduct the Rights Offerings pursuant to and in
accordance with the Rights Offerings Procedures, this Agreement and the Plan and
(b) each Commitment Party shall, and shall cause each of its Affiliates (as
applicable) to, exercise the Subscription Rights issued to and held by such
Commitment Party or its Affiliates (as applicable) as a holder of Second Lien
Notes pursuant to and in accordance with the Rights Offering Procedures, this
Agreement and the Plan. If reasonably requested by the Requisite Commitment
Parties from time to time prior to the Rights Offerings Expiration Time (and any
extensions thereto), MPM shall notify, or cause the Rights Offerings
Subscription Agent to notify, the Commitment Parties of the aggregate number of
Subscription Rights known by MPM or the Rights Offerings Subscription Agent to
have been exercised pursuant to the Rights Offerings as of the most recent
practicable time before such request.
Section 2.2    The Backstop Commitment. On and subject to the terms and
conditions hereof, including entry of the BCA Consummation Approval Order, each
Commitment Party hereby grants to MPM an option (collectively, the “Put Option”)
to require such Commitment Party to purchase Unsubscribed Shares on the Closing
Date subject to the terms and conditions of this Agreement. Upon the exercise of
the Put Option, each Commitment Party agrees, severally and not jointly, to
purchase, and MPM agrees to sell to such Commitment Party, on the Closing Date,
the number of Unsubscribed Shares equal to (a) such Commitment Party’s Backstop
Commitment Percentage multiplied by (b) the aggregate number of Unsubscribed
Shares, rounded among the Commitment Parties solely to avoid fractional shares
as the Commitment Parties may determine in their sole discretion. The
obligations of the Commitment Parties described in this Section 2.2 shall be
referred to as the “Backstop Commitment”. MPM may exercise the Put Option by
delivery to each Commitment Party of a written put election notice (the “Put
Election”), provided that the Put Option shall automatically and irrevocably be
deemed to have been exercised by MPM, without the need for delivery of written
notice or the taking of any other further action by MPM or any other any Person,
if the conditions set forth in Sections 7.3(e) and 7.3(f) shall have been
satisfied or waived in accordance with this Agreement. The purchase price
payable by each Commitment

22

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

Party in respect of each Unsubscribed Share that such Commitment Party is
obligated to purchase under its Backstop Commitment shall be the Purchase Price.
Section 2.3    Commitment Party Default.
(a)    Upon the occurrence of a Commitment Party Default, the Commitment Parties
that are, or are Affiliated with, members of the Ad Hoc Committee (other than
any Defaulting Commitment Party) shall have the right, but not the obligation,
within five (5) Business Days after receipt of written notice from MPM to all
Commitment Parties of such Commitment Party Default, which notice shall be given
promptly following the occurrence of such Commitment Party Default and to all
Commitment Parties substantially concurrently (such five (5) Business Day
period, the “Commitment Party Replacement Period”), to make arrangements for one
or more of the Commitment Parties that is, or is Affiliated with, a member of
the Ad Hoc Committee (other than the Defaulting Commitment Party) to purchase
all or any portion of the Available Shares (such purchase, a “Commitment Party
Replacement”) on the terms and subject to the conditions set forth in this
Agreement and in such amounts as may be agreed upon by all of the Commitment
Parties electing to purchase all or any portion of the Available Shares, or, if
no such agreement is reached, based upon the relative applicable Backstop
Commitment Percentages of any such Commitment Parties that are, or are
Affiliated with, members of the Ad Hoc Committee (other than the Defaulting
Commitment Party) (such Commitment Parties, the “Replacing Commitment Parties”).
Any such Available Shares purchased by a Replacing Commitment Party shall be
included, among other things, in the determination of (x) the Unsubscribed
Shares of such Replacing Commitment Party for all purposes hereunder, (y) the
Backstop Commitment Percentage of such Commitment Party for purposes of
Section 3.1 and (z) the Backstop Commitment of such party for purposes of the
definition of Requisite Commitment Parties. If a Commitment Party Default
occurs, the Outside Date shall be delayed only to the extent necessary to allow
for the Commitment Party Replacement to be completed within the Commitment Party
Replacement Period.
(b)    If a Commitment Party is a Defaulting Commitment Party, it shall not be
entitled to any of the Commitment Premium hereunder.
(c)    Nothing in this Agreement shall be deemed to require a Commitment Party
to purchase more than its Backstop Commitment Percentage of the Unsubscribed
Shares.
(d)    For the avoidance of doubt, notwithstanding anything to the contrary set
forth in Section 9.4 but subject to Section 10.10, no provision of this
Agreement shall relieve any Defaulting Commitment Party from liability
hereunder, or limit the availability of the remedies set forth in Section 10.9,
in connection with any such Defaulting Commitment Party’s Commitment Party
Default.

23

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

Section 2.4    Subscription Escrow Account Funding.
(a)    Funding Notice. No later than the fifth (5th) Business Day following the
Rights Offerings Expiration Time, the Rights Offerings Subscription Agent shall
deliver to each Commitment Party a written notice (the “Funding Notice”) of
(i) the number of Rights Offerings Shares elected to be purchased by the Rights
Offerings Participants and the aggregate Purchase Price therefor; (ii) the
aggregate number of Unsubscribed Shares, if any, and the aggregate Purchase
Price therefor; (iii) the aggregate number of Unsubscribed Shares (based upon
such Commitment Party’s Backstop Commitment Percentage) to be issued and sold by
MPM to such Commitment Party and the aggregate Purchase Price therefor; and
(iv) the escrow account to which such Commitment Party shall deliver and pay the
aggregate Purchase Price for such Commitment Party’s Backstop Commitment
Percentage of the Unsubscribed Shares (the “Subscription Escrow Account”). The
Rights Offerings Subscription Agent shall promptly provide any written backup,
information and documentation relating to the information contained in the
applicable Funding Notice as any Commitment Party may reasonably request.
(b)    Subscription Escrow Account Funding. No later than the second
(2nd) Business Day following receipt of the Funding Notice (such date, the
“Subscription Escrow Funding Date”), each Commitment Party shall deliver and pay
the aggregate Purchase Price for such Commitment Party’s Backstop Commitment
Percentage of the Unsubscribed Shares by wire transfer in immediately available
funds in U.S. dollars into the Subscription Escrow Account in satisfaction of
such Commitment Party’s Backstop Commitment. The Subscription Escrow Account
shall be established with an escrow agent satisfactory to the Requisite
Commitment Parties and the Company pursuant to an escrow agreement in form and
substance mutually satisfactory to the Requisite Commitment Parties and the
Company (the “Subscription Escrow Agreement”). If this Agreement is terminated
in accordance with its terms, the funds held in the Subscription Escrow Account
shall be released, and each Commitment Party shall receive from the Subscription
Escrow Account the cash amount actually funded to the Subscription Escrow
Account by such Commitment Party, plus any interest accrued thereon, promptly
following such termination.
Section 2.5    Closing.
(a)    Subject to Article VII, unless otherwise mutually agreed in writing
between the Company and the Requisite Commitment Parties, the closing of the
Backstop Commitments (the “Closing”) shall take place at the offices of Milbank,
Tweed, Hadley & McCloy LLP, One Chase Manhattan Plaza, New York, New York 10005,
at 11:00 a.m., New York City time, on the date on which all of the conditions
set forth in Article VII shall have been satisfied or waived in accordance with
this Agreement (other than conditions that by their terms are to be satisfied at
the Closing, but subject to the satisfaction or waiver of such conditions). The
date on which the Closing actually occurs shall be referred to herein as the
“Closing Date”.

24

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

(b)    At the Closing, the funds held in the Subscription Escrow Account shall
be released and utilized as set forth in, and in accordance with, the Plan and
the Subscription Escrow Agreement.
(c)    At the Closing, issuance of the Unsubscribed Shares will be made by MPM
to each Commitment Party (or to its designee in accordance with Section 2.6(a))
against payment of the aggregate Purchase Price for the Unsubscribed Shares of
such Commitment Party, in satisfaction of such Commitment Party’s Backstop
Commitment. Unless a Commitment Party requests delivery of a physical stock
certificate, the entry of any Unsubscribed Shares to be delivered pursuant to
this Section 2.5(c) into the account of a Commitment Party pursuant to MPM’s
book entry procedures and delivery to such Commitment Party of an account
statement reflecting the book entry of such Unsubscribed Shares shall be deemed
delivery of such Unsubscribed Shares for purposes of this Agreement.
Notwithstanding anything to the contrary in this Agreement, all Unsubscribed
Shares will be delivered with all issue, stamp, transfer, sales and use, or
similar transfer Taxes or duties that are due and payable (if any) in connection
with such delivery duly paid by MPM.
Section 2.6    Designation and Assignment Rights.
(a)    Each Commitment Party shall have the right to designate by written notice
to MPM no later than two (2) Business Days prior to the Closing Date that some
or all of the Unsubscribed Shares that it is obligated to purchase hereunder be
issued in the name of, and delivered to, one or more of its Affiliates or
Affiliated Funds (other than any portfolio company of such Commitment Party or
its Affiliates) (each, a “Related Purchaser”) upon receipt by MPM of payment
therefor in accordance with the terms hereof, which notice of designation shall
(i) be addressed to MPM and signed by such Commitment Party and each such
Related Purchaser, (ii) specify the number of Unsubscribed Shares to be
delivered to or issued in the name of such Related Purchaser and (iii) contain a
confirmation by each such Related Purchaser of the accuracy of the
representations set forth in Sections 5.6 through 5.9 as applied to such Related
Purchaser; provided, that no such designation pursuant to this Section 2.6(a)
shall relieve such Commitment Party from its obligations under this Agreement.
(b)    In addition to the Transfers required by Section 6.7, each Commitment
Party shall have the right to Transfer all or any portion of its Backstop
Commitment only to (i) any investment fund the primary investment advisor to
which is such Commitment Party or an Affiliate thereof (an “Affiliated Fund”) or
(ii) one or more special purpose vehicles that are wholly-owned by one or more
of such Commitment Party and its Affiliated Funds, created for the purpose of
holding such Backstop Commitment or holding debt or equity of the Debtors, and
with respect to which such Commitment Party either (A) has provided an adequate
equity support letter or a guarantee of such special purpose vehicle’s Backstop
Commitment or (B) otherwise remains

25

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

obligated to fund the Backstop Commitment to be Transferred until the
consummation of the Plan; provided that such special purpose vehicle shall not
be related to or Affiliated with any portfolio company of such Commitment Party
or any of its Affiliates or Affiliated Funds (other than solely by virtue of its
affiliation with such Commitment Party) and the equity of such special purpose
vehicle shall not be transferable other than to such Persons described in clause
(i) or (ii) of this Section 2.6(b), and in such manner, as such Commitment
Party’s Backstop Commitment is transferable pursuant to this Section 2.6(b)
(each of the Persons referred to in clauses (i) and (ii), an “Ultimate
Purchaser”), and that, in each case, provides a written agreement to the Company
under which it (x) confirms the accuracy of the representations set forth in
Article V as applied to such Ultimate Purchaser, (y) agrees to purchase such
portion of such Commitment Party’s Backstop Commitment, and (z) agrees to be
fully bound by, and subject to, this Agreement as a Commitment Party hereto;
provided, that no sale or Transfer pursuant to this Section 2.6(b) shall relieve
such Commitment Party from its obligations under this Agreement. Other than as
set forth in this Section 2.6(b) or as required by Section 6.7, no Commitment
Party shall be permitted to Transfer its Backstop Commitment. For the avoidance
of doubt, no Commitment Party shall have the right to Transfer all or any
portion of its Backstop Commitment to Momentive Performance Materials Holdings
LLC.
(c)    Each Commitment Party, severally and not jointly, agrees that it will not
Transfer, at any time prior to the Closing Date or the earlier termination of
this Agreement in accordance with its terms, any of its rights and obligations
under this Agreement to any Person other than in accordance with Sections 2.3,
2.6(a), 2.6(b) and 6.7. After the Closing Date, nothing in this Agreement shall
limit or restrict in any way the ability of any Commitment Party (or any
permitted transferee thereof) to Transfer any of the shares of Top HoldCo Common
Stock or any interest therein; provided, that any such Transfer shall be made
pursuant to an effective registration statement under the Securities Act or an
exemption from the registration requirements thereunder and pursuant to
applicable securities Laws. For the avoidance of doubt, New Common Stock may
only be Transferred to Top HoldCo in exchange for Top HoldCo Common Stock, which
Transfer shall occur automatically pursuant to the Internal Reorganization.
ARTICLE III
BACKSTOP COMMITMENT PREMIUM AND EXPENSE REIMBURSEMENT
Section 3.1    Premium Payable by the Company. Subject to Section 3.2, as
consideration for the Put Option, the Backstop Commitment and the other
agreements of the Commitment Parties in this Agreement, the Debtors shall pay or
cause to be paid a nonrefundable aggregate premium in an amount equal
to $30,000,000, which represents 5.0% of the Rights Offerings Amount without
application of the Discount to Equity Value, payable in accordance with
Section 3.2, to the Commitment Parties (including any Replacing Commitment
Party, but excluding

26

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

any Defaulting Commitment Party) or their designees based upon their respective
Backstop Commitment Percentages at the time the payment is made (the “Commitment
Premium”).
The provisions for the payment of the Commitment Premium and Expense
Reimbursement, and the indemnification provided herein, are an integral part of
the transactions contemplated by this Agreement and without these provisions the
Commitment Parties would not have entered into this Agreement, and the
Commitment Premium (to the extent required to be paid in cash as set forth in
Section 9.4) and Expense Reimbursement shall, pursuant to the BCA Approval
Order, constitute allowed administrative expenses of the Debtors’ estate under
Sections 503(b) and 507 of the Bankruptcy Code.
Section 3.2    Payment of Premium. The Commitment Premium shall be fully earned,
nonrefundable and non-avoidable upon entry of the BCA Approval Order and shall
be paid by the Debtors, free and clear of any withholding or deduction for any
applicable Taxes, on the Closing Date as set forth above. For the avoidance of
doubt, to the extent payable in accordance with the terms of this Agreement, the
Commitment Premium will be payable regardless of the amount of Unsubscribed
Shares (if any) actually purchased. MPM shall satisfy its obligation to pay the
Commitment Premium on the Closing Date by issuing additional shares of New
Common Stock out of the Total Outstanding Shares to the Commitment Parties in
lieu of any cash payment (the aggregate number of shares of New Common Stock to
be issued in satisfaction of the Commitment Premium will be approximately 1.5
million, subject to the Net Debt Amount as provided in the Plan); provided, that
if the Closing does not occur, the Commitment Premium shall be payable in cash
and only to the extent provided in Section 9.4.

Section 3.3    Expense Reimbursement.
(a)    Until the earlier to occur of (i) the Closing and (ii) the termination of
this Agreement, the Debtors agree to pay in accordance with Section 3.3(b) (A)
the reasonable documented fees and expenses of counsel, financial advisors, and
consultants and other professionals for specialized areas of expertise as
circumstances warrant retained by the Ad Hoc Committee, in each case that have
been and are incurred in connection with (x) the negotiation, preparation and
implementation of the Transaction Agreements and the other agreements and
transactions contemplated thereby and (y) the Restructuring and the Chapter 11
Proceedings, (B) the reasonable documented fees and expenses of one counsel and
one financial advisor retained by Apollo that have been and are incurred solely
with respect to Apollo’s capacity as a Commitment Party, (C) the reasonable
documented fees and expenses of each member of the Ad Hoc Committee, including
the reasonable documented fees and expenses of professionals, including
consultants, retained by each member of the Ad Hoc Committee, that have been
incurred prior to April 1, 2014 in connection with performing diligence with
respect to the Second Lien Notes (provided, that, the fees and

27

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

expenses referred to in this clause (C) shall not exceed $1,000,000 in the
aggregate for all such members), (D) all filing fees, if any, required by the
HSR Act or any other Antitrust Law and all reasonable documented expenses
related thereto, and (E) the reasonable documented fees and expenses of one
executive search consultant retained by the Commitment Parties to assist in the
selection of the board of directors and officers of Reorganized Momentive, in
each case, that have been paid or are payable by the Commitment Parties (such
payment obligations set forth in clauses (A), (B), (C), (D) and (E) above,
collectively, the “Expense Reimbursement”).
(b)    The Expense Reimbursement accrued through the date on which the BCA
Approval Order is entered shall be paid within one (1) Business Day of such
date. The Expense Reimbursement shall thereafter be payable by the Debtors as
soon as practicable after receipt of monthly invoices therefor; provided, that
the Debtors’ final payment shall be made contemporaneously with the Closing or
the termination of this Agreement pursuant to Article IX. The Commitment Parties
shall promptly provide copies of such invoices (redacted to protect privileges)
to the Debtors and to the United States Trustee.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding section of the Company Disclosure
Schedules, the Debtors, jointly and severally, hereby represent and warrant to
the Commitment Parties (unless otherwise set forth herein, as of the date of
this Agreement and as of the Closing Date) as set forth below.
Section 4.1    Organization and Qualification. The Company and each of its
Subsidiaries (i) is a duly organized and validly existing corporation, limited
liability company or limited partnership, as the case may be, and, if
applicable, in good standing (or the equivalent thereof) under the Laws of the
jurisdiction of its incorporation or organization (except where the failure to
be in good standing (or the equivalent) would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect), (ii) has the
corporate or other applicable power and authority to own its property and assets
and to transact the business in which it is currently engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the conduct of its business
as currently conducted requires such qualifications, except in the cases of
clauses (ii) and (iii) where the failure to have such authority or
qualifications would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

28

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

Section 4.2    Corporate Power and Authority.
(a)    Each of the Company and MPM has the requisite corporate power and
authority (i) (A) subject to entry of the BCA Approval Order, to enter into,
execute and deliver this Agreement and to perform the BCA Approval Obligations
and (B) subject to entry of the BCA Consummation Approval Order and the
Confirmation Order, to perform each of its other obligations hereunder and
(ii) subject to entry of the BCA Consummation Approval Order and the
Confirmation Order, to consummate the transactions contemplated herein and in
the Plan, to enter into, execute and deliver the Registration Rights Agreement
and all other agreements to which it will be a party as contemplated by this
Agreement and the Plan (this Agreement, the Plan, the Disclosure Statement, the
RSA, any documentation or agreements relating to the Emergence Credit
Facilities, the Registration Rights Agreement and such other agreements and any
plan supplements or documents referred to herein or therein or hereunder or
thereunder, collectively, the “Transaction Agreements”) and to perform its
obligations under each of the Transaction Agreements (other than this
Agreement). Subject to the receipt of the foregoing Orders, as applicable, the
execution and delivery of this Agreement and each of the other Transaction
Agreements and the consummation of the transactions contemplated hereby and
thereby have been or will be duly authorized by all requisite corporate action
on behalf of the Company and MPM, and no other corporate proceedings on the part
of the Company or MPM are or will be necessary to authorize this Agreement or
any of the other Transaction Agreements or to consummate the transactions
contemplated hereby or thereby.
(b)    Subject to entry of the BCA Consummation Approval Order and the
Confirmation Order, each of the other Debtors has the requisite power and
authority (corporate or otherwise) to enter into, execute and deliver each
Transaction Agreement to which such other Debtor is a party and to perform its
obligations thereunder. Subject to entry of the BCA Consummation Approval Order
and the Confirmation Order, the execution and delivery of this Agreement and
each of the other Transaction Agreements and the consummation of the
transactions contemplated hereby and thereby have been or will be duly
authorized by all requisite action (corporate or otherwise) on behalf of each
other Debtor party thereto, and no other proceedings on the part of any other
Debtor party thereto are or will be necessary to authorize this Agreement or any
of the other Transaction Agreements or to consummate the transactions
contemplated hereby or thereby.
Section 4.3    Execution and Delivery; Enforceability. Subject to entry of the
BCA Approval Order, this Agreement will have been, and subject to the entry of
the BCA Consummation Approval Order and the Confirmation Order, each other
Transaction Agreement will be, duly executed and delivered by the Company and
each of the other Debtors party thereto. Upon entry of the BCA Approval Order
and assuming due and valid execution and delivery hereof by the Commitment
Parties, the BCA Approval Obligations will constitute the valid and legally
binding obligations of the Company and MPM and, to the extent applicable, the
other Debtors, enforceable

29

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

against the Company and MPM and, to the extent applicable, the other Debtors in
accordance with their respective terms. Upon entry of the BCA Consummation
Approval Order and assuming due and valid execution and delivery of this
Agreement and the other Transaction Agreements by the Commitment Parties, each
of the obligations hereunder and thereunder will constitute the valid and
legally binding obligations of the Company and MPM and, to the extent
applicable, the other Debtors, enforceable against the Company and, to the
extent applicable, the other Debtors, in accordance with their respective terms.
Section 4.4    Authorized and Issued Capital Stock.
(a)    On the Closing Date, (i) the authorized capital stock of MPM will consist
of 70,000,000 shares of New Common Stock, (ii) the outstanding capital stock of
MPM will consist of 50,000,000 issued and outstanding shares of New Common Stock
(which shall be the number of Total Outstanding Shares), (iii) no shares of New
Common Stock will be held by MPM in its treasury, (iv) shares of New Common
Stock will be reserved for issuance upon exercise of stock options and other
rights to purchase or acquire shares of New Common Stock granted in connection
with any employment arrangement entered into in accordance with Section 6.3, and
(v) no warrants to purchase shares of New Common Stock will be issued and
outstanding.
(b)    As of the Closing Date, all issued and outstanding shares of New Common
Stock will have been duly authorized and validly issued and will be fully paid
and non-assessable, and will not be subject to any preemptive rights.
(c)    Except as set forth in this Section 4.4, as of the Closing Date, no
shares of capital stock or other equity securities or voting interest in
Reorganized Momentive will have been issued, reserved for issuance or
outstanding.
(d)    Except as described in this Section 4.4 and except as set forth in the
Registration Rights Agreement, the Reorganized Momentive Corporate Documents,
the Emergence Credit Facilities or any employment agreement entered into in
accordance with Section 7.1(h), as of the Closing Date, neither Reorganized
Momentive nor any of its Subsidiaries will be party to or otherwise bound by or
subject to any outstanding option, warrant, call, right, security, commitment,
Contract, arrangement or undertaking (including any preemptive right) that
(i) obligates Reorganized Momentive or any of its Subsidiaries to issue,
deliver, sell or transfer, or repurchase, redeem or otherwise acquire, or cause
to be issued, delivered, sold or transferred, or repurchased, redeemed or
otherwise acquired, any shares of the capital stock of, or other equity or
voting interests in, Reorganized Momentive or any of its Subsidiaries or any
security convertible or exercisable for or exchangeable into any capital stock
of, or other equity or voting interest in, Reorganized Momentive or any of its
Subsidiaries, (ii) obligates Reorganized Momentive or any of its Subsidiaries to
issue, grant, extend or enter into any such option, warrant, call, right,
security,

30

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

commitment, Contract, arrangement or undertaking, (iii) restricts the Transfer
of any shares of capital stock of Reorganized Momentive or any of its
Subsidiaries or (iv) relates to the voting of any shares of capital stock of
Reorganized Momentive.
Section 4.5    Issuance. The shares of New Common Stock, Intermediate HoldCo
Common Stock and Top HoldCo Common Stock to be issued pursuant to the Plan,
including the shares of New Common Stock to be issued in connection with the
consummation of the Rights Offerings and pursuant to the terms hereof, will,
when issued and delivered on the Closing Date in exchange for the aggregate
Purchase Price therefor and the shares of Intermediate HoldCo Common Stock and
Top HoldCo Common Stock issued in the Internal Reorganization, be duly and
validly authorized, issued and delivered and shall be fully paid and
non-assessable, and free and clear of all Taxes, Liens (other than Transfer
restrictions imposed hereunder or under the Reorganized Momentive Corporate
Documents or by applicable Law), preemptive rights, subscription and similar
rights (other than any rights set forth in the Reorganized Momentive Corporate
Documents, and the Registration Rights Agreement).
Section 4.6    No Conflict. Assuming the consents described in clauses (a)
through (f) of Section 4.7 are obtained, the execution and delivery by the
Company and, if applicable, its Subsidiaries of this Agreement, the Plan and the
other Transaction Agreements, the compliance by the Company and, if applicable,
its Subsidiaries with the provisions hereof and thereof and the consummation of
the transactions contemplated herein and therein will not (a) conflict with, or
result in a breach, modification or violation of, any of the terms or provisions
of, or constitute a default under (with or without notice or lapse of time, or
both), or result, except to the extent specified in the Plan, in the
acceleration of, or the creation of any Lien under, or cause any payment or
consent to be required under any Contract to which the Company or any of its
Subsidiaries (including any Subsidiaries that are not Debtors) will be bound as
of the Closing Date after giving effect to the Plan or to which any of the
property or assets of the Company or any of its Subsidiaries (including any
Subsidiaries that are not Debtors) will be subject as of the Closing Date after
giving effect to the Plan, (b) result in any violation of the provisions of the
Reorganized Momentive Corporate Documents or any of the organization documents
of any of the Company’s Subsidiaries, or (c) result in any violation of any Law
or Order applicable to the Company or any of its Subsidiaries (including any
Subsidiaries that are not Debtors) or any of their properties, except in each of
the cases described in clauses (a) and (c) for any conflict, breach,
modification, violation, default, acceleration or Lien which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
Section 4.7    Consents and Approvals. No consent, approval, authorization,
order, registration or qualification of or with any Governmental Entity having
jurisdiction over the Company or any of its Subsidiaries or any of their
properties (each, an “Applicable Consent”) is required for the execution and
delivery by the Company and, to the extent relevant, its Subsidiaries

31

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

of this Agreement, the Plan and the other Transaction Agreements, the compliance
by the Company and, to the extent relevant, its Subsidiaries with the provisions
hereof and thereof and the consummation of the transactions contemplated herein
and therein, except for (a) the entry of the BCA Approval Order authorizing the
Company and MPM to execute and deliver this Agreement and perform the BCA
Approval Obligations, (b) the entry of the BCA Consummation Approval Order
authorizing the Company and MPM to perform each of its other obligations
hereunder, (c) the entry of the Confirmation Order, (d) filings, notifications,
authorizations, approvals, consents, clearances or termination or expiration of
all applicable waiting periods under any Antitrust Laws in connection with the
transactions contemplated by this Agreement, (e) such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or “Blue Sky” Laws in connection with the purchase of the
Unsubscribed Shares by the Commitment Parties, the issuance of the Subscription
Rights, the issuance of the Rights Offerings Shares pursuant to the exercise of
the Subscription Rights, the issuance of New Common Stock in satisfaction of
Votable Claims pursuant to the Plan, the issuance of New Common Stock as payment
of the Commitment Premium and the issuance of shares of Intermediate HoldCo
Common Stock and Top HoldCo Common Stock in the Internal Reorganization, and
(f) any Applicable Consents that, if not made or obtained, would not reasonably
be expected to be material to the Company and its Subsidiaries taken as a whole.
Section 4.8    Arm’s-Length. The Company and MPM acknowledge and agree that
(a) each of the Commitment Parties is acting solely in the capacity of an
arm’s-length contractual counterparty to the Company and MPM with respect to the
transactions contemplated hereby (including in connection with determining the
terms of the Rights Offerings) and not as a financial advisor or a fiduciary to,
or an agent of, the Company or any of its Subsidiaries and (b) no Commitment
Party is advising the Company or any of its Subsidiaries as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction.
Section 4.9    Financial Statements.
(a)    The audited consolidated balance sheets of MPM as at December 31, 2013
and the related consolidated statements of operations and of cash flows for the
fiscal year then ended, accompanied by a report thereon by
PricewaterhouseCoopers LLP (collectively, the “Financial Statements”), present
fairly the consolidated financial condition of MPM as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
fiscal year then ended. All such Financial Statements, including the related
schedules and notes thereto, have been prepared in accordance with U.S.
generally accepted accounting principles (“GAAP”) applied consistently
throughout the periods involved (except as disclosed therein).

32

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

(b)    The unaudited consolidated balance sheet of MPM as at March 31, 2014 and
the related consolidated statements of operations and of cash flows
(collectively, the “Q1 Financial Statements”), that MPM will file with the SEC
shall present fairly the consolidated financial condition of MPM as at March 31,
2014, and the consolidated results of its operations and its consolidated cash
flows for the quarter then ended. The consolidated EBITDA of MPM for the quarter
ended March 31, 2014 that is reflected in the Q1 Financial Statements (which
shall be presented in a manner consistent with the presentation of EBITDA in the
Financial Statements) shall be no less than $48,000,000.
Section 4.10    MPM SEC Documents and Disclosure Statement. Since December 31,
2012, MPM has filed all required reports, schedules, forms and statements with
the SEC. As of their respective dates, and giving effect to any amendments or
supplements thereto filed prior to the date of this Agreement, each of the MPM
SEC Documents that have been filed as of the date of this Agreement complied in
all material respects with the requirements of the Securities Act or the
Exchange Act applicable to such MPM SEC Documents. MPM has filed with the SEC
all Material Contracts that are required to be filed as exhibits to the MPM SEC
Documents that have been filed as of the date of this Agreement. No MPM SEC
Document that has been filed prior to the date of this Agreement, after giving
effect to any amendments or supplements thereto and to any subsequently filed
MPM SEC Documents, in each case filed prior to the date of this Agreement,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
Disclosure Statement as approved by the Bankruptcy Court will conform in all
material respects with Section 1125 of the Bankruptcy Code.
Section 4.11    Absence of Certain Changes. Since December 31, 2013, no event,
development, occurrence or change has occurred or exists that constitutes,
individually or in the aggregate, a Material Adverse Effect.
Section 4.12    No Violation; Compliance with Laws. (i) The Company is not in
violation of its charter or bylaws, and (ii) no Subsidiary of the Company is in
violation of its respective charter or bylaws or similar organizational document
in any material respect. Neither the Company nor any of its Subsidiaries is or
has been at any time since January 1, 2013 in violation of any Law or Order,
except for any such violations that have not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
There is and since January 1, 2013 has been no failure on the part of the
Company or MPM to comply in all material respects with the Sarbanes-Oxley Act
of 2002.
Section 4.13    Legal Proceedings. Other than the Chapter 11 Proceedings and any
adversary proceedings or contested motions commenced in connection therewith,
there are no material legal, governmental, administrative, judicial or
regulatory investigations, audits, actions,

33

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

suits, claims, arbitrations, demands, demand letters, claims, notices of
noncompliance or violations, or proceedings (“Legal Proceedings”) pending or, to
the Knowledge of the Company, threatened to which the Company or any of its
Subsidiaries is a party or to which any property of the Company or any of its
Subsidiaries is the subject, in each case that in any manner draws into question
the validity or enforceability of this Agreement, the Plan or the other
Transaction Agreements or that would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Section 4.14    Labor Relations.
Except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect: (a) there are no strikes or other labor
disputes pending or threatened against the Company or any of its Subsidiaries;
(b) the hours worked and payments made to employees of the Company or any of its
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Law dealing with such matters; and (c) all payments due from
the Company or any of its Subsidiaries or for which any claim may be made
against the Company or any of its Subsidiaries on account of wages and employee
health and welfare insurance and other benefits have been paid or accrued as a
liability on the books of the Company or such Subsidiaries to the extent
required by GAAP. Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, the consummation of
the transactions contemplated by the Transaction Agreements will not give rise
to a right of termination or right of renegotiation on the part of any union
under any material collective bargaining agreement to which the Company or any
of the Subsidiaries (or any predecessor) is a party or by which the Company or
any of the Subsidiaries (or any predecessor) is bound.
Section 4.15    Intellectual Property. Except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
(a) each of the Company and its Subsidiaries owns, or possesses the right to
use, all of the patents, patent rights, trademarks, service marks, trade names,
copyrights, mask works, domain names, and any and all applications or
registrations for any of the foregoing (collectively, “Intellectual Property
Rights”) that are reasonably necessary for the operation of their respective
businesses, without conflict with the rights of any other Person, (b) to the
Knowledge of the Company, none of the Company or any of its Subsidiaries nor any
Intellectual Property Right, proprietary right, product, process, method,
substance, part, or other material now employed, sold or offered by or
contemplated to be employed, sold or offered by such person, is interfering
with, infringing upon, misappropriating or otherwise violating any valid
Intellectual Property Rights of any Person, and (c) no claim or litigation
regarding any of the foregoing is pending or, to the Knowledge of the Company,
threatened.

34

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

Section 4.16    Title to Real and Personal Property.
(a)    Real Property. Each of the Company and its Subsidiaries has valid fee
simple title to, or valid leasehold interests in, or easements or other limited
property interests in, all its Real Properties and has valid title to its
personal property and assets, in each case, except for Permitted Liens and
except for defects in title that do not materially interfere with its ability to
conduct its business as currently conducted or to utilize such properties and
assets for their intended purposes and except where the failure to have such
title would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. All such properties and assets are free
and clear of Liens, other than Permitted Liens.
(b)    Leased Real Property. Each of the Company and its Subsidiaries has
complied with all obligations under all leases to which it is a party that have
not been rejected in the Chapter 11 Proceedings, except where the failure to
comply would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and all such leases are in full force and
effect, except leases in respect of which the failure to be in full force and
effect would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Each of the Company and its Subsidiaries
enjoys peaceful and undisturbed possession under all such leases, other than
leases in respect of which the failure to enjoy peaceful and undisturbed
possession would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(c)    Personal Property. Each of the Company and its Subsidiaries owns or
possesses the right to use, all Intellectual Property Rights and all licenses
and rights with respect to any of the foregoing used in the conduct of their
businesses, without any conflict (of which the Company or any of its
Subsidiaries has been notified in writing) with the rights of others, and free
from any burdensome restrictions on the present conduct of the Company and its
Subsidiaries, as the case may be, except where such conflicts and restrictions
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or.
Section 4.17    No Undisclosed Relationships. Other than Contracts or other
direct or indirect relationships between or among the Company and its
Subsidiaries or between the Subsidiaries of the Company and each other, there
are no Contracts or other direct or indirect relationships existing as of the
date hereof between or among the Company or any of its Subsidiaries, on the one
hand, and any director, officer or greater than 5% stockholder of the Company or
any of its Subsidiaries, on the other hand, that is required by the Exchange Act
to be described in MPM’s filings with the SEC and that is not so described,
except for the transactions contemplated by this Agreement. Any Contract
existing as of the date hereof between or among the Company or any of its
Subsidiaries, on the one hand, and any director, officer or greater than 5%
stockholder of the Company or any of its Subsidiaries, on the other hand, that
is required by the Exchange Act to be

35

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

described in MPM’s filings with the SEC is filed as an exhibit to, or
incorporated by reference as indicated in, the Annual Report on Form 10-K for
the year ended December 31, 2013 that MPM filed on April 11, 2014 or another MPM
SEC Document filed between April 11, 2014 and the date hereof.
Section 4.18    Licenses and Permits. The Company and its Subsidiaries possess
all licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate Governmental Entities
that are necessary for the ownership or lease of their respective properties and
the conduct of the business, except where the failure to possess, make or give
the same would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries (i) has received notice of any revocation or modification of any
such license, certificate, permit or authorization or (ii) has any reason to
believe that any such license, certificate, permit or authorization will not be
renewed in the ordinary course, except to the extent that any of the foregoing
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
Section 4.19    Environmental. Except as to matters that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect:
(a) no written notice, claim, demand, request for information, order, complaint
or penalty has been received by the Company or any of its Subsidiaries, and
there are no judicial, administrative or other actions, suits or proceedings
pending or, to the Knowledge of the Company, threatened which allege a violation
of or liability under any Environmental Laws, in each case relating to the
Company or any of its Subsidiaries, (b) the Company and each of its Subsidiaries
has all environmental permits, licenses and other approvals, and has maintained
all financial assurances, necessary for its operations to comply with all
applicable Environmental Laws and is, and during the term of all applicable
statutes of limitation, has been, in compliance with the terms of such permits,
licenses and other approvals and with all other applicable Environmental Laws,
(c) to the Knowledge of the Company, no Hazardous Material is located at, on or
under any property currently owned, operated or leased by the Company or any of
its Subsidiaries that would reasonably be expected to give rise to any cost,
liability or obligation of the Company or any of its Subsidiaries under any
Environmental Laws, (d) no Hazardous Material has been generated, owned,
treated, stored, handled or controlled by the Company or any of its Subsidiaries
and transported to or Released at any location in a manner that would reasonably
be expected to give rise to any cost, liability or obligation of the Company or
any of its Subsidiaries under any Environmental Laws, and (e) there are no
agreements in which the Company or any of its Subsidiaries has expressly assumed
or undertaken responsibility for any known or reasonably likely liability or
obligation of any other Person arising under or relating to Environmental Laws,
which in any such case has not been made available to the Commitment Parties
prior to the date hereof.

36

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

Section 4.20    Tax Returns.
(a)    Except as would not reasonably be expected to be material to the Company
and its Subsidiaries taken as a whole, (i) each of the Company and its
Subsidiaries has filed or caused to be filed all U.S. federal, state,
provincial, local and non-U.S. Tax returns required to have been filed by it and
(ii) taken as a whole, each such Tax return is true and correct;
(b)    Each of the Company and its Subsidiaries has timely paid or caused to be
timely paid all Taxes shown to be due and payable by it on the returns referred
to in clause (a) and all other Taxes or assessments (or made adequate provision
(in accordance with GAAP) for the payment of all Taxes due) with respect to all
periods or portions thereof ending on or before the date hereof (except Taxes or
assessments that are being contested in good faith by appropriate proceedings
and for which the Company and its Subsidiaries (as the case may be) has set
aside on its books adequate reserves in accordance with GAAP or with respect to
the Debtors only, except to the extent the non-payment thereof is permitted by
the Bankruptcy Code), which Taxes, if not paid or adequately provided for, would
reasonably be expected to be material to the Company and its Subsidiaries taken
as a whole; and
(c)    As of the date hereof, with respect to the Company and its Subsidiaries,
other than in connection with the Chapter 11 Proceedings and other than Taxes or
assessments that are being contested in good faith and are not expected to
result in significant adjustments that would be material to the Company and its
Subsidiaries taken as a whole, (i) there are no claims being asserted in writing
with respect to any Taxes, (ii) no presently effective waivers or extensions of
statutes of limitation with respect to Taxes have been given or requested and
(iii) no Tax returns are being examined by, and no written notification of
intention to examine has been received from, the IRS or any other Governmental
Entity.
Section 4.21    Employee Benefit Plans.
(a)    Except for the filing and pendency of the Chapter 11 Proceedings or
otherwise as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect: (i) each Company Plan and each
Multiemployer Plan is in compliance in all material respects with the applicable
provisions of ERISA and the Code; (ii) no Reportable Event has occurred during
the past five years as to which the Company or any of its Subsidiaries or any
ERISA Affiliate was required to file a report with the PBGC, other than reports
that have been filed; (iii) no Company Plan has any Unfunded Pension Liability
in excess of $35,000,000 with respect to any single Company Plan and in excess
of $75,000,000 with respect to all Company Plans in the aggregate; (iv) no ERISA
Event has occurred or is reasonably expected to occur; (v) none of the Company
or any of its Subsidiaries has engaged in a “prohibited transaction” (as defined
in Section 406 of ERISA and Section 4975 of the Code) in connection with any
employee pension benefit plan (as defined

37

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

in Section 3(2) of ERISA) that would subject the Company or any of its
Subsidiaries to Tax; (vi) with respect to any employee welfare plan (as defined
in Section 3(1) of ERISA) maintained or contributed to by the Company and its
Subsidiaries which provides benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA), the amount of the
projected plan benefits with respect to any such plan does not exceed the fair
market value of all assets allocable to such liabilities by more than
$50,000,000 and the amount of the projected benefit liabilities with respect to
all such plans does not exceed the fair market value of all assets allocable to
such liabilities by more than $75,000,000; and (vii) none of the Company or any
of its Subsidiaries or any ERISA Affiliate has incurred or is reasonably
expected to incur any Withdrawal Liability to any Multiemployer Plan.
(b)    Each of the Company and its Subsidiaries is in compliance (i) with all
applicable provisions of law and all applicable regulations and published
interpretations thereunder with respect to any employee pension benefit plan or
other employee benefit plan governed by the laws of a jurisdiction other than
the United States of America (“Foreign Pension Plan”) and (ii) with the terms of
any such Foreign Pension Plan, except, in each case, for such noncompliance that
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. All Contributions required to be made with respect to
any Foreign Pension Plan have been or will be timely made. Neither the Company
nor any of its Subsidiaries has incurred any material obligation in connection
with the termination of or withdrawal from any Foreign Pension Plan. The amount
of the accumulated plan benefits with respect to any single Foreign Pension Plan
does not exceed the fair market value of all plan assets allocable to such
liabilities by more than $35,000,000 and the amount of the accumulated plan
benefits with respect to all Foreign Pension Plans does not exceed the fair
market value of all plan assets allocable to such liabilities by more than
$100,000,000.
(c)    Except as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect, there are no pending, or to the
Knowledge of the Company, threatened claims (other than claims for benefits in
the normal course), sanctions, actions or lawsuits, asserted or instituted
against any Company Plan or any person as fiduciary or sponsor of any Company
Plan, that would reasonably be expected to result in liability to the Company or
its Subsidiaries or any ERISA Affiliate.
(d)    Within the last five years, no Company Plan of the Company, any of its
Subsidiaries or any ERISA Affiliate has been terminated, whether or not in a
“standard termination” as that term is used in Section 4041(b)(1) of ERISA, that
would reasonably be expected to result in liability to the Company, any of its
Subsidiaries or any ERISA Affiliate in excess of $35,000,000, nor has any
Company Plan of the Company, any of its Subsidiaries or any ERISA Affiliate
(determined at any time within the past five years) with Unfunded Pension
Liabilities been transferred outside of the “controlled group” (with the meaning
of Section 4001(a)(14) of ERISA)

38

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

that has or would reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Effect.
Section 4.22    Internal Control Over Financial Reporting. MPM has established
and maintains a system of internal control over financial reporting (as defined
in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) that
complies in all material respects with the requirements of the Exchange Act and
has been designed to provide reasonable assurances regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP. To the Knowledge of the Company, there are no
material weaknesses in MPM’s internal control over financial reporting as of the
date hereof.
Section 4.23    Disclosure Controls and Procedures. MPM maintains disclosure
controls and procedures (within the meaning of Rules 13a-15(e) and 15d-15(e)
promulgated under the Exchange Act) designed to ensure that information required
to be disclosed by MPM in the reports that it files and submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms, including that information
required to be disclosed by MPM in the reports that it files and submits under
the Exchange Act is accumulated and communicated to management of MPM as
appropriate to allow timely decisions regarding required disclosure.
Section 4.24    Material Contracts. All Material Contracts are valid, binding
and enforceable by and against the Company or its relevant Subsidiary (except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws limiting creditors’ rights generally or by equitable principles
relating to enforceability), and no written notice to terminate, in whole or
part, any Material Contract has been delivered to the Company or any of its
Subsidiaries. Other than as a result of the filing of the Chapter 11
Proceedings, neither the Company nor any of its Subsidiaries nor, to the
Knowledge of the Company, any other party to any Material Contract, is in
material default or breach under the terms thereof. Each Material Contacts to
which the Company or any Subsidiary is a party as of the date hereof is filed as
an exhibit to, or incorporated by reference as indicated in, the Annual Report
on Form 10-K for the year ended December 31, 2013 that MPM filed on April 11,
2014 or another MPM SEC Document filed between April 11, 2014 and the date
hereof.
Section 4.25    No Unlawful Payments. Since January 1, 2013, neither the Company
nor any of its Subsidiaries nor, to the Knowledge of the Company, any of their
respective directors, officers or employees has in any material respect:
(a) used any funds of the Company or any of its Subsidiaries for any unlawful
contribution, gift, entertainment or other unlawful expense, in each case
relating to political activity; (b) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from corporate funds;
(c) violated or is in violation

39

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

of any provision of the U.S. Foreign Corrupt Practices Act of 1977; or (d) made
any bribe, rebate, payoff, influence payment, kickback or other similar unlawful
payment.
Section 4.26    Compliance with Money Laundering Laws. The operations of the
Company and its Subsidiaries are and, since January 1, 2013 have been at all
times, conducted in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the U.S. Currency and
Foreign Transactions Reporting Act of 1970, the money laundering statutes of all
jurisdictions in which the Company and its Subsidiaries operate (and the rules
and regulations promulgated thereunder) and any related or similar Laws
(collectively, the “Money Laundering Laws”) and no material Legal Proceeding by
or before any Governmental Entity or any arbitrator involving the Company or any
of its Subsidiaries with respect to Money Laundering Laws is pending or, to the
Knowledge of the Company, threatened.
Section 4.27    Compliance with Sanctions Laws. Neither the Company nor any of
its Subsidiaries nor, to the Knowledge of the Company, any of their respective
directors, officers, employees or other Persons acting on their behalf with
express authority to so act is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department. Neither the Company nor MPM will directly or indirectly use the
proceeds of the Rights Offerings, or lend, contribute or otherwise make
available such proceeds to any Subsidiary, joint venture partner or other
Person, for the purpose of financing the activities of any Person that, to the
Knowledge of the Company, is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department.
Section 4.28    No Broker’s Fees. Neither the Company nor any of its
Subsidiaries is a party to any Contract with any Person (other than this
Agreement) that would give rise to a valid claim against the Commitment Parties
for a brokerage commission, finder’s fee or like payment in connection with the
Rights Offerings or the sale of the Unsubscribed Shares.
Section 4.29    Takeover Statutes. No Takeover Statute is applicable to this
Agreement, the Backstop Commitment and the other transactions contemplated by
this Agreement. As of the entry of the BCA Approval Order, the board of
directors of Reorganized Momentive shall have authorized and approved the
issuance of the New Common Stock and the Rights Offerings Shares pursuant to
this Agreement, the Plan and the Rights Offerings.
Section 4.30    Investment Company Act. Neither the Company nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended.
Section 4.31    Insurance. The Company and its Subsidiaries have insured their
properties and assets against such risks and in such amounts as are customary
for companies engaged in similar businesses. All premiums due and payable in
respect of material insurance policies

40

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

maintained by the Company and its Subsidiaries have been paid. The Company
reasonably believes that the insurance maintained by or on behalf of the Company
and its Subsidiaries is adequate in all material respects. As of the date
hereof, to the Knowledge of the Company, neither the Company nor any of its
Subsidiaries has received notice from any insurer or agent of such insurer with
respect to any material insurance policies of the Company and its Subsidiaries
of cancellation or termination of such policies, other than such notices which
are received in the ordinary course of business or for policies that have
expired in accordance with their terms.
Section 4.32    Intermediate HoldCo and Top HoldCo Corporate Power and
Authority. Each of Intermediate HoldCo and Top HoldCo, when incorporated by the
Debtors, will have the requisite corporate power and authority, subject to entry
of the Confirmation Order, to consummate the transactions contemplated in the
Plan, to enter into, execute and deliver all agreements to which each will be a
party as contemplated by the Plan (the “HoldCo Transaction Agreements”) and to
perform their respective obligations under each of the HoldCo Transaction
Agreements. Subject to the receipt of the Confirmation Order, the execution and
delivery of the HoldCo Transaction Agreements and the consummation of the
transactions contemplated thereby will be duly authorized by all requisite
corporate action on behalf of each of Intermediate HoldCo and Top HoldCo, and no
other corporate proceedings on the part of either Intermediate HoldCo or Top
HoldCo will be necessary to authorize any of the HoldCo Transaction Agreements
or to consummate the transactions contemplated thereby.
Section 4.33    Authorized and Issued Capital Stock of Top HoldCo.
(a)    Immediately after the Internal Reorganization, (i) the authorized capital
stock of Top HoldCo will consist of 70,000,000 shares of Top HoldCo Common
Stock, (ii) the outstanding capital stock of Top HoldCo will consist of
50,000,000 issued and outstanding shares of Top HoldCo Common Stock (which shall
be the number of Total Outstanding Shares) plus any shares issued after the
Effective Date in accordance with the new management incentive plan in
accordance with the Term Sheet, (iii) no shares of Top HoldCo Common Stock will
be held by Top HoldCo in its treasury, (iv) shares of Top HoldCo Common Stock
will be reserved for issuance upon exercise of stock options and other rights to
purchase or acquire shares of Top HoldCo Common Stock granted in connection with
any employment arrangement entered into in accordance with Section 6.3, and
(v) no warrants to purchase shares of Top HoldCo Common Stock will be issued and
outstanding.
(b)    Immediately after the Internal Reorganization, all issued and outstanding
shares of Top HoldCo Common Stock will have been duly authorized and validly
issued and will be fully paid and non-assessable, and will not be subject to any
preemptive rights (except as set forth in the Registration Rights Agreement and
the Reorganized Momentive Corporate Documents).

41

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

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT PARTIES
Each Commitment Party represents and warrants as to itself only (unless
otherwise set forth herein, as of the date of this Agreement and as of the
Closing Date) as set forth below.
Section 5.1    Incorporation. Such Commitment Party is a legal entity duly
organized, validly existing and, if applicable, in good standing (or the
equivalent thereof) under the Laws of its jurisdiction of incorporation or
organization.
Section 5.2    Corporate Power and Authority. Such Commitment Party has the
requisite power and authority (corporate or otherwise) to enter into, execute
and deliver this Agreement and each other Transaction Agreements to which such
Commitment Party is a party and to perform its obligations hereunder and
thereunder and has taken all necessary action (corporate or otherwise) required
for the due authorization, execution, delivery and performance by it of this
Agreement and the other Transaction Agreements.
Section 5.3    Execution and Delivery. This Agreement and each other Transaction
Agreement to which such Commitment Party is a party (a) has been, or prior to
its execution and delivery will be, duly and validly executed and delivered by
such Commitment Party and (b) upon entry of the BCA Consummation Approval Order
and assuming due and valid execution and delivery hereof and thereof by the
Company and the other Debtors (as applicable), will constitute valid and legally
binding obligations of such Commitment Party, enforceable against such
Commitment Party in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws limiting creditors’ rights generally or by equitable principles
relating to enforceability.
Section 5.4    No Conflict. Assuming that the consents referred to in
clauses (a) and (b) of Section 5.5 are obtained, the execution and delivery by
such Commitment Party of this Agreement and each other Transaction Agreement to
which such Commitment Party is a party, the compliance by such Commitment Party
with all of the provisions hereof and thereof and the consummation of the
transactions contemplated herein and therein (a) will not conflict with, or
result in a breach or violation of, any of the terms or provisions of, or
constitute a default under (with or without notice or lapse of time, or both),
or result in the acceleration of, or the creation of any Lien under, any
Contract to which such Commitment Party is a party or by which such Commitment
Party is bound or to which any of the properties or assets of such Commitment
Party are subject, (b) will not result in any violation of the provisions of the
certificate of incorporation or bylaws (or comparable constituent documents) of
such Commitment Party and (c) will not result in any material violation of any
Law or Order applicable to such Commitment Party or any of its properties,
except in each of the cases described in clauses (a) and (c), for any conflict,
breach,

42

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

violation, default, acceleration or Lien which would not reasonably be expected,
individually or in the aggregate, to prohibit, materially delay or materially
and adversely impact such Commitment Party’s performance of its obligations
under this Agreement.
Section 5.5    Consents and Approvals. No consent, approval, authorization,
order, registration or qualification of or with any Governmental Entity having
jurisdiction over such Commitment Party or any of its properties is required for
the execution and delivery by such Commitment Party of this Agreement and each
other Transaction Agreement to which such Commitment Party is a party, the
compliance by such Commitment Party with the provisions hereof and thereof and
the consummation of the transactions (including the purchase by such Commitment
Party of its Backstop Commitment Percentage of the Unsubscribed Shares and its
portion of the Rights Offering Shares) contemplated herein and therein, except
(a) any consent, approval, authorization, order, registration or qualification
which, if not made or obtained, would not reasonably be expected, individually
or in the aggregate, to prohibit, materially delay or materially and adversely
impact such Commitment Party’s performance of its obligations under this
Agreement and each other Transaction Agreement to which such Commitment Party is
a party and (b) filings, notifications, authorizations, approvals, consents,
clearances or termination or expiration of all applicable waiting periods under
any Antitrust Laws in connection with the transactions contemplated by this
Agreement.
Section 5.6    No Registration. Such Commitment Party understands that (a) the
Unsubscribed Shares, the 4(a)(2) Rights Offering Shares and any shares of New
Common Stock issued to such Commitment Party in satisfaction of the Commitment
Premium, and any shares of Top HoldCo Common Stock into which such shares are
exchanged in the Internal Reorganization, have not been registered under the
Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends on, among
other things, the bona fide nature of the investment intent and the accuracy of
such Commitment Party’s representations as expressed herein or otherwise made
pursuant hereto, and (b) the foregoing shares cannot be sold unless subsequently
registered under the Securities Act or an exemption from registration is
available.
Section 5.7    Purchasing Intent. Such Commitment Party is acquiring the
Unsubscribed Shares, the 4(a)(2) Rights Offering Shares and any shares of New
Common Stock issued to such Commitment Party in satisfaction of the Commitment
Premium, and any shares of Top HoldCo Common Stock into which such shares are
exchanged in the Internal Reorganization, for its own account, not as a nominee
or agent, and not with the view to, or for resale in connection with, any
distribution thereof not in compliance with applicable securities Laws, and such
Commitment Party has no present intention of selling, granting any participation
in, or otherwise distributing the same, except in compliance with applicable
securities Laws.

43

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

Section 5.8    Sophistication; Investigation. Such Commitment Party has such
knowledge and experience in financial and business matters such that it is
capable of evaluating the merits and risks of its investment in the Unsubscribed
Shares, the 4(a)(2) Rights Offering Shares and any shares of New Common Stock
issued to such Commitment Party in satisfaction of the Commitment Premium, and
any shares of Top HoldCo Common Stock into which such shares are exchanged in
the Internal Reorganization. Such Commitment Party is an “accredited investor”
within the meaning of Rule 501(a) of the Securities Act and a “qualified
institutional buyer” within the meaning of Rule 144A of the Securities Act. Such
Commitment Party understands and is able to bear any economic risks associated
with such investment (including the necessity of holding such shares for an
indefinite period of time). Such Commitment Party has conducted and relied on
its own independent investigation of, and judgment with respect to, the Company
and its Subsidiaries and the advice of its own legal, tax, economic and other
advisors. Except for the representations and warranties expressly set forth in
this Agreement or any other Transaction Agreement, such Commitment Party
disclaims reliance on any representations or warranties, either express or
implied, by or on behalf of the Company or any of its Subsidiaries. Such
Commitment Party acknowledges and agrees that any financial forecasts or
projections relating to the Company or any of its Subsidiaries prepared by or on
behalf of the Company of any of its Subsidiaries have been provided to such
Commitment Party with the understanding and agreement that neither the Company
nor any of its Subsidiaries is making any representation or warranty with
respect to such forecasts or projections and that actual future results may vary
from such forecasts or projections based upon numerous factors.
Section 5.9    No Broker’s Fees. Such Commitment Party is not a party to any
Contract with any Person (other than this Agreement and any Contract giving rise
to the Expense Reimbursement hereunder) that would give rise to a valid claim
against the Company or any of its Subsidiaries for a brokerage commission,
finder’s fee or like payment in connection with the Rights Offerings or the sale
of the Unsubscribed Shares.
Section 5.10    Votable Claims.
(a)    As of the Petition Date, such Commitment Party and its Affiliates were,
collectively, the beneficial owner of, or the investment advisor or manager for
the beneficial owner of, the aggregate principal amount of Votable Claims as set
forth opposite such Commitment Party’s name under the column titled “Votable
Claims” on Schedule 2 attached hereto.
(b)    As of the date hereof, such Commitment Party or its applicable Affiliates
has the full power to vote, dispose of and compromise at least the aggregate
principal amount of the Votable Claims set forth opposite such Commitment
Party’s name under the column titled “Votable Claims” on Schedule 2 attached
hereto.

44

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

(c)    Other than the RSA, such Commitment Party has not entered into any
Contract to Transfer, in whole or in part, any portion of its right, title or
interest in such Votable Claims where such Transfer would prohibit such
Commitment Party from complying with the terms of this Agreement or the RSA.
Section 5.11    Arm’s-Length. Such Commitment Party acknowledges and agrees that
(a) the Company and its Subsidiaries are acting solely in the capacities of
arm’s-length contractual counterparties to such Commitment Party with respect to
the transactions contemplated hereby (including in connection with determining
the terms of the Rights Offerings) and not as a financial advisor or a fiduciary
to, or an agent of, such Commitment Party and (b) neither the Company nor any of
its Subsidiaries is advising such Commitment Party as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction.
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1    BCA Consummation Approval Order and Solicitation Order. The
Company shall use its reasonable best efforts, consistent with the RSA, to
(a) obtain the entry of the BCA Approval Order, RSA Approval Order, Plan
Solicitation Order, Confirmation Order and BCA Consummation Approval Order and
(b) cause the Plan Solicitation Order, RSA Approval Order, Confirmation Order
and BCA Consummation Approval Order to become a Final Order (and request that
such Orders be effective immediately upon entry by the Bankruptcy Court pursuant
to a waiver of Rules 3020 and 6004(h) of the Bankruptcy Rules, as applicable),
in each case, as soon as reasonably practicable following the filing of the
motion seeking entry of such Orders (for the avoidance of doubt, entry of the
BCA Consummation Approval Order will be sought at the Confirmation Hearing). The
Company shall provide to each of the Commitment Parties and its counsel copies
of the proposed motion seeking entry of the BCA Approval Order, RSA Approval
Order, Plan Solicitation Order, Confirmation Order and BCA Consummation Approval
Order and a copy of the proposed Plan Solicitation Order, and a reasonable
opportunity to review and comment on such motions and such Order prior to such
motions and such Order being filed with the Bankruptcy Court, and such motions
and such Order must be in form and substance mutually satisfactory to the
Requisite Commitment Parties and the Company. Unless otherwise determined by the
Requisite Commitment Parties, counsel to the Commitment Parties will provide the
Company and its counsel with copies of the proposed BCA Approval Order, RSA
Approval Order and BCA Consummation Approval Order, and such Orders shall be in
form and substance mutually satisfactory to the Requisite Commitment Parties and
the Company. Any amendments, modifications, changes or supplements to any of the
BCA Approval Order, RSA Approval Order, Plan Solicitation Order, BCA
Consummation Approval Order and Confirmation Order, and any of the motions
seeking entry of

45

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

such Orders, shall be in form and substance mutually satisfactory to the
Requisite Commitment Parties and the Company.
Section 6.2    Confirmation Order; Plan and Disclosure Statement. The Debtors
shall use their respective reasonable best efforts to obtain entry of the
Confirmation Order. The Company shall provide to each of the Commitment Parties
and its counsel a copy of the proposed Plan and the Disclosure Statement and any
proposed amendment, modification, supplement or change to the Plan or the
Disclosure Statement and a reasonable opportunity to review and comment on such
documents and each such amendment, modification, supplement or change to the
Plan or the Disclosure Statement must be in form and substance mutually
satisfactory to the Requisite Commitment Parties and the Company. The Company
shall provide to each of the Commitment Parties and its counsel a copy of the
proposed Confirmation Order (together with copies of any briefs, pleadings and
motions related thereto) and a reasonable opportunity to review and comment on
such Order, briefs, pleadings and motions prior to such Order, briefs, pleadings
and motions being filed with the Bankruptcy Court, and such Order, briefs,
pleadings and motions must be in form and substance mutually satisfactory to the
Requisite Commitment Parties and the Company.
Section 6.3    Conduct of Business. Except as set forth in this Agreement
(including with respect to the Internal Reorganization) or with the prior
written consent of Requisite Commitment Parties (requests for which, including
related information, shall be directed to the counsel and financial advisors to
the Ad Hoc Committee and to Apollo), during the period from the date of this
Agreement to the earlier of the Closing Date and the date on which this
Agreement is terminated in accordance with its terms (the “Pre-Closing Period”),
(a) the Company shall, and shall cause each of its Subsidiaries to, carry on its
business in the ordinary course and use its reasonable best efforts to
(i) preserve intact its business, (ii) keep available the services of its
officers and employees, (iii) preserve its material relationships with
customers, suppliers, licensors, licensees, distributors and others having
material business dealings with the Company or its Subsidiaries in connection
with their business and (iv) with respect to MPM, file its financial statements
with the SEC within the time periods required under the Exchange Act, and
(b) the Company shall not, and shall not permit any of its Subsidiaries to,
enter into any transaction that is material to their business other than (A)
transactions in the ordinary course of business, (B) other transactions after
prior notice to the Commitment Parties to implement tax planning which
transactions are not reasonably expected to materially adversely affect any
Commitment Party, (C) transactions expressly contemplated by the Transaction
Agreements, and (D) such other transactions set forth in Section 6.3 of the
Company Disclosure Schedules.
For the avoidance of doubt, the following shall be deemed to occur outside of
the ordinary course of business of the Company and shall require the prior
written consent of the Requisite Commitment Parties unless the same would
otherwise be permissible under the preceding clauses (B), (C) or (D): (1) any
transaction that is with any Person that, collectively with its Affiliates,

46

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

including any Affiliated Funds, beneficially owns more than 20% of the equity in
any Debtor (other than the Company and its Subsidiaries) and involves aggregate
payments or value in excess of $1,750,000, (2) any amendment, modification,
termination, waiver, supplement, restatement or other change to the SSA,
including any changes to the Allocation Percentage (as defined in the SSA) in
the SSA or any assumption of the SSA in connection with the Chapter 11
Proceedings, (3) any amendment, modification, termination, waiver, supplement,
restatement or other change to any Material Contract or any assumption of any
Material Contract in connection with the Chapter 11 Proceedings (other than any
Material Contracts that are otherwise addressed by clause (5) below), (4) entry
into, or any amendment, modification, termination (other than for cause),
waiver, supplement or other change to, any employment agreement to which the
Company or any of its Subsidiaries is a party or any assumption of any such
employment agreement in connection with the Chapter 11 Proceedings, other than
(x) with respect to employment agreements entered into in the ordinary course of
business consistent with past practice that do not contain a change of control
or similar provision or (y) entry into, or any amendment, modification,
termination, waiver, supplement or other change to, any employment agreements
entered into between MSC or any of its Subsidiaries on the one hand and any
employee of MSC or any of its Subsidiaries on the other hand who perform
services for the Company or any of its Subsidiaries pursuant to the SSA or (5)
the adoption or amendment of any management incentive or equity plan by any of
the Debtors except for (x) such adoptions or amendments that do not require
approval of the Bankruptcy Court and under which the payments shall not exceed
$4,000,000 in the aggregate or $150,000 in the aggregate for any individual
(provided, that, to the extent any individual amendment or adoption involves
payments that equal or exceed $500,000 in the aggregate, the Debtors will
provide information concerning such adoption or amendment in advance of, or as
promptly as practicable after, their implementation) and (y) the new management
incentive plan in accordance with the Term Sheet. Except as otherwise provided
in this Agreement, nothing in this Agreement shall give the Commitment Parties,
directly or indirectly, any right to control or direct the operations of the
Company and its Subsidiaries prior to the Closing Date. Prior to the Closing
Date, the Company and its Subsidiaries shall exercise, consistent with the terms
and conditions of this Agreement, complete control and supervision of the
business of the Company and its Subsidiaries.
Section 6.4    Access to Information; Confidentiality.
(a)    Subject to applicable Law and Section 6.4(b), upon reasonable notice
during the Pre-Closing Period, the Company shall (and shall cause its
Subsidiaries to) afford the Commitment Parties and their Representatives upon
request reasonable access, during normal business hours and without unreasonable
disruption or interference with the Company’s and its Subsidiaries’ business or
operations, to the Company’s and its Subsidiaries’ employees, properties, books,
Contracts and records and, during the Pre-Closing Period, the Company shall (and
shall cause its Subsidiaries to) furnish promptly to such parties all reasonable
information concerning the Company’s and its Subsidiaries’ business, properties
and personnel as may reasonably be

47

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

requested by any such party, provided that the foregoing shall not require the
Company (a) to permit any inspection, or to disclose any information, that in
the reasonable judgment of the Company would cause the Company or any of its
Subsidiaries to violate any of their respective obligations with respect to
confidentiality to a third party if the Company shall have used its reasonable
best efforts to obtain, but failed to obtain, the consent of such third party to
such inspection or disclosure, (b) to disclose any legally privileged
information of the Company or any of its Subsidiaries or (c) to violate any
applicable Laws or Orders. All requests for information and access made in
accordance with this Section 6.4 shall be directed to an executive officer of
the Company or such Person as may be designated by the Company’s executive
officers.
(b)    From and after the date hereof until the date that is one (1) year after
the expiration of the Pre-Closing Period, each Commitment Party shall, and shall
cause its Representatives to, (i) keep confidential and not provide or disclose
to any Person any documents or information received or otherwise obtained by
such Commitment Party or its Representatives pursuant to Section 6.4(a), Section
6.5 or in connection with a request for approval pursuant to Section 6.3 (except
that provision or disclosure may be made to any Affiliate or Representative of
such Commitment Party who needs to know such information for purposes of this
Agreement or the other Transaction Agreements and who agrees to observe the
terms of this Section 6.4(b)), and (ii) not use such documents or information
for any purpose other than in connection with this Agreement or the other
Transaction Agreements or the transactions contemplated hereby or thereby.
Notwithstanding the foregoing, the immediately preceding sentence shall not
apply in respect of documents or information that (i) is now or subsequently
becomes generally available to the public through no violation of this Section
6.4(b), (ii) becomes available to a Commitment Party or its Representatives on a
non‑confidential basis from a source other than the Company or any of its
Subsidiaries or any of their respective Representatives, (iii) becomes available
to a Commitment Party or its Representatives through document production or
discovery in connection with the Chapter 11 Proceedings or other judicial or
administrative process, but subject to any confidentiality restrictions imposed
by the Chapter 11 Proceedings or other such process); or (iv) such Commitment
Party or any Representative thereof is required to disclose pursuant to judicial
or administrative process or pursuant to applicable law or applicable securities
exchange rules; provided, that, such Commitment Party or such Representative
shall provide the Company with prompt written notice of such legal compulsion
and cooperate with the Company to obtain a protective order or similar remedy to
cause such information or documents not to be disclosed, including interposing
all available objections thereto, at the Company’s sole cost and expense;
provided, further, that, in the event that such protective order or other
similar remedy is not obtained, the disclosing party shall furnish only that
portion of such information or documents that is legally required to be
disclosed and shall exercise its reasonable best efforts (at the Company’s sole
cost and expense) to obtain assurance that confidential treatment will be
accorded such disclosed information or documents.

48

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

Section 6.5    Financial Information.
(a)    During the Pre-Closing Period, the Company shall deliver to the counsel
and financial advisors to the Ad Hoc Committee and to Apollo, and to each
Commitment Party that so requests, all statements and reports the Company is
required to deliver to the DIP Term Agent pursuant to Section 5.04 of the DIP
Term Loan and to the DIP ABL Agent pursuant to Section 5.04 of the DIP ABL Loan
(each as in effect on the date hereof) (the “Financial Reports”).  Neither any
waiver by the parties to the DIP Term Loan or DIP ABL Loan of their right to
receive the Financial Reports nor any amendment or termination of the DIP Term
Loan or DIP ABL Loan shall affect the Company’s obligation to deliver the
Financial Reports to the Commitment Parties in accordance with the terms of this
Agreement.
(b)    Information required to be delivered pursuant to Section 5.04 of the DIP
Term Loan and pursuant to Section 5.04 of the DIP ABL Loan (each as in effect on
the date hereof) shall be deemed to have been delivered in accordance with
Section 6.5(a) on the date on which the Company provides written notice to the
counsel and financial advisors to the Ad Hoc Committee, and to each Commitment
Party that so requests, such information that such information is available via
the EDGAR system of the SEC on the internet (to the extent such information has
been posted or is available as described in such notice).
(c)    Each Commitment Party agrees that all information and reports delivered
pursuant to this Section 6.5 shall be subject to the provisions of Section
6.4(b).
Section 6.6    Reasonable Best Efforts.
(a)    Without in any way limiting any other respective obligation of the
Company or any Commitment Party in this Agreement, each Party shall use
reasonable best efforts to take or cause to be taken all actions, and do or
cause to be done all things, reasonably necessary, proper or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
and the Plan, including using reasonable best efforts in:
(i)    timely preparing and filing all documentation reasonably necessary to
effect all necessary notices, reports and other filings of such Person and to
obtain as promptly as practicable all consents, registrations, approvals,
permits and authorizations necessary or advisable to be obtained from any third
party or Governmental Entity;
(ii)    defending any Legal Proceedings in any way challenging (A) this
Agreement, the Plan or any other Transaction Agreement, (B) the BCA Approval
Order, RSA Approval Order, Plan Solicitation Order, Confirmation Order or BCA
Consummation Approval Order or (C) the consummation of the transactions
contemplated hereby and

49

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

thereby, including seeking to have any stay or temporary restraining Order
entered by any Governmental Entity vacated or reversed; and
(iii)    working together in good faith to finalize the Reorganized Momentive
Corporate Documents, Transaction Agreements and all other documents relating
thereto for timely inclusion in the Plan and filing with the Bankruptcy Court.
(b)    Subject to applicable Laws relating to the exchange of information, the
Commitment Parties and the Company shall have the right to review in advance,
and to the extent practicable each will consult with the other on all of the
information relating to Commitment Parties or the Company, as the case may be,
and any of their respective Subsidiaries, that appears in any filing made with,
or written materials submitted to, any third party and/or any Governmental
Entity in connection with the transactions contemplated by this Agreement or the
Plan; provided, however, that the Commitment Parties are not required to provide
for review in advance declarations or other evidence submitted in connection
with any filing with the Bankruptcy Court. In exercising the foregoing rights,
the Parties shall act reasonably and as promptly as practicable.
(c)    Without limitation to Sections 6.1 and 6.2, to the extent exigencies
permit, the Company shall provide or cause to be provided a draft of all
motions, applications, pleadings, schedules, Orders, reports or other material
papers (including all material memoranda, exhibits, supporting affidavits and
evidence and other supporting documentation) in the Chapter 11 Proceedings
relating to or affecting the Transaction Agreements in advance of filing the
same with the Bankruptcy Court. All such motions, applications, pleadings,
schedules, Orders, reports and other material papers shall be in form and
substance mutually satisfactory to the Requisite Commitment Parties and the
Company.
(d)    Nothing contained in this Section 6.6 shall limit the ability of any
Commitment Party to consult with the Debtors, to appear and be heard, or to file
objections, concerning any matter arising in the Chapter 11 Proceedings to the
extent not inconsistent with the RSA.
Section 6.7    Transfers and Acquisitions of Votable Claims.
(a)    Each Commitment Party shall deliver written notice of all Transfers and
acquisitions, whether direct or indirect, of Votable Claims, whether through a
derivative instrument or otherwise, made by it and the aggregate principal
amount of Votable Claims held by it immediately following such Transfer or
acquisition to the Company, Milbank, Tweed, Hadley & McCloy LLP, Houlihan Lokey
Capital, Inc., Akin Gump Strauss Hauer & Feld LLP and Lazard Frères & Co LLC, in
each case, within two (2) Business Days of the date of such Transfer or
acquisition.

50

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

(b)    If any Commitment Party (together with all of its Affiliates,
collectively, the “Transferring Commitment Party”) Transfers any Votable Claims
in accordance with the terms and conditions hereof (other than to a Related
Purchaser of such Transferring Commitment Party), each other Commitment Party
that is a member of the Ad Hoc Committee (the “Non-Transferring Commitment
Party”) may elect in its sole discretion, within five (5) Business Days of
receipt of written notice of such Transfer pursuant to Section 6.7(a), to assume
its Assumable Share of the Assumable Amount of the Transferring Commitment
Party’s Backstop Commitment. To the extent that not all Non-Transferring
Commitment Parties have elected to assume their Assumable Share of the Assumable
Amount, each Commitment Party that elected to assume its Assumable Share of the
Assumable Amount may elect to assume the remaining portion of the Assumable
Amount on a pro rata basis (determined by comparing the Backstop Commitment of
such Commitment Party that elected to assume its Assumable Share at the time of
such election against the aggregate Backstop Commitment of all Commitment
Parties so electing to assume such remaining portion). Any Backstop Commitment
assumed by a Non-Transferring Commitment Party in accordance with this Section
6.7(b) shall be included, among other things, in the determination of (x) the
Backstop Commitment Percentage of such Commitment Party for purposes of
Section 3.1 and (y) the Backstop Commitment of such party for purposes of the
definition of Requisite Commitment Parties. If any Commitment Party that is a
Transferring Commitment Party no longer has any Backstop Commitment following a
Transfer effected pursuant to this Section 6.7, it shall automatically cease to
be a Party and will no longer have any rights as a Commitment Party (and, for
the avoidance of doubt, shall not be entitled to receive any portion of the
Commitment Premium).
(c)    Each Commitment Party agrees that any Transfer of any Votable Claims or
any other Claims or equity interests in the Debtors that does not comply with
the terms and procedures set forth in this Section 6.7 shall be deemed void ab
initio. To the extent any Commitment Party (i) beneficially acquires additional
Votable Claims, (ii) beneficially holds or acquires any other Claims or
(iii) beneficially holds or acquires any equity interests in the Debtors, each
such Commitment Party agrees that such Claims shall be subject to this
Section 6.7.
Section 6.8    Emergence Credit Facilities. The Debtors agree to work in good
faith to obtain exit financing in amounts and upon terms and conditions that,
taken as a whole, are more favorable to Reorganized Momentive and its
Subsidiaries than the exit facility currently proposed by J.P. Morgan Securities
LLC, JPMorgan Chase Bank, N.A., Citigroup Global Markets Inc., Credit Suisse AG,
Credit Suisse Securities (USA) LLC pursuant to that certain Commitment Letter
dated April 3, 2014 (the “Currently Proposed Terms”) and that is otherwise in
form and substance mutually satisfactory to the Requisite Commitment Parties and
the Company (the “Emergence Credit Facilities”), it being understood that if the
Debtors are unable to obtain exit financing in amounts and upon terms and
conditions that, taken as a whole, are more favorable to Reorganized Momentive
and its Subsidiaries than the Currently Proposed Terms, then the Debtors shall
obtain exit financing on the Currently Proposed Terms. Each of

51

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

the Commitment Parties shall have the right to receive, upon reasonable request,
an update by the Company on, and a summary of, any material meetings,
discussions or negotiations relating to the Emergence Credit Facilities.
Section 6.9    New Board of Directors. On the Closing Date, the composition of
the board of directors of Reorganized Momentive shall be as described in the
Term Sheet.
Section 6.10    Registration Rights Agreement; Reorganized Momentive Corporate
Documents; SSA Amendment; Rights Offering Procedures.
(a)    The Plan will provide that from and after the Closing Date each holder of
Top HoldCo Common Stock receiving “control” or “restricted” securities shall be
entitled to registration rights pursuant to a registration rights agreement,
which agreement shall be in form and substance consistent with the terms set
forth in the Term Sheet and mutually satisfactory to the Requisite Commitment
Parties and the Company (the “Registration Rights Agreement”). A form of the
Registration Rights Agreement shall be filed with the Bankruptcy Court as part
of the Plan or an amendment thereto.
(b)    The Plan will provide that on the Effective Date (i) the Reorganized
Momentive Corporate Documents will be approved, adopted and effective and (ii)
the amendment to the SSA to be executed and delivered to the Commitment Parties
during the Pre-Closing Period, in form and substance consistent with the terms
set forth in the Term Sheet and mutually satisfactory to the Requisite
Commitment Parties and the Company, shall be assumed pursuant to the Plan and in
connection with the Chapter 11 Proceedings and become effective in accordance
with its terms (the “SSA Amendment”). Notwithstanding anything to the contrary
set forth in Section 6.3, the SSA shall be assumed pursuant to the Plan, with
such assumption being (x) contingent upon the execution and assumption of the
SSA Amendment and (y) deemed effective upon and contingent on the occurrence of
the Effective Date. Forms of the Reorganized Momentive Corporate Documents and
the SSA Amendment shall be filed with the Bankruptcy Court as part of the Plan
or an amendment thereto.
(c)    The Parties will use their reasonable best efforts to finalize the form
of Rights Offering Procedures and file them with the Bankruptcy Court on or
prior to May 26, 2014.
Section 6.11    Form D and Blue Sky. Following the Closing, the Company shall
timely file a Form D with the SEC with respect to the Unsubscribed Shares issued
hereunder to the extent required under Regulation D of the Securities Act and
shall provide, upon request, a copy thereof to each Commitment Party. The
Company shall, on or before the Closing Date, take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for, or
to qualify the Unsubscribed Shares issued hereunder and any shares of Top HoldCo
Common Stock into which such shares are exchanged in the Internal Reorganization
for, sale to the

52

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

Commitment Parties at the Closing Date pursuant to this Agreement under
applicable securities and “Blue Sky” Laws of the states of the United States (or
to obtain an exemption from such qualification) and any applicable foreign
jurisdictions, and shall provide evidence of any such action so taken to the
Commitment Parties on or prior to the Closing Date. The Company shall timely
make all filings and reports relating to the offer and sale of the Unsubscribed
Shares issued hereunder required under applicable securities and “Blue Sky” Laws
of the states of the United States following the Closing Date. The Company shall
pay all fees and expenses in connection with satisfying its obligations under
this Section 6.11.
Section 6.12    No Integration; No General Solicitation. Neither the Company nor
any of its affiliates (as defined in Rule 501(b) of Regulation D promulgated
under the Securities Act) will, directly or through any agent, sell, offer for
sale, solicit offers to buy or otherwise negotiate in respect of, any security
(as defined in the Securities Act), that is or will be integrated with the sale
of the 4(a)(2) Rights Offering Shares, the Rights Offerings and this Agreement
in a manner that would require registration of the New Common Stock,
Intermediate HoldCo Common Stock or Top HoldCo Common Stock to be issued by the
Company on the Effective Date under the Securities Act. None of the Company or
any of its affiliates or any other Person acting on its or their behalf will
solicit offers for, or offer or sell, any 4(a)(2) Rights Offering Shares by
means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D promulgated under the Securities Act or
in any manner involving a public offering within the meaning of Section 4(a)(2)
of the Securities Act.
Section 6.13    DTC Eligibility. The Company shall use reasonable best efforts
to promptly make, when applicable from time to time after the Closing, all
Unlegended Shares eligible for deposit with The Depository Trust Company.
“Unlegended Shares” means any shares of Top HoldCo Common Stock acquired by the
Commitment Parties and their respective Affiliates (including any Related
Purchaser or Ultimate Purchaser in respect thereof) pursuant to this Agreement
and the Plan, including all shares of Top HoldCo Common Stock received in
exchange for Unsubscribed Shares pursuant to the Internal Reorganization and all
shares issued to the Commitment Parties and their respective Affiliates in
connection with the Rights Offerings, that do not require, or are no longer
subject to, the Legend.
Section 6.14    Use of Proceeds. The Debtors will apply the proceeds from the
exercise of the Subscription Rights and the sale of the Unsubscribed Shares for
the purposes identified in the Disclosure Statement and the Plan.
Section 6.15    Share Legend. Each certificate evidencing all shares of Top
HoldCo Common Stock received in exchange for Unsubscribed Shares pursuant to the
Internal Reorganization that are issued hereunder and any certificate evidencing
shares of Top HoldCo Common Stock that may be issued in satisfaction of the
Commitment Premium as provided herein,

53

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

and each certificate issued in exchange for or upon the Transfer of any such
shares, shall be stamped or otherwise imprinted with a legend (the “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.”
In the event that any such shares are uncertificated, such shares shall be
subject to a restrictive notation substantially similar to the Legend in the
stock ledger or other appropriate records maintained by Reorganized Momentive or
agent and the term “Legend” shall include such restrictive notation. Reorganized
Momentive shall remove the Legend (or restrictive notation, as applicable) set
forth above from the certificates evidencing any such shares (or the stock
ledger or other appropriate Reorganized Momentive records, in the case of
uncertified shares) at any time after the restrictions described in such Legend
cease to be applicable, including, as applicable, when such shares may be sold
under Rule 144. Reorganized Momentive may reasonably request such opinions,
certificates or other evidence that such restrictions no longer apply as a
condition to removing the Legend.
Section 6.16    Withdrawal of Commitment Party. In the event there is an
amendment to or waiver of this Agreement directly or indirectly modifying any
Selected Economic Term or any waiver or extension of the Outside Date pursuant
to Section 9.2(f), then any Commitment Party that did not consent to such
amendment (a “Non-Consenting Commitment Party”) may elect, within seven (7) days
of such change, to withdraw as a Commitment Party by delivering written notice
to the Company of such election. Upon such election, (i) the Commitment Parties
that are members of the Ad Hoc Committee (other than the Non-Consenting
Commitment Party) shall automatically assume the Backstop Commitment of the
Non-Consenting Commitment Party on a pro rata basis according to such Commitment
Parties’ Backstop Commitment Percentages (relative to the aggregate Backstop
Commitment provided by the Commitment Parties that are members of the Ad Hoc
Committee (other than the Non-Consenting Commitment Party)) at the time of the
election by the Non‑Consenting Commitment Party to withdraw and (ii) the
Non-Consenting Commitment Party shall automatically cease to be a party to this
Agreement or the RSA and will no longer have any rights as a Commitment Party
(and, for the avoidance of doubt, the Non-Consenting Commitment Party shall not
be entitled to receive any portion of the Commitment Premium). Any Backstop
Commitment assumed by a Commitment Party in accordance with this Section 6.16
shall be included, among other things, in the determination of (x) the Backstop
Commitment Percentage of such Commitment Party for purposes of Section 3.1 and
(y) the Backstop Commitment of such party for purposes of the definition of
Requisite Commitment Parties.

54

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

Section 6.17    Antitrust Approval.
(a)    Each Party agrees to use reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary to
consummate and make effective the transactions contemplated by this Agreement,
the Plan and the other Transaction Agreements, including (i) if applicable,
filing, or causing to be filed, the Notification and Report Form pursuant to the
HSR Act with respect to the transactions contemplated by this Agreement with the
Antitrust Division of the United States Department of Justice and the United
States Federal Trade Commission and any filings (or, if required by any
Antitrust Authority, any drafts thereof) under any other Antitrust Laws that are
necessary to consummate and make effective the transactions contemplated by this
Agreement as soon as reasonably practicable and no later than fifteen (15)
Business Days following the date hereof and (ii) promptly furnishing documents
or information reasonably requested by any Antitrust Authority.
(b)    The Company and each Commitment Party subject to an obligation pursuant
to the Antitrust Laws to notify any transaction contemplated by this Agreement,
the Plan or the other Transaction Agreements that has notified the Company in
writing of such obligation (each such Commitment Party, a “Filing Party”) agree
to reasonably cooperate with each other as to the appropriate time of filing
such notification and its content. The Company and each Filing Party shall, to
the extent permitted by applicable Law: (i) promptly notify each other of, and
if in writing, furnish each other with copies of (or, in the case of material
oral communications, advise each other orally of) any communications from or
with an Antitrust Authority; (ii) not participate in any meeting with an
Antitrust Authority unless it consults with each other Filing Party and the
Company, as applicable, in advance and, to the extent permitted by the Antitrust
Authority and applicable Law, give each other Filing Party and the Company, as
applicable, a reasonable opportunity to attend and participate thereat;
(iii) furnish each other Filing Party and the Company, as applicable, with
copies of all correspondence and communications between such Filing Party or the
Company and the Antitrust Authority; (iv) furnish each other Filing Party with
such necessary information and reasonable assistance as may be reasonably
necessary in connection with the preparation of necessary filings or submission
of information to the Antitrust Authority; and (v) not withdraw its filing, if
any, under the HSR Act without the prior written consent of the Requisite
Commitment Parties and the Company.
(c)    Should a Filing Party be subject to an obligation under the Antitrust
Laws to jointly notify with one or more other Filing Parties (each, a “Joint
Filing Party”) any transaction contemplated by this Agreement, the Plan or the
other Transaction Agreements, such Joint Filing Party shall promptly notify each
other Joint Filing Party of, and if in writing, furnish each other Joint Filing
Party with copies of (or, in the case of material oral communications, advise
each other Joint Filing Party orally of) any communications from or with an
Antitrust Authority.

55

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

(d)    The Company and each Filing Party shall use their reasonable best efforts
to obtain all authorizations, approvals, consents, or clearances under any
applicable Antitrust Laws or to cause the termination or expiration of all
applicable waiting periods under any Antitrust Laws in connection with the
transactions contemplated by this Agreement at the earliest possible date after
the date of filing. The communications contemplated by this Section 6.17 may be
made by the Company or a Filing Party on an outside counsel-only basis or
subject to other agreed upon confidentiality safeguards. The obligations in this
Section 6.17 shall not apply to filings, correspondence, communications or
meetings with Antitrust Authorities unrelated to the transactions contemplated
by this Agreement, the Plan or the other Transaction Agreements.
Section 6.18    Alternative Transactions.
(a)    From the date of this Agreement until the earlier of the termination of
this Agreement in accordance with its terms and the Closing Date, (i) the
Company and its Subsidiaries shall, and shall instruct and direct their
respective Representatives to, immediately cease and terminate any ongoing
solicitation, discussions and negotiations with any Person (including any
Commitment Party) with respect to any Alternative Transaction, and (ii) the
Company and its Subsidiaries shall not, and the Company and its Subsidiaries
shall instruct and direct their respective Representatives not to, initiate or
solicit any inquiries or the making of any proposal or offer relating to an
Alternative Transaction, engage or participate in any discussions or
negotiations, or provide any non-public information to any Person (including any
Commitment Party), with respect to an Alternative Transaction. Notwithstanding
the foregoing sentence, if following the date of this Agreement (A) the Company
or any of its Subsidiaries receives a bona fide, written unsolicited proposal or
offer for an Alternative Transaction (an “Alternative Transaction Proposal”)
from any Person (including any Commitment Party) that did not result from a
breach of this Section 6.18 and (B) the board of directors of the Company (the
“Company Board”) has determined in good faith, after consultation with its
outside counsel and independent financial advisor, that such Alternative
Transaction Proposal constitutes, or could reasonably be expected to result in,
a Superior Transaction, the Company and its Subsidiaries may, in response to
such Alternative Transaction Proposal: (x) furnish non-public information in
response to a request therefor by such Person if such Person has executed and
delivered to the Company a confidentiality agreement on customary terms if the
Company also promptly (and in any event within twenty-four (24) hours after the
time such information is provided to such Person) makes such information
available to the Commitment Parties, to the extent not previously provided to
the Commitment Parties; and (y) engage or participate, or instruct and direct
their respective Representatives to engage or participate, in discussions and
negotiations with such Person regarding such Alternative Transaction Proposal.
Notwithstanding the foregoing, nothing in this Section 6.18(a) shall prohibit,
limit or otherwise restrict the Company and its Subsidiaries and their
respective Representatives from engaging or participating in discussions with,
or providing any information to, any official committee appointed in the Chapter
11 Proceedings, so long as the Company and its Subsidiaries do not, and instruct
and

56

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

direct their respective Representatives not to, initiate or solicit any
inquiries or make any proposal or offer relating to an Alternative Transaction.
(b)    The Company shall notify the Commitment Parties promptly (and, in any
event, within twenty-four (24) hours) if any Alternative Transaction Proposal
(as well as, for purposes of this paragraph, any other proposal with respect to
an Alternative Transaction made by or on behalf of any official committee
appointed in the Chapter 11 Proceedings) is received by and in connection
therewith any non-public information is requested from, or any discussions or
negotiations are sought to be initiated or continued with, the Company or its
Subsidiaries or their respective Representatives, which notice shall indicate
the identity of the parties and the material terms and conditions of such
Alternative Transaction Proposal (including, if applicable, copies of any
written inquiries, requests, proposals or offers, including any proposed
agreements) and, thereafter, the Company shall keep the Commitment Parties
reasonably informed of the status and material terms of such Alternative
Transaction Proposal (including any material amendments thereto) and the status
of any such discussions or negotiations, including any change in the Company’s
intentions as previously notified. None of the Company or any of its
Subsidiaries shall, after the date of this Agreement, enter into any
confidentiality or similar agreement that would prohibit it from providing such
information to the Commitment Parties.
(c)    Subject to the Company’s compliance with this Section 6.18, prior to the
earlier of the occurrence of the Closing Date and the termination of this
Agreement in accordance with its terms, the Company Board may approve an
Alternative Transaction Proposal (including an Alternative Transaction made by
or on behalf of any official committee appointed in the Chapter 11 Proceedings)
not solicited in violation of this Section 6.18 that the Company Board has
determined in good faith, after consultation with its outside legal counsel and
its independent financial advisor, constitutes a Superior Transaction, if and
only if, (i) prior to taking such action the Company Board determines in good
faith, after consultation with its outside legal counsel, that failure to take
such action would be inconsistent with the directors’ fiduciary or other duties
under applicable Law and (ii) the Company Board notifies the Commitment Parties
in writing at least forty-eight (48) hours in advance that it intends to take
such action or that the Company intends to terminate this Agreement pursuant to
Section 9.3(e), which notice shall specify the identity of the Person making
such Alternative Transaction Proposal and all of the material terms and
conditions of such Alternative Transaction Proposal and attach the most current
version of any proposed transaction agreement (and any related agreements)
providing for such Alternative Transaction Proposal); provided, that such
forty-eight (48) hours’ notice shall be given again in the event of any revision
to the financial terms or any other material terms of such Alternative
Transaction Proposal.
(d)    With respect to any Alternative Transaction that is premised, whether
directly or indirectly, on one or more asset sales under Section 363 of the
Bankruptcy Code or pursuant to a chapter 11 plan, each Commitment Party and/or
the respective agents under the Second Lien

57

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

Indenture (including the Collateral Agent under and as defined in the Second
Lien Indenture) shall (in the manner provided for in the Second Lien Documents
and the Second Lien Notes) have the right to “credit bid” (whether pursuant to
Section 363(k) of the Bankruptcy Code or otherwise) all (or such lesser portion
as they may determine under the Second Lien Documents and the Second Lien Notes)
of the Obligations under and as defined in the Second Lien Indenture (including
all principal, premium, interest (at the default rate to the extent applicable
under the Second Lien Documents and Second Lien Notes and irrespective of
whether permissible under the Bankruptcy Code), penalties, fees, charges,
expenses, indemnifications, reimbursements, damages, and all other amounts and
liabilities payable under the Second Lien Documents and the Second Lien Notes),
the principal amount of which shall be no less than $1,345,000,000 as of the
Petition Date, notwithstanding any provision of the Bankruptcy Code or any
applicable Law (including Section 363(k) of the Bankruptcy Code) to the
contrary, subject only to any applicable term or condition of the Second Lien
Intercreditor Agreement, to the extent that such term or condition is found to
be enforceable. The BCA Approval Order shall provide for the foregoing.
Section 6.19    Other Entities; Corporate Form; Internal Reorganization.
(a)    The Company shall cause each of its Subsidiaries to comply with all terms
of this Agreement applicable to such Subsidiaries.
(b)    If the Requisite Commitment Parties, with the approval of the Bankruptcy
Court and the lenders under the Emergence Credit Facility, determine that
Reorganized Momentive shall be a Person other than Top HoldCo, then the Company
shall promptly cause Reorganized Momentive to enter into and become a party to
this Agreement and become fully bound by the agreements and obligations of the
Company hereunder and make the representations and warranties made by the
Company hereunder, this Agreement shall be amended as necessary to reflect such
determination, and the Company shall use its reasonable best efforts to take or
cause to be taken all actions, and do or cause to be done all things, reasonably
necessary, proper or advisable in order to cause Reorganized Momentive to be
such Person determined by the Requisite Commitment Parties.
(c)    On the Effective Date, Reorganized Momentive shall be a Delaware
corporation unless the Requisite Commitment Parties, with the approval of the
Bankruptcy Court and the lenders under the Emergence Credit Facility, determine
that Reorganized Momentive shall be formed in another jurisdiction or with
another corporate form (such as a limited liability company), in which case this
Agreement shall be amended as necessary to reflect such determination and the
Company shall use its reasonable best efforts to take or cause to be taken all
actions, and do or cause to be done all things, reasonably necessary, proper or
advisable in order to cause Reorganized Momentive to be formed in such
jurisdiction, and with such corporate form, as determined by the Requisite
Commitment Parties.

58

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

(d)    Pursuant to the Plan, prior to or concurrently with the Closing, the
Debtors shall organize Intermediate HoldCo and Top HoldCo as new corporations
existing under the Laws of Delaware and immediately after the Closing, the
Debtors shall cause the Internal Reorganization to be effected.
Section 6.20    Bar Date Order. The Debtors shall (a) as soon as reasonably
practicable following the date hereof, file a motion seeking an order of the
Bankruptcy Court setting a bar date with respect to the filing of all Claims
that arose prior to the Petition Date and (b) use their reasonable best efforts
to make such bar date as early as reasonably practicable.
ARTICLE VII

CONDITIONS TO THE OBLIGATIONS OF THE PARTIES
Section 7.1    Conditions to the Obligations of the Commitment Parties. The
obligations of each Commitment Party to consummate the transactions contemplated
hereby shall be subject to (unless waived in accordance with Section 7.2) the
satisfaction of the following conditions prior to or at the Closing:
(a)    BCA Approval Order; RSA Approval Order. The Bankruptcy Court shall have
entered the BCA Approval Order and the RSA Approval Order, and such orders shall
be Final Orders.
(b)    Plan Solicitation Order. The Bankruptcy Court shall have entered the Plan
Solicitation Order, and such order shall be in full force and effect.
(c)    BCA Consummation Approval Order. The Bankruptcy Court shall have entered
the BCA Consummation Approval Order (which may be the Confirmation Order), and
such order shall be a Final Order.
(d)    Confirmation Order. The Bankruptcy Court shall have entered the
Confirmation Order, and such order shall be a Final Order.
(e)    Plan. The Company and all of the other Debtors shall have complied, in
all material respects, with the terms of the Plan that are to be performed by
the Company and the other Debtors on or prior to the Effective Date and the
conditions to the occurrence of the Effective Date set forth in the Plan shall
have been satisfied or, with the prior consent of the Requisite Commitment
Parties, waived in accordance with the terms thereof.

59

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

(f)    Rights Offerings. The Rights Offerings shall have been conducted, in all
material respects, in accordance with the BCA Approval Order and this Agreement,
and the Rights Offerings Expiration Time shall have occurred.
(g)    Effective Date. The Effective Date shall have occurred in accordance with
the terms and conditions in the Plan and in the Confirmation Order.
(h)    Senior Management. A Chief Executive Officer, Chief Financial Officer and
General Counsel shall be employed by Reorganized Momentive, either on an interim
or permanent basis, each of whom will be an employee solely of Reorganized
Momentive and will not be affiliated with or employed by MSC or any competitor
of Reorganized Momentive and the selection of whom shall be consistent with the
terms set forth in the Term Sheet and otherwise be in form and substance
mutually satisfactory to the Requisite Commitment Parties and the Company. The
Certificate of Incorporation shall provide that Reorganized Momentive shall not
be party to any merger or other business combination transaction (whether
effected by way of merger, sale of a majority of the equity, or the sale of all
or substantially all of the assets of Reorganized Momentive or its Subsidiaries)
(a “Sale Transaction”) until a permanent Chief Executive Officer has been
appointed who has reviewed the proposed terms and conditions of such proposed
Sale Transaction.
(i)    Registration Rights Agreement; Reorganized Momentive Corporate Documents;
SSA Amendment.
(i)    The Registration Rights Agreement shall have been executed and delivered
by Reorganized Momentive, shall otherwise have become effective with respect to
the Commitment Parties and the other parties thereto, and shall be in full force
and effect.
(ii)    The Reorganized Momentive Corporate Documents shall duly have been
approved and adopted and shall be in full force and effect.
(iii)    The SSA Amendment shall have been executed by all parties thereto and
shall be in full force and effect.
(j)    Expense Reimbursement. The Debtors shall have paid all Expense
Reimbursement accrued through the Closing Date pursuant to Section 3.3.
(k)    Consents. All governmental and third-party notifications, filings,
consents, waivers and approvals set forth on Schedule 3 and required for the
consummation of the transactions contemplated by this Agreement and the Plan
shall have been made or received.
(l)    Antitrust Approvals. All waiting periods imposed by any Governmental
Entity or Antitrust Authority in connection with the transactions contemplated
by this Agreement

60

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

shall have terminated or expired and all authorizations, approvals, consents or
clearances under any Antitrust Laws in connection with the transactions
contemplated by this Agreement shall have been obtained.
(m)    No Legal Impediment to Issuance. No Law or Order shall have been enacted,
adopted or issued by any Governmental Entity that prohibits the implementation
of the Plan or the transactions contemplated by this Agreement.
(n)    Representations and Warranties.
(i)    The representations and warranties of the Debtors contained in Sections
4.9(b), 4.11 and 4.29 shall be true and correct in all respects on and as of the
Closing Date with the same effect as if made on and as of the Closing Date
(except for such representations and warranties made as of a specified date,
which shall be true and correct only as of the specified date).
(ii)    The representations and warranties of the Debtors contained in
Sections 4.2, 4.3, 4.4, 4.5 and 4.6(b) shall be true and correct in all material
respects on and as of the Closing Date after giving effect to the Plan with the
same effect as if made on and as of the Closing Date after giving effect to the
Plan (except for such representations and warranties made as of a specified
date, which shall be true and correct in all material respects only as of the
specified date).
(iii)    The other representations and warranties of the Debtors contained in
this Agreement shall be true and correct (disregarding all materiality or
Material Adverse Effect qualifiers) on and as of the Closing Date after giving
effect to the Plan with the same effect as if made on and as of the Closing Date
after giving effect to the Plan (except for such representations and warranties
made as of a specified date, which shall be true and correct only as of the
specified date), except where the failure to be so true and correct does not
constitute, individually or in the aggregate, a Material Adverse Effect.
(o)    Covenants. The Debtors shall have performed and complied, in all material
respects, with all of their respective covenants and agreements contained in
this Agreement that contemplate, by their terms, performance or compliance prior
to the Closing Date.
(p)    Material Adverse Effect. Since December 31, 2013, there shall not have
occurred, and there shall not exist, any event, development, occurrence or
change that constitutes, individually or in the aggregate, a Material Adverse
Effect.

61

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

(q)    Officer’s Certificate. The Commitment Parties shall have received on and
as of the Closing Date a certificate of the chief executive officer or chief
financial officer of the Company confirming that the conditions set forth in
Sections 7.1(n), (o), and (p) have been satisfied.
(r)    Minimum Liquidity. The amount, determined on a pro forma basis after
giving effect to the occurrence of the Effective Date and the transactions
contemplated by the Transaction Agreements, of (i) the Emergence Financing
Availability, plus (ii) Cash of Reorganized Momentive shall be no less than (x)
$240,000,000 less (y) the aggregate amount of fees and expenses to be reimbursed
with respect to an executive search consultant pursuant to Section 3.3(a)(E).
(s)    Put Option. The Put Option shall have been exercised in accordance with
Section 2.2.
(t)    1.5 Lien Note Claims. The allowed amount of the 1.5 Lien Note Claims
(including with respect to any applicable make-whole claim, prepayment penalty,
or Applicable Premium) shall have been determined by Final Order and any
settlement with respect to the allowed amount or treatment of the 1.5 Lien Note
Claims pursuant to the Plan (including, in either case, with respect to any
applicable make-whole claim, prepayment penalty, or Applicable Premium) shall be
satisfactory in form, substance and amount to the Requisite Commitment Parties.
(u)    First Lien Note Claims. The allowed amount of the First Lien Note Claims
(including with respect to any applicable make-whole claim, prepayment penalty,
or Applicable Premium) shall have been determined by Final Order and any
settlement with respect to the allowed amount or treatment of the First Lien
Note Claims pursuant to the Plan (including, in either case, with respect to any
applicable make-whole claim, prepayment penalty, or Applicable Premium) shall be
satisfactory in form, substance and amount to the Requisite Commitment Parties.
Section 7.2    Waiver of Conditions to Obligations of Commitment Parties. All or
any of the conditions set forth in Section 7.1 may only be waived in whole or in
part with respect to all Commitment Parties by a written instrument executed by
the Requisite Commitment Parties in their sole discretion and if so waived, all
Commitment Parties shall be bound by such waiver.
Section 7.3    Conditions to the Obligations of the Debtors. The obligations of
the Debtors to consummate the transactions contemplated hereby with any
Commitment Party is subject to (unless waived by the Company) the satisfaction
of each of the following conditions:
(a)    BCA Approval Order; RSA Approval Order. The Bankruptcy Court shall have
entered the BCA Approval Order and the RSA Approval Order, and such orders shall
be Final Orders.

62

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

(b)    Plan Solicitation Order. The Bankruptcy Court shall have entered the Plan
Solicitation Order, and such order shall be in full force and effect.
(c)    BCA Consummation Approval Order. The Bankruptcy Court shall have entered
the BCA Consummation Approval Order (which may be the Confirmation Order), and
such order shall be a Final Order.
(d)    Confirmation Order. The Bankruptcy Court shall have entered the
Confirmation Order, and such order shall be a Final Order.
(e)    Effective Date. The Effective Date shall have occurred in accordance with
the terms and conditions in the Plan and in the Confirmation Order.
(f)    Rights Offerings. The Rights Offerings Expiration Time shall have
occurred.
(g)    Antitrust Approvals. All waiting periods imposed by any Governmental
Entity or Antitrust Authority in connection with the transactions contemplated
by this Agreement shall have terminated or expired and all authorizations,
approvals, consents or clearances under any Antitrust Laws in connection with
the transactions contemplated by this Agreement shall have been obtained.
(h)    No Legal Impediment to Issuance. No Law or Order shall have been enacted,
adopted or issued by any Governmental Entity that prohibits the implementation
of the Plan or the transactions contemplated by this Agreement.
(i)    Representations and Warranties.
(i)    The representations and warranties of such Commitment Party contained in
this Agreement that are qualified by “materiality” or “material adverse effect”
or words or similar import shall be true and correct in all respects on and as
of the Closing Date with the same effect as if made on and as of the Closing
Date (except for such representations and warranties made as of a specified
date, which shall be true and correct in all respects only as of the specified
date).
(ii)    The representations and warranties of such Commitment Party contained in
this Agreement that are not qualified by “materiality” or “material adverse
effect” or words or similar import shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and as
of the Closing Date (except for such representations and warranties made as of a
specified date, which shall be true and correct in all material respects only as
of the specified date).

63

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

(j)    Covenants. Such Commitment Party shall have performed and complied, in
all material respects, with all of its covenants and agreements contained in
this Agreement and in any other document delivered pursuant to this Agreement.
(k)    Officer’s Certificate. The Company shall have received on and as of the
Closing Date a certificate of an executive officer (or equivalent) of such
Commitment Party confirming that the conditions set forth in Sections 7.3(i) and
(j) have been satisfied.
(l)    Put Option. The Put Option shall have been exercised in accordance with
Section 2.2.
ARTICLE VIII
INDEMNIFICATION AND CONTRIBUTION
Section 8.1    Indemnification Obligations. Following the entry of the BCA
Approval Order, the Company and the other Debtors (the “Indemnifying Parties”
and each, an “Indemnifying Party”) shall, jointly and severally, indemnify and
hold harmless each Commitment Party and its Affiliates, equity holders, members,
partners, general partners, managers and its and their respective
Representatives and controlling persons (each, an “Indemnified Person”) from and
against any and all losses, claims, damages, liabilities and costs and expenses
(other than Taxes of the Commitment Parties except to the extent otherwise
provided for in this Agreement) (collectively, “Losses”) that any such
Indemnified Person may incur or to which any such Indemnified Person may become
subject arising out of or in connection with this Agreement, the Plan and the
transactions contemplated hereby and thereby, including the Backstop
Commitments, the Rights Offerings, the payment of the Commitment Premium or the
use of the proceeds of the Rights Offerings, or any claim, challenge,
litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any Indemnified Person is a party thereto, whether or not
such proceedings are brought by the Company, the other Debtors, their respective
equity holders, Affiliates, creditors or any other Person, and reimburse each
Indemnified Person upon demand for reasonable documented (with such
documentation subject to redaction to preserve attorney client and work product
privileges) legal or other third-party expenses incurred in connection with
investigating, preparing to defend or defending, or providing evidence in or
preparing to serve or serving as a witness with respect to, any lawsuit,
investigation, claim or other proceeding relating to any of the foregoing
(including in connection with the enforcement of the indemnification obligations
set forth herein), irrespective of whether or not the transactions contemplated
by this Agreement or the Plan are consummated or whether or not this Agreement
is terminated; provided, that the foregoing indemnity will not, as to any
Indemnified Person, apply to Losses (a) as to a Defaulting Commitment Party, its
Related Parties or any Indemnified Party related thereto, caused by a Commitment
Party Default by such Commitment Party, or (b) to the extent they are found by

64

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

a final, non-appealable judgment of a court of competent jurisdiction to arise
from the bad faith, willful misconduct or gross negligence of such Indemnified
Person.
Section 8.2    Indemnification Procedure. Promptly after receipt by an
Indemnified Person of notice of the commencement of any claim, challenge,
litigation, investigation or proceeding (an “Indemnified Claim”), such
Indemnified Person will, if a claim is to be made hereunder against the
Indemnifying Party in respect thereof, notify the Indemnifying Party in writing
of the commencement thereof; provided, that (a) the omission to so notify the
Indemnifying Party will not relieve the Indemnifying Party from any liability
that it may have hereunder except to the extent it has been materially
prejudiced by such failure and (b) the omission to so notify the Indemnifying
Party will not relieve the Indemnifying Party from any liability that it may
have to such Indemnified Person otherwise than on account of this Article VIII.
In case any such Indemnified Claims are brought against any Indemnified Person
and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party will be entitled to participate therein, and, at its election
by providing written notice to such Indemnified Person, the Indemnifying Party
will be entitled to assume the defense thereof, with counsel reasonably
acceptable to such Indemnified Person; provided, that if the parties (including
any impleaded parties) to any such Indemnified Claims include both such
Indemnified Person and the Indemnifying Party and based on advice of such
Indemnified Person’s counsel there are legal defenses available to such
Indemnified Person that are different from or additional to those available to
the Indemnifying Party, such Indemnified Person shall have the right to select
separate counsel to assert such legal defenses and to otherwise participate in
the defense of such Indemnified Claims. Upon receipt of notice from the
Indemnifying Party to such Indemnified Person of its election to so assume the
defense of such Indemnified Claims with counsel reasonably acceptable to the
Indemnified Person, the Indemnifying Party shall not be liable to such
Indemnified Person for expenses incurred by such Indemnified Person in
connection with the defense thereof or participation therein (other than
reasonable costs of investigation) unless (i) such Indemnified Person shall have
employed separate counsel (in addition to any local counsel) in connection with
the assertion of legal defenses in accordance with the proviso to the
immediately preceding sentence (it being understood, however, that the
Indemnifying Party shall not be liable for the expenses of more than one
separate counsel representing the Indemnified Persons who are parties to such
Indemnified Claims (in addition to one local counsel in each jurisdiction in
which local counsel is required)), (ii) the Indemnifying Party shall not have
employed counsel reasonably acceptable to such Indemnified Person to represent
such Indemnified Person within a reasonable time after the Indemnifying Party
has received notice of commencement of the Indemnified Claims from, or delivered
on behalf of, the Indemnified Person, (iii) after the Indemnifying Party assumes
the defense of the Indemnified Claims, the Indemnified Person determines in good
faith that the Indemnifying Party has failed or is failing to defend such claim
and provides written notice of such determination and the basis for such
determination, and such failure is not reasonably cured within ten (10) Business
Days of receipt of such notice, or (iv) the Indemnifying Party shall have
authorized

65

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

in writing the employment of counsel for such Indemnified Person.
Notwithstanding anything herein to the contrary, the Company and its
Subsidiaries shall have sole control over any Tax controversy or Tax audit and
shall be permitted to settle any liability for Taxes of the Company and its
Subsidiaries.
Section 8.3    Settlement of Indemnified Claims. In connection with any
Indemnified Claim for which an Indemnified Person is assuming the defense in
accordance with this Article VIII, the Indemnifying Party shall not be liable
for any settlement of any Indemnified Claims effected by such Indemnified Person
without the written consent of the Indemnifying Party (which consent shall not
be unreasonably withheld, conditioned or delayed). If any settlement of any
Indemnified Claims is consummated with the written consent of the Indemnifying
Party or if there is a final judgment for the plaintiff in any such Indemnified
Claims, the Indemnifying Party agrees to indemnify and hold harmless each
Indemnified Person from and against any and all Losses by reason of such
settlement or judgment to the extent such Losses are otherwise subject to
indemnification by the Indemnifying Party hereunder in accordance with, and
subject to the limitations of, this Article VIII. The Indemnifying Party shall
not, without the prior written consent of an Indemnified Person (which consent
shall be granted or withheld, conditioned or delayed in the Indemnified Person’s
sole discretion), effect any settlement of any pending or threatened Indemnified
Claims in respect of which indemnity or contribution has been sought hereunder
by such Indemnified Person unless (i) such settlement includes an unconditional
release of such Indemnified Person in form and substance satisfactory to such
Indemnified Person from all liability on the claims that are the subject matter
of such Indemnified Claims and (ii) such settlement does not include any
statement as to or any admission of fault, culpability or a failure to act by or
on behalf of any Indemnified Person.
Section 8.4    Contribution. If for any reason the foregoing indemnification is
unavailable to any Indemnified Person or insufficient to hold it harmless from
Losses that are subject to indemnification pursuant to Section 8.1, then the
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Person as a result of such Loss in such proportion as is appropriate
to reflect not only the relative benefits received by the Indemnifying Party, on
the one hand, and such Indemnified Person, on the other hand, but also the
relative fault of the Indemnifying Party, on the one hand, and such Indemnified
Person, on the other hand, as well as any relevant equitable considerations. It
is hereby agreed that the relative benefits to the Indemnifying Party, on the
one hand, and all Indemnified Persons, on the other hand, shall be deemed to be
in the same proportion as (a) the total value received or proposed to be
received by the Company pursuant to the issuance and sale of the Unsubscribed
Shares in the Rights Offerings contemplated by this Agreement and the Plan bears
to (b) the Commitment Premium paid or proposed to be paid to the Commitment
Parties. The Indemnifying Parties also agree that no Indemnified Person shall
have any liability based on their comparative or contributory negligence or
otherwise to the

66

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

Indemnifying Parties, any Person asserting claims on behalf of or in right of
any of the Indemnifying Parties, or any other Person in connection with an
Indemnified Claim.
Section 8.5    Treatment of Indemnification Payments. All amounts paid by an
Indemnifying Party to an Indemnified Person under this Article VIII shall, to
the extent permitted by applicable Law, be treated as adjustments to the
Purchase Price for all Tax purposes. The provisions of this Article VIII are an
integral part of the transactions contemplated by this Agreement and without
these provisions the Commitment Parties would not have entered into this
Agreement, and the obligations of the Company under this Article VIII shall
constitute allowed administrative expenses of the Debtors’ estate under
Sections 503(b) and 507 of the Bankruptcy Code and are payable without further
Order of the Bankruptcy Court, and the Company may comply with the requirements
of this Article VIII without further Order of the Bankruptcy Court.
Section 8.6    No Survival. All representations, warranties, covenants and
agreements made in this Agreement shall not survive the Closing Date except for
covenants and agreements that by their terms are to be satisfied after the
Closing Date, which covenants and agreements shall survive until satisfied in
accordance with their terms.
ARTICLE IX
TERMINATION
Section 9.1    Consensual Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date by mutual written consent of the Company and the Requisite
Commitment Parties.
Section 9.2    Automatic Termination. Except as otherwise provided in this
Section 9.2, this Agreement shall terminate automatically without further action
or notice by any Party if any of the following occurs; provided, that, except
for Sections 9.2(d), 9.2(f) and 9.2(j), the waiver of which, or extension of any
applicable dates in respect of which, is governed by their terms, the Requisite
Commitment Parties may waive such termination or extend any applicable dates in
accordance with Section 10.7:
(a)    the Bankruptcy Court has not entered the BCA Approval Order or the RSA
Approval Order on or prior to the date that is sixty (60) days after the
Petition Date; provided that such deadline shall be automatically extended to
the date that is sixty-seven (67) days after the Petition Date in connection
with scheduling a hearing with the Bankruptcy Court;

67

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

(b)    the Bankruptcy Court has not entered a Final Order, in form and substance
mutually satisfactory to the Requisite Commitment Parties and the Company,
authorizing the Debtors to enter into the DIP Loans and use cash collateral, on
or prior to the date that is sixty (60) days after the Petition Date;
(c)    the Bankruptcy Court has not entered the Plan Solicitation Order on or
prior to the date that is seventy-five (75) days after the Petition Date;  
(d)    the SSA Amendment has not been executed by all parties thereto and is not
in full force and effect in accordance with its terms on or prior to the date
that is seventy-five (75) days after the Petition Date, unless such date is
waived or extended by delivery of written notice from the Commitment Parties,
other than Apollo, that hold in the aggregate a majority of the Backstop
Commitments, by dollar amount, provided by all Commitment Parties other than
Apollo;
(e)    the Bankruptcy Court has not entered each of the Confirmation Order and
the BCA Consummation Approval Order on or prior to the date that is one hundred
twenty (120) days after the Petition Date;  
(f)    the Closing Date has not occurred by 11:59 p.m., New York City time on
the date that is one hundred eighty (180) days after the Petition Date (as it
may be extended pursuant to this Section 9.2(f) or Section 2.3(a), the “Outside
Date”), unless prior thereto the Effective Date occurs and the Rights Offerings
have been consummated; provided, that (i) the Outside Date may be waived or
extended with the prior written consent of the Requisite Commitment Parties;
provided, further, if any Commitment Party fails to consent to a waiver or
extension of the Outside Date within seven (7) days of a written request being
made either by the Company or by any other Commitment Party for such a waiver or
extension (which request was made no earlier than the date seven (7) days prior
to the Outside Date and has not been withdrawn) and such waiver or extension is
duly approved by the Requisite Commitment Parties, such Commitment Party shall
be deemed a Non-Consenting Commitment Party who has elected to withdraw from its
Backstop Commitment pursuant to Section 6.16 and shall no longer a party to this
Agreement or the RSA (and, for the avoidance of doubt, such Commitment Party
shall not be entitled to receive any portion of the Commitment Premium); and
(ii) this Agreement shall not terminate automatically pursuant to this
Section 9.2(f) if the Commitment Parties are then in willful or intentional
breach of this Agreement;
(g)    any of the BCA Approval Order, RSA Approval Order, BCA Consummation
Approval Order, Plan Solicitation Order, Confirmation Order or any Order of the
Bankruptcy Court approving the DIP Loans is reversed, stayed, dismissed,
vacated, reconsidered or is modified or amended after entry without the prior
written consent of the Requisite Commitment Parties;
(h)    any of this Agreement, the RSA, DIP Loans, Rights Offerings Procedures,
Disclosure Statement, Plan or any documents related to the Plan, including
notices, exhibits or

68

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

appendices, or any of the Definitive Documentation (as defined in the RSA) is
amended or modified without the prior written consent of the Requisite
Commitment Parties;
(i)    the RSA is terminated in accordance with its terms;
(j)    any Apollo entity party to the RSA materially breaches its obligations
thereunder or one or more of the Consenting Noteholders (as defined in the RSA)
materially breaches its obligations under the RSA, such that the Commitment
Party or the Commitment Parties not then in breach of the RSA (the “Non-RSA
Breaching Commitment Parties”) at any time hold collectively less than sixty-six
and two-thirds percent (66-2/3%) of the principal amount of all Second Lien
Notes; provided, that Non-RSA Breaching Commitment Parties providing a majority
of the Backstop Commitments provided by all Non-RSA Breaching Commitment Parties
may waive such termination by written notice within three (3) days of its
occurrence;
(k)    the Company or any of the other Debtors file (i) any motion, application
or adversary proceeding challenging the validity, enforceability, perfection or
priority of or seeking avoidance of the Liens securing the obligations referred
to in the Second Lien Indenture or the documents related thereto or, other than
as contemplated by the Restructuring, or (ii) any other cause of action against
and/or seeking to restrict the rights of holders of Second Lien Notes in their
capacity as such, or the prepetition Liens securing the Second Lien Notes (or if
the Company or any of the Debtors support any such motion, application or
adversary proceeding commenced by any third party or consents to the standing of
any such third party);
(l)    (i) the Company or the other Debtors shall have breached any
representation, warranty, covenant or other agreement made by the Company or the
other Debtors in this Agreement or any such representation or warranty shall
have become inaccurate and such breach or inaccuracy would, individually or in
the aggregate, cause a condition set forth in Sections 7.1(n), 7.1(o) or 7.1(p)
not to be satisfied, (ii) the Commitment Parties shall have delivered written
notice of such breach or inaccuracy to the Company, (iii) such breach or
inaccuracy is not cured by the Company or the other Debtors by the tenth
(10th) Business Day after receipt of such notice, and (iv) as a result of such
failure to cure, any condition set forth in Sections 7.1(n), 7.1(o) or 7.1(p) is
not capable of being satisfied; provided, that, this Agreement shall not
terminate automatically pursuant to this Section 9.2(l) if the Commitment
Parties are then in willful or intentional breach of this Agreement;
(m)    any Law or final and non-appealable Order shall have been enacted,
adopted or issued by any Governmental Entity that prohibits the implementation
of the Plan or the Rights Offerings or the transactions contemplated by this
Agreement or the other Transaction Agreements;
(n)    (i) any of the Chapter 11 Proceedings shall have been dismissed or
converted to a chapter 7 case or (ii) a chapter 11 trustee with plenary powers
or an examiner with enlarged powers relating to the operation of the businesses
of the Debtors beyond those set forth in Section

69

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

1106(a)(3) and (4) of the Bankruptcy Code shall have been appointed in any of
the Chapter 11 Proceedings or the Debtors shall file a motion or other request
for such relief;
(o)    there shall have occurred any event, development, occurrence or change
that, individually, or together with all other Events, has had or would
reasonably be expected to have a Material Adverse Effect;
(p)    (i) three (3) Business Days after each of the Commitment Parties has
received notice in writing (including notice delivered by one of the other
Commitment Parties) that the Debtors, directly or indirectly, have taken any
action that is inconsistent with, or is intended or is reasonably likely to
interfere with or impede or delay consummation of, the RSA, the Restructuring,
the transactions embodied in the Term Sheet, the Rights Offerings, this
Agreement or the Plan, including, but not limited to, soliciting or causing or
allowing any of its Representatives to solicit, encouraging or initiating any
offer or proposal from, or entering into any agreement with, any Person
concerning any actual or proposed Alternative Transaction, or filing any
pleading or document with respect to, or proposing, joining in, or participating
in the formation of, any actual or proposed Alternative Transaction; provided,
that, any actions permitted to be taken by or on behalf of the Debtors under
Section 6.18 shall not give rise to a termination of this Agreement pursuant to
this clause (i), (ii) the Bankruptcy Court approves or authorizes an Alternative
Transaction at the request of any party in interest or (iii) the Company or any
of its Subsidiaries enters into any Contract or written agreement in principle
providing for the consummation of any Alternative Transaction (such Contract or
written agreement in principle, an “Alternative Transaction Agreement”); or
(q)    (i) a DIP Loan Event of Default has occurred and is continuing unwaived
or not subject to a forbearance for more than three (3) Business Days, (ii) an
acceleration of the obligations or termination of commitments under either of
the DIP Loans, (iii) the termination or revocation or other challenge of any
interim or final debtor in possession financing and/or cash collateral Order
entered in the Chapter 11 Proceedings or (iv) a modification or amendment of any
interim or final debtor in possession financing and/or cash collateral Order
entered in the Chapter 11 Proceedings that is not satisfactory, in their sole
discretion, to the Requisite Commitment Parties.
Section 9.3    Termination by the Company. This Agreement may be terminated by
the Company upon written notice to each Commitment Party if:
(a)    the Closing Date has not occurred by the Outside Date (as the same may be
extended pursuant to Section 9.2(f) or Section 2.3(a)), unless prior thereto the
Effective Date occurs and the Rights Offerings have been consummated; provided,
that the Company shall not have the right to terminate this Agreement pursuant
to this Section 9.3(a) if it is then in willful or intentional breach of this
Agreement;

70

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

(b)    any Apollo entity party to the RSA materially breaches its obligations
thereunder or one or more of the Consenting Noteholders (as defined in the RSA)
materially breaches its obligations under the RSA, such that the Non-RSA
Breaching Commitment Parties at any time hold collectively less than sixty-six
and two-thirds percent (66-2/3%) of the principal amount of all Second Lien
Notes;
(c)    any Law or final and non-appealable Order shall have been enacted,
adopted or issued by any Governmental Entity that prohibits the implementation
of the Plan or the Rights Offerings or the transactions contemplated by this
Agreement or the other Transaction Agreements;
(d)    subject to the right of the Commitment Parties to arrange a Commitment
Party Replacement in accordance with Section 2.3(a), (i) any Commitment Party
shall have breached any representation, warranty, covenant or other agreement
made by such Commitment Party in this Agreement or any such representation or
warranty shall have become inaccurate and such breach or inaccuracy would,
individually or in the aggregate, cause a condition set forth in Section 7.3(h)
or Section 7.3(i) not to be satisfied, (ii) the Company shall have delivered
written notice of such breach or inaccuracy to such Commitment Party, (iii) such
breach or inaccuracy is not cured by such Commitment Party by the tenth
(10th) Business Day after receipt of such notice, and (iv) as a result of such
failure to cure, any condition set forth in Section 7.3(h) or Section 7.3(i) is
not capable of being satisfied; provided, that the Company shall not have the
right to terminate this Agreement pursuant to this Section 9.3(d) if it is then
in willful or intentional breach of this Agreement; or
(e)    the Company or any of its Subsidiaries enters into any Alternative
Transaction Agreement or the Bankruptcy Court approves or authorizes an
Alternative Transaction at the request of the Company or any of its
Subsidiaries; provided, that the Company may only terminate this Agreement
pursuant to this Section 9.3(e) if the Company has not breached any of its
obligations under Section 6.18 and, concurrently with such termination, the
Company pays the Commitment Premium pursuant to Section 9.4(b)(ii)
Section 9.4    Effect of Termination.
(a)    Upon termination of this Agreement pursuant to this Article IX, this
Agreement shall forthwith become void and there shall be no further obligations
or liabilities on the part of the Parties; provided, that (i) the obligations of
the Debtors to pay the Expense Reimbursement pursuant to Article III, to satisfy
their indemnification obligations pursuant to Article VIII and to pay the
Commitment Premium pursuant to this Section 9.4(b) shall survive the termination
of this Agreement and shall remain in full force and effect, in each case, until
such obligations have been satisfied, (ii) the provisions set forth in this
Section 9.4, Section 6.18(c) and Article X shall survive the termination of this
Agreement in accordance with their terms and

71

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

(iii) subject to Section 10.10, nothing in this Section 9.4 shall relieve any
Party from liability for its gross negligence or any willful or intentional
breach of this Agreement. For purposes of this Agreement, “willful or
intentional breach” shall mean a breach of this Agreement that is a consequence
of an act undertaken by the breaching party with the knowledge that the taking
of such act would, or would reasonably be expected to, cause a breach of this
Agreement.
(b)    The Debtors shall make payments to the Commitment Parties or their
designees based upon their respective Backstop Commitment Percentages on the
date of payment, by wire transfer of immediately available funds to such
accounts as the Requisite Commitment Parties may designate, if this Agreement is
terminated as follows:
(i)    automatically pursuant to Section 9.2(l) or 9.2(p), then the Company
shall pay the Commitment Premium, in cash, on or prior to the second (2nd)
Business Day following such termination;
(ii)    if the Company shall terminate this Agreement pursuant to Section
9.3(e), then the Company shall pay the Commitment Premium, in cash, concurrently
with such termination; and
(iii)    if this Agreement shall be terminated automatically pursuant to Section
9.2 (other than clauses (j), (m) and (p) of Section 9.2), or by the Company
pursuant to Section 9.3(a), and, within twelve (12) months after the date of
such termination, any of the Debtors executes a definitive agreement with
respect to, or consummates, an Alternative Transaction, or the Bankruptcy Court
approves or authorizes an Alternative Transaction, then the Company shall pay
the Commitment Premium, in cash, on or prior to the second (2nd) Business Day
following such execution or consummation.
To the extent that all amounts due in respect of the Commitment Premium pursuant
to this Section 9.4(b) have actually been paid by the Debtors to the Commitment
Parties in connection with a termination of this Agreement, the Commitment
Parties shall not have any additional recourse against the Debtors for any
obligations or liabilities relating to or arising from this Agreement, except
for liability for gross negligence or willful or intentional breach of this
Agreement pursuant to Section 9.4(a). Except as set forth in this Section
9.4(b), the Commitment Premium shall not be payable upon the termination of this
Agreement.

72

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

ARTICLE X
GENERAL PROVISIONS
Section 10.1    Notices. All notices and other communications in connection with
this Agreement shall be in writing and shall be deemed given if delivered
personally, sent via electronic facsimile (with confirmation), mailed by
registered or certified mail (return receipt requested) or delivered by an
express courier (with confirmation) to the Parties at the following addresses
(or at such other address for a Party as may be specified by like notice):
(a)    If to the Company or MPM:
Momentive Performance Materials Holdings Inc.
260 Hudson River Road
Waterford, New York 12188
Facsimile:    (614) 225-4127
Attention:    Douglas A. Johns
with a copy (which shall not constitute notice) to:
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Facsimile:     (212) 728-8111
Attention:    Matthew Feldman
Cristopher Greer

(b)    If to the Commitment Parties (or to any of them) or any other Person to
which notice is to be delivered hereunder, to the address set forth opposite
each such Commitment Party’s name on Schedule 4.
Section 10.2    Assignment; Third Party Beneficiaries. Neither this Agreement
nor any of the rights, interests or obligations under this Agreement shall be
assigned by any Party (whether by operation of Law or otherwise) without the
prior written consent of the Company and the Requisite Commitment Parties, other
than an assignment by a Commitment Party expressly permitted by Section 2.3, 2.6
or 6.7 and any purported assignment in violation of this Section 10.2 shall be
void ab initio. Except as provided in Section 6.18(c) with respect to agents
under the Second Lien Indenture and Article VIII with respect to the Indemnified
Persons, this Agreement (including the documents and instruments referred to in
this Agreement) is not intended to and does not confer upon any Person any
rights or remedies under this Agreement other than the Parties.

73

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

Section 10.3    Prior Negotiations; Entire Agreement.
(a)    This Agreement (including the agreements attached as Exhibits to and the
documents and instruments referred to in this Agreement) constitutes the entire
agreement of the Parties and supersedes all prior agreements, arrangements or
understandings, whether written or oral, among the Parties with respect to the
subject matter of this Agreement, except that the Parties hereto acknowledge
that any confidentiality agreements heretofore executed among the Parties and
the RSA (including the Term Sheet) will each continue in full force and effect.
(b)    Notwithstanding anything to the contrary in the Plan (including any
amendments, supplements or modifications thereto) or the Confirmation Order (and
any amendments, supplements or modifications thereto) or an affirmative vote to
accept the Plan submitted by any Commitment Party, nothing contained in the Plan
(including any amendments, supplements or modifications thereto) or Confirmation
Order (including any amendments, supplements or modifications thereto) shall
alter, amend or modify the rights of the Commitment Parties under this Agreement
unless such alteration, amendment or modification has been made in accordance
with Section 10.7.
Section 10.4    Governing Law; Venue. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH (A) THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD FOR ANY CONFLICTS OF LAW PRINCIPLES THAT WOULD APPLY THE LAWS OF ANY
OTHER JURISDICTION, AND (B) TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE. THE
PARTIES CONSENT AND AGREE THAT ANY ACTION TO ENFORCE THIS AGREEMENT OR ANY
DISPUTE, WHETHER SUCH DISPUTES ARISE IN LAW OR EQUITY, ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS
CONTEMPLATED HEREBY SHALL BE BROUGHT EXCLUSIVELY IN THE BANKRUPTCY COURT (OR,
SOLELY TO THE EXTENT THE BANKRUPTCY COURT DECLINES JURISDICTION OVER SUCH ACTION
OR DISPUTE, IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK OR ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY). THE PARTIES CONSENT
TO AND AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT.
EACH OF THE PARTIES HEREBY WAIVES AND AGREES NOT TO ASSERT IN ANY SUCH DISPUTE,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (I) SUCH PARTY
IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE BANKRUPTCY COURT, (II) SUCH
PARTY OR SUCH PARTY’S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY THE
BANKRUPTCY COURT OR (III) ANY LITIGATION OR OTHER PROCEEDING COMMENCED IN THE
BANKRUPTCY COURT IS BROUGHT IN AN INCONVENIENT FORUM. THE PARTIES HEREBY AGREE
THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION

74

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

OR PROCEEDING TO AN ADDRESS PROVIDED IN WRITING BY THE RECIPIENT OF SUCH
MAILING, OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF AND HEREBY WAIVE ANY OBJECTIONS TO SERVICE
ACCOMPLISHED IN THE MANNER HEREIN PROVIDED.
Section 10.5    Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ALL RIGHTS TO
TRIAL BY JURY IN ANY JURISDICTION IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE AMONG THE PARTIES UNDER THIS AGREEMENT, WHETHER IN CONTRACT,
TORT OR OTHERWISE.
Section 10.6    Counterparts. This Agreement may be executed in any number of
counterparts, all of which will be considered one and the same agreement and
will become effective when counterparts have been signed by each of the Parties
and delivered to each other Party (including via facsimile or other electronic
transmission), it being understood that each Party need not sign the same
counterpart.
Section 10.7    Waivers and Amendments; Rights Cumulative; Consent. This
Agreement may be amended, restated, modified or changed only by a written
instrument signed by the Company and the Requisite Commitment Parties; provided,
that (a) any Commitment Party’s prior written consent shall be required for any
amendment that would, directly or indirectly: (i) modify such Commitment Party’s
Backstop Commitment Percentage, (ii) increase the Purchase Price to be paid in
respect of the Unsubscribed Shares, or (iii) have a materially adverse and
disproportionate effect on such Commitment Party and (b) the prior written
consent of Apollo and each Commitment Party that was an original signatory
hereto that is still a Commitment Party as of such date of amendment shall be
required for any amendment to the definition of “Requisite Commitment Parties.”
Notwithstanding the foregoing, Schedule 1 shall be revised as necessary without
requiring a written instrument signed by the Company and the Requisite
Commitment Parties to reflect changes in the composition of the Backstop Parties
and Backstop Commitment Percentages as a result of Transfers permitted in
accordance with the terms and conditions of this Agreement. The terms and
conditions of this Agreement (other than the conditions set forth in
Sections 7.1 and 7.3, the waiver of which shall be governed solely by
Article VII, and the termination events set forth in each of Sections 9.2(d),
9.2(f) and 9.2(j), the waiver of which shall be governed by their respective
terms) may be waived (A) by the Debtors only by a written instrument executed by
the Company and (B) by the Requisite Commitment Parties only by a written
instrument executed by the Requisite Commitment Parties. No delay on the part of
any Party in exercising any right, power or privilege pursuant to this Agreement
will operate as a waiver thereof, nor will any waiver on the part of any Party
of any right, power or privilege pursuant to this Agreement, nor will any single
or partial exercise of any right, power or privilege pursuant to this Agreement,
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege pursuant to this Agreement.

75

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

Section 10.8    Headings. The headings in this Agreement are for reference
purposes only and will not in any way affect the meaning or interpretation of
this Agreement.
Section 10.9    Specific Performance. The Parties agree that irreparable damage
would occur if any provision of this Agreement were not performed in accordance
with the terms hereof and that the Parties shall be entitled to an injunction or
injunctions without the necessity of posting a bond to prevent breaches of this
Agreement or to enforce specifically the performance of the terms and provisions
hereof, in addition to any other remedy to which they are entitled at law or in
equity. Unless otherwise expressly stated in this Agreement, no right or remedy
described or provided in this Agreement is intended to be exclusive or to
preclude a Party from pursuing other rights and remedies to the extent available
under this Agreement, at law or in equity.
Section 10.10    Damages. Notwithstanding anything to the contrary in this
Agreement, none of the Parties will be liable for, and none of the Parties shall
claim or seek to recover, any punitive, special, indirect or consequential
damages or damages for lost profits.
Section 10.11    No Reliance. No Commitment Party or any of its Related Parties
shall have any duties or obligations to the other Commitment Parties in respect
of this Agreement, the Plan or the transactions contemplated hereby or thereby,
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) no Commitment Party or any of its Related Parties shall be
subject to any fiduciary or other implied duties to the other Commitment
Parties, (b) no Commitment Party or any of its Related Parties shall have any
duty to take any discretionary action or exercise any discretionary powers on
behalf of any other Commitment Party, (c) no Commitment Party or any of its
Related Parties shall have any duty to the other Commitment Parties to obtain,
through the exercise of diligence or otherwise, to investigate, confirm, or
disclose to the other Commitment Parties any information relating to the Company
or any of its Subsidiaries that may have been communicated to or obtained by
such Commitment Party or any of its Affiliates in any capacity, (d) no
Commitment Party may rely, and confirms that it has not relied, on any due
diligence investigation that any other Commitment Party or any Person acting on
behalf of such other Commitment Party may have conducted with respect to the
Company or any of its Affiliates or any of their respective securities, and
(e) each Commitment Party acknowledges that no other Commitment Party is acting
as a placement agent, initial purchaser, underwriter, broker or finder with
respect to its Unsubscribed Shares or Backstop Commitment Percentage of its
Backstop Commitment.
Section 10.12    Publicity. At all times prior to the Closing Date or the
earlier termination of this Agreement in accordance with its terms, the Company
and the Commitment Parties shall consult with each other prior to issuing any
press releases (and provide each other a reasonable opportunity to review and
comment upon such release) or otherwise making public announcements with respect
to the transactions contemplated by this Agreement, it being understood

76

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

that nothing in this Section 10.12 shall prohibit any Party from filing any
motions or other pleadings or documents with the Bankruptcy Court in connection
with the Chapter 11 Proceedings.
Section 10.13    Settlement Discussions. This Agreement and the transactions
contemplated herein are part of a proposed settlement of a dispute between the
Parties. Nothing herein shall be deemed an admission of any kind. Pursuant to
Section 408 of the U.S. Federal Rule of Evidence and any applicable state rules
of evidence, this Agreement and all negotiations relating thereto shall not be
admissible into evidence in any Legal Proceeding, except to the extent filed
with, or disclosed to, the Bankruptcy Court in connection with the Chapter 11
Proceedings (other than a Legal Proceeding to approve or enforce the terms of
this Agreement).
Section 10.14    Euro Denominated Notes. For purposes of this Agreement, the
principal amount of any Second Lien Notes or Votable Claims that are denominated
in Euros shall be considered to be a dollar amount calculated by applying the
spot exchange rate quoted in the Wall Street Journal for converting Euros into
dollars on April 11, 2014.
Section 10.15    No Recourse. Notwithstanding anything that may be expressed or
implied in this Agreement, and notwithstanding the fact that certain of the
Parties may be partnerships or limited liability companies, each Party
covenants, agrees and acknowledges that no recourse under this Agreement or any
documents or instruments delivered in connection with this Agreement shall be
had against any Party’s Affiliates, or any of such Party’s Affiliates’ or
respective Related Parties in each case other than the Parties to this Agreement
and each of their respective successors and permitted assignees under this
Agreement, whether by the enforcement of any assessment or by any legal or
equitable proceeding, or by virtue of any applicable Law, it being expressly
agreed and acknowledged that no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by any of the Related Parties, as such,
for any obligation or liability of any Party under this Agreement or any
documents or instruments delivered in connection herewith for any claim based
on, in respect of or by reason of such obligations or liabilities or their
creation; provided, however, nothing in this Section 10.15 shall relieve or
otherwise limit the liability of any Party hereto or any of their respective
successors or permitted assigns for any breach or violation of its obligations
under this Agreement or such other documents or instruments.  For the avoidance
of doubt, prior to the Effective Date, none of the Parties will have any
recourse, be entitled to commence any proceeding or make any claim under this
Agreement or in connection with the transactions contemplated hereby except
against any of the Parties or their respective successors and permitted assigns,
as applicable.
[Signature Pages Follow]

77

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

IN WITNESS WHEREOF, the Parties have duly executed this Backstop Commitment
Agreement as of the date first above written.
MOMENTIVE PERFORMANCE MATERIALS HOLDINGS INC.
By:    /s/ William Carter    
Name: William Carter
Title: Chief Financial Officer, Executive Vice President and Director
MOMENTIVE PERFORMANCE MATERIALS INC.
By:    /s/ William Carter    
Name: William Carter
Title: Chief Financial Officer, Executive Vice President and Director

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

COMPANY DISCLOSURE SCHEDULES
TO
BACKSTOP COMMITMENT AGREEMENT
AMONG
MOMENTIVE PERFORMANCE MATERIALS HOLDINGS INC.,
MOMENTIVE PERFORMANCE MATERIALS INC.
AND
THE COMMITMENT PARTIES PARTY HERETO
Dated as of May 9, 2014

The contents of these Company Disclosure Schedules include exceptions to the
representations, warranties and covenants contained in Article IV of, and
information to be disclosed pursuant to, the Backstop Commitment Agreement,
dated as of May 9, 2014, by and among Momentive Performance Materials Holdings
Inc., Momentive Performance Materials Inc. and the Commitment Parties party
thereto (the “Agreement”). Capitalized terms used in these Company Disclosure
Schedules but not defined herein shall have the meanings ascribed to them in the
Agreement.
Section and subsection references in these Company Disclosure Schedules are
references to the corresponding sections and subsections of the Agreement to
which the disclosed exception or information relates and are included for
convenience only and are not intended to limit the effect of the disclosures or
information contained in these Company Disclosure Schedules or to expand the
scope of the information required to be disclosed. Any disclosure or information
with respect to any section or subsection of these Company Disclosure Schedules
shall be deemed to be disclosed for purposes of all other sections and
subsections of these Company Disclosure Schedules to the extent that such
disclosure is made in such a way as to make the relevance of such disclosure or
information to such other sections and subsections reasonably apparent on its
face.
These Company Disclosure Schedules and the disclosures and information contained
therein shall not be deemed to expand in any way the scope or effect of any of
the representations, warranties and covenants contained in the Agreement. To the
extent that any representation, warranty or covenant contained in the Agreement
is limited or qualified by the materiality of the matters to which the
representation, warranty or covenant is given, the inclusion of any matter in
these Company Disclosure Schedules does not constitute a determination by the
Company or any of its Subsidiaries that such matters are material. Nor in such
cases where a representation, warranty, covenant or condition precedent is
limited or qualified by the materiality of the matters to which

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

the representation, warranty or covenant is given shall the disclosure of any
matter in these Company Disclosure Schedules imply that any other, undisclosed
matter having a greater value or other significance is material.
Nothing in these Company Disclosure Schedules constitutes an admission of
liability or obligation of the Company or any of its Subsidiaries to any third
party, nor an admission against the interests of the Company or any of its
Subsidiaries.

2

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

Section 1.1
Permitted Liens
1.
Liens securing the indebtedness set forth on the following table:

Legal Entity
Type
USD Equivalent, as of December 31, 2013
Momentive Performance Materials (Nantong) Co. Ltd.
Fixed Asset Loan
$15 million
Momentive Performance Materials (Nantong) Co. Ltd.
Various Working Capital Loans
$24 million
Momentive Performance Materials (India) Private Limited
Medium Term Loan
$1 million
Momentive Performance Materials (India) Private Limited
Indian Buyers Credit
$5 million

3

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

2.
Liens set forth on the following table¹

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
Momentive Performance Materials Holdings Inc.
DE
200664209813
12/4/2006
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility) *
 
 
20112761933
07/19/11
CONT
JPMORGAN CHASE BANK, N.A.
See above
 
 
20113241281
08/22/2011
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20124434397
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573865
04/24/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131613307
04/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573758
04/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)

¹     The Parties acknowledge that (a) as of the date of the Agreement, the
Liens denoted with an “*” are not currently anticipated to survive the Effective
Date under the current draft of the Plan, (b) the Plan, and thus the treatment
of the Liens listed in this Section 1.1, is subject to change from and after the
date of the Agreement in accordance with the terms and conditions of the
Agreement and the other Transaction Agreements, and (c) neither the Company nor
any of its Subsidiaries is making any representation or warranty regarding the
survival or termination of the Liens listed in this Section 1.1.

4

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
Momentive Performance Materials Inc.
DE
33079145
11/21/2003
UCC-1
GELCO CORPORATION DBA GE FLEET SERVICES
2004 Ford F450
 
 
20080428647
2/5/2008
AMEND
GELCO CORPORATION DBA GE FLEET SERVICES
See above
 
 
20083791967
11/12/2008
CONT
GELCO CORPORATION DBA GE FLEET SERVICES
See above
 
 
20133307262
08/23/2013
CONT
GELCO CORPORATION DBA GE FLEET SERVICES
See above
 
 
200664210092
12/04/2006
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility and the
pre-petition 1st lien $1.1B 8.875% Notes) *
 
 
20112761974
07/19/2011
CONT
JPMORGAN CHASE BANK, N.A.
See above
 
 
20113240648
08/22/2011
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20124434405
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573998
04/24/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131614016
04/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20081793734
5/23/2008
UCC-1
DELL FINANCIAL SERVICES L.L.C.
All computer equipment and peripherals financed under and described in the
Master Lease Agreement
 
 
20130900044
3/8/2013
CONT
DELL FINANCIAL SERVICES L.L.C.
See above
 
 
20083052402
9/9/2008
UCC-1
CISCO SYSTEMS CAPITAL CORPORATION
All equipment (manufactured by Cisco Systems, Inc., its affiliates and others)
and related claims, books and records and software
 
 
20133393379
8/29/2013
CONT
CISCO SYSTEMS CAPITAL CORPORATION
See above

5

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20083393269
10/7/2008
UCC-1
PACKAGING CORPORATION OF AMERICA
All corrugated shipping containers delivered to 340 O’Neill Dr. Hebron, OH 43205
 
 
20132526524
7/1/2013
CONT
PACKAGING CORPORATION OF AMERICA
See above
 
 
20091482725
5/11/2009
UCC-1
COACTIV CAPITAL PARTNERS, INC.
Equipment
 
 
20091482758
5/11/2009
UCC-1
COACTIV CAPITAL PARTNERS, INC.
Equipment
 
 
20112267360
6/14/2011
UCC-1
GELCO CORPORATION DBA GE FLEET SERVICES
2006 Make Toyota Model 7FGU25; Forklift, log $7272668, GE unit #26045, VIN
#83072
 
 
20112839234
7/22/2011
UCC-1
GELCO CORPORATION DBA GE FLEET SERVICES
2006 Make Ford Model E350 14 ft Rockport Aluminum Van Body with Tommygate 89-169
Railgate platform, log #7294020, GE unit #26300, VIN # 1FDWE35L86DA92181
 
 
20120280125
1/24/2012
UCC-1
PPG INDUSTRIES, INC.
All inventories and goods sold by PPG to the Debtor under all agreements between
PPG and the Debtor.
 
 
20133394070
08/30/2013
AMEND
AXIALL CORPORATION
See above (name change)
 
 
20122028878
05/25/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition 1.5 Lien $250MM 10%
Notes) *
 
 
20132076678
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20124433894
11/16/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition Second Lien Notes) *
 
 
20132077353
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY
See above
 
 
20131573915
04/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)

6

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20134638178
11/25/2013
UCC-1
CHG-MERIDIAN USA CORPP.
All equipment leased or financed pursuant to that certain Master Equipment Lease
No. 8384 effective as of August 17, 2010
Momentive Performance Materials Worldwide Inc.
DE
64210175
12/04/2006
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility and the
pre-petition 1st lien $1.1B 8.875% Notes) *
 
 
20112761941
07/19/2011
CONT
JPMORGAN CHASE BANK, N.A.
See above
 
 
20113241059
08/22/2011
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20124434660
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573964
04/24/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131614065
04/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20122028977
05/25/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition 1.5 Lien $250MM 10%
Notes) *
 
 
20132076983
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20124434348
11/16/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition Second Lien Notes) *
 
 
20132077106
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20131573899
04/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)
Momentive Performance Materials Quartz, Inc.
DE
64210233
12/04/2006
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility and the
pre-petition 1st lien $1.1B 8.875% Notes) *

7

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
64563821
12/28/2006
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20112761834
07/19/2011
CONT
JPMORGAN CHASE BANK, N.A.
See above
 
 
20113241596
08/22/2011
AMEND
JP MORGAN CHASE BANK, N.A.
See above
 
 
20124434520
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573907
04/24/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131613356
04/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20102476186
07/16/2010
UCC-1
WELLS FARGO BANK, N.A.
Clark forklift CST-15 S/N 031369
 
 
20122028902
05/25/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition 1.5 Lien $250MM 10%
Notes) *
 
 
20124433928
11/16/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition Second Lien Notes) *
 
 
20131573766
04/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)
Momentive Performance Materials USA Inc.
DE
64210274
12/04/2006
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility and the
pre-petition 1st lien $1.1B 8.875% Notes) *
 
 
20112761883
07/19/2011
CONT
JPMORGAN CHASE BANK, N.A.
See above
 
 
20113240580
08/22/2011
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20124434652
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573949
04/24/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131613992
04/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above

8

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20072822343
7/26/2007
UCC-1
GENERAL ELECTRIC CAPITAL CORPORATION
All equipment and related items in any Lease Schedule subject to that certain
Master Lease Agreement No. 8334163
 
 
20121845843
5/14/2012
AMEND
GENERAL ELECTRIC CAPITAL CORPORATION
See above
 
 
20121845884
5/14/2012
CONT
GENERAL ELECTRIC CAPITAL CORPORATION
See above
 
 
20074113816
10/22/2007
UCC-1
GENERAL ELECTRIC CAPITAL CORPORATION
Equipment and other assets listed on attached annex
 
 
20122729434
7/16/2012
CONT
GENERAL ELECTRIC CAPITAL CORPORATION
See above
 
 
20122729459
7/16/2012
AMEND
GENERAL ELECTRIC CAPITAL CORPORATION
See above
 
 
20080040814
12/31/2007
UCC-1
GENERAL ELECTRIC CAPITAL CORPORATION
Equipment and other assets described on attached annex
 
 
20123915768
10/11/2012
CONT
GENERAL ELECTRIC CAPITAL CORPORATION
See above
 
 
20123915834
10/11/2012
AMEND
GENERAL ELECTRIC CAPITAL CORPORATION
See above
 
 
20080331056
1/22/2008
UCC-1
GENERAL ELECTRIC CAPITALCORPORATION
Equipment and other assets described on attached annex
 
 
20124689354
12/5/2012
CONT
GENERAL ELECTRIC CAPITAL CORPORATION
See above
 
 
20124690444
12/5/2012
AMEND
GENERAL ELECTRIC CAPITAL CORPORATION
See above
 
 
20090644614
2/27/2009
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
New Toyota Forklift Model: 7FBEU15, Serial Number: 7FBEU15-20235 and battery
 
 
20090702651
3/5/2009
UCC-1
PPG INDUSTRIES, INC.
All inventories sold and/or goods in transit sold by PPG to the Debtor under all
agreements between PPG and the Debtor.
 
 
20133394096
8/30/2013
AMEND
AXIALL CORPORATION
See above (name change)
 
 
20090975786
3/27/2009
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota Forklift Model: 7FGCU55, S/N: 7FGCU55-70285

9

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20091291423
4/23/2009
UCC-1
THE DOW CHEMICAL COMPANY
Consignment Product: Isopropanol 99%
 
 
20091291456
4/23/2009
UCC-1
THE DOW CHEMICAL COMPANY
Consignment Product: Methyl Chloride
 
 
20091545539
5/15/2009
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota Forklift Model: 7FGCU55, S/N: 7FGCU55-70303
 
 
20093644553
11/13/2009
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota Forklift Model: 8FGCU25, S/N: 8FGCU25-26529
 
 
20093773097
11/24/2009
UCC-1
TOYOTA MATERIAL HANDLINGCORPORATION
Toyota Forklift Model: 8FGCU25, S/N: 8FGCU25-20511
 
 
20093774822
11/24/2009
AMEND
TOYOTA MOTOR CREDIT CORPORATION
See above
 
 
20093862999
12/3/2009
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota Forklift Model: 7FBEU15, S/N: 7FBEU15-20867
Toyota Forklift Model: 7FGCU25, S/N: 7FGCU25-99292
 
 
20101844095
5/26/2010
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota Forklift Model: 8FGCU25, S/N: 8FGCU25-27500
 
 
20102280869
6/30/2010
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota Forklift Model: 8FGCU25, S/N: 8FGCU25-28489; Cascade Dum Dumper S/N:
1089044-T1
 
 
20102798936
8/11/2010
UCC-1
SOMERSET LEASING CORP. IV
Hyster H120FT Forklift
 
 
20102888661
8/18/2010
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota Forklift Model: 7FGCU25, S/N: 7FGCU25-70481
 
 
20103202466
9/14/2010
UCC-1
CHG-MERIDIAN U.S. FINANCE, LTD.
Various computer equipment leased pursuant to Equipment Schedule #001 to Master
Lease #8384
 
 
20110386279
1/10/2011
AMEND
CHG-MERIDIAN U.S. FINANCE, LTD.
Added various computer equipment leased pursuant to Equipment Schedule 001 to
Master Lease #8384
 
 
20103352394
9/27/2010
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota Forklift Model: 7FBEU15, S/N: 7FBEU15-21714
 
 
20110268584
1/25/2011
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota Forklift Model: 8FGCU25, S/N: 8FGCU25-31384

10

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20110645278
2/22/2011
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota Forklift Model: 8FGCU25, S/N: 8FGCU25-31803
 
 
20110854482
3/8/2011
UCC-1
US CAPITAL EQUIPMENT LEASING,
INC.
All present and future goods leased pursuant to the Master Equipment Lease
Agreement dated July 14, 2010
 
 
20111117376
3/25/2011
ASSIGN
US Capital Equipment Leasing, Inc
Material handling equipment, fork trucks and other assets leased under Equipment
schedule No. US1202-001, US1201-002 and US 1201-003 to Master Equipment Lease
Agreement, dated as of July 14, 2010
 
 
20111300733
4/7/2011
ASSIGN
SOMERSET CAPITAL GROUP, LTD.
Full assignment
 
 
20111070690
3/23/2011
UCC-1
SOMERSET LEASING CORP. VI
Equipment leased under Equipment Schedule No. 14 to the Master Lease Agreement
dated July 9, 2010 - MCW040-E Yale 4, Motorized Hand Trucks
 
 
20111070708
3/23/2011
UCC-1
SOMERSET LEASING CORP. VI
Equipment leased under Equipment Schedule No. 15 to the Master Lease Agreement
dated July 9, 2010 - 42” forks, industrial batteries and chargers
 
 
20111070716
3/23/2011
UCC-1
SOMERSET LEASING CORP. VI
Equipment leased under Equipment Schedule No. 16 to the Master Lease Agreement
dated July 9, 2010 - Low lift walkie pallet truck and freight shipping
 
 
20111116238
3/25/2011
UCC-1
SOMERSET CAPITAL GROUP, LTD.
Material equipment, fork trucks and other assets under Lease Schedule Nos.
US1202-001, US1202-002 and US1202-003 to Master Equipment Lease Agreement dated
July 14, 2010

11

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20111247322
4/5/2011
UCC-1
SOMERSET LEASING CORP. VI
Equipment leased under Equipment Schedule No. 11 to the Master Lease Agreement
dated July 9, 2010 - Forklifts
 
 
20111434474
4/18/2011
UCC-1
SOMERSET CAPITAL GROUP, LTD.
Equipment leased under Equipment Schedule No. 17 to the Master Lease Agreement
dated July 9, 2010 - Caterpillar Forks
 
 
20111824138
5/13/2011
UCC-1
SOMERSET LEASING CORP. I
Equipment leased under Equipment Schedule No. 13 to the Master Lease Agreement
dated July 9, 2010Yard tractors
 
 
20112467721
6/28/2011
UCC-1
SOMERSET LEASING CORP. I
Equipment leased under Equipment Schedule No. 19 to the Master Lease Agreement
dated July 9, 2010 - Batteries and chargers
 
 
20135163655
12/30/2013
ASSIGN
SQN ECHO, LLC
Full assignment
 
 
20113152983
7/25/2011
UCC-1
Lift Lease & Finance Corp., Ltd.
Equipment leased under Equipment Schedule No. 008 to the Master Lease Agreement
dated January 10, 2011 - Forklift, batteries and chargers
 
 
20113154732
7/25/2011
UCC-1
Lift Lease & Finance Corp., Ltd.
Equipment leased under Equipment Schedule No. 005 to the Master Lease Agreement
dated January 10, 2011 - Forklifts, batteries and chargers
 
 
20113155028
7/25/2011
UCC-1
Lift Lease & Finance Corp., Ltd.
Equipment leased under Equipment Schedule No. 002 to the Master Lease Agreement
dated January 10, 2011 - Forklifts
 
 
20113155168
7/25/2011
UCC-1
Lift Lease & Finance Corp., Ltd.
Equipment leased under Equipment Schedule No. 007 to the Master Lease Agreement
dated January 10, 2011 - Forklift, batteries and chargers

12

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20113501916
9/13/2011
UCC-1
SOMERSET LEASING CORP. VII
Equipment leased under Equipment Schedule No. 12 to the Master Lease Agreement
dated July 9, 2010 – Forks, forklifts
 
 
20113616649
9/12/2011
UCC-1
EVERGREEN RESOURCES LLC
Equipment leased under Equipment Schedule No. 001 to the Lease Agreement No. 120
dated January 10, 2011 – Walkie Trucks
 
 
20114013978
10/18/2011
UCC-1
SOMERSET CAPITAL GROUP, LTD.
Equipment leased under Equipment Schedule No. 18 to the Master Lease Agreement
dated July 9, 2010 – Battery, forklift
 
 
20114043330
10/20/2011
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota forklift
 
 
20114133859
10/17/2011
UCC-1
EVERGREEN RESOURCES LLC
Equipment leased under Equipment Schedule No. 009 to the Lease Agreement No. 120
dated January 10, 2011 - forklifts
 
 
20114300474
11/8/2011
UCC-1
SOMERSET LEASING CORP. I
Equipment leased under Equipment Schedule No. 20 to the Master Lease Agreement
dated July 9, 2010 – Batteries, forklifts
 
 
20114633189
12/5/2011
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota reach truck and charger
 
 
20114933928
12/22/2011
UCC-1
SOMERSET LEASING CORP. XI
Equipment leased under Equipment Schedule No. 21 to the Master Lease Agreement
dated July 9, 2010 – battery and forklift
 
 
20121081456
3/21/2012
ASSIGN
SOMERSET LEASING CORP. XI
Full assignment
 
 
20120121196
1/3/2012
UCC-1
EVERGREEN RESOURCES LLC
Equipment leased under Equipment Schedule No. 010 to the Master Lease Agreement
dated January 10, 2011 - forklift
 
 
20121137449
3/26/2012
UCC-1
SOMERSET LEASING CORP. XI
Equipment leased under Equipment Schedule No. 22 to the Master Lease Agreement
dated July 9, 2010 – freight and battery

13

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20123241603
8/21/2012
ASSIGN
SOMERSET LEASING CORP. VIII
Full assignment
 
 
20121222795
3/30/2012
UCC-1
SOMERSET LEASING CORP. VI
Equipment leased under Equipment Schedule No. 8 to the Master Lease Agreement
dated July 9, 2010 – battery and forks
 
 
20121781915
5/8/2012
UCC-1
SOMERSET LEASING CORP. XI
Equipment leased under Equipment Schedule No. 23 to the Master Lease Agreement
dated July 9, 2010 – battery chargers
 
 
20123303882
8/24/2012
ASSIGN
SOMERSET LEASING CORP. VIII
Full assignment
 
 
20122028969
05/25/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition 1.5 Lien $250MM 10%
Notes) *
 
 
20132076850
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20122414854
6/12/2012
UCC-1
EVERGREEN RESOURCES LLC
Equipment leased under Equipment Schedule No. 011 to the Master Lease Agreement
dated January 10, 2011 - forklift
 
 
20123308626
8/16/2012
UCC-1
EVERGREEN RESOURCES LLC
Equipment leased under Equipment Schedule No. 012 to the Master Lease Agreement
dated January 10, 2011 - forklift
 
 
20123733823
09/27/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
General intangibles, goods, inventory and other collateral that is secured by
the Mortgage, dated as of September 21, 2012 (for 703 South Street, New Smryna
Beach, FL 32168) that does not constitute real property or fixtures (in
connection with the pre-petition 1.5 Lien $250MM 10% Notes) *
 
 
20132295039
06/14/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above

14

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20124028934
10/18/2012
UCC-1
Somerset Leasing Corp. V
Equipment leased under Equipment Schedule No. 25 to the Master Lease Agreement
dated July 9, 2010 – batteries and forklifts
 
 
20124178986
10/31/2012
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota forklifts SN: 7FBEU20-21340; 7FBEU20-21344
 
 
20124434306
11/16/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition Second Lien Notes) *
 
 
20132077213
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20124687341
12/5/2012
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota Forklift Model: 8FGCU25, S/N: 8FGCU25-43508
 
 
20130224502
1/17/2013
UCC-1
TOYOTA MOTOR CREDIT CORPORATION
Toyota forklifts SN: 7FBEU15-24869
 
 
20130244955
1/18/2013
UCC-1
Somerset Capital Group, Ltd.
Equipment leased under Equipment Schedule No. 27 to the Master Lease Agreement
dated July 9, 2010 – walkie pallet truck
 
 
20130320334
1/24/2013
UCC-1
Somerset Leasing Corp. V
Equipment leased under Equipment Schedule No. 24 to the Master Lease Agreement
dated July 9, 2010 – battery builders
 
 
20130690959
2/21/2013
UCC-1
Somerset Leasing Corp. VIII
Equipment leased under Equipment Schedule No. 28 to the Master Lease Agreement
dated July 9, 2010 – Viking 2008 Trackmobile Railcar Mover SN 986-0908
 
 
20135163671
12/30/2013
ASSIGN
SQN ECHO, LLC
Full assignment
 
 
20130751082
2/26/2013
UCC-1
Toyota Motor Credit Corporation
Toyota forklifts SN: 7FBEU15-25034

15

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20131052530
03/19/2013
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
General intangibles, goods, inventory and other collateral that is secured by
the Mortgage, dated as of March 15, 2013 (related to the Indenture dated as of
November 5, 2010) that does not constitute real property or fixtures (in
connection with the Second Lien Notes) *
 
 
20131052621
03/19/2013
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
General intangibles, goods, inventory and other collateral that is secured by
the Mortgage, dated as of March 15, 2013 (related to the Indenture dated as of
October 25, 2012) that does not constitute real property or fixtures (in
connection with the pre-petition 1st lien $1.1B 8.875% Notes) *
 
 
20132295229
06/14/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20131118448
3/22/2013
UCC-1
Somerset Leasing Corp. V
Equipment leased under Equipment Schedule No. 24A to the Master Lease Agreement
dated July 9, 2010 – forklift
 
 
20131256677
4/2/2013
UCC-1
Somerset Leasing Corp. VIII
Equipment leased under Equipment Schedule No. 26 to the Master Lease Agreement
dated July 9, 2010 – battery builders
 
 
20131387837
4/11/2013
AMEND
Somerset Leasing Corp. VIII
Restated collateral - equipment leased under Equipment Schedule No. 26 to the
Master Lease Agreement dated July 9, 2010 – yale walkie counterbalanced truck
and exide batteries
 
 
20131573881
04/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)
 
 
20133856292
10/2/2013
UCC-1
Toyota Motor Credit Corporation
SV2632D SN: SV2632D-739095

16

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20135059887
12/20/2013
UCC-1
MPM AR LLC
Collateral related to that certain Contribution Agreement, dated as of May 10,
2011
Juniper Bond Holdings I LLC
DE
20080034858
01/03/2008
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility and the
pre-petition 1st lien $1.1B 8.875% Notes) *
 
 
20123129386
08/14/2012
CONT
JPMORGAN CHASE BANK, N.A.
See above
 
 
20123681055
09/25/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20124434132
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573741
04/24/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131613281
04/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20122028480
05/25/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition 1.5 Lien $250MM 10%
Notes) *
 
 
20132075548
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20124433522
11/16/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition Second Lien Notes) *
 
 
20132077635
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20131573725
04/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)
Juniper Bond Holdings II LLC
DE
20080035137
01/03/2008
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility and the
pre-petition 1st lien $1.1B 8.875% Notes) *
 
 
20123031525
08/07/2012
CONT
JPMORGAN CHASE BANK, N.A.
See above

17

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20123723030
09/27/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20124434256
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573675
04/24/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131613331
04/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20122028589
05/25/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition 1.5 Lien $250MM 10%
Notes) *
 
 
20132075761
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20124433704
11/16/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition Second Lien Notes) *
 
 
20132077593
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20131573683
04/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)
Juniper Bond Holdings III LLC
DE
20080035194
01/03/2008
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility and the
pre-petition 1st lien $1.1B 8.875% Notes) *
 
 
20123031574
08/07/2012
CONT
JPMORGAN CHASE BANK, N.A.
See above
 
 
20123723055
09/27/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20124434322
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573642
04/24/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131613349
04/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above

18

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20122028688
05/25/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition 1.5 Lien $250MM 10%
Notes) *
 
 
20132076140
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20124433753
11/16/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition Second Lien Notes) *
 
 
20132077569
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20131573659
04/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)
Juniper Bond Holdings IV LLC
DE
20080035319
01/03/2008
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility and the
pre-petition 1st lien $1.1B 8.875% Notes) *
 
 
20123031467
08/07/2012
CONT
JPMORGAN CHASE BANK, N.A.
See above
 
 
20124434371
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573717
04/24/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131613315
04/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20122028803
05/25/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition 1.5 Lien $250MM 10%
Notes) *
 
 
20132076306
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20124433787
11/16/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition Second Lien Notes) *

19

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
20132077544
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20131573709
04/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)
Momentive Performance Materials China SPV Inc.
DE
20064210456
12/04/2006
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility and the
pre-petition 1st lien $1.1B 8.875% Notes) *
 
 
20112761602
07/19/2011
CONT
JPMORGAN CHASE BANK, N.A.
See above
 
 
20113241000
08/22/2011
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20124434389
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573808
04/24/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131613299
04/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20122028852
05/25/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition 1.5 Lien $250MM 10%
Notes) *
 
 
20132076389
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20124433878
11/16/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition Second Lien Notes) *
 
 
20132077429
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20131573733
04/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)

20

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
Momentive Performance Materials South America Inc.
DE
20064210399
12/04/2006
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility and the
pre-petition 1st lien $1.1B 8.875% Notes) *
 
 
20112761792
07/19/2011
CONT
JPMORGAN CHASE BANK, N.A.
See above
 
 
20113240606
08/22/2011
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20124434603
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131573923
04/24/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20131613984
04/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
20122028936
05/25/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition 1.5 Lien $250MM 10%
Notes) *
 
 
20132076751
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20124434280
11/16/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition Second Lien Notes) *
 
 
20132077296
05/31/2013
AMEND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
See above
 
 
20131573873
04/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)
MPM Silicones, LLC
NY
200612040956189
12/4/2006
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition GE Cash Flow Facility and the
pre-petition 1st lien $1.1B 8.875% Notes) *
 
 
200612150992037
12/15/2006
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
201107195776979
7/19/2011
CONT
JPMORGAN CHASE BANK, N.A.
See above

21

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

Debtor
State
File Number
File Date
File Type
Secured Party
Description of Collateral
 
 
201108225910948
8/22/2011
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
201211160646342
11/16/2012
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
201304250222617
4/25/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
201304290227552
4/29/2013
AMEND
JPMORGAN CHASE BANK, N.A.
See above
 
 
201001150026377
1/15/2010
UCC-1
UNIPEX SOLUTIONS CANADA INC.
All of the methanol quality described in Schedule A pursuant to the Contract of
Supply of Methanol dated January 1, 2010
 
 
201203270171531
3/27/2012
UCC-1
GLOBE METALLURGICAL, INC.
All of the silicon metal of the quality described in Schedule A pursuant to
Purchase Agreement dated January 1, 2012
 
 
201205250296561
5/25/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition 1.5 Lien $250MM 10%
Notes) *
 
 
201211160646025
11/16/2012
UCC-1
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
All personal property (in connection with the pre-petition Second Lien Notes) *
 
 
201304240221586
4/24/2013
UCC-1
JPMORGAN CHASE BANK, N.A.
All assets (in connection with the pre-petition ABL Facility)

22

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

Section 4.1
Organization and Qualification
N/A

23

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

Section 4.2
Corporate Power and Authority
N/A

24

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

Section 4.3
Execution and Delivery; Enforceability
N/A

25

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

Section 4.4
Authorized and Issued Capital Stock
N/A

26

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

Section 4.5
Issuance
N/A

27

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

Section 4.6
No Conflict
1.
Pursuant to that Global Sales Agreement NA4424, dated as of January 1, 2012, by
and between The Dow Chemical Company (“Dow”) and MPM, Dow is entitled to
terminate the agreement (and all related “Supplementary Agreements”) immediately
upon written notice to MPM upon any of the following events: (a) the insolvency
of MPM, MPM suffering or committing any act of insolvency, or the inability of
MPM to pay its debts, (b) MPM’s bankruptcy or liquidation (whether voluntary or
involuntary) or the appointment for MPM of a receiver or liquidator, and (c) a
change in control or dissolution of MPM (“change in control” is not defined).

2.
Pursuant to that Supplier Purchase Agreement (Packaging), dated as of January 1,
2009, by and between Fischbach USA Inc. (“Fischbach”) and MPM, certain
obligations are triggered in the event that MPM is “sold to another entity.”
Specifically, (i) the agreement and all provisions therein survive the sale and
become the responsibility, and inure to the benefit, of the buyer/new owner of
MPM, (ii) MPM must notify Fischbach of the potential sale and purchase of MPM at
least 45 days prior to the closing of the sale, (iii) the buyer/new owner of MPM
shall be advised by MPM of this provision in writing (in the transaction
agreement to the extent practical) at least 45 days prior to the closing of the
sale, and (iv) the buyer/new owner of MPM shall agree to honor all provisions
and assume all of MPM’s obligations under the agreement.

3.
Various Contracts to which one or more Debtors is a party (and to which no
Subsidiary of the Company that is not a Debtor is a party) contain provisions
that apply in the event of a bankruptcy or similar filing, insolvency, entry
into a plan of reorganization or similar event.  By virtue of such provisions,
the commencement of the Chapter 11 Proceedings and/or the adoption and
effectiveness of the Plan and the transactions contemplated thereby would
conflict with, result in a breach, modification or violation of, constitute a
default under, result in the acceleration of or the creation of a Lien under, or
cause any payment or consent to be required under, such Contracts. Some or all
of these provisions may or may not be enforceable under the Bankruptcy Code or
under other applicable Law.

28

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

Section 4.7
Consents and Approvals
N/A

29

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

Section 4.8
Arm’s-Length
N/A

30

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

Section 4.9
Financial Statements
N/A

31

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

Section 4.10
Company SEC Documents and Disclosure Statement
N/A

32

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

Section 4.11
Absence of Certain Changes
N/A

33

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

Section 4.12
No Violation; Compliance with Laws
1.
See Section 4.19 of these Company Disclosure Schedules.

34

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

Section 4.13
Legal Proceedings
1.
See Section 4.19 and Section 4.20 of these Company Disclosure Schedules.

35

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

Section 4.14
Labor Relations
N/A

36

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

Section 4.15
Intellectual Property
N/A

37

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

Section 4.16
Title to Real and Personal Property
N/A

38

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

Section 4.17
No Undisclosed Relationships
N/A

39

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

Section 4.18
Licenses and Permits
N/A

40

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

Section 4.19
Environmental
Actual and alleged environmental violations were identified by the Company at
the Company’s facility in Waterford, New York with respect to air quality and
hazardous waste regulations. The Company has been cooperating with the New York
State Department of Environmental Conservation (the “NYSDEC”) in addressing
these actual and alleged violations. Although the Company believes that the
costs and potential penalties associated with these actual and alleged
violations will not have a material adverse impact on its business, these issues
may result in administrative and/or civil enforcement by the State of New York
and resolution of such enforcement actions will likely require payment of a
monetary penalty and/or the imposition of other civil sanctions.
In 2008, the NYSDEC issued a notice of violation alleging certain failures to
comply with the State and federal regulatory requirements governing the
treatment of hazardous waste and the operation of the hazardous waste
incinerators at the Company’s Waterford, New York, facility. Subsequently, in
the second quarter of 2009, the USEPA and the U.S. Department of Justice sought,
through search warrant and subpoena, additional information related to the
alleged noncompliances. The Company is cooperating with the State and federal
authorities. Although the Company believes that the costs and potential
penalties associated with these violations will not have a material adverse
impact on its business, these investigations may result in administrative, civil
and/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 and/or criminal sanctions.
In February 2012, the Italian regional environmental agency assessed an
administrative penalty against the directors of the Company’s Italian subsidiary
in connection with allegations that the Company’s Termoli, Italy facility
violated certain hazardous waste record keeping and reporting requirements
during the period from November 2010 to July 2011. In accordance with agency
policies, the Company settled the matter by paying €175,667 in April 2012. The
agency has also alleged that the Company’s Termoli, Italy facility has violated
certain hazardous waste storage and disposal requirements. Although the Company
believes that the costs and potential penalties associated with these violations
will not have a material adverse impact on its business, these allegations may
be the subject of further enforcement actions, including criminal enforcement.
The Company has identified the presence of polychlorinated biphenyls (PCBs) in
the soil in certain locations at its Sistersville, West Virginia facility. The
Company believes this soil contamination is the result of historic operations by
a prior owner (Union Carbide). The Company filed an action in the United States
District Court for the Northern District of New York on December 30, 2011
against the prior owner seeking reimbursement of response costs arising from
this contamination.
The Company is also involved in other remediation actions to clean up soil
and/or groundwater contamination as required by federal and state laws at
several of its manufacturing facilities and offsite landfills. Liabilities for
remediation costs for these actions have been estimated

41

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

in accordance with generally accepted accounting practices. As of December 31,
2013 and 2012, the Company had recognized obligations of $6 million for these
remediation costs, including $3.9 million for cleanup at the Company’s
Waterford, New York, facility, $1.2 million at the Company’s Sistersville, West
Virginia facility and $166,000 at the Company’s former Eulis, Texas facility. In
addition, the cost to operate the groundwater remediation system at the
Waterford, New York facility is expected to be $15 million and is to be paid
over the next 50 years.
In addition, in the normal course of our business, the Company is required to
provide financial assurances for contingent future costs associated with certain
hazardous waste management and remedial activities. Pursuant to financial
assurance requirements set forth in state hazardous waste permit regulations
applicable to the Company’s manufacturing facilities in Waterford, New York and
Sistersville, West Virginia, the Company has provided letters of credit in the
following amounts: $25.3 million for closure and post-closure care for the
Waterford and Sistersville facilities; and $10 million (annual aggregate) for
accidental occurrences at the Waterford and Sistersville facilities. The Company
is currently in discussions with the NYSDEC regarding the renewal of the
Waterford facility’s hazardous waste permit. In connection with the renewal, the
NYSDEC may increase the financial assurances that the Company is required to
provide for this facility, which may result in a material increase in the amount
of letters of credit or other assurance that the Company must deliver.

42

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

Section 4.20
Tax Returns
The following Tax related claims/assessments are currently pending:
 
Entity
Relevant Tax Period
Jurisdiction / Governmental Authority
Brief Description of Matter
1.
MPM Specialties Srl
2003FY
Italy / Tax Court of Campobasso
On 10/14/08, MPM received a tax assessment under which the Revenue Agency
assessed the fiscal deductibility of interest expenses accounted for and
reported by MPM for €2,148,250.56 in FY2003.

MPM appealed and the Provincial Tax Commission of Campobass resolved in favor of
MPM. The Revenue Agency appealed on 3/7/2011.

A hearing is pending.
2.
MPM Specialties Srl
2004FY
Italy / Tax Court of Campobasso
On 12/2/09, MPM received a deed of assessment under which the Revenue Agency (i)
disregarded the fiscal deductibility of interest expenses accounted for and
reported by MPM for €5,102,484.59 in FY2004, (ii) disregarded the
non-deductibility of amortization of intangible assets amounting to €
8,267,340.25, (iii) objected to non-documented costs for €1,800.00 and
unreported VAT payable amounting to €362,876.02, (iv) assessed higher IRES
(income tax) of €1,413,840.00, higher IRAP (community tax) of €568,294.00,
higher VAT of €362,518.00 and sanctions of €2,709,950.

MPM appealed and the Tax Court of Campobasso resolved in favor of MPM. The
decision was appealed by the Revenue Agency on 7/1/13 and MPM filed a notice of
rebuttal on 10/15/13.

A hearing is pending.

43

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

 
Entity
Relevant Tax Period
Jurisdiction / Governmental Authority
Brief Description of Matter
3.
MPM Specialties Srl
2005FY
Italy / Tax Court of Campobasso
On 12/2/09, MPM received a deed of assessment under which the Revenue Agency (i)
assessed the fiscal deductibility of interest expenses accounted for and
reported by MPM for €4,927,465.32 in FY2005, (ii) assessed the non-deductibility
of amortization of intangible assets amounting to €4,596,641.18, and (iii)
objected to non-documented costs of €41,608.46 and VAT of €347,715.25. The
Revenue Agency has therefore assessed higher IRES (income tax) equaling
€1,485,659, higher IRAP (community tax) equaling €406,543.00, VAT equaling
€347,715.00 and penalties of €3,342,732.75.

MPM appealed and the Tax Court of Campobasso resolved in favor of MPM.
The decision was appealed by the Revenue Agency on 7/1/13 and MPM filed a notice
of rebuttal on 10/15/13.

A hearing is pending.   
4.
MPM Specialties Srl
2006FY
Italy / Tax Court of Campobasso
On 12/12/11, MPM received a notice of assessment for tax year 2006 under which
the Revenue Agency (i) assessed the fiscal deductibility of interest expenses
accounted for and reported by MPM for €1,238,176.00 in TY2006, (ii) assessed
extraordinary expenses (penalties) paid for the early extinction of a loan
granted by GE Central Europe LCC for €5,167,938.98, (iii) assessed
non-deductibility of amortization of intangible assets amounting to
€4,542,346.00, (iv) assessed share of substitute tax amounting to €872,665.00.

MPM appealed and the Tax Court of Campobasso resolved in favor of MPM. The
decision was appealed by the Revenue Agency on 7/1/13 and MPM filed its rebuttal
on 10/15/13.

A hearing is pending.   

44

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

 
Entity
Relevant Tax Period
Jurisdiction / Governmental Authority
Brief Description of Matter
5.
MPM Specialties Srl
2007FY
Italy / Tax Court of Campobasso
On 12/20/11, MPM received two notices of assessment for tax year 2007 on IRES
(Income Tax) and IRAP (Community Tax), under which the Revenue Agency (i)
assessed non-deductibility of amortization of intangible assets amounting to
€4,542,346.00; (ii) assessed share of substitute tax amounting to €872,665.00;
(iii) alleged operating loss improperly utilized €3,124,512.00; (iv) total
assessed IRES €2,818,043.00, (v) sanctions of €2,818,043.00; and (vi) assessed
higher IRAP for €284,288, and sanctions of €284,288,00.

MPM appealed and the Tax Court of Campobasso resolved in favor of MPM. The
decision was appealed by the Revenue Agency on 7/1/13 and MPM filed its rebuttal
on 10/15/13.

A hearing is pending.
6.
MPM Specialties Srl
2008FY
Italy / Tax Court of Campobasso
On 11/20-21/13, MPM Italy received two notices of assessment for tax year 2008
on IRES (Income Tax) and IRAP (Community Tax) + VAT, under which Termoli Revenue
Agency assessed: (i) non-deductibility of amortization of intangible assets
amounting to €4,592,346; (ii) share of substitute tax amounted to €872,665;
(iii) costs improperly deducted as refer to servicer rendered in other years
than 2008 €92,785.16; (iv) operating loss improperly utilized €8,043,368 - Total
assessed IRES (€3,740,491), and sanctions for €3,740,491. IRAP: based on IRES
points (i), (ii) and (iii) above, the Revenue Agency assessed higher IRAP of
€267,916, VAT assessed at €8,186, interest up to 11/30/13 at €1,327, and total
sanctions for €362,251,35, of which €77,963 are related to Tolling invoices
issued to MPM GmbH.

MPM Italy appealed on 1/16/14.

A hearing is pending.

45

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

 
Entity
Relevant Tax Period
Jurisdiction / Governmental Authority
Brief Description of Matter
7.
MPM GmbH
2008FY
Italy / Tax Court of Campobasso
On 12/13/13 and 12/20/13, MPM GmbH received an assessment for VAT for FY2008 in
direct connection of the IRAP and VAT assessment issued to MPM Italy for 2008.
The Pescara Revenue Agency assessed VAT amounting to €311,991, sanctions of
€389,987,50 and interest up to 2/28/14 of €53,273.

The original filing due date was 2/11/14 but has been extended by 90 days while
MPM and the taxing authority attempt to resolve the matter. If no resolution is
made, MPM GmbH can still appeal the assessment.
8.
MPM Suisse Sarl
2006FY
Italy / Tax Court of Campobasso
MPM received a tax assessment on 5/13/09 for the 2006FY, under which the Termoli
Revenue Agency claimed higher VAT (€258,548.00) plus interests and sanctions for
the incorrect INTRA reporting filing (total claim amounted to €267.836,00).

MPM appealed and the Tax Court of Campobasso resolved in favor of MPM. The
decision was appealed by the Revenue Agency and MPM submitted a defence deed.

A hearing is pending.
9.
Momentive Performance Materials (India) Private Limited
2009-2010FY
India / Dispute Resolution Panel / The Depurty Commission of Income
MPM received a notice of intent to assess on 3/11/14 from the Deputy
Commissioner of Income under section 144(3) r.w.s. 144C of the Income-tax Act,
1961. On April 9, 2014, Momentive notified the Dispute Resolution Panel of its
objections to the notice of intent and requesting an early hearing on the
matter. The total adjustment amount at issue is estimated to be less than
$300,000.

46

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

Section 4.21
Employee Benefit Plans
1.
The Momentive Performance Materials Inc. Pension Plan, as amended and restated
effective January 1, 2013, is underfunded (by approximately $40.6 million at
December 31, 2013).

2.
MPM maintains Other Postretirement Benefit Plans for its employees.  These are
unfunded and the December 31, 2013 accumulated post-retirement benefit
obligation was $81 million.

3.
The Company’s non-U.S. defined benefit pension plans are underfunded by
approximately $132 million. The Company’s defined benefit pension plans in
Germany are underfunded (by approximately $94.4 million at December 31, 2013).
The Company’s defined benefit pension plan in Japan is underfunded (by
approximately $32.8 million at December 31, 2013).

4.
The MSC U.S. Pension Plan is underfunded (by approximately $38 million at
December 31, 2013).

47

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

Section 4.22
Internal Control Over Financial Reporting
N/A

48

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

Section 4.23
Disclosure Controls and Procedures
N/A

49

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

Section 4.24
Material Contracts
N/A

50

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

Section 4.25
No Unlawful Payments
N/A

51

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

Section 4.26
Compliance with Money Laundering Laws
N/A

52

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

Section 4.27
Compliance with Sanctions Laws
N/A

53

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

Section 4.28
No Broker’s Fees
N/A

54

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

Section 4.29
Takeover Statutes
N/A

55

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

Section 4.30
Investment Company Act
N/A

56

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

Section 4.31
Insurance
N/A

57

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

Section 4.32
Intermediate HoldCo and Top HoldCo Corporate Power and Authority
N/A

58

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

Section 4.33
Authorized and Issued Capital Stock of Top HoldCo
N/A

59

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

Section 6.3
Conduct of Business
1.
The Company will negotiate the terms and conditions of the collective bargaining
agreement between the Company and Local 698-C of the International Chemical
Workers Union Council of the United Food and Commercial Workers prior to the
agreement’s expiration on July 23, 2014.  The negotiations will cover issues
relating to wages, health, welfare and retirement benefits and operational
issues.  The Company anticipates that it will reach an amicable agreement with
the Union as it has in prior negotiations.

2.
Potential investment in Chinese joint venture of no greater than $10 million in
cash and assets in the aggregate.

3.
Settlement of the Company’s claim in Germany against Bosch.

4.
Amendment to Xinan JV Agreement specifically relating to the Company’s future
investments in the JV.

5.
Amendments to the Momentive Performance Materials Holdings LLC 2012 Long-Term
Cash Incentive Plan solely to the extent they pertain to employees of MSC or any
of its Subsidiaries.

6.
Waste water treatment project at the Company’s Sistersville, West Virginia
facility.

7.
Licensing project in Silanes.

8.
Transactions in the ordinary course of business and consistent with past
practices contemplated by and conducted in accordance with the agreements and
arrangements with GE and Apollo (and/or their respective Affiliates) described
in Item 13 of the Annual Report on Form 10-K for the year ended December 31,
2013 that MPM filed on April 11, 2014.

9.
Transactions under the Trademark Use Agreement, dated on or about October 10,
2013, by and among Zhenjiang Momentive Union Specialty Chemicals Ltd. (“JV”),
Momentive Union Specialty Chemicals Ltd. (“JV HoldCo”), MSC, MPM and certain
other parties named therein, pursuant to which the JV is permitted to use
certain intellectual property rights associated with and related to the word
“Momentive” that are owned by MPM.

10.
Transactions under an Agency Agreement by and among Momentive Specialty
Chemicals GmbH and Momentive Performance Materials GmbH relating to the
manufacture and sale of certain products having polyurethane foam applications.

60