Page 1 of 41 pages
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
MPM TECHNOLOGIES, INC.
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(Name of Issuer)
Common Stock, $.001 par value
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(Title of Class of Securities)
553358 10 2
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(CUSIP Number)
Damian C. Georgino
Vice President, General Counsel and Corporate Secretary
United States Filter Corporation
40-004 Cook Street
Palm Desert, CA 92211
(619) 340-0098
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 30, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d- 1(b)(3) or (4), check the following box ___.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act.
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Schedule 13D
1. NAME OF REPORTING PERSON United States Filter Corporation
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 33-0266015
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ____
(b) ____
3. SEC USE ONLY
4. SOURCE OF FUNDS OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ____
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF 7. SOLE VOTING POWER 1,320,000
SHARES
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER 1,320,000
REPORTING
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,320,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ____
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.8%
14. TYPE OF REPORTING PERSON CO
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This Schedule 13D is being filed in connection with the Asset Purchase
Agreement, dated as of March 31, 1997 (the "Purchase Agreement"), between United
States Filter Corporation, a Delaware corporation ("USF"), and MPM Technologies,
Inc., a Washington corporation (the "Company"), pursuant to which USF has sold
and transferred the assets and business of its Huntington Environmental Systems
group to the Company in exchange for 1,320,000 shares of the common stock of the
Company ("Company Common Stock"). In connection with the closing of the
transactions contemplated by the Purchase Agreement, USF and the Company entered
into a Transfer and Registration Agreement dated April 30, 1997 (as amended, the
"Registration Agreement"), which grants to USF, among other things, certain
rights to have the Company Common Stock received by USF included in a
registration statement filed with respect to the Company Common Stock pursuant
to the Securities Act of 1933, as amended (the "Securities Act").
COPIES OF THE PURCHASE AGREEMENT, THE REGISTRATION AGREEMENT AND THE
AMENDMENT TO TRANSFER AND REGISTRATION AGREEMENT ARE FILED AS EXHIBIT 1, EXHIBIT
2 AND EXHIBIT 3 HERETO, RESPECTIVELY, AND ARE INCORPORATED HEREIN BY REFERENCE.
THE DESCRIPTIONS OF THE PURCHASE AGREEMENT AND THE REGISTRATION AGREEMENT
CONTAINED IN THIS SCHEDULE 13D ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO
THE COMPLETE TEXT OF SUCH EXHIBITS.
Item 1. SECURITY AND ISSUER
This Schedule 13D relates to the common stock, $.001 par value per
share of MPM Technologies, Inc. The principal executive offices of the Company
are located at 222 West Mission, Suite 30, Spokane, Washington 99201-2261.
Item 2. IDENTITY AND BACKGROUND
This Schedule 13D is being filed by United States Filter Corporation,
a Delaware corporation. The principal executive offices of USF are located at
40-004 Cook Street, Palm Desert, California 92211. USF is a leading global
provider of industrial and municipal water and wastewater treatment systems,
products and services.
Annex I attached hereto and incorporated herein by reference sets
forth the following information with respect to each director and executive
officer of USF: (a) name; (b) residence or business address; and (c) present
principal occupation or employment and the name, principal business and address
of any corporation or other organization in which such
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employment is conducted. All of the directors and executive officers of USF
identified on Annex I are United States citizens.
During the last five years, neither USF nor, to the knowledge of USF,
any of the persons named in Annex I has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
During the last five years, neither USF nor, to the knowledge of USF,
any of the persons named in Annex I has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to the Purchase Agreement, the consideration given by USF for
the acquisition of the Company Common Stock was the business and assets of USF's
Huntington Environmental Systems group and USF's agreement not to compete with
the Company in any venture related to the business of Huntington Environmental
Systems for a period of five years commencing on April 30, 1997. Huntington
Environmental Systems supplies a wide variety of industrial clients with air
pollution control equipment.
Item 4. PURPOSE OF TRANSACTION
USF acquired the Company Common Stock described in Item 5 in exchange
for the business of Huntington Environmental Systems. USF has no plans to
acquire additional shares of Company Common Stock, nor does it have present
plans to dispose of the shares of Company Common Stock owned by it. However,
depending upon USF's ongoing evaluation of the Company's business, operations
and prospects, and future developments, USF may dispose of any or all Company
Common Stock presently owned by it, at one time or from time to time.
The shares of Company Common Stock acquired by USF pursuant to the
Purchase Agreement are "restricted securities" as defined in Rule 144
promulgated by the Securities and Exchange Commission under the Securities Act.
Accordingly, any sale of Company Common Stock by USF is subject to the
restrictions set forth in Rule 144, including, without limitation, the holding
period requirements and the volume limitations on resale. If USF proposes to
sell to a third party (other than a subsidiary or an
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affiliate of USF) an amount of Company Common Stock owned by it that represents,
in the aggregate, more than 4% (four percent) of the voting power of the Company
(the "Subject Shares"), the Company has the right to purchase all, but not less
than all, of the Subject Shares on the same terms and conditions upon which USF
proposed to sell the Subject Shares to such third party. If the Company elects
not to purchase the Subject Shares, USF may sell the Subject Shares to the third
party.
USF has the right under the Registration Agreement, exercisable at any
time, to cause the Company to file a registration statement under the Securities
Act with respect to not less than 150,000 shares of the Company Common Stock
owned by USF. In addition, if the Company registers any Company Common Stock
(other than a registration statement relating solely to employee benefit plans
or relating solely to a transaction under Rule 145 of the Securities Act),
either for its own account or for the account of other holders of Company Common
Stock exercising their respective demand registration rights, then USF has the
right to have shares of Company Common Stock owned by it included in such
registration statement. Without the consent of the Company, USF may not include
in a registration statement filed by the Company in accordance with the
preceding sentence Company Common Stock amounting to more than 25% of the total
number of shares of Company Common Stock to be included in such registration
statement.
Pursuant to the Purchase Agreement, USF has the right to designate one
member of the Board of Directors of the Company, with the Company's approval,
which will not be unreasonably withheld. USF has not designated a Board member
as of the date hereof.
Except as set forth in this response to Item 4, at the date of this
Schedule 13D, USF has no plans or proposals that relate to or would result in
any of the actions specified in clauses (a) through (j), inclusive, of Item 4 of
Schedule 13D.
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Item 5. INTEREST IN SECURITIES OF THE ISSUER
USF directly owns 1,320,000 shares of Company Common Stock,
constituting approximately 8.8% of the outstanding shares of Company Common
Stock (based upon the 14,966,831 shares of Company Common Stock outstanding on
April 23, 1997 as reported in the Company's Quarterly Report on Form 10-QSB for
the quarter ended March 31, 1997). USF has the sole power to vote and the sole
power to dispose of the 1,320,000 shares of Company Common Stock owned by it.
Except for the transaction described in this Schedule 13D, neither USF
nor any of the persons listed in Annex I attached hereto has effected any
transactions in Company Common Stock within the past 60 days. No other person is
known to have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the shares described in the
preceding paragraph.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
Other than pursuant to the provisions of the Purchase Agreement and
the Registration Agreement described in this Schedule 13D, neither USF nor any
of the persons named in Annex I attached hereto has any contracts, arrangements,
understandings or relationships (legal or otherwise) with respect to any
securities of the Company, including but not limited to transfer or voting of
any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit No. Description
1. Asset Purchase Agreement, dated as of March 31, 1997,
between USF and the Company. (Filed herewith).
2. Transfer and Registration Agreement, dated as of April
30, 1997, between USF and the Company. (Filed
herewith).
3. Amendment to Transfer and Registration Agreement, dated
as of June 5, 1997, between USF and the Company.
(Filed herewith).
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
UNITED STATES FILTER CORPORATION
By: /s/ Damian C. Georgino
____________________________________
Damian C. Georgino
Vice President, General Counsel
and Corporate Secretary
Date: June 5, 1997
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ANNEX I
DIRECTORS AND EXECUTIVE OFFICERS OF
UNITED STATES FILTER CORPORATION
NAME; PRESENT PRINCIPAL ADDRESS AND PRINCIPAL BUSINESS
OCCUPATION ORGANIZATION IN WHICH EMPLOYED
Richard J. Heckmann United States Filter Corporation
Chairman of the Board of 40-004 Cook Street
Directors, Chief Executive Palm Desert, CA 92211
Officer and President Provider of water and wastewater
treatment systems and services
Michael J. Reardon United States Filter Corporation
Director and Executive 40-004 Cook Street
Vice President Palm Desert, CA 92211
Provider of water and wastewater
treatment systems and services
Nicholas C. Memmo United States Filter Corporation
Executive Vice President- 40-004 Cook Street
Process Water Group Palm Desert, CA 92211
Provider of water and wastewater
treatment systems and services
Thierry Reyners United States Filter Corporation
Executive Vice President- 40-004 Cook Street
European Group Palm Desert, CA 92211
Provider of water and wastewater
treatment systems and services
Andrew D. Seidel United States Filter Corporation
Executive Vice President- 40-004 Cook Street
Wastewater Group Palm Desert, CA 92211
Provider of water and wastewater
treatment systems and services
Harry K. Hornish, Jr. United States Filter Corporation
Executive Vice President- 200 Highway 6 West
Distribution Group Suite 620
Waco, TX 76712
Kevin L. Spence United States Filter Corporation
Vice President and Chief 40-004 Cook Street
Financial Officer Palm Desert, CA 92211
Provider of water and wastewater
treatment systems and services
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CUSIP No. 553358 10 2 Page 9 of 41 pages
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Damian C. Georgino United States Filter Corporation
Vice President, General 40-004 Cook Street
Counsel and Corporate Palm Desert, CA 92211
Secretary Provider of water and wastewater
treatment systems and services
Tim L. Traff United States Filter Corporation
Director and Senior Vice 40-004 Cook Street
President Palm Desert, CA 92211
Provider of water and wastewater
treatment systems and services
John S. Swartley United States Filter Corporation
Senior Vice President- 40-004 Cook Street
Corporate Development Palm Desert, CA 92211
Provider of water and wastewater
treatment systems and services
James W. Dierker United States Filter Corporation
Vice President, Controller 40-004 Cook Street
and Treasurer Palm Desert, CA 92211
Provider of water and wastewater
treatment systems and services
Michael E. Hulme, Jr. United States Filter Corporation
Assistant General Counsel 40-004 Cook Street
and Assistant Secretary Palm Desert, CA 92211
Provider of water and wastewater
treatment systems and services
Robert S. Hillas E.M. Warburg, Pincus & Co., Inc.
Managing Director 466 Lexington Avenue
New York, NY 10017-3147
Private investment firm
John L. Diederich 1120 South Negley Avenue
Retired Executive Vice Pittsburgh, PA 15217
President-Chairman's
Counsel of Aluminum
Company of America
C. Howard Wilkins, Jr. Maverick Restaurant Corp.
Chairman of the Board 302 N. Rock Road
Suite 200
Wichita, KS 67206
Owns and operates restaurants
under franchise agreements
J. Danforth Quayle 6263 North Scottsdale
Author and Chairman of Suite 292
Campaign America Scottsdale, AZ 85250
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Arthur B. Laffer A.B. Laffer, V.A. Canto &
Chairman and Chief Associates
Executive Officer 5405 Morehouse Drive
Suite 340
San Diego, CA 92121
Economic research and financial
firm
Alfred E. Osborne, Jr. John E. Anderson Graduate School
Director of the Harold of Management at UCLA
Price Center for 110 Westwood Plaza
Entrepreneurial Studies Box 951481
and Associate Professor Los Angeles, CA 90095-1481
James E. Clark 24-412 Park Grenada
Consultant and Private Calabasas, CA 91302
Investor
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EXHIBIT INDEX
Exhibit Description Page
No.
1. Asset Purchase Agreement, dated as of March 12
31, 1997 between United States Filter
Corporation and MPM Technologies, Inc.
2. Transfer and Registration Agreement, dated as 28
of April 30, 1997, between United States
Filter Corporation and MPM Technologies, Inc.
3. Amendment to Transfer and Registration 38
Agreement, dated as of June 5, 1997,
between United States Filter Corporation and
MPM Technologies, Inc.
CUSIP No. 553358 10 2 Page 12 of 41 pages
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EXHIBIT 1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (Agreement) is dated as of this 31st day of March
1997 by and between U.S. Filter Corporation, a Delaware corporation ("Seller")
and MPM Technologies Inc., a Washington corporation, ("Buyer") or its assigns.
WHEREAS, Seller owns certain assets and properties used in the conduct of
Seller's engineered systems oxidation business (the "Business").
WHEREAS, Seller and Buyer desire to enter into this Agreement pursuant to which
Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller
substantially all of the assets, rights, and Business of Seller.
NOW THEREFORE, in consideration of their mutual promises, and intending to be
legally bound, Buyer and Seller hereby agree as follows:
1. Definitions Each reference in this Agreement to:
"Assets" shall have the meaning set forth in Section 2.1 hereof, as
modified by Sections 2.2 and 2.3 hereof.
"Authorization" shall mean franchise, license, registration, permit,
consent, approval, variance, permission, waiver, authorization or other similar
items of the Business, whether governmental, regulatory or otherwise.
"Books and Records" shall mean each and all records, original titles,
other original documents relating to Seller's ownership of Units, original
customer contracts (including, without limitation, leases), tax exemption
certificates received from customers, files, customer lists, supplier lists,
credit and collection information, business records and all plans, reports,
correspondence, sales, advertising and promotional literature and other selling
material (including, without limitation, relating to marketing services),
magnetic tapes and computer diskettes containing any of the foregoing items, and
other data and similar materials used or held for use in connection with or
relating to the Business.
"Business" shall mean the business of Oxidation Group as described in
Schedule 1.0 hereto.
"Buyer Group" shall mean Buyer and its parent and other affiliates,
their respective officers, directors, employees, shareholders, agents,
representatives and any person claiming by or through any of them.
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"Closing" shall mean the closing of the transactions contemplated
hereby.
"Closing Date" shall mean the date of Closing.
"Encumbrances" shall mean each and all mortgages, claims, liens,
charges, encumbrances, imperfections of or other matters affecting title and any
rights of third parties whatsoever.
"Environmental Law" shall include, without limitation, any and all past
or present federal, state, local and foreign laws (as applicable), regulations,
standards or requirements relating to health, safety or pollution or protection
of the environment, including, without limitation, those relating to emissions,
discharges, spills or other releases or threatened releases of Hazardous
Substances, as such laws have been and hereafter may be enacted, adopted,
amended or supplemented, and any analogous present or future federal, state,
local or foreign laws, and all rules, orders, regulations and requirements
promulgated pursuant to any such federal, state or local or foreign laws, and
any other cause of action relating to the environment, natural resources safety,
health or management of Hazardous Substances.
"Excluded Assets" shall have the meaning set forth in Section 2.2
hereof.
"Financial Transaction" shall mean any operating or finance lease,
installment sale, secured loan or other transaction with respect to the Business
in which or to which Seller is a lessee, installment purchaser, borrower or
otherwise the party making payments under such transaction.
"Hazardous Substances" shall mean those substances, whether waste
materials, raw materials, finished products, co-products, byproducts or any
other materials or articles which (during use, handling, process, storage,
emission, disposal, spill, release or any other activity) are regulated by, form
the basis of liability under, or are defined as hazardous extremely hazardous or
toxic under, any of the Environmental Laws, including, without limitation,
petroleum or any byproducts or fractions thereof, radioactive substances,
infectious agents, explosives, flammables, pollutants, corrosives or
contaminants or any other material or substance which constitutes a health,
safety or environmental hazard to any person, property or natural resource.
"Indemnitee" shall mean the person seeking indemnification pursuant to
Section 9.3 hereof.
"Indemnitor" shall mean the person from whom indemnification is sought
pursuant to Section 9.3.
"Instruments of Transfer" shall mean authorizations, bills of sale,
approvals, assignments (including, without limitation, certifications, consents,
lock-box assignments or other assignments of mechanisms for receipt of
payments), endorsements and other instruments and documents, satisfactory in
form and substance to Buyer and its counsel.
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"Laws" shall mean each and all federal, state, local, foreign and other
laws, statutes, ordinances, rules and regulations and decrees and orders of each
and all courts, governmental, public and self-regulatory bodies, agencies and
other authorities.
"Litigation" shall mean each and all suits, other actions or legal
proceedings, claims, disputes, arbitrations, investigations and inquiries.
"Losses" shall mean any and all demands, claims, losses, liabilities,
actions or causes of action, assessments, judgments, settlement payments,
damages, fines, penalties, costs and expenses (including, without limitation,
interest which may be imposed in connection therewith, reasonable fees and
disbursements of counsel and other experts, and the costs to the Indemnitee of
any funds expended by reason of any of the events specified herein).
"Material Adverse Effect" shall mean a material adverse effect on the
condition (financial or otherwise), results of operation, assets, properties,
business or prospects of the Business.
"Notice" shall mean the written notice given by an Indemnitee to an
Indemnitor of the assertion or the commencement of any Litigation with respect
to any matter referred to in Section 9.1 or 9.2 hereof.
"Purchase Price" shall mean the purchase price to be paid by Buyer to
the Seller for assets, rights and the business covenants not to compete
contained in Section 6.2 hereof.
"Real Properties" shall mean all real property owned or leased by
Seller and used or held for use in connection with the Business.
"Schedule of Purchased Assets" shall mean Net book value with
supporting supplements as described in Schedule 1.01 hereto.
"Seller Group" shall mean Seller and Seller's affiliates and their
respective officers, directors, employees, stockholders, agents and
representatives and any person claiming by or through any of them.
"Seller Value" shall mean the specific purchase price for each
classification of Assets as set forth in Schedule 1.01. The only reference to
Stated Value in this Agreement appears in Section 2.4 and 7.5 hereof.
"Taxes" shall mean any and all federal, state, local, foreign and other
taxes, assessments, interest, penalties, deficiencies, fees and other
governmental charges or impositions (including, without limitation, all income
tax, unemployment compensation, social security, payroll, sales and use, excise,
privilege, real, personal and other property, ad valorem, franchise, license,
school and any other tax or similar governmental charge or imposition under laws
of the United States or any state or municipal or political subdivision thereof
or any foreign country or political subdivision hereof).
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"Unit" shall mean an over-the-road semi trailer, cartage trailer or
storage trailer used in the Business.
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2. TRANSFER OF ASSETS
2.1 Sales and Purchase of Assets. At the closing, on the terms and
subject to the conditions set forth in this Agreement, Seller shall sell,
transfer, assign, convey and deliver to Buyer, and Buyer shall purchase and
acquire from Seller, all right, title and interest of Seller in and to all the
Assets, properties and business listed on Schedule 1.01 free and clear of all
liens, mortgages, pledges, encumbrances and charges of every kind (except those
which the Buyers have expressly agreed in Section 2.3 hereof to assume), as the
same shall exist at the Closing Date (as herein after defined). Including
without limitation all property tangible and intangible, real, personal and
mixed; cash, securities, bank accounts, receivables, conditional sale contracts,
all of Seller's rights and benefits under Contracts relating to the Business
(including, without limitation, all rights to telephone numbers of the
Business), inventories, fixed assets, claims and rights to tax refunds; all
other claims and rights of every kind, insurance policies, leases, prepayments,
rights to use the name of Seller, trade names, trade secrets, patents, patent
applications, know-how, formulae, designs and drawings, computer software,
slogans, operating rights, other licenses and permits, copyrights, licenses and
all books and records, all Intellectual Properties. Current and historical
customer lists, cash flow streams and other materials and assets related to the
business, wherever located, used or held for use by Seller in connection with
the Business (each and all of the foregoing items being herein referred to as
the "assets"); except for the excluded Assets in Section 2.2 below).
2.2 Excluded Assets. Notwithstanding the provisions of Section 2.1
hereof, the term "Assets" shall not include any of the assets, properties or
rights listed on Schedule 2.2 hereto, which: Schedule may be revised by Buyer,
in accordance with the terms of this Agreement at any time prior to Closing
(each and all of such items being herein referred to as "Excluded Assets")
2.3 Assumption of Liabilities. At the Closing, on the terms and subject
to the conditions set forth in this Agreement, from and after March 31, 1997,
Buyer shall assume and hereby agrees to pay, perform, and discharge all the
obligations and liabilities of Seller, fixed and contingent (as the same shall
exist) as at the Closing Date, except any obligation or liabilities of Seller
prior to March 31, 1997, to include: full responsibility for all projects
initiated prior to March 31, 1997 but not completed as of that date for product
warranty, design error or anyother liability; any obligations or liabilities of
Seller under this Agreement; and any obligations or liabilities of Seller
arising or incurred after Closing Date except and expressly provided for in this
Agreement and listed on Schedule 1.01 hereof.
2.4 Reconciliation and Payment of Purchase Price. At the Closing, Buyer
shall pay the Purchase Price by transmitting to Seller One Million Three Hundred
Twenty Thousand shares (1,320,000) of Buyer's common stock. The common shares
shall be section 144 and all common shares shall be legended accordingly.
Additionally, shall carry Piggyback Registration rights as per schedule 2.1.
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2.5 Allocation of Purchase Price. Buyer and Seller agree that the
Purchase Price shall be allocated among the Assets as Buyer and Seller shall
mutually agree after the Closing. Buyer and Seller each agree to report the sale
and purchase of the Assets for all federal, state, local foreign (as applicable)
and other tax purposes in a manner consistent with such allocation.
3. The Closing.
3.1 Time and Place. The Closing shall take place at the
offices of Smith & Hemingway, P.S. at 3:00 p.m., local time,
on April 30, 1997 or at such other time or place as may be
mutually agreed upon by the parties.
3.2 Delivery of Instruments and Payment. At the closing:
(a) Seller shall execute and deliver to Buyer such
Instruments of Transfer as shall be effective to vest
in Buyer on the Closing Date good and marketable
title to the Assets.
(b) Buyer shall pay the Purchase Price in accordance with
Section 2.4 hereof.
(c) Seller shall deliver such limited powers of attorney
as Buyer may reasonably request to enable Buyer to
register title to the Assets and make the
endorsements described in Section 6.1(a) hereof.
(d) Seller shall deliver to Buyer the original Books and
Records of the Business that are pertinent to the
assets or cash flow streams of the Business; and
(e) Buyer and Seller shall each deliver the other
agreements, instruments, certificates, opinions of
counsel and other documents required hereunder,
including, without limitation, those required under
Section 8 and 9 hereof.
(f) Buyer and Seller shall cooperate in notifying all
Accounts that the business share sold and receivables
are now to be paid to Buyer.
4. Representations and Warranties by Seller. Seller represents and
warrants to Buyer as follows:
4.1 Organization, Good Standing, Power, Etc. Seller (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, (b) is qualified or licensed to do
business in Illinois, (c) has all requisite corporate power and authority (i) to
own or lease and operate the Assets and carry on the Business as presently being
conducted or proposed to be conducted and (ii) to execute, deliver and perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby.
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4.2 Authorization. Seller has taken all necessary corporate action to
authorize (a) its execution and delivery of this Agreement and (b) its
performance of this Agreement and the consummation by it of the transactions
contemplated hereby.
4.3 Effect of Agreement, Etc. The execution, delivery and performance
of this Agreement by Seller, and the consummation by Seller of the transactions
contemplated hereby will not, with or without the giving of notice or the lapse
of time, or both, violate any provision of the certificate of incorporation or
by-laws of the Seller.
4.4 Financial Statement. Seller has furnished Buyer with copies of
segmented unaudited financial information and financial schedules of the
Business Assets to be sold as of March 31, 1997.
4.5 Liabilities. At March 31, 1997, Seller did not have any
liabilities, absolute or contingent, which are not fully shown or provided for
on the above-mentioned statement of financial position as at that date, except
obligations to perform after that date under open sales contracts, supply
contracts, purchase orders and other contracts listed on Schedule 4.5 hereto.
4.6 Documents. Seller has furnished Buyer with a list of certain
contracts and other documents as set forth in Schedule 4.5 hereto, to which
Seller is a party. Except for contracts and documents listed on the Document
List, Seller is not a party to any written or oral (i) contract not made in the
ordinary course of business; (ii) employment contracts; (iii) bonus, pension,
profit sharing, retirement, hospitalization, insurance or other plan providing
employee benefits; (iv) lease with respect to any property, real or personal,
whether as lessor or lessee; (v) continuing contract for the future purchase of
materials, supplies, or equipment in excess of the requirements of its business
now booked or for normal operating inventories; (vi) contract or commitment for
capital expenditures; (vii) contract with any labor union association; or (viii)
contract continuing for more than one year from its date. Seller has in all
material respects performed all obligations required to be performed by it to
date, and is not in default in any material respects under any agreements,
leases, or other documents to which it is a party.
4.7 Title to Personal Properties, Absence of Liens and Encumbrances,
Etc. Except as set forth in Schedule 1.01 hereto, Seller has good and valid
title to the owned personal properties and assets used in the Business
(including, without limitation, the assets listed on Schedule 1.01. As of the
Closing, there will be no Encumbrances relating to any of the Assets).
4.8 Intellectual Properties. Schedule 4.8 hereto sets forth an accurate
and complete list of all Intellectual Properties. Except as disclosed in such
Schedule 4.8 (a) Seller owns or possesses adequate licenses or other valid
rights to use (without the making of any payment to others or the obligation to
grant rights to others in exchange for) all Intellectual Properties reasonably
necessary to the conduct of the Business as presently conducted, and the
consummation of the transactions contemplated hereby will not alter or impair
any of such rights and (b) the validity of such rights and the title thereto of
Seller have not been questioned in any Litigation to which Seller is a party
nor, to the knowledge of Seller, is any such Litigation threatened.
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4.9 Insurance Policies. Schedule 4.9 hereto sets forth a list and brief
description of all policies of fire, liability, life and other forms of
insurance held by Seller. Valid policies for such insurance will be outstanding
and fully in force on the Closing Date.
4.10 Legal Actions and Proceedings. Except as described on Schedule
4.10, there are no actions, suits or proceedings pending, or to the knowledge of
Seller, threatened against or affecting Seller (other than actions, suits or
proceedings where liabilities of Seller are adequately covered by insurance).
4.11 Business Names. Seller has unqualified right to use the names in
Huntington Engineering Systems and Altech Corporation and has full power to
assign such rights to Buyer.
4.12 Identification Number. Seller represents and warrants that its
federal taxpayer identification number is 25-0770660.
5. Representations and Warranties by Buyer.
5.1 Organization and Standing of Buyer. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Washington and has all requisite corporate power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby.
5.2 Authorization. The execution, delivery and performance by Buyer of
this Agreement and the consummation by Buyer of the transactions contemplated
hereby have been duly authorized by all requisite corporate action.
6. Covenants of Parties.
6.1 Mail, Payments.
(a) After the Closing, Buyer shall have the right and
authority to endorse without recourse, by way of a
limited power of attorney which Seller shall deliver to
Buyer at the Closing, the name of the Seller on any
instrument of payment of any other evidence of
indebtedness received by Buyer on account of any of the
Assets or the Business transferred by Seller pursuant to
this Agreement. In addition, any payment received by
Seller after Closing in respect of any of the Assets
(other than the Excluded Assets) or the Business shall
be remitted to Buyer within two (2) days of receipt by
Seller.
(b) Buyer and Seller shall deliver to each other within two
(2) business days the original of any mail or other
communication received by it after Closing pertaining to
the Assets or the Business and any moneys, checks or
other instruments of payment to which Buyer is entitled.
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6.2 Covenant Not to Compete, Non-Solicitation.
(a) In all countries which belong to the United Nations as
of the Closing Date (the "Restricted Territory") and for
five (5) years after Closing Date, Seller shall not
unless acting in accordance with the prior written
consent of the Board of Directors of Buyer (i) own,
manage, operate, join, control, finance, participate or
cause participating in the ownership, management,
operation control or financing of, or be connected as a
principal, agent, representative, consultant, investor,
owner, partner, manager, joint venturer or otherwise
with, or permit its or his name to be used by or in
connection with, any business or enterprise related to
the Business being sold hereby, or solicit current or
former customers of the business for placement of such
equipment within the Restricted Territory; (ii) call on
or solicit any person who or which as of the Closing
Date is, or within two years prior thereto had been, a
customer of Seller with respect to prohibited business
covered by clause (i) above; provided that Seller and
the Seller's affiliates shall only be so prohibited if
the subject matter of such call or solicitation relates
to such prohibited business; or, (iii) solicit for
employment any person who is an employee of the Business
on the Closing Date and who accepts employment from
Buyer.
(b) Seller acknowledges that (i) the provisions of this
Section 6.2 are reasonable and necessary to protect the
legitimate interests of Buyer; (ii) the businesses of
Buyer and Seller (including, without limitation, the
Business to be acquired hereby) are conducted throughout
the Restricted Territory; (iii) any violation of this
Section 6.2 will result in irreparable injury to Buyer
and its affiliates for a violation of this Section 6.2;
and (iv) Buyer shall be entitled to have the provisions
of this Section 6.2 specifically enforced by preliminary
and permanent injunctive relief without the necessity of
proving actual damages and without posting bond or other
security. In the event that any of the provisions of
this Section 6.2 should be deemed to exceed the time,
geographic, product or any other limitations permitted
by applicable law, then such provisions shall
automatically be adjusted to conform with the maximum
permitted by applicable law.
(c) Seller agrees that any and all advertising and
promotional materials and activities prepared following
execution hereof will be revised to delete references to
the Business.
(d) Seller shall, for two years following the Closing,
direct all incoming inquiries relating to the Business
to Buyer.
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6.3 Taxes. Seller shall pay, or shall cause to be paid, promptly when
due, all Taxes arising out of or relating to the operations and conduct of, or
assessed on the Assets of the Business before and including March 31, 1997
(including, without limitation, Taxes relating to periods after March 31, 1997
if such Taxes are assessed before on or after March 31, 1997). Buyer shall pay
all, or shall cause to be paid, promptly when due, all Taxes arising out of or
relating to the operations and conduct of, or assessed on the Assets or the
Business after March 31, 1997. Taxes relating to the fiscal tax year 1997 that
are assessed after March 31, 1997, shall be paid by Seller.
6.4 Required Consents and Filings. Further Assistance.
(a) Promptly after the execution hereof, each of Seller and
Buyer shall use its best efforts to obtain all consents,
approvals, transfers, permissions, waivers, orders,
reissuances and authorizations of (and make all
necessary filings or registrations with) all courts,
governmental agencies and bodies and other third parties
which are required to be obtained or made by it in
connection with the consummation of the transactions
contemplated by this Agreement.
(b) At any time and from time to time after the Closing, the
parties agree to ooperation with each other, to execute
and deliver such other documents, instruments of
transfer or assignment, files, books and records
pertaining to the assets and cash flow streams of the
Business and do all such further acts and things as may
be reasonably required to carry out the intent of the
parties hereunder.
6.5 Remittance. Seller will remit to Buyer any receipts of revenues
received subsequent to March 31, 1997. Seller will remit any funds received that
are due to Buyer within two (2) business days.
7. Survival of Representations. Seller and Buyer agree that the
representations and warranties contained in this Agreement shall survive the
Closing unless specifically waived, in writing, by the applicable party hereto.
8. Conditions Precedent to the Obligations of Buyer. The obligations of
Buyer under this Agreement are subject to the satisfaction at or prior to the
Closing of each of the following conditions:
8.1 Accuracy of Representations and Warranties. The representations and
warranties of Seller contained in this shall be true, complete and accurate in
all material respects on and as of the Closing Date with the same effect as if
they were made on and as of the Closing Date.
8.2 All Authorizations Obtained. All Authorizations to be obtained prior
to the Closing in connection with the consummation by Seller of the Transactions
contemplated hereby
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shall have been obtained and shall be in full force and effect, and Buyer shall
have received evidence that these Authorizations have been obtained.
8.3 Due Diligence Review. Buyer shall have completed and be satisfied
with its review of the business, management, assets, properties and financial
conditions of the Business.
9. Conditions Precedent to the Obligations of Seller. The obligations of
Seller under this Agreement are subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
9.1 Accuracy of Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement shall be true, complete and
accurate in all material respects on and as of the Closing Date with the same
effect as if they were made on and as of the Closing Date.
9.2 Performance of Agreements. Buyer shall have performed all
obligations and agreements and complied with all covenants contained in this
Agreement to be performed and complied with by it on or prior to the Closing
Date.
10. Indemnification.
10.1 Seller's Indemnification Obligation. In addition to any other
indemnification provided for under this Agreement, Seller shall indemnify,
defend, and hold harmless each member of the Buyer Group from and against any
and all Losses incurred or suffered by any member of the Buyer Group arising out
of, resulting from or relating to:
(a) Any breach of any of the representations or warranties
made by Seller in this Agreement.
(b) Any failure to comply with any bulk sales law or other
similar law or any action brought or claim made
(including, without limitation, claims of creditors) or
lien or encumbrance imposed as a result thereof;
(c) Any pre-Closing Litigation and any post-Closing
Litigation based on pre- Closing facts, events,
circumstances or omissions relating to the Assets of the
Business;
(d) Workmen Compensation claims, Labor and Industry
Employment related liability causes.
10.2 Buyer's Indemnification Obligation. In addition to any other
indemnification provided for under this Agreement, Buyer shall indemnify,
defend, and hold harmless each member of the Seller Group from and against any
and all Losses incurred or suffered by any member of the Seller Group arising
out of, resulting from or relating to:
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(a) Any breach of any of the representations or warranties
made by Buyer in this Agreement;
(b) Any failure by Buyer to perform any of its covenants or
agreements contained in this Agreement; or
(c) Any post-Closing Litigation based on post-Closing facts,
events, circumstances or omissions relating to the
Assets or the Business with exception of design
liability.
10.3 Indemnification Procedure.
(a) Promptly after receipt by an Indemnitee or written
notice of the assertion or the commencement of any
Litigation with respect to any matter referred to in
Section 9.1 or 9.2 hereof, the Indemnitee shall give
Notice to the Indemnitor and shall thereafter keep the
Indemnitor reasonably informed with respect thereto,
provided that failure of the Indemnitee to give the
Indemnitor prompt Notice as provided herein shall not
relieve the Indemnitor of any of its obligations
hereunder. In case any such Litigation is brought
against any Indemnitee, the Indemnitor shall assume the
defense thereof, by written notice to the Indemnitee
within thirty (30) days after receipt of the Notice of
its intention to do so, with counsel reasonably
satisfactory to the Indemnitee at the Indemnitor's own
expense. The Indemnitor shall not settle such Litigation
unless such settlement includes an unconditional release
of the Indemnitee, satisfactory to the Indemnitee, from
all liability with respect to such Litigation. The
Indemnitee shall be permitted to join in the defense of
such Litigation and to employ counsel at its own
expense.
(b) If the Indemnitor shall fail to notify the Indemnitee of
its desire to assume the defense of any such Litigation
within the prescribed period of time, or shall notify
the Indemnitee that it will not assume the defense of
any such Litigation, then the Indemnitee may assume the
defense of any such Litigation, in which event it may do
so in such manner as it may deem appropriate, and the
Indemnitor shall be bound by any determinations made in
such Litigation or any settlement thereof effected by
the Indemnitee. The Indemnitor shall be permitted to
join in the defense of such Litigation and to employ
counsel at its own expense.
(c) Amounts payable by an Indemnitor to an Indemnitee in
respect of any Losses under 9.1 or 9.2 hereof shall be
promptly paid as incurred. If there should be a dispute
as to the amount or manner of determination or any
indemnity obligation owed under this Section 10, the
Indemnitor shall nevertheless pay when due such portion,
if any, of the obligation as shall not be subject to
dispute. The difference, if any, between the amount of
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obligation ultimately determined as properly payable
under this Section 10 and the portion, if any,
theretofore paid shall bear interest for the period from
the date the amount was demanded until payment in full,
payable on demand, at the fluctuating rate per annum
which at all times shall be two percentage points in
excess of the Prime Rate. Any payment by Seller in
indemnification hereunder shall be treated as a
reduction in the Purchase Price.
(d) Nothing in this Agreement shall limit or restrict in any
manner any rights or remedies which any Indemnitee has,
or might have, at law, in equity or otherwise, against
any Indemnitor based on any willful misrepresentation,
willful breach of warranty or willful failure to fulfill
any agreement or covenant. Any Indemnitee's right to
indemnification under Section 10.1 or 10.2 hereof shall
not be subject to set-off for any claim by the
Indemnitor against such Indemnitee.
11. Board Representation. It is understood and agreed by Buyer that
Seller may designate one member of Buyer's Board of Directors, with Buyer's
approval, approval which will not be unreasonably withheld. Seller shall be free
to substitute any qualified person for such Board of Director's seat at its
discretion, with Buyer's approval, approval which will not be unreasonably
withheld for the customary life of the Board of Directors' position.
12. General.
12.1 Survival of Representations. Warranties and Indemnification. The
representations and warranties given or made by Buyer and Seller in this
Agreement or in any Ancillary Document and all rights to indemnification
pursuant to Section 10.1 or 10.2 hereof shall survive the Closing for a period
of one (1) year.
12.2 Notices. All notices, requests, demands, applications, services
of process and other communications which are required to be or may be given
under this Agreement shall be deemed to have been duly given if sent by telefax
(with confirming telefax receipt) or delivered by recognized courier services
(with receipt acknowledged to the parties hereto at the following addresses:
To Seller: Tim Moody
USF/HPD
55 Shuman Blvd.
Naperville, IL 60563
With a copy to: Katherine Drewek
Via Fax: 414-879-0791
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To Buyer: Robert D. Little
222 West Mission Suite 30
Spokane, WA 99201
With a copy to: L. Craig Cary Smith
1519 West Broadway
Spokane, WA 99201
or to such other address as any party shall furnish to the other by notice given
in accordance with this Section 12.2. Each such notice, request, demand,
application, service of process and other communication shall be deemed to have
been given as of the date so telefaxed or delivered or, if given by any other
means, shall be deemed given only when actually received by the addressee.
12.3 Entire Agreement. Amendments. This Agreement (which includes
the Schedules hereto) embodies the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and understandings, oral or written, with respect thereof. This Agreement may
not be changed orally, but only by an agreement in writing signed by the party
or parties against whom any waiver, change, amendment, modification or discharge
may be sought.
12.4 Binding Effect, Benefits. This Agreement shall inure to the
benefit of and shall be binding upon the parties hereto and their successors and
assigns; provided that prior to the Closing neither this Agreement nor any of
the rights hereunder may be assigned by any of the parties hereto without the
written consent of the other party, except that (a) Buyer may, at its election,
assign its rights to purchase any of the Assets under this Agreement to one or
more direct or indirect wholly-owned subsidiaries or any affiliated company,
provided that no such assignment shall relieve Buyer from any of its obligations
under this Agreement; and (b) Seller may, at its election, assign its rights and
obligations hereunder solely for the purpose of an IRS Section 1031 exchange,
provided that Seller shall remain principally liable for all obligations of
Seller hereunder.
12.5 Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not effect the meaning or
interpretation of this Agreement.
12.6 Counterpart. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.
12.7 Governing Law, Jurisdiction. The validity, performance and
enforcement of this Agreement shall be governed by the laws of the State of
Illinois. The parties hereby agree that any civil claim or claim for arbitration
shall be filed in a court or before an arbitration panel located in the State of
Illinois.
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12.8 Arbitration: Equitable Remedies.
(a) Except as provided in 12.8(b) hereof, any dispute,
controversy or claim arising out of or relating to this
Agreement or to a breach hereof, including, without
limitation, its interpretation, performance or
termination, shall be finally resolved by arbitration.
The arbitration shall be in accordance with the rules of
the American Arbitration Association which shall
administer the arbitration, act as appointing authority
and be the exclusive forum for resolving such dispute,
controversy or claim. The decision of the arbitrators
shall be final and binding upon the parties to this
Agreement and the expense of the arbitration (including,
without limitation, the award of attorney's fees to the
prevailing party) shall be paid as the arbitrators
determine. The decision of the arbitrators shall be
executory, and judgment thereon may be entered by any
court of competent jurisdiction. Notwithstanding the
foregoing, judgment upon the award of the arbitration
may be entered by any court where the arbitration takes
place or any court having jurisdiction thereof and
application may be made to any court for a judicial
acceptance of the award or order of enforcement.
(b) Notwithstanding any other provision of this Agreement,
each party shall have the right to institute judicial
proceedings against the other party or anyone acting by,
through or under such other party in order to enforce
the instituting party's rights hereunder through
specific performance, injunction or similar equitable
relief (including, without limitation, as provided in
Section 6.2). For this purpose, each of the parties
hereto irrevocably and unconditionally (i) agrees that
any Litigation arising out of this Agreement may be
brought and adjudicated in the U.S. District Court for
the district in the jurisdiction set forth in Section
10.7 or, if such court will not accept jurisdiction, in
any court of competent civil jurisdiction sitting in
such district; (ii) submits to the non-exclusive
jurisdiction of any such court for the purposes of any
such Litigation; and (iii) waives and agrees not to
assert by way of motion, as a defense or otherwise in
any such Litigation, any claim that it is not subject to
the jurisdiction of the above courts, that such
Litigation is brought in an inconvenient forum or that
the venue of such Litigation is improper. Each of the
parties hereto also irrevocably and unconditionally
consents to the service of any process, pleadings,
notices or other papers in a manner permitted by the
notice provisions of Section 12.2 hereof.
12.9 Separability. If any provision of this Agreement or the
application thereof to any person or circumstance is held invalid or
unenforceable in any jurisdiction, the remainder hereof shall not be affected
thereby and to this end the provisions of this Agreement shall be severable.
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12.10 Public Announcements. Non-Disclosure. Until closing, neither
Buyer nor Seller shall make any public statements, including without limitation
any press release, with respect to this Agreement and the transactions
contemplated hereby without the proper written consent of the other party hereto
(which consent shall not be unreasonably withheld) except as may be required by
law.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the day and date first written
above.
MPM TECHNOLOGIES, INC.
By: /s/ Charles A . Romberg
-------------------
Its: President
U.S. FILTER CORPORATION
By: /s/ Keith A. Sharlog
-------------------
Its: Comptroller
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EXHIBIT 2
TRANSFER AND REGISTRATION AGREEMENT
This Transfer and Registration Agreement ("Agreement") is entered into
as of April 30, 1997 between MPM Technologies, Inc., a Washington corporation
(the "Company"), and United States Filter Corporation, a Delaware corporation
("USF"), with reference to the Series A Cumulative Convertible Preferred Stock
(the "Series A Preferred Shares") of the Company.
1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Restricted Securities" shall mean the securities of the
Company required to bear the legend set forth in paragraph (a) of Section 3
hereof.
"Registrable Securities" shall mean the Series A Preferred
Shares and the Company's Common Stock issued or issuable upon conversion of the
Series A Preferred Shares; provided, however, that Common Stock shall be treated
as Registrable Securities only if and so long as they have not been (A) sold to
or through a broker or dealer or underwriter in a public distribution or a
public securities transaction, or (B) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions and restrictive legends
with respect thereto are removed upon the consummation of such sale.
The terms "register", "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses incurred by
the Company in complying with Sections 5 and 6 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, and the expense of any special audits incident to or required by
any such registration (but excluding the compensation of regular employees of
the Company which shall be paid in any event by the Company).
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"Selling Expenses" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders and all fees and disbursements of counsel for the
Holders (as limited by Section 7).
"Holder" shall mean any person (including USF) holding
Registrable Securities, including any person holding Registrable Securities to
whom the rights under this Agreement have been transferred in accordance with
this Agreement.
"Initiating Holders" shall mean any person or persons who in
the aggregate are Holders of at least 150,000 shares of the Registrable
Securities.
2. Restrictions on Transferability. The Series A Preferred
Shares and the Common Stock issuable upon conversion of the Series A Preferred
Shares may be sold, assigned, transferred or pledged in accordance with the
conditions specified in this Agreement, which conditions are intended to ensure
compliance with the provisions of the Securities Act. Each Holder will cause any
proposed purchaser, assignee, transferee or pledgee of Series A Preferred Shares
or any such Common Stock of a Holder to agree to take and hold such securities
subject to the provisions of this Agreement.
3. Restrictive Legends. (a) Each certificate representing Series
A Preferred Shares, or Common Stock issuable upon conversion of the Series A
Preferred Shares may be sold, assigned, transferred or pledged in accordance
with the conditions specified in this Agreement, which conditions are intended
to ensure compliance with the provisions of the Securities Act. Each Holder will
cause any proposed purchaser, assigned, transferee or pledgee of Series A
Preferred Shares or any such Common Stock of a Holder to agree to take and hold
such securities subject to the provisions of this Agreement.
3. Restrictive Legends. (a) Each certificate representing Series
A Preferred Shares, or Common Stock issued upon conversion of Series A Preferred
Shares, or any other securities issued in respect of the Series A Preferred
Shares or Common Stock issued upon conversion of the Series A Preferred Shares
upon any stock split, stock dividend, recapitalization, merger or similar event,
shall (unless otherwise permitted by the provisions of Section 4 below) be
stamped with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH
MAY BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE TO IT STATING THAT SUCH
SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT.
(b) Each certificate representing Series A Preferred Share shall be
stamped with the following legend:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF AN AGREEMENT BETWEEN THE SHAREHOLDER AND THE
CORPORATION WHICH INCLUDES A RIGHT OF FIRST REFUSAL ON CERTAIN SALES OF THE
SECURITIES. COPIES OF THE AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE CORPORATION.
Each Holder consents to the Company making a notation on its records
and giving instructions to any transfer agent of the Series A Preferred Shares
(or Common Stock issued upon conversion thereof) in order to implement the
restrictions on transfer established in this Agreement. The legend placed on any
certificate pursuant to Section 3(a) and any notations or instructions with
respect to the Series A Preferred Shares (or Common Stock issued upon conversion
thereof) represented by such certificate will be promptly removed, and the
Company will promptly issue a certificate without such legend to the holder of
such Series A Preferred Shares (or Common Stock issued upon conversion thereof)
(a) if such Series A Preferred Shares (or Common Stock issued upon conversion
thereof) are registered under the Securities Act in connection with a sale of
such securities and a prospectus meeting the requirements of Section 10
of the Securities Act is available, or (b) if the holder thereof satisfies the
requirements of Rule 144(k) and, where reasonably determined necessary by the
Company, provides the Company with an opinion of counsel for the holder of the
Series A Preferred Shares (or Common Stock issued upon conversion thereof),
reasonably satisfactory to the Company, to the effect that (i) the holder meets
the requirements of Rule 144(k) or (ii) a public sale, transfer or assignment of
the Series A Preferred Shares (or Common Stock issued upon conversion thereof)
may be made without registration.
4. Notice of Proposed Transfers. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 4. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities, unless there is in
effect a registrations statement under the Securities Act covering the proposed
transfer, the holder thereof shall give written notice to the Company of such
holder's intention to effect such transfer, sale, assignment or pledge. Each
such notice shall describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and shall be
accompanied at such holder's expense by either (i) an unqualified written
opinion of legal counsel who is, and whose legal opinion shall be, reasonably
satisfactory to the Company addressed to the Company, to the effect that the
proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
Commission to the effect that the transfer of such securities without
registration will not result in a recommendation by the staff of the Commission
that action e taken with respect thereto, whereupon the holder of such
Registered Securities shall be entitled to transfer such Restricted Securities
in accordance with the terms of its notice to the Company. The Company will not
require such a legal opinion or "no action" letter in any transaction which
complies with Rule 144. Each certificate evidencing the Restricted Securities
transferred as above provided shall bear, except if such transfer is made
pursuant to Rule 144, the appropriate restrictive legend set forth in Section
3(a) above, except that such certificate shall not bear such
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restrictive legend if in the opinion of counsel for such holder and the Company
such legend is not required in order to establish compliance with any provisions
of the Securities Act.
5. Demand Registration.
(a) Demand. In case the Company shall receive from any Holder
a written request that the Company effect any registration with respect to at
least 150,000 Series A Preferred Shares and/or shares of Common Stock issued or
issuable upon conversion of Series A Preferred Shares, the Company will:
(i) promptly give written notice of the proposed
registration to all other Holders; and
(ii) file a registration statement with the
Commission within 120 days after USF's request and use its best efforts to
effect such registration (including, without limitation, the execution of
an undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as would
permit or facilitate the sale and distribution of such Registrable Securities as
are specified in such request, together with all Registrable Securities of any
Holder or Holders joining in such request as are specified in a written request
received by the Company within 30 days after receipt of such written notice from
the Company;
Provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 5:
(A) In any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(B) After the Company has effected on such
registration pursuant to this Section 5(a), such registration has been declared
or ordered effective and the securities offered pursuant to such registration
have been sold (provided, however, that if the managing underwriter, in
accordance with the provisions of Section 5(b), has reduced by more than 50,000
shares the number of shares of Registrable Securities included in such
registration, the Holders thereof shall retain the right to request one
registration of such shares in accordance with the provisions of this Section 5,
and provided further that nothing contained herein shall restrict or limit the
rights of the Holders under Section 6); or
(C) During the period starting with the date 60 days
prior to the filing of, and ending on a date three months following the
effective date of, a registration statement (other than with respect to a
registration statement relating to a Rule 145 transaction, an offering solely to
employees or any other registration which is not appropriate for the
registration of Registrable Securities).
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(b) Underwriting. The right of any Holder to registration
pursuant to this Section 5 shall be conditioned upon such Holder's participation
in any underwriting arrangements required by USF pursuant to this Section 5.
If USF proposes to distribute its Registrable Securities by means of an
underwritten public offering, the Company (together with all Holders proposing
to distribute their securities through such underwriting) shall enter into an
underwriting agreement in customary form satisfactory to USF with the managing
underwriter selected for such underwriting by USF (which managing underwriter
shall be reasonably acceptable to the Company). Notwithstanding any other
provision of this Section 5, if the managing underwriter advises USF in writing
that marketing factors require a limitation of the number of shares to be
underwritten, then USF shall so advise all holders of Registrable Securities,
and the number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among all Holders thereof in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by such Holders at the time of filing the registration
statement. No registrable Securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such registration.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and USF. If by the withdrawal of such
Registrable Securities a greater number of Registrable Securities held by other
Holders may be included in such registration (up to the maximum of any
limitation imposed by the underwriters), then the Company shall offer to all
Holders who have included Registrable Securities in the registration the right
to include additional Registrable Securities in the same proportion used in
determining the underwriter limitation in this Section 5(b).
6. Company Registration.
(a) Notice of Registration. If, at any time or from time to
time, the Company shall determine to register any of its securities, either for
its own account or the account of a security holder or holders exercising their
respective demand registration rights, other than a registration relating solely
to employee benefit plans or a registration relating solely to a Securities Act
Rule 145 transaction, the Company will (i) promptly give to each Holder written
notice thereof, and (ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and (subject to this
Section 6) in any underwriting involved therein, all the Registrable Securities
specified in a written request or requests made by Holder within 30 days after
its receipt of such written notice from the Company; provided, however, that in
no event shall the Holders have the right, unless the Corporation otherwise
agrees, to include in such registration Registrable Securities amounting to more
than 25% of the total number (or total value, according to the respective
offering prices) of all securities to be included in such registration.
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(b) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 6(a)(i). In such event the right of any Holder to
registration pursuant to this Section 6 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein. All Holders propose to
distribute all or a portion of their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the Company
(or by the holders who have demanded such registration). Notwithstanding any
other provision of this Section 6, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the Registrable Securities to
be included in such registration. The Company shall so advise all Holders and
the other holders distributing their securities through such underwriting
pursuant to piggyback registration rights similar to this Section 6, and the
number of shares of Registrable Securities and other securities that may be
included in the registration and underwriting shall be allocated among all
Holders and other holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders and other
securities held by other holders at the time of filing the registration
statement. If any Holder or other holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the managing underwriter.
(c) Right to Terminate Registration. The Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 6 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
7. Expenses of Registration. All Registration Expenses incurred
in connection with any registration pursuant to Sections 5 or 6 shall be borne
by the Company, provided that the Company shall not be required to pay the
Registration Expenses of any registration proceedings begun pursuant to Section
5, the request of which has been subsequently withdrawn by USF, in which event
the Holders of Registrable Securities to have been registered shall bear all
such Registration Expenses pro rata on the basis of the number of Registrable
Securities to have been registered. Unless otherwise stated, all other Selling
Expenses relating to securities registered on behalf of the Holders shall be
borne by the Holders of the Registrable Securities pro rata on the basis of the
number of shares so registered.
8. Indemnification.
(a) The Company will indemnify each Holder, each of its
officers, directors, partners, employees and agents and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, with respect
to which registration, qualification or compliance has been effected pursuant to
this Agreement, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or
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registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act or any other federal, state or common law
rule or regulation applicable to the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such Holder, person controlling such Holder for any legal and any other expenses
reasonably incurred in connection with investigating preparing or defending any
such claim, loss, damage, liability or action, provided that the Company will
not be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder or controlling person and stated to be specifically
for use therein.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers and directors
and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statement therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder and
stated to be specifically for use therein.
(c) Each party entitled to indemnification under this Section
8 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the
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Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
9. Obligations of the Company. Whenever required under this
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use its diligent best
efforts to cause such registration statement to become effective, and, upon the
request of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to 120 days.
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
the prospectus is used.
10. Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or
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Holders, the Registrable Securities held by them and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Agreement.
11. Standoff Agreement. Each Holder agrees in connection with
any registration of the Company's securities that, upon request of the Company
or the underwriters managing any underwritten offering of the Company's
securities, not to sell, make any short sale of, loan, grant any option for the
purchase or, or otherwise dispose of any Registrable Securities (other than
those included in the registration), except in a private sale or transfer,
without the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the effective
date of such registration as may be requested by the Company or such managing
underwriters.
12. Amendment of Registration Rights. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this Section 12 shall be binding upon each
holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.
13. Company Right of First Refusal. USF will have the right
and option at any time to transfer all or any portion of the Series A Preferred
Shares to any other person, subject to applicable securities laws. However, in
the event that USF receives a proposal acceptable to USF to purchase, or
otherwise proposes to sell or transfer, Series A Preferred Shares representing
in the aggregate more than 4% of the voting power of the Company (other than a
transfer to a subsidiary or affiliate of USF), USF shall give written notice of
such proposal promptly to the Company setting forth the number and class of
shares, the fact that the proposal is a bona fide one and that USF proposes to
sell such shares pursuant thereto, the name and address of the real party in
interest (if actually known to USF) offering to purchase such shares or
accepting USF's proposal to sell, and the prices per share and terms of payment
specified in the offer or proposal. Shares so proposed to be sold are referred
to herein as the "Offered Shares."
For a period of 15 days following such notice to the Company, the
Company shall have the option to purchase all (but not less than all) of such
shares at the prices and on the terms stated in the notice. In order to exercise
such option, the Company must given notice to USF of that fact within such
15-day period. The Company shall then complete the purchase of said shares not
later than 45 days after its notification to USF of its exercise of such option
to purchase such shares. If the Company gives notice to USF of its election to
purchase such shares then fails to complete such purchase within said 45-day
period, then the Company shall pay to USF an amount equal to the amount, if any,
by which the per-share purchase price of the shares under this Section 13
exceeds the closing market price of the Common Stock on the American Stock
Exchange (or, if the Common Stock is not then listed on the American Stock
Exchange, on the principal national securities exchange on which the Common
Stock is then listed; or, if the Common Stock is not then listed on any national
securities exchange, then the last reported sale
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price in the over-the-counter market as reported by NASDAQ) as of the last day
of said 45-day period. If the Company does not elect to purchase such shares or
complete such purchase within the time periods specified herein, USF shall be
free, for a period of 60 days following the expiration of the period of election
(or the period of purchase, as the case may be) specified above, to consummate
the proposed sale at not less than the prices per share and on terms not
materially less favorable to USF than those set forth in USF's notice; and if
such sale is not consummated within such time, the Offered Shares shall again be
subject to all of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
UNITED STATES FILTER CORPORATION
By: /s/ Keith A. Sharlog
------------------------
MPM TECHNOLOGIES, INC.
By:/s/ Charles A. Romberg
-------------------------
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EXHIBIT 3
AMENDMENT TO
TRANSFER AND REGISTRATION AGREEMENT
THIS AMENDMENT, made as of this 5th day of June, 1997 by and between
United States Filter Corporation, a Delaware corporation ("USF"), and MPM
Technologies, Inc., a Washington corporation ("MPM").
WHEREAS, USF and MPM entered into that certain Asset Purchase Agreement
dated as of March 31, 1997 (the "Purchase Agreement") pursuant to which USF sold
the business and assets of its Huntington Environmental Systems division to MPM
in exchange for 1,320,000 shares of common stock, par value $0.001 per share, of
MPM (the "Company Common Stock"); and
WHEREAS, in connection with the closing of the transactions
contemplated by the Purchase Agreement, USF and MPM executed that certain
Transfer and Registration Agreement dated as of April 30, 1997 (the
"Registration Agreement"), pursuant to which, among other things, MPM granted to
USF certain registration rights with respect to shares of Series A Cumulative
Convertible Preferred Stock of MPM and shares of Common Stock of MPM issuable
upon conversion thereof; and
WHEREAS, the only series of capital stock of MPM that is authorized,
issued and outstanding is the Company Common Stock, and no other class of
capital stock of MPM, including Series A Cumulative Convertible Preferred Stock,
is authorized, issued or outstanding; and
WHEREAS, USF and MPM desire to have all of the rights and obligations
under the Registration Agreement apply to USF and MPM, as the case may be, with
respect to the 1,320,000 shares of Company Common Stock acquired by USF pursuant
to the Purchase Agreement.
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, USF and MPM hereby agree as follows:
1. Incorporation of Recitals. The above recitals are incorporated herein
by reference and are made a part hereof to the same extent as if such recitals
were set forth herein.
2. Amendment of Registration Agreement.
(a) The definition of "Registrable Securities" in Section 1 of
the Registration Agreement is hereby deleted in its entirety and is replaced
with the following definition:
"Registrable Securities" shall mean the 1,320,000
shares of the common stock of the Company, par value
$0.001 per share, received by USF pursuant to that
certain Asset Purchase Agreement dated as of March 31,
1997 between USF and the Company (the "Purchase
Agreement"), as that number of shares shall be adjusted
for stock splits, stock dividends, combinations, mergers
or similar reorganizations or recapitalizations on or
after the date hereof; provided, however, that such
shares shall be treated as Registrable Securities only
if and so long as they have not been (A) sold to or
through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (B)
sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act
under Section 4(1) thereof so that all transfer
restrictions and restrictive legends with respect
thereto are removed upon the consummation of such sale.
(b) Each and every reference to "Series A Cumulative Preferred
Stock", "Series A Preferred Shares", "Common Stock issued or issuable upon
conversion of the Series A Preferred
2
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CUSIP No. 553358 10 2 Page 40 of 41 pages
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Shares", and other similar words or phrases that relate to the Series A
Cumulative Preferred Stock or the common stock issued or issuable upon
conversion thereof, shall be, and hereby is, deemed to be a reference to the
1,320,000 shares of Company Common Stock acquired by USF pursuant to the
Purchase Agreement, as that number of shares shall be adjusted for stock splits,
stock dividends, combinations, mergers or similar reorganizations or
recapitalizations on or after the date hereof.
(c) Section 8(a) is amended to insert the following language at the
end of the sixth line thereof following the beginning of the parenthetical
phrase "(or...":
... alleged untrue statement) of a material fact
contained in any...
(d) Section 11 shall be amended and restated in its entirety to
provide as follows:
11. STANDOFF AGREEMENT. Each Holder agrees in
connection with any registration of the Company's
securities occurring prior to the expiration of the
one-year holding period specified in Rule 144 that, upon
request of the Company or the underwriters managing any
underwritten offering of the Company's securities, not
to sell, make any short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any
Registrable Securities (other than those included in the
registration), except in a private sale or transfer,
without the prior written consent of the Company or such
underwriters, as the case may be, for such period of
time (not to exceed 60 days) from the effective date of
such registration as may be requested by the Company or
such managing underwriters.
3. Miscellaneous. Except as expressly amended or modified by this
Amendment to Transfer and Registration Agreement, the terms and conditions of
the Registration Agreement shall remain unchanged.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment to
Transfer and Registration Agreement as of the date first above written.
UNITED STATES FILTER CORPORATION
By: /s/ Keith A. Sharlog
----------------------
Title: Comptroller
MPM TECHNOLOGIES, INC.
By: /s/ Charles A. Romberg
-----------------------
Title: President
4
