-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OzYPowdDjSV08srY7CEi/ZYADcACDD3HWxwMe3Xff/IK+8yn8KPQeJUSbOF6smVH j5FTNjr3LcHv1jwzZ6VicA== 0000898431-97-000145.txt : 19970610 0000898431-97-000145.hdr.sgml : 19970610 ACCESSION NUMBER: 0000898431-97-000145 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970606 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MPM TECHNOLOGIES INC CENTRAL INDEX KEY: 0000799268 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 810436060 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-51055 FILM NUMBER: 97620006 BUSINESS ADDRESS: STREET 1: 222 W MISSION AVE STREET 2: STE 30 CITY: SPOKANE STATE: WA ZIP: 99201 BUSINESS PHONE: 5093263443 MAIL ADDRESS: STREET 1: 908 N HOWARD SUITE 100 STREET 2: 908 N HOWARD SUITE 100 CITY: SPOKANE STATE: WA ZIP: 99201 FORMER COMPANY: FORMER CONFORMED NAME: MONTANA PRECISION MINING LTD DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: UNITED STATES FILTER CORP CENTRAL INDEX KEY: 0000318025 STANDARD INDUSTRIAL CLASSIFICATION: REFRIGERATION & SERVICE INDUSTRY MACHINERY [3580] IRS NUMBER: 330266015 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 40-004 COOK STREET CITY: PALM DESERT STATE: CA ZIP: 92211 BUSINESS PHONE: 6193400098 MAIL ADDRESS: STREET 1: 40-004 COOK STREET CITY: PALM DESERT STATE: CA ZIP: 92211 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN TOXXIC CONTROL INC DATE OF NAME CHANGE: 19910401 FORMER COMPANY: FORMER CONFORMED NAME: NOVAN ENERGY INC DATE OF NAME CHANGE: 19871227 SC 13D 1 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. ----------------------------------------------------------------- (Name of Issuer) Common Stock, $.001 par value ----------------------------------------------------------------- (Title of Class of Securities) 553358 10 2 -------------------------------------- (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 ----------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 30, 1997 ------------------------------------------------------- (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. CUSIP No. 553358 10 2 Page 2 of 41 pages - ------------------------------------------------------------------------------- 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 CUSIP No. 553358 10 2 Page 3 of 41 pages - ------------------------------------------------------------------------------- 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 CUSIP No. 553358 10 2 Page 4 of 41 pages - ------------------------------------------------------------------------------- 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 CUSIP No. 553358 10 2 Page 5 of 41 pages - ------------------------------------------------------------------------------- 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. CUSIP No. 553358 10 2 Page 6 of 41 pages - ------------------------------------------------------------------------------- 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). CUSIP No. 553358 10 2 Page 7 of 41 pages - ------------------------------------------------------------------------------- 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 CUSIP No. 553358 10 2 Page 8 of 41 pages - ------------------------------------------------------------------------------- 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 CUSIP No. 553358 10 2 Page 9 of 41 pages - ------------------------------------------------------------------------------- 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 CUSIP No. 553358 10 2 Page 10 of 41 pages - ------------------------------------------------------------------------------- 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 CUSIP No. 553358 10 2 Page 11 of 41 pages - ------------------------------------------------------------------------------- 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. EX-1 2 CUSIP No. 553358 10 2 Page 12 of 41 pages - ------------------------------------------------------------------------------- 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. - 1 - CUSIP No. 553358 10 2 Page 13 of 41 pages - ------------------------------------------------------------------------------- "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. - 2 - CUSIP No. 553358 10 2 Page 14 of 41 pages - ------------------------------------------------------------------------------- "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). - 3 - CUSIP No. 553358 10 2 Page 15 of 41 pages - ------------------------------------------------------------------------------- "Unit" shall mean an over-the-road semi trailer, cartage trailer or storage trailer used in the Business. - 4 - CUSIP No. 553358 10 2 Page 16 of 41 pages - ------------------------------------------------------------------------------- 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. - 5 - CUSIP No. 553358 10 2 Page 17 of 41 pages - ------------------------------------------------------------------------------- 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. - 6 - CUSIP No. 553358 10 2 Page 18 of 41 pages - ------------------------------------------------------------------------------- 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. - 7 - CUSIP No. 553358 10 2 Page 19 of 41 pages - ------------------------------------------------------------------------------- 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. - 8 - CUSIP No. 553358 10 2 Page 20 of 41 pages - ------------------------------------------------------------------------------- 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. - 9 - CUSIP No. 553358 10 2 Page 21 of 41 pages - ------------------------------------------------------------------------------- 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 - 10 - CUSIP No. 553358 10 2 Page 22 of 41 pages - ------------------------------------------------------------------------------- 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: - 11 - CUSIP No. 553358 10 2 Page 23 of 41 pages - ------------------------------------------------------------------------------- (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 - 12 - CUSIP No. 553358 10 2 Page 24 of 41 pages - ------------------------------------------------------------------------------- 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 - 13 - CUSIP No. 553358 10 2 Page 25 of 41 pages - ------------------------------------------------------------------------------- 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. - 14 - CUSIP No. 553358 10 2 Page 26 of 41 pages - ------------------------------------------------------------------------------- 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. - 15 - CUSIP No. 553358 10 2 Page 27 of 41 pages - ------------------------------------------------------------------------------- 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 - 16 - EX-2 3 CUSIP No. 553358 10 2 Page 28 of 41 pages - ------------------------------------------------------------------------------- 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). - 1 - CUSIP No. 553358 10 2 Page 29 of 41 pages - ------------------------------------------------------------------------------- "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: - 2 - CUSIP No. 553358 10 2 Page 30 of 41 pages - ------------------------------------------------------------------------------- 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 - 3 - CUSIP No. 553358 10 2 Page 31 of 41 pages - ------------------------------------------------------------------------------- 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). - 4 - CUSIP No. 553358 10 2 Page 32 of 41 pages - ------------------------------------------------------------------------------- (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. - 5 - CUSIP No. 553358 10 2 Page 33 of 41 pages - ------------------------------------------------------------------------------- (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 - 6 - CUSIP No. 553358 10 2 Page 34 of 41 pages - ------------------------------------------------------------------------------- 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 - 7 - CUSIP No. 553358 10 2 Page 35 of 41 pages - ------------------------------------------------------------------------------- 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 - 8 - CUSIP No. 553358 10 2 Page 36 of 41 pages - ------------------------------------------------------------------------------- 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 - 9 - CUSIP No. 553358 10 2 Page 37 of 41 pages - ------------------------------------------------------------------------------- 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 ------------------------- - 10 - EX-3 4 CUSIP No. 553358 10 2 Page 38 of 41 pages - ------------------------------------------------------------------------------- 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. CUSIP No. 553358 10 2 Page 39 of 41 pages - ------------------------------------------------------------------------------- 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 CUSIP No. 553358 10 2 Page 40 of 41 pages - ------------------------------------------------------------------------------- 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. 3 CUSIP No. 553358 10 2 Page 41 of 41 pages - ------------------------------------------------------------------------------- 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 -----END PRIVACY-ENHANCED MESSAGE-----