SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This Second Amendment to Agreement and Plan of Merger (this
"Amendment") is made and entered into as of November 10, 1998, by and among
United States Filter Corporation, a Delaware corporation ("Parent"), Kinetics
Acquisition Corp., a California corporation and a wholly owned subsidiary of
Parent ("Subcorp"), and Unit Instruments, Inc., a California corporation
("Unit").
PRELIMINARY STATEMENTS
A. The parties have entered into an Agreement and Plan of Merger
dated as of July 2, 1998, as amended by a First Amendment to Agreement and Plan
of Merger dated August 5, 1998 (as so amended, the "Agreement").
B. The parties have decided to further amend the Agreement by
amending, restating and supplementing certain provisions of the Agreement as set
forth in this Amendment.
AGREEMENT
Now, therefore, in consideration of these premises and the mutual and
dependent promises hereinafter set forth, the parties hereto agree as follows:
Section 1. Section 2.2(a) of the Agreement is amended and restated in
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its entirety as follows:
"(a) The "Exchange Ratio" shall equal the Merger Consideration
divided by the Parent Share Value. The "Merger Consideration" shall be
determined as follows: (i) if the Parent Share Value is greater than or
equal to $22.00, then the Merger Consideration shall equal $10.00; (ii) if
the Parent Share Value is less than $22.00 and greater than $12.00, then
the Merger Consideration shall equal $8.00 plus the dollar amount equal to
a fraction, the numerator of which shall be the Parent Share Value minus
$12.00 and the denominator of which shall be five (5); and (iii) if the
Parent Share Value is less than or equal to $12.00, then the Merger
Consideration shall equal $8.00. The "Parent Share Value" shall be the
average of the closing price per share for shares of Parent Common Stock as
reported on the New York Stock Exchange ("NYSE") Composite Tape ("NYSE
Composite Tape") on each of the twenty (20) consecutive trading days ending
on the fifth (5th) trading day preceding the Closing Date (the "Average
Share Price"). No certificates for fractional Shares of Parent Common
Stock shall be issued as a result of the conversion provided for in Section
2.1(b)."
Section 2. Section 7.1(c) of the Agreement is amended and restated in
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its entirety as follows:
"(c) by either Parent or Unit if the Merger shall not have been
consummated before January 29, 1999, provided, however, that the right to
terminate this Agreement under this Section 7.1(c) shall not be available
to any party whose failure or whose affiliate's failure to perform any
material covenant or obligation under this Agreement has been the cause of
or resulted in the failure of the Merger to occur on or before such date."
Section 3. Section 7.1(i) of the Agreement is amended and restated in
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its entirety as follows:
"(i) by Parent, if the Average Share Price is less than
$11.00."
Section 4. In order to induce Subcorp and Parent to enter into this
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Amendment, Unit hereby represents and warrants to Parent and Subcorp as follows:
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(a) Unit has received the oral advice of Xxxxxxx & Company, its
financial advisors, to the effect that, as of the date of this Amendment,
the Exchange Ratio is fair to the Unit Shareholders from a financial point
of view. Such oral advice has not been withdrawn or revoked or modified in
any material respect and is to be confirmed in a written fairness opinion
of Xxxxxxx & Company, which opinion will be dated as of the date of this
Amendment. Unit will promptly provide copies of such opinion to Parent.
(b) The Board of Directors of Unit has authorized this Amendment
and, at a meeting duly called and held, has by unanimous vote of all of
Unit's directors (i) determined that the Agreement, as amended by this
Amendment, and the transactions contemplated thereby and hereby, including
the Merger, taken together, are fair to and in the best interests of the
Unit Shareholders, and (ii) resolved to recommend that the Unit
Shareholders approve the Agreement, as amended by this Amendment, and the
transactions contemplated therein and herein, including the Merger (which
recommendation shall be deemed part of the Unit Board Recommendation).
Section 5. In addition to the conditions set forth in Section 6.3 of
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the Agreement, the obligations of Parent and Subcorp to consummate the Merger
and the other transactions contemplated by the Agreement, as amended by this
Amendment, shall be subject to the conditions that (a) the representations and
warranties of Unit set forth in this Amendment shall be true and correct in all
material respects on and as of the Closing Date and (b) a Unit Affiliate Letter
(as defined below) shall have been delivered to Parent by each Unit Affiliate
(as defined below) who is also an officer of Unit, duly executed by such Unit
Affiliate, at least twenty (20) days prior to the Closing Date.
Section 6. Preliminary Statement "E", Section 5.1(d) and Section
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5.3(f) are hereby deleted in their entirety.
Section 7 -- Affiliates of Unit. Unit shall use all reasonable
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efforts to cause such officers and directors of Unit as may be requested by
Parent and, in any event, each person who may be at the Effective Time or was on
the date hereof an "affiliate" of Unit for purposes of Rule 145 under the
Securities Act (each a "Unit Affiliate"), to execute and deliver to Parent no
less than 30 days prior to the date of the Unit Shareholders Meeting, the
written undertakings in the form attached hereto as Exhibit A (the "Unit
Affiliate Letter"). Concurrently with the delivery of this Amendment, Unit,
after consultation with its outside counsel, shall provide Parent with a letter
(reasonably satisfactory to outside counsel to Parent) specifying all of the
persons or entities who, in Unit's opinion, may be deemed to be "affiliates" of
Unit under the preceding sentence.
Section 8 -- Miscellaneous.
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(a) Effect of Amendment. The provisions of this Amendment are
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hereby incorporated into and made part of the Agreement. Except as amended
by this Amendment, all of the provisions of the Agreement shall continue in
full force and effect.
(b) Definitions. Unless otherwise defined in this Amendment,
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capitalized terms have the meanings given in the Agreement.
(c) Entire Agreement. The Agreement (including the documents
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and the instruments referred to therein), the First Amendment to Agreement
and Plan of Merger dated August 5, 1998 among Parent, Subcorp and Unit, the
Confidentiality Agreement, and this Amendment constitute the entire
agreement among the parties and supersede all prior agreements,
understandings and representations by or among the parties, written and
oral, with respect to the subject matter hereof and thereof.
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(d) Counterparts. This Amendment may be executed in
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counterparts, which shall constitute one and the same instrument. The
parties may execute more than one copy of this Amendment, each of which
shall constitute an original.
[Signature Page Follows]
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IN WITNESS WHEREOF, Parent, Subcorp and Unit have signed this
Amendment as of the date first written above.
"PARENT"
UNITED STATES FILTER
CORPORATION,
a Delaware corporation
By:
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Name:
--------------------
Title:
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"SUBCORP"
KINETICS ACQUISITION CORP.,
a California corporation
By:
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Name:
--------------------
Title:
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"UNIT"
UNIT INSTRUMENTS, INC.,
a California corporation
By:
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Name:
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Title:
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EXHIBIT A
[Form of Unit Affiliate Letter]
November ____, 1998
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed an
"affiliate" of Unit Instruments, Inc., a California corporation (the
"Company"), as that term is defined for purposes of paragraphs (c) and (d) of
Rule 145 of the Rules and Regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") under the U.S. Securities
Act of 1933 (the "Act").
Pursuant to the terms of the Agreement and Plan of Merger, dated as of
July 2, 1998, as amended as of August 5, 1998 and November 10, 1998 (as so
amended, the "Agreement"), among United States Filter Corporation, a Delaware
corporation ("Parent"), Kinetics Acquisition Corp., a California corporation
("Subcorp"), and the Company providing for the Merger of Subcorp with and into
the Company (the "Merger"), and as a result of the Merger, I may receive shares
of common stock of Parent, par value $.01 per share (the "Parent Common Stock"),
in exchange for the shares of common stock of the Company, par value $.15 per
share (the "Company Common Stock") owned by me at the Closing of the Merger as
determined pursuant to the Agreement. As used herein the term "Parent Common
Stock" means and includes those shares of Parent Common Stock issued to me as a
result of the Merger.
I represent, warrant and covenant to Parent and Subcorp that in such
event:
A. I shall not make any sale, transfer or other disposition of the
Parent Common Stock in violation of the Act or the Rules and Regulations. In
this connection, I understand that the issuance of the Parent Common Stock to me
has been or will be registered under the Act, but that such registration would
not cover resales by affiliates. Accordingly, the Parent Common Stock must be
held by me indefinitely unless (a) the Parent Common Stock has been registered
under the Act for sale by me, (b) a sale of the Parent Common Stock is made in
conformity with the volume and other applicable limitations of paragraph (d) of
Rule 145, or (c) another exemption from registration is available.
B. I understand that neither Parent nor Subcorp is under any
obligation to register the sale or other disposition of the Parent Common Stock
by me or on my behalf or to take any other action to qualify for an exemption
from registration.
C. I have carefully read this letter and the Agreement and have
discussed their requirements and other applicable limitations upon my ability to
sell, transfer or otherwise dispose of the Parent Common Stock, to the extent I
felt necessary, with my counsel or counsel for the Company.
D. I understand that stop transfer instructions will be given to
Parent's transfer agents with respect to my Parent Common Stock and that there
will be placed on the certificates for my Parent Common Stock a legend stating
in substance:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED, APPLIES AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN
COMPLIANCE WITH THE REQUIREMENTS OF RULE 145 OR PURSUANT TO A REGISTRATION
STATEMENT UNDER THAT ACT OR AN EXEMPTION FROM SUCH REGISTRATION."
E. I also understand that unless the transfer by me of my Parent
Common Stock has been registered under the Act or is a sale made in conformity
with the provisions of Rule 145, Parent reserves the right to put a legend on
the certificates issued to my transferee stating in substance:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO
RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER
THE U.S. SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN ACQUIRED BY
THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION OF SUCH SHARES, AND SUCH SHARES MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE U.S. SECURITIES ACT OF 1933."
Very truly yours,
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