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EXHIBIT 10.11
FIRST AMENDMENT TO
STOCK PURCHASE AGREEMENT
This First Amendment to Stock Purchase Agreement, dated December 11,
1998 (this "Amendment"), is by and among Xxxxxxxxxxx Security, Inc., a Georgia
corporation (the "Purchaser"); UNICCO Security Services, Inc., a Delaware
corporation (the "Company"); USC, Inc., a Massachusetts corporation ("Seller");
and UNICCO Service Company, a Massachusetts business trust ("Shareholder");
BACKGROUND
A. The Purchaser, the Company, the Seller and the Shareholder
have executed and delivered a Stock Purchase Agreement, dated October 26, 1998
(the "Stock Purchase Agreement").
B. The Purchaser, the Company, the Seller and the Shareholder
desire to amend the Stock Purchase Agreement.
AGREEMENTS
1. Definitions. Any capitalized term not otherwise defined in
this Amendment shall have the same meaning as in the Stock Purchase Agreement.
2. Amendment of Stock Purchase Agreement.
(A) SECTION 1.4. Section 1.4 is amended to read as
follows:
1.4 Closing. Subject to the fulfillment or
waiver of the conditions precedent set forth in Article 6
hereof, and subject to any extension permitted under clause
(y) of Section 9.3(b) hereof, the closing of the transactions
contemplated by this Agreement (the "Closing") shall take
place at the offices of Posternak, Xxxxxxxxxx & Xxxx, L.L.P.,
at 000 Xxxxxxx Xxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000,
on December 28, 1998, or such other date as may be agreed upon
by the parties (such date, the "Closing Date"). Subject to the
consummation of the Closing, the sale, transfer and conveyance
to the Purchaser of the Shares shall be deemed effective as of
12:01 A.M., Eastern Standard Time, on the Closing Date (the
"Effective Time"). Except as otherwise provided herein, all
proceedings to be taken and all documents to be executed at
the Closing shall be deemed to have been taken, delivered and
executed simultaneously, and no proceeding shall be deemed
taken nor documents deemed executed or delivered until all
have been taken, delivered and executed.
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(B) SECTION 5.18. The last sentence of Section 5.18 shall
be deleted and the following text shall be inserted in its place:
No supplement or amendment to any such Schedules
shall have any effect for the purpose of determining
satisfaction of the conditions set forth in Sections
6.1(a) or 6.2(a); provided, however that the
disclosure in any such supplement or amendment to the
Schedules with respect to any matter occurring after
the date hereof (which did not exist on the date
hereof) shall not form the basis of a claim for
misrepresentation or breach of a representation,
warranty, covenant or agreement hereunder; provided,
further, however, that none of the Shareholder,
Purchaser, Seller or the Company shall be deemed to
have failed to satisfy the conditions set forth in
Sections 6.1(a) or 6.2(a) by reason of the disclosure
in any supplement or amendment to the Schedules with
respect to any matter occurring after the date of the
First Amendment to Stock Purchase Agreement, dated
December 11, 1998 (the "Amendment Date") (which did
not exist on the date hereof or at any time
thereafter through the Amendment Date).
(C) SECTION 6.1. Section 6.1 is amended as follows:
(i) The text of subsection (a) shall be deleted and
replaced with the following text:
(a) Each of the representations and
warranties of Shareholder, Seller and the Company set
forth in Articles 3 and 4 hereof shall have been true
and correct on and as of the date of this Agreement,
as of the Amendment Date and, except with respect to
the "Excluded Representations" (as defined below), as
of the Closing Date, with the same force and effect
as though made on and as of the Closing Date. The
term "Excluded Representations" means the
representations and warranties of the Shareholder,
Seller and Company set forth in Section 4.8
[Undisclosed Liabilities]; Sections 4.9(a)(i),
4.9(a)iii) and 4.9(b)(iv) [Absence of Certain Changes
and Events]; the last sentence of Section 4.12
[Material Contracts], to the extent relating to a
breach of a Material Contract by a party other than
Company; clauses (d) through (o) of Section 4.15
[Labor Matters]; subsections (a), (b) and (e)(i) of
Section 4.16 [Environmental Matters]; the last
sentence of Section 4.17 [Insurance]; Section 4.19
[Litigation]; and the last sentence of Section 4.24
[Customers]. Notwithstanding the foregoing, any such
representation or warranty that is already qualified
by "materiality" shall be true in all respects at the
time it is reaffirmed; provided, however, that the
foregoing is inapplicable to the Excluded
Representations as of the Closing Date because the
Excluded Representations will not be reaffirmed as of
the Closing Date.
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(ii) Subsection (b) shall be amended by the addition of a
new last sentence to read as follows:
Neither Shareholder, Seller nor Company shall be
deemed to be in default with respect to the covenants
set forth in subsections (b) or (c) of Section 5.2 or
subsection (c) of Section 5.3 because of the
occurrence between the Amendment Date and the Closing
Event of any event not within the control of
Shareholder, Purchaser or Company.
(iii) The text of subsection (e) shall be deleted and the
word "reserved" shall be inserted in its place;
(iv) The text of subsection (r) shall be deleted and the
word "reserved" shall be inserted in its place; and
(v) The text of subsection (s) shall be deleted and the
word "reserved" shall be inserted in its place.
(D) SECTION 6.2. Section 6.2 is amended as follows:
(i) The text of subsection (i) shall be deleted and the
word "reserved" shall be inserted in its place.
(E) SECTION 7.2. Section 7.2 is amended to read as
follows:
7.2 Certain Tax Matters.
(a) Any tax sharing agreement between the
Company and the Seller and/or any direct or indirect
subsidiary of the Seller shall be, and is hereby, terminated
as of the Closing Date and will have no further effect for any
taxable year (whether the current year, a future year or a
past year).
(b) Seller will join with Purchaser in making an
election under Section 338(h)(10) of the Code and Treasury
Regulation Section 1.338(h)(10)-1 (and any corresponding
elections under any applicable state and local Laws)
(collectively, a "Section 338(h)(10) Election") with respect
to the purchase and sale of the Shares hereunder. Seller will
pay any Tax attributable to the making of the Section
338(h)(10) Election and Seller will indemnify Purchaser and
the Company from and against any and all damages, penalties,
fines, costs, reasonable amounts paid in settlement,
liabilities, obligations, losses, expenses and fees (including
court costs and reasonable attorneys' fees and expenses)
arising out of any failure to pay such Tax.
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(c) Seller will be responsible for preparing and
filing all income and franchise Tax Returns of the Company for
all Tax periods ending on or before the Closing Date, and
Seller shall pay all income and franchise taxes of Company for
all such periods. Purchaser will be responsible for preparing
and filing the Section 338(h)(10) election (provided that
Seller shall provide such written consents and other items
required by Seller to make such election) and all income and
franchise Tax Returns of the Company relating to periods
beginning on or after the Closing Date. After the Closing has
occurred, Purchaser will cause the Company to provide, or
cause to be provided, to Seller, without charge, any
information that may reasonably be requested by Seller in
connection with the preparation of any Tax Returns relating to
periods ending on or before the Closing Date.
(d) The parties hereto agree to cooperate with
one another to allocate the Purchase Price in a manner
reasonably acceptable to the parties. Such agreed allocation
shall be binding on the Seller and Purchaser and their
respective affiliates for all purposes (including without
limitation, financial accounting purposes, financial and
regulatory reporting purposes and tax purposes) and none of
the parties or such affiliates shall take for tax purposes any
position in any tax return, report, form, declaration or
questionnaire that is inconsistent with such allocation.
(F) SECTION 7.4. Section 7.4 is amended as follows:
(i) Clause (C) of subsection 7.4(d) is amended to read as
follows:
(C) performing its obligations under the terms of
(w) the Agreement dated October 1, 1996, between Shareholder
and General Services Administration; (x) the Agreement dated
May 19, 1997 between Shareholder and XxXxxxx- Xxxx College;
(y) the Agreement dated July 1, 1992 between Shareholder and
The XxXxxxxx School; and (z) the Agreement dated September,
1988 between Shareholder and Xxxxxxxxx-Xxxx Company.
(G) ARTICLE 7. Article 7 shall be amended by the
insertion of new Sections 7.5 and 7.6 to read as follows:
7.5 Chicago EEOC Litigation. Seller and
Shareholder shall provide, promptly following
receipt, to Purchaser copies of all correspondence
with the EEOC and the court, pleadings and discovery
requests and responses relating to the action filed
by the Equal Employment Opportunity Commission in the
United States District Court for the Northern
District of Illinois, Eastern Division (Civil Action
No. 98C 6083) (the "EEOC Litigation") and otherwise
keep Purchaser fully informed regarding the status of
the EEOC Litigation; provided, however, that Seller
and Shareholder shall be under no obligation to
provide to Purchaser any attorney/client confidential
or privileged materials or any materials relating
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to matters involving Seller or Shareholder insurance
coverage for the EEOC Litigation. Seller and
Shareholder shall (i) at their sole cost and expense,
vigorously defend against the claims asserted against
the Company in the EEOC Litigation to the extent such
claims relate to actions or omissions of the Company
occurring prior to the Closing Date, and (ii) permit
Purchaser to monitor the defense of the EEOC
Litigation, with counsel of its own choice and at its
expense and (iii) consult with and consider the
recommendations and advice of Purchaser and any such
counsel with respect to defense of the EEOC
Litigation. Neither Seller nor Shareholder shall
settle the EEOC Litigation without the prior written
consent of the Purchaser. The parties agree that,
notwithstanding any other provision of this
Agreement, (i) the obligations of Seller and
Shareholder set forth in this Section 7.5 shall
survive the Closing indefinitely, and (ii) there are
no express or implied limitations on Seller's and
Shareholder's defense and settlement rights relating
to the Shareholder in the EEOC Litigation.
7.6 XxXxxxx-Xxxx College Contract.
Seller and Shareholder shall use their best efforts
to obtain, as soon as practicable following the
Closing, the consent of XxXxxxx-Xxxx College, a
client of the Shareholder, to the execution of a
subcontract between the Shareholder and the Purchaser
providing for the performance by the Purchaser of all
services included within the Company Activities that
Shareholder is obligated to provide pursuant to its
contract with such client. Shareholder shall enter
into such subcontract with Purchaser promptly
following Shareholder's receipt of such consent, if
it is received. The obligations of Seller and
Shareholder set forth in this Section 7.6 shall
survive the Closing indefinitely.
(H) SECTION 8.1. Section 8.1 shall be amended as follows:
(i) Paragraph (iii) of subsection 8.1(a) shall be amended
to read as follows:
the Excluded Liabilities (including, without
limitation, the Terminated Contracts, Terminated
Vehicles, and any liability or cost incurred in
respect of any EEOC claim or other litigation
(including, without limitation, the EEOC Litigation)
relating to events occurring prior to the Closing
Date);
(ii) The following text shall be inserted at the end of
Section 8.1:
Purchaser acknowledges and agrees that it shall not
be entitled to assert any claim against the Seller or
Shareholder pursuant to this Section 8.1 or otherwise
with respect to (i) any claim asserted by the EEOC
against the Company and/or the Purchaser in the EEOC
Litigation or any other action, to the extent arising
or resulting from conduct of the Company following
the Closing Date or conduct of the Purchaser at any
time prior to or following the
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Closing Date, or (ii) any costs or expenses of
compliance with any injunctive relief which may be
imposed as a result of the EEOC Litigation and which
relates to the operations or business of the
Purchaser other than the operations and business of
the Company as they existed prior to the Closing
Date.
(I) SECTION 9.3(B). Section 9.3(b) is amended as follows:
(i) The text of clause (ii) shall be deleted and replaced
with the word "reserved"; and
(ii) The date "December 1, 1998" in clause (iii) shall be
deleted and replaced with the date "December 28,
1998".
(J) SECTION 9.3(C). Section 9.3(c) is amended by the
deletion of the date "December 1, 1998" in clause (ii) and the
replacement of such date with the date "December 28, 1998".
3. Representations and Warranties; Covenants. (a) Each of the
representations and warranties of Shareholder, Seller and Company set forth in
the Stock Purchase Agreement was true and correct in all material respects on
the date of the execution of the Stock Purchase Agreement and is true and
correct in all material respects on and as of the date hereof (unless limited by
their term to a prior date) with the same force and effect as though made on and
as of the date hereof; provided, however, that any such representation or
warranty that is already qualified by "materiality" was true and correct on the
date of execution of the Stock Purchase Agreement and is true and correct on and
as of the date hereof with the same force and effect as though made on and as of
the date hereof. Shareholder, Seller and Company have performed and complied
with, in all material respects, all covenants, obligations and agreements set
forth in the Stock Purchase Agreement to be performed and complied with by them
prior to the date hereof.
(b) Purchaser represents and warrants to Seller,
Shareholder and Company that Purchaser has obtained the consent of First Union
National Bank, N.A., as Syndication Agent pursuant to Purchaser's credit
agreement, to the consummation of the transactions contemplated by the Stock
Purchase Agreement and that such consent remains in full force and effect on the
date of this Agreement.
4. Amendment of Schedules. Copies of amended and restated
Schedules 4.12, 4.18, 4.19 and 5.4 are attached to this Amendment. The Seller
and Shareholder jointly and severally represent and warrant to the Purchaser (i)
that the customer contracts that were included on Schedule 4.12 on the date of
the execution of the Stock Purchase Agreement and that are not included in
Schedule 4.12 as amended on the date hereof (the "Excluded Contracts") were
mistakenly included on Schedule 4.12 because they had expired or been terminated
prior to the date of the Stock Purchase Agreement and (ii) that the financial
results and projections supplied by the Seller, Shareholder or Company to
Purchaser in connection with Purchaser's evaluation of the Company's business
did not include any revenues attributable to the Excluded Contracts.
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5. Amendment of Exhibit. Subsection 2.1(g) of Exhibit C to the
Stock Purchase Agreement, the Assumption Agreement, shall be amended to read as
follows: "any liability arising in connection with the termination of employment
of any employee of the Company, Seller or Shareholder that arises prior to the
Closing." The parties agree that all references in the Stock Purchase Agreement
to Exhibit C shall refer to Exhibit C as so amended.
6. Execution of Escrow Agreement. Simultaneously with the
execution and delivery of this Agreement, (i) the Purchaser, the Seller and
SunTrust Bank, Atlanta, as Escrow Agent, are executing and delivering the Escrow
Agreement, dated as of the date hereof, in the form attached to this Amendment
as Exhibit "A" and (ii) the Purchaser is depositing into the escrow fund created
by such Escrow Agreement the sum of $1,200,000 in cash in immediately available
funds, such funds to be held and disbursed pursuant to the terms of such Escrow
Agreement.
7. Effect on Stock Purchase Agreement. Except as expressly
modified by this Amendment, the Parties ratify and confirm the Stock Purchase
Agreement in all respects.
[Signatures appear on the following page]
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IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
PURCHASER:
XXXXXXXXXXX SECURITY, INC.
By: /s/ Xxxxx X. Xxxxxx
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Title: Vice President and Chief
Financial Officer
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THE COMPANY:
UNICCO SECURITY SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Title: Assistant Treasurer
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SELLER:
USC, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Title: Treasurer
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SHAREHOLDER
UNICCO SERVICE COMPANY
By: /s/ Xxxxxx X. Xxxxxx
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Title: Chief Financial Officer
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