UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
General Employment Enterprises, Inc.
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(Name of Issuer)
Common Stock, no par value
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(Title of Class of Securities)
Common Stock, No Par Value
(Title of Class of Securities)
224051102
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(CUSIP Number)
Michael K. Schroering
2650 Eastpoint Parkway, Suite 280
Louisville, KY 40223
502-253-4000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 21, 2012
(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 that is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f)
or 13d-1(g), check the following box [ ].
Note. Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Rule 13d-7 for other parties to whom copies are to be sent.
(Continued on following pages)
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* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
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 or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
CUSIP No.
1. Names of Reporting Persons:
Michael K. Schroering
2. Check the appropriate box if a member of a group
(a) [X] (b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS OO
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2 (e) /_/
6. CITIZENSHIP OR PLACE OF ORGANIZATION
The reporting person is a U.S. citizen
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7. SOLE VOTING POWER 199,334
8. SHARED VOTING POWER 15,842,410
9. SOLE DISPOSITIVE POWER 199,334
10. SHARED DISPOSITIVE POWER 15,842,410
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,041,744
12. CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES /_/
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 73%
14. TYPE OF REPORTING PERSON IN
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CUSIP No.
1. Names of Reporting Persons:
LEED HR, LLC
2. Check the appropriate box if a member of a group
(a) [X] (b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2 (e) /_/
6. CITIZENSHIP OR PLACE OF ORGANIZATION
The reporting person is a Kentucky Limited Liability Company
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7. SOLE VOTING POWER 0
8. SHARED VOTING POWER 15,842,410
9. SOLE DISPOSITIVE POWER 0
10. SHARED DISPOSITIVE POWER 15,842,410
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,842,410
12. CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES /_/
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 72%
14. TYPE OF REPORTING PERSON OO
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This Schedule 13D reports the acquisition by LEED HR, LLC of an
aggregate of 15,657,410 GEE shares, or 72% of GEE's outstanding shares.
The purchases include 3,357,410 shares from Big Red Investments
Partnership LTD on August 16, 2012; 9,325,281 shares from Trinity HR
Services, LLC on August 21, 2012, and 2,974,719 shares from Trinity HR
Services, LLC on August 21, 2012.
Item 1. Security and Issuer.
This Schedule 13D relates to the common stock, no par value per share,
of General Employment Enterprises, Inc. GEE's principal executive
offices are located at One Tower Lane, Suite 2200, Oakbrook Il 60181.
Item 2. Identity and background.
LEED HR, LLC is a Kentucky limited liability company. Schroering is
a U.S. citizen. The address for each is 2650 Eastpoint Parkway, Suite
280, Louisville, KY 40223. Schroering's principal occupation is owner
and President of The Schroering Company, a real estate services company
located in Louisville, Kentucky specializing in leasing, consulting and
sales. He is a past president of the Indiana/Kentucky Society of
Industrial and Office Realtors (SIOR), a member of the Society of
Industrial and Office Realtors and a Certified Commercial Investment
Member (CCIM). Michael received a B.A. in Business Administration in
Finance and Management from Loyola University. He also attended the
Louis D. Brandeis School of Law at the University of Louisville before
commencing his business career. Schroering formed LEED to purchase and
hold the GEE shares purchased in the transactions described below.
Schroering has not been a party to a criminal or civil proceeding
required to be disclosed herein.
Item 3. Source and amount of funds or other consideration.
The purchase price for the Big Red shares was $610,000, payable
$220,000 at closing and the balance upon effective transfer of the
shares. The down payment was funded by (i) $70,000 of Schroering's
personal funds, and (ii) $150,000 borrowed from Michael Boone, a
resident of Kentucky. The Boone loan matures in three months and bears
interest at six percent. It is anticipated that the $390,000 balance
will be funded by personal or borrowed funds, or some combination
thereof.
LEED paid the aggregate $50,000 down payments as to the Trinity shares
with personal funds of Schroering (this involved a release of
indebtedness). It is anticipated that the $950,000 payment due on
October 6, 2012 will be comprised of personal funds of Schroering,
borrowed funds, or a combination thereof.
Item 4. Purpose of transaction.
LEED effected the purchases for investment. LEED anticipates
causing Schroering to be added to the Board of Directors and ultimately
causing additional changes to the Board, including increasing the
number of members of the Board. LEED anticipates facilitating the
growth of GEE's gross revenues to at least $80,000,000 within the next
year through acquisitions and internal growth focused on the staffing
business.
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Item 5. Interest in Securities of the Issuer.
(a) LEED beneficially owns 15,842,410 shares of GEE common stock,
which amounts to 73 % of GEE's outstanding common stock. Schroering
beneficially owns 16,041,744 GEE shares, or 72% of GEE's outstanding
shares.
(b) LEED and Schroering, Leed's sole owner and manager, share voting
and divestment powers with respect to the LEED shares.
(c) LEED purchased 3,357,410 shares from Big Red Investments
Partnership LTD on August 16, 2012 at a price of approximately $.18
per share; 9,325,281 shares from Trinity HR Services, LLC on August 21,
2012 at a price of approximately $.24 per share, and 2,974,719 shares
from Trinity HR, LLC on August 21, 2012 at a price of approximately
$.24 per share.
(d) Under their respective purchase agreements with LEED, Trinity HR
and Trinity HR Services may receive additional purchase price payments
equal to 40% of the excess of LEED's net profits with respect to the
LEED shares (i.e. sales proceeds on dispositions and dividends) after
LEED receives an aggregate of $6,150,000 with respect to the LEED
shares. The ultimate recipients of such proceeds would be Trinity HR's
and Trinity HR Services' owners, Brandon Simmons and Tiffany Simmons.
LEED understands Trinity HR Services is entering into an agreement with
Derby Capital, LLC which will yield Derby a portion of the additional
purchase price payments.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
See 5(d) above.
Item 7. Materials to be filed as Exhibits.
7.1 Big Red Stock Purchase Agreement
7.2 Boone Note
7.3 Trinity HR Services Stock Purchase Agreement
7.4 Trinity HR Services Note
7.5 Trinity HR Stock Purchase Agreement
7.6 Trinity HR Note
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.
Dated: September 13, 2012
LEED HR, LLC
By: /s/ Michael K. Schroering
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Michael K. Schroering, Manager
/s/ Michael K. Schroering
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Michael K. Schroering, individually
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EXHIBIT 7.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made as of August
15, 2012, by and between LEED HR, LLC, a Kentucky limited liability
("Buyer"), and BIG RED INVESTMENTS PARTNERSHIP LTD. ("Seller").
ARTICLE 1.
SALE OF SHARES
1.1 Shares. Seller hereby agrees to sell a total of 3,357,410 shares
of common stock, without par value (the "Shares"), of General
Employment Enterprises, Inc., an Illinois corporation ("GEE"), to
Buyer, and Buyer agrees to purchase the Shares from Seller, free and
clear of all Encumbrances (as defined below) on the Shares.
1.2 Price. The purchase price shall be $610,000 (the
"Purchase Price").
1.3 Closing. The consummation of the purchase and sale contemplated
hereby (the "Closing") shall be effected not later than August 15, 2012
(the "Closing Date"). The Closing shall be effected by Buyer delivering
the Purchase Price to Seller and Seller delivering to Buyer
certificates representing the Shares, duly endorsed in blank for
transfer to Buyer or its assignee. If the Closing has not been effected
by August 15, 2012, the Shares certificates shall be returned to Seller
and the Purchase Price to Buyer.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer to enter into this Agreement, Seller hereby
represents and warrants to Buyer as follows:
2.1 Authority; No Conflict or Default.
(a) This Agreement constitutes the legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its
terms, and Seller has the absolute and unrestricted right, power,
authority, and capacity to execute and deliver this Agreement and to
perform its obligations under this Agreement. The execution, delivery
and performance by Seller of this Agreement have been duly authorized
by all necessary action on behalf of Seller. This Agreement has been
duly executed and delivered by Seller.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance hereof will, directly or indirectly: (i)
contravene, conflict with, or result in a violation of (A) any
provision of the organizational documents of Seller or any agreement or
contract as to which Seller is a party, or (B) any resolution adopted
by the members of Seller; or (ii) contravene, conflict with, or result
in a violation of, or give any natural person, partnership, limited
1
liability company, corporation, joint venture, trust, association or
any other entity, domestic or foreign ("Person"), including any
foreign, federal, state, local or other governmental, statutory
or administrative authority or regulatory body, self-regulatory
organization or any court, tribunal or judicial or arbitral body
("Governmental Body"), the right to challenge any of the transactions
contemplated hereby or to exercise any remedy or obtain any relief
under, any legal requirement, contract or order to which Seller may be
subject.
2.2 Required Consents. Seller is not, nor will it be required to,
give any notice to or obtain any consent from any Person in connection
with the execution and delivery of this Agreement or the consummation
or performance of any of the transactions contemplated hereby, other
than as may be required under the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (the "Exchange Act").
2.3 Title to Shares. The delivery to Buyer of the Shares as
contemplated in this Agreement will transfer to Buyer valid title
thereto, free and clear of all Encumbrances. The voting, transfer and
other rights relating to the Shares are not subject to the terms of any
agreements entered into by Seller or any prior holder of the Shares.
The Shares are owned of record and beneficially by Seller, free and
clear of all Encumbrances. No legend or other reference to any
purported Encumbrance appears upon any certificate representing Shares.
For purposes hereof "Encumbrance" means any charge, claim, community
property interest, condition, equitable interest, lien, option, pledge,
security interest, hypothecation, mortgage, right of first refusal, or
similar encumbrance or restriction of any kind, including, without
limitation, any restriction on use, voting, transfer, receipt of
income, or exercise of any other attribute of ownership (other than
restrictions under applicable federal and state securities laws or
contained in GEE's organizational and other governing documents).
2.4 Litigation. There is no action, suit, proceeding, mediation,
inquiry, dispute or investigation of any kind or nature pending, or, to
Seller's knowledge, threatened that are reasonably likely to prohibit
or restrain the ability of Seller to enter into this Agreement or
consummate the transactions contemplated hereby.
2.5 Financial Advisors. Except as set forth on Schedule 2.5
hereto, no Person has acted, directly or indirectly, as a broker,
finder or financial advisor for Seller in connection with the
transactions contemplated by this Agreement and no Person is entitled
to any fee or commission or like payment in respect thereof except for
the obligations of Seller set forth on the attached distribution
letter.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer hereby
represents and warrants to Seller, as of the date hereof and as of the
Closing Date, as follows:
3.1 Organization and Good Standing. Buyer is a limited liability
company, validly existing and in good standing under the laws of
Kentucky.
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3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms, and Buyer has the absolute and unrestricted right, power,
authority, and capacity to execute and deliver this Agreement and to
perform its obligations under this Agreement. The execution, delivery
and performance by Buyer of this Agreement have been duly authorized by
all necessary action on behalf of Buyer. This Agreement has been duly
executed and delivered by Buyer.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance hereof will, directly or indirectly: (i)
contravene, conflict with, or result in a violation of (A) any
provision of the organizational documents of Buyer or any agreement or
contract as to which Buyer is a party, or (B) any resolution adopted by
the members of Buyer; or (ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other Person the right
to challenge any of the transactions contemplated hereby or to exercise
any remedy or obtain any relief under, any legal requirement, contract
or order to which Buyer may be subject.
3.3 Required Consents. Buyer is not, nor will it be required to,
give any notice to or obtain any consent from any Person in connection
with the execution and delivery of this Agreement or the consummation
or performance of any of the transactions contemplated hereby, other
than as may be required under the Exchange Act.
3.4 Litigation. There is no action, suit, proceeding, mediation,
inquiry, dispute or investigation of any kind or nature pending, or, to
Buyer's knowledge, threatened that are reasonably likely to prohibit or
restrain the ability of Buyer to enter into this Agreement or
consummate the transactions contemplated hereby.
3.5 Investment Intention. Buyer is acquiring the Shares for its
own account, for investment purposes only and not with a view to the
distribution (as such term is used in Section 2(11) of the Securities
Act of 1933, as amended (the "Securities Act")), thereof. Buyer
understands that the Shares have not been registered under the
Securities Act or State securities laws and cannot be sold unless
subsequently registered under the Securities Act and/or State
securities laws or an exemption from such registration is available.
3.6 Financial Advisors. No Person has acted, directly or
indirectly, as a broker, finder or financial advisor for Buyer
in connection with the transactions contemplated by this Agreement and
no Person is entitled to any fee or commission or like payment in
respect thereof.
3.7 Financial Capability. Buyer has, and at the Closing will
have, sufficient internal funds available to pay the Purchase Price and
any expenses incurred by Buyer in connection with the transactions
contemplated by this Agreement.
3.8 Solvency. Immediately after giving effect to the acquisition
of the Shares contemplated by this Agreement: (i) the fair saleable
value of the assets of Buyer will be greater than the total amount of
its liabilities; (ii) Buyer will be able to pay its debts and
3
obligations in the ordinary course of business as they become due; and
(iii) Buyer will have adequate capital to carry on its business. In
completing the transactions contemplated by this Agreement, Buyer does
not intend to hinder, delay or defraud any present or future creditors
of Buyer.
3.9 Own Investigation. Buyer acknowledges that it has conducted
to its satisfaction its own independent investigation of the condition,
operations and business of GEE and, in making its determination to
proceed with the transactions contemplated by this Agreement, Buyer has
relied on the results of its own independent investigation (and not on
Seller, except as provided in Article 2).
3.10 Nature of Buyer. Buyer (a) is an "accredited investor" within
the meaning of Rule 501(a) as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act and (b) by reason of its business
and financial experience it has such knowledge, sophistication and
experience in making similar investments and in business and financial
matters generally so as to be capable of evaluating the merits
and risks of the prospective investment in the Shares, is able to bear
the economic risk of such investment and, at the present time, would be
able to afford a complete loss of such investment.
ARTICLE 4.
GENERAL PROVISIONS
4.1 Binding Agreement; Assignment. This Agreement and the rights
of the parties hereunder shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted
assigns. No party hereto may assign or delegate any of its rights or
obligations hereunder without the prior written consent of the other
party.
4.2 Entire Agreement; Amendment. This Agreement constitutes the
entire Agreement and understanding between the parties hereto and
supersedes and revokes any prior agreement or understanding relating to
the subject matter of this Agreement. No change, amendment, termination
or attempted waiver of any of the provisions hereof shall be binding
upon the other party unless reduced to writing and signed by the party
against whom such change, amendment, termination or waiver is sought to
be enforced.
4.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument. Receipt of
telecopied or scanned and emailed signature pages shall have the same
legal effect as the receipt of original signature pages.
4.4 Expenses. The parties hereto will each pay their own
attorneys and accountant fees, expenses and disbursements in connection
with the negotiation and preparation of this Agreement and all other
costs and expenses incurred in performing and complying with all
conditions to be performed under this Agreement.
4.5 Further Assurances. Upon reasonable request from time to
time, the parties hereto will deliver and/or execute such further
instruments as are necessary or appropriate to the consummation of the
transactions contemplated by this Agreement.
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4.6 No Third-Party Beneficiaries. This Agreement is not intended,
and shall not be deemed, to confer upon or give any Person except the
parties hereto and their respective successors and permitted assigns,
any remedy, claim, liability, reimbursement, cause of action or other
right under or by reason of this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above.
BUYER:
LEED HR, LLC
By: /s/ Michael Schroering
------------------------------
Title: Manager
SELLER:
BIG RED INVESTMENTS PARTNERSHIP, LTD.
BY:
------------------------------
TITLE:
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Schedule 2.5
Financial Advisors, Etc.
[TO COME]
6
AMENDMENT TO
STOCK PURCHASE AGREEMENT
The Stock Purchase Agreement between LEED HR, LLC, a Kentucky limited
liability company ("Buyer") and Big Red Investments Partnership Ltd.
("Seller") dated as of August 15, 2012 is hereby amended as follows:
The Purchase Price shall be paid $220,000 at Closing and the balance
promptly after receipt by Buyer or its agent of a stock certificate
from GEE's transfer agent evidencing the Shares having been registered
in Buyer's name.
As of August 16, 2012
BUYER:
LEED HR, LLC
By: /s/ Michael Schroering
--------------------------
Title: Manager
SELLER:
BIG RED INVESTMENTS PARTNERSHIP, LTD.
BY:
--------------------------
TITLE:
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7
EXHIBIT 7.2
PROMISSORY NOTE
Borrower: Michael Schroering
2650 Eastpoint Parkway, Suite 280
Louisville, KY 40223
###-##-####
Lender: Michael Boone
1302 Clear Springs Trace
Louisville, KY 40223
Principal Amount: $150,000.00
Interest: $15,000.00
Maturity Date: 90 Days
Date of Note: August 8, 2012
PROMISE TO PAY. I MICHAEL SCHROERING ("Borrower") jointly and
severally promise to pay MICHAEL BOONE ("Lender"), or order, in
lawfully money of the United States of America, the principal amount of
$150,000.00 together with interest of $15,000.00 on the unpaid
principal balance from August 8, 2012 until paid in full.
PAYMENT. I will pay this loan in one payment of $165,000.00 on
November 15, 2012. This payment due on November 15, 2012 will be for
all principal and all accrued interest. I will pay Lender at Lender's
address shown above or at such other place as Lender may designate in
writing.
PREPAYMENT; MINIMUM INTEREST CHARGE. I agree that all loan fees and
other prepaid finance charges are earned fully as of the date of the
loan and will not be refunded to me upon early payment (whether
voluntary or as a result of default), except as otherwise required by
law. In any event, even upon full prepayment of this Note, I
understand that Lender is entitled to a minimum interest charge of
$10.00. Other than my obligation to pay any minimum interest charge, I
may pay without penalty all or a portion of the amount owed earlier
than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve me of my obligation to continue to make payments under
the payment schedule. Rather, early payments will reduce the principal
balance due. I agree not to send Lender payments marked "paid in
full", "without recourse", or similar language. If I sent such a
payment, Lender may accept it without losing any of Lender's rights
under this Note, and I will remain obligated to pay any further amount
owed to Lender. All written communications concerning disputed
amounts, including any check or other payment instrument that indicates
that the payment constitutes "payment in full" of the amount owed or
that is tendered with other conditions or limitations or as full
satisfaction of a disputed amount must be mailed or delivered to:
1302 Clear Springs Trace, Louisville, KY 40223.
LATE CHARGE. If a payment is 10 days or more late, I will be charged
5.00% of the regularly scheduled payment or $25.00, whichever is
greater.
1
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon
final maturity, Lender, at its option, may, if permitted by applicable
law, increase the interest rate on this Note 5.000 percentage points.
The interest rate will not exceed the maximum rate permitted by
applicable law.
DEFAULT. I will be in default under this Note if any of the following
happen:
Payment Default. I fail to make any payment when due under this Note.
Break Other Promises. I break any promise made to Lender or fail to
perform promptly at the time and strictly in the manner provided in
this Note or in any agreement related to this Note, or in any other
agreement or loan I have with Lender.
False Statements. Any representation or statement made or furnished to
Lender by me or on my behalf under this Note or the related documents
is false or misleading in any material respect, either nor or at the
time made or furnished.
Death or Insolvency. Any Borrower dies or becomes insolvent; a receiver
is appointed for any part of my property; I make an assignment for the
benefit of creditors; or any proceeding is commenced either by me or
against me under any bankruptcy or insolvency laws. Any creditor or
governmental agency tries to take any of the property or any other of
my property in which Lender has a lien. This includes taking of,
garnishing of or levying on my accounts with Lender. However, if I
dispute in good faith whether the claim on which the taking of the
property is based is valid or reasonable, and if I give Lender written
notice of the claim and furnish Lender with monies or a surety bond
satisfactory to Lender to satisfy the claim, then this default
provision will not apply.
Defective Collateralization. This Note or any of the related documents
ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest
or lien) at any time and for any reason.
Collateral Damage or Loss. Any collateral securing this Note is lost,
stolen, substantially damaged or destroyed and the loss, theft,
substantial damage or destruction is not covered by insurance.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any guarantor, endorser, surety, or accommodation party dies
or becomes incompetent, or revokes or disputes the validity of, or
liability under, any guaranty of the indebtedness. In the event of a
death, lender, at its option, may, but shall not be required to, permit
the guarantor's estate to assume unconditionally the obligations
arising under the guaranty in a manner satisfactory to Lender, and, in
doing so, cure any Event of Default.
Insecurity. Lender in good faith believes itself insecure.
2
Cure Provisions. If any default, other than a default in payment or
failure to satisfy Lender's requirement in the Insufficient Market
Value of Securities section, is curable and if I have not been given a
notice of a breach of the same provision of this Note within the
preceding twelve (12) months, it may be cured (and no event of default
will have occurred) if I, after receiving written notice from Lender
demanding cure of such default: (1) cure the default within fifteen
(15) days; or (2) if the cure requires more than fifteen (15) days,
immediately initiate steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter
continue and complete all reasonable and necessary steps sufficient to
produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest
immediately due, and then I will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help
collect the loan if I do not pay. I will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's
reasonable attorneys' fees and Lender's legal expenses whether or not
there is a lawsuit, including reasonable attorneys' fees and legal
expenses for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable law, I also will pay any court costs, in
addition to all other sums provided by law.
GOVERNING LAW. This Note will be governed by and interpreted in
accordance with federal law and the laws of the Commonwealth of
Kentucky. This Note has been accepted by Lender in the Commonwealth of
Kentucky.
CHOICE OF VENUE. If there is a lawsuit, I agree upon Lender's request
to submit to the jurisdiction of the courts of Jefferson County,
Commonwealth of Kentucky.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon me,
and upon my heirs, personal representatives, successors and assigns,
and shall inure to the benefit of Lender and Lender's successors and
assigns.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. I and any other
person who signs, guarantees or endorses this Note, to the extent
allowed by law, waive presentment, demand for payment, and notice of
dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be
released from liability. All such parties agree that Lender may renew
or extend (repeatedly and for any length of time) this loan or release
any party or guarantor or collateral; or impair, fail to realize upon
or perfect Lender's security interest in the collateral. All such
parties also agree that Lender may modify this loan without the consent
of or notice to anyone other than the party with whom the modification
is made. The obligations under this Note are joint and several. This
means that the words "I", "me", and "my" mean each and all of the
persons signing below.
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PRIOR TO SIGNING THIS NOTE, ALL PARTIES INVOLVED HAVE READ AND
UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. I, AND EACH OF US, AGREE TO
THE TERMS OF THE NOTE.
BORROWER:
/s/ Michael Schroering
------------------------
MICHAEL SCHROERING
2650 Eastpoint Parkway, Suite 280
Louisville, KY 40223
###-##-####
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EXHIBIT 7.3
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made as of August 21, 2012,
by and between LEED HR, LLC, a Kentucky limited liability ("Buyer"), and
Trinity HR Services, LLC, a Delaware limited liability company ("Seller").
ARTICLE 1.
SALE OF SHARES
1.1 Shares. Seller hereby sells a total of 9,325,281 shares (the "Shares")
of common stock, without par value ("GEE shares"), of General Employment
Enterprises, Inc., an Illinois corporation ("GEE"), to Buyer, and Buyer hereby
purchases the Shares from Seller.
1.2 Price, Payment. The purchase price is $2,274,000 (the "Purchase Price").
The Purchase Price is payable (i) $37,900 in cash at closing, (ii) $721,000
not later than 45 days after the date hereof, and (iii) the balance by
delivery of a Promissory Note in the form delivered herewith. As additional
Purchase Price, Buyer shall promptly pay Seller 40% of any Net Share Proceeds
(defined below) in excess of $4,662,641 within thirty days of receipt.
If after the third anniversary date hereof the Market Price (as defined
below) for GEE shares exceeds $.50 (the "Target Price") (such difference being
the "Target Price Excess Amount"), Seller may request in writing (a "Bonus
"Request") that one fifth of the HR Remaining Shares be deemed to be sold
(a "Deemed Sale") in which event, an amount (the "Bonus Amount") equal to the
product of 40% of the Target Price Excess Amount multiplied by the number of
Services Remaining Shares deemed to be sold shall constitute Services Sales
Proceeds. Seller may make no more than one Bonus Request every six months,
provided that Seller may make Bonus Requests in amounts equal to one-fourth,
one third, one-half and finally the remaining balance of the Remaining
Services Shares as to each Bonus Request after the initial Bonus Request.
For purposes of this Section 1.2:
"Excluded Sales" shall mean Buyer sales of GEE shares at a price lower
than the Target Price, provided that any such sale shall not be deemed an
Excluded Sale to the extent after giving effect to such sale the total
Remaining Services Shares and total Remaining HR Shares would exceed the total
number of GEE shares owned by Buyer after such sale.
"Services Distributions" mean each dividend or distribution made by GEE
with respect to a GEE share after the date hereof, multiplied by the number of
Remaining Services Shares immediately prior to the record date for such
dividend or distribution.
"Services Sale Proceeds" means the aggregate net proceeds received by
Buyer from the first 2,974,719 Services Shares (as defined below) either sold
by Buyer or been subject of a Deemed Sale by Buyer, other than Excluded Sales
(as defined above).
"Services Shares" shall mean GEE shares sold by Buyer that are
identified by Buyer as such in writing in a notice delivered by Buyer to
Seller within 10 days of such sale. If no notice is delivered by Buyer within
such period, the number of Services Shares sold in such sale shall equal the
number of GEE shares sold in such sale, multiplied by a fraction, the
numerator of which is the number of Remaining Services Shares immediately
prior to such sale and the denominator of which is the combined number of
Remaining Services Shares and remaining HR Shares immediately prior to such
sale.
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"Market Price" shall mean the average closing sale price for GEE shares
on the principal trading market for GEE shares for the 20 trading days
immediately prior to the Bonus Demand.
"Net Share Proceeds" shall mean the sum of (a) all Services Sale
Proceeds (as defined above) and (b) all Services Distributions (as defined
above).
"Remaining HR Shares" has the meaning set forth in that certain Stock
Purchase Agreement of even date herewith by and between the Seller and Trinity
HR, LLC.
"Remaining Services Shares" at the date of determination means
9,325,281 minus the number of Services Shares sold or which have been subject
of a Deemed Sale by the Buyer prior to such date.
For purposes of this Section 1.2, GEE shares held by an affiliate of
Buyer shall be deemed to be held by Buyer if Buyer and Seller amend this
Agreement to provide that such GEE shares shall be subject hereto.
The Target Price and shares numbers herein shall be appropriately
adjusted in the event of any stock split, reverse stock split, dividend of GEE
shares, or similar stock event after the date hereof.
Buyer shall expend commercially reasonable efforts to maximize its net
profits with respect to sales of GEE shares, provided Buyer shall not be
liable to Seller with respect hereto other than as to sales which evidence bad
faith on the part of Buyer or a breach of Buyer's duty of good faith and fair
dealing.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer to enter into this Agreement, Seller hereby
represents and warrants to Buyer that, other than as previously disclosed in
writing to Buyer:
2.1 Authority; No Conflict or Default.
(a) This Agreement constitutes the legal, valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms, and Seller
has the absolute and unrestricted right, power, authority, and capacity to
execute and deliver this Agreement and to perform its obligations under this
Agreement. The execution, delivery and performance by Seller of this
Agreement have been duly authorized by all necessary action on behalf of
Seller. This Agreement has been duly executed and delivered by Seller.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance hereof will, directly or indirectly: (i)
contravene, conflict with, or result in a violation of (A) any provision of
the organizational documents of Seller, or (B) any resolution adopted by the
members of Seller; or (ii) contravene, conflict with, or result in a violation
of, or give any natural person, partnership, limited liability company,
corporation, joint venture, trust, association or any other entity, domestic
or foreign ("Person"), including any foreign, federal, state, local or other
governmental, statutory or administrative authority or regulatory body,
self-regulatory organization or any court, tribunal or judicial or arbitral
body ("Governmental Body"), the right to challenge any of the transactions
contemplated hereby or to exercise any remedy or obtain any relief under, any
legal requirement, contract or order to which Seller may be subject.
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2.2 Required Consents. Seller is not, nor will it be required to,
give any notice to or obtain any consent from any Person in connection with
the execution and delivery of this Agreement or the consummation or
performance of any of the transactions contemplated hereby, other than as may
be required under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (the "Exchange Act").
2.3 Title to Shares. The delivery to Buyer of the Shares as
contemplated in this Agreement will transfer to Buyer valid title thereto,
free and clear of all Encumbrances. The Shares are owned of record and
beneficially by Seller, free and clear of all Encumbrances. No legend or other
reference to any purported Encumbrance appears upon any certificate
representing Shares. For purposes hereof "Encumbrance" means any charge,
claim, community property interest, condition, equitable interest, lien,
option, pledge, security interest, hypothecation, mortgage, right of first
refusal, or similar encumbrance or restriction of any kind, including, without
limitation, any restriction on use, voting, transfer, receipt of income,
or exercise of any other attribute of ownership (other than restrictions under
applicable federal and state securities laws or contained in GEE's
organizational and other governing documents).
2.4 Litigation. There is no action, suit, proceeding, mediation,
inquiry, dispute or investigation of any kind or nature pending, or, to
Seller's knowledge, threatened that are reasonably likely to prohibit or
restrain the ability of Seller to enter into this Agreement or consummate the
transactions contemplated hereby.
2.5. Financial Advisors. No Person has acted, directly or indirectly,
as a broker, finder or financial advisor for Seller in connection with
the transactions contemplated by this Agreement and no Person is entitled to
any fee or commission or like payment in respect thereof.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer hereby represents and
warrants to Seller, as of the date hereof and as of the Closing Date, as
follows:
3.1 Organization and Good Standing. Buyer is a limited liability
company, validly existing and in good standing under the laws of Kentucky.
3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms, and Buyer
has the absolute and unrestricted right, power, authority, and capacity to
execute and deliver this Agreement and to perform its obligations under this
Agreement. The execution, delivery and performance by Buyer of this Agreement
have been duly authorized by all necessary action on behalf of Buyer. This
Agreement has been duly executed and delivered by Buyer.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance hereof will, directly or indirectly: (i)
contravene, conflict with, or result in a violation of (A) any provision of
the organizational documents of Buyer, or (B) any resolution adopted by the
members of Buyer; or (ii) contravene, conflict with, or result in a violation
of, or give any Governmental Body or other Person the right to challenge any
of the transactions contemplated hereby or to exercise any remedy or obtain
any relief under, any legal requirement, contract or order to which Buyer may
be subject.
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3.3 Required Consents. Buyer is not, nor will it be required to, give
any notice to or obtain any consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or performance of
any of the transactions contemplated hereby, other than as may be required
under the Exchange Act.
3.4 Litigation. There is no action, suit, proceeding, mediation,
inquiry, dispute or investigation of any kind or nature pending, or, to
Buyer's knowledge, threatened that are reasonably likely to prohibit or
restrain the ability of Buyer to enter into this Agreement or consummate the
transactions contemplated hereby.
3.5 Investment Intention. Buyer is acquiring the Shares for its own
account, for investment purposes only and not with a view to the distribution
(as such term is used in Section 2(11) of the Securities Act of 1933, as
amended (the "Securities Act")), thereof. Buyer understands that the Shares
have not been registered under the Securities Act or State securities laws and
cannot be sold unless subsequently registered under the Securities Act and/or
State securities laws or an exemption from such registration is available.
3.6 Financial Advisors. No Person has acted, directly or indirectly,
as a broker, finder or financial advisor for Buyer in connection with the
transactions contemplated by this Agreement and no Person is entitled to any
fee or commission or like payment in respect thereof.
3.7 Financial Capability. Buyer has, and at the Closing will have,
sufficient internal funds available to pay the Purchase Price and any expenses
incurred by Buyer in connection with the transactions contemplated by this
Agreement.
3.8 Solvency. Immediately after giving effect to the acquisition of
the Shares contemplated by this Agreement: (i) the fair saleable value of the
assets of Buyer will be greater than the total amount of its liabilities; (ii)
Buyer will be able to pay its debts and obligations in the ordinary course of
business as they become due; and (iii) Buyer will have adequate capital to
carry on its business. In completing the transactions contemplated by this
Agreement, Buyer does not intend to hinder, delay or defraud any present or
future creditors of Buyer.
3.9 Own Investigation. Buyer acknowledges that it has conducted to
its satisfaction its own independent investigation of the condition,
operations and business of GEE and, in making its determination to proceed
with the transactions contemplated by this Agreement, Buyer has relied on the
results of its own independent investigation (and not on Seller, except as
provided in Article 2).
3.10 Nature of Buyer. Buyer (a) is an "accredited investor" within the
meaning of Rule 501(a) as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act and (b) by reason of its business and financial
experience it has such knowledge, sophistication and experience in making
similar investments and in business and financial matters generally so as to
be capable of evaluating the merits and risks of the prospective investment in
the Shares, is able to bear the economic risk of such investment and, at the
present time, would be able to afford a complete loss of such investment.
ARTICLE 4.
GENERAL PROVISIONS
4.1 Binding Agreement; Assignment. This Agreement and the rights of
the parties hereunder shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. No
party hereto may assign or delegate any of its rights or obligations hereunder
without the prior written consent of the other party.
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4.2 Entire Agreement; Amendment. This Agreement constitutes the entire
Agreement and understanding between the parties hereto and supersedes and
revokes any prior agreement or understanding relating to the subject matter of
this Agreement. No change, amendment, termination or attempted waiver of any
of the provisions hereof shall be binding upon the other party unless reduced
to writing and signed by the party against whom such change, amendment,
termination or waiver is sought to be enforced.
4.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. Receipt of telecopied
or scanned and emailed signature pages shall have the same legal effect as the
receipt of original signature pages.
4.4 Expenses. The parties hereto will each pay their own attorneys and
accountant fees, expenses and disbursements in connection with the negotiation
and preparation of this Agreement and all other costs and expenses incurred in
performing and complying with all conditions to be performed under this
Agreement.
4.5 Further Assurances. Upon reasonable request from time to time, the
parties hereto will deliver and/or execute such further instruments as are
necessary or appropriate to the consummation of the transactions contemplated
by this Agreement.
4.6 No Third-Party Beneficiaries. This Agreement is not intended, and
shall not be deemed, to confer upon or give any Person except the parties
hereto and their respective successors and permitted assigns, any remedy,
claim, liability, reimbursement, cause of action or other right under or by
reason of this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above.
BUYER:
LEED HR, LLC
By: /s/ Michael Schroering
--------------------------------
Title: Manager
SELLER:
TRINITY HR SERVICES, LLC
BY: /s/ Brandon Simmons
--------------------------------
TITLE: Manager
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EXHIBIT 7.4
PROMISSORY NOTE
$1,515,100 August 21, 2012
This Promissory Note is made by LEED HR, LLC, a Kentucky limited liability
company (the "Maker") for the benefit of Trinity HR Services, LLC, a Delaware
limited liability company ("Holder").
1. PAYMENT.
Maker hereby promises to pay to Holder, or assigns, $1,515,100, plus
interest accrued at an annual rate of one percent (1%), not later than January
21, 2014 (the "Maturity Date"). Maker shall make monthly payments of accrued
interest on the 3rd day of each month. The Maturity Date shall be accelerated
if Maker either (i) sells a number of shares of common stock of General
Employment Enterprises, Inc. ("GEE Shares") in a transaction or series of
related transactions which yields it net proceeds of more than 150% of the
balance due on this Note, or (ii) exchanges his GEE Shares in connection with
a merger of GEE with or into another company and in connection therewith
it receives publicly traded shares, and Maker (with its affiliates) no longer
enjoys the power to elect a majority of the members of the Board of Directors
of GEE or the surviving company. In addition, Maker shall pay to Holder
one-half of the net proceeds of any sales of GEE Shares he makes yielding
aggregate proceeds to Maker in excess of $250,000 in any twelve-month period.
Presentment, demand and protest, and notices of protest, dishonor, and
non-payment of this Note and all notices of every kind are hereby waived.
No single or partial exercise of any power hereunder shall preclude the
other or further exercise thereof or the exercise of any other power. No
delay or omission on the part of the holder hereof in exercising any right
hereunder shall operate as a waiver of such right or of any other right under
this Note.
Maker shall have the right to prepay this note without penalty or charge
of any kind.
2. DEFAULT.
(a) Upon the occurrence of any of the following events (herein called
"Events of Default"):
(i) Maker shall fail to pay the principal or interest of this Note
within 10 days of such becoming due;
(ii) Maker shall materially breach any term, provision,
representation, warranty, or covenant under this Note and fail to cure such
default within 30 days (unless such default in incurable);
(iii) (A) Maker shall commence any proceeding or other action
relating to it in bankruptcy or seek reorganization, arrangement, readjustment
of its debts, receivership, dissolution, liquidation, winding-up, composition
or any other relief under any bankruptcy law, or under any other insolvency,
reorganization, liquidation, dissolution, arrangement, composition,
readjustment of debt or any other similar act or law, of any jurisdiction,
domestic or foreign, now or hereafter existing; or (B) Maker shall admit the
material allegations of any petition or pleading in connection with any such
proceeding; or (C) Maker shall apply for, or consent or acquiesce to, the
appointment of a receiver, conservator, trustee or similar officer for it or
for all or a substantial part of its property; or (D) Maker shall make a
general assignment for the benefit of creditors;
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(iv) (A) The commencement of any proceedings or the taking of any
other action against Maker in bankruptcy or seeking reorganization,
arrangement, readjustment of its debts, liquidation, dissolution, arrangement,
composition, or any other relief under any bankruptcy law or any other similar
act or law of any jurisdiction, domestic or foreign, now or hereafter existing
and the continuance of any of such events for sixty (60) days undismissed,
unbonded or undischarged; or (B) the appointment of a receiver, conservator,
trustee or similar officer for Maker for any of its property and the
continuance of any of such events for sixty (60) days undismissed, unbonded
or undischarged;
(v) Maker shall own a number of GEE shares.such that the fair
value of such shares is less than 150% of the amount payable under this Note
("fair value" meaning the higher of the value of Maker's GEE shares based upon
(i) the average closing price of GEE shares for the prior twenty trading days,
or (ii) the reasonably anticipated price GEE would sell for in a sale of the
entire company between a willing buyer and a willing seller;
(vi) Maker shall grant to any other person rights to dividends or
other distributions with respect to any GEE shares; or
(vii) Maker's liabilities, including the liabilities hereunder,
hereby, shall exceed Maker's assets, and Holder shall not have consented to
such Event of Default (provided Holder shall not unreasonably without its
consent to the action described in clause (v) above), then, and in any
such event, Holder, at its option and with written notice to Maker, may
declare the entire principal amount of this Note then outstanding immediately
due and payable, and interest at the default rate shall accrue thereafter, and
the same shall forthwith become immediately due and payable without
presentment, demand, protest, or other notice of any kind, all of which are
expressly waived. If the Note is not paid in full upon acceleration, as
required above, interest shall accrue on the outstanding principal of and
interest on this Note from and including the date of the Event of Default to
but not including the date of payment at a rate equal to the lesser of
eighteen percent (18%) per annum or the maximum interest rate permitted by
applicable law.
Maker shall give Holder prompt written notice of any Event of Default,
or set of circumstances which may reasonably be anticipated to result in
an Event of Default.
(b) No course of dealing or delay on the part of Holder in exercising
any right hereunder shall operate as a waiver or otherwise prejudice its
rights under this Note. No remedy conferred hereby shall be exclusive of any
other remedy referred to herein or now or hereafter available at law, in
equity, by statute or otherwise.
(c) In the event this Note is turned over to an attorney for
collection or Holder otherwise seeks advice of an attorney in connection with
the exercise of its rights hereunder upon the occurrence of an Event of
Default, Maker agrees to pay all reasonable costs of collection, including
reasonable attorney's fees and expenses and all out of pocket expenses
incurred in connection with such collection efforts, which amounts may, at
Holder's option, be added to the principal hereof.
(d) No right or remedy herein conferred upon or reserved to the Holder
is intended to be exclusive of any other right or remedy, and every right and
remedy shall to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy. No delay or omission of
the Holder to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Note or by law
may be exercised from time to time, and as often as shall be deemed expedient,
by the Holder.
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3. Governing Law. This Note shall be governed by and construed in
accordance with the domestic laws of the Commonwealth of Kentucky.
4. Amendments and Waivers. No amendment of any provision of this Note
shall be valid unless the same shall be in writing and signed by Holder and
Maker.
5. Severability. Any term or provision of this Note that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
6. Construction. The parties have participated jointly in the
negotiation and drafting of this Note. In the event an ambiguity or question
of intent or interpretation arises, this Note shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Note.
IN WITNESS WHEREOF, the parties have caused this Note to be issued as of
the date above.
LEED HR, LLC
BY: /s/ Michael Schroering
----------------------------------
Michael Schroering, Manager
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EXHIBIT 7.5
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made as of August 21, 2012,
by and between LEED HR, LLC, a Kentucky limited liability ("Buyer"), and
Trinity HR, LLC, a Kentucky limited liability company ("Seller").
ARTICLE 1.
SALE OF SHARES
1.1 Shares. Seller hereby sells a total of 2,974,719 shares (the
"Shares") of common stock, without par value ("GEE shares"), of General
Employment Enterprises, Inc., an Illinois corporation ("GEE"), to Buyer, and
Buyer hereby purchases the Shares from Seller.
1.2 Price, Payment. The purchase price is $726,000 (the "Purchase
Price"). The Purchase Price is payable (i) $12,100 in cash at closing, (ii)
$229,000 not later than 45 days after the date hereof, and (iii) the balance
by delivery of a Promissory Note in the form delivered herewith. As
additional Purchase Price, Buyer shall promptly pay Seller 40% of any Net
Share Proceeds (defined below) in excess of $1,487,359.50 within thirty days
of receipt.
If after the third anniversary date hereof the Market Price (as defined
below) for GEE shares exceeds $.50 (the "Target Price") (such difference being
the "Target Price Excess Amount"), Seller may request in writing (a "Bonus
Request") that one fifth of the HR Remaining Shares be deemed to be sold (a
"Deemed Sale") in which event, an amount (the "Bonus Amount") equal to the
product of 40% of the Target Price Excess Amount multiplied by the number of
HR Remaining Shares deemed to be sold shall constitute HR Sales Proceeds.
Seller may make no more than one Bonus Request every six months, provided that
Seller may make Bonus Requests in amounts equal to one-fourth, one third,
one-half and finally the remaining balance of the Remaining HR Shares as
to each Bonus Request after the initial Bonus Request.
For purposes of this Section 1.2:
"Excluded Sales" shall mean Buyer sales of GEE shares at a price lower
than the Target Price, provided that any such sale shall not be deemed an
Excluded Sale to the extent after giving effect to such sale the total HR
Remaining Shares and total Services Remaining Shares would exceed the total
number of GEE shares owned by Buyer after such sale.
"HR Distributions" mean each dividend or distribution made by GEE with
respect to a GEE share after the date hereof, multiplied by the number of
Remaining HR Shares immediately prior to the record date for such dividend or
distribution.
"HR Sale Proceeds" means the aggregate net proceeds received by Buyer
from the first 2,974,719 HR Shares (as defined below) either sold by Buyer or
been subject of a Deemed Sale by Buyer, other than Excluded Sales (as defined
above).
"HR Shares" shall mean GEE shares sold by Buyer that are identified by
Buyer as such in writing in a notice delivered by Buyer to Seller within 10
days of such sale. If no notice is delivered by Buyer within such period, the
number of HR Shares sold in such sale shall equal the number of GEE shares
sold in such sale, multiplied by a fraction, the numerator of which is the
number of Remaining HR Shares immediately prior to such sale and the
denominator of which is the combined number of Remaining HR Shares and
Remaining Services Shares immediately prior to such sale.
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"Market Price" shall mean the average closing sale price for GEE shares
on the principal trading market for GEE shares for the 20 trading days
immediately prior to the Bonus Demand.
"Net Share Proceeds" shall mean the sum of (a) all HR Sale Proceeds (as
defined above) and (b) all HR Distributions (as defined above).
"Remaining Services Shares" has the meaning set forth in that certain
Stock Purchase Agreement of even date herewith by and between the Seller and
Trinity HR Services, LLC.
"Remaining HR Shares" at the date of determination means 2,974,719 minus
the number of HR Shares sold or which have been subject of a Deemed Sale by
the Buyer prior to such date.
For purposes of this Section 1.2, GEE shares held by an affiliate of
Buyer shall be deemed to be held by Buyer if Buyer and Seller amend this
Agreement to provide that such GEE shares shall be subject hereto.
The Target Price and shares numbers herein shall be appropriately
adjusted in the event of any stock split, reverse stock split, dividend of GEE
shares, or similar stock event after the date hereof.
Buyer shall expend commercially reasonable efforts to maximize its net
profits with respect to sales of GEE shares, provided Buyer shall not be
liable to Seller with respect hereto other than as to sales which evidence bad
faith on the part of Buyer or a breach of Buyer's duty of good faith and fair
dealing.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer to enter into this Agreement, Seller hereby
represents and warrants to Buyer that, other than as previously disclosed in
writing to Buyer:
2.1 Authority; No Conflict or Default.
(a) This Agreement constitutes the legal, valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms, and Seller
has the absolute and unrestricted right, power, authority, and capacity
to execute and deliver this Agreement and to perform its obligations under
this Agreement. The execution, delivery and performance by Seller of this
Agreement have been duly authorized by all necessary action on behalf of
Seller. This Agreement has been duly executed and delivered by Seller.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance hereof will, directly or indirectly: (i)
contravene, conflict with, or result in a violation of (A) any provision of
the organizational documents of Seller, or (B) any resolution adopted by the
members of Seller; or (ii) contravene, conflict with, or result in a violation
of, or give any natural person, partnership, limited liability company,
corporation, joint venture, trust, association or any other entity, domestic
or foreign ("Person"), including any foreign, federal, state, local or other
governmental, statutory or administrative authority or regulatory body,
self-regulatory organization or any court, tribunal or judicial or arbitral
body ("Governmental Body"), the right to challenge any of the transactions
contemplated hereby or to exercise any remedy or obtain any relief under, any
legal requirement, contract or order to which Seller may be subject.
2.2 Required Consents. Seller is not, nor will it be required to,
give any notice to or obtain any consent from any Person in connection with
the execution and delivery of this Agreement or the consummation or
2
performance of any of the transactions contemplated hereby, other than as may
be required under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (the "Exchange Act").
2.3 Title to Shares. The delivery to Buyer of the Shares as
contemplated in this Agreement will transfer to Buyer valid title thereto,
free and clear of all Encumbrances. The Shares are owned of record and
beneficially by Seller, free and clear of all Encumbrances. No legend or other
reference to any purported Encumbrance appears upon an certificate
representing Shares. For purposes hereof "Encumbrance" means any charge,
claim, community property interest, condition, equitable interest, lien,
option, pledge, security interest, hypothecation, mortgage, right of first
refusal, or similar encumbrance or restriction of any kind, including, without
limitation, any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership (other than restrictions under
applicable federal and state securities laws or contained in GEE's
organizational and other governing documents).
2.4 Litigation. There is no action, suit, proceeding, mediation,
inquiry, dispute or investigation of any kind or nature pending, or, to
Seller's knowledge, threatened that are reasonably likely to prohibit or
restrain the ability of Seller to enter into this Agreement or consummate the
transactions contemplated hereby.
2.5 Financial Advisors. No Person has acted, directly or indirectly,
as a broker, finder or financial advisor for Seller in connection with the
transactions contemplated by this Agreement and no Person is entitled to any
fee or commission or like payment in respect thereof.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer hereby represents and
warrants to Seller, as of the date hereof and as of the Closing Date, as
follows:
3.1 Organization and Good Standing. Buyer is a limited liability
company, validly existing and in good standing under the laws of Kentucky.
3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms, and Buyer
has the absolute and unrestricted right, power, authority, and capacity to
execute and deliver this Agreement and to perform its obligations under this
Agreement. The execution, delivery and performance by Buyer of this Agreement
have been duly authorized by all necessary action on behalf of Buyer.
This Agreement has been duly executed and delivered by Buyer.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance hereof will, directly or indirectly: (i)
contravene, conflict with, or result in a violation of (A) any provision of
the organizational documents of Buyer, or (B) any resolution adopted by the
members of Buyer; or (ii) contravene, conflict with, or result in a violation
of, or give any Governmental Body or other Person the right to challenge any
of the transactions contemplated hereby or to exercise any remedy or obtain
any relief under, any legal requirement, contract or order to which Buyer may
be subject.
3.3 Required Consents. Buyer is not, nor will it be required to, give
any notice to or obtain any consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or performance of
any of the transactions contemplated hereby, other than as may be required
under the Exchange Act.
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3.4 Litigation. There is no action, suit, proceeding, mediation,
inquiry, dispute or investigation of any kind or nature pending, or, to
Buyer's knowledge, threatened that are reasonably likely to prohibit or
restrain the ability of Buyer to enter into this Agreement or consummate the
transactions contemplated hereby.
3.5 Investment Intention. Buyer is acquiring the Shares for its own
account, for investment purposes only and not with a view to the distribution
(as such term is used in Section 2(11) of the Securities Act of 1933, as
amended (the "Securities Act")), thereof. Buyer understands that the Shares
have not been registered under the Securities Act or State securities laws and
cannot be sold unless subsequently registered under the Securities Act and/or
State securities laws or an exemption from such registration is available.
3.6 Financial Advisors. No Person has acted, directly or indirectly,
as a broker, finder or financial advisor for Buyer in connection with the
transactions contemplated by this Agreement and no Person is entitled to any
fee or commission or like payment in respect thereof.
3.7 Financial Capability. Buyer has, and at the Closing will have,
sufficient internal funds available to pay the Purchase Price and any expenses
incurred by Buyer in connection with the transactions contemplated by this
Agreement.
3.8 Solvency. Immediately after giving effect to the acquisition of
the Shares contemplated by this Agreement: (i) the fair saleable value of the
assets of Buyer will be greater than the total amount of its liabilities; (ii)
Buyer will be able to pay its debts and obligations in the ordinary course of
business as they become due; and (iii) Buyer will have adequate capital to
carry on its business. In completing the transactions contemplated by this
Agreement, Buyer does not intend to hinder, delay or defraud any present or
future creditors of Buyer.
3.9 Own Investigation. Buyer acknowledges that it has conducted to
its satisfaction its own independent investigation of the condition,
operations and business of GEE and, in making its determination to proceed
with the transactions contemplated by this Agreement, Buyer has relied on the
results of its own independent investigation (and not on Seller, except as
provided in Article 2).
3.10 Nature of Buyer. Buyer (a) is an "accredited investor" within the
meaning of Rule 501(a) as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act and (b) by reason of its business and financial
experience it has such knowledge, sophistication and experience in making
similar investments and in business and financial matters generally so as to
be capable of evaluating the merits and risks of the prospective investment in
the Shares, is able to bear the economic risk of such investment and, at the
present time, would be able to afford a complete loss of such investment.
ARTICLE 4.
GENERAL PROVISIONS
4.1 Binding Agreement; Assignment. This Agreement and the rights of
the parties hereunder shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. No
party hereto may assign or delegate any of its rights or obligations hereunder
without the prior written consent of the other party.
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4.2 Entire Agreement; Amendment. This Agreement constitutes the entire
Agreement and understanding between the parties hereto and supersedes and
revokes any prior agreement or understanding relating to the subject matter of
this Agreement. No change, amendment, termination or attempted waiver of any
of the provisions hereof shall be binding upon the other party unless reduced
to writing and signed by the party against whom such change, amendment,
termination or waiver is sought to be enforced.
4.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. Receipt of telecopied
or scanned and emailed signature pages shall have the same legal effect as the
receipt of original signature pages.
4.4 Expenses. The parties hereto will each pay their own attorneys and
accountant fees, expenses and disbursements in connection with the negotiation
and preparation of this Agreement and all other costs and expenses incurred in
performing and complying with all conditions to be performed under this
Agreement.
4.5 Further Assurances. Upon reasonable request from time to time, the
parties hereto will deliver and/or execute such further instruments as are
necessary or appropriate to the consummation of the transactions contemplated
by this Agreement.
4.6 No Third-Party Beneficiaries. This Agreement is not intended, and
shall not be deemed, to confer upon or give any Person except the parties
hereto and their respective successors and permitted assigns, any remedy,
claim, liability, reimbursement, cause of action or other right under or by
reason of this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above.
BUYER:
LEED HR, LLC
By: /s/ Michael Schroering
--------------------------
Title: Manager
SELLER:
TRINITY HR, LLC
BY: /s/ Brandon Simmons
-----------------------
TITLE: Manager
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EXHIBIT 7.6
PROMISSORY NOTE
$484,900 August 21, 2012
This Promissory Note is made by LEED HR, LLC, a Kentucky limited liability
company (the "Maker") for the benefit of Trinity HR, LLC, a Kentucky limited
liability company ("Holder").
1. PAYMENT.
Maker hereby promises to pay to Holder, or assigns, $484,900, plus
interest accrued at an annual rate of one percent (1%), not later than January
21, 2014 (the "Maturity Date"). Maker shall make monthly payments of accrued
interest on the 3rd day of each month. The Maturity Date shall be accelerated
if Maker either (i) sells a number of shares of common stock of General
Employment Enterprises, Inc. ("GEE Shares") in a transaction or series of
related transactions which yields it net proceeds of more than 150% of the
balance due on this Note, or (ii) exchanges his GEE Shares in connection with
a merger of GEE with or into another company and in connection therewith it
receives publicly traded shares, and Maker (with its affiliates) no longer
enjoys the power to elect a majority of the members of the Board of Directors
of GEE or the surviving company. In addition, Maker shall pay to Holder
one-half of the net proceeds of any sales of GEE Shares he makes yielding
aggregate proceeds to Maker in excess of $250,000 in any twelve-month period.
Presentment, demand and protest, and notices of protest, dishonor, and
non-payment of this Note and all notices of every kind are hereby waived.
No single or partial exercise of any power hereunder shall preclude the
other or further exercise thereof or the exercise of any other power. No
delay or omission on the part of the holder hereof in exercising any right
hereunder shall operate as a waiver of such right or of any other right under
this Note.
Maker shall have the right to prepay this note without penalty or charge
of any kind.
2. DEFAULT.
(a) Upon the occurrence of any of the following events (herein called
"Events of Default"):
(i) Maker shall fail to pay the principal or interest of this Note
within 10 days of such becoming due;
(ii) Maker shall materially breach any term, provision,
representation, warranty, or covenant under this Note and fail to cure such
default within 30 days (unless such default in incurable);
(iii) (A) Maker shall commence any proceeding or other action
relating to it in bankruptcy or seek reorganization, arrangement, readjustment
of its debts, receivership, dissolution, liquidation, winding-up, composition
or any other relief under any bankruptcy law, or under any other insolvency,
reorganization, liquidation, dissolution, arrangement, composition,
readjustment of debt or any other similar act or law, of any jurisdiction,
domestic or foreign, now or hereafter existing; or (B) Maker shall admit the
material allegations of any petition or pleading in connection with any such
proceeding; or (C) Maker shall apply for, or consent or acquiesce to, the
appointment of a receiver, conservator, trustee or similar officer for it or
for all or a substantial part of its property; or (D) Maker shall make a
general assignment for the benefit of creditors;
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(iv) (A) The commencement of any proceedings or the taking of any
other action against Maker in bankruptcy or seeking reorganization,
arrangement, readjustment of its debts, liquidation, dissolution, arrangement,
composition, or any other relief under any bankruptcy law or any other
similar act or law of any jurisdiction, domestic or foreign, now or hereafter
existing and the continuance of any of such events for sixty (60) days
undismissed, unbonded or undischarged; or (B) the appointment of a receiver,
conservator, trustee or similar officer for Maker for any of its property and
the continuance of any of such events for sixty (60) days undismissed,
unbonded or undischarged;
(v) Maker shall own a number of GEE shares such that the fair
value of such shares is less than 150% of the amount payable under this Note
("fair value" meaning the higher of the value of Maker's GEE shares based upon'
(i) the average closing price of GEE shares for the prior twenty trading days,
or (ii) the reasonably anticipated price GEE would sell for in a sale of the
entire company between a willing buyer and a willing seller;
(vi) Maker shall grant to any other person rights to dividends or
other distributions with respect to any GEE shares; or
(vii) Maker's liabilities, including the liabilities hereunder,
hereby, shall exceed Maker's assets, and Holder shall not have consented to
such Event of Default (provided Holder shall not unreasonably without its
consent to the action described in clause (v) above), then, and in any such
event, Holder, at its option and with written notice to Maker, may declare the
entire principal amount of this Note then outstanding immediately due
and payable, and interest at the default rate shall accrue thereafter, and the
same shall forthwith become immediately due and payable without presentment,
demand, protest, or other notice of any kind, all of which are expressly
waived. If the Note is not paid in full upon acceleration, as required above,
interest shall accrue on the outstanding principal of and interest on this
Note from and including the date of the Event of Default to but not including
the date of payment at a rate equal to the lesser of eighteen percent(18%)
per annum or the maximum interest rate permitted by applicable law.
Maker shall give Holder prompt written notice of any Event of Default,
or set of circumstances which may reasonably be anticipated to result in
an Event of Default.
(b) No course of dealing or delay on the part of Holder in exercising
any right hereunder shall operate as a waiver or otherwise prejudice its
rights under this Note. No remedy conferred hereby shall be exclusive of any
other remedy referred to herein or now or hereafter available at law,
in equity, by statute or otherwise.
(c) In the event this Note is turned over to an attorney for
collection or Holder otherwise seeks advice of an attorney in connection with
the exercise of its rights hereunder upon the occurrence of an Event of
Default, Maker agrees to pay all reasonable costs of collection, including
reasonable attorney's fees and expenses and all out of pocket expenses
incurred in connection with such collection efforts, which amounts may,
at Holder's option, be added to the principal hereof.
(d) No right or remedy herein conferred upon or reserved to the Holder
is intended to be exclusive of any other right or remedy, and every right and
remedy shall to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy. No delay or omission of
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the Holder to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Note or by law
may be exercised from time to time, and as often as shall be deemed expedient,
by the Holder.
3. Governing Law. This Note shall be governed by and construed in
accordance with the domestic laws of the Commonwealth of Kentucky.
4. Amendments and Waivers. No amendment of any provision of this Note
shall be valid unless the same shall be in writing and signed by Holder and
Maker.
5. Severability. Any term or provision of this Note that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
6. Construction. The parties have participated jointly in the
negotiation and drafting of this Note. In the event an ambiguity or question
of intent or interpretation arises, this Note shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Note.
IN WITNESS WHEREOF, the parties have caused this Note to be issued as of
the date above.
LEED HR, LLC
BY: /s/ Michael Schroering
--------------------------
Michael Schroering, Manager
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