EXHIBIT 10.1

 

SUBSCRIPTION AGREEMENT

 

This Subscription Agreement (the "Agreement") dated as of May 15, 2019, has been
executed by the undersigned (the "Subscriber") in connection with the offer and
sale by GEE Group Inc., an Illinois corporation (the "Company") of US$2,000,000
aggregate principal amount of its 8% Convertible Subordinated Notes (the
“Notes”). The offering of the Notes (the “Offering”) is being made in reliance
upon the exemption from registration afforded by Section 4(a)(2) of the
Securities Act and Rule 506(b) of Regulation D (“Regulation D”) promulgated by
the United States Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"). Upon the terms and
subject to the conditions set forth herein, the Company desires to sell Notes to
Subscriber, and Subscriber desires to purchase Notes from the Company on the
terms and conditions set forth herein.

 

In consideration of the mutual promises, representations and warranties set
forth herein, the Company and the Subscriber hereby agree as follows:

 

1. Agreement to Subscribe

 

1.1 Purchase and Issuance of the 8% Convertible Subordinated Notes. The
Subscriber is hereby subscribing for $_________ aggregate principal amount of
Notes (the “Subscriber Notes”). The aggregate price payable for the Subscriber
Notes is US$_________ (the "Purchase Price"). Prior to the Closing, Subscriber
will deliver to a bank account designated by the Company in writing, the
Purchase Price by wire transfer of immediately available funds. Unless, as of or
prior to the Closing all conditions of the Offering have been satisfied by both
the Company and the subscribers thereof (including the Subscriber), the Purchase
Price will be promptly returned to Subscriber without interest or deduction.

 

1.2 Closing. The closing for the sale of the Notes to the Subscriber shall take
place at the offices of the Company on May 15, 2019 (the "Closing"), or at such
other time and/or such other place as the Company may determine in its sole and
absolute discretion.

 

2. Representations and Warranties of the Subscriber

 

The Subscriber represents and warrants to the Company that:

 

2.1 No Government Recommendation or Approval. The Subscriber understands that no
United States federal or state agency has passed upon or made any recommendation
or endorsement of the Company or the Offering of the Notes and the securities of
the Company issuable upon conversion of the Notes (the “Conversion Securities”,
and together with the Notes, the “Offered Securities”).

 

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2.2 Intent. The Subscriber is purchasing the Subscriber Notes and the Conversion
Securities issuable upon conversion of the Subscriber Notes (the “Subscriber
Conversion Securities”) solely for investment purposes, for the Subscriber's own
account, not as a nominee or agent or for the benefit of any other person, and
not with a view towards the distribution or dissemination thereof and the
Subscriber has no present arrangement to sell the Subscriber Notes or the
Subscriber Conversion Securities to or through any person or entity.

 

2.4 Restrictions on Transfer. The Subscriber understands that the Offered
Securities have not been, and will not be, registered under the Securities Act,
by reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Subscriber’s representations as
expressed herein. The Subscriber understands that the Offered Securities are
“restricted securities” under applicable U.S. federal and state securities laws
and that, pursuant to these laws, the Subscriber must hold the Offered
Securities indefinitely unless they are registered with the SEC and qualified by
state authorities, or an exemption from such registration and qualification
requirements is available. The Subscriber acknowledges that the Company has no
obligation to register or qualify the Offered Securities for resale. The
Subscriber further acknowledges that if an exemption from registration or
qualification is available, it may be conditioned on various requirements
including, but not limited to, the time and manner of sale, the holding period
for the Offered Securities, and on requirements relating to the Company which
are outside of the Subscriber’s control, and which the Company is under no
obligation and may not be able to satisfy. The Subscriber agrees that if any
transfer of its Subscriber Notes, Subscriber Conversion Securities or any
interest therein is proposed to be made, as a condition precedent to any such
transfer, Subscriber may be required to deliver to the Company an opinion of
counsel satisfactory to the Company.

 

2.5. Accredited and Sophisticated Investor. The Subscriber is familiar with the
term "accredited investor" as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act and is an "accredited investor" within the meaning of
such term. The Subscriber is sophisticated in financial matters and is able to
evaluate the risks and benefits of the investment in the Offered Securities. The
Subscriber is able to bear the economic risk of his or her investment in the
Offered Securities for an indefinite period of time.

 

2.6 Independent Investigation. The Subscriber, in making the decision to
purchase the Subscriber Notes and the Subscriber Conversion Securities has
relied upon an independent investigation of the Company and has not relied upon
any information or representations made by any third parties or upon any oral or
written representations or assurances from the Company, its officers, directors
or employees or any other representatives or agents of the Company, other than
as set forth in this Agreement. The Subscriber is familiar with the business,
operations and financial condition of the Company and has had an opportunity to
ask questions of, and receive answers from, the Company’s officers and directors
concerning the Company and the terms and conditions of the Offering and has had
full access to such other information concerning the Company as the Subscriber
has requested.

 

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2.7 Authority. This Agreement has been validly authorized, executed and
delivered by the Subscriber and is a valid and binding agreement enforceable
against Subscriber in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
moratorium, reorganization, or similar laws relating to, or affecting generally
the enforcement of, creditors' rights and remedies or by equitable principles of
general application and except as enforcement of rights to indemnity and
contribution may be limited by federal and state securities laws or principles
of public policy.. The execution, delivery and performance of this Agreement by
the Subscriber does not and will not conflict with, violate or cause a breach of
any agreement, contract or instrument to which the Subscriber is a party.

 

2.8 No Advice from the Company. The Subscriber acknowledges that he or it has
had the opportunity to review this Agreement and the transactions contemplated
by this Agreement and the other agreements entered into between the parties
hereto with the Subscriber's own legal counsel and investment and tax advisors.
Except for any statements or representations of the Company made in this
Agreement and the other agreements entered into between the parties hereto, the
Subscriber is relying solely on such counsel and advisors and not on any
statements or representations of the Company or any of its representatives,
advisors or agents for legal, tax or investment advice with respect to this
investment, the transactions contemplated by this Agreement or the securities
laws of any jurisdiction.

 

2.9 Reliance on Representations and Warranties. The Subscriber understands that
the Offered Securities are being offered and sold to the Subscriber in reliance
on specific provisions of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Subscriber set
forth in this Agreement in order to determine the applicability of such
provisions.

 

2.10 No Advertisements. The undersigned is not subscribing for the Offered
Securities as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, or presented at any seminar or meeting.

 

2.11 Residence Subscriber resides in the state identified in the address of
Subscriber set forth on Subscriber’s signature page hereto.

 

3. Representations and Warranties of the Company

 

The Company represents and warrants to the Subscriber that:

 

3.1 Valid Issuance; Reservation of Shares. The Notes, when issued, sold and
delivered in accordance with the terms and for the consideration set forth in
this Agreement, will be validly issued, fully paid and nonassessable and free of
restrictions on transfer other than restrictions on transfer under applicable
state and federal securities laws and liens or encumbrances created by or
imposed by the Subscriber. Assuming the accuracy of the Subscriber’s
representations and warranties set forth in Section 2 hereof, no registration
under the Securities Act is required for the offer and sale of the Subscriber
Notes by the Company to the Subscriber as contemplated hereby. The Conversion
Securities, when issued and delivered in accordance with the terms of the Notes
or the Conversion Securities, as applicable, and for the consideration set forth
in the Notes or the Conversion Securities, as applicable, will be validly
issued, fully paid and nonassessable and free of restrictions on transfer other
than restrictions on transfer under this Agreement, the Conversion Securities,
applicable federal and state securities laws and liens or encumbrances created
by or imposed by the Subscriber. Prior to the Closing, the Company will have
filed with the Secretary of State of the State of Illinois, a Statement of
Resolution Establishing its Series C 8% Cumulative Convertible Preferred Stock,
without par value (“Series C Preferred Stock”). The Company will, at all times
while the Notes are outstanding, reserve for issuance a sufficient number of
shares of Series C Preferred Stock to accommodate the conversion in full of the
then outstanding Notes. The Company will, at all times while shares of Series C
Preferred Stock are outstanding, reserve for issuance a sufficient number of
shares of its common stock, without par value, to accommodate the conversion in
full of the then outstanding shares of Series C Preferred Stock.

 

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3.2 Organization and Qualification. The Company is a corporation duly
incorporated and existing in good standing under the laws of the state of
Illinois and has the requisite corporate power to own its properties and assets
and to carry on its business as now being conducted.

 

3.3 Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and perform its obligations under this Agreement and
to issue the Offered Securities in accordance with the terms hereof The
execution, delivery and performance of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby, including the
issuance of the Offered Securities, have been duly authorized by all necessary
corporate action, and no further consent or authorization of the Company or its
Board of Directors or stockholders is required.. This Agreement and each of the
Notes, when executed and delivered by the Company, constitutes a valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization, or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by equitable principles of general application and except
as enforcement of rights to indemnity and contribution may be limited by federal
and state securities laws or principles of public policy.

 

3.4 No Conflicts. The execution, delivery and performance of this Agreement and
the Notes and the consummation by the Company of the transactions contemplated
hereby and thereby does not (i) result in a violation of the Company's Articles
of Incorporation, as amended or By-Laws, , (ii) conflict with any judgment,
order, writ or decree to which the Company or any of its subsidiaries or any of
their respective properties or assets is subject, (iii) conflict in any material
respect with, or constitute a default under any agreement, indenture or
instrument to which the Company or any of its subsidiaries is a party or (iv)
result in the creation of any lien, charge or encumbrance upon any assets of the
Company or any of its subsidiaries or the suspension, revocation, forfeiture, or
nonrenewal of any material permit or license applicable to the Company or any of
its subsidiaries. Other than any SEC or state securities filings which may be
required to be made by the Company subsequent to the Closing, the Company is not
required under federal, state or local law, rule or regulation to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency or self-regulatory entity in order for it to
perform any of its obligations under this Agreement or issue the Offered
Securities in accordance with the terms hereof.

 

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4. Legends; Denominations

 

4.1 Legend. The Company will issue the Subscriber Notes in the name of the
Subscriber and in such denominations to be specified by the Subscriber prior to
the Closing. The Subscriber Notes and, to the extent required by law, the
Subscriber Conversion Securities will each bear the following legend (the
"Legend"):

 

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR APPLICABLE STATE SECURITIES
LAWS AND ACCORDINGLY, MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES
LAWS (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE
SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, AND IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION. THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES
HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT.”

 

 

4.2 Subscriber's Compliance. Nothing in this Section 4 shall affect in any way
the Subscriber's obligations and agreement to comply with all applicable
securities laws upon resale of the Subscriber Notes and/or the Subscriber
Conversion Securities.

 

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4.3 Company’s Refusal to Register Transfer. The Company shall refuse to register
any transfer of the Subscriber Notes or the Subscriber Conversion Securities not
made pursuant to an effective registration statement filed under the Securities
Act, or pursuant to an available exemption from the registration requirements of
the Securities Act.

 

5. Governing Law; Jurisdiction; Waiver of Jury Trial

 

This Agreement shall be governed by and construed in accordance with the laws of
the State of New York. The parties hereto hereby waive any right to a jury trial
in connection with any litigation pursuant to this Agreement and the
transactions contemplated hereby.

 

6. Assignment; Entire Agreement; Amendment

 

6.1 Assignment. Neither this Agreement nor any rights hereunder may be assigned
by any party to any other person other than by Subscriber to a person agreeing
to be bound by the terms hereof.

 

6.2 Entire Agreement; Amendment. This Agreement and any other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof, and no
party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth in
this Agreement. Except as expressly provided in this Agreement, neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge, or termination is sought.

 

7. Notices; Indemnity

 

7.1 Notices. Unless otherwise provided herein, any notice or other communication
to a party hereunder shall be sufficiently given if in writing and personally
delivered or sent by facsimile with copy sent in another manner herein provided
or sent by courier (which for all purposes of this Agreement shall include
Federal Express, UPS or other recognized overnight courier) or mailed to said
party by certified mail, return receipt requested, at its address provided for
herein or such other address as either may designate for itself in such notice
to the other and communications shall be deemed to have been received when
delivered personally on the scheduled arrival date when sent by next day or
2-day courier service or if sent by facsimile upon receipt of confirmation of
transmittal or, if sent by mail, then three days after deposit in the mail.

 

7.2 Indemnification. Each party shall indemnify the other against any loss, cost
or damages (including reasonable attorney's fees and expenses) incurred as a
result of such party's breach of any representation, warranty, covenant or
agreement in this Agreement.

 

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8. Counterparts

 

This Agreement may be executed in any number of counterparts, each of which
shall be enforceable against the parties actually executing such counterparts,
and all of which together shall constitute one instrument.

 

9. Survival; Severability

 

The representations, warranties, covenants and agreements of the parties hereto
shall survive the Closing. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.

 

10. Titles and Subtitles

 

The titles and subtitles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 

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Name of the Subscriber:

 

Date of Subscription: May 15, 2019

Place of Residency and/or Principal Place of Business: ___________________

Address of Subscriber:

 

Signature of Subscriber:

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

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This subscription is accepted by the Company on the 15th day of May, 2019

 

 

GEE GROUP, INC.

    By:

 

Name:

  Title: 

 

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