GLOBAL EMPLOYMENT HOLDINGS, INC. CONSENT AND FIRST AMENDMENT TO PREFERRED STOCK SECURITIES PURCHASE AGREEMENT
Exhibit 10.3
CONSENT
AND
FIRST AMENDMENT TO PREFERRED STOCK SECURITIES PURCHASE
AGREEMENT
AND
FIRST AMENDMENT TO PREFERRED STOCK SECURITIES PURCHASE
AGREEMENT
THIS CONSENT AND FIRST AMENDMENT TO PREFERRED STOCK SECURITIES PURCHASE AGREEMENT (this
“Consent”), dated as of March 11, 2009, is made by and between Global Employment Holdings, Inc.
(the “Company”), Global Employment Solutions, Inc., a Colorado corporation (“GES”) and the holders
of the Company’s Series A Convertible Preferred Stock (the “Preferred Stock”) listed on the
signature pages hereto, representing more than 66-2/3% of the outstanding shares of Preferred Stock
(collectively, the “Stockholders”).
WHEREAS:
A. The Company, GES and the Stockholders are parties to the Preferred Stock Securities
Purchase Agreement, dated as of March 31, 2006 (the “Preferred SPA”), pursuant to which the Company
issued and the Stockholders purchased the Preferred Stock.
B. The Company’s subsidiary GES desires to sell certain Assets (as defined in the proposed
Asset Purchase and Sale Agreement to be entered into by and among the Company, Temporary Placement
Service, Inc., a Georgia corporation (“TPS”), and Eastern Staffing, LLC, a California limited
liability company, d.b.a. Select Staffing, a copy of which is set forth in Attachment A hereto) of
its subsidiary TPS (the “TPS Asset Sale”), and use the proceeds therefrom to partially pay down the
outstanding balances on the Company’s working capital revolving credit line and term note with
Xxxxx Fargo Bank, N.A., and for working capital purposes.
C. In connection with the TPS Asset Sale, the Company has agreed to amend the definition of
the term “Senior Indebtedness” in the Preferred SPA.
D. The Preferred SPA defines “Senior Indebtedness” by reference to the definition found in the
Notes and, therefore, an amendment of such term in the Notes constitutes an amendment to such term
in the Preferred SPA (the “Amendment”).
E. Pursuant to the terms of the Preferred SPA and the Certificate of Designations, Preferences
and Rights of Series A Convertible Preferred Stock of Global Employment Holdings, Inc., the consent
of the holders of 66-2/3% of the outstanding shares of Preferred Stock is required to approve the
TPS Asset Sale and the Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree and consent as follows:
1. Defined Terms. Capitalized terms used but not defined herein shall have the
meanings set forth in the Notes.
2. Consent of the Stockholders. The Stockholders hereby consent to the TPS Asset
Sale.
3. Amendment of Defined Term “Senior Indebtedness.” Effective 90 days after closing
of the TPS Asset Sale, the Stockholders agree to an amendment of the term “Senior Indebtedness” as
follows:
“Senior Indebtedness” means the principal of (and premium, if any), interest
on, and all fees and other amounts (including, without limitation, any reasonable
out-of-pocket costs, enforcement expenses (including reasonable out-of-pocket legal
fees and disbursements), collateral protection expenses and other reimbursement or
indemnity obligations relating thereto) payable by Company under or in connection
with the Credit Facility; provided, however, that (1) the aggregate
amount of the outstanding amount of the Revolving Advances (as defined in the Credit
Facility) made pursuant to Section 2.1 of the Credit Facility, the outstanding Term
Advance (as defined in the Credit Facility) and the outstanding L/C Amount (as
defined in the Credit Facility) will not at any time exceed $20,000,000 prior to
April 30, 2009, and $15,000,000 on or after April 30, 2009, in each case as such
amount is reduced from time to time by principal payments of the portion of the
Senior Indebtedness constituting term loans and permanent reductions of the
revolving commitments under the Credit Facility, (2) the aggregate amount of the
outstanding amount of the Revolving Advances (as defined in the Credit Facility)
made pursuant to Section 2.1 of the Credit Facility and the outstanding L/C Amount
(as defined in the Credit Facility) will not at any time exceed $10,000,000, and (3)
such Senior Indebtedness shall not at any time, respective of the base rate used and
excluding any Default Period (as defined in the Credit Facility), bear an annual
interest rate in excess of the sum of the WFBC Base Rate (as defined in the Credit
Facility) plus 3% (excluding commitment and similar per annum fees) with respect to
Revolving Advances (as defined in the Credit Facility) and the sum of the WFBC Base
Rate (as defined in the Credit Facility) plus 5% (excluding commitment and similar
per annum fees) with respect to Term Advances.
4. No Other Changes. Except as explicitly set forth in this Consent, all of the terms
and conditions of the Preferred SPA remain in full force and effect.
5. Condition Precedent. Effectiveness of Section 3 hereof is conditioned upon closing
of the TPS Asset Sale.
6. Further Assurances. Each party hereto shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may reasonably request in
order to carry out the intent and accomplish the purposes of this Consent and the consummation of
the transactions contemplated hereby.
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7. Facsimile Signatures; Counterparts. This Consent may be executed in two or more
identical counterparts, all of which shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an original, not a
facsimile signature.
8. Governing Law. This Consent shall be governed by and construed in accordance with
the laws of the State of New York (without reference to conflict of laws principles).
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the undersigned has caused this Consent to be executed as of the
date first written above.
| THE COMPANY: | GES: | |||||||||
| GLOBAL EMPLOYMENT HOLDINGS, INC. | GLOBAL EMPLOYMENT SOLUTIONS, INC. | |||||||||
By:
|
/s/ Xxx Xxxxxxxxxx | By: | /s/ Xxx Xxxxxxxxxx | |||||||
| Title: Chief Financial Officer, Treasurer and Secretary | Title: Chief Financial Officer, Treasurer and Secretary | |||||||||
| THE STOCKHOLDERS: | ||||||||||
| RADCLIFFE SPC, LTD., for and on behalf of the Class A Convertible Crossover Segregated Portfolio | VICTORY PARK CREDIT OPPORTUNITIES MASTER FUND, LTD. | |||||||||
By:
|
RG Capital Management, L.P. | By: | Victory Park Capital Advisors, LLC | |||||||
| By: RGC Management Company, L.L.C. | ||||||||||
By:
|
/s/ Xxxxxx X. Xxxxxxxxxx | By: | /s/ Xxxxxxx Xxx | |||||||
| Title: Managing Director | Title: Principal | |||||||||
Consent and First Amendment to Preferred SPA
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ATTACHMENT A
Asset Purchase and Sale Agreement
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