GEE GROUP, INC (NYSEMKT:JOB) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement

See item 2.03 below.

Item 2.03 Creation of a Direct Financial
Obligation.

On March 31, 2017, the Company and its subsidiaries, as
borrowers, entered into a Revolving Credit, Term Loan and
Security Agreement (the Credit Agreement) with PNC Bank, National
Association (PNC), and certain investment funds managed by MGG
Investment Group LP (MGG).

Under the terms of the Credit Agreement, the Company may borrow
up to $73,750,000 consisting of a four-year term loan in the
principal amount of $48,750,000 and revolving loans in a maximum
amount up to the lesser of (i) $25,000,000 or (ii) an amount
determined to a borrowing base that is calculated based on the
outstanding amount of the Companys eligible accounts receivable,
as described in the Credit Agreement. The loans under the Credit
Agreement mature on March 31, 2021.

Amounts borrowed under the Credit Agreement may be used by the
Company to repay existing indebtedness, to partially fund capital
expenditures, to fund a portion of the purchase price for the
acquisition of all of the issued and outstanding stock of SNI
Holdco Inc. to that certain Agreement and Plan of Merger dated
March 31, 2017, provide for on-going working capital needs and
general corporate needs, and fund future acquisitions subject to
certain customary conditions of the lenders. On the closing date
of the Credit Agreement, the Company borrowed $56,226,316.74
which was used by the Company to repay existing indebtedness, to
pay fees and expenses relating to the Credit Agreement, and to
pay a portion of the purchase price for the acquisition of the
stock of SNI Holdco Inc.

The loans under the Credit Agreement will bear interest at rates
at the Companys option of LIBOR rate plus 10% or PNCs floating
base rate plus 9%. The Term Loans may consist of Domestic Rate
Loans or LIBOR Rate Loans, or a combination thereof.

The Credit Agreement is secured by all of the Companys property
and assets, whether real or personal, tangible or intangible, and
whether now owned or hereafter acquired, or in which it now has
or at any time in the future may acquire any right, title or
interests.

The Term Loans shall be advanced on the Closing Date and shall
be, with respect to principal, payable as follows, subject to
acceleration upon the occurrence of an Event of Default under
this Agreement or termination of this Agreement and provided that
all unpaid principal, accrued and unpaid interest and all unpaid
fees and expenses shall be due and payable in full on the last
day of the Term:

The credit Agreement contains certain covenants over the term of
the agreement:

Fixed Charge Coverage Ratio. Cause to be maintained as of
the last day of each fiscal quarter, a Fixed Charge Coverage
Ratio for Holdings and its Subsidiaries on a Consolidated Basis
of not less than the amount set forth below opposite such fiscal
quarter:

Minimum EBITDA. Cause to be maintained as of the last day
of each fiscal quarter, EBITDA for Holdings and its Subsidiaries
on a Consolidated Basis of not less than the amount set forth
below opposite such fiscal quarter, in each case, measured on a
trailing four (4) quarter basis:

Senior Leverage Ratio. Cause to be maintained as of the
last day of each fiscal quarter, a Senior Leverage Ratio for
Holdings and its Subsidiaries on a Consolidated Basis of not
greater than the amount set forth below opposite such fiscal
quarter, in each case, measured on a trailing four (4) quarter
basis:

In addition to these financial covenants, the agreement includes
other restrictive covenants. The Credit Agreement permits capital
expenditures up to a certain level, and contains customary
default and acceleration provisions. The Credit Agreement also
restricts, above certain levels, acquisitions, incurrence of
additional indebtedness, and payment of dividends.

In connection with this Credit Agreement, the Company has agreed
to pay on original discount fee of approximately $901,300, a
closing fee for the term loan of approximately $75,000 and a
closing fee for the revolving credit facility of approximately
$500,000. In addition, the Company paid early termination fees of
approximately $240,000 to ACF FINCO I, LP.

The description of the Credit Agreement set forth above is
qualified in its entirety by reference to the Credit Agreement, a
copy of which is filed as Exhibit 10.1 hereto and is incorporated
herein by reference.

On October 2, 2015, the Company issued and sold a Subordinated
Note in the aggregate principal amount of $4,185,000 to JAX
Legacy Investment 1, LLC (Jax) to a Subscription Agreement dated
October 2, 2015 between the Company and Jax. On April 3, 2017,
the Company and Jax amended and restated the Subordinated Note in
its entirety in the form of the 10% Convertible Subordinated Note
(the 10% Note) in the aggregate principal amount of $4,185,000.
The 10% Note matures on October 3, 2021 (the Maturity Date). The
10% Note is convertible into shares of the Companys Common Stock
at a conversion price equal to $5.83 per share (subject to
adjustment as provided in the 10% Note upon any stock dividend,
stock combination or stock split or upon the consummation of
certain fundamental transactions) (the Conversion Price) ;
provided, however, that unless and until such time as the
Company has received Requisite Stockholder Approval (as
hereinafter defined) the Company shall not be permitted to make
any interest payment in shares of Common Stock to the extent that
such issuance would cause the Company to exceed the Conversion
Limit (as hereinafter defined). Interest on the 10% Note accrues
at the rate of 10% per annum and shall be paid quarterly in
arrears on June 30, September 30, December 31 and March 31,
beginning on June 30, 2017, on each conversion date with respect
to the 10% Note (as to that principal amount then being
converted), and on the Maturity Date (each such date, an Interest
Payment Date). At the option of the Company, interest may be paid
on an Interest Payment Date either in cash or in shares of Common
Stock of the Company, which Common Stock shall be valued at 95%
of the average daily VWAP of the Common Stock for the 20 trading
days immediately prior to such Interest Payment Date provided,
however, that unless and until such time as the Company has
received Requisite Stockholder Approval the Company shall not be
permitted to make any interest payment in shares of Common Stock
to the extent that such issuance would cause the Company to
exceed the Conversion Limit. For purposes of the 10% Note the
term Requisite Stockholder Approval means approval by the
stockholders of the Company in compliance with Section 712 of the
NYSE MKT Company Guide and Regulation 14A under the Securities
Exchange Act of 1934, as amended, of the issuance of shares of
Common Stock that would constitute more than 19.99% of the Common
Stock outstanding immediately prior to the date of issuance of
the 10% Note (the Conversion Limit) upon (i) the conversion of
the 10% Note and/or (iii) the payment of interest on the 10% Note
in shares of Common Stock and/or (iv) any other issuance of
Common Stock in connection with the issuance of the 10% Note. All
or any portion of the 10% Note may be redeemed by the Company for
cash at any time on or after April 3, 2018 that the average daily
VWAP of the Companys Common Stock reported on the principal
trading market for the Common Stock exceeds the then applicable
Conversion Price for a period of 20 trading days. The redemption
price shall be an amount equal to 100% of the then outstanding
principal amount of the 10% Note being redeemed, plus accrued and
unpaid interest thereon. Except as otherwise provided in the 10%
Note, the Company may not prepay any portion of the principal
amount of any 10% Note without the prior written consent of the
holder thereof. The Company shall be required to prepay the 10%
Notes together with accrued and unpaid interest thereon upon the
consummation by the Company of any Change of Control:
provided, however, that the holder of the 10% Note may
elect to convert the outstanding principal amount of the Note
prior to actual payment in cash for any such redemption by the
delivery of a Notice of Conversion to the Company. For purposes
of the 10% Note, a Change of Control of the Company shall mean
any of the following: (A) the Company effects any sale of all or
substantially all of its assets in one transaction or a series of
related transactions or (B) the consummation of any transaction
(including, without limitation, any merger or consolidation), the
result of which is that any person or entity together with their
affiliates, becomes the beneficial owner, directly or indirectly,
of more than 50% of the Common Stock of the Company. The 10% Note
is subordinated in payment to the obligations of the Company to
the lenders parties to the Credit Agreement, to a Subordination
and Intercreditor Agreements, dated as of March 31, 2017 by and
among the Company, the Borrowers, the Agent and Jax.

The 10% Note issued to Jax is not registered under the Securities
Act of 1933, as amended (the Securities Act). Jax is an
accredited investor. The issuance of the 10% Note to Jax is
exempt from the registration requirements of the Act in reliance
on an exemption from registration provided by Section 4(2) of the
Act

A copy of the Form of 10% Note is filed as Exhibit 4.1 hereto. A
copy of the Subordination Agreement is filed as Exhibits 10.2,
hereto. The descriptions of each of the 10% Note and the
Subordination Agreement contained in this Current Report on the
Form 8-K are qualified in their entirety by reference to Exhibits
4.1 and 10.2, respectively.

Item 9.01 Financial Statements and Exhibits.

About GEE GROUP, INC (NYSEMKT:JOB)

GEE Group Inc., formerly General Employment Enterprises, Inc., is a provider of specialized staffing solutions. The Company operates through two segments: contract staffing services and direct hire placement. The Company’s professional staffing services provide information technology, engineering, medical and accounting professionals to clients on either a regular placement basis or a temporary contract basis. The Company’s industrial staffing business provides weekly temporary staffing for light industrial clients, primarily in Ohio. The Company and its subsidiaries provide professional placement services specializing in the placement of information technology, engineering, and accounting professionals, and medical data entry assistants (medical scribes) specializing in electronic medical records (EMR) services for emergency departments, specialty physician practices and clinics, for direct hire and contract staffing, and temporary staffing services in light industrial staffing.

GEE GROUP, INC (NYSEMKT:JOB) Recent Trading Information

GEE GROUP, INC (NYSEMKT:JOB) closed its last trading session up +0.10 at 5.91 with 8,492 shares trading hands.