Exhibit 99.1
General
Empløyment Enterprises,
Inc.
One
Tower Place,
Ste. 2200
Oakbroik
Terrace,
Illinois 60181
Via
email:
egoldst278@aol.com
December
17, 2009
Mr. Eric
Goldstein
Chairman
GTS
Systems. Inc.
295
Madison Avenue
New York.
New York
Re:
Purchase of GTS Accounts, Clients and Assets
Dear
Mr.
Goldstein:
In
furtherance of our Memorandum of Understanding of December 3, 2009, General
Employment Enterprises, Inc (“GEE”) by and through a newly formed subsidiary.
GEE of New York, Inc., (NEWCO) (“Purchaser”) hereby offers to purchase the
assets, accounts and clients of GTS Systems, Inc. (Eric Goldstein “Seller”)
under the following terms and conditions which we have previously
discussed:
1) At
closing the Seller will be issued 2,000,000 restricted shares of GEE stock (J0B
symbol) which shall include a claw-back provision; a consulting contract for a
period of three years to be paid at the rate of $240,000.00 per year; and 25% of
the excess of $2,000,000 in EBIT for the same three year period. The claw-buck
provision will only become effective in the event EBIT tails below $1,500,000
per year for NEWCO and in that event the number of restricted shares issued as
the purchase price shall be reduced by the same percentage as the EDIT is
reduced below the $1,500,000? For instance, if EBIT drops by 10% below
$1,500,000 ($150,000) the amount of restricted shares issued to Seller would
drop by the corresponding 10% (200,000 shares).
2) NEWCO
will not be purchasing the Light Industrial component which we have been told has been
sold, and NEWCO will not be purchasing the Healthcare component.
3) NEWCO
has procured an account receivable financing line of credit of $9,000,000.
4)
NEWCO under this line of credit will have $2,500,000
in cash to be utilized in the future financing of accounts
receivables.
5) NEWCO will enter into a servicing
agreement with the existing lender to continue to collect all receivables generated by
GTS through December 31, 2009 for a fee which will be negotiated on a similar basis as the agreement as that
with ICG.
6) NEWCO
is prepared to continue to service the collection Healthcare receivables for a
fee similar to that with the ICG transaction.
7) Seller
will be entitled to a seat on the Board of Directors of GEE.
8) Except
as excluded
herein. NEWCO will be entitled to all of the business and assets of
Seller used
or usable in the Core Business, excepting only Excluded Assets (as
defined below). These would include, without limitation, the
following:
All
equipment, products tools, programs, computer hardware, computer software,
furnishings, furniture und fixture and other materials used or usable by Seller
in the operation of the Core Business (all material assets that would be
included in the foregoing should be scheduled).
All
resumes, contact information and records rclatcd to individuals who are provided
as temporary employees and shift workers to clients and customers (other- than
in the Excluded industries) (such individuals are hereinafter referred to
collectively as “Employee Assets" these should be scheduled so that there is no
question as to which of such individuals arc to be considered the “property” of
Purchaser rather than that of the purchaser of any other portion of Seller’s
business).
All lists
of clients/customers and their books and records that relate, directly or
indirectly, to the Core Business, which shall include, without limitation. all
personnel and related records related to Seller’s personnel and in place
workfnrce and all operating manuals instructions booklets, written warranties
and bills of sale or other documents of conveyances related to any of the
Purchased Assets.
All
contracts related to the conduct of the Core Business (these will have to be
identified arid scheduled).
All
deposits held for the account or benefit of Seller under any such
contract.
All good will associated with any of
the above property and assets.
9) Seller
will undertake prior to closing of the transaction., to take such actions as
Purchaser
may reasonably request and assist Purchaser in (a) transferrimig the
relationship with
Employee Assets for purchaser and (b) transitioning Seller’s clients and
customers (other
than clients and customers in the Excluded Industries) and the related accounts
to Purchaser.
10)
"Excluded Assets"
include Light
Industrial Division and Healthcare Division which would not be acquired
by Purchaser and would consist of the following: (a.) cash and bank accounts;
(b) accounts receivible; (c) Sellers corporate name; (d) Sellers corporate
minute book and othcr corporate records; (e) any books and
records related to the providing ot temporary employees arid shift workers to
clients and customers in the Excluded Industries; and any good will related to
any of the foregoing.
11) NEWCO
is ready to close this purchase by December 31, 2009 subject to the execution of
a definitive agreement within 10 days hereof.
12)
Termination of Offer: This offer and letter of intent shall he considered
withdrawn and void
unless countcrsigned by you no later than 5:00PM (EST) on
December 17,2009.
/s/ Stephen
H. Pence
Stephen
H. Pence
Chairman.
General Employment
Enterprises, Inc
Accepted:
/s/ Eric
Goldstein
Eric Goldstein
Chairman.
GTS Systems Inc.
Cc: Ron
Heineman, CEO)
Sal
Zizza