Exhibit
10.24 


 


CAPITAL
CONTRIBUTION AGREEMENT


 


THIS CAPITAL CONTRIBUTION
AGREEMENT (this “Agreement”) is made as of the 28th day of May, 2013, by and among TAGLICH PRIVATE
EQUITY, LLC, a Delaware limited liability company (“Obligor”), LTN STAFFING, LLC, a Delaware limited liability
company (“LTN Staffing”), BG STAFFING, LLC, a Delaware limited liability company (“BG Staffing”),
BG PERSONNEL SERVICES, LP, a Texas limited partnership (“BG Personnel Services”), BG PERSONNEL, LP, a Texas
limited partnership (“BG Personnel”), and B G STAFF SERVICES EMC., a Texas corporation (“B G Staff
Services”, and together with LTN Staffing, BG Staffing, BG Personnel Services and BG Personnel, collectively, “Borrowers”
and each a “Borrower”), LEGG MASON SBIC MEZZANINE FUND, L.P., a Delaware limited partnership (“Calvert”),
BROOKSIDE PECKS CAPITAL PARTNERS, L.P., a Delaware limited partnership (“Brookside”) and BROOKSIDE MEZZANINE
FUND II, L.P., a Delaware limited partnership (“Brookside II”; and, together with Calvert and Brookside, collectively,
the “Lenders” and each a “Lender”).


 


WITNESSETH:


 


WHEREAS, Borrowers
and Lender are parties to that certain Amended and Restated Securities Purchase Agreement dated the date hereof, as amended from
time to time (as restated, modified or supplemented and in effect from time to time, the “Purchase Agreement”),
pursuant to which Lenders have made loans and advances to or extend other financial accommodations to Borrowers;


 


WHEREAS, Obligor is
the direct or indirect principal owner of Borrowers and has a direct and substantial financial interest in Borrowers, and thus
is desirous of having Lenders extend credit to Borrowers;


 


WHEREAS, among other
things, Obligor’s entering into this Agreement is a condition to Lender’s obligations under the Purchase Agreement;


 


NOW, THEREFORE, in
consideration of foregoing recitals, which are incorporated herein by this reference thereto, the mutual agreements contained herein,
and other good and valuable consideration, Obligor, Borrowers and Lender agree as follows:


 


1.           Defined
Terms. Terms that are capitalized but which are not defined herein and are defined in the Purchase Agreement shall have the
meanings ascribed to such terms in the Purchase Agreement. In addition, the following terms shall have the meanings indicated:


 


“API”
shall mean American Partners, Inc., a Rhode Island corporation.


 


“API Earn Out
Payments” shall mean those payments made or required to be made by BG Staffing pursuant to Section 1.6 of the API Purchase
Agreement.


 


“API Purchase
Agreement” shall mean that certain Asset Purchase Agreement dated as of December 3, 2012 by and among BG Staffing, LTN
Acquisition, LLC, API, Thomas Leonard, Justin Franks and Ronald Wnek.


 




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“API Purchase
Transaction” shall mean the purchase by BG Staffing of certain of the assets of and the assumption by BG Staffing of
certain liabilities of API, pursuant to the terms of the API Purchase Agreement.


 


“Earn Out Payment”
and “Earn Out Payments” shall mean, individually and collectively, as appropriate (i) API Earn Out Payments
and (ii) InStaff Earn Out Payments.


 


“InStaff’
shall mean, collectively, InStaff Holding Corporation, a Texas corporation, and InStaff Personnel, LLC, a Texas limited liability
company.


 


“InStaff Earn
Out Payments” shall mean those payments made or required to be made by LTN Staffing pursuant to Section 1.6 of the InStaff
Purchase Agreement.


 


“InStaff Purchase
Agreement” shall mean that certain Asset Purchase Agreement dated as of May 28, 2013 by and among LTN Staffing, InStaff,
North Texas Opportunity Fund, Randy Burkhart, Beth Garvey, Arthur Hollingsworth and John Lewis,


 


“InStaff Purchase
Transaction” shall mean the purchase by LTN Staffing of certain of the assets of and the assumption by LTN Staffing of
certain liabilities of InStaff pursuant to the terms of the InStaff Purchase Agreement.


 


2.           Obligor’s
Capital Contributions Obligations.


 


(a)          BG
Staffing heretofore acquired substantially all of the assets and business of API pursuant to the API Purchase Transaction and Lenders
have previously consented to such action. In connection with the API Purchase Transaction, BG Staffing entered into the API Purchase
Agreement and became obligated to pay the API Earn Out Payments, on and subject to the terms and conditions of the API Purchase
Agreement. Borrowers acknowledge, however, that the API Earn Out Payments are not subordinated to Borrowers’ Debt to Lenders.
Accordingly, Lenders prior consent to the API Purchase Transaction was subject to the condition that Borrowers agree that no API
Earn Out Payment shall be paid if, when such payment is due, an Event of Default then exists or would occur as a result of the
payment thereof, except if such payment is funded by capital contributions from Obligor and/or arranged by Obligor to be contributed
by other persons and entities.


 


(b)          Borrowers
have informed Lender that LTN Staffing intends to acquire substantially all of the assets and business of InStaff pursuant to the
InStaff Purchase Transaction and Borrowers have requested that Lenders consent to such actions. In connection with the InStaff
Purchase Transaction, LTN Staffing will enter into the InStaff Purchase Agreement and become obligated to pay the InStaff Earn
Out Payments, on and subject to the terms and conditions of the InStaff Purchase Agreement. Borrowers acknowledge, however, that
the InStaff Earn Out Payments will not be subordinated to Borrowers’ Debt to Lenders. Accordingly, Lenders are only willing
to consent to the InStaff Purchase Transaction on the condition that Borrowers agree that no InStaff Earn Out Payment shall be
paid if, when such payment is due, an Event of Default then exists or would occur as a result of the payment thereof, except if
such payment is funded by capital contributions from Obligor and/or arranged by Obligor to be contributed by other persons and
entities.


 




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(c)          Accordingly,
and in consideration of Lenders’ entering into the Purchase Agreement, Borrowers and Obligor hereby agree that, when any
Earn Out Payment shall become due, if there then exists an Event of Default under the Purchase Agreement, or an Event of Default
would occur as a result of the payment of such Earn Out Payment by BG Staffing, LTN Staffing or any other Borrower, then, unless
otherwise agreed by Borrowers and Lenders, neither LTN Staffing, BG Staffing nor any other Borrower shall make any such payment
or payments unless (i) Borrowers and Obligor agree that such payments should be made, and then only if Obligor agrees to promptly
facilitate the investment of additional capital into LTN Staffing and/or BG Staffing, as appropriate, in an amount equal to the
amount of the Earn Out Payment which is due, and (ii) such amount of additional capital is actually received by either BG Staffing
or LTN Staffing, as appropriate, before or concurrently with making such payment.


 


(d)          LTN
Staffing and BG Staffing each agree that it will notify Lenders and Obligor in writing, not less than ten (10) Business Days prior
to the date upon which any Earn Out Payment is to become due, of the amount which is expected to be payable in respect thereof
and the date upon which such payment is to be made. In addition, such notice shall state whether any Event of Default exists or
is expected to occur as a result of making such payment. In the event that such notice states that an Event of Default then exists
or is expected to arise as a result of such payment, then such notice shall also constitute a demand by either LTN Staffing or
BG Staffing, as appropriate, to Obligor for a contribution of the required amount of additional capital on or before the date specified
as the date upon which payment of the applicable Earn Out Payment will be due.


 


(e)          Any
capital contributions required to be made by Obligor pursuant to the requirements of this Agreement shall be provided to either
LTN Staffing or BG Staffing not later than the Business Day prior to the date upon which the corresponding Earn Out Payment is
due. Proceeds of any such capital contributions shall be contributed by Obligor directly to either LTN Staffing or BG Staffing,
as appropriate, unless otherwise agreed by Lender and such capital contribution shall otherwise be on terms reasonably acceptable
to Lender.


 


(f)          LTN
Staffing, BG Staffing and Obligor shall jointly notify Lender in writing of funding of any capital contribution promptly (and in
any event on the same day) upon the occurrence thereof.


 


3.           Event
of Default; Lender’s Enforcement Rights. Borrowers and Obligor acknowledge and agree that failure by Obligor to comply
with any of the requirements of this Agreement, including, without limitation, to promptly make any capital contribution payment
required to be made by Obligor pursuant to Section 2 hereof, in addition to being a breach of this Agreement by Obligor shall be
an immediate Event of Default under the Loan Documents. In addition, Obligor expressly agrees and acknowledges that its undertakings
under this Agreement are for the direct benefit of Lenders and that Lenders shall be entitled to enforce this Agreement against
Obligor, and shall be entitled to seek specific performance of such obligations, or otherwise exercise any and all remedies provided
at law or in equity.


 


4.           Reinstatement.
The obligations of Obligor hereunder shall continue to be effective or automatically be reinstated, as the case may be, if at any
time payment of any amount by Obligor pursuant to this Agreement is rescinded or otherwise must be restored or returned by any
of Borrowers upon the insolvency, bankruptcy or reorganization of Obligor, or otherwise, all as though such payment had not been
made.


 




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5.           Successors
and Assigns. This Agreement shall inure to the benefit of Lenders, and their successors and assigns. This Agreement shall be
binding on Borrowers, Obligor and their respective successors and assigns and estates, and shall continue in full force and effect
until all of Borrowers’ obligations and liabilities to Lender are indefeasibly paid and performed in full and the Purchase
Agreement is terminated.


 


6.           No
Waiver of Rights. No delay or failure on the part of Lenders to exercise any right, power or privilege under this Agreement,
or any of the other Loan Documents shall operate as a waiver thereof, and no single or partial exercise of any right, power or
privilege shall preclude any other or further exercise thereof or the exercise of any other power or right, or be deemed to establish
a custom or course of dealing or performance between the parties hereto. The rights and remedies herein provided are cumulative
and not exclusive to any rights or remedies provided by law. No notice to or demand on Obligor in any case shall entitle Obligor
to any other or further notice or demand in the same, similar or other circumstance.


 


7.           Modification.
The terms of this Agreement may be waived, discharged, or terminated only by an instrument in writing signed by the party against
which enforcement of the change, waiver, discharge or termination is sought. No amendment, modification, waiver or other change
of any of the terms of this Agreement shall be effective without the prior written consent of Lenders.


 


8.           Costs
and Expenses. Obligor agrees to pay on demand all costs and expenses incurred by or on behalf of Lenders (including, without
limitation, attorneys’ fees and expenses) in enforcing the obligations of Obligor under this Agreement.


 


9.           Severability.
Whenever possible, each provision hereof will be interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such provision will be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability
without invalidating the remainder of such invalid, illegal or unenforceable provision or provisions or any other provisions hereof,
unless such a construction would be unreasonable. Upon any such determination that any term or other provision hereof is invalid,
illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner, to the end that the transactions contemplated hereby are
fulfilled to the extent possible in the circumstances.


 




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10.          Notices.
Unless otherwise specifically provided herein, any notice or other communication required or permitted to be given shall be in
writing addressed to the respective party as set forth below and may be personally served, telecopied, telexed or sent by overnight
courier service or United States mail and shall be deemed to have been given, (a) if delivered in person, when delivered: 05)
if delivered by telecopy or telex, on the date of transmission if transmitted on a Business Day before 4:00 p.m. (Eastern Standard
Time) or, if not, on the next succeeding Business Day; (c) if delivered by overnight courier, one day after delivery to such courier
properly addressed; or (d) if by U.S. Mail, four Business Days after depositing in the United States mail with postage prepaid
and properly addressed. Notices shall be addressed as follows:


 


	If to Obligor:	
        Taglich Private Equity, LLC

        275 Madison Avenue

        New York, NY 10016

        Attn: Douglas E. Hailey

        Fax: (212) 661-6826

         

	If to Borrowers:	
        LTN Staffing, LLC

        BG Staffing, LLC

        BG Personnel Services, LP

        BG Personnel, LP

        B G Staff Services Inc.

        14900 Landmark Blvd., Suite 300

        Dallas, TX 75254

        Attn: L. Allen Baker, Jr.

        Fax: (972) 692-2444

         

	If to Calvert:	
        Legg Mason SBIC Mezzanine Fund, L.P.

        111 South Calvert Street, Suite 1800

        Baltimore, MD 21202

        Attention: Mr. Joseph W. Hasse

        Fax: (443) 573-3703

         

	If to Brookside and Brookside II:	
        Brookside Pecks Capital Partners,
        L.P. Brookside Mezzanine Fund II, L.P.

        201 Tresser Boulevard, Suite 330

        Stamford, CT 06901-3435

        Attention: Mr. Corey L. Sclar

        Fax: (203) 618-0984

         

	With a copy to:	
        Stevens & Lee

        620 Freedom Business Center

        Suite 200

        King of Prussia, PA 19046

        Fax: (610) 371-7986

         

        Attention: Steven M. Tyminski, Esquire



 


or to such other address as the party addressed
shall have previously designated by written notice to the serving party, given In accordance with this Section 10. A notice
not given as provided above shall, if it is in writing, be deemed given if and when actually received by the party to whom given.


 




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11.         APPLICABLE
LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED M ACCORDANCE WITH, THE EXTERNAL LAWS OF THE STATE
OF DELAWARE, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.


 


12.         CONSENT
TO JURISDICTION. OBLIGOR HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF DELAWARE
AND IRREVOCABLY AGREES THAT, SUBJECT TO LENDER’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH PARTY HERETO EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. OBLIGOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES
THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH PERSON BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED
TO OBLIGOR AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN
POSTED.


 


13.         WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH PARTY HAS RELIED ON THE WAIVER M ENTERING INTO THIS AGREEMENT AND LENDER IS RELYING ON THIS AGREEMENT IN CONNECTION WITH
EXTENDING CREDIT TO BORROWERS, AND THAT EACH PARTY WILL CONTINUE TO RELY ON SUCH WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY
HERETO WARRANTS AND REPRESENTS THAT IT HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT IT KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.


 


14.         REPRESENTATION.
OBLIGOR ACKNOWLEDGES THAT IT HAS HAD THE OPPORTUNITY TO HAVE THE ASSISTANCE OF COUNSEL IN CONNECTION WITH THIS AGREEMENT AND HAS
EITHER CONSULTED WITH SUCH COUNSEL OR ELECTED NOT TO CONSULT.


 


15.         Other
Interpretive Provisions. The meanings of defined terms are equally applicable to the singular and plural forms of the defined
terms. Whenever the context so requires, the neuter gender includes the masculine and feminine, the single number includes the
plural, and vice versa, and in particular the words “Borrower” and “Borrowers” shall be so construed.


 


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signature pages follow]


 




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IN WITNESS WHEREOF, the parties hereto
have duly executed this Capital Contribution Agreement as of the day and year first above written.


 


	 	OBLIGOR:
	 	 
	 	TAGLICH PRIVATE EQUITY, LLC, a 

Delaware limited liability company
	 	 	 	 
	 	By	/s/ Douglas Hailey
	 	 	Name:	Douglas Hailey
	 	 	Title:	Managing Member
	 	 	 	 
	 	BORROWERS:
	 	 
	 	LTN STAFFING, LLC, a Delaware 

limited liability company
	 	 	 	 
	 	By	/s/ L. Allen Baker, Jr.
	 	 	Name:	L. Allen Baker, Jr.
	 	 	Title:	President and Chief Executive Officer
	 	 	 	 
	 	BG STAFFING, LLC, a Delaware limited 

liability company
	 	 	 	 
	 	By:	LTN Staffing, LLC, a Delaware limited
	 	 	liability company
	 	Its:	Sole Member


 


	 	 	By	/s/ L. Allen Baker, Jr.
	 	 	 	Name:	L. Allen Baker, Jr.
	 	 	 	Title:	President and Chief Executive Officer


 


Signature Page to Capital Contribution Agreement


 




    	 



    	 



    

 


	 	BG PERSONNEL SERVICES, LP, a Texas 

limited partnership
	 	 	 	 	 	 
	 	By:	BG Staffing, LLC, a Delaware limited
	 	 	liability company
	 	Its:	General Partner
	 	 	 	 	 	 
	 	 	By:	LTN Staffing, LLC, a Delaware
	 	 	 	limited liability company
	 	 	Its:	Sole Member
	 	 	 	 	 	 
	 	 	 	By:	/s/ L. Allen Baker, Jr.
	 	 	 	 	Name:	L. Allen Baker, Jr.
	 	 	 	 	Title:	President and Chief
	 	 	 	 	 	Executive Officer
	 	 	 	 	 	 
	 	BG PERSONNEL, LP, a Texas limited partnership
	 	 	 	 	 	 
	 	By:	BG Staffing, LLC, a Delaware limited
	 	 	liability company
	 	Its:	General Partner
	 	 	 	 	 	 
	 	 	By:	LTN Staffing, LLC, a Delaware
	 	 	 	limited liability company
	 	 	Its:	Sole Member
	 	 	 	 	 	 
	 	 	 	By:	/s/ L. Allen Baker, Jr.
	 	 	 	 	Name:	L. Allen Baker, Jr.
	 	 	 	 	Title:	President and Chief
	 	 	 	 	 	Executive Officer
	 	 	 	 	 	 
	 	BG STAFF SERVICES INC., a Texas limited corporation
	 	 	 	 	 	 
	 	By:	/s/ L. Allen Baker, Jr.
	 	 	Name:	L. Allen Baker, Jr.
	 	 	Title:	President and Chief Executive Officer


 


Signature Page to Capital Contribution Agreement


 




    	 



    	 



    

 


	 	LENDERS:
	 	 
	 	LEGG MASON SBIC MEZZANINE FUND, L.P.
	 	 	 	 
	 	By:	Legg Mason SBIC Mezzanine Fund
	 	Management, LLC
	 	Its:	Sole General Partner
	 	 	 	 
	 	By:	/s/ Joseph W. Hasse
	 	 	Name:	Joseph W. Hasse
	 	 	Title:	Member
	 	 	 	 
	 	BROOKSIDE PECKS CAPITAL PARTNERS, L.P.
	 	 	 	 
	 	By:	Brookside Pecks Management, LLC
	 	Its:	Sole General Partner
	 	 	 
	 	By:	/s/ David D. Buttolph
	 	 	Name:	David D. Buttolph
	 	 	Title:	Managing Director
	 	 	 	 
	 	BROOKSIDE MEZZANINE FUND II, L.P.
	 	 	 	 
	 	By:	Brookside Mezzanine Partners II, LLC
	 	Its:	Sole General Partner
	 	 	 
	 	By:	/s/ Corey Sclar
	 	 	Name:	Corey Sclar
	 	 	Title:	Managing Director


 


Signature Page to Capital Contribution Agreement