Exhibit
10.29 


 


THIS
14% SENIOR SUBORDINATED NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATED IN THE MANNER AND TO THE EXTENT SET FORTH
IN THAT CERTAIN SUBORDINATION AND INTERCREDITOR AGREEMENT DATED OCTOBER 17, 2007, AS AMENDED THROUGH AND AS OF THE DATE HEREOF,
BY AND AMONG LTN ACQUISITION, LLC, THE MAKERS (AS DEFINED BELOW), THE PAYEE (AS DEFINED BELOW), LEGG MASON SBIC MEZZANINE FUND,
L.P., BROOKSIDE PECKS CAPITAL PARTNERS, L.P. AND FIFTH THIRD BANK (AS HEREAFTER MODIFIED, AMENDED, SUPPLEMENTED AND/OR RESTATED
FROM TIME TO TIME, THE “SUBORDINATION AGREEMENT”).


 


THE SECURITY REPRESENTED
BY THIS SENIOR SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THIS SECURITY MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THAT ACT AND UNDER ANY APPLICABLE
STATE SECURITIES LAWS UNLESS PRIOR TO SUCH SALE, TRANSFER, PLEDGE OR DISPOSITION, MAKERS ARE FURNISHED WITH AN OPINION OF COUNSEL,
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO MAKERS, THAT THE PROPOSED SALE, TRANSFER, PLEDGE OR DISPOSITION WILL BE EXEMPT
FROM SUCH REGISTRATION.


 


14%
SENIOR SUBORDINATED NOTE 


 


	$4,000,000.00	May 28, 2013


 


FOR
VALUE RECEIVED, 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”), a Texas limited
partnership, B G STAFF SERVICES INC., a Texas corporation (“B
G Staff Services;” together with LTN Staffing, BG Staffing, BG Personnel Services
and BG Personnel being each individually referred to herein as a “Maker” and
being collectively referred to herein as the “Makers”), jointly
and severally promise to pay to the order of BROOKSIDE MEZZANINE FUND II, L.P., a
Delaware limited partnership (the “Payee”), at its address
at 201 Tresser Boulevard, Suite 330, Stamford, Connecticut 06901-3435 or at such other place as Payee may from time to time designate
in writing, the principal sum of FOUR MILLION DOLLARS ($4,000,000.00) with interest, on the terms and conditions described below.
The actual amount due and owing from time to time hereunder shall be evidenced by Payee’s records, which shall be prima
facie evidence of the unpaid balance thereof.


 


1.  Securities
Purchase Agreement. This
14% Senior Subordinated Note (this “Note”)
is the Brookside II Senior Subordinated Note issued to the Payee pursuant to the terms and
subject to the conditions of that certain Amended and Restated Securities Purchase Agreement dated the date hereof among LTN Acquisition,
LLC, Makers, the Payee, Brookside Pecks Capital Partners, L.P., and Legg Mason SBIC Mezzanine Fund, L.P. (all future amendments,
restatements, extensions and substitutions therefor or thereof, the “Purchase Agreement”), and
is entitled to all the benefits referred to in the Purchase Agreement. The terms of the Purchase Agreement are incorporated by
reference herein. All capitalized terms used in this Note without definition which are defined in the Purchase Agreement shall
have the meanings ascribed to such terms therein.


 




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2.  Contract
Interest Rate; Cash Interest and PIK Interest Payments. Subject
to the provisions of Section 4 hereof,
interest shall accrue on the unpaid principal balance of this Note at the fixed annual rate
of fourteen percent (14%) (such per annum rate, the “Contract
Rate”); provided,
however, that on the date of each scheduled payment of interest on the
outstanding principal balance under this Note, the Maker shall only pay in cash an amount of interest equal to twelve percent
(12%) per annum (the “Cash
Interest”) on
the outstanding principal balance under this Note. The payment of the remaining two percent (2%) per annum of the interest accrued
on the outstanding principal balance of this Note shall be deferred (the aggregate amount of such deferred payments of interest,
“PIK Interest”) until
the Maturity Date. All PIK Interest shall: (i) be added to the unpaid principal balance of this Note on the date the related Cash
Interest payment is due and payable pursuant to the above proviso and on the dates hereinafter set forth; (ii) be due and payable,
together with all interest accrued thereon, in cash, on the Maturity Date or acceleration of this Note pursuant to the terms hereof;
and (iii) bear interest at a fixed rate per annum equal to the Contract Rate or the Default Rate, as applicable. Accrued interest
shall be payable quarterly in arrears commencing on the first Business Day of July, 2013 and continuing on the first Business
Day of every third month thereafter (i.e. the first Business Day of October, January, April, July, etc.) until the principal amount
of, and all accrued interest on, this Note, including, without limitation, the PIK Interest, have been paid in full. Any interest
that is not paid when due shall itself earn interest at the rate provided herein until the same has been paid in full. Interest
shall be calculated on the basis of a three hundred sixty (360)-day year for actual number of days elapsed.


 


3.  Balloon
Principal Repayment; Maturity Date. Subject
to the provisions of Section 8 hereof, the entire outstanding principal balance of this Note, including all accrued unpaid interest,
late charges, fees, and expenses hereunder shall be immediately due and payable on the Maturity Date.


 


4.  Default
Rate. Notwithstanding
the above, upon the occurrence of any Event of Default, this Note shall immediately and automatically begin to bear interest at
the Default Rate and shall continue thereafter to bear interest at the Default Rate until such Event of Default is waived in writing
by Payee.


 


5.  Post-Judgment
Interest. The
interest rate or rates provided in this Note shall apply to the indebtedness evidenced hereby before, on, and after the date or
dates on which Payee enters judgment on this Note.


 


6.  Prepayments.
The prepayment of
principal on this Note shall be governed by and subject to the provisions of Section 2.8 of the Purchase Agreement, the provisions
of which are incorporated herein by reference thereto as if fully set forth herein.


 


7.  Parent
Guaranty. This
Note is secured by Second Amended and Restated Guaranty and Suretyship of LTN Acquisition, LLC, a Delaware limited liability company
(the “Parent”), dated
the date hereof executed and delivered by the Parent in favor of the Payee, Brookside Pecks Capital Partners, L.P. and Legg Mason
SBIC Mezzanine Fund, L.P.


 


8.  Default:
Rights, Remedies. Upon
the occurrence of any Event of Default, Payee may exercise any and all rights and remedies set forth in the Loan Documents or
otherwise available under applicable law.


 


9.  Extensions
of Maturity. All
parties to this Note, whether maker, endorser, surety or guarantor, agree that the Maturity Date of this Note, or any payment
due hereunder, may only be extended at any time or from time to time following the written consent of the Payee and such extension
shall not release, discharge or affect the liability of any such party.


 




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10. Unconditional
Obligations. Maker’s
obligations under this Note shall be the absolute and unconditional duty and obligation of Maker and shall be independent of any
rights of set-off, recoupment, or counterclaim which Maker might otherwise have against Payee and Maker shall pay absolutely the
payments of principal, interest, fees, charges and expenses required hereunder and under the Purchase Agreement, free of any deductions
and without abatement, diminution or set-off.


 


11. Waivers.
Maker and all endorsers,
guarantors and sureties of this Note waive presentment, demand, notice of dishonor, protest, and notice of protest with regard
to this Note.


 


12. Binding
Effect. The
provisions of this Note shall bind and inure to the benefit of Maker and Payee and their respective successors and permitted assigns.


 


13. Joint
and Several Obligations. All
references herein to the “Maker”
shall be deemed to refer to each and every person defined herein as a “Maker”
individually, and to all of them, collectively, jointly and severally, as though each were
named whenever the term “Maker” is used, and this Note shall
be a joint and several obligation of all of them.


 


14. Waiver
of Jury Trial. Each
Maker (by its execution of this Note) and Payee (by its acceptance of this Note) agree that any suit, action, or proceeding,
whether claim or counterclaim, brought or instituted by or against any Maker or Payee, or any successor or assign of any Maker
or Payee, on or with respect to this Note or which in any way relates, directly or indirectly, to the obligations of any Maker
to Payee under this Note or the Purchase Agreement, or the dealings of the parties with respect thereto, shall be tried only by
a court and not by a jury. EACH MAKER AND PAYEE
HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING.


 


15.
Governing Law; Jurisdiction
and Venue. This
Note and all issues relating to this Note and the rights and obligations of Payee and Maker, as appropriate (including, without
limitation, the validity, construction, interpretation, and enforceability of this Note and its various provisions and consequences
and legal effect of all transactions and events which resulted in the issuance of this Note or which occurred or were to occur
as a direct or indirect result of this Note having been executed) shall be governed by and construed in accordance with the domestic
internal laws of the State of Delaware without regard to its rules pertaining to conflict of laws. Any action which is based,
directly or indirectly, on this Note or any matter in or related to this Note, shall be brought only in the courts of the State
of Delaware. Each of the Payee and the Maker irrevocably waives any objection which it may now or hereinafter have to the laying
of the venue of any suit, action or proceeding brought in such court and any claim that such suit, action or proceeding brought
in such a court has been brought in an inconvenient forum.


 


[The remainder of this page is intentionally
left blank].


 




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IN
WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed as an instrument under seal
by its authorized officer the day and year first above written.


 


	 	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


 


	 	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


 





Signature Page to $4,000,000 Brookside
II Senior Subordinated Note 


 




    	 



    	 



    

 


	 	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


 


	 	B G STAFF SERVICES INC., a Texas corporation
	 	 	 
	 	By:	/s/ L. Allen Baker, Jr.
	 	Name:	L. Allen Baker, Jr.
	 	Title:	President and Chief Executive Officer


 


	 	(“Makers”)
	 	 
	 	ACCEPTED BY:
	 	 
	 	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
	 	 
	 	(“Payee”)


 





Signature Page to $4,000,000 Brookside
II Senior Subordinated Note