Exhibit
10.4


 


	
  

  	
  Interchange
  Corporate Center

  450 Plymouth Road, Suite 400

  Plymouth Meeting, PA 19462-1644

  Ph. (610) 832-8240

  



 


SUBORDINATION AGREEMENT


 


I.      PARTIES


 


The parties to this
Agreement are:


 


1.     Primoris Services
Corporation                                                                                                      ,
hereinafter called Contractor.


 


2.     Christopher S. Wallace, as
Sellers’ Representative                                                                           ,
hereinafter called Creditor.


 


3.     Liberty Mutual Insurance
Company and any other company that is part of or added to the Liberty Mutual
Group and for which Liberty Mutual Surety underwrites surety business,
hereinafter called “Surety”. For the purposes of this Agreement, the definition
of Surety shall include Safeco Insurance Company of America, General Insurance
Company of America, First National Insurance Company of America, Safeco
National Insurance Company (individually and collectively the “Safeco Insurance
Companies”).


 


II.    RECITALS:


 


This Agreement is entered
into based upon the following facts and circumstances:


 


	
  (1)

  	
  From time to time
  Contractor may request Surety to execute instruments of suretyship on its
  behalf, hereinafter called Bonds.

  
	
   

  	
   

  
	
  (2)

  	
  Contractor is indebted to
  Creditor in the sum of
  $16,711,967                                          ,
  as evidenced by that certain Convertible Promissory Note dated November 12,
  2010 in favor of certain stockholders of Rockford Holdings Corporation
  hereinafter called “Promissory Note”.

  
	
   

  	
   

  
	
  (3)

  	
  Contractor and Creditor
  desire Surety to furnish Bonds as requested by Contractor and as an
  inducement therefor enter into the following Agreement.

  



 


III.   COVENANTS:


 


In consideration of the
furnishing of any such Bonds by Surety, Contractor and Creditor hereby agree as
follows:


 


1.     Creditor hereby subordinates
all rights and claims against Contractor on account of the above mentioned
indebtedness to any and all rights and claims of Surety on account of Loss as
defined herein. Loss shall mean any and all loss or expense of whatever kind,
including interest, court costs and counsel fees which Surety incurs or
sustains as a result of or in connection with any Bond furnished by Surety.
Originals or photocopies of claim drafts, or of payment records kept in the
ordinary course of business, including computer print-outs, verified by
affidavit, shall be prima facie evidence of the fact and amount of Surety’s
loss and Surety shall be entitled to reimbursement for any and all disbursements
made by it in good faith, under the belief that it was liable, or that such
disbursement was necessary or expedient.


 


2.     Surety’s Loss shall be paid
in full out of the assets of the Contractor before any payment on account of
the above mentioned indebtedness is made to or realized by Creditor.


 


3.     Creditor hereby assigns to
Surety all of its rights and claims, including its security, if any, on account
of such indebtedness so that in the event of receivership, bankruptcy or
insolvency of Contractor, Surety may enforce such rights and claims and may
have dividends thereon until Surety is reimbursed in full for its Loss.


 


4.     Unless specifically
permitted in paragraph 11 below or Surety provides its express written consent,
Creditor and Contractor agree that until Surety has been provided with
competent legal evidence of the release or exoneration of each and every Bond,
the mentioned indebtedness shall remain unchanged and unliquidated; that
neither Creditor nor Contractor will by act or omission procure or permit the
reduction of such indebtedness; nor will Creditor sell, transfer or hypothecate
said indebtedness.


 


5.     Creditor agrees that in the
event of a breach of any of the terms of this Agreement, all funds, the value
of any property and any benefit received by Creditor in connection with such
breach shall be returned by Creditor to Contractor upon Surety’s demand.
Contractor further agrees to compensate Surety for any damage the Surety
sustained that was caused by or contributed to by any breach of the Agreement,
including, but not limited to any breach of the Agreement by Creditor.


 


6.     This Agreement shall apply
to Bonds heretofore or hereafter executed and furnished by Surety, procured by
Surety, or executed by any other surety as sole surety or as co-surety, and the
rights hereunder shall inure to the benefit of Surety, such other surety, if
any, and their reinsurers, if any.


 


7.     This Agreement shall apply
to Bonds executed both before and after the effective date of this Agreement
including any alterations, renewals, extensions and modifications thereof.


 


8.     The Surety’s ability to
exercise any particular right or remedy under this Agreement, shall not be
prejudiced by either a delay or failure to exercise such right or remedy. The
obligations of the Creditor and Contractor hereunder shall be in addition to,
and not in lieu of, their obligations to the Surety under any other agreements,
including but not limited to the General Agreement of Indemnity executed in
favor of the Surety, and in the event of any conflict or inconsistency between
the terms of this Agreement and the terms of any other agreements, the term or
interpretation most favorable to the Surety, as determined by the Surety, shall
control. Creditor and Contractor further acknowledge each has been provided
with an opportunity to consult its own counsel prior to execution hereof.


 


9.     Notwithstanding this
Agreement, Surety has no obligation to issue Bonds requested by Contractor or
Creditor.


 


10.   This Agreement may not be
terminated without the prior written consent of all parties hereto. In the
event that all liability under the Bonds issued to Contractor has been
extinguished, in the sole and absolute discretion of the Surety, Surety shall
not withhold its consent to terminate this Agreement.


 


11.   NOTWITHSTANDING the
foregoing provisions, Contractor shall be entitled to make and Creditor shall
be entitled to receive: a) payouts as set forth in Section 2.1(B)(iv)(b) &
(c) of the Promissory Note; and b) installments no greater than the normally
scheduled principal and interest amounts as set forth in the Promissory Note.
In the event that Contractor desires to make and Creditor desires to receive
any other prepayment or accelerated payment, the Contractor and/or the Creditor
must provide Surety with 30 days prior written notice sent by certified mail (“Surety
Notice”) of its request to make such a payment. Surety retains the right to
expressly consent to such a payment, however, if Surety withholds its consent,
Surety will provide written notice to both Contractor and Creditor within 30
days of receipt of the Surety Notice. Any payment made in violation of this
paragraph shall be considered a breach of this Agreement as described in
paragraph 5 and Surety shall be entitled to all remedies as described herein.
Provided, however, that no payments of any kind may be made while any Loss
remains unpaid to the Surety, or should Contractor be in breach of the General
Agreement of Indemnity, this Agreement, or any other agreement executed in
favor of Surety.


 


12.   Any notice given to Surety
or Contractor hereunder shall be given in writing and sent to the respective
parties or their designated representative at the address below:


 


	
  If to Surety:

  	
   

  	
  Liberty Mutual Surety

  	
   

  	
  If to Creditor:

  	
   

  	
  Christopher S. Wallace

  
	
   

  	
   

  	
  450 Plymouth Road,
  Suite 400

  	
   

  	
   

  	
   

  	
  Second City Capital
  Corporation

  
	
   

  	
   

  	
  Plymouth Meeting, PA 19462

  	
   

  	
   

  	
   

  	
  1075 West George Street,
  Suite 2600

  
	
   

  	
   

  	
  ATTN: Home Office
  Underwriter

  	
   

  	
   

  	
   

  	
  Vancouver,
  BC, Canada V6E 3C9

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  If to Contractor:

  	
   

  	
  Primoris Services Corporation

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  26000 Commercenter Drive

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lake Forest, CA 92630

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ATTN: General Counsel

  	
   

  	
   

  	
   

  	
   

  



 

















 


DATED as of this 12th day of
November, 2010.


 


WITNESS/ATTEST


	
   

  	
   

  	
  Primoris Services
  Corporation

  
	
   

  	
   

  	
  (CORPORATION/PARTNER/PERSON
  as CONTRACTOR)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Brian Pratt

  	
  (SEAL)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Christopher S. Wallace, as
  Sellers’ Representative

  
	
   

  	
   

  	
  (CREDITOR)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Christopher S. Wallace

  	
  (Seal)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Sellers’ Representative

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LIBERTY
  MUTUAL INSURANCE COMPANY

  
	
   

  	
   

  	
  (SURETY)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Brett D. Asmus

  	
  (Seal)

  
	
   

  	
   

  	
   

  	
  Attorney-in-Fact