Document:

Exhibit
10.2

 

VOTING AGREEMENT

 

THIS VOTING AGREEMENT (“Agreement”) is made and
entered into as of December 18, 2009 by and among James Construction Group,
LLC, a Florida limited liability company (“Target”), Michael D.
Killgore, as Sellers’ Representative, and each of the persons listed under the
caption “Stockholders” on Exhibit A attached hereto (each, a “Stockholder”
and collectively, the “Stockholders”). 
The Stockholders are stockholders of Primoris Services Corporation, a
Delaware corporation (the “Company”). 
Target, Sellers and Stockholders are referred to herein individually as
a “Party” and collectively as the “Parties.”

 

R E C I T A L S

 

A.            As of December 18, 2009, the Company, the
Target, the members of Target and Michael D. Killgore, as Sellers’
Representative, have entered into a Membership Interest Purchase Agreement (the
“Purchase Agreement”) that provides, inter  alia, upon the terms and subject to the conditions thereof,
for the purchase of all of the limited liability company interests of Target by
the Company.  All capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Agreement.

 

B.            As of the date hereof, each Stockholder
owns beneficially and has the right to vote (including shares subject to a
proxy provided to Brian Pratt) or to direct the vote of the number of shares of
common stock of the Company, par value $0.0001 per share (“Company Common
Stock”), as set forth opposite such Stockholder’s name on Exhibit A hereto (all such shares and any
shares of which beneficial ownership and the right to vote or to direct the
vote of that are hereafter acquired by any of the Stockholders, whether by
purchase, conversion, exercise or otherwise, prior to the termination of this
Agreement are referred to herein as the “Shares”).

 

C.            As a condition to the consummation of the
Purchase Agreement, the Stockholders have agreed to enter into this Agreement.

 

A G R E E M E N T

 

NOW, THEREFORE, in consideration of the premises and
of the mutual agreements and covenants set forth herein and in the Purchase
Agreement, and intending to be legally bound hereby, the parties hereto hereby
agree as follows:

 

1.             Voting of Shares.

 

1.1           Obligation to Vote in Favor of
the Conversion of the Buyer Shares.  During the term of this Agreement, each
Stockholder agrees to vote (or cause to be voted) the Shares over which he or
it has the right to vote or to direct the vote of, in favor of the conversion
of the Buyer Shares to Company Common Stock at any meeting of the holders of
the Company Common Stock, however called, or in connection with any written
consent of the holders of the Company Common Stock.

 

1

 

1.2           Term of Agreement.  The obligations of the Stockholders pursuant to
this Agreement shall terminate immediately following the date the stockholders
of the Company approve the conversion of the Buyer Shares to Company Common
Stock at any meeting of the holders of the Company Common Stock, however
called, or by written consent.

 

1.3           Obligations as Director and/or
Officer.  Nothing in
this Agreement shall be deemed to limit or restrict any director or officer of
the Company from acting in his or her capacity as such director or officer or
from exercising his or her fiduciary duties and responsibilities, it being
agreed and understood that this Agreement shall apply to each Stockholder
solely in his or her capacity as a Stockholder of the Company and shall not
apply to his or her actions, judgments or decisions as a director or officer of
the Company if he or she is such a director or officer.

 

1.4           Disclosure.  The Stockholders hereby agree that the
Company is permitted to publish and disclose in the Proxy Statement and any
other form, document or schedule filed with the SEC, and any press release or
other disclosure document which Buyer and Sellers reasonably determine to be
necessary or desirable in connection with the Purchase Agreement and any
transactions related thereto, the Stockholders’ identity and ownership of the
Shares and the nature of the Stockholders’ commitments, arrangements and
understandings under this Agreement.

 

1.5           Transfer.  No Stockholder shall transfer any Shares if
such transfer will result in an excess of 200,000 shares of Company Common
Stock, in aggregate, being sold by the Stockholders after the date hereof
unless the transferee agrees in writing to be bound to the terms and conditions
of this Agreement.

 

2.             Representations and Warranties; Covenants of
the Stockholders.  Each
Stockholder hereby severally represents warrants and covenants as follows:

 

2.1           Authorization.  Such Stockholder has full legal capacity and
authority to enter into this Agreement and to carry out such Stockholder’s
obligations hereunder.  This Agreement
has been duly executed and delivered by such Stockholder, and (assuming due
authorization, execution and delivery by the Company, the Sellers and the other
Stockholders) this Agreement constitutes a legal, valid and binding obligation
of such Stockholder, enforceable against such Stockholder in accordance with
its terms.

 

2.2           No Conflict; Required Filings and
Consents.

 

(a)           The execution and delivery
of this Agreement by such Stockholder does not, and the performance of this
Agreement by such Stockholder will not, (i) conflict with or violate any
Laws applicable to such Stockholder or by which any property or asset of such
Stockholder is bound or affected, or (ii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of any
encumbrance on any property or asset of such Stockholder, including, without
limitation, the Shares, pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation.

 

2

 

(b)           The execution and delivery
of this Agreement by such Stockholder does not, and the performance of this
Agreement by such Stockholder will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, except (i) for applicable
requirements, if any, of the Securities Exchange Act, and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or materially delay the
performance by such Stockholder of such Stockholder’s obligations under this
Agreement.

 

2.3           Title to Shares.  Such Stockholder is the legal and beneficial
owner of its Shares, free and clear of all liens and other encumbrances except
certain restrictions upon the transfer of such Shares.

 

3.             General Provisions.

 

3.1           Notices.  All notices and other communications given or
made pursuant hereto shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by
overnight courier service, by telecopy, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other addresses as shall be specified by notice
given in accordance with this Section 3.1):

 

(a)           If to the Company or to any
Stockholder:

 

Primoris Services
Corporation

26000 Commercentre Drive

Lake Forest, CA  92630

Attention:  General Counsel

Facsimile:  949-595-5544

 

with
a mandatory copy to

 

Rutan &
Tucker, LLP

611 Anton Blvd., Suite 1400

Costa Mesa, CA 92626

Telephone:        (714) 641-5100

Facsimile:         (714) 546-9035

Attn:       George Wall, Esq.

 

(b)           If to the Sellers then to
the Sellers’ Representative:

 

Michael D. Killgore

James Construction Group

11200 Industriplex Boulevard

Baton Rouge, LA 70809

Telephone:        (225)
241-3211

Facsimile:         (225) 295-4838

 

3

 

with
a mandatory copy to:

 

Kean,
Miller, Hawthorne, D’Armond, McCowan & Jarman, L.L.P.

Post Office Box 3513 (70821)

Suite 1800, One American Place

Baton Rouge, Louisiana 70802

Telephone:        (225) 382-3414

Facsimile:         (225) 215-4014

Attn: G. Blane Clark, Jr.

 

3.2           Headings.  The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

3.3           Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.  Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, 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 to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

 

3.4           Entire Agreement.  This Agreement constitutes the entire
agreement of the parties and supersedes all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to the
subject matter hereof.  This Agreement
may not be amended or modified except in an instrument in writing signed by, or
on behalf of, the parties hereto.

 

3.5           Specific Performance.  The parties hereto agree that irreparable
damage would occur in the event that any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.

 

3.6           Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.

 

3.7           Arbitration.  Except as otherwise provided in this
Agreement, any controversy or claim arising out of or relating to this
Agreement or the breach thereof shall be settled by arbitration in Harris
County, Texas.

 

(a)           Judicial Arbitration and
Mediation Services.  The
arbitration shall be administered by Judicial Arbitration and Mediation
Services (“JAMS”) in its Harris office.

 

(b)           Arbitrator.  The arbitrator shall be a retired superior or
appellate court judge of the State of Texas affiliated with JAMS.

 

4

 

(c)           Provisional Remedies and Appeals.  Each of the parties reserves the right to
file with a court of competent jurisdiction an application for temporary or
preliminary injunctive relief, writ of attachment, writ of possession,
temporary protective order and/or appointment of a receiver on the grounds that
the arbitration award to which the applicant may be entitled may be rendered
ineffectual in the absence of such relief. 
The award of the arbitrator shall be binding, final, and nonappealable.

 

(d)           Enforcement of Judgment.  Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.  The award of the arbitrator shall be binding,
final, and nonappealable.

 

(e)           Discovery.  The parties may obtain discovery in aid of the
arbitration to the fullest extent permitted under law.  All discovery disputes shall be resolved by
the arbitrator.

 

(f)            Consolidation.  Any arbitration hereunder may be consolidated
by JAMS with the arbitration of any other dispute arising out of or relating to
the same subject matter when the arbitrator determines that there is a common
issue of law or fact creating the possibility of conflicting rulings by more
than one arbitrator.  Any disputes over
which arbitrator shall hear any consolidated matter shall be resolved by JAMS.

 

(g)           Power and Authority of Arbitrator.  The arbitrator shall not have any power to
alter, amend, modify or change any of the terms of this Agreement nor to grant
any remedy which is either prohibited by the terms of this Agreement, or not
available in a court of law.

 

(h)           Governing Law.  All questions in respect of procedure to be
followed in conducting the arbitration as well as the enforceability of this
Agreement to arbitrate which may be resolved by state law shall be resolved
according to the law of the state of Delaware. 
Any action brought to enforce the provisions of this Section shall
be brought in the Harris County Superior Court. 
All other questions in respect to this Agreement, including but not
limited to the interpretation, enforcement of this Agreement (other than the
right to arbitrate), and the rights, duties and liabilities of the parties to
this Agreement shall be governed by Delaware law.

 

(i)            Costs.  The costs of the arbitration, including any
JAMS administration fee, and arbitrator’s fee, and costs of the use of
facilities during the hearings, shall be borne equally by the parties in the
first instance.  Upon issuance of an award,
costs shall be awarded to the prevailing party.

 

5

 

3.8           Attorneys’ Fees.  If a party to this Agreement shall bring any
action, suit, counterclaim, appeal, arbitration, or mediation for any relief
against the other parties, declaratory or otherwise, to enforce the terms
hereof or to declare rights hereunder (referred to herein as an “Action”),
the non-prevailing party in such Action shall pay to the prevailing party in
such Action a reasonable sum for the prevailing party’s attorneys’ fees and expenses
(at the prevailing party’s attorneys’ then-current rates, as increased from
time to time by the giving of advance written notice by such counsel to such
party) incurred in prosecuting or defending such Action and/or enforcing any
judgment, order, ruling or award (referred to herein as a “Decision”),
granted therein, all of which shall be deemed to have accrued from the
commencement of such Action, and shall be paid whether or not such Action is
prosecuted to a Decision.  Any Decision
entered into in such Action shall contain a specific provision providing for
the recovery of attorneys’ fees and expenses incurred in enforcing such
Decision.  The court or arbitrator may
fix the amount of reasonable attorneys’ fees and expenses upon the request of
any party.  For purposes of this Section,
attorneys’ fees shall include, without limitation, fees incurred in connection
with (1) postjudgment motions and collection actions, (2) contempt
proceedings, (3) garnishment, levy and debtor and third party examination,
(4) discovery and (5) bankruptcy litigation.

 

3.9           Submission to Jurisdiction.  Subject to the provisions of Section 3.7
above, each of the Parties submits to the
exclusive jurisdiction of any federal court sitting in the State of Texas,
County of Harris, in any action or proceeding arising out of or relating to
this Agreement and agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court.  Each Party also agrees not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court.  Each of the parties waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required
of the other Party with respect thereto. 
Either Party may make service on the other Party by sending or
delivering a copy of the process to the Party to be served at the address and
in the manner provided for the giving of notices in Section 9.7 of the
Purchase Agreement.  Nothing in this
Section 3.9, however, shall affect the right of either Party to serve
legal process in any other manner permitted by law or at equity.  Each party agrees that a final judgment in
any action or proceeding so brought shall be conclusive and may be enforced by
suit on the judgment or in any other manner provided by law or at equity.

 

3.10         No Waiver.  No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

 

3.11         Counterparts.  This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.

 

3.12         Purchase Agreement.  All references to the Purchase Agreement
herein shall be to such agreement as may be amended by the parties thereto from
time to time.

 

6

 

3.13         Certain Events.  The Stockholders agree that this Agreement
and the obligations hereunder shall attach to the Shares and shall be binding
upon any person to which legal or beneficial ownership of such Shares shall
pass, whether by operation of law or otherwise, including without limitation,
any such Stockholders’ spouses, trustees, beneficiaries, heirs, guardians,
administrators or successors. 
Notwithstanding any such transfer of Shares, the transferor shall remain
liable for the performance of all obligations under this Agreement.  This Agreement and the obligations hereunder,
so long as any Stockholder is an individual, will survive the death,
incompetency and disability of such Stockholder or any other individual holder of
the Shares, so long as any Stockholder is an entity, will survive the merger or
reorganization of such Stockholder, so long as any Stockholder is a trust, will
survive the dissolution of such Stockholder.

 

[Signature Page Follows]

 

7

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.

 

 

	
  TARGET:

  	
  James
  Construction Group, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael D. Killgore

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  STOCKHOLDERS:

  	
  /s/
  Brian Pratt

  
	
   

  	
  Brian
  Pratt

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  John P. Schauerman

  
	
   

  	
  John
  P. Schauerman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Timothy R. Healy

  
	
   

  	
  Timothy
  R. Healy

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Summers
  Trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Scott Summers

  
	
   

  	
   

  	
  Scott
  Summers, Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Mark Thurman

  
	
   

  	
  Mark
  Thurman

  
	
   

  	
   

  
	
   

  	
   

  
	
  SELLERS’
  REPRESENTATIVE:

  	
  /s/
  Michael D. Killgore

  
	
   

  	
  Michael
  D. Killgore,

  
	
   

  	
  as
  Sellers’ Representative

  

 

8

 

EXHIBIT
A

 

STOCKHOLDERS

 

	
  Name and Address

  	
   

  	
  Number of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Brian Pratt

  	
   

  	
   

  	
   

  
	
  26000 Commercenter Drive

  	
   

  	
   

  	
   

  
	
  Lake Forest, CA 92630

  	
   

  	
  15,732,508

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  John P. Schauerman

  	
   

  	
   

  	
   

  
	
  26000 Commercenter Drive

  	
   

  	
   

  	
   

  
	
  Lake Forest, CA 92630

  	
   

  	
  1,281,462

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Timothy R. Healy

  	
   

  	
   

  	
   

  
	
  26000 Commercenter Drive

  	
   

  	
   

  	
   

  
	
  Lake Forest, CA 92630

  	
   

  	
  518,545

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Summers Family Trust

  	
   

  	
   

  	
   

  
	
  26000 Commercenter Drive

  	
   

  	
   

  	
   

  
	
  Lake Forest, CA 92630

  	
   

  	
  1,352,986

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mark Thurman

  	
   

  	
   

  	
   

  
	
  26000 Commercenter Drive

  	
   

  	
   

  	
   

  
	
  Lake Forest, CA 92630

  	
   

  	
  53,643

  	
   

  

 

9Exhibit
10.3

 

THE INDEBTEDNESS EVIDENCED BY
THIS NOTE IS SUBORDINATED TO ANY AND ALL INDEBTEDNESS OF THE ISSUER TO THE
PRIVATEBANK AND TRUST COMPANY (“THE PRIVATEBANK”) IN THE MANNER AND TO THE
EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT BETWEEN THE ISSUER AND
THE PRIVATEBANK, DATED DECEMBER 15, 2009, TO WHICH REFERENCE IS HEREBY MADE FOR
A MORE FULL STATEMENT THEREOF.  THE
HOLDER HAS AGREED THEREBY NOT TO SELL, ASSIGN, TRANSFER, PLEDGE OR HYPOTHECATE
THIS NOTE WITHOUT THE PRIVATEBANK’S WRITTEN CONSENT.

 

PROMISSORY NOTE

 

	
  $53,500,000

  	
   

  	
  December 18, 2009

  
	
   

  	
   

  	
  Lake Forest, California

  

 

FOR VALUE RECEIVED, PRIMORIS SERVICES CORPORATION, a
Delaware corporation (“Issuer”),
promises to pay to the order of each of the individuals set forth on Exhibit A
hereto (each a, “Holder” and
collectively, the “Holders”), the
specific principal amounts next to each such Holder’s name as set forth on Exhibit A
hereto with an aggregate principal sum of Fifty-Three Million Five Hundred
Thousand Dollars ($53,500,000), together with interest as computed below.

 

This Note is issued pursuant to the Membership
Interest Purchase Agreement dated as of November 18, 2009 (as amended,
modified or supplemented, the “Purchase Agreement”) by and between
Issuer, the Holders, James Construction Group, L.L.C. and Michael D. Killgore,
as Sellers’ Representative.

 

The following is a statement of the rights of each
Holder and the conditions to which this Note is subject, and to which each
Holder, by the acceptance of this Note, agrees:

 

1.                                       Certain Definitions.  The following terms, when used in this Note, shall
have the following meanings.  Any of
these terms may, unless the context otherwise requires, be used in the singular
or plural depending on the reference.  Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Purchase Agreement.

 

“Affiliate” has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended.

 

“Applicable Interest
Rate” means the rate per annum equal to:

 

a.                                       five percent (5%) during the period
beginning on the Issuance Date and ending on the date nine (9) months
after the Issuance Date (the “First Period Termination
Date”);

 

b.                                      seven percent (7%) during the period beginning
on the First Period Termination Date and ending on the date eighteen (18)
months after the Issuance Date; and

 

 

c.                                       eight percent (8%) thereafter.

 

“Event of Default”
shall have the meaning set forth in Section 5.

 

“Holder”
means the Persons specified in the introductory paragraph of this Note or any
Person who shall at the time be the registered holder of this Note.

 

“Holders’ Representative”
means Michael D. Killgore, or any individual appointed as a successor Sellers’
Representative pursuant to Section 7 hereof.

 

“Issuance Date”
means December 15, 2009.

 

“Issuer”
includes Primoris Services Corporation, a Delaware corporation, and any Person
which shall succeed to or assume the obligations of Issuer under this Note,
provided, however, that Issuer shall not be released hereunder except pursuant
to a written release executed by Holders’ Representative or by payment in full
of all the Obligations.

 

“Maturity Date”
means December 15, 2014.

 

“Net Equity” means the amount of cash proceeds received by Issuer
in connection with the offering of any capital equity of Issuer or any of its
Affiliates minus any expenses incurred in connection with such offering,
including but not limited to attorneys’ fees, underwriters’ fees and
accountants’ fees.

 

“Note”
means this Promissory Note.

 

“Obligations”
means and includes all loans, advances, debts, liabilities and obligations,
howsoever arising, owed by Issuer to the Holders of every kind and description
(whether or not evidenced by any note or instrument and whether or not for the
payment of money), now existing or hereafter arising under or pursuant to the
terms of this Note, including, all interest, fees, charges, expenses, attorneys’
fees and costs and accountants’ fees and costs chargeable to and payable by
Issuer hereunder.

 

“Person”
means and includes an individual, an individual or entity serving in the
capacity as a trustee of a trust or the trust itself, a partnership, a
corporation (including a business trust), a joint stock company, a limited
liability company, an unincorporated association, a joint venture or other
entity or a governmental authority.

 

“Purchase Agreement”
shall have the meaning set forth in the second introductory paragraph of this
Note.

 

“Qualified Debt” means the amount of cash proceeds received by Issuer
or any of its Affiliates in connection with the incurrence of any indebtedness
except for indebtedness under a bank line of credit (provided that with respect
to indebtedness under a line of credit to finance the acquisition of a business
whatever the structure, this exception shall be limited to an outstanding
balance of $10,000,000 in the aggregate at any time) or indebtedness incurred
to finance operating expenses, equipment and capital expenditures (but
specifically excluding any 

 

2

 

capital expenditures
associated with the acquisition of a business whatever the structure) incurred
by Issuer or any of its Affiliates in the ordinary course of business.

 

“Subordination Agreements”
means the subordination agreements with The
PrivateBank and Trust Company and Liberty Mutual Insurance Company
subordinating, in accordance with their terms, the Note to Issuer’s senior
lender and bonding agency as attached hereto on Exhibit B.

 

2.                                       Payments of Principal and
Interest; Default Interest Rate; Late Fees.

 

2.1                                 Payments of Principal and
Interest.  Beginning on the Issuance Date, the
outstanding principal balance of this Note shall bear interest at the
Applicable Interest Rate and shall be computed on the basis of a 365-day
year and the actual number of days elapsed.  Payments of
principal and interest shall be payable in cash in sixty (60) equal and fully
amortizing monthly payments of principal and interest commencing January 15,
2010 and ending on the Maturity Date; provided, however, that if
Issuer or any of its Affiliates raise additional capital or increase the
balance due under any Qualified Debt (whether equity or debt), then Issuer
shall notify Holders of same and:

 

(a)                                  Issuer shall prepay this Note in an
amount equal to (i) one hundred percent (100%) of the first Ten Million
Dollars ($10,000,000) of Net Equity raised (excluding the proceeds received
from the exercise of any warrant outstanding on the date hereof, with respect
to which Issuer hereby represents and warrants to Holders that such outstanding
warrants will not allow the holders thereof to purchase more than 5,605,956
shares of common stock of Issuer) plus (ii) seventy-five percent
(75%) of Net Equity raised in excess of Ten Million Dollars ($10,000,000), if
any, plus (iii) thirty-three percent (33%) of Qualified Debt
raised, if any, and

 

(b)                                 Any prepayment of this Note, whether
required or discretionary, shall be applied first to expenses due the Holders
including without limitation late fees, second to accrued interest due, and
third to principal applied in reverse order of when such principal is scheduled
to be paid; and

 

(c)                                  Any prepayment required by this Section shall
be due within ten (10) business days of the receipt of cash proceeds by
Issuer.

 

2.2                                 Default
Interest Rate.  If any
amount of principal or interest on this Note is not paid when due the entire
outstanding principal balance of the Note shall bear interest at a rate to the
Applicable Interest Rate plus two percent (2%) from the due date of such
installment of such principal or interest until such default is cured by the
payment of all principal and interest and late fees then due (“Default Interest”).  The incurrence of Default Interest shall not
excuse late payment.

 

2.3                                 Late
Fees.  Should any
payment under this Note not be paid when due and payable, it is recognized by
Issuer that the Holders will incur extra expenses for handling the delinquent
payment.  The exact amount of said extra
expenses is impossible to ascertain at this time, but a charge of two percent
(2%) of the amount of the delinquent payment would be a fair 

 

3

 

approximation
of the expense so incurred by the Holders. 
Therefore, in the event a payment is received more than ten (10) days
after the date on which it was due, Issuer shall, without notice and without
prejudice to the right of the Holders to declare an Event of Default or to
collect any other amounts due hereunder, pay to the Holders a “late charge”
equal to two percent (2%) of the amount of the delinquent payment.  At the option of Issuer, said late charge may
be added to the principal under this Note.

 

2.4                                 No
Right of Offset.  Issuer
shall have no right to set off against payments due under this Note.

 

2.5                                 Allocation
Among Holders. All payments under this Note whether principal,
interest, late fees, and expenses shall be paid to the Holders pro rata based
on the principal balance due each Holder.

 

3.                                       Payment on Non-Business
Days.
Whenever any payment to be made shall be due on a Saturday, Sunday or a public
holiday under the laws of the State of California, such payment may be due on
the next succeeding business day and such next succeeding day shall be included
in the calculation of the amount of accrued interest payable on such date.

 

4.                                       Prepayment. 
Upon five (5) days prior written notice to the Holders, Issuer may
prepay this Note in whole or in part; provided, however, that any
such prepayment will be applied first to the payment of expenses due under this
Note, second to interest accrued on this Note and third, if the amount of
prepayment exceeds the amount of all such expenses and accrued interest, to the
payment of principal of this Note as described in Section 2.1(b) and Section 2.5.

 

5.                                       Events of Default. 
The occurrence of any of the following shall constitute an “Event of Default” under this Note:

 

5.1                                 Failure to Pay. 
Issuer shall fail to pay when due any payment required under the terms
of this Note by the end of the tenth day following the due date.

 

5.2                                 Breaches of Covenants. 
Issuer shall fail to observe or perform any covenant set forth in Section 8
and such failure shall continue for twenty
(20) days after Issuer’s receipt of Holder’s written notice to Issuer of
such breach.

 

5.3                                 Voluntary Bankruptcy or
Insolvency Proceedings.  Issuer shall (i) apply
for or consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property, (ii) be
unable, or admit in writing its inability, to pay its debts generally as they
mature, (iii) make a general assignment for the benefit of its or any of
its creditors, (iv) be dissolved or liquidated, (v) become insolvent
(as such term may be defined or interpreted under any applicable statute), (vi) commence
a voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or consent to any
such relief or to the appointment of or taking possession of its property by
any official in an involuntary case or other proceeding commenced against it,
or (vii) take any action for the purpose of effecting any of the
foregoing.

 

4

 

5.4                                 Involuntary Bankruptcy
or Insolvency Proceedings.  Proceedings
for the appointment of a receiver, trustee, liquidator or custodian of Issuer
or of all or a substantial part of its property, or an involuntary case or
other proceedings seeking liquidation, reorganization or other relief with
respect to Issuer or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
sixty (60) days of commencement.

 

5.5                                 Cessation of Business. 
Issuer dissolves, is subject to liquidation or ceases to conduct
business in the ordinary course.

 

5.6                                 Change of Control. 
Notwithstanding the foregoing, this Note, plus all accrued interest,
shall be paid in full within 30 days after a Change of Control. A “Change of
Control” shall be deemed to have occurred if, at any time, (a) Buyer
ceases to control Target or to be entitled to elect all of the members of the
board of directors or managers of Target; or (b) all or substantially all
of any of the assets of Buyer or Target are sold in one transaction or a series
of transactions to any Person or related group of Persons; or (c) Buyer or
Target are merged with or into another Person except for a merger in which the
stockholders of Issuer immediately prior to the merger continue to beneficially
own at least a majority of the equity in the combined entity immediately after
the merger; or (d) the filing of a certificate of dissolution or the
equivalent for Buyer or Target, or (e) the lapse of ninety (90) days after
the notice to Buyer of revocation without a reinstatement of Buyer’s charter
within thirty (30) days after receipt of notice of this revocation is received
by Buyer.

 

5.7                                 Levy or Seizure. 
The attachment, seizure or levy under legal process, which is not
removed within forty-five days, upon assets of Issuer or any of its Affiliates
that are material to the operation of the business of Buyer and its subsidiaries
when taken as a whole.

 

6.                                       Rights of Holder Upon
Default.  Upon the
occurrence or existence of any Event of Default (other than an Event of Default referred to
in Sections 5.3 and 5.4) and at any time thereafter during the
continuance of such Event of Default, Holder may declare all outstanding
Obligations payable by Issuer hereunder to be immediately due and payable
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived; provided, however,
if the Event of Default is the failure to pay as set forth in Section 5.1
and the reason for Issuer’s failure to pay is that Issuer is contractually
prohibited from making a payment due to the terms of the Subordination
Agreements, then the Holders shall not be entitled to declare all outstanding
Obligations payable by Issuer until the earlier of (a) the date that is
180 days after the date that the Event of Default was triggered, or (ii) the
date 10 days after the contractual prohibition to payment has been
removed.  Upon the occurrence or
existence of any Event of Default described in Sections 5.3 and 5.4,
immediately and without notice, all outstanding Obligations payable by Issuer
hereunder shall automatically become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived.  In addition to
the foregoing remedies, upon the occurrence or existence of any Event of
Default, Holder may exercise any other right power or remedy permitted by law,
either by suit in equity or by action at law, or both.

 

5

 

7.                                       Holders Representative.  Each Holder constituted and appointed Michael D.
Killgore as Holders’ Representative pursuant to the terms and provisions of Section 9.19
of the Purchase Agreement.

 

8.                                       Certain Covenants. 
While any amount is outstanding under this Note, without the prior
written consent of the Holders’ Representative, Issuer shall not:

 

8.1                                 Incur any obligations
for seller financing associated with the acquisition of a business (whatever
the structure) without
making it contractually subordinated in right of payment to the payment of this
Note; or

 

8.2                                 make any payment on
account of indebtedness of Issuer that has been contractually subordinated in
right of payment to this Note; or

 

8.3                                 except for regular, in
terms of purpose, quarterly dividends, make any distribution or declare or pay
any dividends (in cash or other property, other than common stock); or

 

8.4                                 if Issuer is not
permitted by the senior lender and/or surety company that are parties to the
Subordination Agreements to make the prepayments required under Section 2.1(a),
Issuer shall not consummate the transaction that would have required the
prepayment; or

 

8.5                                 purchase, acquire,
redeem, or retire any of any common stock of Issuer, whether now or hereafter
outstanding, unless the principal balance of this Note is less than Ten Million
Dollars ($10,000,000).

 

9.                                       Successors and Assigns. 
Subject to the restrictions on transfer described in Sections 11
and 12, the rights and obligations of Issuer and Holders of this Note shall
be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.

 

10.                                 Waiver and Amendment. 
Any provision of this Note may be amended, waived or modified upon the
written consent of Issuer and the Holders’ Representative.

 

11.                                 Transfer of this Note. 
With respect to any offer, sale, assignment or other disposition of this
Note, any Holder will give written notice to Issuer prior thereto, describing
the identity of the assignee thereof, and such transfer shall be effectively
following the written consent of Issuer which shall not be unreasonably
withheld.

 

12.                                 Assignment by Issuer. 
Neither this Note nor any of the rights, interests or obligations
hereunder may be assigned, by operation of law or otherwise, in whole or in
part, by Issuer without the prior written consent of the Holders’
Representative and any such assignment without such written consent shall be
void.

 

13.                                 Notices.  All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given on the
earlier of (a) when actually received, (b) two business days after it
is sent by overnight courier, or (c) two business days after it is sent by

 

6

 

registered
or certified mail (return receipt requested, postage prepaid) and addressed to
the intended recipient as set forth below:

 

If to Holders or Holders’
Representative:

 

Donald B. Bonaventure

James Construction
Group

11200 Industriplex Boulevard, Suite 150

Baton Rouge, LA 70809

Telephone:                      (225) 906-1110

Facsimile:                           (225) 295-4838

 

7

 

Copy to:                                                                                                  KEAN, MILLER, HAWTHORNE,
D’ARMOND,

McCOWAN & JARMAN, L.L.P.

Post Office Box 3513 (70821)

Suite 1800, One American Place

Baton Rouge, Louisiana 70802

Telephone:                      (225) 382-3414

Facsimile:                           (225) 215-4014

Attn: Mr. G. Blane Clark, Jr.

 

And:                                                                                                                     Stefani &
Stefani, Professional Corporation

512 E. Eleven Mile Road

Royal Oak, MI 
48067

Attn: Michael L. Stefani

 

If to Issuer:                                                                                   PRIMORIS SERVICES
CORPORATION

26000 Commercentre Drive

Lake Forest, CA  92630

Telephone:                      (949) 598-9242

Facsimile:                           (949) 595-5544

Attn:                    General Counsel

 

Copy to:                                                                                                  Rutan & Tucker,
LLP

611 Anton Blvd., Suite 1400

Costa Mesa, CA 92626

Telephone:                      (714) 641-5100

Facsimile:                           (714) 546-9035

Attn:                    George Wall, Esq.

 

Either Party may send any
notice, request, demand, claim, or other communication hereunder to the
intended recipient at the address set forth above using any other means
(including personal delivery, expedited courier, messenger service, telecopy,
telex, ordinary mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless
and until it actually is received by the intended recipient.  Either Party may change the address to which
notices, requests, demands, claims, and other communications hereunder are to
be delivered by giving the other Party notice in the manner herein set forth.

 

14.                                 Payment. 
Payment shall be made in lawful tender of the United States.

 

15.                                 Usury. 
In the event any interest is paid on this Note which is deemed to be in
excess of the then legal maximum rate, then that portion of the interest
payment representing an amount in excess of the then legal maximum rate shall
be deemed a payment of principal and applied against the principal of this
Note.

 

16.                                 Expenses; Waivers. 
Issuer agrees to pay all costs and expenses of collection incurred
by the Holders in connection with enforcement of this Note whether incurred
prior to or after an action is instituted by Holders. If action is instituted to collect this
Note, the non-prevailing party promises to pay all costs and expenses,
including, without limitation, reasonable 

 

8

 

attorneys’ fees, expert
fees and all other costs, incurred by the prevailing party in connection with
such action. Such expenses, costs and fees include but are not
limited to those which may be incurred in connection with all appearances and
other activity in bankruptcy or insolvency proceedings involving the Issuer or
the enforcement of the Note, the defense of any claims or causes of action
against the Holders, and in the negotiation or settlement by the Holders of any
modification or compromise, or request for same, regarding the performance by
Issuer of any of its obligations hereunder, all without regard to any statutory,
judicial, administrative or other schedule for reimbursement or payment of
legal fees.  Issuer hereby waives notice of default,
presentment or demand for payment, protest or notice of nonpayment or dishonor
and all other notices or demands relative to this instrument.

 

17.                                 Governing Law; Venue. 
This Note and all actions arising out of or in connection with this Note
shall be governed by and construed in accordance with the laws of the State of
Delaware, without regard to the conflicts of law provisions of the State of
Delaware, or of any other state. Venue for all proceedings shall be in Harris
County, Texas.  Each of the Parties submits to the exclusive jurisdiction of any federal
court sitting in the State of Texas, County of Harris, in any action or
proceeding arising out of or relating to this Note and agrees that all claims
in respect of the action or proceeding may be heard and determined in any such
court.  Each Party also agrees not to
bring any action or proceeding arising out of or relating to this Note in any
other court.  Each of the Parties waives
any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security that might
be required of the other Party with respect thereto.  Either Party may make service on the other
Party by sending or delivering a copy of the process to the Party to be served
at the address and in the manner provided for the giving of notices in Section 13
above.  Nothing in this Section 17,
however, shall affect the right of either Party to serve legal process in any
other manner permitted by law or at equity. 
Each Party agrees that a final judgment in any action or proceeding so
brought shall be conclusive and may be enforced by suit on the judgment or in
any other manner provided by law or at equity.

 

18.                                 Failure or Indulgence
Not Waiver.
No failure or delay on the part of the Holders in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privileges. All
rights and remedies existing hereunder are cumulative to, and not exclusive of,
any rights or remedies otherwise available.

 

9

 

IN WITNESS WHEREOF,
Issuer has caused this Note to be issued as of the date first written above.

 

 

	
   

  	
  PRIMORIS SERVICES CORPORATION,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/BRIAN PRATT

  
	
   

  	
  Brian Pratt, Chief Executive Officer, President and
  Chairman of the Board

  

 

 

EXHIBITS:

 

A                                      List of Holders and Principal Amounts

B                                        Subordination Agreements

 

[Signature
page to Promissory Note]

 

10

 

EXHIBIT A

 

HOLDERS AND
PRINCIPAL AMOUNTS

 

	
   

  	
   

  	
  Note Allocation(1)

  	
   

  
	
  Family Members

  	
   

  	
   

  	
   

  
	
  Dominic
  Iafrate

  	
   

  	
  $

  	
  8,492,307.69

  	
   

  
	
  Angelo
  Iafrate

  	
   

  	
  8,492,307.69

  	
   

  
	
  Trust
  for Stephen M. Iafrate

  	
   

  	
  7,076,923.08

  	
   

  
	
  Trust
  for Dominic A. Iafrate

  	
   

  	
  7,076,923.08

  	
   

  
	
  Trust
  for Jaclyn Iafrate

  	
   

  	
  4,953,846.15

  	
   

  
	
  Trust
  for Donielle M. Iafrate

  	
   

  	
  4,953,846.15

  	
   

  
	
  Trust
  for Anthony C. Iafrate

  	
   

  	
  4,953,846.15

  	
   

  
	
   

  	
   

  	
  46,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Management Members

  	
   

  	
   

  	
   

  
	
  Mike
  Killgore

  	
   

  	
  1,428,571.43

  	
   

  
	
  Donald
  Bonaventure

  	
   

  	
  1,428,571.43

  	
   

  
	
  Danny
  Hester

  	
   

  	
  1,428,571.43

  	
   

  
	
  Rodney
  James

  	
   

  	
  642,857.14

  	
   

  
	
  Charles
  Poole

  	
   

  	
  642,857.14

  	
   

  
	
  Bruce
  Hix

  	
   

  	
  535,714.29

  	
   

  
	
  Conrad
  Bourg

  	
   

  	
  428,571.43

  	
   

  
	
  Tommy
  Lasseigne

  	
   

  	
  321,428.57

  	
   

  
	
  Kan
  Janke

  	
   

  	
  321,428.57

  	
   

  
	
  Thomas
  Love Jr

  	
   

  	
  321,428.57

  	
   

  
	
   

  	
   

  	
  7,500,000.00

  	
   

  
	
  Total
  Note

  	
   

  	
  $

  	
  53,500,000.00

  	
   

  

 

 

EXHIBIT B

 

SUBORDINATION
AGREEMENT

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