-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DBlnYVIJlCwwmGMap1xRcuBoreTx7psHdCrVEQ4efCwV4N4y20fH2cXMw0LabEq8 MSdmaadiPyiFYysoj9WW7Q== 0000927356-00-000466.txt : 20000320 0000927356-00-000466.hdr.sgml : 20000320 ACCESSION NUMBER: 0000927356-00-000466 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 23 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000317 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEADOW VALLEY CORP CENTRAL INDEX KEY: 0000934749 STANDARD INDUSTRIAL CLASSIFICATION: WATER, SEWER, PIPELINE, COMM AND POWER LINE CONSTRUCTION [1623] IRS NUMBER: 880328443 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-25428 FILM NUMBER: 573013 BUSINESS ADDRESS: STREET 1: PO BOX 60726 CITY: PHOENIX STATE: AZ ZIP: 85082 BUSINESS PHONE: 6024375400 MAIL ADDRESS: STREET 1: P O BOX 60726 CITY: PHOENIX STATE: AZ ZIP: 85082 10-K 1 FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 0-25428 MEADOW VALLEY CORPORATION (Exact name of registrant as specified in its charter) Nevada 88-0328443 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 4411 South 40th Street, Suite D-11, Phoenix, AZ 85040 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (602) 437-5400 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Title of each class: Name of exchange on which registered: ------------------- ------------------------------------ Common stock, $.001 par value Nasdaq National Market Common stock purchase warrants Nasdaq National Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ___ --- Indicated by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. On February 16, 2000, the aggregate market value of the registrant's voting stock held by non-affiliates was $11,237,196. On February 16, 2000, there were 3,501,250 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE The registrant incorporates by reference into Part III of this Report, information contained in its definitive proxy statement disseminated in connection with its Annual Meeting of Shareholders for the year ended December 31, 1999. 1 MEADOW VALLEY CORPORATION ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999 TABLE OF CONTENTS
PART I PAGE Item 1. Business 3 Item 2. Properties 10 Item 3. Legal Proceedings 10 Item 4. Submission of Matters to a Vote of Security Holders 10 PART II Item 5. Market for the Registrant's Common Stock and Related Stockholders Matters 10 Item 6. Selected Financial Data 11 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 18 Item 8. Financial Statements and Supplementary Data 18 Item 9. Change in and Disagreements with Accountants on Accounting and Financial Disclosure 18 PART III Item 10. Directors and Executive Officers of the Registrant 18 Item 11. Executive Compensation 18 Item 12. Security Ownership of Certain Beneficial Owners and Management 19 Item 13. Certain Relationships and Related Transactions 19 PART IV Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K 19
2 PART I Item 1. Business General The following is a summary of certain information contained in this Report and is qualified in its entirety by the detailed information and financial statements that appear elsewhere herein. Except for the historical information contained herein, the matters set forth in this Report include forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties are detailed throughout this Report and will be further discussed from time to time in the Company's periodic reports filed with the Commission. The forward-looking statements included in this Report speak only as of the date hereof. Meadow Valley Corporation (the "Company") was incorporated in Nevada on September 15, 1994. On October 1, 1994, the Company purchased all of the outstanding Common Stock of Meadow Valley Contractors, Inc. ("MVC") for $11.5 million comprised of a $10 million promissory note and $1.5 million paid by the issuance of 500,000 restricted shares of the Company's Common Stock valued at $3.00 per share. On January 4, 1999, the $10 million promissory note was paid in full. MVC was founded in 1980 as a heavy construction contractor and has been engaged in that activity since inception. References to the Company's history include the history of MVC. On October 16, 1995, the Company sold 1,675,000 Units of its securities to the public at $6.00 per Unit (the "Public Offering"). Each Unit consisted of one share of $.001 par value common stock and one common stock purchase warrant. In November 1995, the Company sold an additional 251,250 Units pursuant to its underwriters' overallotment option. The Company, through its subsidiaries, primarily operates as a heavy construction contractor specializing in infrastructure projects including the construction of bridges and overpasses, channels, roadways, highways and airport runways. The Company generally serves as the prime contractor for public sector customers (such as federal, state and local governmental authorities) in the states of Nevada, Arizona, Utah and New Mexico. The Company primarily seeks public sector customers because public sector projects are less cyclical than private sector projects, payment is more reliable, work required by the project is generally standardized and little marketing expense is incurred in obtaining projects. The Company owns and leases portable hot mix asphalt plants and related paving equipment and a rubberized asphalt plant. The asphalt paving capabilities provide the Company the opportunity to expand its existing geographic market, enhance its construction operations in its existing market, improve its competitiveness and may generate increased revenues on projects that call for large quantities of asphaltic concrete, recycled asphalt or rubberized asphalt. The Company had a project backlog of approximately $104 million at December 31, 1999, which included the remainder of a $94.6 million portion of the reconstruction of the core of the interchange at I-15 and US 95 in Las Vegas, NV, the remainder of $87.8 million of projects which are portions of the Beltway Continuation projects in Las Vegas, Nevada, the remainder of a $29.3 million portion of the State Route 87 Continuation, in Sunflower, AZ, the remainder of a $17.5 million portion of the Reconstruction of US 89, in Cherry Hills, UT and the $13.0 million Storm Drain Channel Construction, in Chandler, AZ. The Company's backlog includes approximately $100 million of work that is scheduled for completion during 2000. The Company has acted as the prime contractor on projects funded by a number of governmental authorities, including the Federal Highway Administration, the Arizona Department of Transportation, the Nevada Department of Transportation, the Utah Department of Transportation, the Clark County (Nevada) Department of Public Works, the Salt Lake City (Utah) Airport Authority, the New Mexico State Highway and Transportation Department and the City of Phoenix. In 1996, the Company expanded its Nevada construction industry activities with the formation of Ready Mix, Inc. ("RMI") as a wholly-owned subsidiary. RMI manufactures and distributes ready mix concrete and owns and operates a construction materials processing plant in the Las Vegas, Nevada area. RMI primarily targets prospective customers such as concrete subcontractors, prime contractors, home builders, commercial and industrial property developers, pool builders and homeowners. RMI began its ready mix concrete operation from its first location in March 1997 and began processing construction materials in November 1999. Financed with internal funds, a $2 million line of credit, notes payable and operating leases, RMI intends 3 to operate from two or more sites using at least 104 mixer trucks. During January 2000, the Company ordered 64 mixer trucks at an estimated cost of $8,400,000. In 1996, the Company formed Prestressed Products Incorporated ("PPI") as a wholly-owned subsidiary to design, manufacture and erect precast prestressed concrete building components for use on commercial, institutional and public construction projects throughout the Southwest. Product lines included architectural and structural building components and prestressed bridge girders for highway construction. During 1997, PPI began operations with a precast yard and concrete batch plant located on leased property adjacent to the Company's office in Moapa, Nevada. As a result of continuing operating losses, in June 1998, the Company adopted a formal plan (the "plan") to discontinue the operations of PPI. The plan included the completion of approximately $2.8 million of uncompleted contracts and the disposition of approximately $1.2 million of equipment. The Company recorded an estimated loss of $1,950,000 (net of income tax benefit of $1,300,000), related to the disposal of assets of PPI, which included a provision of $1,350,000 for estimated losses during the phase-out period of July 1, 1998 through June 30, 1999. During the twelve months ended December 31, 1998 and 1999, $1,134,112 and $598,172 of the expected losses were incurred (net of income tax benefit of $756,073 and $398,743). In 1999, the Company expanded its construction materials processing operations within its geographic area. During January 2000, the Company purchased equipment in the amount of $159,000 and has requested finance proposals for equipment totaling approximately $7,433,840, related to its construction materials processing operations. Business Strategy The Company seeks to grow revenue and improve profitability by pursuing the following business strategy: (i) Expand construction-related niche markets. The Company will continue to explore niche markets which may increase the Company's competitiveness, diversify its revenue base, increase project revenue and improve profitability. This may include acquiring equipment and personnel to increase the amount of work to be performed by the Company. (ii) Increase the Company's ownership and/or control of strategic aggregate resources and develop commercial construction materials production and sale operations to focus on increasing sales of construction materials to third parties. In recent years, the Company has successfully obtained mineral leases on a number of aggregate resources in Nevada, Arizona, Utah and New Mexico and will consider expansion into other western states. The Company intends to further develop its position as a commercial supplier and producer of aggregates and related materials such as ready mix concrete and asphalt. As a commercial supplier of construction materials, the Company will focus on sales to unrelated third parties engaged in residential and commercial construction, as well as public infrastructure. Control of aggregate resources may enhance the Company's competitiveness on new contract work that it performs and may generate additional revenue with improved profit margins on materials sold to third parties. (iii) Seek to acquire other businesses. The Company may seek to acquire other businesses that provide subcontracting services used by the Company in its projects, complement the Company's existing construction expertise or offer construction services similar to the Company in geographic locations not currently served by the Company. For certain projects, the Company may join with one or more companies to combine expertise, financial strength, and/or bonding capacity. Through joint ventures, the Company may elect to pursue projects which might otherwise exceed its staffing or bonding resources, including design-build type projects within the Company's existing market. (iv) Increase bonding capacity. The Company will continue to seek to increase its bonding capacity in order to allow it to increase its volume of bids and work. See "Insurance and Bonding." Market Overview The passage of the Transportation Equity Act for the 21st Century ("TEA 21") not only assured continued federal funding through 2003 for transportation infrastructure, but also substantially increased the levels of funding over the previous authorizing legislation. The increase in federal funds from TEA-21 combined with the existing high volume of infrastructure work in the healthy construction economies of the Company's markets leads the Company to believe that infrastructure construction (primarily highways, bridges, overpasses, tunnels and other transportation projects) in the western United States is substantial. 4 The increased federal funding from the TEA-21 legislation has yet to reach the construction industry with the impact originally expected. Federally-funded highway projects are administered through each respective state department of transportation and therefore, the rate at which federal funds are expended is contingent upon the execution of each individual state's capital improvement program. Since the passage of TEA-21, the pace at which federal funds have been invested in the infrastructure has been significantly less than originally projected. Construction industry belief is that the system has likely been constrained by some combination of funding, planning or availability of contractors, equipment or labor. It is expected that the effects of TEA-21 will become more visible in the year 2000. Some industry projections expect an overall increase in highway construction in the year 2000 to reach $6.1 billion or 12% more than 1999. Growth in the Company's current four-state market continues to outperform many areas of the country. The states of Arizona, Nevada and Utah remain among the leaders in key growth statistics such as population growth and employment gains. Between 1990 and 1998, Nevada and Utah were number one and two in overall housing growth. Arizona was fourth behind Idaho. The consensus of economic predictions indicates a slowing over the high growth rates experienced in recent years, but most indicators point toward a continuing healthy construction economy. While expected to diminish slightly from 1999, continuing positive growth in population and employment and the overall good health of the economy in the year 2000 in the Company's market should continue to provide funding for construction of key transportation facilities. Multi-billion dollar freeway construction programs in metropolitan Phoenix, Arizona and Las Vegas, Nevada are continuing to be funded by sales tax measures that are in addition to monies obtained from TEA-21 and other local user fees. The Company's commercial construction materials operations are impacted to a greater degree by the conditions of the residential and commercial sectors of the construction economy. Local economic forecasts for 2000 predict that residential and commercial construction in both Las Vegas, Nevada and Phoenix, Arizona areas will be less than 1999 levels but should still show positive growth. The primary customers of RMI, the Company's wholly-owned ready mix concrete subsidiary, are residential and commercial builders and subcontractors. As a result, the Company may be faced with increased competition from other local suppliers of ready mix concrete. RMI plans to increase its activity in the infrastructure portion of the market and may more frequently provide concrete to MVC. The Company believes the overall economic health in its existing market will present opportunities for improved performance. Operations In addition to the construction of highways, bridges, overpasses and airport runways, the Company constructs other heavy civil projects. From its Phoenix, Arizona corporate office and area offices in Phoenix, Arizona, Moapa, Nevada, Farmington, Utah and Ruidoso, New Mexico, the Company markets (primarily by responding to solicitations for competitive bids) and manages all of its projects. Project management is also located on-site to provide direct supervision to the operations. In addition to profitability, the Company considers a number of factors when determining whether to bid on a project, including the location of the project, likely competitors and the Company's current and projected workloads. The Company uses a computer-based project estimating system which reflects its bidding and construction experience and performs detailed quantity take-offs from bidding documents, which the Company believes helps identify a project's risks and opportunities. The Company develops comprehensive estimates with each project divided into phases and line items for which separate labor, equipment, material, subcontractor and overhead cost estimates are compiled. Once a project begins, the estimate provides the Company with a budget against which ongoing project costs are measured. There can be no assurance that every project will attain its budgeted costs. A number of factors can affect a project's profitability including weather, availability of a quality workforce and actual productivity rates. Each month the project manager updates the project's projected performance at completion by using actual costs-to-date and re-forecasted costs-to-complete for the balance of the work remaining. Regular review of these estimated costs-to-complete allow project, area and corporate management to be as responsive as possible to cost overruns or other problems that may affect profitability. The Company owns some of the equipment used in its business lines, including cranes, backhoes, scrapers, graders, loaders, trucks, trailers, pavers, rollers, construction material processing plants, batch plants and related equipment. The net book value of the Company's equipment at December 31, 1999 was approximately $15.1 million. During 1999, the Company acquired $6.5 million of equipment, related primarily to the construction material processing plants and additional equipment needed for the 5 added construction workload. The Company leases a significant portion of its equipment and attempts to keep the equipment as fully utilized as possible. Equipment may be rented on a short-term basis to subcontractors. The Company's corporate management oversees operational and strategic issues and, through the corporate accounting staff, provides administrative support services to subsidiary managers, area managers and individual project management at the project site. The latter are responsible for planning, scheduling and budgeting operations, equipment maintenance and utilization and customer satisfaction. Subsidiary managers, area managers and project managers monitor project costs on a daily and weekly basis while corporate management monitors such costs monthly. Raw materials (primarily concrete, aggregate and steel) used in the Company's operations are available from a number of sources. There are a sufficient number of materials suppliers within the Company's market area to assure the Company of adequate competitive bids for supplying such raw materials. Generally, the Company will obtain several bids from competing concrete, asphalt or aggregate suppliers whose reserves of such materials will normally extend beyond the expected completion date of the project. Costs for raw materials vary depending upon project duration, construction season, or other factors; but, generally, prices quoted to the Company for raw materials are fixed for the project's duration. The Company initiated its commercial construction materials operations in the first quarter 1997 with the start-up of RMI. RMI currently operates one concrete batch plant in North Las Vegas with 40 ready mix trucks. All of RMI's internal sand and gravel needs are manufactured from its own rock quarry in Moapa, Nevada. Production capacity at the Moapa quarry was increased substantially during 1999. Additional sales staff was added to promote sales of rock and sand products and landscape rock resulting from the Company's increased production capacity. Currently, the Company sells rock and sand products from its other commercial materials production sites in Ruidoso, New Mexico, Alamagordo, New Mexico and Prescott Valley, Arizona. The Company intends to expand its production capabilities at its Prescott Valley quarry. Recently, the Company obtained the rights to mine sand and gravel from sites in Nephi and Payson, Utah and expects to begin producing and selling sand and gravel, ready mix concrete and asphalt from these sites during the year 2000. The Company is negotiating the acquisition of mineral rights on properties in Phoenix, Arizona and Henderson, Nevada. If these mineral rights can be successfully acquired, the Company intends to accelerate the development of these properties into producing commercial sites as soon as possible. Ultimately, it is the Company's intent to generate approximately one-third of its revenue from commercial material sales. Projects and Customers The Company specializes in public sector construction projects and its principal customers are the state departments of transportation in Nevada, Arizona, Utah and New Mexico and bureaus and departments of municipal and county governments in those states. For the year ended December 31, 1999, revenue generated from six projects in Nevada, Arizona and Utah represented 67% of the Company's revenue. The discontinuance of any projects, a general economic downturn or a reduction in the number of projects let out for bid in any of the states in which the Company operates, could have an adverse effect on the Company's results of operations. For the years ended December 31, 1997, 1998 and 1999, the Company recognized a significant portion of its consolidated revenue from three customers (shown as an approximate percentage of consolidated revenue): For the Years Ended December 31, ------------------------------------ 1997 1998 1999 ------------------------------------ Arizona Department of Transportation... 27.8% 29.9% 26.2% Clark County General Services.......... 33.0% 12.5% 28.7% Nevada Department of Transportation.... 7.6% 24.3% 17.2% Backlog The Company's backlog (anticipated revenue from the uncompleted portions of awarded projects) was approximately $104 million at December 31, 1999, compared to approximately $220 million at December 31, 1998. At December 31, 1999, the Company's backlog included approximately $100 million of work that is scheduled for completion during 2000. Accordingly, revenue in 2000 and 2001 will be significantly reduced if the Company is unable to obtain substantial new projects in 2000. The Company includes a construction project in its backlog at such time as a contract is awarded or a firm letter of commitment is obtained. The Company believes that its backlog figures are firm, subject to provisions contained in its contracts which allow 6 customers to modify or cancel the contracts at any time upon payment of a relatively small cancellation fee. The Company has not been materially adversely affected by contract cancellations or modifications in the past. Revenue is impacted in any one period by the backlog at the beginning of the period. The Company's backlog depends upon the Company's success in the competitive bid process. Bidding strategies and priorities may be influenced and changed from time to time by the level of the Company's backlog and other internal and external factors. A portion of the Company's anticipated revenue in any year is not reflected in its backlog at the start of the year because some projects are initiated and completed in the same year. Competition The Company believes that the primary competitive factors as a prime contractor in the construction industry are price, reputation for quality work, financial strength, and knowledge of local market conditions and estimating abilities. The Company believes that it competes favorably with respect to each of the foregoing factors. Most of the Company's projects involve public sector work for which contractors are first pre-qualified to bid and then are chosen by a competitive bidding process, primarily on the basis of price. Because the Company's bids are often determined by the cost to it of subcontractor services and materials, the Company believes it is often able to lower its overall construction bids due to its prompt payments to, consistent workloads for, and good relationships with its subcontractors and suppliers. The Company competes with a large number of small owner/operator contractors that tend to dominate smaller (under $4 million) projects. When bidding on larger infrastructure projects, the Company also competes with larger, well capitalized regional and national contractors (including Granite Construction Incorporated, Peter Kiewit Sons', Inc., Sundt Corp. and Morrison Knudsen), many of whom have larger net worths, higher bonding capacities and more construction personnel than the Company. Due to currently favorable market conditions in Nevada, Arizona, Utah and New Mexico, which have resulted in an increase in heavy construction projects in these states, additional competition may be expected. Such additional competition could reduce the Company's profit margins on certain projects. The Company has received single project bond approval up to $110 million and has an aggregate program bond capacity of over $300 million. The Company believes its bonding capacity is sufficient to sustain anticipated growth. Larger competitors typically have unlimited bonding capacity and, therefore, may be able to bid on more work than the Company. Except for bonding capacity, the Company does not believe it is at a competitive disadvantage in relation to its larger competitors. With respect to its smaller competitors, the Company believes that its larger bonding capacity, long relationships with subcontractors and suppliers and the perceived stability of having been in business since 1980 may be competitive advantages. The Company does not believe that the competitive environment is materially different in other western states in which the Company may expand. Initially, the Company will be at a competitive disadvantage in new geographic locations until it obtains information on those locations and develops relationships with local subcontractors and suppliers. To some extent, the Company faces the same competitors for sales of construction materials as it does for its contracting work. It is common for prime contractors in the heavy highway construction industry to develop some degree of vertical integration into construction materials. Companies such as Granite Construction, Kiewitt, Oldcastle and LaFarge, among others, provide contracting services and produce construction materials. The quality of the product and the customer service are often just as important, if not more so, than price in successfully marketing construction materials. Vertical integration into construction materials may occasionally allow the Company to be more competitive in its bidding for construction contracts. However, the Company's marketing strategy is to make third party sales its top priority. To accomplish this, the Company recognizes that its construction materials customers must receive a consistently high quality product and first-priority service. The Contract Process The Company's projects are obtained primarily through competitive bidding and negotiations in response to advertisements by federal, state and local government agencies and solicitations by private parties. The Company submits bids after a detailed review of the project specifications, an internal review of the Company's capabilities and equipment availability and an assessment of whether the project is likely to attain targeted profit margins. The Company owns, leases, or is readily able to rent, any equipment necessary to complete the projects upon which it bids. After computing estimated costs of the project to be bid, the Company adds its desired profit margin before submitting its bid. The Company believes that success in the competitive bidding process involves (i) being selective on projects bid upon in order to conserve resources, (ii) identifying projects which require the Company's specific expertise, (iii) becoming familiar with all aspects of the project to avoid costly bidding errors and 7 (iv) analyzing the local market to determine the availability and cost of labor and the degree of competition. Since 1987, the Company has been awarded contracts for approximately 21% of the projects upon which it has bid. A substantial portion of the Company's revenue is derived from projects that involve "fixed unit price" contracts under which the Company is committed to provide materials or services at fixed unit prices (such as dollars per cubic yard of earth or concrete, or linear feet of pipe). The unit price is determined by a number of factors including haul distance between the construction site and the warehouses or supply facilities of local material suppliers and to or from disposal sites, site characteristics and the type of equipment to be used. While the fixed unit price contract generally shifts the risk of estimating the quantity of units for a particular project to the customer, any increase in the Company's unit cost over its unit bid price, whether due to inefficiency, faulty estimates, weather, inflation or other factors, must be borne by the Company. Most public sector contracts provide for termination of the contract at the election of the customer. In such event the Company is generally entitled to receive a small cancellation fee in addition to reimbursement for all costs it incurred on the project. Many of the Company's contracts are subject to completion requirements with liquidated damages assessed against the Company if schedules are not met. The Company has not been materially adversely affected by these provisions in the past. Contracts often involve work periods in excess of one year. Revenue on uncompleted fixed price contracts is recorded under the percentage of completion method of accounting. The Company begins to recognize revenue on its contracts when it first accrues direct costs. Pursuant to construction industry practice, a portion of billings, generally not exceeding 10%, may be retained by the customer until the project is completed and all obligations of the contractor are paid. The Company has not been subject to a loss in connection with any such retention. The Company acts as prime contractor on most of its construction projects and subcontracts certain jobs such as electrical, mechanical, guardrail and fencing, signing and signals, foundation drilling, steel erection and other specialty work to others. As prime contractor, the Company bills the customer for work performed and pays the subcontractors from funds received from the customer. Occasionally the Company provides its services as a subcontractor to another prime contractor. As a subcontractor, the Company will generally receive the same or similar profit margin as it would as a prime contractor, although revenue to the Company will be smaller because the Company only contracts a part of the project. As prime contractor, the Company is responsible for the performance of the entire contract, including work assigned to subcontractors. Accordingly, the Company is subject to liability associated with the failure of subcontractors to perform as required under the contract. The Company occasionally requires its subcontractors to furnish bonds guaranteeing their performance, although affirmative action regulations require the Company to use its best efforts to hire minority subcontractors for a portion of the project and some of these subcontractors may not be able to obtain surety bonds. On average, the Company has required performance bonds for less than 10% of the dollar amount of its subcontracted work. However, the Company is generally aware of the skill levels and financial condition of its subcontractors through its direct inquiry of the subcontractors and contract partners of the subcontractors, as well as its review of financial information provided by the subcontractors and third party reporting services including credit reporting agencies and bonding companies. The Company has not been materially adversely affected by subcontractor related losses over the past five years. As the Company expands into new geographic areas, it expects to obtain references and examine the financial condition of prospective subcontractors before entering into contracts with them, requiring bonding as deemed appropriate. In connection with public sector contracts, the Company is required to provide various types of surety bonds guaranteeing its own performance. The Company's ability to obtain surety bonds depends upon its net worth, working capital, past performance, management expertise and other factors. Surety companies consider such factors in light of the amount of the Company's surety bonds then outstanding and the surety companies' current underwriting standards, which may change from time to time. See "Insurance and Bonding". Insurance and Bonding The Company maintains general liability and excess liability insurance covering its owned and leased construction equipment and workers' compensation insurance in amounts it believes are consistent with its risks of loss and in compliance with specific insurance coverage required by its customers as a part of the bidding process. The Company carries liability insurance of $27 million per occurrence, which management believes is adequate for its current operations and consistent with the requirements of projects currently under construction by the Company. The Company carries builders risk insurance on a limited number of projects and is dependent upon management's assessment of the project risk versus the cost of insurance. 8 The Company is required to provide a surety bond on most of its projects. The Company's ability to obtain bonding, and the amount of bonding required, is primarily determined by the Company's management experience, net worth, liquid working capital (consisting of cash and accounts receivable in excess of accounts payable and accrued liabilities), the Company's performance history, the number and size of projects under construction and other factors. Surety companies consider such factors in light of the amount of the Company's surety bonds then outstanding and the surety companies' current underwriting standards, which may change from time to time. The larger the project and/or the more projects in which the Company is engaged, the greater the Company's bonding, net worth and liquid working capital requirements. Bonding requirements vary depending upon the nature of the project to be performed. The Company generally pays a fee to bonding companies of 1/2% to 1% of the amount of the contract to be performed. Because these fees are generally payable at the beginning of a project, the Company must maintain sufficient working capital to satisfy the fee prior to receiving revenue from the project. The Company has received single project bonding approval up to $110 million and has an aggregate program bond capacity of over $300 million. Marketing The Company obtains its projects primarily through the process of competitive bidding. Accordingly, the Company's marketing efforts are limited to subscribing to bid reporting services and monitoring trade journals and other industry sources for bid solicitations by various government authorities. In response to a bid request, the Company submits a proposal detailing its qualifications, the services to be provided and the cost of the services to the soliciting entity which then, based on its evaluation of the proposals submitted, awards the contract to the successful bidder. Generally, the contract for a project is awarded to the lowest bidder, although other factors may be taken into consideration such as the bidder's track record for compliance with bid specifications and procedures and its construction experience. A more focused marketing effort and greater emphasis on customer care and service are important tools in promoting sales of construction materials. Certification of plants and facilities must be obtained and maintained in order to comply with certain project and specification requirements. Membership and participation in selected industry associations help increase the Company's exposure to potential clients and are two means by which the Company stays informed on industry developments and future prospects within the marketplace. Building and maintaining customer relations and reputation for quality work are essential elements to the marketing efforts of RMI. Government Regulation The Company's operations are subject to compliance with regulatory requirements of federal, state and municipal authorities, including regulations covering labor relations, safety standards, affirmative action and the protection of the environment including requirements in connection with water discharge, air emissions and hazardous and toxic substance discharge. Under the Federal Clean Air Act and Clean Water Act, the Company must apply water or chemicals to reduce dust on road construction projects and to contain water contaminants in run-off water at construction sites. The Company may also be required to hire subcontractors to dispose of hazardous wastes encountered on a project. The Company believes that it is in substantial compliance with all applicable laws and regulations. However, amendments to current laws or regulations imposing more stringent requirements could have a material adverse effect on the Company. Employees On December 31, 1999, the Company employed approximately 68 salaried employees (including its management personnel and executive officers) and approximately 417 hourly employees. The number of hourly employees varies depending upon the amount of construction in progress. For the year ended December 31, 1999, the number of hourly employees ranged from approximately 417 to approximately 640 and averaged approximately 563. At December 31, 1999, the Company is party to four project agreements in Arizona with the Arizona State District Council of Carpenters, AFL-CIO which covers approximately 7% of the Company's hourly workforce. At December 31, 1999, the Company believes its relations with its employees are satisfactory. 9 Item 2. Properties The following properties were leased by the Company at December 31, 1999: (1) 8,300 square feet of executive office space at 4411 South 40th Street, Suites D-10 and D-11, Phoenix, Arizona, 85040, pursuant to a lease which expires in December 2000, at a monthly rental rate of $8,026 per month. (2) 2,000 square feet of office space for the Company's ready mix operations, at 3430 E. Flamingo, Suite 100, Las Vegas, Nevada, pursuant to a lease that expires in October 2000, at a monthly rental rate of $2,692. (3) 2,000 square feet of office space at 1501 Highway 168, Moapa, Nevada 89025, on a month-to-month basis, at a rental rate of $840 per month, from a Company controlled by Kim A. Marshall, a principal stockholder. The Company believes that its Moapa rental rate is fair, reasonable and consistent with rates charged by unaffiliated third parties in the same market area. The Company owns approximately five acres of land at 109 W. Delhi, North Las Vegas, Nevada 89030, which is used for the manufacturing of ready mix concrete. The Company owns approximately 24.5 acres of land in Moapa, Nevada, which is currently being held for sale. The Company has determined that the above properties are sufficient to meet the Company's current needs. Item 3. Legal Proceedings The Company is a party to legal proceedings in the ordinary course of its business. The Company believes that the nature of these proceedings (which generally relate to disputes between the Company and its subcontractors, material suppliers or customers regarding payment for work performed or materials supplied) are typical for a construction firm of its size and scope, and no pending proceedings are material to its financial condition. Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the year ended December 31, 1999. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters The Company's Common Stock has been listed on the Nasdaq National Market since October 1995 and is traded under the symbol "MVCO". The following table represents the high and low closing prices for the Company's Common Stock on the Nasdaq National Market. 1998 1999 --------------------------------------- High Low High Low --------------------------------------- First Quarter.......... 6 5/8 5 1/8 5 7/16 4 Second Quarter ...... 7 5 1/2 4 3/4 4 Third Quarter ........ 7 1/4 5 4 9/16 3 15/16 Fourth Quarter ....... 6 1/4 4 5/8 4 3/8 3 3/8 Holders of Record As of February 16, 2000, there were 675 record and beneficial owners of the Company's Common Stock. 10 Item 6. Selected Financial Data Years Ended December 31, - ------------------------
Income Statement Data: 1995 1996 1997 1998 1999 ----------- ------------ ------------ ------------ ------------ Revenue............................................. $90,048,523 $133,723,645 $146,273,286 $187,036,077 $210,002,272 Gross Profit........................................ 4,354,455 2,810,585 7,861,972 9,444,231 9,931,446 Income (loss) from Operations....................... 2,364,676 (255,072) 3,172,430 3,084,983 3,260,411 Interest Expense.................................... 1,116,464 611,828 624,048 435,358 209,872 Income (loss) from continuing operations before income taxes............................... 1,608,997 (30,410) 3,235,458 3,592,019 3,930,586 Net income (loss) from continuing operations........ 1,059,347 (37,531) 2,072,567 2,169,579 2,340,106 Discontinued Operations: Loss from discontinued operations (1)............. - (47,697) (860,952) (635,246) - Estimated loss on disposal of net assets of discontinued operations (2)..................... - - - (1,950,000) - Net income (loss)................................... 1,059,347 (85,228) 1,211,615 (415,667) - Basic net income (loss) per common share: Income (loss) from continuing operations.......... $.65 $(.01) $.58 $.60 $.67 Loss from discontinued operations................. - (.01) (.24) (.18) - Estimated loss on disposal of net assets of discontinued operations......................... - - - (.54) - Basic net income (loss) per common share............ $.65 $(.02) $.34 $(.12) $.67 Diluted net income (loss) per common share: Income (loss) from continuing operations.......... $.65 $(.01) $.57 $.60 $.66 Loss from discontinued operations................. - (.01) (.24) (.17) - Estimated loss on disposal of net assets of discounted operations........................... - - - (.54) - Diluted net income (loss) per common share.......... $.65 $(.02) $.33 $(.11) $.66 Basic weighted average common shares outstanding....................................... 1,641,663 3,601,250 3,601,250 3,601,250 3,518,510 Diluted weighted average common shares outstanding....................................... 1,641,663 3,601,250 3,651,360 3,644,651 3,529,705 Financial Position Data: Working capital..................................... $11,319,107 $ 8,689,123 $ 5,152,550 $ 5,760,414 $ 6,167,161 Total assets........................................ 28,909,786 42,171,030 47,737,762 49,297,063 58,425,361 Long-term debt...................................... 3,689,055 4,631,377 5,847,659 5,977,643 7,121,634 Stockholders' equity................................ 11,761,997 11,676,769 12,888,384 12,472,717 14,812,823
(1) Includes the net income tax benefit of $28,756, $443,520 and $423,497 for the years ended December 31, 1996, 1997 and 1998 for the discontinued operations of Prestressed Products Incorporated. (2) Estimated loss on disposal of net assets of Prestressed Products Incorporated (net of income tax benefit of $1,300,000), including $1,350,000 for operating losses during the phase-out period. 11 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations General The following is a summary of certain information contained in this Report and is qualified in its entirety by the detailed information and financial statements that appear elsewhere herein. Except for the historical information contained herein, the matters set forth in this Report include forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties are detailed throughout the Report and will be further discussed from time to time in the Company's periodic reports filed with the Commission. The forward-looking statements included in the Report speak only as of the date hereof. The Company was incorporated in Nevada on September 15, 1994. On October 1, 1994, the Company purchased all of the outstanding Common Stock of Meadow Valley Contractors, Inc. ("MVC"), for $11.5 million comprised of a $10 million promissory note and $1.5 million paid by the issuance of 500,000 restricted shares of the Company's Common Stock valued at $3.00 per share. On January 4, 1999, the $10 million promissory note was paid in full. MVC was founded in 1980 as a heavy construction contractor and has been engaged in that activity since inception. References to the Company's history include the history of MVC. The Company, through its subsidiaries, primarily operates as a heavy construction contractor specializing in infrastructure projects including the construction of bridges and overpasses, channels, roadways, highways and airport runways. The Company generally serves as the prime contractor for public sector customers (such as federal, state and local governmental authorities) in the states of Nevada, Arizona, Utah and New Mexico. The Company primarily seeks public sector customers because public sector projects are less cyclical than private sector projects, payment is more reliable, work required by the project is generally standardized and little marketing expense is incurred in obtaining projects. The Company owns and leases portable hot mix asphalt plants and related paving equipment and a rubberized asphalt plant. The asphalt paving capabilities provide the Company the opportunity to expand its existing geographic market, enhance its construction operations in its existing market, improve its competitiveness and may generate increased revenues on projects that call for large quantities of asphaltic concrete, recycled asphalt or rubberized asphalt. In 1996, the Company expanded its Nevada construction industry activities with the formation of Ready Mix, Inc. ("RMI") as a wholly-owned subsidiary. RMI manufactures and distributes ready mix concrete and owns and operates a construction materials processing plant in the Las Vegas, NV area. RMI primarily targets prospective customers such as concrete subcontractors, prime contractors, home builders, commercial and industrial property developers, pool builders and homeowners. RMI began its ready mix concrete operation from its first location in March 1997 and began processing construction materials in November 1999. Financed with internal funds, a $2 million line of credit, notes payable and operating leases, RMI intends to operate from two or more sites using at least 104 mixer trucks. During January 2000, the Company ordered 64 mixer trucks at an estimated cost of $8,400,000. In 1996, the Company formed Prestressed Products Incorporated ("PPI") as a wholly-owned subsidiary to design, manufacture and erect precast prestressed concrete building components for use on commercial, institutional and public construction projects throughout the Southwest. Product lines included architectural and structural building components and prestressed bridge girders for highway construction. During 1997, PPI began operations with a precast yard and concrete batch plant located on leased property adjacent to the Company's office in Moapa, Nevada. As a result of continuing operating losses, in June 1998, the Company adopted a formal plan (the "plan") to discontinue the operations of PPI. The plan included the completion of approximately $2.8 million of uncompleted contracts and the disposition of approximately $1.2 million of equipment. The Company recorded an estimated loss of $1,950,000 (net of income tax benefit of $1,300,000), related to the disposal of assets of PPI, which included a provision of $1,350,000 for estimated losses during the phase-out period of July 1, 1998 through June 30, 1999. During the twelve months ended December 31, 1998 and 1999, $1,134,112 and $598,172 of the expected losses were incurred (net of income tax benefit of $756,073 and $398,743). In 1999, the Company expanded its construction materials processing operations within its geographic area. During January 2000, the Company purchased equipment in the amount of $159,000 and has requested finance proposals for equipment totaling 12 approximately $7,433,840, related to its construction materials processing operations. The Company's backlog (anticipated revenue from the uncompleted portions of awarded projects) was approximately $104 million at December 31, 1999, compared to approximately $220 million at December 31, 1998. At December 31, 1999, the Company's backlog included approximately $100 million of work that is scheduled for completion during 2000. Accordingly, revenue in 2000 and 2001 will be significantly reduced if the Company is unable to obtain substantial new projects in 2000. The Company includes a construction project in its backlog at such time as a contract is awarded or a firm letter of commitment is obtained. The Company believes that its backlog figures are firm, subject to provisions contained in its contracts which allow customers to modify or cancel the contracts at any time upon payment of a relatively small cancellation fee. The Company has not been materially adversely affected by contract cancellations or modifications in the past. Revenue is impacted in any one period by the backlog at the beginning of the period. The Company's backlog depends upon the Company's success in the competitive bid process. The Company's projects are obtained primarily through competitive bidding and negotiations in response to advertisements by federal, state and local government agencies and solicitations by private parties. The Company submits bids after a detailed review of the project specifications, an internal review of the Company's capabilities and equipment availability and an assessment of whether the project is likely to attain targeted profit margins. The Company owns, leases, or is readily able to rent, any equipment necessary to complete the projects upon which it bids. After computing estimated costs of the project to be bid, the Company adds its desired profit margin before submitting its bid. The Company believes that success in the competitive bidding process involves (i) being selective on projects bid upon in order to conserve resources, (ii) identifying projects which require the Company's specific expertise, (iii) becoming familiar with all aspects of the project to avoid costly bidding errors and (iv) analyzing the local market to determine the availability and cost of labor and the degree of competition. Revenue on uncompleted fixed price contracts is recorded under the percentage of completion method of accounting. The Company begins to recognize revenue on its contracts when it first accrues direct costs. Contracts often involve work periods in excess of one year and revisions in cost and profit estimates during construction are reflected in the accounting period in which the facts that require the revision become known. Losses on contracts, if any, are provided in total when determined, regardless of the percent complete. Claims for additional contract revenue are recognized only to the extent that contract costs relating to the claim have been incurred and evidence provides a legal basis for the claim. Pursuant to construction industry practice, a portion of billings, generally not exceeding 10%, may be retained by the customer until the project is completed and all obligations of the contractor are paid. The Company has not been subject to a loss in connection with any such retention. The Company has historically relied upon a small number of projects to generate a significant portion of its revenue. For instance, revenue generated from six projects represented 67% of the Company's revenue for the year ended December 31, 1999. Results for any one calendar quarter may fluctuate widely depending upon the stage of completion of the Company's active projects. 13 Results of Operations The following table sets forth statement of operations data expressed as a percentage of revenues for the periods indicated:
Years Ended December 31, --------------------------------- 1997 1998 1999 ------ ------ ------ Revenue.................................................... 100.00% 100.00% 100.00% Cost of revenue............................................ 94.63 94.95 95.27 Gross profit............................................... 5.37 5.05 4.73 General and administrative expenses........................ 3.21 3.40 3.18 Income from operations..................................... 2.16 1.65 1.55 Interest income............................................ .46 .46 .32 Interest expense........................................... (.43) (.23) (.10) Other income............................................... .01 .05 .10 Net income from continuing operations...................... 1.42 1.16 1.11 Loss from discontinued operations.......................... (.59) (.34) - Estimated loss on disposal of net assets of discontinued operations............................... - (1.04) - Net income (loss).......................................... .83 (.22) 1.11
Year Ended December 31, 1999 compared to Year Ended December 31, 1998 Revenue and Backlog. Revenue increased 12.3% to $210.0 million for the year ended December 31, 1999 from $187.0 million for the year ended December 31, 1998. The increase was the result of an increase in contract revenue of $22.7 million and a $.3 million increase in revenue generated from construction materials production and manufacturing sold to non-affiliates. Backlog decreased to $104.0 million at December 31, 1999 compared to $220.0 million at December 31, 1998. Revenue is impacted in any one period by the backlog at the beginning of the period. Gross Profit. As a percentage of revenue, consolidated gross profit margin decreased from 5.05% for 1998 to 4.73% for 1999. The decrease in gross profit margin was the result of (i) cost overruns on certain projects (ii) weather and execution difficulties related to a bridge substructure and (iii) costs to remove and repair a portion of a partially constructed bridge that was damaged by the collapse of a temporary support system, offset, in part, by increased profit recognition related to several projects nearing completion at December 31, 1999. Gross profit margins are affected by a variety of factors including construction delays and difficulties due to weather conditions, availability of materials, the timing of work performed by other subcontractors and the physical and geological condition of the construction site. General and Administrative Expenses. General and administrative expenses increased from $6,359,248 for 1998 to $6,671,035 for 1999. The increase resulted, in part, from costs related to various employee incentive plans amounting to $206,000, $44,000 in costs related to the education and training of corporate and area personnel, $69,000 in costs related to legal and accounting and a variety of other costs related to the administration of the corporate and area offices. Interest Income and Expense. Interest income for 1999 decreased to $668,928 from $856,191 for 1998 resulting primarily from a decrease in invested cash reserves. Interest expense decreased for 1999 to $209,872 from $435,358 for 1998 due primarily to a $1,000,000 reduction in related party debt during January 1999. Net Income from Continuing Operations After Income Taxes. Net income from continuing operations after income taxes was $2,340,106 for 1999 as compared to $2,169,579 for 1998. The increase resulted from higher revenues offset by increased general and administrative expenses and decreased gross profit margins, as well as lower interest income and lower interest expense. 14 Discontinued Operations. In June 1998, due to continuing operating losses, the Company decided to dispose of its wholly-owned subsidiary Prestressed Products Incorporated. Accordingly, the Company has reclassified the operations of Prestressed Products Incorporated as discontinued operations in the accompanying financial statements. In June 1998, the Company accrued a $1,950,000 charge (net of income tax benefit of $1,300,000), related to the disposal of assets for the Prestressed Products business, which included a provision of $1,350,000 for estimated operating losses during the phase-out period. During the years ended December 31, 1998 and 1999, $1,134,112 and $598,172 of the expected losses were incurred (net of income tax benefit of $756,073 and $398,743). Net Income (loss). Net income (loss), after discontinued operations, for 1999 was $2,340,106 as compared to $(415,667) for 1998. Year Ended December 31, 1998 compared to Year Ended December 31, 1997 Revenue and Backlog. Revenue increased 27.9% to $187.0 million for the year ended December 31, 1998 from $146.3 million for the year ended December 31, 1997. The increase was the result of an increase in contract revenue of $36.6 million and a $4.1 million increase in revenue generated from construction materials production and manufacturing sold to non-affiliates. Backlog increased to $220 million at December 31, 1998 compared to $214 million at December 31, 1997. Revenue is impacted in any one period by the backlog at the beginning of the period. Gross Profit. As a percentage of revenue, consolidated gross profit decreased from 5.37% in 1997 to 5.05% in 1998. The decrease in MVC's gross profit margin was the result of (i) cost overruns on certain projects (ii) subcontractor difficulties and (iii) costs related to plan or specification errors. Gross profit margins are affected by a variety of factors including construction delays and difficulties due to weather conditions, availability of materials, the timing of work performed by other subcontractors and the physical and geological condition of the construction site. General and Administrative Expenses. General and administrative expenses increased to $6,359,248 for 1998 from $4,689,542 for 1997. The increase resulted, in part, from costs associated with expansion into the white paving market amounting to approximately $323,000, $267,000 in corporate labor, $871,000 in costs related to various employee incentive plans, $120,000 in legal costs, $35,000 in costs related to the Company's safety plan, $32,000 in costs related to the administration of various employee incentive and benefit plans and a variety of other costs related to the administration of the corporate and area offices. Interest Income and Expense. Interest income for 1998 increased to $856,191 from $666,397 in 1997 due to an increase in cash reserves resulting primarily from billings in excess of costs and estimated earnings on uncompleted projects. Interest expense decreased in 1998 to $435,358 from $624,048, due to a $1,000,000 reduction in related party debt during the fourth quarter 1997 and a $1,500,000 reduction in 1998. At December 31, 1998 the remaining balance on the related party promissory note was $1,000,000. During January 1999, the Company made the final principal payment of $1,000,000. Net Income from Continuing Operations After Income Taxes. Net income from continuing operations after income taxes was $2,169,579 in 1998 as compared to $2,072,567 for 1997. The slight increase resulted from higher revenues offset by increased general and administrative expenses and decreased gross profit margins, as well as higher interest income and lower interest expense. Discontinued Operations. In June 1998, due to continuing operating losses, the Company decided to dispose of its wholly-owned subsidiary Prestressed Products Incorporated. Accordingly, the Company has reclassified the operations of Prestressed Products Incorporated as discontinued operations in the accompanying financial statements. In June 1998, the Company accrued a $1,950,000 charge (net of income tax benefit of $1,300,000), related to the disposal of assets for the Prestressed Products business, which included a provision of $1,350,000 for estimated operating losses during the phase-out period. During the year ended December 31, 1998, $1,134,112 of the expected losses were incurred (net of income tax benefit of $756,073). Net Loss. Net loss, after discontinued operations, for 1998 was $415,667. 15 Liquidity and Capital Resources The Company's primary need for capital has been to finance growth in its core business as a heavy construction contractor and its expansion into the other construction and construction related businesses heretofore discussed. Annual revenue has grown from approximately $146.3 million in 1997 to $210.0 million in 1999. Growth has resulted in the need for additional capital to finance increased receivables, inventory, retentions and capital expenditures, and to address fluctuations in the work-in-process billing cycle. The following table sets forth, for the periods presented, certain items from the Statements of Cash Flows of the Company.
For The Years Ended December 31, ---------------------------------------------- 1997 1998 1999 ------------ ----------- ------------ Cash Provided By (Used in) Operating Activities........... $ 7,545,827 $ 10,889,235 $ (2,248,335) Cash Provided By (Used in) Investing Activities........... (4,432,322) 331,646 681,483 Cash Used in Financing Activities......................... (1,738,860) (3,043,020) (3,248,684)
Although the Company may experience increased profitability as operations increase, cash may be reduced to finance receivables and for customer cash retention required under contracts subject to completion. Management continually monitors the Company's cash requirements to maintain adequate cash reserves, and the Company believes that its cash balances were and, together with the operating lines of credit described below, are sufficient. Cash provided by operating activities during 1997 amounted to $7.5 million, primarily the result of net income of $1.2 million, depreciation and amortization of $1.3 million, a decrease in accounts receivable of $2.8 million, an increase in net billings in excess of costs of $3.1 million, $.4 million increase in deferred income tax payable, offset by a decrease in accounts payable of $1.3 million. Cash provided by operating activities during 1998 amounted to $10.9 million, primarily the result of a decrease in accounts receivable of $8.7 million, depreciation and amortization of $1.8 million, an increase in net billings in excess of costs of $4.8 million, an increase in accrued liabilities of $1.3 million, offset by a decrease in accounts payable of $4.6 million and an increase in prepaid expenses and other of $.8 million and a net loss of $.4 million. Cash used in operating activities during 1999 amounted to $2.2 million, primarily the result of an increase in net costs in excess of billings of $7.9 million, an increase in inventory of $3.6 million, an increase in accounts receivable of $3.8 million, offset in part by an increase in accounts payable of $7.0 million, an increase in accrued liabilities of $.3 million, a decrease in prepaid expense and other of $.6 million, an increase in deferred income taxes payable of $.6 million, net income of $2.3 million and depreciation and amortization of $2.0 million. Cash used in investing activities during 1997 amounted to $4.4 million related primarily to an increase in net assets of discontinued operations of $2.6 million and the purchase of property and equipment of $1.8 million. Cash provided by investing activities during 1998 amounted to $.3 million related primarily to the decrease in related party note receivable of $.3 million, a decrease in net assets of discontinued operations of $2.5 million and proceeds from the sale of property and equipment in the amount of $.2 million, offset by the increase in restricted cash of $2.0 million and the purchase of property and equipment of $.6 million. The aforementioned note receivable related party was due from Paul R. Lewis, an officer and director of the Company. Cash provided by investing activities during 1999 amounted to $.7 million related primarily to a decrease in restricted cash of $1.5 million, the collection of a note receivable of $.2 million, proceeds from the sale of property and equipment of $.4 million and a decrease in net assets of discontinued operations of $.2 million, offset by the purchase of property and equipment of $1.4 million and the purchase of mineral rights of $.2 million. 16 Cash used in financing activities during 1997 amounted to $1.7 million including $.5 million repayment of a loan from a related party plus $.5 million prepayment of a loan from a related party and repayments of notes payable and capital lease obligations in the amount of $.7 million. Cash used in financing activities during 1998 amounted to $3.0 million including a total of $1.5 million of prepayments of a loan from a related party and repayments of notes payable and capital lease obligations in the amount of $1.5 million. Cash used in financing activities during 1999 amounted to $3.2 million including the $1.0 million prepayment of a loan from a related party and the repayments of notes payable and capital lease obligations in the amount of $2.2 million. The aforementioned note payable related party was due to a principal shareholder of the Company, the Richard C. Lewis Family Revocable Trust I. The Company currently has available from a commercial bank a $2 million operating line of credit at an interest rate of the commercial bank's prime plus .50% ("line of credit"). At December 31, 1999, and as of the filing date of this report, nothing had been drawn on the line of credit. Under the line of credit, the Company is required to maintain certain levels of working capital, to promptly pay all its obligations and is precluded from conveying, selling or leasing all or substantially all of its assets. At December 31, 1999, the Company was in full compliance with all such covenants and there are no material covenants or restrictions in the line of credit which the Company believes would impair its operations. The line of credit expires September 15, 2000. During January 2000, the Company solicited finance proposals for equipment totaling $7,433,840, related to its construction materials processing operations. In addition, the Company ordered 64 mixer trucks at an estimated cost of $8,400,000. The Company anticipates the equipment and mixer trucks will be financed using notes payable and/or operating leases. In February 2000, the Company ordered an asphalt hot mix plant, which is included in the solicited finance proposals, with an estimated cost of $1,900,000. The Company anticipates that a substantial portion of the costs associated with a planned second ready-mix plant and related equipment will be financed through bank financing and operating leases. In addition, the Company is currently leasing approximately 40 ready-mix trucks with annual lease payments of approximately $882,000. Management believes that the Company's cash reserves, together with its lines of credit and its capacity to enter into other financing arrangements are sufficient to fund its cash requirements for the next 12 months and that the Company's working capital will be adequate to fund its short term and long term requirements. Impact of Inflation The Company believes that inflation has not had a material impact on its operations. However, substantial increases in labor costs, worker compensation rates and employee benefits, equipment costs, material or subcontractor costs could adversely affect the operations of the Company for future periods. Year 2000 At this time, the Company has not been adversely affected by the Year 2000. The Company does not anticipate any future disruptions to business, but cannot be assured that any disruptions to business arising from customers or vendors may not affect its operations. Known and Anticipated Future Trends and Contingencies During 1998 and early 1999, the Company was the focal point of a union organizing effort spearheaded by the Building and Trades Organizing Project ("BTOP"). In mid-1999 the BTOP reduced its presence in the Las Vegas area and, as a result, the Company has currently ceased being the target of their organizing activities. Subject to the Company's profitability and increases in retained earnings, it is anticipated that its bonding limits will increase proportionately, thereby allowing the Company to bid on and perform more and larger projects. The Company believes that government at all levels will continue to be the primary source of funding for infrastructure work. TEA-21 establishes a total budget authority of $215 billion over the six-year period 1998-2003. TEA-21 ensures that tax 17 revenue deposited into the Highway Trust Fund will be spent on transportation improvements by guaranteeing $165 billion for highways and $35 billion for transit and by further stipulating that appropriators can spend trust fund dollars only on transportation. See "Market Overview". The competitive bidding process will continue to be the dominant method for determining contract award. However, other innovative bidding methods will be tried and may gain favor, namely "A Plus B" contracts, where the bidders' proposals are selected on both price and scheduling criteria. Design-build projects are becoming more common and are likely to increase in frequency. Design-build projects also tend to be of more worth to the owner when the contract size is substantial, usually $50 million or more. In light of the rising needs for infrastructure work throughout the nation and the tendency of the current needs to out-pace the supply of funds, it is anticipated that alternative funding sources will continue to be sought. Funding for infrastructure development in the United States is coming from a growing variety of innovative sources. An increase of funding measures is being undertaken by various levels of government to help solve traffic congestion and related air quality problems. Sales taxes, fuel taxes, user fees in a variety of forms, vehicle license taxes, private toll roads and quasi-public toll roads are examples of how transportation funding is evolving. Transportation norms are being challenged by federally mandated air quality standards. Improving traffic movement, eliminating congestion, increasing public transit, adding or designating high occupancy vehicle (HOV) lanes to encourage car pooling and other solutions are being considered in order to help meet EPA-imposed air quality standards. Seasonality The construction industry is seasonal, generally due to inclement weather occurring in the winter months. Accordingly, the Company may experience a seasonal pattern in its operating results with lower revenue in the first and fourth quarters of each calendar year than other quarters. Quarterly results may also be affected by the timing of bid solicitations by governmental authorities, the stage of completion of major projects and revenue recognition policies. Results for any one quarter, therefore, may not be indicative of results for other quarters or for the year. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not Applicable Item 8. Financial Statements and Supplementary Data The Company's Consolidated Financial Statements are indexed on page F-2. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not Applicable PART III Item 10. Directors and Executive Officers of the Registrant Information on directors and executive officers of the Company will be included under the caption "Directors and Executive Officers" of the Company's definitive Proxy Statement relating to the Annual Meeting of Shareholders for the year ended December 31, 1999, which is hereby incorporated by reference. Item 11. Executive Compensation Information on executive compensation will be included under the caption "Compensation of Executive Officers" of the Company's definitive Proxy Statement relating to the Annual Meeting of Shareholders for the year ended December 31, 1999, which is hereby incorporated by reference. 18 Item 12. Security Ownership of Certain Beneficial Owners and Management Information on beneficial ownership of the Company's voting securities by each director and all officers and directors as a group, and by any person known to beneficially own more than 5% of any class of voting security of the Company will be included under the caption "Beneficial Ownership of the Company's Securities" of the Company's definitive Proxy Statement relating to the Annual Meeting of the Shareholders for the year ended December 31, 1999, which is hereby incorporated by reference. Item 13. Certain Relationships and Related Transactions Information on certain relationships and related transactions including information with respect to management indebtedness will be included under the caption "Certain Relationships and Related Transactions" and "Information Regarding Indebtedness of Management to the Company" of the Company's definitive Proxy Statement relating to the Annual Meeting of Shareholders for the year ended December 31, 1999, which is hereby incorporated by reference. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a)(1) Financial Statements See Item 8 of Part II hereof. (a)(2) Financial Statement Schedules The schedules specified under Regulation S-X are either not applicable or immaterial to the Company's consolidated financial statements for the years ended December 31, 1997, 1998 and 1999. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the fourth quarter ended December 31, 1999. (c) Exhibits Exhibit No. Title ------- --------------------------------------------------- 1.01 Form of Underwriting Agreement with Spelman & Co., Inc. (1) 1.02 Form of Selected Dealer Agreement (1) 1.03 Form of Representatives' Warrant (1) 1.04 Consulting Agreement with the Representative (1) 1.05 Form of Amended Underwriting Agreement (Spelman & Co., Inc.) (1) 1.06 Form of Amended Representatives' Warrant (Spelman & Co., Inc.)(1) 1.07 Form of Underwriting Agreement (H D Brous & Co., Inc.)(1) 1.08 Form of Selected Dealer Agreement (H D Brous & Co., Inc.)(1) 1.09 Form of Representatives' Unit Warrant (H D Brous & Co., Inc.)(1) 1.10 Warrant Agreement (1) 1.11 Agreement Among Underwriters (1) 1.12 Form of Underwriting Agreement (H D Brous & Co., Inc. and Neidiger/Tucker/Bruner, Inc.)(1) 1.13 Form of Agreement Among Underwriters (H D Brous & Co., Inc. and Neidiger/Tucker/Bruner, Inc.)(1) 19 Exhibit No. Title ------- ------------------------------------------------- 1.14 Form of Selected Dealer Agreement (H D Brous & Co., Inc. and Neidiger/Tucker/Bruner, Inc.)(1) 1.15 Form of Representatives' Warrant Agreement, including Form of Representatives' Warrant (H D Brous & Co., Inc. and Neidiger/Tucker/ Bruner, Inc. )(1) 3.01 Articles of Incorporation and Amendments thereto of the Registrant (1) 3.02 Bylaws of the Registrant (1) 3.03 Bylaws of the Registrant Effective October 20, 1995 (1) 5.01 Opinion of Gary A. Agron, regarding legality of the Common Stock (includes Consent)(1) 5.02 Opinion of Gary A. Agron, regarding legality of the Units, Common Stock and Warrants (1) 10.01 Incentive Stock Option Plan (1) 10.02 Office lease of the Registrant (1) 10.03 Office lease of the Registrant (1) 10.04 Contract between the State of Arizona and the Registrant dated October 22, 1993 (1) 10.05 Surety Bond between the Registrant and St. Paul Fire & Marine Insurance Company (1) 10.06 Surety Bond between the Registrant and United States Fidelity and Guaranty Company (1) 10.07 Contract between Clark County, Nevada and the Registrant dated October 6, 1992 (1) 10.08 Surety Bond between the Registrant and St. Paul Fire and Marine Insurance Company (1) 10.09 Agreement between Salt Lake City Corporation and the Registrant dated May 5, 1993 (1) 10.10 Contract between Clark County, Nevada and the Registrant dated July 21, 1993 (1) 10.11 Contract between Clark County, Nevada and the Registrant dated August 17, 1993 (1) 10.12 Promissory Note executed by Robert C. Lewis and Richard C. Lewis (1) 10.13 Promissory Note executed by Moapa Developers, Inc. (1) 10.14 Promissory Note executed by Paul R. Lewis (1) 10.15 Contract between Clark County, Nevada and the Registrant dated September 7, 1993 (1) 10.16 Agreement between Salt Lake City Corporation and the Registrant dated February 11, 1994 (1) 10.17 Contract between Northwest/Cheyenne Joint Venture and the Registrant dated March 16, 1994 (1) 10.18 Contact between Clark County, Nevada and the Registrant dated April 5, 1994 (1) 10.19 Statutory Payment Bond dated September 8, 1994 (1) 10.20 Employment Agreement with Mr. Lewis (1) 10.21 Employment Agreement with Mr. Black (1) 10.22 Employment Agreement with Mr. Terril (1) 10.23 Employment Agreement with Mr. Nelson (1) 10.24 Employment Agreement with Ms. Danley (1) 10.25 Employment Agreement with Mr. Jessop (1) 10.26 Employment Agreement with Mr. Larson (1) 10.27 Stock Purchase Agreement (1) 10.28 Form of Lockup Letter (1) 10.29 Revolving Credit Loan Agreement (1) 20 Exhibit No. Title ------- ---------------------------------------------------------------- 10.30 Contract Award Notification - Arizona Department of Transportation (1) 10.31 Contract Award Notification - McCarran International Airport (1) 10.32 Contract Award Notification - City of Henderson (1) 10.33 Contract between Registrant and Arizona Department of Transportation (1) 10.34 Contract between Registrant and Arizona Department of Transportation (1) 10.35 Office Lease of the Registrant (1) 10.36 Contract between Registrant and Arizona Department of Transportation (2) 10.37 Contract Award Notification - Clark County (2) 10.38 Joint Venture Agreement (2) 10.39 Employment Agreement with Mr. Grasmick (2) 10.40 Contract between Registrant and Clark County, Nevada (2) 10.41 Contract between Registrant and Clark County, Nevada (2) 10.42 Contract between Registrant and Utah Department of Transportation (2) 10.43 Contract between Registrant and Arizona Department of Transportation (2) 10.44 Promissory Note executed by Nevada State Bank (2) 10.45 Escrow Settlement Documents and related Promissory Note (2) 10.46 Conveyor Sales Contract and Security Agreement (2) 10.47 CAT Financial Installment Sale Contract (2) 10.48 Second and Third Amendments to Office Lease of the Registrant (2) 10.49 Lease Agreement with US Bancorp (2) 10.50 Lease Agreement with CIT Group (2) 10.51 CAT Financial Installment Sale Contract (3) 10.52 CAT Financial Installment Sale Contract (3) 10.53 CAT Financial Installment Sale Contract (3) 10.54 CAT Financial Installment Sale Contract (3) 10.55 CAT Financial Installment Sale Contract (3) 10.56 Escrow Settlement Documents (3) 10.57 Promissory Note executed by General Electric Capital Corporation (3) 10.58 Promissory Note executed by General Electric Capital Corporation (3) 10.59 Promissory Note executed by General Electric Capital Corporation (3) 10.60 Promissory Note executed by General Electric Capital Corporation (3) 10.61 Promissory Note executed by Nevada State Bank (3) 10.62 KDC Sales Contract (3) 10.63 Lease Agreement with CIT (3) 10.64 Lease Agreement with CIT (3) 10.65 Contract between Registrant and Utah Department of Transportation (3) 10.66 Contract between Registrant and Clark County, Nevada (3) 10.67 Contract between Registrant and New Mexico State Highway and Transportation Department (3) 10.68 Contract between Registrant and Salt Lake City Corporation (3) 10.69 Contract between Registrant and Utah Department of Transportation (3) 10.70 Contract between Registrant and Arizona Department of Transportation (3) 10.71 Contract between Registrant and Nevada Department of Transportation (3) 21 Exhibit No. Title ------- ----------------------------------------------------------------- 10.72 Employment and Indemnification Agreements with Mr. Nelson (3) 10.73 Employment and Indemnification Agreements with Mr. Terril (3) 10.74 Employment and Indemnification Agreements with Mr. Lewis (3) 10.75 Employment and Indemnification Agreements with Mr. Larson (3) 10.76 Employment and Indemnification Agreements with Mr. Burnell (3) 10.77 Lease Agreement with Banc One Leasing Corp. (4) 10.78 Lease Agreement with Banc One Leasing Corp. (4) 10.79 Lease Agreement with Banc One Leasing Corp. (4) 10.80 Lease Agreement with US Bancorp. (4) 10.81 Security Agreement with Associates Commercial Corporation (4) 10.82 Lease Agreement with Caterpillar Financial Services (4) 10.83 Contract between Registrant and Clark County, Nevada (4) 10.84 Contract between Registrant and Arizona Department of Transportation (4) 10.85 Contract between Registrant and New Mexico State Highway and Transportation Department (4) 10.87 Contract between Registrant and New Mexico State Highway and Transportation Department (4) 10.88 Joint Venture Agreement between Registrant and R.E. Monks Construction Co. (4) 10.89 Contract between Meadow Valley Contractors, Inc./R.E. Monks Construction Co. (JV) and Arizona Department of Transportation (4) 10.90 Contract between the Registrant and Utah Department of Transportation (4) 10.91 Contract between the Registrant and Clark County, Nevada (4) 10.92 General Agreement of Indemnity between the Registrant and Liberty Mutual Insurance Company (4) 10.93 Employment Agreement with Mr. Larson (4) 10.94 Lease Agreement between the Registrant and Ken Nosker (4) 10.95 Promissory Note executed by General Electric Capital Corporation 10.96 Promissory Note executed by General Electric Capital Corporation 10.97 Promissory Note executed by John Deere Construction Equipment Company 10.98 Promissory Note executed by John Deere Construction Equipment Company 10.99 Transfer and Assumption Agreement executed by Associates Leasing, Inc 10.100 Lease Agreement with Banc One Leasing Corp. 10.101 Lease Agreement with Caterpillar Financial Services 10.102 Lease Agreement with Trinity Capital Corporation 10.103 Lease Agreement with Banc One Leasing Corp. 10.104 Wheeler Machinery Co. Installment Sale Contract 10.105 Wheeler Machinery Co. Installment Sale Contract 10.106 Bank One, Arizona Restated Revolving Line of Credit Note 10.107 Promissory Note executed by General Electric Capital Corporation 10.108 Employment Agreement with Mr. Larson 10.109 Lease Agreement with Banc One Leasing Corp. 10.110 Master Lease Agreement with Banc One Leasing Corp. 10.111 Contract between Registrant and Arizona Department of Transportation 10.112 Contract between Registrant and Arizona Department of Transportation 22 Exhibit No. Title ------- --------------------------------------------------------------- 10.113 Contract between Registrant and Utah Department of Transportation 10.114 Contract between Registrant and Flood Control District of Maricopa County 10.115 Contract between Registrant and Johnson and Danley Construction 16.01 Letter re: Change in Certifying Accountant (1) 21.01 Subsidiaries of the Registrant (1) 23.01 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.02 Consent of Semple & Cooper (Meadow Valley Corporation)(1) 23.03 Consent of Gary A. Agron, Esq. (See 5.01, above.)(1) 23.04 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.05 Consent of BDO Seidman, LLP (Meadow Valley Corporation)(1) 23.06 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.07 Consent of BDO Seidman, LLP (Meadow Valley Corporation) (1) 23.08 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.09 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.)(1) 23.10 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.11 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.)(1) 23.12 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1) 23.13 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.)(1) 23.14 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.15 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.)(1) 27.1 Financial Data Schedule _________ (1) Incorporated by reference to the Company's Registration Statement on Form S-1, File Number 33-87750 declared effective on October 16, 1995. (2) Incorporated by reference to the Company's December 31, 1996 Annual Report on Form 10-K. (3) Incorporated by reference to the Company's December 31, 1997 Annual Report on Form 10-K (4) Incorporated by reference to the Company's December 31, 1998 Annual Report on Form 10-K 23 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MEADOW VALLEY CORPORATION /s/ Bradley E. Larson ------------------------------- Bradley E. Larson President and Chief Executive Officer Date: March 15, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ Bradley E. Larson /s/ Earle C. May - ------------------------------------- ------------------------------------ Bradley E. Larson, Earle C. May Director, President and Chief Executive Director Officer Date: March 15, 2000 Date: March 15, 2000 /s/ Kenneth D. Nelson /s/ Paul R. Lewis - ------------------------------------- ------------------------------------ Kenneth D. Nelson, Paul R. Lewis, Director, Chief Administrative Officer Director and Chief Operating Officer and Vice President Date: March 15, 2000 Date: March 15, 2000 /s/ Alan A. Terril /s/ Gary A. Agron - ------------------------------------- ------------------------------------ Alan A. Terril, Gary A. Agron, Director and Vice President Nevada Director Operations Date: March 15, 2000 Date: March 15, 2000 /s/ Charles E. Cowan /s/ Charles R. Norton - ------------------------------------- ------------------------------------ Charles E. Cowan, Charles R. Norton Director Director Date: March 15, 2000 Date: March 15, 2000 /s/ Julie L.Bergo - ------------------------------------- Julie L. Bergo Secretary and Principal Accounting Officer Date: March 15, 2000 24 INDEX TO FINANCIAL STATEMENTS Meadow Valley Corporation and Subsidiaries Independent Auditors' Report.......................................................................... F-3 Consolidated Balance Sheets at December 31, 1998 and 1999............................................. F-4 Consolidated Statements of Operations for the years ended December 31, 1997, 1998, and 1999........... F-5 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 1997, 1998 and 1999................................................................................... F-6 Consolidated Statements of Cash Flows for the years ended December 31, 1997, 1998 and 1999............ F-7 Notes to Consolidated Financial Statements............................................................ F-9
F-2 INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT To the Stockholders and Board of Directors of Meadow Valley Corporation We have audited the accompanying consolidated balance sheets of Meadow Valley Corporation and Subsidiaries (the "Company") as of December 31, 1998 and 1999, and the related consolidated statements of operations, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 1999. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted audit standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Meadow Valley Corporation and Subsidiaries as of December 31, 1998 and 1999, and the consolidated results of their operations, and cash flows for each of the three years in the period ended December 31, 1999, in conformity with generally accepted accounting principles. February 25, 2000 F-3 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
December 31, December 31, Assets: 1998 1999 --------------- --------------- Current Assets: Cash and cash equivalents (Notes 1 and 2)................................... $ 10,993,025 $ 6,177,489 Restricted cash (Notes 1, 2 and 17)......................................... 3,678,685 2,143,507 Accounts receivable, net (Notes 1, 3 and 17)................................ 15,434,491 19,256,882 Prepaid expenses and other.................................................. 1,858,184 1,193,912 Inventory (Note 1).......................................................... - 3,603,517 Note receivable - other (Note 10)........................................... 2,386 - Costs and estimated earnings in excess of billings on uncompleted contracts (Note 4)....................................................... 3,850,619 8,858,933 --------------- --------------- Total Current Assets............................................... 35,817,390 41,234,240 Property and equipment, net (Notes 1, 5, 8, 11, 12 and 22)....................... 10,995,846 15,077,673 Refundable deposits (Note 21).................................................... 191,433 83,680 Note receivable - other (Note 10)................................................ 206,421 - Goodwill, net (Note 1)........................................................... 1,660,792 1,580,762 Mineral rights................................................................... - 255,168 Net assets of discontinued operations (Note 20).................................. 425,181 193,838 --------------- --------------- Total Assets..................................................... $ 49,297,063 $ 58,425,361 =============== =============== Liabilities and Stockholders' Equity: Current Liabilities: Notes payable - other (Note 8).............................................. $ 1,145,621 $ 1,304,092 Obligations under capital leases (Note 13).................................. 678,562 1,114,722 Accounts payable (Notes 6 and 11)........................................... 13,797,436 20,807,792 Accrued liabilities (Notes 7 and 11)........................................ 3,091,362 3,387,320 Billings in excess of costs and estimated earnings on uncompleted contracts (Note 4)........................................................ 11,343,995 8,453,153 --------------- --------------- Total Current Liabilities........................................ 30,056,976 35,067,079 Deferred income taxes (Notes 1 and 12)........................................... 789,727 1,423,825 Obligations under capital leases (Note 13)....................................... 2,031,316 4,410,854 Note payable - related party (Note 11)........................................... 1,000,000 - Notes payable - other (Note 8)................................................... 2,946,327 2,710,780 --------------- --------------- Total Liabilities................................................. 36,824,346 43,612,538 --------------- --------------- Commitments and contingencies (Notes 9, 11, 13 and 15) Stockholders' Equity: Preferred stock - $.001 par value; 1,000,000 shares authorized, none issued and outstanding (Note 14)................................................. - - Common stock - $.001 par value; 15,000,000 shares authorized, 3,601,250 issued and 3,501,250 outstanding (Notes 14 and 18)....................... 3,601 3,601 Additional paid-in capital.................................................. 10,943,569 10,943,569 Capital adjustments......................................................... (799,147) (799,147) Retained earnings........................................................... 2,324,694 4,664,800 --------------- --------------- Total Stockholders' Equity........................................ 12,472,717 14,812,823 --------------- --------------- Total Liabilities and Stockholders' Equity........................ $ 49,297,063 $ 58,425,361 =============== ===============
The Accompanying Notes are an Integral Part of the Consolidated Financial Statement F-4 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, -------------------------------------------------------- 1997 1998 1999 ---------------- --------------- -------------- Revenue (Note 17)........................................... $ 146,273,286 $ 187,036,077 $ 210,002,272 Cost of revenue (Note 11)................................... 138,411,314 177,591,846 200,070,826 ---------------- --------------- -------------- Gross profit................................................ 7,861,972 9,444,231 9,931,446 General and administrative expenses (Note 11)............... 4,689,542 6,359,248 6,671,035 ---------------- --------------- -------------- Income from operations...................................... 3,172,430 3,084,983 3,260,411 ---------------- --------------- -------------- Other Income (Expense): Interest income............................................. 666,397 856,191 668,928 Interest expense (Note 11).................................. (624,048) (435,358) (209,872) Other income................................................ 20,679 86,203 211,119 ---------------- --------------- -------------- 63,028 507,036 670,175 ---------------- --------------- -------------- Income from continuing operations before income taxes....... 3,235,458 3,592,019 3,930,586 Income tax expense (Note 12)................................ (1,162,891) (1,422,440) (1,590,480) ---------------- --------------- -------------- Net income from continuing operations....................... 2,072,567 2,169,579 2,340,106 Discontinued operations (Note 20): Loss from operations of Prestressed Products subsidiary, net of income tax benefit of $443,520 and $423,497...... (860,952) (635,246) - Estimated loss on disposal of net assets of Prestressed Products subsidiary (net of income tax benefit of $1,300,000), including $1,350,000 for operating losses during phase-out period................................. - (1,950,000) - ---------------- --------------- -------------- Net income (loss) (Note 18)................................. $ 1,211,615 $ (415,667) $ 2,340,106 ================ =============== ============== Basic net income (loss) per common share (Note 19): Income (loss) from continuing operations.................. $ .58 $ .60 $ .67 Loss from operations of Prestressed Products subsidiary... (.24) (.18) - Estimated loss on disposal of net assets of Prestressed Products subsidiary..................................... - (.54) - ---------------- --------------- -------------- Basic net income (loss) per common share.................... $ .34 $ (.12) $ .67 ================ =============== ============== Diluted net income (loss) per common share (Note 19): Income (loss) from continuing operations.................. $ .57 $ .60 $ .66 Loss from operations of Prestressed Products subsidiary... (.24) (.17) - Estimated loss on disposal of net assets of Prestressed Products subsidiary..................................... - (.54) - ---------------- --------------- -------------- Diluted net income (loss) per common share.................. $ .33 $ (.11) $ .66 ================ =============== ============== Basic weighted average common shares outstanding (Note 19)................................................. 3,601,250 3,601,250 3,518,510 ================ =============== ============== Diluted weighted average common shares outstanding (Note 19)................................................. 3,651,360 3,644,651 3,529,705 ================ =============== ==============
The Accompanying Notes are an Integral Part of the Consolidated Financial Statements F-5 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY For the Years Ended December 31, 1997, 1998 and 1999
Common Stock ----------------------------- Number of Shares Paid-in Capital Retained Outstanding Amount Capital Adjustment Earnings --------------- ----------- ------------ ------------- ------------ Balance at January 1, 1997........................... 3,601,250 $ 3,601 $ 10,943,569 $ (799,147) $ 1,528,746 Net income for the year.............................. 1,211,615 ------------- ---------- ------------ ------------ ----------- Balance at December 31, 1997......................... 3,601,250 3,601 10,943,569 (799,147) 2,740,361 Net loss for the year................................ (415,667) ------------- ---------- ------------ ------------ ----------- Balance at December 31, 1998......................... 3,601,250 3,601 10,943,569 (799,147) 2,324,694 Treasury stock held for funding employer retirement plan contributions.................... (100,000) Net income for the year.............................. 2,340,106 ------------- ---------- ------------ ------------ ----------- Balance at December 31, 1999......................... 3,501,250 $ 3,601 $ 10,943,569 $ (799,147) $ 4,664,800 ============= ========== ============ ============ ===========
The Accompanying Notes are an Integral Part of the Consolidated Financial Statements F-6 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, --------------------------------------------------- 1997 1998 1999 -------------- ----------------- -------------- Increase (Decrease) in Cash and Cash Equivalents: Cash flows from operating activities: Cash received from customers................................. $ 152,130,455 $ 200,534,004 $ 198,476,899 Cash paid to suppliers and employees......................... (143,994,944) (188,760,555) (200,249,598) Interest received............................................ 615,008 878,517 695,759 Interest paid................................................ (658,622) (488,474) (235,899) Income taxes paid............................................ (546,070) (1,274,257) (935,496) -------------- --------------- --------------- Net cash provided by (used in) operating activities..... 7,545,827 10,889,235 (2,248,335) -------------- --------------- --------------- Cash flows from investing activities: Decrease (increase) in restricted cash....................... (304,191) (1,958,917) 1,535,178 Collection of notes receivable - related party............... - 257,575 - Collection of note receivable - other........................ 1,184 2,466 208,807 Proceeds from sale of property and equipment................. 322,960 165,182 361,138 Purchase of property and equipment........................... (1,819,960) (588,784) (1,399,815) Purchase of mineral rights.................................... - - (255,168) Decrease (increase) in net assets of discontinued operations................................................ (2,632,315) 2,454,124 231,343 -------------- --------------- --------------- Net cash provided by (used in) investing activities..... (4,432,322) 331,646 681,483 -------------- --------------- --------------- Cash flows from financing activities: Repayment of capital lease obligations....................... (319,428) (645,534) (882,677) Repayment of notes payable - other........................... (419,432) (897,486) (1,366,007) Repayment of note payable - related party.................... (1,000,000) (1,500,000) (1,000,000) -------------- --------------- --------------- Net cash used in financing activities................... (1,738,860) (3,043,020) (3,248,684) -------------- --------------- --------------- Net increase (decrease) in cash and cash equivalents.............. 1,374,645 8,177,861 (4,815,536) Cash and cash equivalents at beginning of year.................... 1,440,519 2,815,164 10,993,025 -------------- --------------- --------------- Cash and cash equivalents at end of year.......................... $ 2,815,164 $ 10,993,025 $ 6,177,489 ============== =============== ===============
The Accompanying Notes are an Integral Part of the Consolidated Financial Statements F-7 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
For the Years Ended December 31, ---------------------------------------------------------- 1997 1998 1999 ------------------- ----------------- ----------------- Increase (Decrease) in Cash and Cash Equivalents (Continued): Reconciliation of Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities: Net Income (loss)..................................................... $ 1,211,615 $ (415,667) $ 2,340,106 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization.................................... 1,277,764 1,849,628 2,012,592 (Gain) Loss on sale of property and equipment.................... (24,890) (29,777) 11,886 Deferred income taxes payable.................................... 399,951 377,166 634,098 Changes in Assets and Liabilities: Accounts receivable, net......................................... 2,770,489 8,685,541 (3,849,222) Prepaid expenses and other....................................... (152,550) (801,540) 643,386 Costs and estimated earnings in excess of billings on uncompleted contracts.......................................... (187,147) 62,856 (5,008,314) Inventory........................................................ - - (3,603,517) Refundable deposits.............................................. - - (26,027) Interest payable................................................. (34,574) (53,116) 107,461 Accounts payable................................................. (1,258,450) (4,573,921) 7,010,356 Accrued liabilities.............................................. 100,100 1,301,618 321,985 Billings in excess of costs and estimated earnings on uncompleted contracts.......................................... 3,278,038 4,693,104 (2,890,842) Interest receivable.............................................. (51,389) 22,326 26,831 Income tax receivable............................................ 216,870 (228,983) 20,886 -------------- ------------- -------------- Net cash provided by (used in) operating activities................... $ 7,545,827 $ 10,889,235 $ (2,248,335) ============== ============= ==============
The Accompanying Notes are an Integral Part of the Consolidated Financial Statements F-8 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies: Nature of the Corporation: Meadow Valley Corporation (the "Company") was organized under the laws of the State of Nevada on September 15, 1994. The principal business purpose of the Company is to operate as the holding Company of Meadow Valley Contractors, Inc. (MVC) and Ready Mix, Inc. (RMI). MVC is a general contractor, primarily engaged in the construction of structural concrete highway bridges and overpasses, and the paving of highways and airport runways in the states of Nevada, Arizona, Utah and New Mexico. RMI is a producer and retailer of ready-mix concrete operating in the Las Vegas metropolitan area. Formed by the Company, RMI commenced operations in 1997. Principles of Consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries MVC and RMI. Intercompany transactions and balances have been eliminated in consolidation. Accounting Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are used when accounting for the percentage of completion and the estimated gross profit on projects in progress, allowance for doubtful accounts, depreciation and amortization, accruals, taxes, contingencies and goodwill, which are discussed in the respective notes to the consolidated financial statements. Revenue and Cost Recognition: Revenues and costs from fixed-price and modified fixed-price construction contracts are recognized for each contract on the percentage-of-completion method, measured by the percentage of costs incurred to date to the estimated total of direct costs. Direct costs include, among other things, direct labor, field labor, equipment rent, subcontracting, direct materials, and direct overhead. General and administrative expenses are accounted for as period costs and are, therefore, not included in the calculation of the estimates to complete construction contracts in progress. Project losses are provided in the period in which such losses are determined, without reference to the percentage-of-completion. As contracts can extend over one or more accounting periods, revisions in costs and earnings estimated during the course of the work are reflected during the accounting period in which the facts that required such revisions become known. Claims for additional contract revenue are recognized only to the extent that contract costs relating to the claim have been incurred and evidence provides a legal basis for the claim. During the year ended December 31, 1999, revenue and costs in the amount of $3,500,000 were recorded related to claims. The estimated total claims that have been filed or will be filed total $10,205,211 at December 31, 1999. The asset "costs and estimated earnings in excess of billings on uncompleted contracts" represents revenue recognized in excess of amounts billed. The liability "billings in excess of costs and estimated earnings on uncompleted contracts" represents billings in excess of revenues recognized. Restricted Cash: At December 31, 1998 and 1999 funds in the amount of $3,678,685 and $2,143,507 were held in trust, in lieu of retention, on certain of the Company's construction contracts and will be released to the Company after the contracts are completed. Inventory: Inventories, which consist primarily of raw materials, are stated at the lower of cost, determined by the first-in, first-out method, or market. Inventory quantities are determined by physical measurements. Accounts Receivable: Included in accounts receivable are trade receivables that represent amounts billed but uncollected on completed construction contracts and construction contracts in progress. F-9 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. Summary of Significant Accounting Policies (Continued): Accounts Receivable (Continued): The Company follows the allowance method of recognizing uncollectible accounts receivable. The allowance method recognizes bad debt expense based on a review of the individual accounts outstanding, and the Company's prior history of uncollectible accounts receivable. At December 31, 1998 and December 31, 1999 the Company had established an allowance for potentially uncollectible accounts receivable in the amounts of $59,178 and $97,324. During the years ended December 31, 1997, 1998 and 1999 the Company incurred bad debt expense in the amounts of $35,441, $59,273 and $79,681. Property and Equipment: Property and equipment are recorded at cost. Depreciation charged to operations during the years ended December 31, 1997, 1998 and 1999 was $1,185,147, $1,757,422 and $1,932,272. Depreciation is provided for on the straight-line method, over the following estimated useful lives. Plant 15 years Computer equipment 5-7 years Equipment 5-10 years Vehicles 5 years Office furniture and equipment 7 years Leasehold Improvements 2-5 years At December 31, 1998 and 1999, property and equipment with a net book value of $7,219,459 and $10,872,442 were pledged as collateral for notes payable and capital lease obligations. Goodwill: Goodwill represents the excess of the costs of acquiring Meadow Valley Contractors, Inc. over the fair value of its net assets and is being amortized on the straight-line method over twenty-five (25) years. Amortization expense charged to operations for each of the years ended December 31, 1997, 1998 and 1999 was $80,029. The carrying value of goodwill will be periodically reviewed by the Company and impairments, if any, will be recognized when expected future operating cash flows derived from goodwill is less than its carrying value. Tradename: On January 2, 1996, the Company acquired the tradename of AKR Contracting in the amount of $36,531. The tradename amortization is provided for on a straight line basis over three years. Amortization expense charged to operations in each of the years ended December 31, 1997 and 1998 was $12,177. Income Taxes: The Company accounts for income taxes in accordance with the Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). SFAS 109 requires the Company to recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in a Company's financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company files consolidated tax returns with MVC, RMI and PPI for federal and state tax reporting purposes. Cash Flow Recognition: For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an initial maturity of three (3) months or less to be cash equivalents. Fair Value of Financial Instruments: The carrying amounts of financial instruments including cash, restricted cash, accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts, current maturities of long-term debt, accounts payable, billings in excess of costs and estimated earnings on uncompleted contracts, accrued liabilities and long-term debt approximate fair value because of their short maturity. F-10 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. Summary of Significant Accounting Policies (Continued): Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed of: Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of" (SFAS 121) establishes new guidelines regarding when impairment losses on long-lived assets, which include plant and equipment, and certain identifiable intangible assets, should be recognized and how impairment losses should be measured. Stock-Based Compensation: Statements of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS No. 123) establishes a fair value method of accounting for stock-based compensation plans and for transactions in which an entity acquires goods or services from nonemployees in exchange for equity instruments. SFAS 123 also encourages, but does not require companies to record compensation cost for stock-based employee compensation. The Company has chosen to continue to account for stock-based compensation utilizing the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." Accordingly, compensation cost for stock options is measured as the excess, if any, of the fair market price of the Company's stock at the date of grant over the amount an employee must pay to acquire the stock. Earnings per Share: Statement of Financial Accounting Standards No. 128, "Earnings per Share," ("SFAS 128") provides for the calculation of Basic and Diluted earnings per share. Basic earnings per share includes no dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of an entity, similar to fully diluted earnings per share. The Company adopted this accounting standard on December 15, 1997. The effect of adopting this standard was that diluted earnings per share for the year ended December 31, 1997, decreased by $.01 over the calculations under APB Opinion No. 15. There was no effect on prior years. Reporting Comprehensive Income: Statement of Financial Accounting Standard No. 130, "Reporting Comprehensive Income," ("SFAS 130") establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. The Company adopted this accounting standard on December 15, 1997. There was no effect on the financial position or results of operations for all years presented. Disclosures about Segments of an Enterprise and Related Information: Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information," ("SFAS 131") requires that public companies report certain information about operating segments, products, services and geographical areas in which they operate and their major customers. The Company adopted this accounting standard on December 15, 1997. There was no material effect on the financial position or results of operations as the Company operates in one segment. Reporting on the Costs of Start-Up Activities: Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities," ("SOP 98-5"), issued by the American Institute of Certified Public Accountants is effective for years beginning after December 15, 1998. Early adoption is permitted. SOP 98-5 requires that costs of start-up activities should be expensed as incurred. The Company adopted this accounting standard this year and there was no material effect on the financial position or results of operations. 2. Concentration of Credit Risk: The Company maintains cash balances at various financial institutions. Deposits not to exceed $100,000 for each institution are insured by the Federal Deposit Insurance Corporation. At December 31, 1998 and December 31, 1999, the Company has uninsured cash, cash equivalents, and restricted cash in the amount of $16,909,324and $9,682,808. F-11 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 3. Accounts Receivable: Following is a summary of receivables at December 31, 1998 and 1999:
December 31, December 31, 1999 1999 ------------ ------------ Contracts in progress........................ $ 9,249,373 $ 8,046,857 Contracts in progress - retention............ 2,627,812 7,543,315 Completed contracts.......................... 10,063 3,000 Completed contracts - retention.............. 412,310 598,408 Other trade receivables...................... 2,624,593 3,068,583 Other receivables............................ 569,518 94,043 ------------ ------------ 15,493,669 19,354,206 Less: Allowance for doubtful accounts (59,178) (97,324) ------------ ------------ $ 15,434,491 $ 19,256,882 ============ ============
4. Contracts in Progress: Costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings on uncompleted contracts consist of the following:
December 31, December 31, 1998 1999 -------------- ------------- Costs incurred on uncompleted contracts........ $ 314,134,398 $ 395,414,292 Estimated earnings to date..................... 17,538,432 19,077,844 -------------- ------------- 331,672,830 414,492,136 Less: billings to date......................... (339,166,206) (414,086,356) -------------- ------------- $ (7,493,376) $ 405,780 ============== =============
Included in the accompanying balance sheet under the following captions:
December 31, December 31, 1998 1999 ---------------- ---------------- Costs and estimated earnings in excess of billings on uncompleted contracts............................... $ 3,850,619 $ 8,858,933 Billings in excess of costs and estimated earnings on uncompleted contracts............................... (11,343,995) (8,453,153) --------------- --------------- $ (7,493,376) $ 405,780 =============== ===============
F-12 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 5. Property and Equipment: Property and equipment consists of the following:
December 31, December 31, 1998 1999 ----------------- ---------------- Land.................................................... $ 827,206 $ 852,243 Plant................................................... 2,804,757 6,013,967 Computer equipment...................................... 306,902 324,710 Equipment............................................... 7,746,895 10,389,473 Vehicles (Note 13)...................................... 2,808,540 2,449,844 Office furniture and equipment.......................... 50,311 50,311 Leasehold improvements.................................. 6,863 8,926 ---------------- ---------------- 14,551,474 20,089,474 Accumulated depreciation................................ (3,555,628) (5,011,801) ---------------- ---------------- $ 10,995,846 $ 15,077,673 ================ ================
6. Accounts Payable: Accounts payable consist of the following:
December 31, December 31, 1998 1999 ----------------- ----------------- Trade.................................................... $ 10,027,339 $ 13,934,908 Retentions............................................... 3,770,097 6,872,884 ---------------- ---------------- $ 13,797,436 $ 20,807,792 ================ ================
7. Accrued Liabilities: Accrued liabilities consist of the following:
December 31, December 31, 1998 1999 ----------------- ----------------- Compensation.............................................. $ 1,275,775 $ 1,516,610 Outside service........................................... - 524,780 Interest.................................................. 26,027 - Taxes..................................................... 610,254 534,388 Insurance................................................. 534,699 224,456 Other..................................................... 644,607 587,086 --------------- ---------------- $ 3,091,362 $ 3,387,320 =============== ================
F-13 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 8. Notes payable - other: Notes payable - other consist of the following:
December 31, December 31, 1998 1999 ---------------- ----------------- Notes payable, interest rates ranging from 6.382% to 10% with monthly payments of $106,129, due dates ranging from 12/18/99 to 1/1/03, collateralized by equipment......................................................... $ 3,615,618 $ 2,479,456 Notes payable, interest rates ranging from 9.0% to 9.33% with monthly payments of $9,958, due dates ranging from 8/15/03 to 12/31/04, collateralized by land.............................................................. 476,330 398,825 Note payable, interest rate of 6.28% with monthly payments of $1,316, due 12/25/03, collateralized by equipment........................................... - 55,282 Note payable, interest rate of 7.15% with monthly payments of $5,529, due 2/19/04, collateralized by equipment............................................ - 238,480 Note payable, interest rate of 7.81% with monthly payments of $6,840, due 6/4/04, collateralized by equipment............................................. - 305,763 Note payable, interest rate of 3.9% with monthly payments of $2,499, due 7/1/03, collateralized by equipment................................................. - 97,987 Note payable, interest rate of 7.75% with monthly payments of $1,367, due 7/1/03, collateralized by equipment............................................. - 50,169 Note payable, interest rate of 6.28% with monthly payments of $1,946, due 12/1/03, collateralized by equipment............................................ - 80,915 Note payable, interest rate of 6.96% with monthly payments of $7,239, due 1/15/04, collateralized by equipment............................................ - 307,995 --------------- --------------- 4,091,948 4,014,872 Less: current portion............................................................... (1,145,621) (1,304,092) --------------- --------------- $ 2,946,327 $ 2,710,780 =============== ===============
Following are maturities of long-term debt for each of the next 5 years: 2000..................... $ 1,304,092 2001..................... 1,055,516 2002..................... 980,109 2003..................... 592,248 2004..................... 82,907 -------------- $ 4,014,872 ============== 9. Line of Credit: At December 31, 1999, the Company had available from a commercial bank a $2,000,000 operating line of credit ("line of credit") at an interest rate of 8.5%, the commercial bank's prime, plus .50%. At December 31, 1999, nothing had been drawn on the line of credit. Under the line of credit, the Company is required to maintain certain levels of working capital, to promptly pay all its obligations and is precluded from conveying, selling or leasing all or substantially all of its assets. At December 31, 1999, the Company was in compliance with all such covenants. The line of credit expires September 15, 2000. F-14 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 10. Note receivable - other: Note receivable - other consist of the following:
December 31, December 31, 1998 1999 ----------------- ------------------- 8% note receivable, 84 monthly payments in the amount of $1,565 commencing July 19, 1996, balloon payment in the amount of $197,282 due June 19, 2003, collateralized by deed of trust.................................. $ 208,807 $ - Less: current portion................................................................ (2,386) - -------------- ------------ $ 206,421 $ - ============== ============
11. Related Party Transactions: Note receivable - related party: Note receivable - related party consists of a 6% note receivable from a corporate officer, dated December 15, 1994, due June 15, 1997, collateralized by 100,000 share of the Company's common stock. During June 1997, the Company extended the due date to June 15, 1998. Note receivable - related party was $257,575 at December 31, 1997. During January 1998, the note receivable - related party was paid in full. Equipment: During the year ended December 31, 1998, the Company purchased equipment used in the construction business from a related party in the amount of $295,000. Professional Services: During the years ended December 31, 1997, 1998 and 1999, a related party rendered professional services to the Company in the amounts of $16,060, $10,904 and $7,944. During each of the years ended December 31, 1997, 1998 and 1999, the Company paid outside board of directors a total of $5,000. Subcontractor/Supplier: Various related parties provided materials and equipment used in the Company's construction business during the years ended December 31, 1997, 1998 and 1999, in the amounts of $153,189, $191,694 and $65,441. Included in accounts payable at December 31, 1998 and 1999 are amounts due to related parties, in the amount of $1,114 and $821, related to supplies. Royalties: During the years ended December 31, 1997, 1998 and 1999, the Company paid various related parties mining royalties in the amounts of $76,392, $186,949 and $182,061. Included in accounts payable at December 31, 1998 and 1999 are amounts due to related parties, in the amount of $10,424 and $1,158, related to royalties. Accrued Interest: During the years ended December 31, 1997 and 1998, the Company incurred interest expense in the amounts of $412,842 and $243,322 related to notes payable to a principal stockholder. Included in accrued liabilities at December 31, 1998 are amounts due to related parties, in the amounts of $26,027. During January 1998, the accrued interest receivable in the amount of $15,793 was paid in full. Note payable - related party:
December 31, December 31, 1998 1999 ------------------ ---------------- 12.5% note payable from a related party, due October 16, 2000, due in equal annual installments of $1,000,000 plus accrued interest............ $ 1,000,000 $ - Less: current portion.................................................... - - -------------- ----------- $ 1,000,000 $ - ============== ===========
F-15 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 11. Related Party Transactions (Continued): Commitments: The Company leases office space in Moapa, Nevada on a month-to-month basis from a Company controlled by a principal stockholder with monthly payments of $840. The lease terms also require the Company to pay common area maintenance, taxes, insurance and other costs. Rent expense under the lease for the year ended December 31, 1997, 1998 and 1999 amounted to $9,600, $10,040 and $10,080, respectively. The Company leased additional space for its prestressed concrete operations on a month-to-month basis from a Company controlled by a principal stockholder with monthly payments of $2,500. The lease terminated January 31, 1999 under the plan to discontinue operations of PPI. Rent expense under the lease for the years ended December 31, 1997 and 1998 amounted to $30,000 and $42,369. 12. Income Taxes: The provisions for income taxes from continuing operations consist of the following:
For the Years Ended December 31, ---------------------------------------------------------------------- 1997 1998 1999 ----------------------- ------------------------ -------------------- Current: Federal................................... $ 669,566 $ 932,032 $ 851,180 State..................................... 93,374 113,242 105,202 --------------- ----------------- --------------- 762,940 1,045,274 956,382 Deferred....................................... 399,951 377,166 634,098 --------------- ----------------- --------------- $ 1,162,891 $ 1,422,440 $ 1,590,480 =============== ================= ===============
The Company's deferred tax liability consists of the following, all of which is long-term in nature:
December 31, December 31, 1998 1999 ---------------------- ------------------------ Deferred tax asset: Other...................................... $ 34,107 $ 129,461 Deferred tax liability: Depreciation.............................. (823,834) (1,553,286) -------------- ---------------- Net deferred tax liability.................... $ (789,727) $ (1,423,825) ============== ================
For the years ended December 31, 1997, 1998 and 1999, the effective tax rate differs from the federal statutory rate primarily due to state income taxes. 13. Commitments: The Company is currently leasing office space in Phoenix, Arizona under a non-cancelable operating lease agreement expiring in December 2000. During December 1998, the Company amended the original lease. The amended lease agreement provides for monthly payments of $6,998 through December 31, 1999 and $7,431 from January 1, 2000 through December 31, 2000. The lease also requires the Company to pay common area maintenance, taxes, insurance and other costs. Rent under the aforementioned operating lease was $56,576, $66,117 and $89,152 for the years ended December 31, 1997, 1998 and 1999. F-16 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 13. Commitments (Continued): The Company leases equipment under operating leases expiring on various years through 2006. Rent under the aforementioned operating lease was $1,351,805, $1,839,891 and $2,374,109 for the years ended December 31, 1997, 1998 and 1999. Minimum future rental payments under non-cancelable operating leases having remaining terms in excess of one year as of December 31, 1999 for each of the next five years in aggregate are:
Year Ended December 31, Amount -------------------------------------------------------- 2000................................... $ 2,511,950 2001................................... 2,289,385 2002................................... 1,203,657 2003................................... 934,882 Subsequent to 2003..................... 1,098,224 --------------- Total minimum payments................. $ 8,038,098 ===============
The Company has entered into employment contracts with each of its executive officers that provide for an annual salary, issuance of the Company's common stock and various other benefits and incentives. At December 31, 1998 and 1999, the total commitments, excluding benefits and incentives amount to $1,011,250 and $1,530,438. The Company is the lessee of vehicles and equipment under capital leases expiring in various years through 2006. The assets and liabilities under a capital lease are initially recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. Each asset is depreciated over its expected useful life. Depreciation on the assets under capital leases charged to expense in 1997, 1998 and 1999 was $298,283, $533,008 and $1,152,306. At December 31, 1998 and 1999, property and equipment included $2,785,777 and $5,893,238, net of accumulated depreciation, of vehicles and equipment under capital leases. Minimum future lease payments under capital leases as of December 31, 1999 for each of the next five years and in aggregate are:
Year Ended December 31, Amount ------------------------------------------------------------- 2000............................................$ 1,519,499 2001............................................ 1,359,971 2002............................................ 1,139,056 2003............................................ 979,301 2004............................................ 1,802,621 Subsequent to 2004.............................. - ------------ Total minimum payments.......................... 6,800,448 Less: executory costs........................... (20,145) ------------ Net minimum lease payments...................... 6,780,303 Less: amount representing interest.............. (1,254,727) ------------ Present value of net minimum lease payment .....$ 5,525,576 ============
14. Stockholders' Equity: Preferred Stock: The Company has authorized 1,000,000 shares of $.001 par value preferred stock to be issued, with such rights, preferences, privileges, and restrictions as determined by the Board of Directors. F-17 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 14. Stockholders' Equity (Continued): Initial Public Offering: During October 1995, the Company completed an initial public offering ("Offering") of Units of the Company's securities. Each unit consisted of one share of $.001 par value common stock and one redeemable common stock purchase warrant ("Warrant"). Each Warrant is exercisable to purchase one share of common stock at $7.20 per share for a period of 5 years from the date of the Offering. The Offering included the sale of 1,926,250 Units at $6.00 per Unit. Net proceeds of the Offering, after deducting underwriting commissions and offering expenses of $2,122,080, amounted to $9,435,420. In connection with the Offering, the Company granted the underwriters warrants to purchase 167,500 shares of common stock at $7.20 per share for a period of twelve months from the date of the offering and for a period of four years thereafter. 15. Litigation Matters: The Company is defending a claimed preference in connection with a payment made to it by an insurance Company in the approximate amount of $100,000. The Company believes that the payment is not a preference, and is vigorously defending the action. 16. Statement of Cash Flows: Non-Cash Investing and Financing Activities: The Company recognized investing and financing activities that affected assets, liabilities, and equity, but did not result in cash receipts or payments. These non-cash activities are as follows: During the years ended December 31, 1997, 1998 and 1999, the Company financed the purchase of property, plant and equipment in the amount of $3,658,608, $3,273,137 and $4,987,308. During the year ended December 31, 1999, the Company received $135,000 trade in value on equipment. 17. Significant Customers: For the years ended December 31, 1997, 1998 and 1999, the Company recognized a significant portion of its revenue from four Customers (shown as an approximate percentage of total revenue):
For the Years Ended December 31, ---------------------------------------------------------------------- 1997 1998 1999 ----------------------- ------------------------ -------------------- A............................. 27.8% 29.9% 26.2% B............................. 33.0% 12.5% 28.7% C............................. 7.6% 24.3% 17.2%
At December 31, 1998 and 1999, amounts due from the customers that are greater than 10% included in restricted cash and accounts receivables, are as follows:
December 31, -------------------------------------- 1998 1999 ------------- ---------------- A..................................... $ 8,369,999 $ 4,947,425 B..................................... 1,805,712 8,866,348 C..................................... 1,709,294 1,082,888
F-18 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 18. Stock Option Plan: In November, 1994, the Company adopted a Stock Option Plan providing for the granting of both qualified incentive stock options and non-qualified stock options. The Company has reserved 1,200,000 shares of its common stock for issuance under the Plan. Granting of the options is at the discretion of the Board of Directors and may be awarded to employees and consultants. Consultants may receive only non-qualified stock options. The maximum term of the stock options are 10 years and may be exercised as follows: 33.3% after one year of continuous service, 66.6% after two years of continuous service and 100.0% after three years of continuous service. The exercise price of each option is equal to the market price of the Company's common stock on the date of grant. The following summarizes the stock option transactions:
Weighted Average Price Shares Per Share --------------- -------------------------- Outstanding January 1, 1998.............................................. 524,025 $ 5.87 Granted............................................................. 144,350 5.28 Forfeited........................................................... (46,300) 5.28 ----------- Outstanding December 31, 1998............................................ 622,075 5.43 Granted............................................................. (165,500) 5.43 Forfeited........................................................... (14,700) 5.43 ----------- Outstanding December 31, 1999............................................ 772,875 5.12 ===========
Information relating to stock options at December 31, 1999 summarized by exercise price are as follows:
Outstanding Exercisable -------------------------------------------------- ------------------------------------ Weighted Average Weighted Average ----------------------------------- ----------------------- Exercise Price Per Share Shares Life (Year) Exercise Price Shares Exercise Price - ------------------------------ -------- ------------- ---------------- -------- ----------------------- $6.25 196,250 10 $ 6.25 196,250 $ 6.25 $4.375 to $5.41 198,225 10 5.36 198,225 5.36 $5.31 80,000 10 5.31 53,333 5.31 $5.875 132,900 10 5.875 44,300 5.875 $4.563 20,000 10 4.563 - - $4.00 20,000 10 4.00 - - $3.875 125,500 10 3.875 - - - ------------------------------ -------- ------- ---------- -------- -------- $3.875 to $6.25 772,875 10 $ 5.12 492,108 $ 5.12 ============================== ======== ======= ========== ======== ========
F-19 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 18. Stock Option Plan (Continued): All stock options issued to employees have an exercise price not less than the fair market value of the Company's Common Stock on the date of grant. In accordance with accounting for such options utilizing the intrinsic value method, there is no related compensation expense recorded in the Company's financial statements for the years ended December 31, 1997, 1998 and 1999. Had compensation cost for stock-based compensation been determined based on the fair value of the options at the grant dates consistent with the method of SFAS 123, the Company's net income and earnings per share for the years ended December 31, 1997, 1998 and 1999 would have been reduced to the proforma amounts presented below:
1997 1998 1999 ------------- ------------ ------------- Net income (loss) As reported......................................... $ 1,211,615 $ (415,667) $ 2,340,106 Proforma............................................ 989,003 (933,371) 1,784,024 Basic net income (loss) per common share As reported......................................... $ .34 $ (.12) $ .67 Proforma............................................ .26 (.24) .44 Diluted net income (loss) per common share As reported......................................... $ .33 $ (.11) $ .66 Proforma............................................ .26 (.23) .44
The fair value of option grants is estimated as of the date of grant utilizing the Black-Scholes option-pricing model with the following weighted average assumptions for grants in 1997 and 1998: expected life of options of 5 years, expected volatility of 48.65%, risk-free interest rates of 8.0%, and a 0% dividend yield and 1999: expected life of options of 5 years, expected volatility of 54.87%, risk-free interest rates of 8.0%, and a 0% dividend yield. The weighted average fair value at date of grant for options granted during 1997, 1998 and 1999 approximated $1.01, $1.44 and $1.13. 19. Basic Earnings (Loss) Per Share: The Company's basic net income (loss) per share at December 31, 1997 and 1998 was computed by dividing net income for the period by 3,601,250, the basic weighted average number of common shares outstanding during the period. The Company's basic net income per share at December 31, 1999 was computed by dividing net income for the period by 3,518,510, the basic weighted average number of common shares outstanding during the period. The Company's diluted net income per common share at December 31, 1997 includes 50,110 common shares that would be issued upon exercise of outstanding stock options. Options to purchase 217,200 at $6.25 per share were outstanding during 1997, but were not included in the computation of diluted net income per common share because the options' exercise price was greater than the average market price of the common share. The Company's diluted net income per common share at December 31, 1998 includes 43,401 common shares that would be issued upon exercise of outstanding stock options. Options to purchase 199,500 at $6.25 per share and options to purchase 142,550 at $5.875 per share were outstanding during 1998, but were not included in the computation of diluted net income per common share because the options' exercise price was greater than the average market price of the common share. The Company's diluted net income per common share at December 31, 1999 includes 11,195 common shares that would be issued upon exercise of outstanding stock options. Options to purchase 429,705 at a range of $5.31 to $6.25 per share were outstanding during 1999, but were not included in the computation of diluted net income per common share because the options' exercise price was greater than the average market price of the common share. F-20 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 20. Discontinued Operations: In June 1998, the Company adopted a formal plan ( the "plan") to discontinue the operations of Prestressed Products Incorporated ("PPI"). The plan included the completion of approximately $2.8 million of uncompleted contracts and the disposition of approximately $1.2 million of equipment. Accordingly, the Company has reclassified the operations of PPI as discontinued operations in the accompanying statements of operations. The Company recorded an estimated loss of $1,950,000 (net of income tax benefit of $1,300,000), related to the disposal of assets for PPI, which included a provision of $1,350,000 for estimated operating losses during the phase-out period. During the year ended December 31, 1998 and 1999, $1,134,112 and $598,172 of the expected losses were incurred (net of income tax benefit of $756,073 and $398,743). Operating results of PPI for the six months ended June 30, 1998 are shown separately in the accompanying statement of operations. The statements of operations for the year ended December 31, 1997 have been restated and operating results of PPI are also shown separately. The revenue of PPI for the years ended December 31, 1997, 1998 and 1999 were $3,706,109, $5,419,036 and $1,460,381. These amounts are not included in revenue in the accompanying statements of operations. The accompanying consolidated balance sheets as of December 31, 1998 and December 31, 1999, have been restated to reflect the net liabilities and the estimated loss as a single amount as follows:
December 31, -------------------------------- 1998 1999 ------------- ------------ Current assets.......................................... $ 1,204,192 $ 653,668 Non-current assets...................................... 481,331 - Liabilities............................................. (444,454) (242,113) ------------- ------------ Net assets........................................... 1,241,069 411,555 Estimated loss on disposition........................... (815,888) (217,717) ------------- ------------ Net assets of discontinued operations................... $ 425,181 $ 193,838 ============= ============
21. Subsequent Events: During January 2000, the Company purchased equipment totaling $143,167. In addition, the Company made a deposit of $128,000 related to the ordering of 64 ready mix trucks, with an estimated cost of $8,400,000. During January 2000, the Company solicited finance proposals for equipment totaling $7,433,840, related to its construction materials processing operations. The Company anticipates the equipment and mixer trucks will be financed using notes payable and/or operating leases. During February 2000, the Company made a deposit of $20,000 related to the ordering of an asphalt plant, with an estimated cost of $1,900,000. F-21 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 22. Year 2000 (Unaudited): At this time, the Company has not been adversely affected by the Year 2000. The Company does not anticipate any future disruptions to business, but cannot be assured that any disruptions to business arising from customers or vendors may not affect its operations. F-22 EX-10.95 2 PROMISSORY NOTE EXECUTED BY GENERAL ELECTRIC EXHIBIT 10.95 PROMISSORY NOTE 2/19/99 ---------------- (Date) 4411 S. 40th Street, Suite D-11, Phoenix, Maricopa County, AZ 85040 - -------------------------------------------------------------------------------- (Address of Maker) FOR VALUE RECEIVED, Meadow Valley Contractors, Inc. ("Maker") promises, jointly and severally if more than one, to pay to the order of General Electric Capital Corporation or any subsequent holder hereof (each, a "Payee") at its office located at One Lincoln Centre, 5400 LBJ Freeway Suite 1280, L.B. 3, Dallas, TX 75240 or at such other place as Payee or the holder hereof may designate, the principal sum of Two hundred seventy-eight thousand two hundred fifty and no/100 Dollars ($278,250.00), with interest on the unpaid principal balance, from the date hereof through and including the dates of payment, at a fixed, simple interest rate of Seven and 15/100 percent (7.15%) per annum, to be paid in lawful money of the United States, in Sixty (60) consecutive monthly installments of principal and interest as follows: Periodic Installment Amount ----------- ------ 1 thru 59 $ 5,529.40 each ("Periodic Installment") and a final installment which shall be in the amount of the total outstanding principal and interest. The first Periodic Installment shall be due and payable on March 15, 1999 and the following Periodic Installments and the final installment shall be due and payable on the same day of each succeeding period (each, a "Payment Date"). All payments shall be applied first to interest and then to principal. The acceptance by Payee of any payment which is less than payment in full of all amounts due and owing at such time shall not constitute a waiver of Payee's right to receive payment in full at such time or at any prior or subsequent time. Interest shall be calculated on the basis of a 365 day year (366 day leap year). The payment of any Periodic Installment after its due date shall result in a corresponding decrease in the portion of the Periodic Installment credited to the remaining unpaid principal balance. The payment of any Periodic Installment prior to its due date shall result in a corresponding increase in the portion of the Periodic Installment credited to the remaining unpaid principal balance. The Maker hereby expressly authorizes the Payee to insert the date value is actually given in the blank space on the face hereof and on all related documents pertaining hereto. This Note may be secured by a security agreement, chattel mortgage, pledge agreement or like instrument (each of which is hereinafter called a "Security Agreement"). Time is of the essence hereof. If any installment or any other sum due under this Note or any Security Agreement is not received within ten (10) days after its due date, the Maker agrees to pay, in addition to the amount of each such installment or other sum, a late payment charge of five percent (5%) of the amount of said installment or other sum, but not exceeding any lawful maximum. If (i) Maker fails to make payment of any amount due hereunder within ten (10) days after the same becomes due and payable; or (ii) Maker is in default under, or fails to perform under any term or condition contained in any Security Agreement, then the entire principal sum remaining unpaid, together with all accrued interest thereon and any other sum payable under this Note or any Security Agreement, at the election of Payee, shall immediately become due and payable, with interest thereon at the lesser of eighteen percent (18%) per annum or the highest rate not prohibited by applicable law from the date of such accelerated maturity until paid (both before and after any judgment). The Maker may prepay in full, but not in part, its entire indebtedness hereunder upon payment of the entire indebtedness plus an additional sum as a premium equal to the following percentages of the original principal balance for the indicated period: Prior to the first annual anniversary date of this Note: One percent (1%) and zero percent (0%) thereafter, plus all other sums due hereunder or under any Security Agreement. It is the intention of the parties hereto to comply with the applicable usury laws; accordingly, it is agreed that, notwithstanding any provision to the contrary in this Note or any Security Agreement, in no event shall this Note or any Security Agreement require the payment or permit the collection of interest in excess of the maximum amount permitted by applicable law. If any such excess interest is contracted for, charged or received under this Note or any Security Agreement, or if all of the principal balance shall be prepaid, so that under any of such circumstances the amount of interest contracted for, charged or received under this Note or any Security Agreement on the principal balance shall exceed the maximum amount of interest permitted by applicable law, then in such event (a) the provisions of this paragraph shall govern and control, (b) neither Maker nor any other person or entity now or hereafter liable for the payment hereof shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest permitted by applicable law, (c) any such excess which may have been collected shall be either applied as a credit against the then unpaid principal balance or refunded to Maker, at the option of the Payee, and (d) the effective rate of interest shall be automatically reduced to the maximum lawful contract rate allowed under applicable law as now or hereafter construed by the courts having jurisdiction thereof. It is further agreed that without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received under this Note or any Security Agreement which are made for the purpose of determining whether such rate exceeds the maximum lawful contract rate, shall be made, to the extent permitted by applicable law, by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of the indebtedness evidenced hereby, all interest at any time contracted for, charged or received from Maker or otherwise by Payee in connection with such indebtedness; provided, however, that if any applicable state law is amended or the law of the United States of America preempts any applicable state law, so that it becomes lawful for the Payee to receive a greater interest per annum rate than is presently allowed, the Maker agrees that, on the effective date of such amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the maximum interest per annum rate allowed by the amended state law or the law of the United States of America. The Maker and all sureties, endorsers, guarantors or any others (each such person, other than the Maker, an "Obilgor") who may at any time become liable for the payment hereof jointly and severally consent hereby to any and all extensions of time, renewals, waivers or modifications of, and all substitutions or releases of, security or of any party primarily or secondarily liable on this Note or any Security Agreement or any term and provision of either, which may be made, granted or consented to by Payee, and agree that suit may be brought and maintained against any one or more of them, at the election of Payee without joinder of any other as a party thereto, and that Payee shall not be required first to foreclose, proceed against, or exhaust any security hereof in order to enforce payment of this Note. The Maker and each Obligor hereby waives presentment, demand for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, and all other notices in connection herewith, as well as filing of suit (if permitted by law) and diligence in collecting this Note or enforcing any of the security hereof, and agrees to pay (if permitted by law) all expenses incurred in collection, including Payee's reasonable attorneys' fees. THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. This Note and any Security Agreement constitute the entire agreement of the Maker and Payee with respect to the subject matter hereof and supercedes all prior understandings, agreements and representations, express or implied. No variation or modification of this Note, or any waiver of any of its provisions or conditions, shall be valid unless in writing and signed by an authorized representative of Maker and Payee. Any such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given. Any provision in this Note or any Security Agreement which is in conflict with any statute, law or applicable rule shall be deemed omitted, modified or altered to conform thereto. Meadow Valley Contractors, Inc. /s/ Nicole Smith By: Gary W. Burnell - ------------------------------ ------------------------------(L.S.) (Witness) (Signature) Nicole Smith Gary W. Burnell - ------------------------------ --------------------------------- (Print name) Print name (and title, if applicable) 3926 E. Kimberly Way 880171959 - ------------------------------ --------- (Address) Phoenix AZ, 85050 (Federal tax identification number) COLLATERAL SCHEDULE NO. 4 THIS COLLATERAL SCHEDULE NO. 4 is annexed to and made a part of that certain Master Security Agreement dated as of November 17, 1997 between General Electric Capital Corporation, together with its successors and assigns, if any, as Secured Party and Meadow Valley Contractors, Inc. as Debtor and describes collateral in which Debtor has granted Secured Party a security interest in connection with the Indebtedness (as defined in the Security Agreement) including without limitation that certain Promissory Note dated 2/14/99 in the original principal amount of $278,250.00. Quantity Manufacturer Serial Number Year/Model and Type of Equipment - -------- ------------ ------------- -------------------------------- 1 CMI 505106 ER-1000 Excavator/Reclaimer and including all additions, attachments, accessories and accessions thereto, and any and all substitutions, replacements or exchanges therefor, and all insurance and/or other proceeds thereof. Equipment immediately listed above is located at: 1206 Mechem Drive, Ruidoso, Lincoln County, NM 88355 SECURED PARTY: DEBTOR: General Electric Capital Corporation Meadow Valley Contractors, Inc. By: /s/ [ILLEGIBLE]^^ By: /s/ Gary W. Burnell --------------------------------- ------------------------- Title: Senior Risk Analyst Title: VP/CFO ------------------------------ ---------------------- Date: 2/19/99 Date: 2-11-99 ------------------------------- ------------------------ EX-10.96 3 PROMISSORY NOTE EXECUTED BY GENERAL ELECTRIC EXHIBIT 10.96 PROMISSORY NOTE 6/4/99 ------------ (Date) 4411 South 40th Street, Suite D-11, Phoenix, Maricopa County, AZ 85040 - ----------------------------------------------------------------------------- (Address of Maker) FOR VALUE RECEIVED, Meadow Valley Contractors, Inc. ("Maker") promises, jointly and severally if more than one, to pay to the order of General Electric Capital Corporation or any subsequent holder hereof (each, a "Payee") at its office located at One Lincoln Centre, 5400 LBJ Freeway Suite 1280, L.B. 3, Dallas, TX 75240 or at such other place as Payee or the holder hereof may designate, the principal sum of Three hundred thirty-eight thousand eight hundred forty-five and no/100 Dollars ($338,845.00), with interest on the unpaid principal balance, from the date hereof through and including the dates of payment, at a fixed, simple interest rate of Seven and 81/100 percent (7.81%) per annum, to be paid in lawful money of the United States, in Sixty (60) consecutive monthly installments of principal and interest as follows: Periodic Installment Amount ---------------------------- 1 thru 59 $ 6,839.78 each ("Periodic Installment") and a final installment which shall be in the amount of the total outstanding principal and interest. The first Periodic Installment shall be due and payable on July 4, 1999 and the following Periodic Installments and the final installment shall be due and payable on the same day of each succeeding period (each, a "Payment Date"). All payments shall be applied first to interest and then to principal. The acceptance by Payee of any payment which is less than payment in full of all amounts due and owing at such time shall not constitute a waiver of Payee's right to receive payment in full at such time or at any prior or subsequent time. Interest shall be calculated on the basis of a 365 day year (366 day leap year). The payment of any Periodic Installment after its due date shall result in a corresponding decrease in the portion of the Periodic Installment credited to the remaining unpaid principal balance. The payment of any Periodic Installment prior to its due date shall result in a corresponding increase in the portion of the Periodic Installment credited to the remaining unpaid principal balance. The Maker hereby expressly authorizes the Payee to insert the date value is actually given in the blank space on the face hereof and on all related documents pertaining hereto. This Note may be secured by a security agreement, chattel mortgage, pledge agreement or like instrument (each of which is hereinafter called a "Security Agreement"). Time is of the essence hereof. If any installment or any other sum due under this Note or any Security Agreement is not received within ten (10) days after its due date, the Maker agrees to pay, in addition to the amount of each such installment or other sum, a late payment charge of five percent (5%) of the amount of said installment or other sum, but not exceeding any lawful maximum. If (i) Maker fails to make payment of any amount due hereunder within ten (10) days after the same becomes due and payable; or (ii) Maker is in default under, or fails to perform under any term or condition contained in any Security Agreement, then the entire principal sum remaining unpaid, together with all accrued interest thereon and any other sum payable under this Note or any Security Agreement, at the election of Payee, shall immediately become due and payable, with interest thereon at the lesser of eighteen percent (18%) per annum or the highest rate not prohibited by applicable law from the date of such accelerated maturity until paid (both before and after any judgment). The Maker may prepay in full, but not in part, its entire indebtedness hereunder upon payment of the entire indebtedness plus an additional sum as a premium equal to the following percentages of the original principal balance for the indicated period: Prior to the first annual anniversary date of this Note: One percent (1%) and zero percent (0%) thereafter, plus all other sums due hereunder or under any Security Agreement. It is the intention of the parties hereto to comply with the applicable usury laws; accordingly, it is agreed that, notwithstanding any provision to the contrary in this Note or any Security Agreement, in no event shall this Note or any Security Agreement require the payment or permit the collection of interest in excess of the maximum amount permitted by applicable law. If any such excess interest is contracted for, charged or received under this Note or any Security Agreement, or if all of the principal balance shall be prepaid, so that under any of such circumstances the amount of interest contracted for, charged or received under this Note or any Security Agreement on the principal balance shall exceed the maximum amount of interest permitted by applicable law, then in such event (a) the provisions of this paragraph shall govern and control, (b) neither Maker nor any other person or entity now or hereafter liable for the payment hereof shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest permitted by applicable law, (c) any such excess which may have been collected shall be either applied as a credit against the then unpaid principal balance or refunded to Maker, at the option of the Payee, and (d) the effective rate of interest shall be automatically reduced to the maximum lawful contract rate allowed under applicable law as now or hereafter construed by the courts having jurisdiction thereof. It is further agreed that without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received under this Note or any Security Agreement which are made for the purpose of determining whether such rate exceeds the maximum lawful contract rate, shall be made, to the extent permitted by applicable law, by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of the indebtedness evidenced hereby, all interest at any time contracted for, charged or received from Maker or otherwise by Payee in connection with such indebtedness; provided, however, that if any applicable state law is amended or the law of the United States of America preempts any applicable state law, so that it becomes lawful for the Payee to receive a greater interest per annum rate than is presently allowed, the Maker agrees that, on the effective date of such amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the maximum interest per annum rate allowed by the amended state law or the law of the United States of America. The Maker and all sureties, endorsers, guarantors or any others (each such person, other than the Maker, an "Obligor") who may at any time become liable for the payment hereof jointly and severally consent hereby to any and all extensions of time, renewals, waivers or modifications of, and all substitutions or releases of, security or of any party primarily or secondarily liable on this Note or any Security Agreement or any term and provision of either, which may be made, granted or consented to by Payee, and agree that suit may be brought and maintained against any one or more of them, at the election of Payee without joinder of any other as a party thereto, and that Payee shall not be required first to foreclose, proceed against, or exhaust any security hereof in order to enforce payment of this Note. The Maker and each Obligor hereby waives presentment, demand for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, and all other notices in connection herewith, as well as filing of suit (if permitted by law) and diligence in collecting this Note or enforcing any of the security hereof, and agrees to pay (if permitted by law) all expenses incurred in collection, including Payee's reasonable attorneys' fees THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. This Note and any Security Agreement constitute the entire agreement of the Maker and Payee with respect to the subject matter hereof and supercedes all prior understandings, agreements and representations, express or implied. No variation or modification of this Note, or any waiver of any of its provisions or conditions, shall be valid unless in writing and signed by an authorized representative of Maker and Payee. Any such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given. Any provision in this Note or any Security Agreement which is in conflict with any statute, law or applicable rule shall be deemed omitted, modified or altered to conform thereto. Meadow Valley Contractors, Inc. /s/ Nicole Smith By: /s/ Gary W. Burnell (L.S.) - ---------------------- ----------------------------- (Witness) (Signature) Nicole Smith GARY W. BURNELL, VP/CFO - ---------------------- --------------------------------- (Print name) Print name (and title, if applicable) 3926 E. Kimberly Way 880171959 - ---------------------- ---------- (Address) Phoenix AZ 85050 (Federal tax identification number) COLLATERAL SCHEDULE NO. 5 THIS COLLATERAL SCHEDULE NO. 5 is annexed to and made a part of that certain Master Security Agreement dated as of November 17, 1997 between General Electric Capital Corporation, together with its successors and assigns, if any, as Secured Party and Meadow Valley Contractors, Inc. as Debtor and describes collateral in which Debtor has granted Secured Party a security interest in connection with the Indebtedness (as defined in the Security Agreement) including without limitation that certain Promissory Note dated 6/4/99 in the original principal amount of $338,845.00.
Quantity Manufacturer Serial Number Year/Model and Type of Equipment - -------- ------------ ------------- -------------------------------- 1 Linkbelt 18HA738 1979 HC218A Lattice Boom Truck Crane, 22Oft boom, 70ft jib, 70 ton hook block & headache ball
and including all additions, attachments, accessories and accessions thereto, and any and all substitutions, replacements or exchanges therefor, and all insurance and/or other proceeds thereof. Equipment immediately listed above is located at: 4411 South 40th Street, Phoenix, Maricopa County, AZ 85040 SECURED PARTY: DEBTOR: General Electric Capital Corporation Meadow Valley Contractors, Inc. By: /s/ [ILLEGIBLE]^^ By: /s/ Gary W. Burnell - --------------------------------- ------------------------------- Title: SENIOR RISK ANALYST Title: VP/CFO --------------------------- ---------------------------- Date: 6/4/99 Date: 6/2/99 ---------------------------- ----------------------------- EX-10.97 4 PROMISSORY NOTE EXECUTED BY JOHN DEERE COMPANY EXHIBIT 10.97 SETTLED FOR? New Used For Office Yes No X X J 908 801 262-7441 14May99 Use Only P01 880171959 - ------------------------------------------------------------------------------------------------------------------------------------ SELLER'S NAME & ADDRESS SCOTT MACHINERY COMPANY 4055 SOUTH 500 WEST SALT LAKE CIT UT 84123 - ------------------------------------------------------------------------------------------------------------------------------------ BORROWER'S (DEBTOR'S) NAME (Last Name First) BORROWER'S (DEBTOR'S) NAME (Last Name First) & MAILING ADDRESS (including County & Zip) & MAILING ADDRESS (including Zip) - ------------------------------------------------------------------------------------------------------------------------------------ MEADOW VALLEY CONTRACTORS, INC. - ------------------------------------------------------------------------------------------------------------------------------------ P.O. BOX 60726 - ------------------------------------------------------------------------------------------------------------------------------------ PHOENIX MARIC AZ 85082 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ BORROWER'S (DEBTOR'S) PHONE NO. BORROWER (DEBTOR) RESIDES BORROWER (DEBTOR) AGREES TO PLACE OF FILING IN (Country, State) KEEP GOODS IN (Co./St.) (Town & State) 602 437-5400 MARIC AZ WEAVER UT SEC. OF STATE - ------------------------------------------------------------------------------------------------------------------------------------ BORROWER'S SOC. SEC. NO. (First Signer) or TYPE OF BUSINESS NAME & TITLE OF SIGNING OFFICER (If Corporation or LLC) ------------------------------ FED. TAX ID. NO. Prop. Partner Corp. LLC ###-##-#### X BRADLEY E. LARSON, * PRESIDENT - ------------------------------------------------------------------------------------------------------------------------------------
I hereby apply to John Deere Construction Equipment Company (the "Lender") for a loan of the Amount Financed shown below, and on the following terms and conditions. The amount of the Unpaid Balance of Cash Price shown below on Line 3 is to be used to finance the Balance Due on the Purchase Order executed in connection with the purchase from the Lender of the Equipment described below (the "Goods"). I agree that I have received the Goods. PARTIES: In this agreement, the words "I", "me", and "my" mean the persons, whether one or more, who sign it as "Borrower(s)" (who is also known as "Debtor(s)"). PROMISSORY NOTE: If this Loan Contract is accepted by Lender, I promise to pay to Lender or its order the TOTAL OF PAYMENTS as in line 9 below, in monthly installments and/or installments other than monthly as shown below. If more than one person signs this agreement as "Borrower", we will be jointly and severally liable for all amounts due under this agreement. I represent that the Goods are being purchased for a business or commercial purpose.
- ------------------------------------------------------------------------------------------------------------------------------------ Qty New MFR. MODEL GOODS (Equipment) PRODUCT IDENTIFICATION NO. DELIVERED CASH PRICE Used - ------------------------------------------------------------------------------------------------------------------------------------ 1 N JD 160L 160LC EXCAVATOR P00160X040482 128500 00 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 128500 00 - ------------------------------------------------------------------------------------------------------------------------------------ OTY. MFR. MODEL DESCRIPTION OF TRADE-IN (From Purchase Order) PRODUCT IDENTIFICATION NO. AMOUNT --------------------------------------------------------------------------------------------------------------------------- TRADE-IN DATA --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- CASH DOWN PAYMENT: 26,180.00 TOTAL TRADE-IN 00 - ------------------------------------------------------------------------------------------------------------------------------------ INSTALLMENTS OTHER THAN MONTHLY MONTHLY INSTALLMENTS - ------------------------------------------------------------------------------------- Amount No. Of When Payments Amount No. Of Amount Of First Payment Financed Mos. Are Due Of Payments Payments Each Payment Due Date - ------------------------------------------------------------------------------------- 48 2499 05 01-Aug-99 - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ ITEMIZATION OF AMOUNT FINANCED - ------------------------------------------------------------------------------------------------------------------------------------ SALES TAX 8159 75 - ------------------------------------------------------------------------------------------------------------------------------------ 01-Jul-03 CASH PRICE (Including Tax) 1 136659 75 - ------------------------------------------------------------------------------------- TOTAL DOWN PAYMENT (Sum of - ------------------------------------------------------------------------------------- Payments are due each successive month on the same day Trade-In & Cash Down Payment) 2 26180 00 of the month as the first payment except as follows: - ------------------------------------------------------------------------------------------------------------------------------------ JUN 99 UNPAID BALANCE 3 110479 75 - ------------------------------------------------------------------------------------------------------------------------------------ DOCUMENTATION FEES 4 400 00 - ------------------------------------------------------------------------------------------------------------------------------------ OFFICIAL FEES 5 20 00 - ------------------------------------------------------------------------------------------------------------------------------------ TOTALS DATE FINANCE CHARGE BEGINS: 01-Jul-99 INSURANCE-Credit Life and/or Physical Damage 6 00 - ------------------------------------------------------------------------------------------------------------------------------------ SECURITY AGREEMENT: To secure the indebtedness evidenced by this contract, I hereby PRINCIPAL BALANCE 7 110899 75 grant to Lender (Secured Party) a Security Interest in the Goods described above ----------------------------------------------- (which term includes items, if any, listed as "security" or "additional security") FINANCE CHARGE 8 9054 65 and all parts and accessories now or hereafter incorporated in or on such Goods by ----------------------------------------------- way of addition, accession or replacement, together with all proceeds, including, TOTAL without limitation, insurance proceeds. (Principal Balance plus 9 119954 40 finance Charge) EARLY PAYMENT: I may prepay my obligation in full at any time prior to the original ----------------------------------------------- or any extended maturity and will be charged only for earned Finance Charges. No ANNUAL INTEREST RATE penalties will be imposed for early payment. The cost of the Borrower(s) credit as a yearly rate. 3.90% ADDITIONAL CONTRACT INFORMATION: See the front and back of this agreement for ----------------------------------------------- additional information and terms regarding non-payment, default, the right to demand immediate payment, and prepayment refunds. ----------------------------------------------- LATE PAYMENTS: In addition to promising to pay the installments set forth above, I promise to pay past due penalty on each installment in default more than 10 days (15 days in North Carolina) not to exceed the highest penalty permitted by applicable state law.
RETURNED CHECK FEE: If payment is made by a check, draft, or order which is dishonored, I agree to pay you a fee of $20 or such lesser amount specified by applicable law. STATE LAW APPLYING: EXCEPT AS PROHIBITED BY THE LAW OF THE STATE WHERE I LIVE, THE CONSTRUCTION AND VALIDITY OF THIS AGREEMENT SHALL BE CONTROLLED BY THE LAW OF IOWA, WHERE THIS AGREEMENT IS ACCEPTED AND ENTERED INTO, AND THE VALIDITY OF THE SECURITY INTEREST SHALL BE CONTROLLED BY THE LAW OF THE STATE WHERE THE GOODS ARE TO BE KEPT AND USED. PHYSICAL DAMAGE INSURANCE REQUIRED (See Provisions on Reverse Side) Liability insurance coverage for bodily injury and property damage caused to others not included. If you desire Liability coverage, you should obtain such coverage from an agent of your choice. - -------------------------------------------------------------------------------- ADDITIONAL PROVISIONS CONCERNING RIGHTS OF THE PARTIES ON REVERSE SIDE ARE A PART OF THIS CONTRACT - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ INSURANCE DISCLOSURES: I may obtain Physical Damage Insurance from NO. MOS. PREMIUM I want Physical Damage Insurance anyone I want that is acceptable to Lender. If I get this insurance (Sign in this box) through Seller, I will pay the Premium shown at right. No insurance will be provided unless I sign at the right, the premium is shown and Lender accepts this contract. X - ------------------------------------------------------------------------------------------------------------------------------------ Credit Life Insurance is not required to obtain credit and will not NO. MOS. PREMIUM I want Credit Life Insurance be provided unless I sign at the right, the premium is shown and (Sign in this box) Lender accepts this contract. X Age: - ------------------------------------------------------------------------------------------------------------------------------------
NOTICE TO BORROWER(S): 1. Do not sign this contract before you read it or if it contains blank spaces. 2. You are entitled to an exact and completely filled in copy of this contract when you sign it. Keep it to protect your legal rights. 3. Under the law, you have the following rights, among others: a. to pay off in advance the full amount due and to obtain a partial refund of the finance charge; b. to redeem the property if repossessed for a default within the time provided by law; c. to require, under certain conditions, a resale of the property if repossessed. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN IT. I acknowledge receipt of a true copy hereof. MEADOW VALLEY CONTRACTORS, INC. DO NOT WRITE IN SHADED AREA. - FOR DEERE CREDIT SERVICES, INC. USE ONLY. --------------------------------------------------- /s/ Bradley E. Larson - Pres. Date 6/29/99 Accepted By: JOHN DEERE CONSTRUCTION EQUIPMENT - -------------------------------------------------------------- ---------- COMPANY (Lender/Secured Party) Borrower's (Debtor's) Signature BRADLEY E. LARSON, President AT 1415 28th Street, P.O. Box 65090, West Des ------------------------------------------ ______________________________________________________________ Date __________ Moines, IA 50265-0090 Borrower's (Debtor's) Signature ------------------------------------------- (Address) ______________________________________________________________ Date __________ BY /s/ Margaret Thomas Date 7/9/99 Borrower's (Debtor's) Signature ----------------------------- ------------- (Authorized Signature) ---------------------------------------------------
EX-10.98 5 PROMISSORY NOTE EXECUTED BY JOHN DEERE COMPANY EXHIBIT 10.98 - ------------------------------------------------------------------------------------------------------------------------------------ GOODS PREVIOUSLY CONSTRUCTION DEALER ACCOUNT DEALER PHONE NO. APPLICATION DATE ACCEPTED CONTRACT NO. SETTLED FOR? NUMBER DATE BY J.D. CONS. EQMT. CO New Used For Office Yes X No JX 908 801 262-7441 14 MAY 99 Use Only P02 880171959 17 - ------------------------------------------------------------------------------------------------------------------------------------ SELLER'S NAME & ADDRESS SCOTT MACHINERY COMPANY 4055 SOUTH 500 WEST SALT LAKE CIT UT 84123 - ------------------------------------------------------------------------------------------------------------------------------------ BORROWER'S (DEBTOR'S) NAME (Last Name First) BORROWER'S (DEBTOR'S) NAME (Last Name First) & MAILING ADDRESS (including County & Zip) & MAILING ADDRESS (including Zip) - ------------------------------------------------------------------------------------------------------------------------------------ MEADOW VALLEY CONTRACTORS, INC. - ------------------------------------------------------------------------------------------------------------------------------------ P.O. BOX 60726 - ------------------------------------------------------------------------------------------------------------------------------------ PHOENIX MARIC AZ 85082 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ BORROWER'S (DEBTOR'S) PHONE NO. BORROWER (DEBTOR) RESIDES BORROWER (DEBTOR) AGREES TO PLACE OF FILING IN (Country, State) KEEP GOODS IN (Co./St.) (Town & State) 602 437-5400 MARIC AZ WEAVER UT SEC. OF STATE - ------------------------------------------------------------------------------------------------------------------------------------ BORROWER'S SOC. SEC. NO. (First Signer) or TYPE OF BUSINESS NAME & TITLE OF SIGNING OFFICER (If Corporation or LLC) ------------------------------ FED. TAX ID. NO. Prop. Partner Corp. LLC ###-##-#### X BRADLEY E. LARSON * PRESIDENT - ------------------------------------------------------------------------------------------------------------------------------------
I hereby apply to John Deere Construction Equipment Company (the "Lender") for a loan of the Amount Financed shown below, and on the following terms and conditions. The amount of the Unpaid Balance of Cash Price shown below on Line 3 is to be used to finance the Balance Due on the Purchase Order executed in connection with the purchase from the Lender of the Equipment described below (the "Goods"). I agree that I have received the Goods. PARTIES: In this agreement, the words "I", "me", and "my" mean the persons, whether one or more, who sign it as "Borrower(s)" (who is also known as "Debtor(s)"). PROMISSORY NOTE: If this Loan Contract is accepted by Lender, I promise to pay to Lender or its order the TOTAL OF PAYMENTS as in line 9 below, in monthly installments and/or installments other than monthly as shown below. If more than one person signs this agreement as "Borrower", we will be jointly and severally liable for all amounts due under this agreement. I represent that the Goods are being purchased for a business or commercial purpose.
- ------------------------------------------------------------------------------------------------------------------------------------ Qty. New MFR. MODEL GOODS (Equipment) PRODUCT IDENTIFICATION NO. DELIVERED CASH PRICE Used - ------------------------------------------------------------------------------------------------------------------------------------ 1 U JD 310E WHEEL LOADER BACKHOE T0310EX839952 55800 00 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 55800 00 - ------------------------------------------------------------------------------------------------------------------------------------ QTY. MFR. MODEL DESCRIPTION OF TRADE-IN (From Purchase Order) PRODUCT IDENTIFICATION NO. AMOUNT --------------------------------------------------------------------------------------------------------------------------- TRADE-IN DATA --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- CASH DOWN PAYMENT: 3,500.00 TOTAL TRADE-IN 00 - ------------------------------------------------------------------------------------------------------------------------------------ INSTALLMENTS OTHER THAN MONTHLY MONTHLY INSTALLMENTS - ------------------------------------------------------------------------------------- Amount No. Of When Payments Amount No. Of Amount Of First Payment Financed Mos. Are Due Of Payments Payments Each Payment Due Date - ------------------------------------------------------------------------------------- 48 1366 95 01-Aug-99 - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ ITEMIZATION OF AMOUNT FINANCED - ------------------------------------------------------------------------------------------------------------------------------------ RECEIVED SALES TAX 3543 30 - ------------------------------------------------------------------------------------------------------------------------------------ JUL 06 1999 01-JUL-03 CASH PRICE (Including Tax) 1 59343 30 - ------------------------------------------------------------------------------------------------------------------------------------ DEERE CREDIT SERVICE TOTAL DOWN PAYMENT (Sum of - ------------------------------------------------------------------------------------- Payments are due each successive month on the same day Trade-In & Cash Down Payment) 2 3500 00 of the month as the first payment except as follows: - ------------------------------------------------------------------------------------------------------------------------------------ JUN 99 UNPAID BALANCE 3 55843 30 - ------------------------------------------------------------------------------------------------------------------------------------ DOCUMENTATION FEES 4 400 00 - ------------------------------------------------------------------------------------------------------------------------------------ OFFICIAL FEES 5 20 00 - ------------------------------------------------------------------------------------------------------------------------------------ TOTALS DATE FINANCE CHARGE BEGINS: 01-JUL-99 INSURANCE Credit Life and/or Physical Damage 6 00 - ------------------------------------------------------------------------------------------------------------------------------------ SECURITY AGREEMENT: To secure the indebtedness evidenced by this contract, I hereby PRINCIPAL BALANCE 7 56263 30 grant to Lender (Secured Party) a Security Interest in the Goods described above ----------------------------------------------- (which term includes items, if any, listed as "security" or "additional security") FINANCE CHARGE 8 9350 30 and all parts and accessories now or hereafter incorporated in or on such Goods ------------------------------------------------ by way of addition, accession or replacement, together with all proceeds, TOTAL including, without limitation, insurance proceeds. (Principal Balance plus 9 65613 60 finance Charge) EARLY PAYMENT: I may prepay my obligation in full at any time prior to the original ----------------------------------------------- or any extended maturity and will be charged only for earned Finance Charges. No ANNUAL INTEREST RATE penalties will be imposed for early payment. The cost of the Borrower(s) credit as a yearly rate. 7.75% ADDITIONAL CONTRACT INFORMATION: See the front and back of this agreement for ----------------------------------------------- additional information and terms regarding non-payment, default, the right to demand immediate payment, and prepayment refunds. ----------------------------------------------- LATE PAYMENTS: In addition to promising to pay the installments set forth above, I promise to pay past due penalty on each installment in default more than 10 days (15 days in North Carolina) not to exceed the highest penalty permitted by applicable state law.
RETURN CHECK FEE: If payment is made by a check, draft, or order which is dishonored, I agree to pay you a fee of $20 or such lesser amount specified by applicable law. STATE LAW APPLYING: EXCEPT AS PROHIBITED BY THE LAW OF THE STATE WHERE I LIVE, THE CONSTRUCTION AND VALIDITY OF THIS AGREEMENT SHALL BE CONTROLLED BY THE LAW OF IOWA, WHERE THIS AGREEMENT IS ACCEPTED AND ENTERED INTO, AND THE VALIDITY OF THE SECURITY INTEREST SHALL BE CONTROLLED BY THE LAW OF THE STATE WHERE THE GOODS ARE TO BE KEPT AND USED. PHYSICAL DAMAGE INSURANCE REQUIRED (See Provisions on Reverse Side) Liability insurance coverage for bodily injury and property damage caused to others not included. If you desire Liability coverage, you should obtain such coverage from an agent of your choice. - -------------------------------------------------------------------------------- ADDITIONAL PROVISIONS CONCERNING RIGHTS OF THE PARTIES ON REVERSE SIDE ARE A PART OF THIS CONTRACT - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ INSURANCE DISCLOSURES: I may obtain Physical Damage Insurance from NO. MOS. PREMIUM I want Physical Damage Insurance anyone I want that is acceptable to Lender. If I get this insurance (Sign in this box) through Seller, I will pay the Premium shown at right. No insurance will be provided unless I sign at the right, the premium is shown and Lender accepts this contract. X - ------------------------------------------------------------------------------------------------------------------------------------ Credit Life Insurance is not required to obtain credit and will not NO. MOS. PREMIUM I want Credit Life Insurance be provided unless I sign at the right, the premium is shown and (Sign in this box) Lender accepts this contract. X Age: - ------------------------------------------------------------------------------------------------------------------------------------
NOTICE TO BORROWER(S): 1. Do not sign this contract before you read it or if it contains blank spaces. 2. You are entitled to an exact and completely filled in copy of this contract when you sign it. Keep it to protect your legal rights. 3. Under the law, you have the following rights, among others: a. to pay off in advance the full amount due and to obtain a partial refund of the finance charge; b. to redeem the property if repossessed for a default within the time provided by law; c. to require, under certain conditions, a resale of the property if repossessed. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN IT. I acknowledge receipt of a true copy hereof. MEADOW VALLEY CONTRACTORS, INC. DO NOT WRITE IN SHADED AREA. - FOR DEERE CREDIT SERVICES, INC. USE ONLY. --------------------------------------------------- /s/ Bradley E. Larson - Pres. Date 6/29/99 Accepted By: JOHN DEERE CONSTRUCTION EQUIPMENT - -------------------------------------------------------------- ---------- COMPANY (Lender/Secured Party) Borrower's (Debtor's) Signature BRADLEY E. LARSON, President AT 1415 28th Street, P.O. Box 65090, West Des ______________________________________________________________ Date __________ Moines, IA 50265-0090 Borrower's (Debtor's) Signature ------------------------------------------- (Address) ______________________________________________________________ Date __________ BY /s/ Margaret Thomas Date 7/9/99 Borrower's (Debtor's) Signature ----------------------------- ------------- (Authorized Signature) ---------------------------------------------------
EX-10.99 6 TRANSFER AND ASSUMPTION AGREEMENT EXHIBIT 10.99 TRANSFER AND ASSUMPTION 1001-2051 AGREEMENT ................ Account Number [LOGO](R) This transfer and Assumption Agreement dated July 23, 1999 is entered into by and between the undersigned transferor ("Transferor"), the undersigned transferee ("Transferee"), Associates Leasing, Inc. ("Associates") and any guarantor or endorser signing below. On January 28, 1998, Transfer leased from Associates the following described property (herein, with all present and future attachments, accessories, replacement parts, repairs, additions, and all proceeds thereof, referred to as "Property"): One (1) Sky Trak Model 10042 Telescopic Handler, SN: 5197, with 10,000 lbs. reach forklift, 72 inch carriage, 60 inch forks and on that date executed a Lease (herein, with all amendments thereto, referred to as the "Contract") evidencing the leasing of the Property for the aggregate rent set forth therein, of which there now remains unpaid the sum of $62,522.10 ("Unpaid Rentals") which is payable in 30 remaining installments as follows: $62,522.10 For equal successive (a) $2,084.07 on August 1, 1999 and a like sum on the monthly installments like date of each month thereafter until fully paid, provided, however, that the final installment of rent shall be in the amount of the remaining Unpaid Rentals. For other than equal (b) successive monthly installments: The Contract and any guarantees and other documents executed in connection with the Contract are herein collectively called the "Documents". Transferor has advised Associates that Transferor desires to transfer to Transferee and that Transferee desires to acquire Transferor's interest, as lessee, in the Property, but Transferor is prohibited from doing so without first obtaining the written consent of Associates to such transfer. Transferor has requested Associates to consent to the transfer of Transferor's interest as lessee in the Property by Transferor to Transferee. Associates has expressed its willingness to give its written consent to such transfer provided that: (i) this Agreement is executed by Transferor and Transferee and delivered to Associates; (ii) any guarantors and/or endorsers of Transferor's obligations under the Contract (individually and collectively called the "Guarantor") execute this Agreement or such other consent and acknowledgment of the continuance of their obligations and liabilities under the Documents as Associates may require; and (iii) the ownership rights of Associates in the Property is and continues to be valid, first, prior to all others and effective against all persons whether such persons are claiming by, through or under Transferor, Transferee or any other person. NOW, THEREFORE, Transferor, for and in consideration of One Dollar and other valuable consideration paid to Transferor by Transferee, hereby assigns to Transferee, all of Transferor's interest as lessee in and to the Property, subject to the terms, conditions and agreements hereof and of the Contract. The Property will be kept at: 4411 S. 40th Street, D-11, Phoenix, Maricopa, AZ 84040 ------------------------------------------------------------------------ (Street Address & City) (County) (State/Province & Zip Code) Present location of the Property 1501 State Highway #168, Moapa, Clark, NV 89025 if different from the foregoing: ------------------------------------------------------------------- (Street Address & City) (County) (State/Province & Zip Code)
No oral Agreement, Guaranty, Promise, Representation or Warranty shall be binding on Associates. Each of the parties executing this Agreement acknowledges receipt of a copy hereof. The additional terms and conditions on the reverse side are a part of this agreement. IN WITNESS WHEREOF, we have hereunto set our hands and seals as of the day and year first above written. TRANSFEROR Prestressed Products Incorporated TRANSFEREE Meadow Valley Contractors, Inc. -------------------------------------------------- ------------------------------------------------- (Name of individual(s), corporation or partnership. (Name of individual(s), corporation or partnership. Give trade style, if any, after name.) Give trade style, if any, after name.) By: /s/ Kenneth D. Nelson Title Vice President By /s/ Kenneth D. Nelson Title Vice President --------------------- -------------------- ---------------------------- -------------------- (If corporation, authorized officer must sign and (If corporation, authorized officer, must sign and show show corporate title. corporate title. If partnership, a general partner must sign. If owner(s) If partnership, a general partner must sign. If owner(s) or or partner, show which.) partner, show which.) 4411 S. 40th Street, D-11 -------------------------------------------------------- (Street Address of Transferee) Phoenix, MARICOPA, AZ 84040 -------------------------------------------------------- (City, COUNTY, State/Province and Zip Code) Witnesses to Transferee's signature /s/ [ILLEGIBLE]^^ /s/ [ILLEGIBLE]^^ ------------------------------------------- -------------------------------------------------------- (Witness) (Witness) GUARANTOR GUARANTOR or ENDORSER Meadow Valley Corporation or ENDORSER_____________________________________________ ----------------------------------------------- (Name of individual, corporation or partnership) (Name of individual, corporation or partnership.) By /s/ Kenneth D. Nelson, V.P. By______________________________________________________ ------------------------------------------------------- (Individual guarantors must sign without titles. (Individual guarantors must sign without titles. Sign simply "John Smith," not "John Smith, President.") Sign simply "John Smith," not "John Smith, President.")
Associates hereby consents to the above transfer and assumption pursuant to the terms and conditions of the above agreement. ASSOCIATES LEASING, Inc. By_________________________________ ----------------- (Authorized Representative) (Additional terms and conditions of transfer and assumption agreement) In consideration of the written consent of Associates, Transferee hereby: promises to pay the Unpaid Rentals to Associates in accordance with the schedule set forth on the face hereof; assumes all of the obligations and liabilities of Transferor contained in the Contract as though Transferee was the original lessee of the Property. Transferor agrees that, notwithstanding the transfer referred to herein, Transferor is in no way released from its obligations set forth in the Contract, but is and shall continue to be firmly bound thereby. Transferor and Transferee jointly and severally agree to pay the Unpaid Rentals and to pay and perform all other obligations and liabilities under the Contract. Transferee agrees that no warranties have been made as to the Property by Associates, that ASSOCIATES MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE QUALITY, WORKMANSHIP, DESIGN, MERCHANTABILITY, SUITABILITY OR FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED and that Associates shall not under any circumstances be liable for any loss or damage whatsoever including, without limitation, loss of anticipatory profits or for consequential damages. Transferor and Transferee agree to promptly cause such actions or procedures to be taken as are required or permitted by statute or regulation to accomplish such transfer and to protect Associates ownership of the Property, including, without limitation, filing financing statements, recording documents, and obtaining Certificates of Title (to the extent permitted by law), Associates assuming no responsibility therefor. Guarantor consents to the above transfer, and agrees that such transfer shall not affect its obligations and liabilities under the Documents, which obligations and liabilities shall remain in full force and effect. Transferor and Guarantor each consents that Associates may, without notice to any of them and without affecting any of their obligations and liabilities hereunder and/or under the Documents, elect any remedy, and compound or release any rights against Transferee or any other persons obligated under the Documents, and release all or any part of the Property, on terms satisfactory to Associates, by operation of law or otherwise, and settle, compromise or adjust any and all rights against and grant extensions of time or payment to Transferee or any other persons obligated under the Documents. EX-10.100 7 LEASE AGREEMENT WITH BANC ONE LEASING CORP. EXHIBIT 10.100 [LOGO] LEASE SCHEDULE NO. 1000098533 FINANCING LEASE ---------- (Per Diem Interim Rent) Master Lease Agreement dated 04/24/98 -------------- Lessor: BANC ONE LEASING CORPORATION ---------------------------- Lessee: MEADOW VALLEY CONTRACTORS, INC. ------------------------------ 1. GENERAL. This Lease Schedule is signed and delivered under the Master Lease Agreement identified above, as amended from time to time ("Master Lease"), between Lessee and Lessor. Capitalized terms defined in the Master Lease will have the same meanings when used in this Schedule. 2. FINANCING. Lessor finances for Lessee, and Lessee finances with Lessor, all of the property ("Equipment") described in Schedule A-1 attached hereto (and Lessee represents that all Equipment is new unless specifically identified as used): 3. AMOUNT FINANCED: Equipment Cost: $ 164,836.22 Set-up/Filing Fee: N/A Miscellaneous: N/A Sales Tax: N/A Total: $ 164,836.22 ---------- 4. FINANCING TERM. The Base Term of this Schedule shall be 84 months and the -- Base Term shall commence on the Acceptance Date ("Commencement Date"). The total ---------- ---- Lease Term consists of the Interim Term plus the Base Term. The Interim Term begins on the date that Lessor accepts this Schedule as stated below Lessor's signature ("Acceptance Date") and continues up to the Commencement Date. 5. INSTALLMENT PAYMENTS/FEES. As financing for the Equipment, Lessee shall pay to Lessor all amounts stated below on the due dates stated below. There shall be added to each installment payment all applicable Taxes as in effect from time to time. (a) For the Interim Term, Lessee shall pay to Lessor on the Commencement Date an amount equal to one-thirtieth (1/30th) of the Installment Payment multiplied by the number of days in the Interim Term. "Installment Payment" means the total of all installment payments due and payable during the Base Term divided by the number of months in the Base Term. (b) During the Base Term, Lessee shall pay to Lessor installment payments in the amounts and according to the timing set forth below, provided however, that notwithstanding the following, the final installment payment due hereunder shall be equal to the remaining principal balance hereunder together with all accrued interest and fees. (1) Amount of each installment payment during the Base Term (including principal and interest): 84 MONTHLY PAYMENTS AT $2,588.71 (2) Frequency of installment payments during the Base Term: MONTHLY (3) Timing of installment payments during the Base Term: ARREARS Page 1 of 4 [LOGO OF BANK ONE] (c) Lessee shall pay Lessor a Set-Up/Filing Fee as follows: (1) $N/A shall be paid on the Acceptance Date, or --- (2) $N/A has been included in the above Amount Financed of the Equipment. --- (d) Security Deposit: $N/A. On the Acceptance Date, Lessee shall pay Lessor --- said Security Deposit which shall be held in accordance with paragraph 6 below. 6. SECURITY INTEREST. This Schedule is intended to be a secured debt financing transaction, not a true lease. See Paragraph 7 below regarding Lessee's --- ownership of the Equipment. As collateral security for payment and performance of all Secured Obligations (defined in Paragraph 8 below) and to induce Lessor to extend credit from time to time to Lessee (under the Lease or otherwise), Lessee hereby grants to Lessor a first priority security interest in all of Lessee's right, title and interest in the Equipment, whether now existing or hereafter acquired, any sums specified in this Schedule as a "Security Deposit", and in all Proceeds (defined in Paragraph 8 below). At its option, Lessor may apply all or any part of any Security Deposit to cure any default of Lessee under the Lease. If upon final termination of this Schedule, Lessee has fulfilled all of the terms and conditions hereof, then Lessor shall pay to Lessee upon Lessee's written request any remaining balance of the Security Deposit for this Schedule, without interest. 7. TITLE TO EQUIPMENT; FIRST PRIORITY LIEN. Lessee represents, warrants and agrees: that Lessee currently is the lawful owner of the Equipment; that good and marketable title to the Equipment shall remain with Lessee at all times; that Lessee has granted to Lessor a first priority security interest in the Equipment and all Proceeds; and that the Equipment and all Proceeds are, and at all times shall be, free and clear of any Liens other than Lessor's security interest therein. Lessee at its sole expense will protect and defend Lessor's first priority security interest in the Equipment against all claims and demands whatsoever. 8. CERTAIN DEFINITIONS. "Secured Obligations" means (a) all payments and other obligations of Lessee under or in connection with this Schedule, and (b) all payments and other obligations of Lessee (whether now existing or hereafter incurred) under or in connection with the Master Lease and all present and future Lease Schedules thereto, and (c) all other leases, indebtedness, liabilities and/or obligations of any kind (whether now existing or hereafter incurred, absolute or contingent, direct or indirect) of Lessee to Lessor or to any affiliate of either Lessor or BANK ONE CORPORATION. "Proceeds" means all cash and non-cash proceeds of the Equipment including, without limitation, proceeds of insurance, indemnities and/or warranties. 9. AMENDMENTS TO MASTER LEASE. For purposes of this Schedule only, Lessee and Lessor agree to amend the Master Lease as follows: (a) public liability or property insurance as described in the second sentence of Section 8 will not be required; (b) the definition of "Stipulated Loss Value" in clause (b) of Section 9 is deleted and replaced by Paragraph 10 below; (c) the text of Section 10 is deleted in its entirety; (d) Subsections 23(a) and 23(c) are deleted; (e) subsection 23(b) and the last sentence of section 4 will apply only if an event of default occurs; and (f) all references in the Lease as it relates to this Schedule to "Lessee" and "Lessor" shall be changed to "Borrower" and "Lender" respectively. 10. STIPULATED LOSS VALUE. For purposes of this Schedule only, the "Stipulated Loss Value" of any item of Equipment during its Lease Term equals the aggregate of the following as of the date specified by Lessor: (a) all accrued and unpaid interest, late charges and other amounts due under this Schedule and the Master Lease to the extent it relates to this Schedule as of such specified date, plus (b) the remaining principal balance due and payable by Lessee under this Schedule as of such specified date, plus (c) interest on the amount described in the foregoing clauses (a) and (b) at the Overdue Rate commencing with the specified date; provided, that the foregoing calculation shall not exceed the maximum amount which may be collected by Lessor from Lessee under applicable law in connection with enforcement of Lessor's rights under this Schedule and the Master Lease to the extent it relates to this Schedule. Page 2 of 4 [LOGO OF BANK ONE] 11. LESSEE TO PAY ALL TAXES. For purposes of this Schedule and its Equipment only: Lessee shall pay any and all Taxes relating to this Schedule and its Equipment directly to the applicable taxing authority; Lessee shall prepare and file all reports or returns concerning any such Taxes as may be required by applicable law or regulation (provided, that Lessor shall not be identified as the owner of the Equipment in such reports or returns); and Lessee shall, upon Lessor's request, send Lessor evidence of payment of such Taxes and copies of any such reports or returns. 12. LESSEE'S ASSURANCES. Lessee irrevocably and unconditionally: (a) reaffirms all of the terms and conditions of the Master Lease and agrees that the Master Lease remains in full force and effect; (b) agrees that the Equipment is and will be used at all times solely for commercial purposes, and not for personal, family or household purposes; and (c) incorporates all of the terms and conditions of the Master Lease as if fully set forth in this Schedule. 13. REPRESENTATIONS AND WARRANTIES: Lessee represents and warrants that: (a) Lessee is a corporation, partnership or proprietorship duly organized, validly existing and in good standing under the laws of the state of its organization and is qualified to do business and is in good standing under the laws of each other state in which the Equipment is or will be located; (b) Lessee has full power, authority and legal right to sign, deliver and perform the Master Lease, this Schedule and all related documents and such actions have been duly authorized by all necessary corporate/partnership/proprietorship action; and (c) the Master Lease, this Schedule and each related document has been duly signed and delivered by Lessee and each such document constitutes a legal, valid and binding obligation of Lessee enforceable in accordance with its terms. 14. CONDITIONS. No lease of Equipment under this Schedule shall be binding on Lessor, and Lessor shall have no obligation to purchase the Equipment covered hereby, unless: (a) Lessor has received evidence of all required insurance; (b) in Lessor's sole judgment, there has been no material adverse change in the financial condition or business of Lessee or any guarantor; (c) Lessee has signed and delivered to Lessor this Schedule, which must be satisfactory to Lessor, and Lessor has signed and accepted this Schedule; (d) no change in the Code or any regulation thereunder, which in Lessor's sole judgment would adversely affect the economics to Lessor of the lease transaction, shall have occurred or shall appear to be imminent; (e) Lessor has received, in form and substance satisfactory to Lessor, such other documents and information as Lessor shall reasonably request; and (f) Lessee has satisfied all other reasonable conditions established by Lessor. 15. OTHER DOCUMENTS: EXPENSES: Lessee agrees to sign and deliver to Lessor any additional documents deemed desirable by Lessor to effect the terms of the Master Lease or this Schedule including, without limitation, Uniform Commercial Code financing statements which Lessor is authorized to file with the appropriate filing officers. Lessee hereby irrevocably appoints Lessor and any designee of Lessor as Lessee's attorney-in-fact with full power and authority in the place of Lessee and in the name of Lessee to prepare, sign, amend, file or record any Uniform Commercial Code financing statements or other documents deemed desirable by Lessor to perfect, establish or give notice of Lessor's interests in the Equipment or in any collateral as to which Lessee has granted Lessor a security interest. Lessee shall pay upon Lessor's written request any actual out-of-pocket costs and expenses paid or incurred by Lessor in connection with the above terms of this section or the funding and closing of this Schedule. 16. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (i) Lessor has not selected, manufactured, sold or supplied any of the Equipment, (ii) Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has received a copy of, and approved, the purchase orders or purchase contracts for the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (a) LESSEE HAS RECEIVED, INSPECTED AND APPROVED ALL OF THE EQUIPMENT; (b) ALL EQUIPMENT IS IN GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND Page 3 of 4 LOGO ALL APPLICABLE SPECIFICATIONS; (c) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR PURPOSES OF THE LEASE "AS-IS, WHERE-IS" WITH ALL FAULTS; AND (d) LESSEE UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF THE EQUIPMENT. LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE AGREES THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING THE EQUIPMENT OR THIS SCHEDULE. BANC ONE LEASING CORPORATION MEADOW VALLEY CONTRACTORS, INC. - ---------------------------- ------------------------------- (Lessor) (Lessee) By: /s/ [ILLEGIBLE] By: /s/ Bradley E Larson ------------------------- ---------------------------- Title: Funding Authority Title: President ---------------------- ------------------------- Acceptance Date: 9-10-99 Witness: /s/ Julie L. Bergo ------------ ----------------------- Page 4 of 4 CORPORATE GUARANTY Master Lease Agreement Date: 04/24/98 -------- Lessee Name: MEADOW VALLEY CONTRACTORS, INC ------------------------------ Equipment Cost: $164,836.22 ----------- 1. For valuable consideration, the receipt of which is hereby acknowledged, the undersigned jointly and severally unconditionally guarantee to BANC ONE LEASING CORPORATION (hereinafter called "Lessor") the full and prompt performance by the lessee identified above (hereinafter called "Lessee"), of all obligations which Lessee now has or may hereafter have to Lessor, including but not limited to obligations under equipment leases and promissory notes executed in connection with anticipated equipment leases (including but not limited to all present and future lease schedules and promissory notes under the Master Lease identified above, with a total original equipment cost to the Lessor of no more than the amount of the Equipment Cost set forth above), and unconditionally guarantee the prompt payment when due (whether at scheduled maturity, upon acceleration or otherwise) of any and all sums, indebtedness and liabilities of whatsoever nature, due or to become due, direct or indirect, absolute or contingent, now or hereafter at any time owed or contracted by Lessee to Lessor, and all costs and expenses of and incidental to collection of any of the foregoing, including reasonable attorneys' fees (all of the foregoing hereinafter called "Obligations"). It is the undersigned's express intention that this guaranty in addition to covering all present Obligations of Lessee to Lessor, shall extend to all future Obligations of Lessee to Lessor, whether or not such Obligations are reduced or entirely extinguished and thereafter increased or are reincurred, whether or not such Obligations are related to the Master Lease identified above, whether or not such Obligations exceed the Equipment Cost identified above, and whether or not such Obligations are specifically contemplated by the undersigned, Lessee, and Lessor as of the date hereof. 2. This is an absolute and unconditional guarantee of payment and not of collection. Lessor shall not be required, as a condition of the liability of the undersigned, to resort to, enforce or exhaust any of its remedies against the Lessee or any other party who may be liable for payment on any Obligation or to resort to, marshall, enforce or exhaust any of its remedies against any leased property or any property given or held as security for this Guaranty or any Obligation. 3. The undersigned hereby waive and grant to Lessor, without notice to the undersigned and without in any way affecting the liability of the undersigned, the right at any time and from time to time, to extend other and additional credit, leases, loans or financial accommodations to Lessee apart from the Obligations, to deal in any manner as it shall see fit with any Obligation of Lessee to Lessor and with any leased property or security for such Obligation, including, but not limited to, (i) accepting partial payments on account of any Obligation, (ii) granting extensions or renewals of all or any part of any Obligation, (iii) releasing, surrendering, exchanging, dealing with, abstaining from taking, taking, abstaining from perfecting, perfecting, or accepting substitutes for any or all leased property or security which it holds or may hold for any Obligation, (iv) modifying, waiving, supplementing or otherwise changing any of the terms, conditions or provisions contained in any Obligation and (v) the addition or release of any other party or person liable hereon, liable on the Obligations or liable on any other guaranty executed to guarantee any of Lessee's Obligations. The undersigned jointly and severally hereby agree that any and all settlements, compromises, compositions, accounts stated and agreed balances made in good faith between Lessor and Lessee shall be binding upon the undersigned. 4. Every right, power and discretion herein granted to Lessor shall be for the benefit of the successors or assigns of Lessor and of any transferee or assignee of any Obligation covered by this Guaranty, and in the event any such Obligation shall be transferred or assigned, every reference herein to Lessor shall be construed to mean, as to such Obligation, the transferee or assignee thereof. This Guaranty shall be binding upon each of the undersigned's executors, administrators, heirs, successors and assigns. 5. This Guaranty shall continue in force for so long as Lessee shall be obligated to Lessor, and thereafter until Lessor shall have actually received written notice of the termination hereof from the undersigned, it being contemplated that Lessee may borrow, lease, repay and subsequently borrow money from or lease property from, or become obligated to, Lessor from time to time, and the undersigned, not having given notice of the termination hereof as herein provided for, shall be deemed to have permitted this Guaranty to remain in full force and effect for the purpose of inducing Lessor to make further leases or loans to Lessee; provided, however, no notice of termination of this Guaranty shall affect in any manner the rights of Lessor arising under this Guaranty with respect to the following: (a) any Obligation incurred by Lessee in connection with the Master Lease identified above with a total equipment cost of no more than the amount of the Total Equipment Cost set forth above, whether such obligation is in the form of a lease or a promissory note; or (b) any Obligation incurred by Lessee prior to receipt by Lessor of written notice of termination or any Obligation incurred after receipt of such written notice pursuant to a written agreement entered into by Lessor prior to receipt of such notice. The undersigned expressly waive notice of the incurring by Lessee of any Obligation to Lessor. The undersigned also waive presentment, demand of payment, protest, notice of dishonor or nonpayment of or nonperformance of any Obligation. 6. The undersigned hereby waive any claims or rights which they might now have or hereafter acquire against Lessee or any other person primarily or contingently liable on any Obligation of Lessee, which claims or rights arise from the existence or performance of the undersigned's obligations under this Guaranty or any other guaranty or under any instrument or agreement with respect to any leased property or any property constituting collateral or security for this Guaranty or any other guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, or any right to participate in any claim or remedy of Lessor or any other creditor which the undersigned now has or hereafter acquires, whether such claim or right arises in equity, under contract or statute, at common law, or otherwise. 7. Lessor's rights hereunder shall be reinstated and revived, and this Guaranty shall be fully enforceable, with respect to any amount at any time paid on account of the Obligations which thereafter shall be required to be restored or returned by Lessor upon the bankruptcy, insolvency or reorganization of the Lessee, the undersigned, or any other person, or as a result of any other fact or circumstance, all as though such amount had not been paid. 8. The undersigned jointly and severally agree to pay to Lessor all costs and expenses, including reasonable attorneys' fees, incurred by Lessor in the enforcement or attempted enforcement of this Guaranty, whether or not suit is filed in connection therewith, or in the exercise by Lessor of any right, privilege, power or remedy conferred by this Guaranty. 9. The undersigned represent and warrant that they have relied exclusively on their own independent investigation of Lessee, the leased property and the collateral for their decision to guarantee Lessee's Obligations now existing or thereafter arising. The undersigned agree that they have sufficient knowledge of the Lessee, the leased property, and the collateral to make an informed decision about this Guaranty, and that Lessor has no duty or obligation to disclose any information in its possession or control about Lessee, the leased property, and the collateral to the undersigned. The undersigned warrant to Lessor that they have adequate means to obtain from the Lessee on a continuing basis information concerning the financial condition of the Lessee and that they are not relying on Lessor to provide such information either now or in the future. 10. As long as any indebtedness under any of the Obligations remains unpaid or any credit is available to Lessee under any of the Obligations, the undersigned agree to furnish to Lessor: (a) annual financial statements setting forth the financial condition and results of operation of the undersigned (financial statements shall include balance sheet, income statement, changes in financial position and all notes thereto) within 120 days of the end of each fiscal year of the undersigned; (b) quarterly financial statements setting forth the financial condition and results of operation of the undersigned within 60 days of the end of each of the first three fiscal quarters of the undersigned; and (c) such other financial information as Lessor may from time to time request including, without limitation, financial reports filed by the undersigned with federal or state regulatory agencies. 11. No postponement or delay on the part of Lessor in the enforcement of any right hereunder shall constitute a waiver of such right. The failure of any person or entity to sign this Guaranty shall not discharge the liability of any of the undersigned. 12. This Guaranty remains fully enforceable irrespective of any claim, defense or counterclaim which the Lessee may or could assert on any of the Obligations including but not limited to failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, fraud, bankruptcy, accord and satisfaction, and usury, same of which the undersigned hereby waive along with any standing by the undersigned to assert any said claim, defense or counterclaim. 13. This Guaranty contains the entire agreement of the parties and supersedes all prior agreements and understandings, oral or written, with respect to the subject matter hereof. This Guaranty is not intended to replace or supersede any other guaranty which the undersigned have entered into or may enter into in the future. The undersigned may enter into additional guaranties in the future which may or may not refer to the Master Lease identified above and such guaranties are not intended to replace or supersede this Guaranty unless specifically provided in that additional guaranty. The interpretation, construction and validity of this guaranty shall be governed by the laws of the State of Ohio. With respect to any action brought by Lessor against Guarantor to enforce any term of this guaranty, Guarantor hereby irrevocably consents to the jurisdiction and venue of any state or federal court in Franklin County, Ohio, where Lessor has its principal place of business and where payments are to be made by Lessee and Guarantor. ALL PARTIES TO THIS GUARANTY, INCLUDING GUARANTOR AND LESSOR, WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY RELATED TO THIS GUARANTY. Guarantor: MEADOW VALLEY CORPORATION - ------------------------- By: /s/ Bradley E Larson --------------------------------- Title: President ------------------------------ Witness: /s/ Julie L. Bergo ---------------------------- Date: 9-8-99 ------------------------------- Bane One Leasing Corporation SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER QUANTITY DESCRIPTION PAGE 1 ================================================================================ EQUIPMENT LOCATION: 4411 S. 40TH ST., SUITE D-11 PHOENIX, AZ 85082 COUNTY: MARICOPA COST: $164,836.22 1 WALTON TRAILER MODEL 6OKTP VIN NUMBER - 1W9TE3039X1284407 1 1998 KENWORTH T800 DUMP TRUCK WITH BOMAX TRAILER VIN NUMBER - 1NKDLB0X0WR759476 TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS, IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO. This Schedule A-1 is attached to and made a part of Lease Number 1000098533 and constitutes a true and accurate description of the equipment. Lessee: MEADOW VALLEY CONTRACTORS, INC. - ------------------------------ By: /s/ Bradley E Larson ---------------------------- Date: 9-8-99 -------------------------- EX-10.101 8 LEASE AGREEMENT WITH CATERPILLAR FINANCIAL SERVICE EXHIBIT 10.101 CATERPILLAR FINANCIAL SERVICES CORPORATION FINANCE LEASE Dated as of SEP 3 1999 LESSEE: MEADOW VALLEY LESSOR: CATERPILLAR FINANCIAL SERVICES CONTRACTORS, INC. CORPORATION ADDRESS: P.O.BOX 60726 ADDRESS: 4965 Preston Park Blvd. Suite PHOENIX, AZ 85040 400 Plano, TX 75093 Lessor, in reliance on Lessee's selection of the equipment described below ("Unit" or "Units"), agrees to acquire and lease the Units to Lessee, and Lessee agrees to lease the Units from Lessor, subject to the terms and conditions below and on the reverse side:
Description of Unit(s) Serial# Monthly Rent Final Payment - ---------------------- ------- ------------ -------------- (1) 972G CaterpiLLar WHEEL LOADER 7Ls00253 # 1-12 @ 4,496.30 148,707.33 * #13-24 @ 4,496.30 101,874.93 * #25-36 @ 4,496.30 52,357.12 * #37-48 @ 4,496.30 1.00
Rent to be paid: in arrears (starts one month after Delivery Date) and every month thereafter. Lease Term: 48 Months Utilization Date: NOVEMBER 30, 1999 The [_] Mandatory Final Payment (Section 13) [X] Optional Final Payment (Section 14) is applicable to this Lease (check one) Location of Unit(s): HWY 54 & 70 ALAMAGORDO, NM 88310 OTERO ADDITIONAL PROVISIONS: RIDERS: FLEX OPTION AMENDMENT TERMS AND CONDITIONS 1. LEASE TERM: The lease term for each Unit shall start on its Delivery Data (the date (a) Lessor executes this Lease, (b) Lessor takes title to the Unit, or (c) Lessee or its agent takes control of physical possession of the Unit, whichever is latest), provided the Delivery Date is on or before the utilization date stated above, and shall continue for the number of months stated above. If the Delivery Date is not on or before the utilization date, Lessee shall, at the option of Lessor, assume Lessor's obligations to purchase and pay for the Unit. Lessee shell execute and send Lessor's delivery supplement to Lessor promptly after delivery of a Unit. 2. RENT: Lessee shall pay to Lessor, at P.O. BOX 730681, DALLAS TX 75373-0681 or such other location Lessor designates in writing, rent for each Unit as stated above starting (a) on its Delivery Date if the rent is to be paid in advance, or (b) one month (or other period as stated above) after its Delivery Date if the rent is to be paid in arrears. An amount equal to the first rent payment for each Unit must accompany this document when it is submitted to Lessor. If Lessor executes this document, the amount shall be the first rent payment. If Lessor does not execute this document, the amount shall be returned to Lessee. If Lessor does not receive a rent payment on the date it is due, Lessee shall pay to Lessor, on demand, a late payment charge equal to five percent (5%) of the rent payment not paid when due or the highest charge allowed by law, whichever is less. 3. NO ABATEMENT: Lessee shall not be entitled to abatement or reduction of rent or setoff against rent for any reason whatsoever. Except as otherwise provided, this Lease shall not terminate because of, nor shall the obligations of Lessor or Lessee be affected by damage to, any defect in, destruction of, or loss of possession or use of a Unit; the attachment of any lien, security interest or other claim to a Unit; any Interference with Lessee's use of a Unit; Lessee's insolvency or the commencement of any bankruptcy or similar proceeding by or against Lessee, or any other cause whatsoever. 4. DISCLAIMER OF WARRANTIES: Lessee acknowledges and agrees that Lessor is not the manufacturer of the Unit(s) and that Lessee has selected each Unit based on Lessee's own judgment without any reliance whatsoever on any statements or representations made by Lessor. AS BETWEEN LESSOR AND LESSEE, THE UNIT(S) ARE PROVIDED "AS IS" WITHOUT ANY WARRANTIES OF ANY KIND. LESSOR HEREBY EXPRESSLY DISCLAIMS a) ALL WARRANTIES OF MERCHANTABILITY, b) ALL WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, AND c) ALL WARRANTIES AGAINST INFRINGEMENT OR THE LIKE. Lessor assigns to Lessee its interest in any of the manufacturer's warranties on the Unit(s). 5. POSSESSION,USE AND MAINTENANCE: Lessee shall not (a) use, operate, maintain or store a Unit improperly, carelessly, unsafely or in violation of any applicable law or regulation or for any purpose other than in the conduct of Lessee's business; (b) abandon a Unit; (c) sublease a Unit, permit the use of a Unit by anyone other than Lessee, change the use of unit from that specified in the Application Survey/Usage Rider attached hereto, or change the location of a Unit from that specified above, without the prior written consent of Lessor; or (d) create or allow to exist any lien, claim, security interest or encumbrance on any of its rights hereunder or a Unit. A Unit is and shall remain personal property regardless of its use or manner of attachment to realty. Lessor and its agent shall have the right (but not the obligation) to inspect a Unit and maintenance records relating to it and observe its use. Lessee, at its expense, shall maintain each Unit in good operating order, repair and condition and shall perform maintenance at least as frequently as stated in any applicable operator's guide, service manual, or lubrication and maintenance guide. Lessee shall not alter any Unit or affix any accessory or equipment to it if doing so will impair its originally intended function or use or reduce its value. Any alteration or addition to a Unit shall be the responsibility of and at the sole risk of Lessee. All Parts, accessories and equipment affixed to a Unit shall be subject to the security interest of Lessor. SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS Lessee: MEADOW VALLEY CONTRACTORS, INC. Lessor: CATERPILLAR FINANCIAL SERVICES CORPORATION By /s/ Bradley E Larson By /s/ Dicki Sizemore ------------------------------ ----------------------------------- Name (PRINT) BRADLEY E LARSON NAME (PRINT) DICKI SIZEMORE -------------------- ------------------------- Title PRESIDENT Title CREDIT ANALYST --------------------------- -------------------------------- Date 8-19-99 Date SEP 3 1999 --------------------------- --------------------------------
6. TAXES: Lessee shall promptly pay or reimburse Lessor for all fees, charges and taxes of any nature, including, without limitation, personal property taxes, together with any penalties, fines or additions to tax and interest thereon (collectively, "Taxes") levied on or assessed against Lessor in connection with the ownership, leasing, rental, sale, possession, purchase, or use of a Unit; excluding however, all charges or taxes on or measured by Lessor's net income, or charges or taxes levied on or assessed against Lessor in connection with a Unit after the Unit is returned to Lessor in accordance with the terms of this Lease. If the reimbursement to Lessor of Taxes constitutes income for federal, state or local tax purposes and if the Lessor is not entitled to a deduction for the full amount of the reimbursement, the Lessee shall pay the Lessor an additional amount such that the net amount received by Lessor after payment of all related Taxes equals the amount which Lessor would have received if no such Taxes were payable. Lessee shall prepare and timely file, in a manner satisfactory to Lessor, any reports or returns which may be required with respect to a Unit, including, without limitation, personal property tax returns. For purposes of this section, in computing Lessor's Taxes attributable to a reimbursement, it shall be assumed that the Lessor is in the highest marginal tax rate applicable to corporations at the time the reimbursement is made, and that the term "Lessor" shall include any affiliated group, within the meaning of Section 1504 of the Internal Revenue Code of 1986, of which Lessor is a member for any year in which a consolidated or combined income tax return is filed for the affiliated group. 7. LOSS OR DAMAGE: Lessee shall bear the risk, of any Casualty Occurrence (the Unit is worn out, lost, stolen, destroyed, taken by government action or, in Lessor's opinion, irreparably damaged) or other damage from the time it is purchased by Lessor until it is returned to Lessor. Lessee shall give Lessor prompt notice of a Casualty Occurrence or other damage. If, in Lessor opinion, the damage is not a Casualty Occurrence, Lessee shall, at its expense, promptly restore the Unit to the condition required by Section 5. If a Casualty Occurrence, Lessee shall pay to Lessor on the first rent payment date following the Casualty Occurrence (thirty (30) days after the Casualty Occurrence if there is no rent payment date remaining) the lesser of (a) the sum of (i) all amounts then due under this Lease with respect to the Unit, (ii) the present value of all unpaid rent for the Unit, and (iii) the present value of the Purchase Price of the Unit as stated on the front hereof; or (b) the maximum amount permitted by law. Present values will be determined by discounting at the implicit interest rate of this Lease. Upon making this payment, the lease term with respect to the Unit shall terminate and Lessee shall be entitled to possession of the Unit and to any recovery in respect to it (subject to the rights of any Insurer). 8. WAIVER AND INDEMNITY: LESSEE HEREBY AGREES TO RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS LESSOR, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS FROM AND AGAINST ANY CLAIMS OF LESSEE OR THIRD PARTIES, INCLUDING CLAIMS BASED UPON BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL INJURY, PROPERTY DAMAGE, STRICT LIABILITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR INJURY CAUSED BY OR RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY, CONDITION, OPERATION, USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY UNIT. FURTHER, LESSEE AGREES TO BE RESPONSIBLE FOR ALL COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEYS' FEES, INCURRED BY LESSOR OR IT'S DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS IN DEFENDING SUCH CLAIMS OR IN ENFORCING THIS PROVISION. UNDER NO CONDITION OR CAUSE OF ACTION SHALL LESSOR BE LIABLE FOR ANY LOSS OF ACTUAL OR ANTICIPATED BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES. 9. INSURANCE: Lessee, at its expense, shall keep each Unit Insured for the benefit of Lessor against all risks for not less than the amount described in Section 7 and shall maintain comprehensive public liability insurance (including product and broad form contractual liability) covering the Unit for not less than $1,000,000 combined coverage for bodily injury and property damage. All insurance shall be in a form and with companies as Lessor shall approve, shall specify Lessor and Lessee as name insured, shall be primary, without the right of contribution from any other insurance carried by Lessor, and shall provide that the insurance may not be canceled or altered so as to affect the interest of Lessor without at least to (10) days' prior written notice to Lessor. All Insurance covering loss or damage to a Unit shall name Lessor as loss payee. Lessee shall not make adjustments with insurers except with Lessor's prior written consent end hereby irrevocably appoints Lessor as Lessee's attorney-in- fact to receive payment of and to endorse all checks, drafts and other documents and to take any other actions necessary to pursue Insurance claims and recover payments if Lessee fails to do so. Lessee shall promptly notify Lessor of any occurrence which may become the basis of a claim and shall provide Lessor with all requested pertinent date, Lessee shall promptly deliver to Lessor evidence of such insurance coverage. 10. EVENTS OF DEFAULT: Each of the following constitutes an event of default ("Event of Default"): (a) Lessee fails to make any payment when due; (b) any representation or warranty to Lessor which is incorrect or misleading; (c) Lessee fails to observe or perform any covenant, agreement or warranty made by Lessee and the failure continues for ten (10) days after written notice to Lessee; (d) any default occurs under any other agreement between Lessee and Lessor or any affiliate of Lessor; (e) Lessee or any guarantor of this Lease ceases to do business, becomes insolvent, makes an assignment for the benefit of creditors or files any petition or action under any bankruptcy, reorganization, insolvency or moratorium law, or any other law or laws for the relief of, or relating to, debtors; (f) filing of any involuntary petition under any bankruptcy statute against Lessee or any guarantor of this Lease, or appointment of a receiver, trustee, custodian or similar official to take possession of the properties of Lessee or any guarantor of this Lease, unless the petition or appointment ceases to be in effect within thirty (30) days after filing or appointment; and (g) breach or repudiation of a guaranty obtained by Lessor in connection with this Lease. 11. REMEDIES: If an Event of Default occurs, Lessor may (a) proceed by court action to enforce performance by Lessee of the covenants of this Lease or to recover damages for their breach or (b) by notice in writing to Lessee terminate this Lease, in which event Lessee shall remain liable as provided herein and Lessor may do any one or more of the following: (i) declare the balance due (or the maximum amount permitted by law if recovery of the entire balance due is prohibited) with respect to each Unit (immediately due and payable and recover any additional damages and expenses sustained by Lessor due to breach of any covenant, representation or warranty in this Lease other than for the payment of rent; (ii) enforce the security interest granted herein; (iii) require Lessee to return each Unit and additional security pursuant to Section 12; and (iv) enter the premises where any Unit or additional security may be and take possession of it without notice, liability or legal process. Lessee agrees to pay all charges, costs, expenses and reasonable attorney's fees incurred by Lessor in enforcing this Lease. Lessor has all rights given to a secured party by law. Lessor may undertake commercially reasonable efforts to sell or release a Unit and additional security, and the proceeds of any sale or, release shall be applied in the following order: (i) to reimburse Lessor for all expenses of retaking, holding, preparing for sale or re-lease and selling or re-leasing the Unit and additional security, including any taxes, charges, costs, expenses and reasonable attorney's fees incurred by Lessor; (ii) to pay Lessor all amounts which under the terms of this Lease are due or have accrued as of the date of Lessor's receipt of the proceeds; and (iii) to pay Lessor the balance due (or the maximum amount permitted by law if recovery of the entire balance due is prohibited) with respect to the Unit and additional security. Any surplus shall be paid to the person entitled to it. Lessee shall promptly pay any deficiency to Lessor, Lessee acknowledges that sales for cash or credit to a wholesaler, retailer or user of a Unit or additional security are all commercially reasonable. The remedies provided to Lessor shall be cumulative and shall be in addition to all other remedies existing at law or in equity. If Lessee fails to perform, any of its obligations under this Lease, Lessor may perform the obligations, and the expenses incurred by Lessor as a result shall be payable by Lessee upon demand. 12. RETURN OF UNIT: If Lessor shall rightfully demand possession of a Unit, Lessee, at its expense, shall promptly deliver possession of the Unit to Lessor, properly protected and in the condition required by Section 5, at the option of Lessor, (a) to the premises of the nearest Caterpillar dealer selling equipment of the same type as the Unit, or (b) on board a carrier named by Lessor and shipping it, freight collect, to the destination designated by Lessor. If the Unit is not in the condition required by Section 5, Lessee shall pay to Lessor, on demand, all coats and expenses incurred by Lessor to bring the Unit into the required condition. 13. MANDATORY FINAL PAYMENT: If the Mandatory Final Payment box is checked, at the end of lease term with respect to a Unit, provided this Lease has not been terminated with respect to it, Lessee shall pay the Final Payment stated on the front hereof. Upon receipt of the Final Payment, and all other amounts due under this Lease, plus an amount equal to any taxes due in connection with the transfer of the Unit or the delivery of the bill of sale, Lessor shall deliver to Lessee, upon request, a bill of sale without warranties except that the Unit is free of all encumbrances of any person claiming through Lessor, Lessee shall purchase the Unit "AS IS, WHERE IS, WITH ALL FAULTS." 14. OPTIONAL FINAL PAYMENT: If the Optional Final Payment box is checked and If no Event of Default shall have occurred and be continuing, Lessee may, by notice delivered to Lessor not less than sixty (60) days prior to the end of the lease term with respect to a Unit, elect to pay the Final Payment stated on the front. Payment of the Final Payment shall be due at the end of the lease term. Upon payment of the Final Payment and all other amounts due under this Lease, plus an amount equal to any taxes due in connection with the transfer of the Unit or the delivery of the bill of sale, Lessor shall deliver to Lessee, upon request, a bill of sale without warranties except that the Unit is free of all encumbrances of any person claiming through Lessor. Lessee shall purchase the Unit "AS IS, WHERE IS, WITH ALL FAULTS". If Lessee does not elect to pay the Final Payment, Lessee, upon expiration of the lease term, shall return the Unit to Lessor as provided in Section 12 and furnish Lessor with documentation, as Lessor may reasonably request, conveying to Lessor all of Lessee's right, title and Interest in the Unit, free and clear of all liens, claims, security interests and encumbrances other than those of Lessor. 15. SECURITY INTEREST: LESSEE REPRESENTATIONS: Unless applicable law provides otherwise, title to a Unit shall remain in Lessor as security for the obligations of Lessee hereunder until Lessee has fulfilled all of its obligations. Lessee hereby grants to Lessor a continuing security interest in the Unit, including all attachments, accessories and optional features therefor (whether or not installed thereon) and all substitutions, replacements, additions, and accessions thereto, and proceeds of all the foregoing, to secure the payment of all sums due hereunder. Lessee will, at its expense, do any act and execute, acknowledge, deliver, file, register and record any documents which Lessor deems desirable in its discretion to protect Lessor's security interest in the Unit and Lessor's rights and benefits under this Lease. Lessee hereby irrevocably appoints Lessor as Lessee's Attorney-In-Fact for the signing and filing of such documents and authorizes Lessor to delegate these limited powers. Lessee represents and warrants to Lessor that (a) Lessee has the power to make, delver and perform under this Lease, (b) the person executing and delivering this Lease is authorized to do so on behalf of Lessee, and (c) this Lease constitutes a valid obligation of Lessee, legally binding upon it and enforceable in accordance with its terms. Lessee shall, during the lease term, display in a prominent place on the Unit labels supplied by Lessor stating that the Unit is leased from Lessor. 16. ASSIGNMENT; COUNTERPARTS: The rights of Lessor under this Lease and title to the Unit may be assigned by Lessor at any time. If notified by Lessor, Lessee shall make all payments due under this Lease to the party designated in the notice, without offset or deduction. No assignment of this Lease or any right or obligation under it may be made by Lessee without the prior written consent of Lessor. This Lease shall be binding upon and benefit Lessor and Lessee and their respective successors and assigns. If this Lease is assigned by Lessor to a partnership or trust, the term "Lessor" shall thenceforth mean and include the partnership or trust and shall also include, for purposes of Sections 4,5,6,7, 8 and 9, each partner in or beneficiary of the partnership or trust. Although multiple counterparts of this document may be signed, only the counterpart accepted, acknowledged and certified by Caterpillar Financial Services Corporation on the signature page thereof as the original will constitute original chattel paper. 17. EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF LEASE; NOTICES: A delay or omission by Lessor to exercise any right or remedy shall not impair any right or remedy and shall not be construed as waiver of any breach or default. Any waiver or consent by Lessor must be in writing. This Lease completely states the rights of Lessor and Lessee and supersedes all prior agreements with respect to the Unit. No variation or modification of this lease, shall be valid unless in writing. All notices shall be in writing, addressed to the other party at the address stated on the front or at such other address as may hereafter be furnished in writing. 18. APPLICABLE LAW, JURISDICTION AND JURY TRIAL WAIVER PROVISIONS: This Agreement shall be governed by and construed under the laws of the State of Tennessee, without giving effect to the conflict-of-laws principles thereof, and Lessee hereby consents to the jurisdiction of any state or federal court located within the State of Tennessee. THE PARTIES HERETO HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OBLIGATIONS OR THE COLLATERAL. 19. SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Lease shall be invalid under any law, it shall be deemed omitted but the remaining provisions hereof shall be given effect. All obligations of Lessee under this Lease shall survive the expiration or termination of this Lease to the extent required for their full observance and performance. GUARANTY OF PAYMENT THIS GUARANTY ("Guaranty") is made and entered into as of SEP 3 1999 by MEADOW VALLEY CORPORATION, (hereinafter, referred to as "Guarantor"), in favor of Caterpillar Financial Services Corporation, 3322 West End Avenue, Nashville, Tennessee 37203-0983 (hereinafter referred to as "Caterpillar Financial"), guaranteeing the Indebtedness (as hereinafter defined) of MEADOW VALLEY CONTRACTORS, INC. (hereinafter referred to as "Obligor"). WITNESSETH: FOR VALUE RECEIVED, and/or as an inducement to Caterpillar Financial to now or hereafter enter into, purchase or otherwise acquire the agreements, accounts and/or other obligations evidencing and/or securing Obligor's Indebtedness and in consideration of and for credit and financial accommodations now or hereafter extended to or for the account of the Obligor (which includes Caterpillar Financial's consent to an assignment and/or assumption of the Indebtedness), which is in the best interest of Guarantor and which would not have been extended but for this Guaranty, the Guarantor agrees as follows: SECTION 1. Guaranty of Obligor's Indebtedness. Guarantor hereby absolutely, - --------------------------------------------- irrevocably and unconditionally agrees to, and by these presents does hereby: (a) guarantee the prompt and punctual payment, performance and satisfaction of all present and future indebtedness and obligations of Obligor to Caterpillar Financial which Obligor now owes Caterpillar Financial or which Obligor shall at any time or from time to time hereafter owe Caterpillar Financial when the same, shall become due in connection with or arising out of that certain FINANCE LEASE by and between Obligor and Caterpillar Financial dated SEP 3 1999, including any and all existing and future additional schedules, amendments and/or related agreements thereto (the "Contract"), whether direct or contingent, due or to become due, joint or several, primary or secondary, liquidated or unliquidated, secured or unsecured, original or renewed or extended, or by open account or otherwise, and whether representing rentals, principal, interest and/or late charges or other charges of an original balance, an accelerated balance, a balance reduced by part payment or a deficiency after sale of collateral or otherwise and (b) undertake and guarantee to pay on demand and indemnify Caterpillar Financial against all liabilities, losses, costs, attorney's fees, and expenses which may be suffered by Caterpillar Financial by reason of Obligor's default or default of the Guarantor (with all of Obligor's indebtedness and/or obligations as stated above (including all costs, fees and expenses) being hereinafter individually and collectively referred to under this Guaranty as Obligor's "Indebtedness", which indebtedness shall be conclusively presumed to have been created in reliance upon this Guaranty). SECTION 2. Joint, Several and Solidary Liability. Guarantor further agrees that - ------------------------------------------------ its obligations and liabilities for the prompt and punctual payment, performance and satisfaction of Obligor's indebtedness are independent of any agreement or transaction with any third parties and shall be on a "joint and several" and "solidary" basis along with Obligor to the same degree and extent as if Guarantor had been and/or will be a co-borrower, co-principal obligor and/or co-maker of Obligor's Indebtedness. In the event that there is more than one guarantor under this Guaranty, or in the event that there are other guarantors, endorsers, sureties or any other party who may at any time become liable for all or any portion of Obligor's Indebtedness (each, an "Other Obligor"), the provisions hereof shall be read with all grammatical changes thereby rendered necessary and each reference to the Guarantor shall include each and every one of those parties liable for all or any portion of Obligor's Indebtedness and each Guarantor's obligations and liabilities hereunder shall be on a "joint and several" and "solidary" basis along with such Other Obligors. SECTION 3. Duration; Cancellation of Guaranty. This Guaranty and Guarantor's - --------------------------------------------- obligations and liabilities hereunder shall remain in full force and effect until such time as Obligor's Indebtedness shall be fully and finally paid, performed and/or satisfied, until such time as this Guaranty may be cancelled by Caterpillar Financial under a written cancellation instrument in favor of Guarantor or otherwise as stated herein. SECTION 4. Default by Obligor. Immediately upon Obligor's default under any of - ----------------------------- its Indebtedness in favor of Caterpillar Financial, Caterpillar Financial may make demand upon Guarantor and Guarantor unconditionally and absolutely agrees to pay the full then unpaid amount of all of Obligor's Indebtedness (whether at stated maturity, by required prepayment, declaration, acceleration or otherwise) and/or perform any covenant or agreement hereunder guaranteed. Such payment or payments shall be made immediately following demand by Caterpillar Financial at Caterpillar Financial's offices indicated above. SECTION 5. Additional Covenants. Guarantor further agrees that Caterpillar - ------------------------------- Financial may, at its sole option, at any time, and from time to time, without the consent of or notice to Guarantor, or to any other party, and without incurring any responsibility to Guarantor or to any other party, and without affecting, impairing or releasing the obligations of Guarantor under this Guaranty: (a) discharge or release any party (including, but not limited to, Obligor, secondary obligors of Obligor's Indebtedness or any co-guarantor under this Guaranty) who is or may be liable to Caterpillar Financial for Obligor's Indebtedness; (b) sell at public or private sale, exchange, release, impair, surrender, substitute, realize upon or otherwise deal with, in any manner and in any order and upon such terms and conditions as Caterpillar Financial deems best at its uncontrolled discretion, any leased equipment and/or any collateral listed in the Contract or now or hereafter otherwise directly or indirectly securing repayment of Obligor's Indebtedness (all such leased equipment and/or all such collateral shall hereinafter be referred to as the "Equipment"), including without limitation, the purchase of all or any part of such collateral for Caterpillar Financial's own account; (c) change the manner, place or terms of payment and/or available credit (including without limitation increase or decrease in the amount of such payments, available credit or any interest rate adjustments), or change or extend the time of payment of or renew, as often and for such periods as Caterpillar Financial may determine, or alter Obligor's Indebtedness or grant any other indulgence to Obligor and/or any secondary obligors of Obligor's Indebtedness or any co-guarantor under this Guaranty; (d) settle or compromise Obligor's Indebtedness with Obligor and/or any third party or refuse any offer of performance with respect to, or substitutions for, the Indebtedness; (e) take or accept any other security or guaranty for any or all of Obligor's Indebtedness; and/or (f) enter into, deliver, modify, amend or waive compliance with, any instrument, agreement or arrangement evidencing, securing or otherwise affecting, all or any part of Obligor's Indebtedness. SECTION 6. No Release of Guarantor. Guarantor's obligations and liabilities - ---------------------------------- under this Guaranty shall not be released, impaired, reduced or otherwise affected by, and shall continue in full force and effect, notwithstanding the occurrence of any event, including without limitation any one or more of the following events: (a) death, insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of authority (whether corporate, partnership or trust) of Obligor (or any person acting on Obligor's behalf) or any Other Obligor or any other defense based on or arising out of the lack of validity or unenforceability of the Indebtedness or any agreement or instrument relating thereto or any provisions thereof and/or Obligor's absence or cessation of liability thereunder for any reason, including without limitation, Caterpillar Financial's failure to preserve any right or remedy against Obligor; (b) any change in Obligor's financial condition; (c) partial payment or payments of any amount due and/or outstanding under Obligor's Indebtedness; (d) any change in Obligor's management, ownership, identity or business or organizational structure; (e) any payment by Obligor or any other party to Caterpillar Financial that is held to constitute a preferential transfer or a fraudulent conveyance under any applicable law, or for any reason, Caterpillar Financial is required to fund such payment or pay such amount to Obligor or Page 1 of 2 to any other person; (f) any sale, lease or transfer, whether or not commercially reasonable, of all or any part of Obligor's assets and/or any assignment, transfer or delegation of Obligor's Indebtedness to any third party (whereby this Guaranty shall continue to extend to all sums due from or for the account or Obligor and/or the new or substituted legal entity); (g) any failure to perfect any lien or security interest securing the Indebtedness or preserve any right, priority or remedy against any Equipment; (h) any interruption, change or cessation of relations between Guarantor and Obligor; (i) any defect in, damage to, destruction of or loss of or interference with possession or use of any Equipment for any reason by Obligor or any other person; (j) any act or omission by Caterpillar Financial which increases the scope of Guarantor's risk, including without limitation, negligent administration of transactions with Obligor; and/or (k) any other occurrence or circumstance whatsoever, whether similar or dissimilar to the foregoing, which might otherwise constitute a legal or equitable discharge, release or defense of a guarantor or surety or which might otherwise limit recourse against Guarantor. SECTION 7. Waivers by Guarantor. Guarantor waives, for the benefit of - -------------------------------- Caterpillar Financial (which waivers shall survive until this Guaranty is released or terminated in writing by Caterpillar Financial): (a) notice of the acceptance of this Guaranty; (b) notice of the existence, creation or incurrence of new and/or additional debt owing from Obligor to Caterpillar Financial; (c) presentment, protest and demand, and notice of protest, demand, nonpayment, nonperformance and dishonor of any and all agreements, notes or other obligations signed, accepted, endorsed or assigned to or by Caterpillar Financial or agreed to between Obligor and Caterpillar Financial; (d) notice of adverse change in Obligor's financial condition or any other fact which might materially increase the risk of Guarantor; (e) any and all rights in and notices or demands relating to any Equipment, including without limitation, all rights, notices, advertisements or demands relating, whether directly or indirectly, to the foreclosure, sale or other disposition of any or all such Equipment or the manner of such sale or other disposition; (f) any claim, right or remedy which Guarantor may now have or hereafter acquire against the Obligor that arises hereunder and/or from the performance by any Other Obligor including, without limitation, any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification, or participation in any claim, right or remedy of Caterpillar Financial against the Obligor or any security which Caterpillar Financial now has or hereafter acquires with respect to the Obligor, whether or not such claim, right or remedy arises in equity, under contract (express or implied), by statute, under common law or otherwise; (g) notice of any default by Obligor or any other person obligated in any manner for all or any portion of Obligor's Indebtedness and notice of any legal proceedings against such parties; (h) any right of contribution from any Other Obligors; (i) notice and hearing as to any prejudgment remedies; (j) any defense which is premised on an alleged lack of consideration of the obligation undertaken by Guarantor, including without limitation, any defense to the enforcement of this Guaranty based upon the timing of execution of this Guaranty and/or that the Guaranty had been executed after the execution date of any agreements evidencing the Indebtedness; (k) all exemptions and homestead laws; (l) any other demands and notices required by law; (m) all setoffs and counterclaims against Caterpillar Financial and/or Obligor; (n) any defense based on the claim that Guarantor's liabilities and obligations exceed or are more burdensome than those of Obligor; (o) any defense which the Obligor may assert or be able to assert on the underlying Indebtedness or which may be asserted by Guarantor, including but not limited to (i) breach of warranty, (ii) fraud, (iii) statute of frauds, (iv) infancy, (v) statute of limitations, (vi) lender liability, (vii) accord and satisfaction, (viii) payment and/or (ix) usury. SECTION 8. Enforcement of Guarantor's Obligations and Liabilities. Guarantor - ------------------------------------------------------------------ agrees that, should Caterpillar Financial deem it necessary to file an appropriate collection action to enforce Guarantor's obligations and liabilities under this Guaranty, Caterpillar Financial may commence such a civil action against Guarantor without the necessity of first (i) attempting to collect Obligor's Indebtedness from Obligor or from any Other Obligor, whether through filing of suit or otherwise, (ii) attempting to exercise any rights Caterpillar Financial may have against any Equipment, whether through re-lease, the filing of an appropriate foreclosure action or otherwise, (iii) including Obligor or any Other Obligor as an additional party defendant in such a collection action against Guarantor, or (iv) pursuing any other remedy in Caterpillar Financial's power or to mitigate damages. If there is more than one guarantor under this Guaranty, each Guarantor additionally agrees that Caterpillar Financial may file an appropriate collection and/or enforcement action against any one or more of them, without impairing the rights of Caterpillar Financial against any other guarantor under this Guaranty. SECTION 9. Construction. This writing is intended as a final expression of this - ------------------------ Guaranty agreement and is a complete and exclusive statement of the terms of that agreement, provided however, that the provisions of this Guaranty shall be in addition to and cumulative of, and not in substitution, novation or discharge of, any and all prior or contemporaneous written guaranties or other written agreements by Guarantor (or any one or more of them), in favor of Caterpillar Financial or assigned to Caterpillar Financial by others, all of which shall be construed as complementing each other. Nothing herein contained shall prevent Caterpillar Financial from enforcing any and all such other guaranties or agreements in accordance with their respective terms. SECTION 10. Successors and Assigns Bound. Guarantor's obligations and - ----------------------------------------- liabilities under this Guaranty shall be binding upon Guarantor's successors, heirs, legatees, devisees, administrators, executors and assigns. Caterpillar Financial may assign this Guaranty and any and all rights and interests included herein in Caterpillar Financial's sole discretion without notice to Guarantor and the rights and remedies granted to Caterpillar Financial under this Guaranty shall also inure to the benefit of Caterpillar Financial's successors and assigns, as well as to any and all subsequent holder or holders of any of Obligor's Indebtedness subject to this Guaranty, without setoff, counterclaim, reduction, recoupment, abatement, deduction or defense based on any claim Guarantor may have against Caterpillar Financial, such successors and assigns or subsequent holders of Obligor's Indebtedness. Guarantor shall not assign this Guaranty without the prior written consent of Caterpillar Financial. SECTION 11. Termination. This Guaranty is irrevocable and may be terminated only - ------------------------ as to Indebtedness created sixty (60) days after actual receipt by Caterpillar Financial of written notice of termination hereof, provided however, that all Indebtedness incurred, created or arising pursuant to a commitment of Caterpillar Financial made prior to the effective date of such termination (the "Termination Date") and any extensions, renewals or modifications of such Indebtedness (including without limitation loan and/or other commitments) agreed to or instituted by Caterpillar Financial prior to the Termination Date shall not be effected by such termination and shall be deemed to have been incurred prior to termination (irrespective of whether indebtedness arising thereunder occurs after the Termination Date) and shall be fully covered by this Guaranty. Any termination of this Guaranty shall be ineffective unless upon the Termination Date Guarantor deposits with Caterpillar Financial collateral in the form of cash in an amount not less than the amount of the Indebtedness outstanding on the Termination Date. Such cash shall be held by Caterpillar Financial in a separate account and shall be returned to Guarantor upon the full and indefeasible payment of all of the Indebtedness. SECTION 12. Governing Law; Waiver of Jury. This Guaranty shall be construed - ------------------------------------------ liberally in favor of Caterpillar Financial and shall be governed and construed in accordance with the substantive laws of the State of Tennessee without regard to the conflicts of laws principles thereof. ANY ACTION, SUIT OR PROCEEDING RELATING DIRECTLY OR INDIRECTLY TO THIS GUARANTY OR THE RELATIONSHIP BETWEEN GUARANTOR AND CATERPILLAR FINANCIAL, WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE W1THOUT A JURY. AS SUCH, GUARANTOR HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN ANY SUCH ACTION, SUIT OR PROCEEDING. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY THE COURT. SECTION 13. Severability. If any provision of this Guaranty is held to be - ------------------------- illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable, this Guaranty shall be construed and enforceable as if the illegal, invalid or unenforceable provision had never comprised a part of it, and the remaining provisions of this Guaranty shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. IN WITNESS WHEREOF, Guarantor has executed this Guaranty in favor of Caterpillar Financial on the day, month and year first written above. GUARANTOR HAS READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS GUARANTY. (Complete Address, Phone, SSN if Guarantor is an individual) Guarantor: MEADOW VALLEY CORPORATION Address: _____________________________ Signature: /s/ Bradley E Larson ------------------------- ______________________________________ Name (PRINT): BRADLEY E LARSON Phone: _______________________________ ---------------------- Title: President SSN: _________________________________ ----------------------------- Page 2 of 2 EX-10.102 9 LEASE AGREEMENT WITH TRINITY CAPITAL CORPORATION EXHIBIT 10.102 Trinity Capital Corporation COMMERCIAL LEASE AGREEMENT NO.: 0025150-001 475 Sansome Street, 19th Floor, ----------- San Francisco, Ca1ifornia 94111 Page 1 of 2 (415) 956-3095 Fax: (415) 956-5187 LESSEE: MEADOW VALLEY CONTRACTORS, INC. PO Box 60726 PHOENIX, AZ 85082 PHONE: (602) 437-5400 EQUIPMENT: Per Exhibit A attached hereto and made a part hereof. SUPPLIER DONOHUE, INC. PO BOX 40 MESILLA PARK, NM 88047 LEASE TERMS: Commencement Date of Lease: 7/15/99 (To be filled in per Paragraph 1 below) ------- Lease Term (number of months): 36, plus any extension and renewal periods -- Number of Monthly Rentals paid in advance: 1 (First and Last ____) - End of Term: Purchase Option: $1.00 Monthly Rental Amount: $2,132.42, plus applicable taxes, if any --------- Security Deposit, If any: $2,266.76, tax included ---------
- ------------------------------------------------------------------------------ TERMS AND CONDITIONS This commercial lease agreement (the "Agreement") has been written in plain English. The words "you" and "your" herein refer to the Lessee listed above. The words "we", "us" and "our" refer to the Lessor, Trinity Capital Corporation. 1. Term and Rent. We agree to lease to you and you agree to lease from us the personal property listed in any attached exhibit, plus any replacements, additions and accessories attached to the property (the "Equipment") for the full number of consecutive months stated above (the "Lease Term"). You agree to pay to us the Monthly Rental payment ("Rental") for the full Lease Term and any renewals and extensions. This Equipment and the supplier referenced above have been selected by you and if you have entered into any purchase or supply contracts for the Equipment, you assign to us your rights under such supply contracts. By executing this Schedule, you request us to order the Equipment, arrange for its delivery to you and pay for the Equipment upon your acceptance of it. This Lease will begin on the date when the Equipment is accepted by you and the Equipment will be deemed irrevocably accepted by you upon the earlier of: a) the delivery to us of a signed Acceptance Certificate (if requested by us); or b) 10 days after delivery of the Equipment to you if previously you have not given written notice to us of your non-acceptance. Rentals are due monthly beginning in advance of the date you accept the Equipment and on the first day of each month thereafter for Equipment accepted on the 1st through the 14th day of the month or on the fifteenth day of each month thereafter for Equipment accepted on the 15th through the 24th day of the month or on the 25th of each month thereafter for Equipment accepted from the 25th through the last day of the month. 2. Disclaimer of Warranties. We are leasing the Equipment to you "AS IS". WE MAKE NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE MERCHANTABILITY AND PERFORMANCE OF THE EQUIPMENT OR THE EQUIPMENT'S FITNESS FOR A PARTICULAR PURPOSE OR ITS COMPLIANCE WITH APPLICABLE LAW. WE MAKE NO WARRANTY OF TITLE TO ANY PORTION OF THE EQUIPMENT WHICH CONSISTS OF SOFTWARE, SOFTWARE LICENSES AND/OR THE RIGHT TO USE ANY SOFTWARE. You acknowledge that we do not manufacture, deliver or install the Equipment, we do not represent the supplier(s) of the Equipment and you have selected the Equipment and the supplier(s) based on your own judgment. You agree not to make any claim for any reason against us for consequential damages. You acknowledge you have been advised that you may have rights against the supplier(s) of the Equipment and that you should contact each supplier for a description of any such rights. So long as this Agreement is not in default, we assign to you any warranties received by us in connection with the Equipment. 3. Noncancellable Lease. This Agreement cannot be canceled and you agree that all your obligations are unconditional. Upon your acceptance of the Equipment and to the extent permitted by law, you agree to waive any rights to reject the Equipment and repudiate this Agreement as per Sections 10401 through 10522 of the California Commercial Code. 4. Governing Law. You agree that this Agreement shall be governed by the laws of the State of California. You agree that we may bring any action to enforce any provisions of this Agreement in the City and County of San Francisco, California and you consent to personal jurisdiction in either state or federal court. - ------------------------------------------------------------------------------ THE UNDERSIGNED AGREE TO ALL OF THE TERMS AND CONDITIONS ABOVE AND ON PAGE 2 OF THIS AGREEMENT AND ANY ATTACHED EXHIBITS AND SCHEDULES MADE A PART OF THIS AGREEMENT. THIS IS A NON-CANCELABLE AGREEMENT. LESSOR LESSEE TRINITY CAPITAL CORPORATION MEADOW VALLEY CONTRACTORS, INC. This Agreement shall not be binding The undersigned affirms that he/she is on us until it has been accepted and a duly authorized corporate officer, executed by an officer of the Lessor partner or proprietor of the above- at its office. named Lessee. Signature: /s/ [ILLEGIBLE]^^ Signature: /s/ Bradley E. Larson -------------------------- ------------------------ Title: Credit Manager Title: President ------------------------------ ---------------------------- Date: 7/22/99 Date: 7/12/99 ------------------------------ ----------------------------- The original of this lease has the Lessor's original signature. Any purchaser of this paper is hereby notified that a security interest has been granted to the party holding the copy of this lease with the original Lessor's signature. COMMERCIAL LEASE AGREEMENT NO: 0025150-001 ------------- Page 2 of 2 5. Agency. You agree that no salesperson or representative of any supplier is acting on behalf of us and/or can bind us in any way. 6. Late Charges. Time is of the essence. If any Rental or other amount due under this Agreement is not paid within 10 days after its due date, you agree to promptly pay a late charge of 10% of the past due amount, subject to a $25 minimum, for those amounts under 30 days past due, plus interest on any amounts over 30 days past due at the rate of 1.5% per month. However, in no event shall these late charges exceed the maximum lawful charges. 7. Ownership and use of Equipment. Subject to Section 2 of this Agreement, we are the owners of the Equipment and you have no rights to the Equipment except as provided for in this Agreement. You agree to keep the Equipment clear of all liens, claims and encumbrances. You agree that the Equipment will remain our personal property regardless of its attachment to realty. You agree to use the Equipment only for business purposes and in compliance with its intended use, any applicable laws and any license agreement pertaining to the Equipment. You agree to keep the Equipment at an appropriate and safe location, and you agree to promptly inform us of such location in advance. Subject to Sections 13 and 14 of this Agreement, you agree, at your expense, to return the Equipment to us at the end of the Lease Term (or any renewal term) to our address above, or to such address as we may designate in writing, in the same condition as it was delivered to you except for ordinary wear and tear. You agree that we are not responsible for any losses or injuries caused in connection with the Equipment. You agree to indemnify us for and at our option and your expense, defend us against any claims, suits and actions including negligence and strict liability, whenever made for losses or injuries related to the Equipment 8. Equipment Maintenance. You are responsible, at your expense, to maintain the Equipment in good working order. Subject to Section 11 of this Agreement, if any Equipment is damaged, missing or does not work satisfactorily for any reason, you agree to continue to pay all Rentals and other amounts under this Agreement when they become due. You shall not make any alterations to the Equipment without our advance written consent. You agree that we may inspect the Equipment at any reasonable time. 9. Taxes and Fees. You agree to pay when due, either directly or to us upon our demand, all taxes, filing fees, license fees, interest and penalties relating to this Agreement and the Equipment. If we pay any of these amounts you agree to reimburse us upon demand and to pay to us a $25.00 service charge. You agree to pay to us a documentation fee of $45.00 to cover our costs of preparing this Agreement. You shall pay to us a fee of $20.00 for every check that is returned to us as unpaid by your bank. 10. Risk of Loss and Insurance. You are responsible for any loss or damage to the Equipment and/or caused by the Equipment until all of your obligations under this Agreement have been fulfilled. You agree to immediately notify us of any such losses or damages and of any insurance claims pertaining to the Equipment. If the Equipment or any portion of the Equipment is missing, stolen or damaged, you will, at our option and at your expense, promptly repair the Equipment to our satisfaction, replace the Equipment with equipment of equal purpose and value or pay to us any default remedies described under Section 13 of this Agreement. At your expense you agree to keep the Equipment fully insured against loss until your obligations under this Agreement are paid in full, with any loss payable to us. You will maintain public liability coverage that is acceptable to us and include us as an insured on that policy. You agree to provide us with satisfactory evidence of the required insurance. You agree that we may sign, endorse and/or negotiate on your behalf as attorney-in-fact for you any instrument representing proceeds from any insurance policy covering the Equipment. If we obtain any of the required insurance for you, you agree to pay to us on demand the cost of that insurance. Nothing in this Agreement will create an insurance relationship of any kind between us and any other party. You acknowledge that we are not required to maintain any insurance and we will not be liable to you if we terminate or modify any insurance coverage that we may arrange. 11. Assignment. You may not sell, transfer, assign or subrent the Equipment or this Agreement without our advance written consent and payment to us of an assignment processing fee. You agree that we may sell or assign this Agreement and any security interest without notice to you, and that our assignee shall have all of our rights under this Agreement. You agree that the rights of our assignee will not be subject to any claims, defenses or setoffs that you may have against us. 12. Default and Remedies. You are in default if you a) fail to pay any Rental when due; b) fail to comply with any requirement of this Agreement and/or any other obligation to us and/or any license agreement, system support agreement, mandatory maintenance agreement or installation agreement, pertaining to the Equipment, c) any representation made to us by or on behalf of you and/or any guarantor of your obligations hereunder is found to have been false when made. Upon such default, we may, at our option, do one or more of the following: a) require you to immediately pay the remaining amounts due under this Agreement including but not limited to the balance of unpaid Rentals discounted to its present value at a rate of 5% per year; b) terminate this Agreement and/or any other agreements we have entered into with you, c) require you to immediately pay us the value of the Equipment or promptly return the Equipment to us in good condition; d) peacefully enter onto your premises and take possession of the Equipment without liability to you for trespass or damages; e) deactivate the Equipment; and f) use any other remedies available to us at law or in equity. You agree that any delay or failure by us to enforce this Agreement does not prevent us from enforcing our rights at a later time. You agree to pay all of our costs to enforce this Agreement including reasonable attorney's fees and the costs of repossessing, refurbishing, storing and selling the Equipment. If we take possession of the Equipment, we may sell or otherwise dispose of it with or without notice, at a public or private sale, and apply the proceeds (after deducting our disposition costs) to the amounts that you owe us. Our acceptance of any amount due hereunder which is less than payment in full of all amounts due and owing at that time shall not constitute a waiver of our right to receive payment in full. 13. Renewal. Unless you have returned the Equipment to us by the end of the original Lease Term, this Agreement will be automatically renewed and the Lease Term extended on a continuing month-to-month basis at the same Monthly Rental amount as that of the final Rental of the original Lease Term. You can terminate this automatic renewal by sending advance written notice to us. Such termination shall be effective 30 days after our receipt of such notice, provided that you have returned the Equipment to us in good condition or purchased the Equipment from us by that termination date. 14. Purchase Option. If it is indicated above that you have been given an end of term purchase option and if you are not in default under this Lease, you may purchase the Equipment at the end of the Lease Term for the stated price plus any applicable taxes and remaining amounts due hereunder. Such purchase of the Equipment shall be "AS IS, WHERE IS, IF IS" and we make no warranties of any kind. If the purchase price is "Fair Market Value" and we and you cannot agree on such value, you may, at your expense, retain an independent appraiser acceptable to us and such appraisal shall be binding. 15. Miscellaneous. You agree that this Agreement is the entire agreement you have with us pertaining to this Equipment and it cannot be changed except as agreed by you and us in writing. You agree, however, that we are authorized, without notice to you, to supply missing information or correct obvious errors in this Agreement. You agree that the Rental amount may be adjusted to reflect any change in the Equipment cost as a result of any Equipment change orders, add-ons, returns, errors or other similar events verbally agreed to by you. In the event of any such adjustment, we will furnish you a written notice thereof. You agree that a signed faxed version of this Agreement and Acceptance Certificate shall be deemed to be of the same force and effect as an original of a manually signed Agreement and Acceptance Certificate. You agree that we can sign any applicable UCC financing statement as attorney-in-fact for you until such time as all of your obligations to us have been fulfilled. You hereby authorize any employee of yours to accept the Equipment and sign on your behalf any Acceptance Certificate pertaining to this Agreement. This Agreement is binding upon the successors and assigns of you and us. If there is more than one Lessee, your obligations shall be joint and several. LESSEE: RE: COMMERCIAL LEASE AGREEMENT NO: 0025150-001 MEADOW VALLEY CONTRACTORS, INC. PO Box 60726 PHOEN1X, AZ 85082 GUARANTY This Guaranty ("Guaranty") has been written in plain English. The word "Agreement" herein refers to the commercial lease agreement referenced above. The word "Lessee" refers to the lessee referenced above. The words "you" and "your" refer to the Guarantors listed below. The words "we", "us" and "our" refer to the Lessor, Trinity Capital Corporation, located at 475 Sansome Street, 19/th/ Floor, San Francisco, CA 94111. In consideration of us providing any present of future financing of any nature to the Lessee, including but not limited to entering into this Agreement, you unconditionally guaranty (jointly and severally if more than one) in favor of us, our successors and assigns, any and all indebtedness of Lessee to us, whether now existing or subsequently entered into, including but not limited to Lessee's performance of all of its obligations under the Agreement and under all other agreements previously or subsequently entered into between us and Lessee. You promise to pay all of our expenses, including reasonable attorney's fees, incurred by us in connection with enforcing this Guaranty. You waive all notice of acceptance of this Guaranty and any demands and/or notices of any kind, including those of any action or non-action of Lessee, us or any other party. Without affecting your liability, you authorize us to renew, compromise, waive and/or alter our rights against Lessee and/or any leased property. You also agree that we have the right, at our option, to assign this Guaranty and/or any financing transaction between us and Lessee, including the Agreement, to any other party at any time. You waive all rights to seek repayment from Lessee in the event you must pay us under this Guaranty. You acknowledge that you have received a copy of the Agreement and understand its terms and conditions. You agree that upon any default of Lessee, we may, at our option, proceed directly and at once, without notice, against you to collect and recover the full amount you have guaranteed, or any portion of that amount, without proceeding against Lessee or any other person, or without exercising any other remedy available to us. This Guaranty shall be binding upon your heirs, executors, administrators, successors and assigns. You agree that any and all payments due from you under this Guaranty shall be payable to us in U.S. dollars at our offices in San Francisco, CA, or at some other location that we may specify in writing. You agree that this Guaranty shall be governed by the laws of the State of California. You agree that we may bring any action to enforce any provisions of this Guaranty in the City and County of San Francisco, California and you consent to personal jurisdiction in either state or federal court. You agree that this Guaranty is the entire agreement with us pertaining to your guaranty of the obligations described herein and it cannot be changed in any way except with our advance written consent. You agree that a signed faxed version of the Agreement, Acceptance Certificate and this Guaranty shall be deemed to be of the same force and effect as an original of a manually signed Agreement, Acceptance Certificate and Guaranty, respectively. You agree that any failure or delay by us to enforce our rights under this Guaranty does not prevent us from enforcing any rights at a later time. You agree that we may reevaluate your creditworthiness during the term of the Agreement and you authorize us or our assignee to obtain any applicable credit ratings and credit reports. You agree to provide us with your updated financial statements upon our request until all of your obligations to us have been fulfilled. 7/12/99 /s/ Bradley E. Larson /s/ Bradley E. Larson President - ------------------ ------------------------------ --------------------------------- ------------------------ Date Authorized Signature Name of Signor Title Meadow Valley Corporation 4411 S. 40/th/ St., Ste.D-11, Phoenix, AZ 8???? - ----------------------------------------------------- --------------------------------------------------------------- Guarantor Legal Name Address 602-437-5400 602-437-1681 88-0328443 - ----------------------------------------------------- -------------------------------------------------------------- Phone Number Fax Number Tax Id Number
EQUIPMENT EXHIBIT A TO COMMERCIAL LEASE AGREEMENT NO. 0025150-001 ----------- BETWEEN TRINITY CAPITAL CORPORATION (LESSOR) AND MEADOW VALLEY CONTRACTORS, INC. (LESSEE) Equipment Location: 300 U.S. HIGHWAY 70 WEST ALAMOGORDO, NM 88310 QTY DESC $ AMOUNT TOPCON APL1A W/ HUSKY FS3 DATA COLLECTOR TDS SURVEY PRO SOFTWARE W/ HARDWARE LOCK TRIPOD PRECISE QUICK RELEASE PRISM POLE $31,641.25 TOPCON 800 W/ HUSKY MP 2500 DATA COLLECTOR ON BOARD TDS SURVEY PRO W/LOCK TDS SURVEY PRO SOFTWARE W/LOCK TRIPOD PRECISE QUICK RELEASE PRISM POLE 20,332.00 TOPCON 212 W/ HUSKY FS/GS DATA COLLECTOR TDS SURVEY PRO W/ LOCK TRIPOD PRECISE PRISM POLE 10,132.00 3 COPIES - FORESIGHT SOFTWARE W/HARDWARE LOCKS 1,164.00 CARD READER 195.50 TOTAL $63,464.75 LEASE SCHEDULE NO. 1000099257 FINANCING LEASE ---------- (Per Diem Interim Rent) Master Lease Agreement dated-JULY 01, 1999 ------------- Lessor: BANC ONE LEASING CORPORATION ---------------------------- Lessee: READY MIX, INC. --------------- 1. GENERAL. This Lease Schedule is signed and delivered under the Master Lease Agreement identified above, as amended from time to time ("Master Lease"), between Lessee and Lessor. Capitalized terms defined in the Master Lease will have the same meanings when used in this Schedule. 2. FINANCING. Lessor finances for Lessee, and Lessee finances with Lessor, all of the property ("Equipment") described in Schedule A-1 attached hereto (and Lessee represents that all Equipment is new unless specifically identified as used): 3. AMOUNT FINANCED: Equipment Cost: $2,499,758.58 Set-up/Filing Fee: 200.00 Miscellaneous: N/A Sales Tax: N/A Total: $2,499,958.58 ------------ 4. FINANCING TERM. The Base Term of this Schedule shall be 84 months and the -- Base Term shall commence on the Acceptance Date ("Commencement Date"). The total --------------- Lease Term consists of the Interim Term plus the Base Term. The Interim Term begins on the date that Lessor accepts this Schedule as stated below Lessor's signature ("Acceptance Date") and continues up to the Commencement Date. 5. INSTALLMENT PAYMENTS/FEES. As financing for the Equipment, Lessee shall pay to Lessor all amounts stated below on the due dates stated below. There shall be added to each installment payment all applicable Taxes as in effect from time to time. (a) For the Interim Term, Lessee shall pay to Lessor on the Commencement Date an amount equal to one-thirtieth (1/30th) of the Installment Payment multiplied by the number of days in the Interim Term. "Installment Payment" means the total of all installment payments due and payable during the Base Term divided by the number of months in the Base Term. (b) During the Base Term, Lessee shall pay to Lessor installment payments in the amounts and according to the timing set forth below, provided however, that notwithstanding the following, the final installment payment due hereunder shall be equal to the remaining principal balance hereunder together with all accrued interest and fees. (1) Amount of each installment payment during the Base Term (including principal and interest): 84 Monthly payments of $38,831.28 (2) Frequency of installment payments during the Base Term: MONTHLY (3) Timing of installment payments during the Base Term: ARREARS (c) Lessee shall pay Lessor a Set-Up/Filing Fee as follows: (1) $ shall be paid on the Acceptance Date, or (2) $375.00 has been included in the above Amount Financed of the ------ Equipment. (d) Security Deposit:$. On the Acceptance Date, Lessee shall pay Lessor said - Security Deposit which shall be held in accordance with paragraph 6 below. 6. SECURITY INTEREST. This Schedule is intended to be a secured debt financing transaction, not a true lease. See Paragraph 7 below regarding Lessee's --- ownership of the Equipment. As collateral security for payment and performance of all Secured Obligations (defined in Paragraph 8 below) and to induce Lessor to extend credit from time to time to Lessee (under the Lease or otherwise), Lessee hereby grants to Lessor a first priority security interest in all of Lessee's right, title and interest in the Equipment, whether now existing or hereafter acquired, any sums specified in this Schedule as a "Security Deposit", and in all Proceeds (defined in Paragraph S below). At its option, Lessor may apply all or any part of any Security Deposit to cure any default of Lessee under the Lease. If upon final termination of this Schedule, Lessee has fulfilled all of the terms and conditions hereof, then Lessor shall pay to Lessee upon Lessee's written request any remaining balance of the Security Deposit for this Schedule, without interest. 7. TITLE TO EQUIPMENT; FIRST PRIORITY LIEN. Lessee represents, warrants and agrees: that Lessee currently is the lawful owner of the Equipment; that good and marketable title to the Equipment shall remain with Lessee at all times; that Lessee has granted to Lessor a first priority security interest in the Equipment and all Proceeds; and that the Equipment and all Proceeds are, and at all times shall be, free and clear of any Liens other than Lessor's security interest therein. Lessee at its sole expense will protect and defend Lessor's first priority security interest in the Equipment against all claims and demands whatsoever. 8. CERTAIN DEFINITIONS. "Secured Obligations" means (a) all payments and other obligations of Lessee under or in connection with this Schedule, and (b) all payments and other obligations of Lessee (whether now existing or hereafter incurred) under or in connection with the Master Lease and all present and future Lease Schedules thereto, and (c) all other leases, indebtedness, liabilities and/or obligations of any kind (whether now existing or hereafter incurred, absolute or contingent, direct or indirect) of Lessee to Lessor or to any affiliate of either Lessor or BANK ONE CORPORATION. "Proceeds" means all cash and non-cash proceeds of the Equipment including, without limitation, proceeds of insurance, indemnities and/or warranties. 9. AMENDMENTS TO MASTER LEASE. For purposes of this Schedule only, Lessee and Lessor agree to amend the Master Lease as follows: (a) public liability or property insurance as described in the second sentence of Section 8 will not be required, (b) the definition of "Stipulated Loss Value" in clause (b) of Section 9 is deleted and replaced by Paragraph 10 below; (c) the text of Section 10 is deleted in its entirety; (d) Subsections 23(a) and 23(c) are deleted; (e) subsection 23(b) and the last sentence of section 4 will apply only if an event of default occurs; and (f) all references in the Lease as it relates to this Schedule to "Lessee" and "Lessor" shall be changed to "Borrower" and "Lender" respectively. 10. STIPULATED LOSS VALUE. For purposes of this Schedule only, the "Stipulated Loss Value" of any item of Equipment during its Lease Term equals the aggregate of the following as of the date specified by Lessor: (a) all accrued and unpaid interest, late charges and other amounts due under this Schedule and the Master Lease to the extent it relates to this Schedule as of such specified date, plus (b)the remaining principal balance due and payable by Lessee under this Schedule as of such specified date, plus (c) interest on the amount described in the foregoing clauses (a) and (b) at the Overdue Rate commencing with the specified date; provided, that the foregoing calculation shall not exceed the maximum amount which may be collected by Lessor from Lessee under applicable law in connection with enforcement of Lessor's rights under this Schedule and the Master Lease to the extent it relates to this Schedule. 11. LESSEE TO PAY ALL TAXES. For purposes of this Schedule and its Equipment only: Lessee shall pay any and all Taxes relating to this Schedule and its Equipment directly to the applicable taxing authority; Lessee shall prepare and file all reports or returns concerning any such Taxes as may be required by applicable law or regulation (provided, that Lessor shall not be identified as the owner of the Equipment in such reports or returns); and Lessee shall, upon Lessor's request, send Lessor evidence of payment of such Taxes and copies of any such reports or returns. 12. LESSEE'S ASSURANCES. Lessee irrevocably and unconditionally (a)reaffirms all of the terms and conditions of the Master Lease and agrees that the Master Lease remains in full force and effect; (b) agrees that the Equipment is and will be used at all times solely for commercial purposes, and not for personal, family or household purposes; and (c) incorporates all of the terms and conditions of the Master Lease as if fully set forth in this Schedule. 13. REPRESENTATIONS AND WARRANTIES: Lessee represents and warrants that: (a) Lessee is a corporation, partnership or proprietorship duly organized, validly existing and in good standing under the laws of the state of its organization and is qualified to do business and is in good standing under the laws of each other state in which the Equipment is or will be located; (b) Lessee has full power, authority and legal right to sign, deliver and perform the Master Lease, this Schedule and all related documents and such actions have been duly authorized by all necessary corporate/partnership/proprietorship action, and (c) the Master Lease, this Schedule and each related document has been duly signed and delivered by Lessee and each such document constitutes a legal, valid and binding obligation of Lessee enforceable in accordance with its terms. 14. CONDITIONS. No lease of Equipment under this Schedule shall be binding On Lessor, and Lessor shall have no obligation to purchase the Equipment covered hereby, unless: (a) Lessor has received evidence of all required insurance; (b) in Lessor's sole judgment, there has been no material adverse change in the financial condition or business of Lessee or any guarantor, (c) Lessee has signed and delivered to Lessor this Schedule, which must be satisfactory to Lessor, and Lessor has signed and accepted this Schedule; (d) no change in the Code or any regulation thereunder, which in Lessor's sole judgment would adversely affect the economics to Lessor of the lease transaction, shall have occurred or shall appear to be imminent; (e) Lessor has received, in form and substance satisfactory to Lessor, such other documents and information as Lessor shall reasonably request; and (f) Lessee has satisfied all other reasonable conditions established by Lessor. 15. OTHER DOCUMENTS: EXPENSES: Lessee agrees to sign and deliver to Lessor any additional documents deemed desirable by Lessor to effect the terms of the Master Lease or this Schedule including, without limitation, Uniform Commercial Code financing statements which Lessor is authorized to file with the appropriate filing officers. Lessee hereby irrevocably appoints Lessor and any designee of Lessor as Lessee's attorney-in-fact with full power and authority in the place of Lessee and in the name of Lessee to prepare, sign, amend, file or record any Uniform Commercial Code financing statements or other documents deemed desirable by Lessor to perfect, establish or give notice of Lessor's interests in the Equipment or in any collateral as to which Lessee has granted Lessor a security interest. Lessee shall pay upon Lessor's written request any actual out-of-pocket costs and expenses paid or incurred by Lessor in connection with the above terms of this section or the funding and closing of this Schedule. 16. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (I) Lessor has not selected, manufactured, sold or supplied any of the Equipment, (ii) Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has received a copy of, and approved, the purchase orders or purchase contracts for the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (a) LESSEE HAS RECEIVED, INSPECTED AND APPROVED ALL OF THE EQUIPMENT; (b) ALL EQUIPMENT IS IN GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND ALL APPLICABLE SPECIFICATIONS; (c) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR PURPOSES OF THE LEASE "AS-IS, "WHERE-IS" WITH ALL FAULTS; AND (d) LESSEE UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF THE EQUIPMENT. LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE AGREES THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING THE EQUIPMENT OR THIS SCHEDULE. BANC ONE LEASING CORPORATION READY MIX, INC. - ---------------------------- --------------- (Lessor) (Lessee) By: By: /s/ Kenneth D. Nelson ------------------------- ------------------------------- Title: Title: VICE PRESIDENT ---------------------- ----------------------------- Acceptance Date: Witness: /s/ Nicole Smith ------------- -------------------------- Banc One Leasing Corporation SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER QUANTITY DESCRIPTION PAGE 1 ================================================================================ EQUIPMENT LOCATION: 1501 HIGHWAY 168 MOAPA, NV 89025 COUNTY : CLARK COST : $2,499,758.58 "ALL PROPERTY DESCRIBED IN THE INVOICES AND EXHIBITS IDENTIFIED BELOW, WHICH PROPERTY MAY BE GENERALLY DESCRIBED AS ROCK AND SAND CRUSHING EQUIPMENT."
VENDOR INVOICE # CONSTRUCTION EQUIPMENT SALES 4466 AGGREGATE DESIGNS 9906-11 CONVEYOR SALES 19245 TK ELECTRIC 99431 TK ELECTRIC 99491 KIMBALL EQUIPMENT 150325 KIMBALL EQUIPMENT 150326 CRUSHER SERVICE 39331 CONSTRUCTION EQUIPMENT SALES 4470 CRUSHER SERVICE 39501 HAZEMAG USA 9282A CONVEYOR SALES 19568 KIMBALL EQUIPMENT 150905 CONVEYOR SALES 19248
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS, IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO. This Schedule A-1 is attached to and made a part of Lease Number 1000099257 and constitutes a true and accurate description of the equipment. Lessee: READY MIX, INC. - ----------------------------- By: /s/ Kenneth D. Nelson -------------------------- Date: 9-24-99 ------------------------ Banc One Leasing Corporation SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER
QUANTITY DESCRIPTION PAGE 2 ================================================================================ EXHIBIT A 45232.30 EXHIBIT B 98839.11 EXHIBIT C 62173.00 EXHIBIT D 56848.98 EXHIBIT E 94554.19 EXHIBIT F 19360.07 EXHIBIT G 91554.01 EXHIBIT H 98803.97 EXHIBIT I 176037.96 EXHIBIT J 60246.81 EXHIBIT K 29686.42
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS, IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO. This Schedule A-1 is attached to and made a part of Lease Number 1000099257 and constitutes a true and accurate description of the equipment. Lessee: READY MIX, INC. - ----------------------------- By: /s/ Kenneth D. Nelson -------------------------- Date: 9-24-99 ------------------------ MASTER LEASE AGREEMENT This MASTER LEASE AGREEMENT is dated as of: 7-1-1999 and is made and ---------- entered into by and between BANC ONE LEASING CORPORATION ("Lessor"), an Ohio corporation, with its principal place of business at 1111 Polaris Parkway, Suite A3 (OH1-1085), Columbus, Ohio 43240 and the Lessee identified below: LESSEE NAME: READY MIX, INC. LESSEE ADDRESS: 4411 South 40th Street, Phoenix, Arizona 1. LEASE OF EQUIPMENT: Lessor leases to Lessee, and Lessee leases from Lessor, all the property described in the Lease Schedules which are signed from time to time by Lessor and Lessee. 2. CERTAIN DEFINITIONS: "Schedule" means each Lease Schedule signed by Lessee and Lessor which incorporates the terms of this Master Lease Agreement, together with all exhibits, riders, attachments and addenda thereto. "Equipment" means the property described in each Schedule, together with all attachments, additions, accessions, parts, repairs, improvements, replacements and substitutions thereto. "Lease", "herein", "hereunder", "hereof" and similar words mean this Master Lease Agreement and all Schedules, together with all exhibits, riders, attachments and addenda to any of the foregoing, as the same may from time to time be amended, modified or supplemented. "Prime Rate" means the prime rate of interest announced from time to time as the prime rate by Bank One, NA (or its successors or assigns); provided, that the parties acknowledge that the Prime Rate is not intended to be the lowest rate of interest charged by said bank in connection with extensions of credit. "Lien" means any security interest, lien, mortgage, pledge, encumbrance, judgment, execution, attachment, warrant, writ, levy, other judicial process or claim of any nature whatsoever by or of any person. "Fair Market Value" means the amount which would be paid for an item of Equipment by an informed and willing buyer (other than a used equipment or scrap dealer) and an informed and willing seller neither under a compulsion to buy or sell. "Lessor's Cost" means the invoiced price of any item of Equipment plus any other cost to Lessor of acquiring an item of Equipment. All terms defined in the Lease are equally applicable to both the singular and plural form of such terms. 3. LEASE TERM AND RENT: The term of the lease of the Equipment described in each Schedule ("Lease Term") commences on the date stated in the Schedule and continues for the term stated therein. As rent for the Equipment described in each Schedule, Lessee shall pay Lessor the rent payments and all other amounts stated in such Schedule, payable on the dates specified therein. All payments due under the Lease shall be made in United States dollars at Lessor's office stated in the opening paragraph or as otherwise directed by Lessor in writing. 4. ORDERING, DELIVERY, REMOVAL AND INSPECTION OF EQUIPMENT: If an event of default occurs or if for any reason Lessee does not accept, or revokes its acceptance of, equipment covered by a purchase order or purchase contract or if any commitment or agreement of Lessor to lease equipment to Lessee expires, terminates or is otherwise canceled, then automatically upon notice from Lessor, any purchase order or purchase contract and all obligations thereunder shall be assigned to Lessee and Lessee shall pay and perform all obligations thereunder. Lessee agrees to pay, defend, indemnify and hold Lessor harmless from any liabilities, obligations, claims, costs and expenses (including reasonable attorney fees and expenses) of whatever kind imposed on or asserted against Lessor in any way related to any purchase orders or purchase contracts. Lessee shall make all arrangements for, and Lessee shall pay all costs of, transportation, delivery, installation and testing of Equipment. Lessor has the right upon reasonable notice to Lessee to inspect the Equipment wherever located. Lessor may enter upon any premises where Equipment is located and remove it immediately, without notice or liability to Lessee, upon the expiration or other termination of the Lease Term. 5. MAINTENANCE AND USE: Lessee agrees it will, at its sole expense: (a) repair and maintain the Equipment in good condition and working order and supply and install all replacement parts or other devices when required to so maintain the Equipment or when required by applicable law or regulation, which parts or devices shall automatically become part of the Equipment; (b) use and operate the Equipment in a careful manner in the normal course of its business and only for the purposes for which it was designed in accordance with the manufacturer's warranty requirements, and comply with all laws and regulations relating to the Equipment, and obtain all permits or licenses necessary to install, use or operate the Equipment; and (c) make no alterations, additions, subtractions, upgrades or improvements to the Equipment without Lessor's prior written consent, but any such alterations, additions, upgrades or improvements shall automatically become part of the Equipment. The Equipment will not be used or located outside of the United States. 6. NET LEASE; NO EARLY TERMINATION: The Lease is a net lease. Lessee's obligation to pay all rent and all other amounts payable under the Lease is absolute and unconditional under any and all circumstances and shall not be affected by any circumstances of any character including, without limitation, (a) any setoff, claim, counterclaim, defense or reduction which Lessee may have at any time against Lessor or any other party for any reason, or (b) any defect in the condition, design or operation of, any lack of fitness for use of, any damage to or loss of, or any lack of maintenance or service for any of the Equipment. Each Schedule is a noncancelable lease of the Equipment described therein and Lessee's obligation to pay rent Page 1 and perform all other obligations thereunder and under the Lease are not subject to cancellation or termination by Lessee for any reason. 7. NO WARRANTIES BY LESSOR: LESSOR LEASES THE EQUIPMENT AS-IS, WHERE-IS, AND WITH ALL FAULTS. LESSOR MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, OF ANY KIND AS TO THE EQUIPMENT INCLUDING, WITHOUT LIMITATION: ITS MERCHANTABILITY; ITS FITNESS FOR ANY PARTICULAR PURPOSE; ITS DESIGN, CONDITION, QUALITY, CAPACITY, DURABILITY, CAPABILITY, SUITABILITY OR WORKMANSHIP; ITS NON- INTERFERENCE WITH OR NON-INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHT; OR ITS COMPLIANCE WITH ANY LAW, RULE, SPECIFICATION, PURCHASE ORDER OR CONTRACT PERTAINING THERETO. Lessor hereby assigns to Lessee the benefit of any assignable manufacturer's or supplier's warranties, but Lessor, at Lessee's written request, will cooperate with Lessee in pursuing any remedies Lessee may have under such warranties. Any action taken with regard to warranty claims against any manufacturer or supplier by Lessee will be at Lessee's sole expense. LESSOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND AS TO THE FINANCIAL CONDITION OR FINANCIAL STATEMENTS OF ANY PARTY OR AS TO THE TAX OR ACCOUNTING TREATMENT OR CONSEQUENCES OF THE LEASE, THE EQUIPMENT OR THE RENTAL PAYMENTS. 8. INSURANCE: Lessee at its sole expense shall at all times keep each item of Equipment insured against all risks of loss or damage from every cause whatsoever for an amount not less than the greater of the full replacement value or the Lessor's Cost of such item of Equipment. Lessee at its sole expense shall at all times carry public liability and property damage insurance in amounts satisfactory to Lessor protecting Lessee and Lessor from liabilities for injuries to persons and damage to property of others relating in any way to the Equipment. All insurers shall be reasonably satisfactory to Lessor. Lessee shall deliver to Lessor satisfactory evidence of such coverage. Proceeds of any insurance covering damage or loss of the Equipment shall be payable to Lessor as loss payee and shall, at Lessor's option, be applied toward (a) the replacement, restoration or repair of the Equipment, or (b) payment of the obligations of Lessee under the Lease. If an event of default occurs and is continuing, or if Lessee fails to make timely payments due under Section 9 hereof, then Lessee automatically appoints Lessor as Lessee's attorney-in-fact with full power and authority in the place of Lessee and in the name of Lessee or Lessor to make claim for, receive payment of, and sign and endorse all documents, checks or drafts for loss or damage under any such policy. Each insurance policy will require that the insurer give Lessor at least 30 days prior written notice of any cancellation of such policy and will require that Lessor's interests remain insured regardless of any act, error, omission, neglect or misrepresentation of Lessee. The insurance maintained by Lessee shall be primary without any right of contribution from insurance which may be maintained by Lessor. 9. LOSS AND DAMAGE: (a) Lessee bears the entire risk of loss, theft, damage or destruction of Equipment in whole or in part from any reason whatsoever ("Casualty Loss"). No Casualty Loss to Equipment shall relieve Lessee from the obligation to pay rent or from any other obligation under the Lease. In the event of Casualty Loss to any item of Equipment, Lessee shall immediately notify Lessor of the same and Lessee shall, if so directed by Lessor, immediately repair the same. If Lessor determines that any item of Equipment has suffered a Casualty Loss beyond repair ("Lost Equipment"), then Lessee, at the option of Lessor, shall: (1) immediately replace the Lost Equipment with similar equipment in good repair, condition and working order free and clear of any Liens and deliver to Lessor a bill of sale covering the replacement equipment, in which event such replacement equipment shall automatically be Equipment under the Lease; or (2) On the rent payment date which is at least 30 but no more than 60 days after the date of the Casualty Loss, pay to Lessor all amounts then due and payable by Lessee under the Lease for the Lost Equipment plus the Stipulated Loss Value for such Lost Equipment as of the date of the Casualty Loss. Upon payment by Lessee of all amounts due under the above clause (2), the lease of the Lost Equipment will terminate and Lessor shall transfer to Lessee all of Lessor's right, title and interest in such Equipment on an "as-is, where-is" basis with all faults, without recourse and without representation or warranty of any kind, express or implied. (b) "Stipulated Loss Value" of any item of Equipment during its Lease Term equals the present value discounted in arrears to the applicable date at the applicable SLV Discount Rate of (1) the remaining rents and all other amounts [including, without limitation, any balloon payment and, as to a terminal rental adjustment clause ("TRAC") lease, the TRAC value stated in the Schedule, and any other payments required to be paid by Lessee at the end of the applicable Lease Term] payable under the Lease for such item on and after such date to the end of the applicable Lease Term and (2) an amount equal to the Economic Value of the Equipment. For any item of Equipment, "Economic Value" means the Fair Market Value of the Equipment at the end of the applicable Lease Term as originally anticipated by Lessor at the Commencement Date of the applicable Schedule; provided, that Lessee agrees that such value shall be determined by the books of Lessor as of the Commencement Date of the applicable Schedule. After the payment of all rent due under the applicable Schedule and the expiration of the Lease Term of any item of Equipment, the Stipulated Loss Value of such item equals the Economic Value of such item. Stipulated Loss Value shall also include any Taxes payable by Lessor in connection with its receipt thereof. For any item of Equipment, "SLV Discount Rate" means an interest rate equal to the Prime Rate in effect on the Commencement Date of the Schedule for such item minus two percentage points. 10. TAX BENEFITS INDEMNITY. (a) The Lease has been entered into on the basis that Lessor shall be entitled to such deductions, credits and other tax benefits as are provided by federal, state and local income tax law to an owner of the Equipment (the "Tax Benefits") including, without limitation: (1) modified accelerated cost recovery deductions on each item Page 2 of Equipment under Section 168 of the Code (as defined below) in an amount determined commencing with the taxable year in which the Commencement Date of the applicable Schedule occurs, using the maximum allowable depreciation method available under Section 168 of the Code, using a recovery period (as defined in Section 168 or the Code) reasonably determined by Lessor, and using an initial adjusted basis which is equal to the Lessor's Cost of such item; (2) amortization of the expenses paid by Lessor in connection with the Lease on a straight-line basis over the term of the applicable Schedule; and (3) Lessor's federal taxable income will be subject to the maximum rate on corporations in effect under the Code as of the Commencement Date of the applicable Schedule. (b) If on any one or more occasions (1) Lessor shall lose, shall not have or shall lose the right to claim all or any part of the Tax Benefits, (2) there shall be reduced, disallowed, recalculated or recaptured all or any part of the Tax Benefits, or (3) all or any part of the Tax Benefits is reduced by a change in law or regulation (each of the events described in subparagraphs 1, 2 or 3 of this paragraph (b) will be referred to as a "Tax Loss"), then, upon 30 days written notice by Lessor to Lessee that a Tax Loss has occurred, Lessee shall pay Lessor an amount which, in the reasonable opinion of Lessor and after the deduction of all taxes required to be paid by Lessor with respect to the receipt of such amount, will provide Lessor with the same after-tax net economic yield which was originally anticipated by Lessor as of the Commencement Date of the applicable Schedule. (c) A Tax Loss shall occur upon the earliest of: (1) the happening of any event (such as disposition or change in use of an item of Equipment) which may cause such Tax Loss; (2) Lessor's payment to the applicable taxing authority of the tax increase resulting from such Tax Loss; or (3) the adjustment of Lessor's tax return to reflect such Tax Loss. (d) Lessor shall not be entitled to payment under this section for any Tax Loss caused solely by one or more of the following events: (1) a disqualifying sale or disposition of an item of Equipment by Lessor prior to any default by Lessee; (2) Lessor's failure to timely or properly claim the Tax Benefits in Lessor's tax return; (3) a disqualifying change in the nature of Lessor's business or liquidation thereof; (4) a foreclosure by any person holding through Lessor a security interest on an item of Equipment which foreclosure results solely from an act of Lessor; or (5) Lessor's failure to have sufficient taxable income or tax liability to utilize the Tax Benefits. (e) "Code" shall mean the Internal Revenue Code of 1986, as amended. For the purposes of this section 10, the term "Lessor" shall include any affiliate group (within the meaning of section 1504 of the Code) of which Lessor is a member for any year in which a consolidated income tax return is filed for such affiliated group. Lessee's obligations under this section shall survive the expiration, cancellation or termination of the Lease. 11. GENERAL TAX INDEMNITY: Lessee will pay, and will defend, indemnify and hold Lessor harmless on an after-tax basis from, any and all Taxes (as defined below) and related audit and contest expenses on or relating to (a) any of the Equipment, (b) the Lease, (c) purchase, acceptance, ownership, lease, possession, use, operation, transportation, return or other disposition of any of the Equipment, and (d) rentals or earnings relating to any of the Equipment or the Lease. "Taxes" means present and future taxes or other governmental charges that are not based on the net income of Lessor, whether they are assessed to or payable by Lessee or Lessor, including, without limitation (i) sales, use, excise, licensing, registration, titling, franchise, business and occupation, gross receipts, stamp and personal property taxes, (ii) levies, imposts, duties, assessments, charges and withholdings, (iii) penalties, fines, and additions to tax and (iv) interest on any of the foregoing. Unless Lessor elects otherwise, Lessor will prepare and file all reports and returns relating to any Taxes and will pay all Taxes to the appropriate taxing authority. Lessee will reimburse Lessor for all such payments promptly on request. On or after any applicable assessment/levy/lien date for any personal property Taxes relating to any Equipment, Lessee agrees that upon Lessor's request Lessee shall pay to Lessor the personal property Taxes which Lessor reasonably anticipates will be due, assessed, levied or otherwise imposed on any Equipment during its Lease Term. If Lessor elects in writing, Lessee will itself prepare and file all such reports and returns, pay all such Taxes directly to the taxing authority, and send Lessor evidence thereof. Lessee's obligations under this section shall survive the expiration, cancellation or termination of the Lease. 12. GENERAL INDEMNITY: Lessee assumes all risk and liability for, and shall defend, indemnify and keep Lessor harmless on an after-tax basis from, any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and expenses, including reasonable attorney fees and expenses, of whatsoever kind and nature imposed on, incurred by or asserted against Lessor, in any way relating to or arising out of the manufacture, purchase, acceptance, rejection, ownership, possession, use, selection, delivery, lease, operation, condition, sale, return or other disposition of the Equipment or any part thereof (including, without limitation, any claim for latent or other defects, whether or not discoverable by Lessee or any other person, any claim for negligence, tort or strict liability, any claim under any environmental protection or hazardous waste law and any claim for patent, trademark or copyright infringement). Lessee will not indemnify Lessor under this section for loss or liability arising from events which occur after the Equipment has been returned to Lessor or for loss or liability caused directly and solely by the gross negligence or willful misconduct of Lessor. In this section, "Lessor" also includes any director, officer, employee, agent, successor or assign of Lessor. Lessee's obligations under this section shall survive the expiration, cancellation or termination of the Lease. 13. PERSONAL PROPERTY: Lessee represents and agrees that the Equipment is, and shall at all times remain, separately identifiable personal property. Upon Lessor's request, Lessee shall furnish Lessor a landlord's and/or mortgagee's Page 3 waiver and consent to remove all Equipment. Lessor may display notice of its interest in the Equipment by any reasonable identification. Lessee shall not alter or deface any such indicia of Lessor's interest. 14. DEFAULT: Each of the following events shall constitute an event of default under the Lease: (a) Lessee fails to pay any rent or other amount due under the Lease within ten days of its due date; or (b) Lessee fails to perform or observe any of its obligations in Sections 8, 18, or 22 hereof; or (c) Lessee fails to perform or observe any of its other obligations in the Lease for more than 30 days after Lessor notifies Lessee of such failure; or (d) Lessee or any Lessee affiliate defaults in the payment, performance or observance of any obligation under any loan, credit agreement or other lease in which Lessor or any subsidiary (direct or indirect) of Bank One Corporation (or its successors or assigns) is the creditor or lessor; or (e) any statement, representation or warranty made by Lessee in the Lease, in any Schedule or in any document, certificate or financial statement in connection with the Lease proves at any time to have been untrue or misleading in any material respect as of the time when made; or (f) Lessee becomes insolvent or bankrupt, or Lessee admits its inability to pay its debts as they mature, or Lessee makes an assignment for the benefit of creditors, or Lessee applies for, institutes or consents to the appointment of a receiver, trustee or similar official for Lessee or any substantial part of its property or any such official is appointed without Lessee's consent, or Lessee applies for, institutes or consents to any bankruptcy, insolvency, reorganization, debt moratorium, liquidation or similar proceeding relating to Lessee or any substantial part of its property under the laws of any jurisdiction or any such proceeding is instituted against Lessee without stay or dismissal for more than 30 days, or Lessee commences any act amounting to a business failure or a winding up of its affairs, or Lessee ceases to do business as a going concern; or (g) with respect to any guaranty, letter of credit, pledge agreement, security agreement, mortgage, deed of trust, debt subordination agreement or other credit enhancement or credit support agreement (whether now existing or hereafter arising) signed or issued by any party in connection with all or any part of Lessee's obligations under the Lease, the party signing or issuing any such agreement defaults in its obligations thereunder or any such agreement shall cease to be in full force and effect or shall be declared to be null, void, invalid or unenforceable by the party signing or issuing it; or (h) there shall occur in Lessor's reasonable opinion any material adverse change in the financial condition, business or operations of Lessee. As used in this section 14, the term "Lessee" also includes any guarantor (whether now existing or hereafter arising) of all or any part of Lessee's obligations under the Lease and/or any issuer of a letter of credit (whether now existing or hereafter arising) relating to all or any part of Lessee's obligations under the Lease, and the term "Lease" also includes any guaranty or letter of credit (whether now existing or hereafter arising) relating to all or any part of Lessee's obligations under the Lease. 15. REMEDIES. If any event of default exists, Lessor may exercise in any order one or more of the remedies described in the lettered subparagraphs of this section, and Lessee shall perform its obligations imposed thereby: (a) Lessor may require Lessee to return any or all Equipment as provided in the Lease. (b) Lessor or its agent may repossess any or all Equipment wherever found, may enter the premises where the Equipment is located and disconnect, render unusable and remove it, and may use such premises without charge to store or show the Equipment for sale. (c) Lessor may sell any or all Equipment at public or private sale, with or without advertisement or publication, may release or otherwise dispose of it or may use, hold or keep it. (d) Lessor may require Lessee to pay to Lessor on a date specified by Lessor, with respect to any or all Equipment (i) all accrued and unpaid rent, late charges and other amounts due under the Lease on or before such date, plus (ii) as liquidated damages for loss of a bargain and not as a penalty, and in lieu of any further payments of rent, the Stipulated Loss Value of the Equipment on such date, plus (iii) interest at the Overdue Rate on the total of the foregoing ("Overdue Rate" means an interest rate per annum equal to the higher of 18% or 2% over the Prime Rate, but not to exceed the highest rate permitted by applicable law). The parties acknowledge that the foregoing money damage calculation reasonably reflects Lessor's anticipated loss with respect to the Equipment and the related Lease resulting from the event of default. If an event of default under section 14(f) of this Master Lease Agreement exists, then Lessee will be automatically liable to pay Lessor the foregoing amounts as of the next rent payment date unless Lessor otherwise elects in writing. (e) Lessee shall pay all costs, expenses and damages incurred by Lessor because of the event of default or its actions under this section, including, without limitation any collection agency and/or attorney fees and expenses, any costs related to the repossession, safekeeping, storage, repair, reconditioning or disposition of the Equipment and any incidental and consequential damages. (f) Lessor may terminate the Lease and/or any or all Schedules, may sue to enforce Lessee's performance of its obligations under the Lease and/or may exercise any other right or remedy then available to Lessor at law or in equity. Lessor is not required to take any legal process or give Lessee any notice before exercising any of the above remedies. None of the above remedies is exclusive, but each is cumulative and in addition to any other remedy available to Lessor. Lessor's exercise of one or more remedies shall not preclude its exercise of any other remedy. No action taken by Lessor shall release Lessee from any of its obligations to Lessor. No delay or failure on the part of Lessor to exercise any right hereunder Page 4 shall operate as a waiver thereof, nor as an acquiescence in any default, nor shall any single or partial exercise of any right preclude any other exercise thereof or the exercise of any other right. After any default, Lessor's acceptance of any payment by Lessee under the Lease shall not constitute a waiver by Lessor of such default, regardless of Lessor's knowledge or lack of knowledge at the time of such payment, and shall not constitute a reinstatement of the Lease if the Lease has been declared in default by Lessor, unless Lessor has agreed in writing to reinstate the Lease and to waive the default. If Lessor actually repossesses any Equipment, then it will use commercially reasonable efforts under the then current circumstances to attempt to mitigate its damages; provided, that Lessor shall not be required to sell, re-lease or otherwise dispose of any Equipment prior to Lessor enforcing any of the remedies described above. Lessor may sell or re-lease the Equipment in any manner it chooses, free and clear of any claims or rights of Lessee and without any duty to account to Lessee with respect thereto except as provided below, If Lessor actually sells or re-leases the Equipment, it will credit the net proceeds of any sale of the Equipment, or the net present value (discounted at the then current Prime Rate) of the rents payable under any new lease of the Equipment, against and up to (but not exceeding) the Stipulated Loss Value of the Equipment and any other amounts Lessee owes Lessor, or will reimburse Lessee for and up to (but not exceeding) Lessee's payment thereof. The term "net" as used above shall mean such amount after deducting the costs and expenses described in clause (e) above of this section. If Lessor elects in writing not to sell or re-lease any Equipment, it will similarly credit or reimburse Lessee for Lessor's reasonable estimate of such Equipment's Fair Market Value. 16. LESSOR'S RIGHT TO PERFORM: If Lessee fails to make any payment under the Lease or fails to perform any of its other agreements in the Lease (including, without limitation, its agreement to provide insurance coverage as stated in the Lease), Lessor may itself make such payment or perform such agreement, and the amount of such payment and the amount of the expenses of Lessor incurred in connection with such payment or performance shall be deemed to be additional rent, payable by Lessee on demand. 17. FINANCIAL REPORTS: Lessee agrees to furnish to Lessor: (a) annual financial statements setting forth the financial condition and results of operation of Lessee (financial statements shall include balance sheet, income statement and changes in financial position and all notes thereto) within 120 days of the end of each fiscal year of Lessee; (b) upon Lessor's request, quarterly financial statements setting forth the financial condition and results of operation of Lessee within 60 days of the end of each of the first three fiscal quarters of Lessee; and (C) such other financial information as Lessor may from time to time reasonably request including, without limitation, financial reports filed by Lessee with federal or state regulatory agencies. All such financial information shall be prepared in accordance with generally accepted accounting principles. 18. NO CHANGES IN LESSEE: Lessee shall not: (a) liquidate, dissolve or suspend business; (b) sell, transfer or otherwise dispose of all or a majority of its assets, except that Lessee may sell its inventory in the ordinary course of its business; (c) enter into any merger, consolidation or similar reorganization unless it is the surviving corporation; (d) transfer all or any substantial part of its operations or assets outside of the United States of America; or (e) without 30 days advance written notice to Lessor, change its name or chief place of business. 19. LATE CHARGES: If any rent or other amount payable under the Lease is not paid when due, then as compensation for the administration and enforcement of Lessee's obligation to make timely payments, Lessee shall pay with respect to each overdue payment on demand an amount equal to the greater of fifteen dollars ($15.00) or five percent (5%) of the each overdue payment (but not to exceed the highest late charge permitted by applicable law) plus any collection agency fees and expenses. 20. NOTICES; POWER OF ATTORNEY: (a) Service of all notices under the Lease shall be sufficient if given personally or couriered or mailed to the party involved at its respective address set forth herein or at such other address as such party may provide in writing from time to time. Any such notice mailed to such address shall be effective three days after deposit in the United States mail with postage prepaid. (b) With respect to any power of attorney covered by the Lease, the powers conferred on Lessor thereby: are powers coupled with an interest; are irrevocable; are solely to protect Lessor's interests under the Lease; and do not impose any duty on Lessor to exercise such powers. Lessor shall be accountable solely for amounts it actually receives as a result of its exercise of such powers. 21. ASSIGNMENT BY LESSOR: Lessor and any assignee of Lessor, with or without notice to or consent of Lessee, may sell, assign, transfer or grant a security interest in all or any part of Lessor's rights, obligations, title or interest in the Equipment, the Lease, any Schedule or the amounts payable under the Lease or any Schedule to any entity ("transferee"). The transferee shall succeed to all of Lessor's rights in respect to the Lease (including, without limitation, all rights to insurance and indemnity protection described in the Lease). Lessee agrees to sign any acknowledgement and other documents reasonably requested by Lessor or the transferee in connection with any such transfer transaction. Lessee, upon receiving notice of any such transfer transaction, shall comply with the terms and conditions thereof. Lessee agrees that it shall not assert against any transferee any claim, defense, setoff, deduction or counterclaim which Lessee may now or hereafter be entitled to assert against Lessor. Unless otherwise agreed in writing, the transfer transaction shall not relieve Lessor of any of its obligations to Lessee under the Lease and Lessee agrees that the transfer transaction shall not be construed as being an assumption of such obligations by the transferee. Page 5 22. NO ASSIGNMENT, SUBLEASE OR LIEN BY LESSEE: LESSEE SHALL NOT, DIRECTLY OR INDIRECTLY, (a) MORTGAGE, ASSIGN, SELL, TRANSFER, OR OTHERWISE DISPOSE OF THE LEASE OR ANY INTEREST THEREIN OR THE EQUIPMENT OR ANY PART THEREOF, OR (b) SUBLEASE, RENT, LEND OR TRANSFER POSSESSION OR USE OF THE EQUIPMENT OR ANY PART THEREOF TO ANY PARTY, OR (c) CREATE, INCUR, GRANT, ASSUME OR ALLOW TO EXIST ANY LIEN ON THE LEASE, ANY SCHEDULE, THE EQUIPMENT OR ANY PART THEREOF. 23. EXPIRATION OF LEASE TERM: (a) At least 90 days (or earlier if otherwise specified), but no more than 270 days prior to expiration of the Lease Term of each Schedule, Lessee shall give Lessor written notice of its electing one of the following options for all (but not less than all) of the Equipment covered by such Schedule: return the Equipment under clause (b) below; or purchase the Equipment under clause (c) below. The election of an option shall be irrevocable. If Lessee fails to give timely notice of its election, it shall be deemed to have elected to return the Equipment. (b) If Lessee elects or is deemed to have elected to return the Equipment at the expiration of the Lease Term of a Schedule or if Lessee is obligated at any time to return the Equipment, then Lessee shall, at its sole expense and risk, deinstall, disassemble, pack, crate, insure and return the Equipment to Lessor (all in accordance with applicable industry standards) at any location in the continental United States of America selected by Lessor. The Equipment shall be in the same condition as when received by Lessee, reasonable wear, tear and depreciation resulting from normal and proper use excepted (or, if applicable, in the condition set forth in the Lease or the Schedule), shall be in good operating order and maintenance as required by the Lease, shall be certified as being eligible for any available manufacturer's maintenance program, shall be free and clear of any Liens as required by the Lease, shall comply with all applicable laws and regulations and shall include all manuals, specifications, repair and maintenance records and similar documents. Until Equipment is returned as required above, all terms of the Lease shall remain in full force and effect including, without limitation, obligations to pay rent and insure the Equipment; provided, that after the expiration of any Schedule and before Lessee has completed its return of the Equipment or its purchase option (if elected), the term of the lease of the Equipment covered by such Schedule shall be month- to-month or such shorter period as may be specified by Lessor. (c) If Lessee gives Lessor timely notice of its election to purchase Equipment, then on the expiration date of the applicable Schedule Lessee shall purchase all (but not less than all) of the Equipment and shall pay to Lessor the Fair Market Value of the Equipment plus all Taxes (other than income taxes on Lessor's gains on such sale), costs and expenses incurred or paid by Lessor in connection with such sale plus all accrued but unpaid amounts due with respect to the Equipment and/or the Schedule. The Stipulated Loss Value or Economic Value of any item of Equipment shall have no bearing or influence on the determination of Fair Market Value under this clause (c). Upon payment in full of the above amounts, and if no default has occurred and is continuing under the Lease, Lessor shall transfer title to such Equipment to Lessee "as-is, where-is" with all faults and without recourse to Lessor and without any representation or warranty of any kind whatsoever by Lessor, express or implied. (d) For purposes of the purchase option of the Lease, the determination of the Fair Market Value of any Equipment shall be determined (1) without deducting any costs of dismantling or removal from the location of use, (2) on the assumption that the Equipment is in the condition required by the applicable return and maintenance provisions of the Lease and is free and clear of any Liens as required by the Lease, and (3) shall be determined by mutual agreement of Lessee and Lessor or, if Lessor and Lessee are not able to agree on such value, by the Appraisal Procedure. "Appraisal Procedure" means the determination of Fair Market Value by an independent appraiser acceptable to Lessor and Lessee, or, if the parties are unable to agree on an acceptable appraiser, by averaging the valuation (disregarding the one which differs the most from the other two) of three independent appraisers, the first appointed by Lessor, the second appointed by Lessee and the third appointed by the first two appraisers. For purposes of the "Remedies" section of the Lease, the Fair Market Value shall be determined by Lessor in good faith and any such valuation shall be on an "as- is, where is" basis without regard to the first sentence of clause (d). Lessee, at its sole expense, shall pay all fees, costs and expenses of the above described appraisers. 24. GOVERNING LAW: THE INTERPRETATION, CONSTRUCTION AND VALIDITY OF THE LEASE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF OHIO. WITH RESPECT TO ANY ACTION BROUGHT BY LESSOR AGAINST LESSEE TO ENFORCE ANY TERM OF THE LEASE, LESSEE HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT IN THE FRANKLIN COUNTY, OHIO, WHERE LESSOR HAS ITS PRINCIPAL PLACE OF BUSINESS AND WHERE PAYMENTS ARE TO BE MADE BY LESSEE. 25. MISCELLANEOUS: (a) Subject to the limitations herein, the Lease shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, administrators, successors and assigns. (b) This Master Lease Agreement and each Schedule may be executed in any number of counterparts, which together shall constitute a single instrument. Only one counterpart of each Schedule shall be marked "Lessor's Original" and all other counterparts shall be marked "Duplicate". A security interest in any Schedule may be created through transfer and possession only of the counterpart marked "Lessor's Original". (c) Section and paragraph headings in this Master Lease Agreement and the Schedules are for convenience only and have no independent meaning. (d) The terms of the Lease shall be severable and if any term thereof is declared unconscionable, invalid, illegal or void, in whole or in part, the decision so holding shall not be construed as impairing the other Page 6 terms of the Lease and the Lease shall continue in full force and effect as if such invalid, illegal, void or unconscionable term were not originally included herein. (e) All indemnity obligations of Lessee under the Lease and all rights, benefits and protections provided to Lessor by warranty disclaimers shall survive the cancellation, expiration or termination of the Lease. (f) Lessor shall not be liable to Lessee for any indirect, consequential or special damages for any reason whatsoever. (g) Each payment made by Lessee shall be applied by Lessor in such manner as Lessor determines in its discretion which may include, without limitation, application as follows: first, to accrued late charges; second, to accrued rent; and third, the balance to any other amounts then due and payable by Lessee under the Lease. (h) If the Lease is signed by more than one Lessee, each of such Lessees shall be jointly and severally liable for payment and performance of all of Lessee's obligations under the Lease. 26. ENTIRE AGREEMENT: THE LEASE REPRESENTS THE FINAL, COMPLETE AND ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO. THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS OR UNDERSTANDINGS AFFECTING THE LEASE OR THE EQUIPMENT. Lessee agrees that Lessor is not the agent of any manufacturer or supplier, that no manufacturer or supplier is an agent of Lessor, and that any representation, warranty or agreement made by manufacturer, supplier or by their employees, sales representatives or agents shall not be binding on Lessor. 27. JURY WAIVER: ALL PARTIES TO THIS MASTER LEASE AGREEMENT WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY RELATED TO THIS MASTER LEASE AGREEMENT. IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Master Lease Agreement as of the date first written above. READY MIX, INC. BANC ONE LEASING CORPORATION (Lessee) (Lessor) By: /s/ Kenneth D. Nelson By: /s/ [ILLEGIBLE] ---------------------------- ------------------------------- Title: VICE PRESIDENT Title: /s/ [ILLEGIBLE] -------------------------- ---------------------------- Lessee's Witness: /s/ Julie L. Bergo ------------------ Regardless of any prior, present or future oral agreement or course of dealing, no term or condition of the Lease may be amended, modified, waived, discharged, cancelled or terminated except by a written instrument signed by the party to be bound; except Lessee authorizes Lessor to complete the Acceptance Date of each Schedule and the serial numbers of any Equipment. READY MIX, INC. BANC ONE LEASING CORPORATION (Lessee) (Lessor) By: /s/ Kenneth D. Nelson By: /s/ [ILLEGIBLE] ------------------------------- -------------------------------- Title: VICE PRESIDENT Title: /s/ [ILLEGIBLE] --------------------------- ----------------------------- Page 7 EX-10.103 10 LEASE AGREEMENT WITH BANC ONE LEASING CORP. EXHIBIT 10.103 [LOGO OF BANK ONE] LEASE SCHEDULE NO.:1000100319 FINANCING LEASE ---------- (Per Diem Interim Rent) Master Lease Agreement dated 07/01/99 -------- Lessor: BANC ONE LEASING CORPORATION Lessee: READY MIX, INC. -------------- 1. GENERAL. This Lease Schedule is signed and delivered under the Master Lease Agreement identified above, as amended from time to time ("Master Lease"), between Lessee and Lessor. Capitalized terms defined in the Master Lease will have the same meanings when used in this Schedule. 2. FINANCING. Lessor finances for Lessee, and Lessee finances with Lessor, all of the property ("Equipment") described in Schedule A-1 attached hereto (and Lessee represents that all Equipment is new unless specifically identified as used): 3. AMOUNT FINANCED: Equipment Cost: $ 721,894.88 Set-Up/filing Fee: $ 375.00 Miscellaneous: Sales Tax: $ 0.00 Total: $ 722.269.88 ------------ 4. FINANCING TERM. The Base Term of this Schedule shall be 60 months and the -- Base Term shall commence on Acceptance Date ("Commencement Date"). The total --------------- Lease Tenn consists of the Interim Term plus the Base Term. The Interim Term begins on the date that Lessor accepts this Schedule as stated below Lessor's signature ("Acceptance Date") and continues up to the Commencement Date. 5. INSTALLMENT PAYMENTS/FEES. As financing for the Equipment, Lessee shall pay to Lessor all amounts stated below on the due dates stated below: There shall be added to each installment payment all applicable Taxes as in effect from time to time. (a) For the Interim Term, Lessee shall pay to Lessor on the Commencement Date an amount equal to one-thirtieth (1/30th) of the Installment Payment multiplied by the number of days in the Interim Term. "Installment Payment" means the total of all installment payments due and payable during the Base Term divided by the number of months in the Base Term. (b) During the Base Term, Lessee shall pay to Lessor installment payments in the amounts and according to the timing set forth below, provided however, that notwithstanding the following, the final installment payment due hereunder shall be equal to the remaining principal balance hereunder together with all accrued interest and fees. (1) Amount of each installment payment during the Base Term (including principal and interest): 60 MON $14,752.42 (2) Frequency of installments payments during the Base Term: Monthly ------- Page 1 of 4 [LOGO OF BANK ONE] (3) Timing of installment payments during the Base Term: arrears ------- (c) Lessee shall pay Lessor a Set-Up/Filing Fee as follows: (1) $0.00 shall be paid on the Acceptance Date, or ----- (2) $375.00 has been included in the above Amount Financed of the ------- Equipment. (d) Security Deposit: $0.00. On the Acceptance Date, Lessee shall pay Lessor ----- said Security Deposit which shall be held in accordance with paragraph 6 below. 6. SECURITY INTEREST. This Schedule is intended to be a secured debt financing transaction, not a true lease. See Paragraph 7 below regarding Lessee's --- ownership of the Equipment. As collateral security for payment and performance of all Secured Obligations (defined in Paragraph 8 below) and to induce Lessor to extend credit from time to time to Lessee (under the Lease or otherwise), Lessee hereby grants to Lessor a first priority security interest in all of Lessee's right, title and interest in the Equipment, whether now existing or hereafter acquired, any sums specified in this Schedule as a "Security Deposit", and in all Proceeds (defined in Paragraph 8 below). At its option, Lessor may apply all or any part of any Security Deposit to cure any default of Lessee under the Lease. If upon final termination of this Schedule, Lessee has fulfilled all of the terms and conditions hereof, then Lessor shall pay to Lessee upon Lessee's written request any remaining balance of the Security Deposit for this Schedule, without interest. 7. TITLE TO EQUIPMENT; FIRST PRIORITY LIEN. Lessee represents, warrants and agrees: that Lessee currently is the lawful owner of the Equipment; that good and marketable title to the Equipment shall remain with Lessee at all times; that Lessee has granted to Lessor a first priority security interest in the Equipment and all Proceeds; and that the Equipment and all Proceeds are, and at all times shall be, free and clear of any Liens other than Lessor's security interest therein. Lessee at its sole expense will protect and defend Lessor's first priority security interest in the Equipment against all claims and demands whatsoever. 8. CERTAIN DEFINITIONS. "Secured Obligations" means (a) all payments and other obligations of Lessee under or in connection with this Schedule, and (b) all payments and other obligations of Lessee (whether now existing or hereafter incurred) under or in connection with the Master Lease and all present and future Lease Schedules thereto, and (c) all other leases, indebtedness, liabilities and/or obligations of any kind (whether now existing or hereafter incurred, absolute or contingent, direct or indirect) of Lessee to Lessor or to any affiliate of either Lessor or BANK ONE CORPORATION. "Proceeds" means all cash and non-cash proceeds of the Equipment including, without limitation, proceeds of insurance, indemnities and/or warranties. 9. AMENDMENTS TO MASTER LEASE. For purposes of this Schedule only, Lessee and Lessor agree to amend the Master Lease as follows: (a) public liability or property insurance as described in the second sentence of Section 8 will not be required; (b) the definition of "Stipulated Loss Value" in clause (b) of Section 9 is deleted and replaced by Paragraph 10 below; (c) the text of Section 10 is deleted in its entirety; (d) Subsections 23(a) and 23(c) are deleted; (e) subsection 23(b) and the last sentence of section 4 will apply only if an event of default occurs; and (f) all references in the Lease as it relates to this Schedule to "Lessee" and "Lessor" shall be changed to "Borrower" and "Lender" respectively. 10. STIPULATED LOSS VALUE. For purposes of this Schedule only, the "Stipulated Loss Value" of any item of Equipment during its Lease Term equals the aggregate of the following as of the date specified by Lessor: (a) all accrued and unpaid interest, late charges and other amounts due under this Schedule and the Master Lease to the extent it relates to this Schedule as of such specified date, plus (b) the remaining principal balance due and payable by Lessee under this Schedule as of such specified date, plus (c) interest on the amount described in the foregoing clauses (a) and (b) at the Overdue Rate commencing with the specified date; provided, that the foregoing calculation shall not exceed Page 2 of 4 [LOGO] the maximum amount which may be collected by Lessor from Lessee under applicable law in connection with enforcement of Lessor's rights under this Schedule and the Master Lease to the extent it relates to this Schedule. 11. LESSEE TO PAY ALL TAXES. For purposes of this Schedule and its Equipment only: Lessee shall pay any and all Taxes relating to this Schedule and its Equipment directly to the applicable taxing authority; Lessee shall prepare and file all reports or returns concerning any such Taxes as may be required by applicable law or regulation (provided, that Lessor shall not be identified as the owner of the Equipment in such reports or returns); and Lessee shall, upon Lessor's request, send Lessor evidence of payment of such Taxes and copies of any such reports or returns. 12. LESSEE'S ASSURANCES. Lessee irrevocably and unconditionally: (a) reaffirms all of the terms and conditions of the Master Lease and agrees that the Master Lease remains in full force and effect; (b) agrees that the Equipment is and will be used at all times solely for commercial purposes, and not for personal, family or household purposes; and (c) incorporates all of the terms and conditions of the Master Lease as if fully set forth in this Schedule. 13. REPRESENTATIONS AND WARRANTIES: Lessee represents and warrants that: (a) Lessee is a corporation, partnership or proprietorship duly organized, validly existing and in good standing under the laws of the state of its organization and is qualified to do business and is in good standing under the laws of each other state in which the Equipment is or will be located; (b) Lessee has full power, authority and legal right to sign, deliver and perform the Master Lease, this Schedule and all related documents and such actions have been duly authorized by all necessary corporate/partnership/proprietorship action; and (c) the Master Lease, this Schedule and each related document has been duly signed and delivered by Lessee and each such document constitutes a legal, valid and binding obligation of Lessee enforceable in accordance with its terms. 14. CONDITIONS. No lease of Equipment under this Schedule shall be binding on Lessor, and Lessor shall have no obligation to purchase the Equipment covered hereby, unless: (a) Lessor has received evidence of all required insurance; (b) in Lessor's sole judgment, there has been no material adverse change in the financial condition or business of Lessee or any guarantor; (c) Lessee has signed and delivered to Lessor this Schedule, which must be satisfactory to Lessor, and Lessor has signed and accepted this Schedule; (d) no change in the Code or any regulation thereunder, which in Lessor's sole judgment would adversely affect the economics to Lessor of the lease transaction, shall have occurred or shall appear to be imminent; (e) Lessor has received, in form and substance satisfactory to Lessor, such other documents and information as Lessor shall reasonably request; and (f) Lessee has satisfied all other reasonable conditions established by Lessor. 15. OTHER DOCUMENTS: EXPENSES: Lessee agrees to sign and deliver to Lessor any additional documents deemed desirable by Lessor to effect the terms of the Master Lease or this Schedule including, without limitation, Uniform Commercial Code financing statements which Lessor is authorized to file with the appropriate filing officers. Lessee hereby irrevocably appoints Lessor and any designee of Lessor as Lessee's attorney-in-fact with full power and authority in the place of Lessee and in the name of Lessee to prepare, sign, amend, file or record any Uniform Commercial Code financing statements or other documents deemed desirable by Lessor to perfect, establish or give notice of Lessor's interests in the Equipment or in any collateral as to which Lessee has granted Lessor a security interest. Lessee shall pay upon Lessor's written request any actual out-of-pocket costs and expenses paid or incurred by Lessor in connection with the above terms of this section or the funding and closing of this Schedule. Page 3 of 4 [LOGO] 16. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (I) Lessor has not selected, manufactured, sold or supplied any of the Equipment, (ii) Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has received a copy of, and approved, the purchase orders or purchase contracts for the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (a) LESSEE HAS RECEIVED, INSPECTED AND APPROVED ALL OF THE EQUIPMENT; (b) ALL EQUIPMENT IS IN GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND ALL APPLICABLE SPECIFICATIONS; (c) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR PURPOSES OF THE LEASE "AS-IS, WHERE-IS" WITH ALL FAULTS; AND (d) LESSEE UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF THE EQUIPMENT. LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE AGREES THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING THE EQUIPMENT OR THIS SCHEDULE. BANC ONE LEASING CORPORATION READY MIX, INC. - ---------------------------- --------------- (Lessor) (Lessee) By: /s/ [ILLEGIBLE] By: /s/ Kenneth D. Nelson ------------------------------- --------------------------------- Title: [ILLEGIBLE] Title: VICE PRESIDENT ----------------------------- ------------------------------ Acceptance Date: 11/24/99 Witness: /s/ Tortina M. Bunton ------------------ ---------------------------- Page 4 of 4 Banc One Leasing Corporation SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER QUANTITY DESCRIPTION PAGE 1 ======================================================================= LOCATION: 4411 SOUTH 40TH ST. D-11 PHOENIX, AZ 85040 COUNTY: MARICOPA COST: $722,269.88 1 MULTISHANK RIPPER/DOZER MODEL D9N S/N-6XJ01019 1 8R5597 BUCKET MODEL#990 S/N-7HK00107 TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS, IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO. This Schedule A-1 is attached to and made a part of Lease Number 1000100319 and ---------- constitutes a true and accurate description of the equipment. Lessee: READY MIX, INC. --------------------- By: /s/ Kenneth D. Nelson --------------------------- Date: 11-23-99 ------------------------- EX-10.104 11 WHEELER MACHINERY CO. INSTALLMENT SALE CONTRACT EXHIBIT 10.104 INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT) PURCHASER(S): SELLER (DEALER): MEADOW VALLEY WHEELER MACHINERY CO. CONTRACTORS, INC. P.O. BOX 60726 4901 WEST 2100 SOUTH PHOENIX, AZ 85082 SALT LAKE CITY UT 84120-1227 County: MARICOPA - -------------------------------------------------------------------------------- Subject to the terms and conditions set forth below and on the reverse side hereof, Seller hereby sells the equipment described below (the "Unit" or "Units") to Purchaser, and Purchaser (if more than one, jointly and severally), having been offered both a cash sale price and a time sale price, hereby buys the Units from Seller on a time sale basis. - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------- NEW (IF USED) DELIVERED OR FIRST MODEL DESCRIPTION OF UNIT(S) SERIAL# CASH SALE USED USED PRICE - -------------------------------------------------------------------------------------------------------------------------------- (1) NEW 416C CATERPILLAR BACKHOE LOADER 5YN06745 64,000.00 - -------------------------------------------------------------------------------------------------------------------------------- FIRST DESCRIPTION OF ADDITIONAL SECURITY USED (MAKE, MODEL & SERIAL NUMBER) Sub-Total.................................... $ 64,000.00 - ------------------------------------------------------- NONE Sales Tax.................................... $ 3,352.80 1. Total Cash Sale Price........................ $ 67,352.80 Cash Down Pay 11,200.00 Net Trade-in Allow 0.00 2. Total Down Payment........................... $ 11,200.00 - ------------------------------------------------------- FIRST DESCRIPTION OF TRADE-IN EQUIPMENT 3. Unpaid Balance of Cash Price (1 - 2)......... $ 56,152.80 USED (MAKE, MODEL & SERIAL NUMBER) 4. Official Fees (Specify)...................... $ 150.00 - ------------------------------------------------------- NONE DOCUMENTATION FEE 150.00 5. Physical Damage Insurance.................... $ 6. Principal Balance (Amount Financed) (3 + 4 + 5)................ $ 56,302.80 - -------------------------------------------------------- 7. Finance Charge Trade-in Value 0.00 (Time Price Differential).................... $ 6,858.96 Less Owing to (___n/a___) 0.00 8. Time Balance Net Trade-in Allowance 0.00 (Total of Payments) (6 + 7).................. $ 63,161.76 9. Time Sale Balance Location of Units: VICINITY OF (Total of Payment Price) (2 + 8)............. $ 74,361.76 SALT LAKE CITY, UTAH 10. Annual Percentage Rate 6.28% 11. Date FINANCE CHARGE begins to accrue. January 25, 2000
Purchaser hereby sells and conveys to Seller the above described Trade-in Equipment and warrants it to be free and clear of all claims, liens, security interests and encumbrances except to the extent shown above. 1. PAYMENT: Purchaser shall pay to Seller, at P.O. BOX 100647, PASADENA CA 91189-0647 or such other location Seller designates in writing, the Time Balance (Item 8 above) as follows [check (a) or (b)]: X (a) in 48 equal monthly installments of $1,315.87 each, with the first - --- installment due on December 25, 1999, and the balance of the installments due on the like day of each month thereafter, (except no payments shall be due during the month(s) of (N/A)), until the entire indebtedness has been paid; or ___ (b) in accordance with the Payment Schedule attached to this Contract. (Provisions of section 1 continued on reverse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urchaser(s) and Seller have duly executed this Contract as of 11/25, 1999. Purchaser(s): Seller: MEADOW VALLEY WHEELER MACHINERY CO. CONTRACTORS, INC. By /s/ Kenneth D. Nelson By /s/ [ILLEGIBLE]^^ --------------------------------- ----------------------------------- Name (PRINT) KENNETH D. NELSON Name (PRINT)__________________________ ---------------------- Title VICE PRESIDENT Title Vice President ------------------------------ -------------------------------- ADDITIONAL TERMS AND CONDITIONS 1. PAYMENT (continued): Purchaser shall pay to Seller a late payment charge equal to the lesser of (a) the highest charge allowed by law or (b) 5% of the amount of any payment (including any accelerated payment) not made when due under this Contract (or such later date as may be required by applicable law). Upon prepayment in full or acceleration of the total unpaid Time Balance, Purchaser shall receive a rebate of the unearned portion of the Finance Charge computed on an actuarial basis. Except as otherwise expressly provided herein, the obligations of Purchaser hereunder shall not be affected by any defect in, damage to, loss of or interference with possession or use of any Unit, by the attachment of any lien or claim to any Unit, or for any other cause. 2. DISCLAIMER OF WARRANTIES: Purchaser acknowledges and agrees that Seller is not the manufacturer of the Unit(s) and that Purchaser has selected each Unit based on Purchaser's own judgment without any reliance whatsoever on any statements or representations made by Seller. AS BETWEEN SELLER AND PURCHASER, THE UNIT(S) ARE PROVIDED "AS IS" WITHOUT ANY WARRANTIES OF ANY KIND. PURCHASER HEREBY EXPRESSLY DISCLAIMS a) ALL WARRANTIES OF MERCHANTABILITY, b) ALL WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, AND c) ALL WARRANTIES AGAINST INFRINGEMENT OR THE LIKE. Seller assigns to Purchaser its interest in any of the manufacturer's warranties on the Unit(s). 3. POSSESSION, USE AND MAINTENANCE: Purchaser shall not (a) use any Unit improperly, carelessly, unsafely or in violation of any law or regulation or for personal, family, or household purposes or for any purpose other than in Purchaser's business (including agricultural business); (b) permit the use of any Unit by anyone other than Purchaser or change the permanent location of any Unit from the county and state specified above without the prior written consent of Seller; or (c) sell, lease, assign or transfer, or create or suffer to exist any lien, claim, security interest or encumbrance on any of its rights hereunder or in any Unit. The Units are and shall remain personal property irrespective of their use or manner of attachment to realty. Upon prior notice to Purchaser, Seller or its agent shall have the right (but not the obligation) at all reasonable times to inspect any Unit. Purchaser shall at its expense maintain the Units in good operating order, repair and condition. Purchaser shall not alter any Unit or affix any equipment to any Unit if such alteration or addition would impair the originally intended function or reduce the value of such Unit. Any alteration or addition to any Unit shall be at the sole risk of Purchaser. 4. TAXES: Purchaser shall promptly pay all taxes, assessments, fees and other charges when levied or assessed against any Unit or the ownership or use thereof, or this Contract or any payments made or to be made to Seller. 5. WAIVER AND INDEMNITY: PURCHASER HEREBY AGREES TO RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS FROM AND AGAINST ANY CLAIMS OF PURCHASER OR THIRD PARTIES, INCLUDING CLAIMS BASED UPON BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL INJURY, PROPERTY DAMAGE, STRICT LIABILITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR INJURY CAUSED BY OR RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY, CONDITION, OPERATION, USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY UNIT. FURTHER, PURCHASER AGREES TO BE RESPONSIBLE FOR ALL COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEYS' FEES, INCURRED BY SELLER OR ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS IN DEFENDING SUCH CLAIMS OR IN ENFORCING THIS PROVISION. UNDER NO CONDITION OR CAUSE OF ACTION SHALL SELLER BE LIABLE FOR ANY LOSS OF ACTUAL OR ANTICIPATED BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES. 6. INSURANCE: Purchaser, at its expense, shall keep each Unit and all equipment listed as Additional Security insured against all risks for their full insurable value and shall maintain comprehensive public liability insurance in an amount reasonably acceptable to Seller. All such insurance shall be in such form and with such companies as Seller shall reasonably approve, shall be primary, without right of contribution from any insurance carried by Seller, and shall provide that such insurance may not be cancelled or altered so as to affect the interest of Seller without at least 30 days' prior written notice to Seller. All insurance covering loss or damage to the Units and Additional Security shall name Seller (or its designee) as loss payee and be payable to Seller as its interest may appear. Purchaser agrees to notify Seller of any occurrence which may become the basis of an insurance claim hereunder and not to make any adjustments with insurers without Seller's prior written consent. Prior to the first delivery of any Unit to Purchaser, Purchaser shall deliver to Seller satisfactory evidence of such insurance coverage. 7. EVENTS OF DEFAULT: Each of the following shall constitute an "Event of Default" hereunder: (a) Purchaser shall fail to make any payment to Seller when due hereunder or fail to observe or perform any other covenant, agreement or warranty made by Purchaser hereunder; (b) any representation or warranty of Purchaser contained herein or in any document furnished to Seller in connection herewith shall be incorrect or misleading when made; (c) any Unit or additional security shall become lost, stolen, destroyed, irreparably damaged or subject to any sale, lien, claim, security interest or encumbrance (other than in favor of Seller or its assignee); (d) any default shall occur under any other agreement between Purchaser and Seller; (e) Purchaser or any guarantor of this Contract shall cease to do business, become insolvent, make an assignment for the benefit of creditors or file any petition under any bankruptcy, reorganization, insolvency or moratorium law, or any other law for the relief of debtors; (f) any involuntary petition shall be filed under any bankruptcy statute against Purchaser or any guarantor of this Contract or any receiver, trustee, or similar official shall be appointed to take possession of the properties of Purchaser or any guarantor of this Contract unless such petition or appointment ceases to be in effect within 30 days of said filing or appointment; (g) Seller shall reasonably deem itself to be insecure; or (h) any breach or repudiation by any guarantor shall occur under any guaranty obtained by Seller in connection with this Contract. 8. REMEDIES: If any Event of Default shall occur, Seller may, at its option, do any one or more of the following: (a) Declare all amounts due or to become due under this Contract, excluding any unearned portion of the Finance Charge, immediately due and payable; (b) recover any additional damages and expenses sustained by Seller by reason of the breach of any covenant, representation or warranty contained in this Contract; (c) enforce the security interest granted hereunder; (d) without notice, liability or legal process, enter upon the premises where any of the Units or additional security may be and take possession thereof, and (e) require Purchaser to assemble the Units and additional security and make them available to Seller at a place designated by Seller which is reasonably convenient to both parties. Time is of the essence of this Contract. Seller shall have all rights given to a secured party by law and may retain all monies theretofore paid by Purchaser hereunder as compensation for the reasonable use of the Units by Purchaser. Seller may, at its option, undertake commercially reasonable efforts to sell the Units and additional security, and the proceeds of any such sale shall be applied: First, to reimburse Seller for all reasonable expenses of retaking, holding, preparing for sale, and selling the Units and additional security, including all taxes and reasonable attorneys' fees, and second, to the extent not previously paid by Purchaser, to pay Seller all amounts then due or accrued under this Contract, including any accelerated payments and late payment charges. Any surplus shall be paid to the person entitled thereto. Purchaser shall promptly pay any deficiency to Seller. Purchaser acknowledges that sales for cash or on credit to a wholesaler, retailer or user of the Units or additional security, and with or without the Units or additional security being present at such sale, are all commercially reasonable. Purchaser agrees to pay all reasonable attorneys' fees (to the extent permitted by applicable law) and all costs and expenses incurred by Seller in enforcing this Contract. The remedies provided herein shall be cumulative and in addition to all other remedies at law or in equity. If Purchaser fails to perform any of its obligations under this Contract, Seller may (but need not) at any time thereafter perform such obligation, and the expenses incurred in connection therewith shall be payable by Purchaser upon demand. 9. SECURITY INTEREST; PURCHASER ASSURANCES AND REPRESENTATIONS: To secure payment of Purchaser's indebtedness to Seller hereunder and the performance of all obligations of Purchaser hereunder, Purchaser hereby grants to Seller a continuing security interest in the Units, and in the equipment, if any, described as Additional Security on the front of this Contract, including all attachments, accessories and optional features for such Units and Additional Security (whether or not installed thereon) and all substitutions, replacements, additions and accessions thereto, and proceeds of all the foregoing. Purchaser will, at its expense, do any act and execute, acknowledge, deliver, file, register and record any Documents which Seller deems desirable in its discretion to protect Seller's security interest and Seller's rights and benefits under this Contract. Purchaser hereby irrevocably appoints Seller as Purchaser's Attorney-in-Fact for the signing and filing of such documents and authorizes Seller to delegate these limited powers. Purchaser acknowledges the signature of Seller or said delegatee upon such documents to be the same as Purchaser's own for all purposes and with the present intent to authenticate the document. Purchaser represents and warrants to Seller that (a) Purchaser has the power to make, deliver and perform under this Contract; (b) the person executing and delivering this Contract is authorized to do so on behalf of Purchaser; (c) this Contract constitutes a valid obligation of Purchaser, legally binding upon it and enforceable in accordance with its terms; and (d) all credit, financial and other information submitted to Seller in connection with this Contract is and shall be true, correct and complete. 10. ASSIGNMENT; COUNTERPARTS: The rights and remedies of Seller under this Contract may be assigned by Seller at any time. If this Contract is assigned by Seller, the term "Seller" shall thenceforth mean Seller's assignee, and if assigned to a partnership, shall thenceforth mean such partnership and, for purposes of Sections 2, 4, 5 and 6, each partner in such partnership. If notified by Seller, Purchaser shall make all payments due hereunder directly to the party designated in such notice, without any offset or deduction whatsoever. Purchaser waives, as to Seller's assignee, all claims and defenses Purchaser may have or assert against Seller and agrees that no such claim or defense will be asserted against Seller's assignee. No assignment of this Contract by Seller shall release any claim Purchaser may have against Seller hereunder. No assignment of this Contract or any right or obligation hereunder may be made by Purchaser without the prior written consent of Seller. This Contract shall be binding upon and inure to the benefit of Seller and Purchaser and their respective successors and assigns. Although multiple counterparts of this document may be signed, only the counterpart accepted, acknowledged and certified by Caterpillar Financial Services Corporation on the signature page thereof as the original will constitute original chattel paper. 11. EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF CONTRACT; NOTICES: No delay or omission to exercise any right or remedy accruing to Seller hereunder shall impair any such right or remedy nor shall it be construed to be a waiver of any breach or default of Purchaser. Any waiver or consent by Seller under this Contract must be in writing specifically set forth. This Contract completely states the rights of Seller and Purchaser with respect to the Units and supersedes all prior agreements with respect thereto. No variation or modification of this Contract shall be valid unless in writing. All notices hereunder shall be in writing, addressed to each party at the address set forth on the front of this Contract or at such other address as may hereafter be furnished in writing. 12. APPLICABLE LAW, JURISDICTION AND JURY TRIAL WAIVER PROVISIONS: This Agreement shall be governed by and construed under the laws of the State of Tennessee, without giving effect to the conflict-of-laws principles thereof, and Purchaser hereby consents to the jurisdiction of any state or federal court located within the State of Tennessee. THE PARTIES HERETO HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT; THE OBLIGATIONS OR THE COLLATERAL. 13. SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Contract shall be invalid under any applicable law, such provision shall be deemed omitted but the remaining provisions hereof shall be given effect. All obligations of Purchaser under this Contract shall survive the expiration or termination of this Contract to the extent required for their full observance and performance. GUARANTY OF PAYMENT - INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT) THIS GUARANTY ("Guaranty") is made and entered into as of 11/25/99 by MEADOW VALLEY CORPORATION, (hereinafter, referred to as "Guarantor"), in favor of WHEELER MACHINERY CO. 4901 WEST 2100 SOUTH SALT LAKE CITY UT 8412O-1227 (hereinafter referred to as "Seller"), guaranteeing the Indebtedness (as hereinafter defined) of MEADOW VALLEY CONTRACTORS, INC. (hereinafter referred to as "Obligor"). WITNESSETH: FOR VALUE RECEIVED, and/or as an inducement to Seller to now or hereafter enter into, purchase or otherwise acquire the agreements, accounts and/or other obligations evidencing and/or securing Obligor's Indebtedness and in consideration of and for credit and financial accommodations now or hereafter extended to or for the account of the Obligor (which includes Seller's consent to an assignment and/or assumption of the Indebtedness), which is in the best interest of Guarantor and which would not have been extended but for this Guaranty, the Guarantor agrees as follows: SECTION 1. Guaranty of Obligor's Indebtedness. Guarantor hereby absolutely, - ---------------------------------------------- irrevocably and unconditionally agrees to, and by these presents does hereby: (a) guarantee the prompt and punctual payment, performance and satisfaction of all present and future indebtedness and obligations of Obligor to Seller which Obligor now owes Seller or which Obligor shall at any time or from time to time hereafter owe Seller when the same shall become due in connection with or arising out of that certain INSTALLMENT SALES CONTRACT by and between Obligor and Seller dated 11/25/99, including any and all existing and future additional schedules, amendments and/or related agreements thereto (the "Contract"), whether direct or contingent, due or to become due, joint or several, primary or secondary, liquidated or unliquidated, secured or unsecured, original or renewed or extended, or by open account or otherwise, and whether representing rentals, principal, interest and/or late charges or other charges of an original balance, an accelerated balance, a balance reduced by part payment or a deficiency after sale of collateral or otherwise and (b) undertake and guarantee to pay on demand and indemnify Seller against all liabilities, losses, costs, attorney's fees, and expenses which may be suffered by Seller by reason of Obligor's default or default of the Guarantor (with all of Obligor's indebtedness and/or obligations as stated above (including all costs, fees and expenses) being hereinafter individually and collectively referred to under this Guaranty as Obligor's "Indebtedness", which Indebtedness shall be conclusively presumed to have been created in reliance upon this Guaranty). SECTION 2. Joint, Several and Solidary Liability. Guarantor further agrees that - ------------------------------------------------ its obligations and liabilities for the prompt and punctual payment, performance and satisfaction of Obligor's Indebtedness are independent of any agreement or transaction with any third parties and shall be on a "joint and several" and "solidary" basis along with Obligor to the same degree and extent as if Guarantor had been and/or will be a co-borrower, co-principal obligor and/or co- maker of Obligor's Indebtedness. In the event that there is more than one guarantor under this Guaranty, or in the event that there are other guarantors, endorsers, sureties or any other party who may at any time become liable for all or any portion of Obligor's Indebtedness (each, an "Other Obligor"), the provisions hereof shall be read with all grammatical changes thereby rendered necessary and each reference to the Guarantor shall include each and every one of those parties liable for all or any portion of Obligor's Indebtedness and each Guarantor's obligations and liabilities hereunder shall be on a "joint and several" and "solidary" basis along with such Other Obligors. SECTION 3. Duration; Cancellation of Guaranty. This Guaranty and Guarantor's - --------------------------------------------- obligations and liabilities hereunder shall remain in full force and effect until such time as Obligor's Indebtedness shall be fully and finally paid, performed and/or satisfied, until such time as this Guaranty may be cancelled by Seller under a written cancellation instrument in favor of Guarantor or otherwise as stated herein. SECTION 4. Default by Obligor. Immediately upon Obligor's default under any of - ----------------------------- its Indebtedness in favor of Seller, Seller may make demand upon Guarantor and Guarantor unconditionally and absolutely agrees to pay the full then unpaid amount of all of Obligor's Indebtedness (whether at stated maturity, by required prepayment, declaration, acceleration or otherwise) and/or perform any covenant or agreement hereunder guaranteed. Such payment or payments shall be made immediately following demand by Seller at Seller's offices indicated above. SECTION 5. Additional Covenants. Guarantor further agrees that Seller may, at - ------------------------------- its sole option, at any time, and from time to time, without the consent of or notice to Guarantor, or to any other party, and without incurring any responsibility to Guarantor or to any other party, and without affecting, impairing or releasing the obligations of Guarantor under this Guaranty: (a) discharge or release any party (including, but not limited to, Obligor, secondary obligors of Obligor's indebtedness or any co-guarantor under this Guaranty) who is or may be liable to Seller for Obligor's Indebtedness; (b) sell at public or private sale, exchange, release, impair, surrender, substitute, realize upon or otherwise deal with, in any manner and in any order and upon such terms and conditions as Seller deems best at its uncontrolled discretion, any leased equipment and/or any collateral listed in the Contract or now or hereafter otherwise directly or indirectly securing repayment of Obligor's Indebtedness (all such leased equipment and/or all such collateral shall hereinafter be referred to as the "Equipment"), including without limitation, the purchase of all or any part of such collateral for Seller's own account; (c) change the manner, place or terms of payment and/or available credit (including without limitation increase or decrease in the amount of such payments, available credit or any interest rate adjustments), or change or extend the time of payment of or renew, as often and for such periods as Seller may determine, or alter Obligor's Indebtedness or grant any other indulgence to Obligor and/or any secondary obligors of Obligor's Indebtedness or any co-guarantor under this Guaranty; (d) settle or compromise Obligor's Indebtedness with Obligor and/or any third party or refuse any offer of performance with respect to, or substitutions for, the Indebtedness; (e) take or accept any other security or guaranty for any or all of Obligor's Indebtedness; and/or (f) enter into, deliver, modify, amend or waive compliance with, any instrument, agreement or arrangement evidencing, securing or otherwise affecting, all or any part of Obligor's Indebtedness. SECTION 6. No Release of Guarantor. Guarantor's obligations and liabilities - ---------------------------------- under this Guaranty shall not be released, impaired, reduced or otherwise affected by, and shall continue in full force and effect, notwithstanding the occurrence of any event, including without limitation any one or more of the following events: (a) death, insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of authority (whether corporate, partnership or trust) of Obligor (or any person acting on Obligor's behalf) or any Other Obligor or any other defense based on or arising out of the lack of validity or unenforceability of the Indebtedness or any agreement or instrument relating thereto or any provisions thereof and/or Obligor's absence or cessation of liability thereunder for any reason, including without limitation, Seller's failure to preserve any right or remedy against Obligor; (b) any change in Obligor financial condition; (c) partial payment or payments of any amount due and/or outstanding under Obligor's Indebtedness; (d) any change in Obligor's management, ownership, identity or business or organizational structure; (e) any payment by Obligor or any other party to Seller that is held to constitute a preferential transfer or a fraudulent conveyance under any applicable law, or for any reason, Seller is required to fund such payment or pay such amount to Obligor or to any other person; (f) any sale, lease or transfer, whether or not commercially reasonable, of all or any part of Obligor's assets and/or any assignment, transfer or delegation of Obligor's Indebtedness to any third party (whereby this Guaranty shall continue to extend to all sums due from or for the account of Obligor and/or the new or substituted legal entity); (g) any failure to perfect any lien or security interest securing the Indebtedness or preserve any right, priority or remedy against any Equipment; (h) any interruption, change or cessation of relations between Guarantor and Obligor; (i) any defect in, damage to, destruction of or loss of or interference with possession or use of any Equipment for any reason by Obligor or any other person; (j) any act or omission by Seller which Page 1 of 2 increases the scope of Guarantor's risk, including without limitation, negligent administration of transactions with Obligor; and/or (k) any other occurrence or circumstance whatsoever, whether similar or dissimilar to the foregoing, which might otherwise constitute a legal or equitable discharge, release or defense of a guarantor or surety or which might otherwise limit recourse against Guarantor. SECTION 7. Waivers by Guarantor. Guarantor waives, for the benefit of Seller - ------------------------------- (which waivers shall survive until this Guaranty is released or terminated in writing by Seller): (a) notice of the acceptance of this Guaranty; (b) notice of the existence, creation or incurrence of new and/or additional debt owing from Obligor to Seller; (c) presentment, protest and demand, and notice of protest, demand, nonpayment, nonperformance and dishonor of any and all agreements, notes or other obligations signed, accepted, endorsed or assigned to or by Seller or agreed to between Obligor and Seller; (d) notice of adverse change in Obligor's financial condition or any other fact which might materially increase the risk of Guarantor; (e) any and all rights in and notices or demands relating to any Equipment, including without limitation, all rights, notices, advertisements or demands relating, whether directly or indirectly, to the foreclosure, sale or other disposition of any or all such Equipment or the manner of such sale or other disposition; (f) any claim, right or remedy which Guarantor may now have or hereafter acquire against the Obligor that arises hereunder and/or from the performance by any Other Obligor including, without limitation, any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification, or participation in any claim, right or remedy of Seller against the Obligor or any security which Seller now has or hereafter acquires with respect to the Obligor, whether or not such claim, right or remedy arises in equity, under contract (express or implied), by statute, under common law or otherwise; (g) notice of any default by Obligor or any other person obligated in any manner for all or any portion of Obligor's Indebtedness and notice of any legal proceedings against such parties; (h) any right of contribution from any Other Obligors; (i) notice and hearing as to any prejudgment remedies; (j) any defense which is premised on an alleged lack of consideration of the obligation undertaken by Guarantor, including without limitation, any defense to the enforcement of this Guaranty based upon the timing of execution of this Guaranty and/or that the Guaranty had been executed after the execution date of any agreements evidencing the Indebtedness; (k) all exemptions and homestead laws; (l) any other demands and notices required by law; (m) all setoffs and counterclaims against Seller and/or Obligor; (n) any defense based on the claim that Guarantor's liabilities and obligations exceed or are more burdensome than those of Obligor; (o) any defense which the Obligor may assert or be able to assert on the underlying Indebtedness or which may be asserted by Guarantor, including but not limited to (i) breach of warranty, (ii) fraud, (iii) statute of frauds, (iv) infancy, (v) statute of limitations, (vi) lender liability, (vii) accord and satisfaction, (viii) payment and/or (ix) usury. SECTION 8. Enforcement of Guarantor's Obligations and Liabilities. Guarantor - ----------------------------------------------------------------- agrees that, should Seller deem it necessary to file an appropriate collection action to enforce Guarantor's obligations and liabilities under this Guaranty, Seller may commence such a civil action against Guarantor without the necessity of first (i) attempting to collect Obligor's Indebtedness from Obligor or from any Other Obligor, whether through filing of suit or otherwise, (ii) attempting to exercise any rights Seller may have against any Equipment, whether through re-lease, the filing of an appropriate foreclosure action or otherwise, (iii) including Obligor or any Other Obligor as an additional party defendant in such a collection action against Guarantor, or (iv) pursuing any other remedy in Seller's power or to mitigate damages. If there is more than one guarantor under this Guaranty, each Guarantor additionally agrees that Seller may file an appropriate collection and/or enforcement action against any one or more of them, without impairing the rights of Seller against any other guarantor under this Guaranty. SECTION 9. Construction. This writing is intended as a final expression of this - ----------------------- Guaranty agreement and is a complete and exclusive statement of the terms of that agreement, provided however, that the provisions of this Guaranty shall be in addition to and cumulative of, and not in substitution, novation or discharge of, any and all prior or contemporaneous written guaranties or other written agreements by Guarantor (or any one or more of them), in favor of Seller or assigned to Seller by others, all of which shall be construed as complementing each other. Nothing herein contained shall prevent Seller from enforcing any and all such other guaranties or agreements in accordance with their respective terms. SECTION 10. Successors and Assigns Bound. Guarantor's obligations and - ---------------------------------------- liabilities under this Guaranty shall be binding upon Guarantor's successors, heirs, legatees, devisees, administrators, executors and assigns. Seller may assign this Guaranty and any and all rights and interests included herein in Seller's sole discretion without notice to Guarantor and the rights and remedies granted to Seller under this Guaranty shall also inure to the benefit of Seller's successors and assigns, as well as to any and all subsequent holder or holders of any of Obligor's Indebtedness subject to this Guaranty, without setoff, counterclaim, reduction, recoupment, abatement, deduction or defense based on any claim Guarantor may have against Seller, such successors and assigns or subsequent holders of Obligor's Indebtedness. Guarantor shall not assign this Guaranty without the prior written consent of Seller. SECTION 11. Termination. This Guaranty is irrevocable and may be terminated - ----------------------- only as to indebtedness created sixty (60) days after actual receipt by Seller of written notice of termination hereof, provided however, that all Indebtedness incurred, created or arising pursuant to a commitment of Seller made prior to the effective date of such termination (the "Termination Date") and any extensions, renewals or modifications of such Indebtedness (including without limitation loan and/or other commitments) agreed to or instituted by Seller prior to the Termination Date shall not be effected by such revocation and shall be deemed to have been incurred prior to termination (irrespective of whether Indebtedness arising thereunder occurs after the Termination Date) and shall be fully covered by this Guaranty. Any termination of this Guaranty shall be ineffective unless upon the Termination Date Guarantor deposits with Seller collateral in the form of cash in an amount not less than the amount of the Indebtedness outstanding on the Termination Date. Such cash shall be held by Seller in a separate account and shall be returned to Guarantor upon the full and indefeasible payment of all of the Indebtedness. SECTION 12. Governing Law; Waiver of Jury. This Guaranty shall be construed - ----------------------------------------- liberally in favor of Seller and shall be governed and construed in accordance with the substantive laws of the state of Seller's office specified above or the state of Seller's successors and assigns principal place of business without regard to the conflicts of laws principles thereof. ANY ACTION, SUIT OR PROCEEDING RELATING DIRECTLY OR INDIRECTLY TO THIS GUARANTY OR THE RELATIONSHIP BETWEEN GUARANTOR AND SELLER OR SELLER'S SUCCESSORS AND ASSIGNS, WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE WITHOUT A JURY. AS SUCH, GUARANTOR HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN ANY SUCH ACTION, SUIT OR PROCEEDING. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY THE COURT. This Agreement shall be governed by and construed under the laws of the State of Tennessee, without giving effect to the conflict- of-laws principles thereof, and Guarantor hereby consents to the jurisdiction of any state or federal court located within the State of Tennessee. SECTION 13. Severability. If any provision of this Guaranty is held to be - ------------------------ illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable, this Guaranty shall be construed and enforceable as if the illegal, invalid or unenforceable provision had never comprised a part of it, and the remaining provisions of this Guaranty shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. IN WITNESS WHEREOF, Guarantor has executed this Guaranty in favor of Seller on the day, month and year first written above. GUARANTOR HAS READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS GUARANTY. (Complete Address, Phone, SSN if Guarantor is an Individual.) Guarantor: MEADOW VALLEY CORPORATION Address: __________________________________________ Signature: /s/ Kenneth D. Nelson ___________________________________________________ ------------------------------- Name (PRINT): KENNETH D. NELSON Phone: ____________________________________________ ---------------------------- Title: Vice President SSN: ______________________________________________ -----------------------------------
EX-10.105 12 WHEELER MACHINERY CO. INSTALLMENT SALE CONTRACT EXHIBIT 10.105 INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT) PURCHASER(S): SELLER (DEALER): READY MIX, INC. WHEELER MACHINERY CO. P.O. BOX 60726 4901 WEST 2100 SOUTH PHOENIX, AZ 85082 SALT LAKE CITY UT 84120-1227 County: MARICOPA - -------------------------------------------------------------------------------- Subject to the terms and conditions set forth below and on the reverse side hereof, Seller hereby sells the equipment described below (the "Unit" or "Units") to Purchaser, and Purchaser (if more than one, jointly and severally), having been offered both a cash sale price and a time sale price, hereby buys the Units from Seller on a time sale basis. - -------------------------------------------------------------------------------- NEW (IF USED) DELIVERED OR FIRST MODEL DESCRIPTION OF UNIT(S) SERIAL# CASH SALE USED USED PRICE - -------------------------------------------------------------------------------- (1) IT24F CATERPILLAR INTEGRATED TOOLCARRIER 4NN01022 104,330.57
- --------------------------------------------------------------------------------------------------------------------- FIRST DESCRIPTION OF ADDITIONAL SECURITY USED (MAKE MODEL & SERIAL NUMBER) Sub-Total............................ $ 104,330.57 - -------------------------------------------------------- NONE Sales Tax............................ $ 4,912.86 1. Total Cash Sale Price................ $ 109,243.43 Cash Down Pay 26,962.72 Net Trade-in Allow 0.00 - -------------------------------------------------------- FIRST DESCRIPTION OF TRADE-IN EQUIPMENT 2. Total Down Payment................... $ 26,962.72 USED (MAKE MODEL & SERIAL NUMBER) 3. Unpaid Balance of Cash Price (1-2)... $ 82,280.71 - -------------------------------------------------------- 4. Official Fees (Specify).............. $ 150.00 NONE DOCUMENTATION FEE 150.00 5. Physical Damage Insurance............ $ 0.00 6. Principal Balance - -------------------------------------------------------- (Amount Financed) (3 + 4 + 5)........ $ 84,430.71 7. Finance Charge Trade-in Value 0.00 (Time Price Differential)............ $ 11,000.81 Less Owing to (___n/a___) 0.00 8. Time Balance Net Trade-in Allowance 0.00 (Total of Payments) (6 + 7).......... $ 93,431.52 9. Time Sale Balance Location of Units: 3430 E. FLAMINGO RD. #100 (Total of Payment Price) (2 + 8)..... $ 120,394.24 LAS VEGAS, NV 89121 CLARK 10. Annual Percentage Rate 6.28% 11. Date FINANCE CHARGE begins to accrue. 12/1/99
Purchaser hereby sells and conveys to Seller the above described Trade-in Equipment and warrants it to be free and clear of all claims, liens, security interests and encumbrances except to the extent shown above. 1. PAYMENT: Purchaser shall pay to Seller, at P.O. BOX 100647, PASADENA CA 91189-0647 or such other location Seller designates in writing, the Time Balance (item 8 above) as follows (check (a) of (b)): X (a) in 48 equal monthly installments of $1,946.49 each, with the first - - installment due on 1/1/00, and the balance of the installments due on the like day of each month thereafter, (except no payments shall be due during the month(s) of (___n/a___)), until the entire indebtedness has been paid; or __ (b) in accordance with the Payment Schedule attached to this Contract. (Provisions of section 1 continued on reverse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urchaser(s) and Seller have duly executed this Contract as of 12/1, 1999. Purchaser(s): Seller: READY MIX, INC. WHEELER MACHINERY CO. By /s/ Kenneth D. Nelson By /s/ [ILLEGIBLE]^^ ----------------------------- ----------------------------- Name (PRINT) KENNETH D. NELSON Name (PRINT) ------------------ ___________________ Title Vice President Title Vice President -------------------------- -------------------------- ADDITIONAL TERMS AND CONDITIONS 1. PAYMENT (continued): Purchaser shall pay to Seller a late payment charge equal to the lesser of (a) the highest charge allowed by law or (b) 5% of the amount of any payment (including any accelerated payment) not made when due under this Contract (or such later date as may be required by applicable law). Upon prepayment in full or acceleration of the total unpaid Time Balance, Purchaser shall receive a rebate of the unearned portion of the Finance Charge computed on an actuarial basis. Except as otherwise expressly provided herein, the obligations of Purchaser hereunder shall not be affected by any defect in, damage to, loss of or interference with possession or use of any Unit, by the attachment of any lien or claim to any Unit, or for any other cause. 2. DISCLAIMER OF WARRANTIES: Purchaser acknowledges and agrees that Seller is not the manufacturer of the Unit(s) and that Purchaser has selected each Unit based on Purchaser's own judgment without any reliance whatsoever on any statements or representations made by Seller. AS BETWEEN SELLER AND PURCHASER, THE UNIT(S) ARE PROVIDED "AS IS" WITHOUT ANY WARRANTIES OF ANY KIND. PURCHASER HEREBY EXPRESSLY DISCLAIMS a) ALL WARRANTIES OF MERCHANTABILITY, b) ALL WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, AND c) ALL WARRANTIES AGAINST INFRINGEMENT OR THE LIKE. Seller assigns to Purchaser its interest in any of the manufacturer's warranties on the Unit(s). 3. POSSESSION, USE AND MAINTENANCE: Purchaser shall not (a) use any Unit improperly, carelessly, unsafely or in violation of any law or regulation or for personal, family, or household purposes or for any purpose other than in Purchaser's business (including agricultural business); (b) permit the use of any Unit by anyone other than Purchaser or change the permanent location of any Unit from the county and state specified above without the prior written consent of Seller; or (c) sell, lease, assign or transfer, or create or suffer to exist any lien, claim, security interest or encumbrance on any of its rights hereunder or in any Unit. The Units are and shall remain personal property irrespective of their use or manner of attachment to realty. Upon prior notice to Purchaser, Seller or its agent shall have the right (but not the obligation) at all reasonable times to inspect any Unit. Purchaser shall at its expense maintain the Units in good operating order, repair and condition. Purchaser shall not alter any Unit or affix any equipment to any Unit if such alteration or addition would impair the originally intended function or reduce the value of such Unit. Any alteration or addition to any Unit shall be at the sole risk of Purchaser. 4. TAXES: Purchaser shall promptly pay all taxes, assessments, fees and other charges when levied or assessed against any Unit or the ownership or use thereof, or this Contract or any payments made or to be made to Seller. 5. WAIVER AND INDEMNITY: PURCHASER HEREBY AGREES TO RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS FROM AND AGAINST ANY CLAIMS OF PURCHASER OR THIRD PARTIES, INCLUDING CLAIMS BASED UPON BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL INJURY, PROPERTY DAMAGE, STRICT LIABILITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR INJURY CAUSED BY OR RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY, CONDITION, OPERATION, USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY UNIT. FURTHER, PURCHASER AGREES TO BE RESPONSIBLE FOR ALL COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEYS' FEES, INCURRED BY SELLER OR ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS IN DEFENDING SUCH CLAIMS OR IN ENFORCING THIS PROVISION. UNDER NO CONDITION OR CAUSE OF ACTION SHALL SELLER BE LIABLE FOR ANY LOSS OF ACTUAL OR ANTICIPATED BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES. 6. INSURANCE: Purchaser, at its expense, shall keep each Unit and all equipment listed as Additional Security insured against all risks for their full insurable value and shall maintain comprehensive public liability insurance in an amount reasonably acceptable to Seller. All such insurance shall be in such form and with such companies as Seller shall reasonably approve, shall be primary, without right of contribution from any insurance carried by Seller, and shall provide that such insurance may not be cancelled or altered so as to affect the interest of Seller without at least 30 days' prior written notice to Seller. All insurance covering loss or damage to the Units and Additional Security shall name Seller (or its designee) as loss payee and be payable to Seller as its interest may appear. Purchaser agrees to notify Seller of any occurrence which may become the basis of an insurance claim hereunder and not to make any adjustments with insurers without Seller's prior written consent. Prior to the first delivery of any Unit to Purchaser, Purchaser shall deliver to Seller satisfactory evidence of such insurance coverage. 7. EVENTS OF DEFAULT: Each of the following shall constitute an "Event of Default" hereunder: (a) Purchaser shall fail to make any payment to Seller when due hereunder or fail to observe or perform any other covenant, agreement or warranty made by Purchaser hereunder; (b) any representation or warranty of Purchaser contained herein or in any document furnished to Seller in connection herewith shall be incorrect or misleading when made; (c) any Unit or additional security shall become lost, stolen, destroyed, irreparably damaged or subject to any sale, lien, claim, security interest or encumbrance (other than in favor of Seller or its assignee); (d) any default shall occur under any other agreement between Purchaser and Seller; (e) Purchaser or any guarantor of this Contract shall cease to do business, become insolvent, make an assignment for the benefit of creditors or file any petition under any bankruptcy, reorganization, insolvency or moratorium law, or any other law for the relief of debtors; (f) any involuntary petition shall be filed under any bankruptcy statute against Purchaser or any guarantor of this Contract or any receiver, trustee, or similar official shall be appointed to take possession of the properties of Purchaser or any guarantor of this Contract unless such petition or appointment ceases to be in effect within 30 days of said filing or appointment; (g) Seller shall reasonably deem itself to be insecure; or (h) any breach or repudiation by any guarantor shall occur under any guaranty obtained by Seller in connection with this Contract. 8. REMEDIES: If any Event of Default shall occur, Seller may, at its option, do any one or more of the following: (a) Declare all amounts due or to become due under this Contract, excluding any unearned portion of the Finance Charge, immediately due and payable; (b) recover any additional damages and expenses sustained by Seller by reason of the breach of any covenant, representation or warranty contained in this Contract; (c) enforce the security interest granted hereunder; (d) without notice, liability or legal process, enter upon the premises where any of the Units or additional security may be and take possession thereof, and (e) require Purchaser to assemble the Units and additional security and make them available to Seller at a place designated by Seller which is reasonably convenient to both parties. Time is of the essence of this Contract. Seller shall have all rights given to a secured party by law and may retain all monies theretofore paid by Purchaser hereunder as compensation for the reasonable use of the Units by Purchaser. Seller may, at its option, undertake commercially reasonable efforts to sell the Units and additional security, and the proceeds of any such sale shall be applied: First, to reimburse Seller for all reasonable expenses of retaking, holding, preparing for sale, and selling the Units and additional security, including all taxes and reasonable attorneys' fees and second, to the extent not previously paid by Purchaser, to pay Seller all amounts then due or accrued under this Contract, including any accelerated payments and late payment charges. Any surplus shall be paid to the person entitled thereto. Purchaser shall promptly pay any deficiency to Seller. Purchaser acknowledges that sales for cash or on credit to a wholesaler, retailer or user of the Units or additional security, and with or without the Units or additional security being present at such sale, are all commercially reasonable. Purchaser agrees to pay all reasonable attorneys' fees (to the extent permitted by applicable law) and all costs and expenses incurred by Seller in enforcing this Contract. The remedies provided herein shall be cumulative and in addition to all other remedies at law or in equity. If Purchaser fails to perform any of its obligations under this Contract, Seller may (but need not) at any time thereafter perform such obligation, and the expenses incurred in connection therewith shall be payable by Purchaser upon demand. 9. SECURITY INTEREST; PURCHASER ASSURANCES AND REPRESENTATIONS: To secure payment of Purchaser's indebtedness to Seller hereunder and the performance of all obligations of Purchaser hereunder, Purchaser hereby grants to Seller a continuing security interest in the Units, and in the equipment, if any, described as Additional Security on the front of this Contract, including all attachments, accessories and optional features for such Units and Additional Security (whether or not installed thereon) and all substitutions, replacements, additions and accessions thereto, and proceeds of all the foregoing. Purchaser will, at its expense, do any act and execute, acknowledge, deliver, file, register and record any Documents which Seller deems desirable in its discretion to protect Seller's security interest and Seller's rights and benefits under this Contract. Purchaser hereby irrevocably appoints Seller as Purchaser's Attorney-in-Fact for the signing and filing of such documents and authorizes Seller to delegate these limited powers. Purchaser acknowledges the signature of Seller or said delegatee upon such documents to be the same as Purchaser's own for all purposes and with the present intent to authenticate the document. Purchaser represents and warrants to Seller that (a) Purchaser has the power to make, deliver and perform under this Contract; (b) the person executing and delivering this Contract is authorized to do so on behalf of Purchaser; (c) this Contract constitutes a valid obligation of Purchaser, legally binding upon it and enforceable in accordance with its terms; and (d) all credit, financial and other information submitted to Seller in connection with this Contract is and shall be true, correct and complete. 10. ASSIGNMENT; COUNTERPARTS: The rights and remedies of Seller under this Contract may be assigned by Seller at any time. If this Contract is assigned by Seller, the term "Seller" shall thenceforth mean Seller's assignee, and if assigned to a partnership, shall thenceforth mean such partnership and, for purposes of Sections 2, 4, 5 and 6, each partner in such partnership. If notified by Seller, Purchaser shall make all payments due hereunder directly to the party designated in such notice, without any offset or deduction whatsoever. Purchaser waives, as to Seller's assignee, all claims and defenses Purchaser may have or assert against Seller and agrees that no such claim or defense will be asserted against Seller's assignee. No assignment of this Contract by Seller shall release any claim Purchaser may have against Seller hereunder. No assignment of this Contract or any right or obligation hereunder may be made by Purchaser without the prior written consent of Seller. This Contract shall be binding upon and inure to the benefit of Seller and Purchaser and their respective successors and assigns. Although multiple counterparts of this document may be signed, only the counterpart accepted, acknowledged and certified by Caterpillar Financial Services Corporation on the signature page thereof as the original will constitute original chattel paper. 11. EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF CONTRACT; NOTICES: No delay or omission to exercise any right or remedy accruing to Seller hereunder shall impair any such right or remedy nor shall it be construed to be a waiver of any breach or default of Purchaser. Any waiver or consent by Seller under this Contract must be in writing specifically set forth. This Contract completely states the rights of Seller and Purchaser with respect to the Units and supersedes all prior agreements with respect thereto. No variation or modification of this Contract shall be valid unless in writing. All notices hereunder shall be in writing, addressed to each party at the address set forth on the front of this Contract or at such other address as may hereafter be furnished in writing. 12. APPLICABLE LAW, JURISDICTION AND JURY TRIAL WAIVER PROVISIONS: This Agreement shall be governed by and construed under the laws of the State of Tennessee, without giving effect to the conflict-of-laws principles thereof, and Purchaser hereby consents to the jurisdiction of any state or federal court located within the State of Tennessee. THE PARTIES HERETO HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OBLIGATIONS OR THE COLLATERAL. 13. SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Contract shall be invalid under any applicable law, such provision shall be deemed omitted but the remaining provisions hereof shall be given effect. All obligations of Purchaser under this Contract shall survive the expiration or termination of this Contract to the extent required for their full observance and performance. GUARANTY OF PAYMENT - INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT) THIS GUARANTY ("Guaranty") is made and entered into as of 12/1/99 by MEADOW VALLEY CORPORATION, (hereinafter, referred to as "Guarantor"), in favor of WHEELER MACHINERY CO. 4901 WEST 2100 SOUTH SALT LAKE CITY UT 84120-1227 (hereinafter referred to as "Seller"), guaranteeing the Indebtedness (as hereinafter defined) of READY MIX, INC. (hereinafter referred to as "Obligor"). WITNESSETH: FOR VALUE RECEIVED, and/or as an inducement to Seller to now or hereafter enter into, purchase or otherwise acquire the agreements, accounts and/or other obligations evidencing and/or securing Obligor's Indebtedness and in consideration of and for credit and financial accommodations now or hereafter extended to or for the account of the Obligor (which includes Seller's consent to an assignment and/or assumption of the Indebtedness), which is in the best interest of Guarantor and which would not have been extended but for this Guaranty, the Guarantor agrees as follows: SECTION 1. Guaranty of Obligor's Indebtedness. Guarantor hereby absolutely, - --------------------------------------------- irrevocably and unconditionally agrees to, and by these presents does hereby: (a) guarantee the prompt and punctual payment, performance and satisfaction of all present and future indebtedness and obligations of Obligor to Seller which Obligor now owes Seller or which Obligor shall at any time or from time to time hereafter owe Seller when the same shall become due in connection with or arising out of that certain INSTALLMENT SALES CONTRACT by and between Obligor and Seller dated 12/1/99, including any and all existing and future additional schedules, amendments and/or related agreements thereto (the "Contract"), whether direct or contingent, due or to become due, joint or several, primary or secondary, liquidated or unliquidated, secured or unsecured, original or renewed or extended, or by open account or otherwise, and whether representing rentals, principal, interest and/or late charges or other charges of an original balance, an accelerated balance, a balance reduced by part payment or a deficiency after sale of collateral or otherwise and (b) undertake and guarantee to pay on demand and indemnify Seller against all liabilities, losses, costs, attorney's fees, and expenses which may be suffered by Seller by reason of Obligor's default or default of the Guarantor (with all of Obligor's indebtedness and/or obligations as stated above (including all costs, fees and expenses) being hereinafter individually and collectively referred to under this Guaranty as Obligor's "Indebtedness", which Indebtedness shall be conclusively presumed to have been created in reliance upon this Guaranty). SECTION 2. Joint, Several and Solidary Liability. Guarantor further agrees that - ------------------------------------------------ its obligations and liabilities for the prompt and punctual payment, performance and satisfaction of Obligor's Indebtedness are independent of any agreement or transaction with any third parties and shall be on a "joint and several" and "solidary" basis along with Obligor to the same degree and extent as if Guarantor had been and/or will be a co-borrower, co-principal obligor and/or co- maker of Obligor's Indebtedness. In the event that there is more than one guarantor under this Guaranty, or in the event that there are other guarantors, endorsers, sureties or any other party who may at any time become liable for all or any portion of Obligor's Indebtedness (each, an "Other Obligor"), the provisions hereof shall be read with all grammatical changes thereby rendered necessary and each reference to the Guarantor shall include each and every one of those parties liable for all or any portion of Obligor's Indebtedness and each Guarantor's obligations and liabilities hereunder shall be on a "joint and several" and "solidary" basis along with such Other Obligors. SECTION 3. Duration; Cancellation of Guaranty. This Guaranty and Guarantor's - --------------------------------------------- obligations and liabilities hereunder shall remain in full force and effect until such time as Obligor's Indebtedness shall be fully and finally paid, performed and/or satisfied, until such time as this Guaranty may be cancelled by Seller under a written cancellation instrument in favor of Guarantor or otherwise as stated herein. SECTION 4. Default by Obligor. Immediately upon Obligor's default under any of - ----------------------------- its Indebtedness in favor of Seller, Seller may make demand upon Guarantor and Guarantor unconditionally and absolutely agrees to pay the full then unpaid amount of all of Obligor's Indebtedness (whether at stated maturity, by required prepayment, declaration, acceleration or otherwise) and/or perform any covenant or agreement hereunder guaranteed. Such payment or payments shall be made immediately following demand by Seller at Seller's offices indicated above. SECTION 5. Additional Covenants. Guarantor further agrees that Seller may, at - ------------------------------- its sole option, at any time, and from time to time, without the consent of or notice to Guarantor, or to any other party, and without incurring any responsibility to Guarantor or to any other party, and without affecting, impairing or releasing the obligations of Guarantor under this Guaranty: (a) discharge or release any party (including, but not limited to, Obligor, secondary obligors of Obligor's indebtedness or any co-guarantor under this Guaranty) who is or may be liable to Seller for Obligor's Indebtedness; (b) sell at public or private sale, exchange, release, impair, surrender, substitute, realize upon or otherwise deal with, in any manner and in any order and upon such terms and conditions as Seller deems best at its uncontrolled discretion, any leased equipment and/or any collateral listed in the Contract or now or hereafter otherwise directly or indirectly securing repayment of Obligor's Indebtedness (all such leased equipment and/or all such collateral shall hereinafter be referred to as the "Equipment"), including without limitation the purchase of all or any part of such collateral for Seller's own account; (c) change the manner, place or terms of payment and/or available credit (including without limitation increase or decrease in the amount of such payments, available credit or any interest rate adjustments), or change or extend the time of payment of or renew, as often and for such periods as Seller may determine, or alter Obligor's Indebtedness or grant any other indulgence to Obligor and/or any secondary obligors of Obligor's Indebtedness or any co-guarantor under this Guaranty; (d) settle or compromise Obligor's Indebtedness with Obligor and/or any third party or refuse any offer of performance with respect to, or substitutions for, the Indebtedness; (e) take or accept any other security or guaranty for any or all of Obligor's Indebtedness; and/or (f) enter into, deliver, modify, amend or waive compliance with, any instrument, agreement or arrangement evidencing, securing or otherwise affecting, all or any part of Obligor's Indebtedness. SECTION 6. No Release of Guarantor. Guarantor's obligations and liabilities - ---------------------------------- under this Guaranty shall not be released, impaired, reduced or otherwise affected by, and shall continue in full force and effect, notwithstanding the occurrence of any event, including without limitation any one or more of the following events: (a) death, insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of authority (whether corporate, partnership or trust) of Obligor (or any person acting on Obligor's behalf) or any Other Obligor or any other defense based on or arising out of the lack of validity or unenforceability of the Indebtedness or any agreement or instrument relating thereto or any provisions thereof and/or Obligor's absence or cessation of liability thereunder for any reason, including without limitation, Seller's failure to preserve any right or remedy against Obligor; (b) any change in Obligor's financial condition; (c) partial payment or payments of any amount due and/or outstanding under Obligor's Indebtedness; (d) any change in Obligor's financial condition; (c) partial payment or payments of any amount due and/or outstanding under Obligor's Indebtedness; (d) any change in Obligor's management, ownership, identity or business or organizational structure; (e) any payment by Obligor or any other party to Seller that is held to constitute a preferential transfer or a fraudulent conveyance under any applicable law, or for any reason, Seller is required to fund such payment or pay such amount to Obligor or to any other person; (f) any sale, lease or transfer, whether or not commercially reasonable, of all or any part of Obligor's assets and/or any assignment, transfer or delegation of Obligor's Indebtedness to any third party (whereby this Guaranty shall continue to extend to all sums due from or for the account of Obligor and/or the new or substituted legal entity); (g) any failure to perfect any lien or security interest securing the Indebtedness or preserve any right, priority or remedy against any Equipment; (h) any interruption, change or cessation of relations between Guarantor and Obligor; (i) any defect in, damage to, destruction of or loss of or interference with possession or use of any Equipment for any reason by Obligor or any other person; (j) any act or omission by Seller which Page 1 of 2 increases the scope of Guarantor's risk, including without limitation, negligent administration of transactions with Obligor; and/or (k) any other occurrence or circumstance whatsoever, whether similar or dissimilar to the foregoing, which might otherwise constitute a legal or equitable discharge, release or defense of a guarantor or surety or which might otherwise limit recourse against Guarantor. SECTION 7. Waivers by Guarantor. Guarantor waives, for the benefit of Seller - ------------------------------- (which waivers shall survive until this Guaranty is released or terminated in writing by Seller): (a) notice of the acceptance of this Guaranty; (b) notice of the existence, creation or incurrence of new and/or additional debt owing from Obligor to Seller; (c) presentment, protest and demand, and notice of protest, demand, nonpayment, nonperformance and dishonor of any and all agreements, notes or other obligations signed, accepted, endorsed or assigned to or by Seller or agreed to between Obligor and Seller; (d) notice of adverse change in Obligor's financial condition or any other fact which might materially increase the risk of Guarantor; (e) any and all rights in and notices or demands relating to any Equipment, including without limitation, all rights, notices, advertisements or demands relating, whether directly or indirectly, to the foreclosure, sale or other disposition of any or all such Equipment or the manner of such sale or other disposition; (f) any claim, right or remedy which Guarantor may now have or hereafter acquire against the Obligor that arises hereunder and/or from the performance by any Other Obligor including, without limitation, any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification, or participation in any claim, right or remedy of Seller against the Obligor or any security which Seller now has or hereafter acquires with respect to the Obligor, whether or not such claim, right or remedy arises in equity, under contract (express or implied), by statute, under common law or otherwise; (g) notice of any default by Obligor or any other person obligated in any manner for all or any portion of Obligor's Indebtedness and notice of any legal proceedings against such parties; (h) any right of contribution from any Other Obligors; (i) notice and hearing as to any prejudgment remedies; (j) any defense which is premised on an alleged lack of consideration of the obligation undertaken by Guarantor, including without limitation, any defense to the enforcement of this Guaranty based upon the timing of execution of this Guaranty and/or that the Guaranty had been executed after the execution date of any agreements evidencing the Indebtedness; (k) all exemptions and homestead laws; (l) any other demands and notices required by law; (m) all setoffs and counterclaims against Seller and/or Obligor; (n) any defense based on the claim that Guarantor's liabilities and obligations exceed or are more burdensome than those of Obligor; (o) any defense which the Obligor may assert or be able to assert on the underlying Indebtedness or which may be asserted by Guarantor, including but not limited to (i) breach of warranty, (ii) fraud, (iii) statute of frauds, (iv) infancy, (v) statute of limitations, (vi) lender liability, (vii) accord and satisfaction, (viii) payment and/or (ix) usury. SECTION 8. Enforcement of Guarantor's Obligations and Liabilities. Guarantor - ----------------------------------------------------------------- agrees that, should Seller deem it necessary to file an appropriate collection action to enforce Guarantor's obligations and liabilities under this Guaranty, Seller may commence such a civil action against Guarantor without the necessity of first (i) attempting to collect Obligor's Indebtedness from Obligor or from any Other Obligor, whether through filing of suit or otherwise, (ii) attempting to exercise any rights Seller may have against any Equipment, whether through re-lease, the filing of an appropriate foreclosure action or otherwise, (iii) including Obligor or any Other Obligor as an additional party defendant in such a collection action against Guarantor, or (iv) pursuing any other remedy in Seller's power or to mitigate damages. If there is more than one guarantor under this Guaranty, each Guarantor additionally agrees that Seller may file an appropriate collection and/or enforcement action against any one or more of them, without impairing the rights of Seller against any other guarantor under this Guaranty. SECTION 9. Construction. This writing is intended as a final expression of this - ----------------------- Guaranty agreement and is a complete and exclusive statement of the terms of that agreement, provided however, that the provisions of this Guaranty shall be in addition to and cumulative of, and not in substitution, novation or discharge of, any and all prior or contemporaneous written guaranties or other written agreements by Guarantor (or any one or more of them), in favor of Seller or assigned to Seller by others, all of which shall be construed as complementing each other. Nothing herein contained shall prevent Seller from enforcing any and all such other guaranties or agreements in accordance with their respective terms. SECTION 10. Successors and Assigns Bound. Guarantor's obligations and - ---------------------------------------- liabilities under this Guaranty shall be binding upon Guarantor's successors, heirs, legatees, devisees, administrators, executors and assigns. Seller may assign this Guaranty and any and all rights and interests included herein in Seller's sole discretion without notice to Guarantor and the rights and remedies granted to Seller under this Guaranty shall also inure to the benefit of Seller's successors and assigns, as well as to any and all subsequent holder or holders of any of Obligor's Indebtedness subject to this Guaranty, without setoff, counterclaim, reduction, recoupment, abatement, deduction or defense based on any claim Guarantor may have against Seller, such successors and assigns or subsequent holders of Obligor's Indebtedness. Guarantor shall not assign this Guaranty without the prior written consent of Seller. SECTION 11. Termination. This Guaranty is irrevocable and may be terminated only - ----------------------- as to indebtedness created sixty (60) days after actual receipt by Seller of written notice of termination hereof, provided however, that all Indebtedness incurred, created or arising pursuant to a commitment of Seller made prior to the effective date of such termination (the "Termination Date") and any extensions, renewals or modifications of such Indebtedness (including without limitation loan and/or other commitments) agreed to or instituted by Seller prior to the Termination Date shall not be effected by such revocation and shall be deemed to have been incurred prior to termination (irrespective of whether Indebtedness arising thereunder occurs after the Termination Date) and shall be fully covered by this Guaranty. Any termination of this Guaranty shall be ineffective unless upon the Termination Date Guarantor deposits with Seller collateral in the form of cash in an amount not less than the amount of the Indebtedness outstanding on the Termination Date. Such cash shall be held by Seller in a separate account and shall be returned to Guarantor upon the full and indefeasible payment of all of the Indebtedness. SECTION 12. Governing Law; Waiver of Jury. This Guaranty shall be construed - ----------------------------------------- liberally in favor of Seller and shall be governed and construed in accordance with the substantive laws of the state of Seller's office specified above or the state of Seller's successors and assigns principal place of business without regard to the conflicts of laws principles thereof. ANY ACTION, SUIT OR PROCEEDING RELATING DIRECTLY OR INDIRECTLY TO THIS GUARANTY OR THE RELATIONSHIP BETWEEN GUARANTOR AND SELLER OR SELLER'S SUCCESSORS AND ASSIGNS, WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE WITHOUT A JURY. AS SUCH, GUARANTOR HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN ANY SUCH ACTION, SUIT OR PROCEEDING. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY THE COURT. This Agreement shall be governed by and construed under the laws of the State of Tennessee, without giving effect to the conflict-of-laws principles thereof, and Guarantor hereby consents to the jurisdiction of any state or federal court located within the State of Tennessee. SECTION 13. Severability. If any provision of this Guaranty is held to be - ------------------------ illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable, this Guaranty shall be construed and enforceable as if the illegal, invalid or unenforceable provision had never comprised a part of it, and the remaining provisions of this Guaranty shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. IN WITNESS WHEREOF, Guarantor has executed this Guaranty in favor of Seller on the day, month and year first written above. GUARANTOR HAS READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS GUARANTY. (Complete Address, Phone, SSN if Guarantor is an Individual.) Guarantor: MEADOW VALLEY CORPORATION Address: ________________________________________________________________ Signature: /s/ Kenneth D. Nelson _________________________________________________________________________ ------------------------------------ Name (PRINT): KENNETH D. NELSON Phone: __________________________________________________________________ --------------------------------- Title: VICE PRESIDENT SSN: ____________________________________________________________________ ----------------------------------------
EX-10.106 13 BANK ONE, AZ RESTATED REVOLVING LINE OF CREDIT EXHIBIT 10.106 - ---------------------------------------------------------------------------------------------------------------------------- APPROVED BY: - ---------------------------------------------------------------------------------------------------------------------------- Officer Name Officer No. Dept./Branch Name Hope Berman Levin 706564 COMMERCIAL BANKING CENTER - ---------------------------------------------------------------------------------------------------------------------------- Dept./Branch No. Account No. Commitment No. Note No. Class 01781 5905359723 34 42 - ----------------------------------------------------------------------------------------------------------------------------- Loan $ Name $2,000,000.00 MEADOW VALLEY CORPORATION, a Nevada corporation, MEADOW VALLEY CONTRACTORS, INC., a Nevada corporation and READY-MIX, INC., a Nevada corporation - ----------------------------------------------------------------------------------------------------------------------------- Rate Interest From Renewal of Note BANK ONE, ARIZONA, NA PRIME RATE PLUS .50% TO MOVE WITH PRIME - ----------------------------------------------------------------------------------------------------------------------------- Collateral S/A - A/R, INV., & RTP, DATED 8/8/96 & S/A - EQUIP., DATED 8/8/96 - -----------------------------------------------------------------------------------------------------------------------------
Bank One, Arizona, NA RESTATED REVOLVING LINE OF CREDIT NOTE VARIABLE RATE PHOENIX, Arizona September 15, 1999 - ------- ------------------ FOR VALUE RECEIVED, the undersigned ("Borrower"), promises to pay on or before September 15, 2000 to BANK ONE, ARIZONA, NA, a national banking ------------------ association, ("Bank"), or order, the aggregate principal amount outstanding on Borrower's revolving line of credit as shown on Bank's records which shall at all times be conclusive and govern, with interest payable MONTHLY on the unpaid ------- balance outstanding from time to time at an annual rate equal to ONE HALF -------- percent (0.50%) more than the rate of interest publicly announced by BANK ONE, ---- --------- ARIZONA, NA as its "prime rate", as such rate shall change from time to time - ----------- during the term hereof. Interest is to be charged on a daily basis for the actual number of days the principal is outstanding from the date of disbursement to date of maturity. The rate of interest agreed to shall include the interest rate as shown above, in accordance with the terms of this note, plus any compensating balance requirement and any additional charges, costs and fees incident to this loan to the extent they are deemed to be interest under applicable Arizona law. It is expressly agreed by Borrower that the maximum outstanding principal at any one time on this note shall not exceed the amount of TWO MILLION AND 00/100 DOLLARS ($2,000,000.00), and the amount outstanding on ---------------------- ------------- this note at any specific time shall be the total amount advanced hereunder by Bank less the amount of principal payments made hereon from time to time by Borrower. All amounts payable hereunder shall be paid in lawful money of the United States. Should the rate of interest as calculated under this note exceed that allowed by law, the applicable rate of interest will be the maximum rate of interest allowed by applicable law. Principal and interest shall be payable at the Commercial Banking Center ------------------------- office of Bank One, Arizona, NA in Phoenix, Arizona, or at such other place as ------- the holder hereof may designate. At Bank's option, any payments may be applied first to accrued interest and then to principal. Interest on the Note is computed by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. If payment is 10 days or more late, Borrower will be charged 5.0% of the regularly scheduled payment or $25.00, whichever is greater, up to the maximum amount of $1500.00 per late charge. Upon default, including failure to pay upon final maturity, Bank, at its option, may also, if permitted under applicable law, do one or both of the following: (a) increase the applicable interest rate on this Note 3.00 percentage points, and (b) add any unpaid accrued interest to principal and such sum will bear interest therefrom until paid at the rate provided in this Note (including any increased rate). The interest rate will not exceed the maximum rate permitted by applicable law. This note shall become immediately due and payable at the option of the holder hereof without presentment or demand or any notice to Borrower or any other person obligated hereon, upon default in the payment of any of the principal hereof or any interest thereon when due, or in payment under any other agreement between Borrower and Bank, or if any event occurs or condition exists which authorized the acceleration of the maturity hereof under any security agreement, mortgage, deed of trust or other agreement made by Borrower in favor of Bank. Failure to exercise this option shall not constitute a waiver of the right to exercise the same in the event of any subsequent default. In the event any holder hereof utilizes the services of an attorney in attempting to collect the amounts due hereunder or to enforce the terms hereof or of any agreements related to this indebtedness, or if any holder hereof becomes party plaintiff or defendant in any legal proceeding in relation to the property described in any instrument securing this note or for the recovery or protection of the indebtedness evidenced hereby, Borrower, its successors and assigns, shall repay to such holder hereof, on demand, all costs and expenses so incurred, including reasonable attorneys' fees, including those costs, expenses and attorneys' fees incurred after the filing by or against the Borrower of any proceeding under any chapter of the Bankruptcy Act, or similar federal or state statute, and whether incurred in connection with the involvement of any holder hereof as creditor in such proceedings or otherwise. This note is issued pursuant to that Revolving Line of Credit Loan Agreement (Accounts Receivable and Inventory) of even date herewith ("Loan Agreement") between Borrower and Bank. The capitalized terms used herein and not otherwise defined shall have the same meanings set forth in the Loan Agreement. Borrower and all sureties, guarantors and/or endorsers hereof (or of any obligation hereunder) and accommodation parties hereon (all of which, including Borrower, are severally each hereinafter called a "Surety") each; (a) agree that the liability under this note of all parties hereto is joint and several; (b) severally waive any homestead or exemption laws and right thereunder affecting the full collection of this note; (c) severally waive any and all formalities in connection with this note to the maximum extent allowed by law, including (but not limited to) presentment, demand, diligence, presentment for payment, protest and demand, and notice of extension, dishonor, protest, demand and nonpayment of this note; and (d) consent that Bank may extend the time of payment or otherwise modify the terms of 1 payment of any part or the whole of the debt evidenced by this note, at the request of any other person liable hereon, and such consent shall not alter nor diminish the liability of any person hereon. Each Surety consents to and waives notice of: (i) the granting of indulgences or extensions of time of payment, (ii) the taking or releasing of security, and (iii) the addition or release of persons who may be or become primarily or secondarily liable for the Loan or any other indebtedness arising in connection with the Loan, or any part thereof, and all in such manner and at such time as Bank may deem advisable. In addition, each Surety waives and agrees not to assert: (a) any right to require Bank to proceed against Borrower or any other Surety, to proceed against or exhaust any security for the note, to pursue any other remedy available to Bank, or to pursue any remedy in any particular order or manner; (b) the benefit of any statute of limitations affecting its liability hereunder or the enforcement hereof; (c) the benefits of any legal or equitable doctrine or principle of marshalling; (d) notice of the existence, creation or incurring of new or additional indebtedness of Borrower to Bank; (e) the benefits of any statutory provision limiting the liability of a surety, including without limitation the provisions of Section 12-1641, et seq., of the Arizona Revised ------ Statutes; (f) any defense arising by reason of any disability or other defense of Borrower or by reason of the cessation from any cause whatsoever (other than payment in full) of the liability of Borrower for payment of this note; and (g) the benefits of any statutory provision limiting the right of Bank to recover a deficiency judgment, or to otherwise proceed against any person or entity obligated for payment of this note, after any foreclosure or trustee's sale of any security for this note, including without limitation the benefits, if any, to a Surety of Arizona Revised Statutes Section 33-814. Until payment in full of this note and Bank has no obligation to make further advances of the proceeds hereof, no Surety shall have any right of subrogation and each hereby waives any right to enforce any remedy which Bank now has, or may hereafter have, against Borrower or any other Surety, and waives any benefit of, and any right to participate in, any security now or hereafter held by Bank. Borrower agrees that to the extent Borrower or any other Surety makes any payment to Bank in connection with the indebtedness evidenced by this note, and all or any part of such payment is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid by Bank or paid over to a trustee, receiver or any other entity, whether under any bankruptcy act or otherwise (any such payment is hereinafter referred to as a "Preferential Payment"), then the indebtedness of Borrower under this note shall continue or shall be reinstated, as the case may be, and, to the extent of such payment or repayment by Bank, the indebtedness evidenced by this note or part thereof intended to be satisfied by such Preferential Payment shall be revived and continued in full force and effect as if said Preferential Payment had not been made. Without limiting the right of Bank to bring any action or proceeding against Borrower or any other Surety or against any property of Borrower or any other Surety (an "Action") arising out of or relating to this note or any indebtedness evidenced hereby in the courts of other jurisdictions, Borrower and each other Surety hereby irrevocably submit to the jurisdiction, process and venue of any Arizona State or Federal court sitting in Phoenix, Arizona, and hereby irrevocably agree that any Action may be heard and determined in such Arizona State court or in such Federal court. Borrower and all other Sureties each hereby irrevocably waives, to the fullest extent it may effectively do so, the defenses of lack of jurisdiction over any person, inconvenient forum or improper venue, to the maintenance of any Action in any jurisdiction. This note shall be binding upon Borrower and their respective successors and assigns and shall inure to the benefit of Bank, and any subsequent holders of this note, and their successors and assigns. This note shall be governed by and construed according to the laws of the State of Arizona, without giving effect to conflict of laws principles. Bank and Borrower will establish specific instructions and procedures by which draws against said credit will be presented for disbursement, but nothing contained herein shall create a duty on the part of Bank to make said disbursement if Borrower is in default. MEADOW VALLEY CORPORATION, a Nevada corporation, MEADOW VALLEY CONTRACTORS, INC., a Nevada corporation and READY-MIX, INC., a Nevada corporation 4411 SOUTH 40TH STREET, STE. D11 PHOENIX, AZ 85040-2950 MEADOW VALLEY CORPORATION, a Nevada corporation By: /s/ Bradley E Larson ------------------------------- Name: Bradley Larson Title: President/CEO MEADOW VALLEY CONTRACTORS, INC., a Nevada corporation By: /s/ Bradley E Larson ------------------------------- Name: Bradley Larson Title: President/CEO READY-MIX, INC., A Nevada corporation By: /s/ Kenneth D Nelson ------------------------------- Name: Kenneth Nelson Title: VP/Treasurer Borrower's Signature 2 EX-10.107 14 PROMISSORY NOTE EXECUTED BY GENERAL ELECTRIC EXHIBIT 10.107 PROMISSORY NOTE January 13, 1999 ==================== (Date) 3430 E. Flamingo, Suite 100, Las Vegas, Clark County, NV 89121 - -------------------------------------------------------------------------------- (Address of Maker) FOR VALUE RECEIVED, Ready Mix, Inc. ("Maker") promises, jointly and severally if more than one, to pay to the order of General Electric Capital Corporation or any subsequent holder hereof (each, a "Payee") at its office located at 8480 Orchard Road Suite 5000, Englewood, CO 80111 or at such other place as Payee or the holder hereof may designate, the principal sum of Three Hundred Sixty Five Thousand Nine Hundred Forty and No/100 Dollars ($365,940.00), with interest on the unpaid principal balance, from the date hereof through and including the dates of payment, at a fixed, simple interest rate of Six and 96/100 percent (6.96%) per annum, to be paid in lawful money of the United States, in Sixty (60) consecutive monthly installments of principal and interest as follows: Periodic Installment Amount ----------- ------ 59 $7,239.15 each ("Periodic Installment") and a final installment which shall be in the amount of the total outstanding principal and interest. The first Periodic Installment shall be due and payable on 2/13/99 and the following Periodic ------------ Installments and the final installment shall be due and payable on the same day of each succeeding period (each, a "Payment Date"). All payments shall be applied first to interest and then to principal. The acceptance by Payee of any payment which is less than payment in full of all amounts due and owing at such time shall not constitute a waiver of Payee's right to receive payment in full at such time or at any prior or subsequent time. Interest shall be calculated on the basis of a 365 day year (366 day leap year). The payment of any Periodic Installment after its due date shall result in a corresponding decrease in the portion of the Periodic Installment credited to the remaining unpaid principal balance. The payment of any Periodic Installment prior to its due date shall result in a corresponding increase in the portion of the Periodic Installment credited to the remaining unpaid principal balance. The Maker hereby expressly authorizes the Payee to insert the date value is actually given in the blank space on the face hereof and on all related documents pertaining hereto. This Note may be secured by a security agreement, chattel mortgage, pledge agreement or like instrument (each of which is hereinafter called a "Security Agreement"). Time is of the essence hereof. If any installment or any other sum due under this Note or any Security Agreement is not received within ten (10) days after its due date, the Maker agrees to pay, in addition to the amount of each such installment or other sum, a late payment charge of five percent (5%) of the amount of said installment or other sum, but not exceeding any lawful maximum. If (i) Maker fails to make payment of any amount due hereunder within ten (10) days after the same becomes due and payable; or (ii) Maker is in default under, or fails to perform under any term or condition contained in any Security Agreement, then the entire principal sum remaining unpaid, together with all accrued interest thereon and any other sum payable under this Note or any Security Agreement, at the election of Payee, shall immediately become due and payable, with interest thereon at the lesser of eighteen percent (18%) per annum or the highest rate not prohibited by applicable law from the date of such accelerated maturity until paid (both before and after any judgment). The Maker may prepay in full, but not in part, its entire indebtedness hereunder upon payment of the entire indebtedness plus an additional sum as a premium equal to the following percentages of the original principal balance for the indicated period: Prior to the first annual anniversary date of this Note: one percent (1%) and zero percent (0%) thereafter, plus all other sums due hereunder or under any Security Agreement. It is the intention of the parties hereto to comply with the applicable usury laws; accordingly, it is agreed that, notwithstanding any provision to the contrary in this Note or any Security Agreement, in no event shall this Note or any Security Agreement require the payment or permit the collection of interest in excess of the maximum amount permitted by applicable law. If any such excess interest is contracted for, charged or received under this Note or any Security Agreement, or if all of the principal balance shall be prepaid, so that under any of such circumstances the amount of interest contracted for, charged or received under this Note or any Security Agreement on the principal balance shall exceed the maximum amount of interest permitted by applicable law, then in such event (a) the provisions of this paragraph shall govern and control, (b) neither Maker nor any other person or entity now or hereafter liable for the payment hereof shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest permitted by applicable law, (c) any such excess which may have been collected shall be either applied as a credit against the then unpaid principal balance or refunded to Maker, at the option of the Payee, and (d) the effective rate of interest shall be automatically reduced to the maximum lawful contract rate allowed under applicable law as now or hereafter construed by the courts having jurisdiction thereof. It is further agreed that without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received under this Note or any Security Agreement which are made for the purpose of determining whether such rate exceeds the maximum lawful contract rate, shall be made, to the extent permitted by applicable law, by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of the indebtedness evidenced hereby, all interest at any time contracted for, charged or received from Maker or otherwise by Payee in connection with such indebtedness; provided, however, that if any applicable state law is amended or the law of the United States of America preempts any applicable state law, so that it becomes lawful for the Payee to receive a greater interest per annum rate than is presently allowed, the Maker agrees that, on the effective date of such amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the maximum interest per annum rate allowed by the amended state law or the law of the United States of America. The Maker and all sureties, endorsers, guarantors or any others (each such person, other than the Maker, an "Obligor") who may at any time become liable for the payment hereof jointly and severally consent hereby to any and all extensions of time, renewals, waivers or modifications of, and all substitutions or releases of, security or of any party primarily or secondarily liable on this Note or any Security Agreement or any term and provision of either, which may be made, granted or consented to by Payee, and agree that suit may be brought and maintained against any one or more of them, at the election of Payee THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. This Note and any Security Agreement constitute the entire agreement of the Maker and Payee with respect to the subject matter hereof and supercedes all prior understandings, agreements and representations, express or implied. No variation or modification of this Note, or any waiver of any of its provisions or conditions, shall be valid unless in writing and signed by an authorized representative of Maker and Payee. Any such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given. Any provision in this Note or any Security Agreement which is in conflict with any statute, law or applicable rule shall be deemed omitted, modified or altered to conform thereto. Ready Mix, Inc. /s/ Julie L. Bergo By: /s/ Gary W. Burnell (L.S.) - ------------------------------ ---------------------------- (Witness) (Signature) Julie L. Bergo Gary W. Burnell, Vice President - ------------------------------ ------------------------------- (Print name) Print name (and title, if applicable) 4411 S. 40th St. Ste D.11 860830443 - ------------------------------ ------------------------------- Phoenix AZ 85040 (Federal tax identification number) - ------------------------------ (Address) COLLATERAL SCHEDULE NO. 2 THIS COLLATERAL SCHEDULE NO. 2 is annexed to and made a part of that certain Master Security Agreement dated as of December 4, 1997 between General Electric Capital Corporation as Secured Party and Ready Mix, Inc. as Debtor and describes collateral in which Debtor has granted Secured Party a security interest in connection with the Indebtedness (as defined in the Security Agreement) including without limitation that certain Promissory Note dated ______________in the original principal amount of $365,940.00. Quantity Manufacturer Serial Number Year/Model and Type of Equipment - -------- ------------ ------------- -------------------------------- One (1) Caterpillar 2ZR00221 1996 988F Wheel Loader and including all attachments, accessions and accessories Equipment immediately listed above is located at: 3430 E. Flamingo, Suite 100, Las Vegas, Clark County, NV 89121 SECURED PARTY: DEBTOR: General Electric Capital Corporation Ready Mix, Inc. By: /s/ [ILLEGIBLE]^^ By: /s/ Gary W. Burnell ------------------------------- ------------------------------- Title: Risk Analyst Title: Vice President ---------------------------- ---------------------------- Date: January 13, 1999 Date: 1-12-99 ----------------------------- ----------------------------- EX-10.108 15 EMPLOYMENT AGREEMENT WITH MR. LARSON EXHIBIT 10.108 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT is entered into as of the 1/st/ day of March 1999, by and between Meadow Valley Corporation, a Nevada corporation (the "Employer"), and Bradley E. Larson (the "Employee"). The Employer hereby employs the Employee on a full-time basis, and the Employee hereby accepts such full-time employment on the terms and conditions hereinafter set forth. 1. EMPLOYMENT. Employee is employed as the President and Chief Executive ---------- Officer for the Employer. Employee shall perform all duties as outlined herein and as may be assigned by the Employer and shall devote full time, attention and loyalty to the affairs of the Employer. The duties of the Employee shall specifically be: A) To serve as a member of the Board of Directors, report directly to the Board, communicate with the board regarding current operational and financial status of Employer and strategic plans. B) To present to the board, for board approval, annual operating plans, capital improvement programs, budgets and annual updates of strategic plans. C) To assist the Chief Operating Officer in organizing operations personnel to maximize productivity and synergy between various area managers. Delegate responsibilities and oversee activities in the areas of finance/accounting, operations, estimating/marketing, safety and human resources. D) To actively represent the Employer in industry organizations where the membership is deemed to be beneficial to the Employer; and serve as board member and/or officer in said organizations when elected to do so. E) To seek out, and present to the board, any opportunities for acquisition and/or investment for growth of the Employer, and to negotiate or assist in the negotiations of acquisitions or investment expenditures. F) To represent the Employer in contract negotiations with owners of work, subcontractors and suppliers. G) To establish, foster and maintain relationships with important vendors and suppliers of strategic resources. H) Any other area specifically assigned by the Board of Directors. 2. TERM. Subject to the provisions of termination provided in paragraph ---- 12, the initial term of this Agreement shall commence on day and year first written above and terminate on March 1, 2004. This Agreement may be extended by the mutual written agreement of the Employee and the Employer. 3. COMPENSATION. Employee shall receive a base salary of One Hundred ------------ Sixty-two Thousand Seven Hundred Fifty Dollars ($162,750.00) per year, payable in accordance with the regular payroll practices of Employer, and subject to applicable deductions of withholding taxes and other customary employment taxes. The Board Compensation Committee of Employer shall review Employee's salary at a minimum annually and may adjust Employee's salary upward to recognize improvement, achievement or expansion of Employee's responsibilities. Employee shall participate as a member of senior management in cash incentive plans as currently existing or as amended or adopted in the future by the Compensation Committee of Employer's Board of Directors. Cash bonus plans are subject to annual review and/or change as recommended by the Compensation Committee and approved by the Board of Directors. 4. OPTIONS TO ACQUIRE COMMON STOCK. Employee is eligible to participate ------------------------------- in the Meadow Valley Corporation 1994 Stock Option Plan. Future grants of stock options shall be subject to the discretion of Meadow Valley Corporation's board of directors. 5. EMPLOYEE BENEFITS. Employer shall provide to Employee, and to the ----------------- Employee's dependents, a comprehensive major medical, health, and dental insurance program comparable to the programs normally provided by other employers in the same industry and marketplace, and the Employer shall pay the cost of the Employee's portion of the premium. Should, at any time, the Employee opt to maintain a personal major medical and health insurance policy for himself and for his dependents and not participate in the Employer's group plan, then Employer shall reimburse Employee the lesser of the amount Employee pays for said personal policy, as evidenced by adequate documentation, or what Employer would otherwise be paying were Employee participating in the Employer's group plan. Should the Employee opt to maintain his own coverage, neither he nor his dependents shall be precluded from later participating in the Employer's group plan so long as they otherwise qualify for enrollment. At Employer's cost, Employer will maintain a life insurance policy covering Employee, with at least $250,000 of death benefits being payable, in a manner that is free of income tax, to Employee's estate or other beneficiaries designated by Employee. Employer agrees to provide Employee with an automobile for business-related use. In addition to the cost of the vehicle itself, Employer shall pay, directly or by reimbursement to Employee, for all maintenance, fuel, repairs, insurance, operating and other costs incidental thereto. Employer shall pay for, or reimburse Employee for, dues for his membership in industry related associations perceived as beneficial to Employer and as approved by the Employer's Executive Committee. So long as it is within the guidelines of the respective plan, Employee shall be given the opportunity to participate in Employer's 401(k) and any other plans made available to other members of executive management. Employee shall be entitled to receive all other employee benefits for senior management personnel upon the terms and conditions then in effect. 6. MOVING EXPENSES AND SUBSISTENCE. In the event the Employer requires ------------------------------- the Employee to relocate, the Employer shall pay for all moving costs of reasonable and normal household effects, including up to six months storage of such household effects while Employee obtains a permanent residence in the relocation area. 2 Employee shall obtain a minimum of two moving and storage quotes from reputable movers and Employer shall pay the most competitive rate. Employer shall provide Employee a subsistence allowance of Two Thousand Dollars ($2,000.00) per month for the lesser of nine months from the date of reassignment in a new location or until such time as the relocation of Employee and his/her spouse to the relocation area is complete. In addition, costs for one round-trip airline ticket per week between the Employee's previous location and the relocation area will be reimbursed by Employer to Employee during the same nine-month period, or less if relocation is completed earlier. Such tickets may be used either by Employee or by his/her spouse. 7. HOLIDAYS AND VACATION. --------------------- A) Employee shall be paid for the following seven (7) holidays: New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and the day after Thanksgiving, and Christmas Day and all other holidays for Employees of the Company as approved by the Chief Executive Officer or Board of Directors. B) Employee is entitled to four weeks vacation during the first year of employment and for each year thereafter. Unused vacation in any given year shall accrue to following years up to a maximum of eight weeks in any one year. 8. RESPONSIBILITIES OF EMPLOYEE. The Employee shall devote such ---------------------------- reasonable time as is necessary or is deemed reasonably necessary by the Employer to carry out all required duties and will devote full time to the Employer during normal business hours. The Employee shall at all times faithfully, with diligence and to the Employee's best good faith ability, experience and talents, perform all the duties that may be required pursuant to the express terms hereof to the reasonable satisfaction of the Employer, in accordance with customary professional standards. 9. WORKING FACILITIES. The Employee shall be furnished with all ------------------ facilities and services suitable to Employee's position and adequate for the performance of Employee's duties. 10. EXPENSES. The Employee is authorized to incur reasonable expenses for -------- promoting business of the Employer, including expenses for entertainment, travel and similar items. The Employer shall reimburse the Employee for all such expenses on the presentation by the Employee of itemized and adequately documented accounts of such expenditures. 11. DISABILITY. If unable to perform duties under the terms of this ---------- Agreement by reason of illness or incapacity for a period of four weeks, Employee shall, commencing at the end of such four week period, be entitled to receive Employee's compensation hereunder for a period of up to and including a maximum of one year or until he is no longer disabled, whichever occurs first. After one year of disability at full salary, the Employee, or his designated beneficiary, shall be provided with a disability 3 insurance policy, if available, at no cost to Employee. The disability income policy would provide for monthly income benefits at the rate of sixty percent (60%) of the Employee's base salary at the time the disability occurred. The Company will attempt to procure a disability income policy that would provide monthly benefits until the Employee reaches 65 years of age or is no longer disabled whichever occurs first. If such a policy is unavailable, the Company will attempt to provide the best policy available. If no policy is available, no other disability income benefits will be provided. 12. TERMINATION. This Employment Agreement may be terminated under the ----------- following circumstances: A) WITHOUT CAUSE. Employer may terminate this Agreement at any time ------------- upon thirty (30) days written notice to Employee, but Employer shall be obligated to pay to Employee compensation in a lump sum for the balance of the term of this Agreement within 30 days of termination, unless Employee agrees to other payment terms. B) VOLUNTARY TERMINATION BY EMPLOYEE WITHOUT CAUSE. Employee may ----------------------------------------------- terminate this Agreement at any time upon thirty (30) days written notice to Employer and Employer shall be obligated, in that event, to pay Employee compensation up to the date of the termination only. All accrued but unpaid compensation and Employee benefits shall be paid in cash within 30 days of termination, unless Employee agrees to other payment terms. C) TERMINATION BY EMPLOYER FOR REASONABLE CAUSE. -------------------------------------------- The Employer may terminate this Agreement for reasonable cause upon the unanimous vote of the Board of Directors and by thirty (30) days written notice to the Employee and Employer shall be obligated, in that event, to pay Employee compensation up to the date of termination only. For purposes hereof, "cause" shall be defined as meaning (i) such conduct by the Employee which constitutes material breach of this Agreement which is not cured within ninety (90) days of written notice to the Employee of said alleged breach or (ii) a material failure to competently perform Employee's duties as stated in paragraph 1 in accordance with applicable professional standards as stated in paragraphs 1 and 8 hereof provided that Employer has previously given Employee written notice and a reasonable opportunity to remedy such failure and such failure has a materially adverse effect on the business or financial condition of Employer or (iii) material breach of Employee's fiduciary duty and such breach has a material adverse effect on the business or financial condition of Employer or (iv) egregiously improper or illegal conduct of the Employee which, based upon a unanimous good faith determination of the Board of Directors of the Employer, has a material adverse affect on Employer. D) TERMINATION BY EMPLOYEE FOR REASONABLE CAUSE. --------------------------------------------- Employee may terminate this Agreement for cause. In such event, Employer shall be obligated to pay Employee compensation in lump sum for the balance of the term of this Agreement within 30 days of termination or as Employee shall agree, plus damages suffered and expenses incurred by reason 4 thereof. For this purpose "cause" shall mean (i) a material breach of this Agreement by Employer or (ii) failure of Employer to pay any amount owed Employee hereunder at the time and in the amount due or (iii) failure of Employer to follow applicable law, especially with respect to SEC filings and compliance over the objection of Employee or contrary to the reasonable advice of Employee or (iv) egregiously improper conduct with respect to dealing with Employee or in a manner which brings discredit to Employee. 13. CONFIDENTIALITY. Employee agrees not to disclose any confidential, --------------- proprietary competitively sensitive information to persons who are not employees, directors, lenders, bonding agents, insurance companies or advisors of the Employer, except as required by law, without prior consent of the Employer; provided however, any disclosure involving this paragraph shall not result in a breach of this Agreement unless the disclosure has a materially adverse effect on the Employer. 14. INDEMNIFICATION. Employer and Meadow Valley Contractors, Inc. shall --------------- provide Employee with an Officer Indemnification Agreement in the form attached hereto. 15. NOTICES. All notices, demands, and communications given under this ------- Agreement ("Notice") shall be in writing and delivered personally or sent by registered or certified mail, return receipt requested, in the United States mail, postage prepaid, addressed as follows: If to Employer: Meadow Valley Corporation P.O. Box 60726 Phoenix, AZ 85082-0726 If to Employee: Bradley E. Larson 671 E. Encinas Ave. Gilbert, AZ 85234 or at such other address as a party may from time to time designate by Notice hereunder. Notice shall be effective upon delivery in person, or if mailed, at midnight on the third business day after the date of mailing. 16. ASSIGNMENT OF AGREEMENT. Neither party may assign or otherwise ----------------------- transfer this Agreement or any of its rights or obligations hereunder without the prior written consent to such assignment or transfer by the other party hereto; and all the provisions of this Agreement shall be binding upon the respective employees, successors, heirs and assigns of the parties; provided, however, the benefits payable to Employee hereunder in the event of disability or death or incapacity are payable to Employee's spouse or personal representative. 5 17. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. This Agreement ----------------------------------------------------- and the representations, warranties, covenants and other agreements (however characterized or described) by both parties and contained herein or made pursuant to the provisions hereof shall survive the execution and delivery of this Agreement. 18. FURTHER INSTRUMENTS. The parties shall execute and deliver any and all ------------------- such other instruments in reasonable mutually acceptable form and substance and shall take any and all such other actions as may be reasonably necessary to carry the intent of the Agreement into full force and effect. 19. SEVERABILITY. If any provision of this Agreement shall be held, ------------ declared or pronounced void, voidable, invalid, unenforceable or inoperative for any reason by any court of competent jurisdiction, governmental authority or otherwise, such holding, declaration or pronouncement shall not affect adversely any other provision of this Agreement, which shall otherwise remain in full force and effect and be enforced in accordance with its terms, and the effect of such holding, declaration or pronouncement shall be limited to the territory of jurisdiction in which made. 20. WAIVER. All the rights and remedies of either party under this ------ Agreement are cumulative and not exclusive of any other rights and remedies provided by law. No delay or failure on the part of either party in the exercise of any right or remedy arising from a breach of this Agreement shall operate as a waiver of any subsequent right or remedy arising from a subsequent breach of this Agreement. The consent of any party where required hereunder to any act or occurrence shall not be deemed to be a consent to any other act or occurrence. 21. GENERAL PROVISIONS. This Agreement shall be construed and enforced in ------------------ accordance with, and governed by, the laws of the state of Arizona. Except as otherwise expressly stated herein, time is of the essence in performing under this Agreement. This Agreement embodies the entire agreement and understanding between the parties and supersedes all prior agreements and understandings relating to the subject matter of this Agreement as it relates to the parties' duties and obligations from and after March 1, 1999, and this Agreement may not be modified or amended or any term or provision hereof waived or discharged except in writing signed by the party against whom such amendment, modification, waiver or discharge is sought to be enforced. The headings of this Agreement are for convenience in reference only and shall not limit or otherwise affect the meaning thereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. 22. SPECIAL RIGHT OF EMPLOYEE UNDER CERTAIN CIRCUMSTANCES. During the term ----------------------------------------------------- of this Agreement, if (i) Employer is involved in a merger, consolidation or other business combination in which Employer is not the 6 principal subsidiary are sold; or (iii) in the event Employee is required to relocate outside the Phoenix, Arizona area in a manner not mutually acceptable to Employee and Employer, then Employee shall have the following rights: A) To terminate this Agreement with 30 days prior notice, in which event Employer shall pay Employee as if there were a termination without cause by the Employer; and B) All options granted shall, to the extent not specifically prohibited by the stock option plan then in effect, vest immediately and be exercisable within one year of the occurring of one of the events set forth in (i), (ii) or (iii) above. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. Meadow Valley Corporation /s/ Bradley E. Larson By /s/ Gary A. Agron - --------------------------- ------------------------------------- Employee Temp. Chairman - Compensation Committee 7 EX-10.109 16 LEASE AGREEMENT WITH BANC ONE LEASING CORP. EXHIBIT 10.109 LEASE SCHEDULE NO. 1000099257 FINANCING LEASE ---------- (Per Diem Interim Rent) Master Lease Agreement dated-JULY 01, 1999 ------------- Lessor: BANC ONE LEASING CORPORATION ---------------------------- Lessee: READY MIX, INC. --------------- 1. GENERAL. This Lease Schedule is signed and delivered under the Master Lease Agreement identified above, as amended from time to time ("Master Lease"), between Lessee and Lessor. Capitalized terms defined in the Master Lease will have the same meanings when used in this Schedule. 2. FINANCING. Lessor finances for Lessee, and Lessee finances with Lessor, all of the property ("Equipment") described in Schedule A-1 attached hereto (and Lessee represents that all Equipment is new unless specifically identified as used): 3. AMOUNT FINANCED: Equipment Cost: $2,499,758.58 Set-up/Filing Fee: 200.00 Miscellaneous: N/A Sales Tax: N/A Total: $2,499,958.58 ------------ 4. FINANCING TERM. The Base Term of this Schedule shall be 84 months and the -- Base Term shall commence on the Acceptance Date ("Commencement Date"). The total --------------- Lease Term consists of the Interim Term plus the Base Term. The Interim Term begins on the date that Lessor accepts this Schedule as stated below Lessor's signature ("Acceptance Date") and continues up to the Commencement Date. 5. INSTALLMENT PAYMENTS/FEES. As financing for the Equipment, Lessee shall pay to Lessor all amounts stated below on the due dates stated below. There shall be added to each installment payment all applicable Taxes as in effect from time to time. (a) For the Interim Term, Lessee shall pay to Lessor on the Commencement Date an amount equal to one-thirtieth (1/30th) of the Installment Payment multiplied by the number of days in the Interim Term. "Installment Payment" means the total of all installment payments due and payable during the Base Term divided by the number of months in the Base Term. (b) During the Base Term, Lessee shall pay to Lessor installment payments in the amounts and according to the timing set forth below, provided however, that notwithstanding the following, the final installment payment due hereunder shall be equal to the remaining principal balance hereunder together with all accrued interest and fees. (1) Amount of each installment payment during the Base Term (including principal and interest): 84 Monthly payments of $38,831.28 (2) Frequency of installment payments during the Base Term: MONTHLY (3) Timing of installment payments during the Base Term: ARREARS (c) Lessee shall pay Lessor a Set-Up/Filing Fee as follows: (1) $ shall be paid on the Acceptance Date, or (2) $375.00 has been included in the above Amount Financed of the ------ Equipment. (d) Security Deposit:$ On the Acceptance Date, Lessee shall pay Lessor said - Security Deposit which shall be held in accordance with paragraph 6 below. 6. SECURITY INTEREST. This Schedule is intended to be a secured debt financing transaction, not a true lease. See Paragraph 7 below regarding Lessee's --- ownership of the Equipment. As collateral security for payment and performance of all Secured Obligations (defined in Paragraph 8 below) and to induce Lessor to extend credit from time to time to Lessee (under the Lease or otherwise), Lessee hereby grants to Lessor a first priority security interest in all of Lessee's right, title and interest in the Equipment, whether now existing or hereafter acquired, any sums specified in this Schedule as a "Security Deposit", and in all Proceeds (defined in Paragraph 8 below). At its option, Lessor may apply all or any part of any Security Deposit to cure any default of Lessee under the Lease. If upon final termination of this Schedule, Lessee has fulfilled all of the terms and conditions hereof, then Lessor shall pay to Lessee upon Lessee's written request any remaining balance of the Security Deposit for this Schedule, without interest. 7. TITLE TO EQUIPMENT; FIRST PRIORITY LIEN. Lessee represents, warrants and agrees: that Lessee currently is the lawful owner of the Equipment; that good and marketable title to the Equipment shall remain with Lessee at all times; that Lessee has granted to Lessor a first priority security interest in the Equipment and all Proceeds; and that the Equipment and all Proceeds are, and at all times shall be, free and clear of any Liens other than Lessor's security interest therein. Lessee at its sole expense will protect and defend Lessor's first priority security interest in the Equipment against all claims and demands whatsoever. 8. CERTAIN DEFINITIONS. "Secured Obligations" means (a) all payments and other obligations of Lessee under or in connection with this Schedule, and (b) all payments and other obligations of Lessee (whether now existing or hereafter incurred) under or in connection with the Master Lease and all present and future Lease Schedules thereto, and (c) all other leases, indebtedness, liabilities and/or obligations of any kind (whether now existing or hereafter incurred, absolute or contingent, direct or indirect) of Lessee to Lessor or to any affiliate of either Lessor or BANK ONE CORPORATION. "Proceeds" means all cash and non-cash proceeds of the Equipment including, without limitation, proceeds of insurance, indemnities and/or warranties. 9. AMENDMENTS TO MASTER LEASE. For purposes of this Schedule only, Lessee and Lessor agree to amend the Master Lease as follows: (a) public liability or property insurance as described in the second sentence of Section 8 will not be required; (b) the definition of "Stipulated Loss Value" in clause (b) of Section 9 is deleted and replaced by Paragraph 10 below; (c) the text of Section 10 is deleted in its entirely; (d) Subsections 23(a) and 23(c) are deleted; (e) subsection 23(b) and the last sentence of section 4 will apply only if an event of default occurs; and (f) all references in the Lease as it relates to this Schedule to "Lessee" and "Lessor" shall be changed to "Borrower" and "Lender" respectively. 10. STIPULATED LOSS VALUE. For purposes of this Schedule only, the "Stipulated Loss Value" of any item of Equipment during its Lease Term equals the aggregate of the following as of the date specified by Lessor: (a) all accrued and unpaid interest, late charges and other amounts due under this Schedule and the Master Lease to the extent it relates to this Schedule as of such specified date, plus (b) the remaining principal balance due and payable by Lessee under this Schedule as of such specified date, plus (c) interest on the amount described in the foregoing clauses (a) and (b) at the Overdue Rate commencing with the specified date; provided, that the foregoing calculation shall not exceed the maximum amount which may be collected by Lessor from Lessee under applicable law in connection with enforcement of Lessor's rights under this Schedule and the Master Lease to the extent it relates to this Schedule. 11. LESSEE TO PAY ALL TAXES. For purposes of this Schedule and its Equipment only: Lessee shall pay any and all Taxes relating to this Schedule and its Equipment directly to the applicable taxing authority, Lessee shall prepare and file all reports or returns concerning any such Taxes as may be required by applicable law or regulation (provided, that Lessor shall not be identified as the owner of the Equipment in such reports or returns); and Lessee shall, upon Lessor's request, send Lessor evidence of payment of such Taxes and copies of any such reports or returns. 12. LESSEE'S ASSURANCES. Lessee irrevocably and unconditionally: (a) reaffirms all of the terms and conditions of the Master Lease and agrees that the Master Lease remains in full force and effect; (b) agrees that the Equipment is and will be used at all times solely for commercial purposes, and not for personal, family or household purposes; and (c) incorporates all of the terms and conditions of the Master Lease as if fully set forth in this Schedule. 13. REPRESENTATIONS AND WARRANTIES: Lessee represents and warrants that: (a) Lessee is a corporation, partnership or proprietorship duly organized, validly existing and in good standing under the laws of the state of its organization and is qualified to do business and is in good standing under the laws of each other state in which the Equipment is or will be located; (b) Lessee has full power, authority and legal right to sign, deliver and perform the Master Lease, this Schedule and all related documents and such actions have been duly authorized by all necessary corporate/partnership/proprietorship action; and (c) the Master Lease, this Schedule and each related document has been duly signed and delivered by Lessee and each such document constitutes a legal, valid and binding obligation of Lessee enforceable in accordance with its terms. 14. CONDITIONS. No lease of Equipment under this Schedule shall be binding on Lessor, and Lessor shall have no obligation to purchase the Equipment covered hereby, unless: (a) Lessor has received evidence of all required insurance; (b) in Lessor's sole judgment, there has been no material adverse change in the financial condition or business of Lessee or any guarantor; (c) Lessee has signed and delivered to Lessor this Schedule, which must be satisfactory to Lessor, and Lessor has signed and accepted this Schedule; (d) no change in the Code or any regulation thereunder, which in Lessor's sole judgment would adversely affect the economics to Lessor of the lease transaction, shall have occurred or shall appear to be imminent; (e) Lessor has received, in form and substance satisfactory to Lessor, such other documents and information as Lessor shall reasonably request; and (f) Lessee has satisfied all other reasonable conditions established by Lessor. 15. OTHER DOCUMENTS: EXPENSES: Lessee agrees to sign and deliver to Lessor any additional documents deemed desirable by Lessor to effect the terms of the Master Lease or this Schedule including, without limitation, Uniform Commercial Code financing statements which Lessor is authorized to file with the appropriate filing officers. Lessee hereby irrevocably appoints Lessor and any designee of Lessor as Lessee's attorney-in-fact with full power and authority in the place of Lessee and in the name of Lessee to prepare, sign, amend, file or record any Uniform Commercial Code financing statements or other documents deemed desirable by Lessor to perfect, establish or give notice of Lessor's interests in the Equipment or in any collateral as to which Lessee has granted Lessor a security interest. Lessee shall pay upon Lessor's written request any actual out-of-pocket costs and expenses paid or incurred by Lessor in connection with the above terms of this section or the funding and closing of this Schedule. 16. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (I) Lessor has not selected, manufactured, sold or supplied any of the Equipment, (ii) Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has received a copy of, and approved, the purchase orders or purchase contracts for the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (a) LESSEE HAS RECEIVED, INSPECTED AND APPROVED ALL OF TEE EQUIPMENT; (b) ALL EQUIPMENT IS IN GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND ALL APPLICABLE SPECIFICATIONS; (c) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR PURPOSES OF THE LEASE "AS-IS, WHERE-IS" WITH ALL FAULTS; AND (d) LESSEE UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF THE EQUIPMENT. LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE AGREES THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING THE EQUIPMENT OR THIS SCHEDULE. BANC ONE LEASING CORPORATION READY MIX, INC. - ---------------------------- --------------- (Lessor) (Lessee) By:_________________________ By:/s/ Kenneth D. Nelson --------------------------- Title: _____________________ Title: Vice President ----------------------- Acceptance Date: ___________ Witness:/s/ Nicole Smith ---------------------- Banc One Leasing Corporation SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER QUANTITY DESCRIPTION PAGE 1 ================================================================================ EQUIPMENT LOCATION: 1501 HIGHWAY 168 MOAPA, NV 89025 COUNTY : CLARK COST : $2,499,758.58 "ALL PROPERTY DESCRIBED IN THE INVOICES AND EXHIBITS IDENTIFIED BELOW, WHICH PROPERTY MAY BE GENERALLY DESCRIBED AS ROCK AND SAND CRUSHING EQUIPMENT."
VENDOR INVOICE # CONSTRUCTION EQUIPMENT SALES 4466 AGGREGATE DESIGNS 9906-11 CONVEYOR SALES 19245 TK ELECTRIC 99431 TK ELECTRIC 99491 KIMBALL EQUIPMENT 150325 KIMBALL EQUIPMENT 150326 CRUSHER SERVICE 39331 CONSTRUCTION EQUIPMENT SALES 4470 CRUSHER SERVICE 39501 HAZEMAG USA 9282A CONVEYOR SALES 19568 KIMBALL EQUIPMENT 150905 CONVEYOR SALES 19248
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS, IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO. This Schedule A-1 is attached to and made a part of Lease Number 1000099257 and constitutes a true and accurate description of the equipment. Lessee: READY MIX, INC. - -------------------------------------- By: /s/ Kenneth D. Nelson ---------------------------------- Date: 9-24-99 --------------------------------- Banc One Leasing Corporation SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER QUANTITY DESCRIPTION PAGE 2 ================================================================================ EXHIBIT A 45232.30 EXHIBIT B 98839.11 EXHIBIT C 62173.00 EXHIBIT D 56848.98 EXHIBIT E 94554.19 EXHIBIT F 19360.07 EXHIBIT G 91554.01 EXHIBIT H 98803.97 EXHIBIT I 176037.96 EXHIBIT J 60246.81 EXHIBIT K 29686.42 TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS, IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO. This Schedule A-1 is attached to and made a part of Lease Number 1000099257 and constitutes a true and accurate description of the equipment. Lessee: READY MIX, INC. - --------------------------------- By: /s/ Kenneth D. Nelson ------------------------------ Date: 9-24-99 ---------------------------- EX-10.110 17 MASTER LEASE AGREEMENT WITH BANC ONE LEASING CORP. EXHIBIT 10.110 MASTER LEASE AGREEMENT This MASTER LEASE AGREEMENT is dated as of: 7-1-99, and is made and entered ------ into by and between BANC ONE LEASING CORPORATION ("Lessor"), an Ohio corporation, with its principal place of business at 1111 Polaris Parkway, Suite A3 (OH1-1085), Columbus, Ohio 43240 and the Lessee identified below: LESSEE NAME: READY MIX, INC. LESSEE ADDRESS: 4411 South 40th Street, Phoenix, Arizona 1. LEASE OF EQUIPMENT: Lessor leases to Lessee, and Lessee leases from Lessor, all the property described in the Lease Schedules which are signed from time to time by Lessor and Lessee. 2. CERTAIN DEFINITIONS: "Schedule" means each Lease Schedule signed by Lessee and Lessor which incorporates the terms of this Master Lease Agreement, together with all exhibits, riders, attachments and addenda thereto. "Equipment" means the property described in each Schedule, together with all attachments, additions, accessions, parts, repairs, improvements, replacements and substitutions thereto. "Lease", "herein", "hereunder", "hereof" and similar words mean this Master Lease Agreement and all Schedules, together with all exhibits, riders, attachments and addenda to any of the foregoing, as the same may from time to time be amended, modified or supplemented. "Prime Rate" means the prime rate of interest announced from time to time as the prime rate by Bank One, NA (or its successors or assigns); provided, that the parties acknowledge that the Prime Rate is not intended to be the lowest rate of interest charged by said bank in connection with extensions of credit. "Lien" means any security interest, lien, mortgage, pledge, encumbrance, judgment, execution, attachment, warrant, writ, levy, other judicial process or claim of any nature whatsoever by or of any person. "Fair Market Value" means the amount which would be paid for an item of Equipment by an informed and willing buyer (other than a used equipment or scrap dealer) and an informed and willing seller neither under a compulsion to buy or sell. "Lessor's Cost" means the invoiced price of any item of Equipment plus any other cost to Lessor of acquiring an item of Equipment. All terms defined in the Lease are equally applicable to both the singular and plural form of such terms. 3. LEASE TERM AND RENT: The term of the lease of the Equipment described in each Schedule ("Lease Term") commences on the date stated in the Schedule and continues for the term stated therein. As rent for the Equipment described in each Schedule, Lessee shall pay Lessor the rent payments and all other amounts stated in such Schedule, payable on the dates specified therein. All payments due under the Lease shall be made in United States dollars at Lessor's office stated in the opening paragraph or as otherwise directed by Lessor in writing. 4. ORDERING, DELIVERY, REMOVAL AND INSPECTION OF EQUIPMENT: If an event of default occurs or if for any reason Lessee does not accept, or revokes its acceptance of, equipment covered by a purchase order or purchase contract or if any commitment or agreement of Lessor to lease equipment to Lessee expires, terminates or is otherwise canceled, then automatically upon notice from Lessor, any purchase order or purchase contract and all obligations thereunder shall be assigned to Lessee and Lessee shall pay and perform all obligations thereunder. Lessee agrees to pay, defend, indemnify and hold Lessor harmless from any liabilities, obligations, claims, costs and expenses (including reasonable attorney fees and expenses) of whatever kind imposed on or asserted against Lessor in any way related to any purchase orders or purchase contracts. Lessee shall make all arrangements for, and Lessee shall pay all costs of, transportation, delivery, installation and testing of Equipment. Lessor has the right upon reasonable notice to Lessee to inspect the Equipment wherever located. Lessor may enter upon any premises where Equipment is located and remove it immediately, without notice or liability to Lessee, upon the expiration or other termination of the Lease Term. 5. MAINTENANCE AND USE: Lessee agrees it will, at its sole expense: (a) repair and maintain the Equipment in good condition and working order and supply and install all replacement parts or other devices when required to so maintain the Equipment or when required by applicable law or regulation, which parts or devices shall automatically become part of the Equipment; (b) use and operate the Equipment in a careful manner in the course of its business and only for the purposes for which it was designed in accordance with the manufacturer's warranty requirements, and comply with all laws and regulations relating to the Equipment, and obtain all permits or licenses necessary to install, use or operate the Equipment; and (c) make no alterations, additions, subtractions, upgrades or improvements to the Equipment without Lessor's prior written consent, but any such alterations, additions, upgrades or improvements shall automatically become part of the Equipment. The Equipment will not be used or located outside of the United States. 6. NET LEASE; NO EARLY TERMINATION: The Lease is a net lease. Lessee's obligation to pay all rent and all other amounts payable under the Lease is absolute and unconditional under any and all circumstances and shall not be affected by any circumstances of any character including, without limitation, (a) any setoff, claim, counterclaim, defense or reduction which Lessee may have at any time against Lessor or any other party for any reason, or (b) any defect in the condition, design or operation of, any lack of fitness for use of, any damage to or loss of, or any lack of maintenance or service for any of the Equipment. Each Schedule is a noncancelable lease of the Equipment described therein and Lessee's obligation to pay rent Page 1 and perform all other obligations thereunder and under the Lease are not subject to cancellation or termination by Lessee for any reason. 7. NO WARRANTIES BY LESSOR: LESSOR LEASES THE EQUIPMENT AS-IS, WHERE-IS, AND WITH ALL FAULTS. LESSOR MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, OF ANY KIND AS TO THE EQUIPMENT INCLUDING, WITHOUT LIMITATION: ITS MERCHANTABILITY; ITS FITNESS FOR ANY PARTICULAR PURPOSE; ITS DESIGN, CONDITION, QUALITY, CAPACITY, DURABILITY, CAPABILITY, SUITABILITY OR WORKMANSHIP; ITS NON- INTERFERENCE WITH OR NON-INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHT; OR ITS COMPLIANCE WITH ANY LAW, RULE, SPECIFICATION, PURCHASE ORDER OR CONTRACT PERTAINING THERETO. Lessor hereby assigns to Lessee the benefit of any assignable manufacturer's or supplier's warranties, but Lessor, at Lessee's written request, will cooperate with Lessee in pursuing any remedies Lessee may have under such warranties. Any action taken with regard to warranty claims against any manufacturer or supplier by Lessee will be at Lessee's sole expense. LESSOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND AS TO THE FINANCIAL CONDITION OR FINANCIAL STATEMENTS OF ANY PARTY OR AS TO THE TAX OR ACCOUNTING TREATMENT OR CONSEQUENCES OF THE LEASE, THE EQUIPMENT OR THE RENTAL PAYMENTS. 8. INSURANCE: Lessee at its sole expense shall at all times keep each item of Equipment insured against all risks of loss or damage from every cause whatsoever for an amount not less than the greater of the full replacement value or the Lessor's Cost of such item of Equipment. Lessee at its sole expense shall at all times carry public liability and property damage insurance in amounts satisfactory to Lessor protecting Lessee and Lessor from liabilities for injuries to persons and damage to property of others relating in any way to the Equipment. All insurers shall be reasonably satisfactory to Lessor. Lessee shall deliver to Lessor satisfactory evidence of such coverage. Proceeds of any insurance covering damage or loss of the Equipment shall be payable to Lessor as loss payee and shall, at Lessor's option, be applied toward (a) the replacement, restoration or repair of the Equipment, or (b) payment of the obligations of Lessee under the Lease. If an event of default occurs and is continuing, or if Lessee fails to make timely payments due under Section 9 hereof, then Lessee automatically appoints Lessor as Lessee's attorney-in-fact with full power and authority in the place of Lessee and in the name of Lessee or Lessor to make claim for, receive payment of, and sign and endorse all documents, checks or drafts for loss or damage under any such policy. Each insurance policy will require that the insurer give Lessor at least 30 days prior written notice of any cancellation of such policy and will require that Lessor's interests remain insured regardless of any act, error, omission, neglect or misrepresentation of Lessee. The insurance maintained by Lessee shall be primary without any right of contribution from insurance which may be maintained by Lessor. 9. LOSS AND DAMAGE: (a) Lessee bears the entire risk of loss, theft, damage or destruction of Equipment in whole or in part from any reason whatsoever ("Casualty Loss"). No Casualty Loss to Equipment shall relieve Lessee from the obligation to pay rent or from any other obligation under the Lease. In the event of Casualty Loss to any item of Equipment, Lessee shall immediately notify Lessor of the same and Lessee shall, if so directed by Lessor, immediately repair the same. If Lessor determines that any item of Equipment has suffered a Casualty Loss beyond repair ("Lost Equipment"), then Lessee, at the option of Lessor, shall: (1) immediately replace the Lost Equipment with similar equipment in good repair, condition and working order free and clear of any Liens and deliver to Lessor a bill of sale covering the replacement equipment, in which event such replacement equipment shall automatically be Equipment under the Lease; or (2) On the rent payment date which is at least 30 but no more than 60 days after the date of the Casualty Loss, pay to Lessor all amounts then due and payable by Lessee under the Lease for the Lost Equipment plus the Stipulated Loss Value for such Lost Equipment as of the date of the Casualty Loss. Upon payment by Lessee of all amounts due under the above clause (2), the lease of the Lost Equipment will terminate and Lessor shall transfer to Lessee all of Lessor's right, title and interest in such Equipment on an "as-is, where-is" basis with all faults, without recourse and without representation or warranty of any kind, express or implied. (b) "Stipulated Loss Value" of any item of Equipment during its Lease Term equals the present value discounted in arrears to the applicable date at the applicable SLV Discount Rate of (1) the remaining rents and all other amounts [including, without limitation, any balloon payment and, as to a terminal rental adjustment clause ("TRAC") lease, the TRAC value stated in the Schedule, and any other payments required to be paid by Lessee at the end of the applicable Lease Term] payable under the Lease for such item on and after such date to the end of the applicable Lease Term and (2) an amount equal to the Economic Value of the Equipment. For any item of Equipment, "Economic Value" means the Fair Market Value of the Equipment at the end of the applicable Lease Term as originally anticipated by Lessor at the Commencement Date of the applicable Schedule; provided, that Lessee agrees that such value shall be determined by the books of Lessor as of the Commencement Date of the applicable Schedule. After the payment of all rent due under the applicable Schedule and the expiration of the Lease Term of any item of Equipment, the Stipulated Loss Value of such item equals the Economic Value of such item. Stipulated Loss Value shall also include any Taxes payable by Lessor in connection with its receipt thereof. For any item of Equipment, "SLV Discount Rate" means an interest rate equal to the Prime Rate in effect on the Commencement Date of the Schedule for such item minus two percentage points. 10. TAX BENEFITS INDEMNITY. (a) The Lease has been entered into on the basis that Lessor shall be entitled to such deductions, credits and other tax benefits as are provided by federal, state and local income tax law to an owner of the Equipment (the "Tax Benefits") including, without limitation: (1) modified accelerated cost recovery deductions on each item Page 2 of Equipment under Section 168 of the Code (as defined below) in an amount determined commencing with the taxable year in which the Commencement Date of the applicable Schedule occurs, using the maximum allowable depreciation method available under Section 168 of the Code, using a recovery period (as defined in Section 168 of the Code) reasonably determined by Lessor, and using an initial adjusted basis which is equal to the Lessor's Cost of such item; (2) amortization of the expenses paid by Lessor in connection with the Lease on a straight-line basis over the term of the applicable Schedule; and (3) Lessor's federal taxable income will be subject to the maximum rate on corporations in effect under the Code as of the Commencement Date of the applicable Schedule. (b) If on any one or more occasions (1) Lessor shall lose, shall not have or shall lose the right to claim all or any part of the Tax Benefits, (2) there shall be reduced, disallowed, recalculated or recaptured all or any part of the Tax Benefits, or (3) all or any part of the Tax Benefits is reduced by a change in law or regulation (each of the events described in subparagraphs 1, 2 or 3 of this paragraph (b) will be referred to as a "Tax Loss"), then, upon 30 days written notice by Lessor to Lessee that a Tax Loss has occurred, Lessee shall pay Lessor an amount which, in the reasonable opinion of Lessor and after the deduction of all taxes required to be paid by Lessor with respect to the receipt of such amount, will provide Lessor with the same after-tax net economic yield which was originally anticipated by Lessor as of the Commencement Date of the applicable Schedule. (c) A Tax Loss shall occur upon the earliest of: (1) the happening of any event (such as disposition or change in use of an item of Equipment) which may cause such Tax Loss; (2) Lessor's payment to the applicable taxing authority of the tax increase resulting from such Tax Loss; or (3) the adjustment of Lessor's tax return to reflect such Tax Loss. (d) Lessor shall not be entitled to payment under this section for any Tax Loss caused solely by one or more of the following events: (1) a disqualifying sale or disposition of an item of Equipment by Lessor prior to any default by Lessee; (2) Lessor's failure to timely or properly claim the Tax Benefits in Lessor's tax return; (3) a disqualifying change in the nature of Lessor's business or liquidation thereof; (4) a foreclosure by any person holding through Lessor a security interest on an item of Equipment which foreclosure results solely from an act of Lessor; or (5) Lessor's failure to have sufficient taxable income or tax liability to utilize the Tax Benefits. (e) "Code" shall mean the Internal Revenue Code of 1986, as amended. For the purposes of this section 10, the term "Lessor" shall include any affiliate group (within the meaning of section 1504 of the Code) of which Lessor is a member for any year in which a consolidated income tax return is filed for such affiliated group. Lessee's obligations under this section shall survive the expiration, cancellation or termination of the Lease. 11. GENERAL TAX INDEMNITY: Lessee will pay, and will defend, indemnify and hold Lessor harmless on an after-tax basis from, any and all Taxes (as defined below) and related audit and contest expenses on or relating to (a) any of the Equipment, (b) the Lease, (c) purchase, acceptance, ownership, lease, possession, use, operation, transportation, return or other disposition of any of the Equipment, and (d) rentals or earnings relating to any of the Equipment or the Lease. "Taxes" means present and future taxes or other governmental charges that are not based on the net income of Lessor, whether they are assessed to or payable by Lessee or Lessor, including, without limitation (i) sales, use, excise, licensing, registration, titling, franchise, business and occupation, gross receipts, stamp and personal property taxes, (ii) levies, imposts, duties, assessments, charges and withholdings, (iii) penalties, fines, and additions to tax and (iv) interest on any of the foregoing. Unless Lessor elects otherwise, Lessor will prepare and file all reports and returns relating to any Taxes and will pay all Taxes to the appropriate taxing authority. Lessee will reimburse Lessor for all such payments promptly on request. On or after any applicable assessment/levy/lien date for any personal property Taxes relating to any Equipment, Lessee agrees that upon Lessor's request Lessee shall pay to Lessor the personal property Taxes which Lessor reasonably anticipates will be due, assessed, levied or otherwise imposed on any Equipment during its Lease Term. If Lessor elects in writing, Lessee will itself prepare and file all such reports and returns, pay all such Taxes directly to the taxing authority, and send Lessor evidence thereof. Lessee's obligations under this section shall survive the expiration, cancellation or termination of the Lease. 12. GENERAL INDEMNITY: Lessee assumes all risk and liability for, and shall defend, indemnify and keep Lessor harmless on an after-tax basis from, any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and expenses, including reasonable attorney fees and expenses, of whatsoever kind and nature imposed on, incurred by or asserted against Lessor, in any way relating to or arising out of the manufacture, purchase, acceptance, rejection, ownership, possession, use, selection, delivery, lease, operation, condition, sale, return or other disposition of the Equipment or any part thereof (including, without limitation, any claim for latent or other defects, whether or not discoverable by Lessee or any other person, any claim for negligence, tort or strict liability, any claim under any environmental protection or hazardous waste law and any claim for patent, trademark or copyright infringement). Lessee will not indemnify Lessor under this section for loss or liability arising from events which occur after the Equipment has been returned to Lessor or for loss or liability caused directly and solely by the gross negligence or willful misconduct of Lessor. In this section, "Lessor" also includes any director, officer, employee, agent, successor or assign of Lessor. Lessee's obligations under this section shall survive the expiration, cancellation or termination of the Lease. 13. PERSONAL PROPERTY: Lessee represents and agrees that the Equipment is, and shall at all times remain, separately identifiable personal property. Upon Lessor's request, Lessee shall furnish Lessor a landlord's and/or mortgagee's Page 3 waiver and consent to remove all Equipment. Lessor may display notice of its interest in the Equipment by any reasonable identification. Lessee shall not alter or deface any such indicia of Lessor's interest. 14. DEFAULT: Each of the following events shall constitute an event of default under the Lease: (a) Lessee fails to pay any rent or other amount due under the Lease within ten days of its due date; or (b) Lessee fails to perform or observe any of its obligations in Sections 8, 18, or 22 hereof; or (c) Lessee fails to perform or observe any of its other obligations in the Lease for more than 30 days after Lessor notifies Lessee of such failure; or (d) Lessee or any Lessee affiliate defaults in the payment, performance or observance of any obligation under any loan, credit agreement or other lease in which Lessor or any subsidiary (direct or indirect) of Bank One Corporation (or its successors or assigns) is the creditor or lessor; or (e) any statement, representation or warranty made by Lessee in the Lease, in any Schedule or in any document, certificate or financial statement in connection with the Lease proves at any time to have been untrue or misleading in any material respect as of the time when made; or (f) Lessee becomes insolvent or bankrupt, or Lessee admits its inability to pay its debts as they mature, or Lessee makes an assignment for the benefit of creditors, or Lessee applies for, institutes or consents to the appointment of a receiver, trustee or similar official for Lessee or any substantial part of its property or any such official is appointed without Lessee's consent, or Lessee applies for, institutes or consents to any bankruptcy, insolvency, reorganization, debt moratorium, liquidation or similar proceeding relating to Lessee or any substantial part of its property under the laws of any jurisdiction or any such proceeding is instituted against Lessee without stay or dismissal for more than 30 days, or Lessee commences any act amounting to a business failure or a winding up of its affairs, or Lessee ceases to do business as a going concern; or (g) with respect to any guaranty, letter of credit, pledge agreement, security agreement, mortgage, deed of trust, debt subordination agreement or other credit enhancement or credit support agreement (whether now existing or hereafter arising) signed or issued by any party in connection with all or any part of Lessee's obligations under the Lease, the party signing or issuing any such agreement defaults in its obligations thereunder or any such agreement shall cease to be in full force and effect or shall be declared to be null, void, invalid or unenforceable by the party signing or issuing it; or (h) there shall occur in Lessor's reasonable opinion any material adverse change in the financial condition, business or operations of Lessee. As used in this section 14, the term "Lessee" also includes any guarantor (whether now existing or hereafter arising) of all or any part of Lessee's obligations under the Lease and/or any issuer of a letter of credit (whether now existing or hereafter arising) relating to all or any part of Lessee's obligations under the Lease, and the term "Lease" also includes any guaranty or letter of credit (whether now existing or hereafter arising) relating to all or any part of Lessee's obligations under the Lease. 15. REMEDIES. If any event of default exists, Lessor may exercise in any order one or more of the remedies described in the lettered subparagraphs of this section, and Lessee shall perform its obligations imposed thereby: (a) Lessor may require Lessee to return any or all Equipment as provided in the Lease. (b) Lessor or its agent may repossess any or all Equipment wherever found, may enter the premises where the Equipment is located and disconnect, render unusable and remove it, and may use such premises without charge to store or show the Equipment for sale. (c) Lessor may sell any or all Equipment at public or private sale, with or without advertisement or publication, may release or otherwise dispose of it or may use, hold or keep it. (d) Lessor may require Lessee to pay to Lessor on a date specified by Lessor, with respect to any or all Equipment (i) all accrued and unpaid rent, late charges and other amounts due under the Lease on or before such date, plus (ii) as liquidated damages for loss of a bargain and not as a penalty, and in lieu of any further payments of rent, the Stipulated Loss Value of the Equipment on such date, plus (iii) interest at the Overdue Rate on the total of the foregoing ("Overdue Rate" means an interest rate per annum equal to the higher of 18% or 2% over the Prime Rate, but not to exceed the highest rate permitted by applicable law). The parties acknowledge that the foregoing money damage calculation reasonably reflects Lessor's anticipated loss with respect to the Equipment and the related Lease resulting from the event of default. If an event of default under section 14(f) of this Master Lease Agreement exists, then Lessee will be automatically liable to pay Lessor the foregoing amounts as of the next rent payment date unless Lessor otherwise elects in writing. (e) Lessee shall pay all costs, expenses and damages incurred by Lessor because of the event of default or its actions under this section, including, without limitation any collection agency and/or attorney fees and expenses, any costs related to the repossession, safekeeping, storage, repair, reconditioning or disposition of the Equipment and any incidental and consequential damages. (f) Lessor may terminate the Lease and/or any or all Schedules, may sue to enforce Lessee's performance of its obligations under the Lease and/or may exercise any other right or remedy then available to Lessor at law or in equity. Lessor is not required to take any legal process or give Lessee any notice before exercising any of the above remedies. None of the above remedies is exclusive, but each is cumulative and in addition to any other remedy available to Lessor. Lessor's exercise of one or more remedies shall not preclude its exercise of any other remedy. No action taken by Lessor shall release Lessee from any of its obligations to Lessor. No delay or failure on the part of Lessor to exercise any right hereunder Page 4 shall operate as a waiver thereof, nor as an acquiescence in any default, nor shall any single or partial exercise of any right preclude any other exercise thereof or the exercise of any other right. After any default, Lessor's acceptance of any payment by Lessee under the Lease shall not constitute a waiver by Lessor of such default, regardless of Lessor's knowledge or lack of knowledge at the time of such payment, and shall not constitute a reinstatement of the Lease if the Lease has been declared in default by Lessor, unless Lessor has agreed in writing to reinstate the Lease and to waive the default. If Lessor actually repossesses any Equipment, then it will use commercially reasonable efforts under the then current circumstances to attempt to mitigate its damages; provided, that Lessor shall not be required to sell, re-lease or otherwise dispose of any Equipment prior to Lessor enforcing any of the remedies described above. Lessor may sell or re-lease the Equipment in any manner it chooses, free and clear of any claims or rights of Lessee and without any duty to account to Lessee with respect thereto except as provided below. If Lessor actually sells or re-leases the Equipment, it will credit the net proceeds of any sale of the Equipment, or the net present value (discounted at the then current Prime Rate) of the rents payable under any new lease of the Equipment, against and up to (but not exceeding) the Stipulated Loss Value of the Equipment and any other amounts Lessee owes Lessor, or will reimburse Lessee for and up to (but not exceeding) Lessee's payment thereof. The term "net" as used above shall mean such amount after deducting the costs and expenses described in clause (e) above of this section. If Lessor elects in writing not to sell or re-lease any Equipment, it will similarly credit or reimburse Lessee for Lessor's reasonable estimate of such Equipment's Fair Market Value. 16. LESSOR'S RIGHT TO PERFORM: If Lessee fails to make any payment under the Lease or fails to perform any of its other agreements in the Lease (including, without limitation, its agreement to provide insurance coverage as stated in the Lease), Lessor may itself make such payment or perform such agreement, and the amount of such payment and the amount of the expenses of Lessor incurred in connection with such payment or performance shall be deemed to be additional rent, payable by Lessee on demand. 17. FINANCIAL REPORTS: Lessee agrees to furnish to Lessor: (a) annual financial statements setting forth the financial condition and results of operation of Lessee (financial statements shall include balance sheet, income statement and changes in financial position and all notes thereto) within 120 days of the end of each fiscal year of Lessee; (b) upon Lessor's request, quarterly financial statements setting forth the financial condition and results of operation of Lessee within 60 days of the end of each of the first three fiscal quarters of Lessee; and (c) such other financial information as Lessor may from time to time reasonably request including, without limitation, financial reports filed by Lessee with federal or state regulatory agencies. All such financial information shall be prepared in accordance with generally accepted accounting principles. 18. NO CHANGES IN LESSEE: Lessee shall not: (a) liquidate, dissolve or suspend business; (b) sell, transfer or otherwise dispose of all or a majority of its assets, except that Lessee may sell its inventory in the ordinary course of its business; (c) enter into any merger, consolidation or similar reorganization unless it is the surviving corporation; (d) transfer all or any substantial part of its operations or assets outside of the United States of America; or (e) without 30 days advance written notice to Lessor, change its name or chief place of business. 19. LATE CHARGES: If any rent or other amount payable under the Lease is not paid when due, then as compensation for the administration and enforcement of Lessee's obligation to make timely payments, Lessee shall pay with respect to each overdue payment on demand an amount equal to the greater of fifteen dollars ($15.00) or five percent (5%) of the each overdue payment (but not to exceed the highest late charge permitted by applicable law) plus any collection agency fees and expenses. 20. NOTICES; POWER OF ATTORNEY: (a) Service of all notices under the Lease shall be sufficient if given personally or couriered or mailed to the party involved at its respective address set forth herein or at such other address as such party may provide in writing from time to time. Any such notice mailed to such address shall be effective three days after deposit in the United States mail with postage prepaid. (b) With respect to any power of attorney covered by the Lease, the powers conferred on Lessor thereby: are powers coupled with an interest; are irrevocable; are solely to protect Lessor's interests under the Lease; and do not impose any duty on Lessor to exercise such powers. Lessor shall be accountable solely for amounts it actually receives as a result of its exercise of such powers. 21. ASSIGNMENT BY LESSOR: Lessor and any assignee of Lessor, with or without notice to or consent of Lessee, may sell, assign, transfer or grant a security interest in all or any part of Lessor's rights, obligations, title or interest in the Equipment, the Lease, any Schedule or the amounts payable under the Lease or any Schedule to any entity ("transferee"). The transferee shall succeed to all of Lessor's rights in respect to the Lease (including, without limitation, all rights to insurance and indemnity protection described in the Lease). Lessee agrees to sign any acknowledgement and other documents reasonably requested by Lessor or the transferee in connection with any such transfer transaction. Lessee, upon receiving notice of any such transfer transaction, shall comply with the terms and conditions thereof. Lessee agrees that it shall not assert against any transferee any claim, defense, setoff, deduction or counterclaim which Lessee may now or hereafter be entitled to assert against Lessor. Unless otherwise agreed in writing, the transfer transaction shall not relieve Lessor of any of its obligations to Lessee under the Lease and Lessee agrees that the transfer transaction shall not be construed as being an assumption of such obligations by the transferee. Page 5 22. NO ASSIGNMENT, SUBLEASE OR LIEN BY LESSEE: LESSEE SHALL NOT, DIRECTLY OR INDIRECTLY (a) MORTGAGE, ASSIGN, SELL, TRANSFER, OR OTHERWISE DISPOSE OF THE LEASE OR ANY INTEREST THEREIN OR THE EQUIPMENT OR ANY PART THEREOF, OR (b) SUBLEASE, RENT, LEND OR TRANSFER POSSESSION OR USE OF THE EQUIPMENT OR ANY PART THEREOF TO ANY PARTY, OR (c) CREATE, INCUR, GRANT, ASSUME OR ALLOW TO EXIST ANY LIEN ON THE LEASE, ANY SCHEDULE, THE EQUIPMENT OR ANY PART THEREOF. 23. EXPIRATION OF LEASE TERM: (a) At least 90 days (or earlier if otherwise specified), but no more than 270 days prior to expiration of the Lease Term of each Schedule, Lessee shall give Lessor written notice of its electing one of the following options for all (but not less than all) of the Equipment covered by such Schedule: return the Equipment under clause (b) below; or purchase the Equipment under clause (c) below. The election of an option shall be irrevocable. If Lessee fails to give timely notice of its election, it shall be deemed to have elected to return the Equipment. (b) If Lessee elects or is deemed to have elected to return the Equipment at the expiration of the Lease Term of a Schedule or if Lessee is obligated at any time to return the Equipment, then Lessee shall, at its sole expense and risk, deinstall, disassemble, pack, crate, insure and return the Equipment to Lessor (all in accordance with applicable industry standards) at any location in the continental United States of America selected by Lessor. The Equipment shall be in the same condition as when received by Lessee, reasonable wear, tear and depreciation resulting from normal and proper use excepted (or, if applicable, in the condition set forth in the Lease or the Schedule), shall be in good operating order and maintenance as required by the Lease, shall be certified as being eligible for any available manufacturer's maintenance program, shall be free and clear of any Liens as required by the Lease, shall comply with all applicable laws and regulations and shall include all manuals, specifications, repair and maintenance records and similar documents. Until Equipment is returned as required above, all terms of the Lease shall remain in full force and effect including, without limitation, obligations to pay rent and insure the Equipment; provided, that after the expiration of any Schedule and before Lessee has completed its return of the Equipment or its purchase option (if elected), the term of the lease of the Equipment covered by such Schedule shall be month- to-month or such shorter period as may be specified by Lessor. (c) If Lessee gives Lessor timely notice of its election to purchase Equipment, then on the expiration date of the applicable Schedule Lessee shall purchase all (but not less than all) of the Equipment and shall pay to Lessor the Fair Market Value of the Equipment plus all Taxes (other than income taxes on Lessor's gains on such sale), costs and expenses incurred or paid by Lessor in connection with such sale plus all accrued but unpaid amounts due with respect to the Equipment and/or the Schedule. The Stipulated Loss Value or Economic Value of any item of Equipment shall have no bearing or influence on the determination of Fair Market Value under this clause (c). Upon payment in full of the above amounts, and if no default has occurred and is continuing under the Lease, Lessor shall transfer title to such Equipment to Lessee "as-is, where-is" with all faults and without recourse to Lessor and without any representation or warranty of any kind whatsoever by Lessor, express or implied. (d) For purposes of the purchase option of the Lease, the determination of the Fair Market Value of any Equipment shall be determined (1) without deducting any costs of dismantling or removal from the location of use, (2) on the assumption that the Equipment is in the condition required by the applicable return and maintenance provisions of the Lease and is free and clear of any Liens as required by the Lease, and (3) shall be determined by mutual agreement of Lessee and Lessor or, if Lessor and Lessee are not able to agree on such value, by the Appraisal Procedure. "Appraisal Procedure" means the determination of Fair Market Value by an independent appraiser acceptable to Lessor and Lessee, or, if the parties are unable to agree on an acceptable appraiser, by averaging the valuation (disregarding the one which differs the most from the other two) of three independent appraisers, the first appointed by Lessor, the second appointed by Lessee and the third appointed by the first two appraisers. For purposes of the "Remedies" section of the Lease, the Fair Market Value shall be determined by Lessor in good faith and any such valuation shall be on an "as- is, where is" basis without regard to the first sentence of clause (d). Lessee, at its sole expense, shall pay all fees, costs and expenses of the above described appraisers. 24. GOVERNING LAW: THE INTERPRETATION, CONSTRUCTION AND VALIDITY OF THE LEASE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF OHIO. WITH RESPECT TO ANY ACTION BROUGHT BY LESSOR AGAINST LESSEE TO ENFORCE ANY TERM OF THE LEASE, LESSEE HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT IN THE FRANKLIN COUNTY, OHIO, WHERE LESSOR HAS ITS PRINCIPAL PLACE OF BUSINESS AND WHERE PAYMENTS ARE TO BE MADE BY LESSEE. 25. MISCELLANEOUS: (a) Subject to the limitations herein, the Lease shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, administrators, successors and assigns. (b) This Master Lease Agreement and each Schedule may be executed in any number of counterparts, which together shall constitute a single instrument. Only one counterpart of each Schedule shall be marked "Lessor's Original" and all other counterparts shall be marked "Duplicate". A security interest in any Schedule may be created through transfer and possession only of the counterpart marked "Lessor's Original". (c) Section and paragraph headings in this Master Lease Agreement and the Schedules are for convenience only and have no independent meaning. (d) The terms of the Lease shall be severable and if any term thereof is declared unconscionable, invalid, illegal or void, in whole or in part, the decision so holding shall not be construed as impairing the other Page 6 terms of the Lease and the Lease shall continue in full force and effect as if such invalid, illegal, void or unconscionable term were not originally included herein. (e) All indemnity obligations of Lessee under the Lease and all rights, benefits and protections provided to Lessor by warranty disclaimers shall survive the cancellation, expiration or termination of the Lease. (f) Lessor shall not be liable to Lessee for any indirect, consequential or special damages for any reason whatsoever. (g) Each payment made by Lessee shall be applied by Lessor in such manner as Lessor determines in its discretion which may include, without limitation, application as follows: first, to accrued late charges; second, to accrued rent; and third, the balance to any other amounts then due and payable by Lessee under the Lease. (h) If the Lease is signed by more than one Lessee, each of such Lessees shall be jointly and severally liable for payment and performance of all of Lessee's obligations under the Lease. 26. ENTIRE AGREEMENT: THE LEASE REPRESENTS THE FINAL, COMPLETE AND ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO. THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS OR UNDERSTANDINGS AFFECTING THE LEASE OR THE EQUIPMENT. Lessee agrees that Lessor is not the agent of any manufacturer or supplier, that no manufacturer or supplier is an agent of Lessor, and that any representation, warranty or agreement made by manufacturer, supplier or by their employees, sales representatives or agents shall not be binding on Lessor. 27. JURY WAIVER: ALL PARTIES TO THIS MASTER LEASE AGREEMENT WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY RELATED TO THIS MASTER LEASE AGREEMENT. IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Master Lease Agreement as of the date first written above. READY MIX, INC. BANC ONE LEASING CORPORATION (Lessee) (Lessor) By: /s/ Kenneth D. Nelson By: /s/ [SIGNATURE ILLEGIBLE] ---------------------------- ---------------------------------- Title: Vice President Title: [ILLEGIBLE] ------------------------- ------------------------------- Lessee's Witness: /s/ Julie L. Bergo ----------------------------- Regardless of any prior, present or future oral agreement or course of dealing, no term or condition of the Lease may be amended, modified, waived, discharged, cancelled or terminated except by a written instrument signed by the party to be bound; except Lessee authorizes Lessor to complete the Acceptance Date of each Schedule and the serial numbers of any Equipment. READY MIX, INC. BANC ONE LEASING CORPORATION (Lessee) (Lessor) By: /s/ Kenneth D. Nelson By: /s/ [SIGNATURE ILLEGIBLE] ---------------------------- ------------------------------ Title: Vice President Title: [ILLEGIBLE] ------------------------ --------------------------- Page 7 EX-10.111 18 CONTRACT BETWEEN REGISTRANT AND AZ DEPT. OF TRANS. EXHIBIT 10.111 CONTRACT AGREEMENT THIS AGREEMENT, made and entered into this 24TH day of AUGUST, 1999. by and between the STATE OF ARIZONA, acting by and through its State Engineer duly authorized by the Department of Transportation to enter into such agreement, party of the first part, and ___________________________ MEADOW VALLEY CONTRACTORS, INC. - ------------------------------------------------------------------------------- hereinafter called the Contractor, party of the second part. WITNESSETH: That the said Contractor, for in consideration of the sum to be paid him by said State Arizona in the manner and at the time hereinafter provided, and of the other covenants and agreements herein contained, hereby agrees, for himself, heirs, administrators, successors and assigns as follows: ARTICLE I - SCOPE OF WORK: The Contractor shall perform in a workmanlike and substantial manner and to the satisfaction of the State Engineer, all the work specified under TRACS/Project No. 089A YV 355 H274101C STP-366(19)P PRESCOTT-FLAGSTAFF HIGHWAY (Cottonwood-Cornville Road) and furnish at his own cost and expense all necessary machinery, tools, apparatus, materials and labor to complete the work in the most substantial and workmanlike manner according to the Plans and Specifications therefor on file with the State Engineer and such modifications of the same and other directions that may be made by the State Engineer as provided herein. ARTICLE II - CONTRACT DOCUMENTS: It is further agreed that the Proposal, Plans, Standard Specifications, Special Provisions, Contract Bond(s) and any and all Supplementary Agreements, and any and all requirements necessary to complete the work in a substantial and acceptable manner, and any and all equipment and progress statements required, are hereby referred to and made a part of this contract, and shall have the same force and effect as though all of the same were fully inserted herein. ARTICLE III - WARRANTY: The Contractor expressly warrants that he is free from obligation of any other person or persons for services rendered, or supposed to have rendered, in the procurement of this contract. He further agrees that any breach of the Warranty shall constitute adequate cause for the annulment of the Contract by the State of Arizona and that the State of Arizona may retain to its own use from any sums of money due or become due thereunder, an amount thereof equal to any brokerage, commission, or percentage so paid, or agreed to be paid. ARTICLE IV - TIME OF COMPLETION: The Contractor further covenants and agrees that all of the said materials shall be furnished and delivered and all of the said labor shall be done and performed in every respect to the satisfaction and approval of the State Engineer and that the said work shall be turned over to the State Engineer, complete and ready for use, on or before the specified time herein. The work shall be free am discharged of all claims and demands whatsoever for, or on account of any and all labor and materials used or furnished to be used in said work. It is expressly understood and agreed that in case of failure on the part of the Contractor, for any reason, except with the written consent of the State Engineer, to complete the entire work to the satisfaction of the State Engineer, and within the aforesaid time limit, the party of the first part shall deduct from any money due, or which may become due the Contractor, as liquidated damages, an amount in accordance with Subsection 108.09 of the Contract Specifications. If no money shall be due the Contractor, the State shall have a cause of action to recover against the Contractor in a court of competent jurisdiction, liquidated damages, in accordance with Subsection 108.09 of the Contract Specifications, said deduction to be made, or said sum to be recovered, not as a penalty, but as liquidated damages; provided, however, that upon receipt of written notice from the Contractor, of the existence of causes, as herein provided, over which said Contractor has no control and which must delay the completion of said work or any delay occasioned by the Arizona Department of Transportation, the State Engineer may extend the period hereinbefore specified for the completion of said work in accordance with the Specifications and in such case, the Contractor shall become liable for said liquidated damages for delays commencing from date said extension period shall expire. After the date as set up in Contract plus any extension granted, no further payments shall be made the Contractor until all work is completed and accepted by the State engineer. It is also agreed that the date of completion shall be that upon which the work is accepted by the State Engineer. ARTICLE V - CLAIMS FOR EXTRA WORK: It is distinctly understood and agreed that no claim for extra work or materials, not specifically herein provided, done or furnished by the Contractor, will be allowed by the State Engineer, nor shall the Contractor do any work or furnish any materials not covered by these Specifications and Contract, unless such work is ordered in writing by the State Engineer. In no event shall the Contractor incur any liability by reason of any oral direction or instruction that he may be given by the State Engineer, or his authorized representatives. It is the intent and meaning of this Article that all orders, directions, instructions, not contained in the Plans, Specifications, and Special Provisions, pertaining to the work shall be in writing, and the Contractor hereby waives any claims for compensation for work done, or materials furnished in violation thereof. ARTICLE VI - MISUNDERSTANDING OR DECEPTION: The party of the second part agrees that he has investigated the site of the work and all parts and appurtenances thereto and hereby waives any right to plead misunderstanding or deception as to location, character of work or materials, estimates of quantities or other conditions surrounding or being a part of the work and understands that the quantities given in the Bidding Schedule are approximate only, and hereby agrees to accept the quantities as actually placed and finally determined upon the completion of the work, in accordance with the Contract Documents. ARTICLE VII - PAYMENTS: For and in consideration of the faithful performance of the work herein embraced, as set forth in the Contract Agreement, Specifications, Special Provisions, Bidding Schedule and all general and detailed Specifications and Plans, which are a part hereof, and in accordance with the directions of the State Engineer and to his satisfaction or his authorized agents, the said State of Arizona agrees to pay to said Contractor the amount earned, computed from the actual quantities of work performed, as shown by the estimates of the State Engineer, and the unit prices named in the attached Bidding Schedule and Supplementary Agreements made a part hereof, and to make such payments in the manner and the time provided in the specifications hereto appended. Sheet 1 of 2 ARTICLE VIII - IT IS EXPRESSLY UNDERSTOOD AND AGREED that no work shall be done nor any obligations incurred under this contract during any fiscal year which are in excess of the funds programmed and budgeted for this project for that fiscal year. ARTICLE IX - THE CONTRACTOR SHALL INDEMNIFY AND SAVE HARMLESS THE STATE, its officers and employees, from all suits, actions or claims of any character brought because of any injuries or damage received or sustained by any person, persons or property on account of the operations of the said contractor or an account of or in consequence of any neglect in safeguarding the work; or through use of unacceptable materials in constructing the work; or because of any act or omission, neglect or misconduct of said contractor; or because of any claims or amounts recovered from any infringements of patent, trademark or copyright; or from any claims or amounts arising or recovered under the Workmen's Compensation Act or any other law, ordinance, order or decree, except the contractor is not required to indemnify or save harmless the State from liability arising from the negligence of the State. The contractor shall indemnify and save harmless any county or incorporated city, its officers and employees, within the limits of which county or incorporated city work is being performed, all in the same manner and to the same extent as provided in the above paragraph. IT IS FURTHER UNDERSTOOD AND AGREED that all work required to be done under this contract in excess of the funds now appropriated and budgeted for this project shall not be done nor any obligation incurred therefor until such time as the Legislature appropriates the additional funds and the same are budgeted for this project by the Arizona Department of Transportation and in that event the parties hereto are bound to continue performance of this contract to the extent permitted by the funds so appropriated and budgeted. In the event that no funds are appropriated or budgeted for this project for the succeeding fiscal year, then this contract shall be null and void, except as to that portion for which funds have now been appropriated and budgeted, therefore, and no right of action or damages shall accrue to the benefit of the parties hereto as to that portion of the contract that may so become null and void. All parties are hereby put on notice that this contract (agreement) is subject to cancellation by the Governor pursuant to Arizona Revised Statutes Section 38-511. IT IS ALSO UNDERSTOOD AND AGREED that this contract is subject to A.R.S. 28-1824, 28-1825, 28-1826, together with all other limitations pursuant to the applicable laws of the State of Arizona relating to public contracts and expenditures. 089A YV 355 H274101C STP-366(19)P PRESCOTT-FLAGSTAFF HIGHWAY (Cottonwood-Cornville Road) Witness our hands and seals this 24TH day of AUGUST 19 99 ---- ----------- ---- STATE OF ARIZONA By: /s/ [ILLEGIBLE] -------------------------------------- Department of Transportation EVIDENCE OF AUTHORITY TO SIGN THE CONTRACT MUST BE ON FILE WITH THE DEPARTMENT, OTHERWISE IT MUST BE FURNISHED WITH THE PROPOSAL. PARTY OF THE FIRST PART ____________________________________________ By: /s/ Bradley E. Larson President ---------------------------------------- Contractor Meadow Valley Contractors, Inc. Attest: /s/ Robert W. Bottcher PARTY OF THE SECOND PART ----------------------- Seal Article IX Revised 6/15/98 Contract Agreement Sheet 2 of 2 Page 15 of 16 BID SCHEDULE 089A YV 355 H274101C
- ------------------------------------------------------------------------------------------------------------------------------- Item No. Item Description Unit Quantity Unit Price Extended Amount - ------------------------------------------------------------------------------------------------------------------------------- CONCRETE BOX CULVERT, STA 236+57.90 - ------------------------------------------------------------------------------------------------------------------------------- 2030401 D DRAINAGE EXCAVATION CU.YD 70 5.00 350.00 - ------------------------------------------------------------------------------------------------------------------------------- 2030501 D STRUCTURAL EXCAVATION CU.YD 755 10.00 7,550.00 - ------------------------------------------------------------------------------------------------------------------------------- 2030506 D STRUCTURE BACKFILL CU.YD 463 20.00 9,260.00 - ------------------------------------------------------------------------------------------------------------------------------- 6010002 D STRUCTURAL CONCRETE (CLASS S) (F'C = 3,000) CU.YD 279 275.00 76,725.00 - ------------------------------------------------------------------------------------------------------------------------------- 6050002 D REINFORCING STEEL LB 46,236 0.40 18,494.40 - -------------------------------------------------------------------------------------------------------------------------------
"A" Amount ---------------------- CONSTRUCTION COST BID: 4,494,190.12 ---------------------- EX-10.112 19 CONTRACT BETWEEN REGISTRANT AND AZ DEPT. OF TRANS. EXHIBIT 10.112 CONTRACT AGREEMENT THIS AGREEMENT, made and entered into this 27TH day of SEPTEMBER , 1999 -------- ----------- ---- by and between the STATE OF ARIZONA, acting by and through its State Engineer duly authorized by the Director, Arizona Department of Transportation to enter into such agreement, party of the first part, and _________________________________________________ MEADOW VALLEY CONTRACTORS, INC. - -------------------------------------------------------------------------------- hereinafter called the Contractor, party of the second part. WITNESSETH: That the said Contractor, for in consideration of the sum to be paid him by said State Arizona in the manner and at the time hereinafter provided, and of the other covenants and agreements herein contained, hereby agrees, for himself, heirs, administrators, successors and assigns as follows: ARTICLE I - SCOPE OF WORK: The Contractor shall perform in a workmanlike and substantial manner and to the satisfaction of the State Engineer, all the work specified under TRACS/Project No. 040 AP 320 H443301C AC-IM-40-5(103)P HOLBROOK - LUPTON HWY (Pinta T.I. - McCarrell T.I.) and furnish at his own cost and expense all necessary machinery, tools, apparatus, materials and labor to complete the work in the most substantial and workmanlike manner according to the Plans and Specifications therefor on file with the State Engineer and such modifications of the same and other directions that may be made by the State Engineer as provided herein. ARTICLE II - CONTRACT DOCUMENTS: It is further agreed that the Proposal, Plans, Standard Specifications, Special Provisions, Contract Bond(s) and any and all Supplementary Agreements, and any and all requirements necessary to complete the work in a substantial and acceptable manner, and any and all equipment and progress statements required, are hereby referred to and made a part of this contract, and shall have the same force and effect as though all of the same were fully inserted herein. ARTICLE III - WARRANTY: The Contractor expressly warrants that he is free from obligation of any other person or persons for services rendered, or supposed to have rendered, in the procurement of this contract. He further agrees that any breach of the Warranty shall constitute adequate cause for the annulment of the Contract by the State of Arizona and that the State of Arizona may retain to its own use from any sums of money due or become due thereunder, an amount thereof equal to any brokerage, commission, or percentage so paid, or agreed to be paid. ARTICLE IV - TIME OF COMPLETION: The Contractor further covenants and agrees that all of the said materials shall be furnished and delivered and all of the said labor shall be done and performed in every respect to the satisfaction and approval of the State Engineer and that the said work shall be turned over to the State Engineer, complete and ready for use, on or before the specified time herein. The work shall be free and discharged of all claims and demands whatsoever for, or on account of any and all labor and materials used or furnished to be used in said work. It is expressly understood and agreed that in case of failure on the part of the Contractor, for any reason, except with the written consent of the State Engineer, to complete the entire work to the satisfaction of the State Engineer, and within the aforesaid time limit, the party of the first part shall deduct from any money due, or which may become due the Contractor, as liquidated damages, an amount in accordance with Subsection 108.09 of the Contract Specifications. If no money shall be due the Contractor, the State shall have a cause of action to recover against the Contractor in a court of competent jurisdiction, liquidated damages, in accordance with Subsection 108.09 of the Contract Specifications, said deduction to be made, or said sum to be recovered, not as a penalty, but as liquidated damages; provided, however, that upon receipt of written notice from the Contractor, of the existence of causes, as herein provided, over which said Contractor has no control and which must delay the completion of said work or any delay occasioned by the Arizona Department of Transportation, the State Engineer may extend the period hereinbefore specified for the completion of said work in accordance with the Specifications and in such case, the Contractor shall become liable for said liquidated damages for delays commencing from date said extension period shall expire. After the date as set up in Contract plus any extension granted, no further payments shall be made the Contractor until all work is completed and accepted by the State engineer. It is also agreed that the date of completion shall be that upon which the work is accepted by the State Engineer. ARTICLE V - CLAIMS FOR EXTRA WORK: It is distinctly understood and agreed that no claim for extra work or materials, not specifically herein provided, done or furnished by the Contractor, will be allowed by the State Engineer, nor shall the Contractor do any work or furnish any materials not covered by these Specifications and Contract, unless such work is ordered in writing by the State Engineer. In no event shall the Contractor incur any liability by reason of any oral direction or instruction that he may be given by the State Engineer, or his authorized representatives. It is the intent and meaning of this Article that all orders, directions, instructions, not contained in the Plans, Specifications, and Special Provisions, pertaining to the work shall be in writing, and the Contractor hereby waives any claims for compensation for work done, or materials furnished in violation thereof. ARTICLE VI - MISUNDERSTANDING OR DECEPTION: The party of the second part agrees that he has investigated the site of the work and all parts and appurtenances thereto and hereby waives any right to plead misunderstanding or deception as to location, character of work or materials, estimates of quantities or other conditions surrounding or being a part of the work and understands that the quantities given in the Bidding Schedule are approximate only, and hereby agrees to accept the quantities as actually placed and finally determined upon the completion of the work, in accordance with the Contract Documents. ARTICLE VII - PAYMENTS: For and in consideration of the faithful performance of the work herein embraced, as set forth in the Contract Agreement, Specifications, Special Provisions, Bidding Schedule and all general and detailed Specifications and Plans, which are a part hereof, and in accordance with the directions of the State Engineer and to his satisfaction or his authorized agents, the said State of Arizona agrees to pay to said Contractor the amount earned, computed from the actual quantities of work performed, as shown by the estimates of the State Engineer, and the unit prices named in the attached Bidding Schedule and Supplementary Agreements made a part hereof, and to make such payments in the manner and at the time provided in the specifications hereto appended. Sheet 1 of 2 ARTICLE VIII - IT IS EXPRESSLY UNDERSTOOD AND AGREED that no work shall be done nor any obligations incurred under this contract during any fiscal year which are in excess of the funds programmed and budgeted for this project for that fiscal year. ARTICLE IX - THE CONTRACTOR SHALL INDEMNIFY AND SAVE HARMLESS THE STATE, its officers and employees, from all suits, actions or claims of any character brought because of any injuries or damage received or sustained by any person, persons or property on account of the operations of the said contractor or an account of or in consequence of any neglect in safeguarding the work; or through use of unacceptable materials in constructing the work; or because of any act or omission, neglect or misconduct of said contractor; or because of any claims or amounts recovered from any infringements of patent, trademark or copyright; or from any claims or amounts arising or recovered under the Workmen's Compensation Act or any other law, ordinance, order or decree, except the contractor is not required to indemnify or save harmless the State from liability arising from the negligence of the State. The contractor shall indemnify and save harmless any county or incorporated city, its officers and employees, within the limits of which county or incorporated city work is being performed, all in the same manner and to the same extent as provided in the above paragraph. IT IS FURTHER UNDERSTOOD AND AGREED that all work required to be done under this contract in excess of the funds now appropriated and budgeted for this project shall not be done nor any obligation incurred therefor until such time as the Legislature appropriates the additional funds and the same are budgeted for this project by the Arizona Department of Transportation and in that event the parties hereto are bound to continue performance of this contract to the extent permitted by the funds so appropriated and budgeted. In the event that no funds are appropriated or budgeted for this project for the succeeding fiscal year, then this contract shall be null and void, except as to that portion for which funds have now been appropriated and budgeted, therefore, and no right of action or damages shall accrue to the benefit of the parties hereto as to that portion of the contract that may so become null and void. All parties are hereby put on notice that this contract (agreement) is subject to cancellation by the Governor pursuant to Arizona Revised Statutes Section 38-511. IT IS ALSO UNDERSTOOD AND AGREED that this contract is subject to A.R.S. 28-1824, 28-1825, 28-1826, together with all other limitations pursuant to the applicable laws of the State of Arizona relating to public contracts and expenditures. 040 AP 320 H443301C AC-IM-40-5(103)P HOLBROOK - LUPTON HWY (Pinta T.I. - McCarrell T.I.) Witness our hands and seals this 27TH day of SEPTEMBER 1999 ------ ----------- ---- STATE OF ARIZONA By: /s/ [ILLEGIBLE]^^ ---------------------------------- Department of Transportation EVIDENCE OF AUTHORITY TO SIGN THE CONTRACT MUST BE ON FILE WITH THE DEPARTMENT, OTHERWISE IT MUST BE FURNISHED WITH THE PROPOSAL. PARTY OF THE FIRST PART Meadow Valley Contractors, Inc. ------------------------------------- By: /s/ Bradley E. Larson ---------------------------------- Contractor Attest: /s/ [ILLEGIBLE]^^ PARTY OF THE SECOND PART ------------------------- Seal Sheet 2 of 2 Page 11 of 11 BID SCHEDULE 040 AP 318 H443301C
- ------------------------------------------------------------------------------------------------------------------------------------ Item No. Item Description Unit Quantity Unit Price Extended Amount - ------------------------------------------------------------------------------------------------------------------------------------ McCARRELL T.I.: BRIDGE NO. 710 - ------------------------------------------------------------------------------------------------------------------------------------ 9240142 C MISCELLANEOUS WORK (MICROSILICA MODIFIED CONCRETE FOR OVERLAY AND DECK REPAIR) CU.YD. 33 3,150.00 103,950.00 - ------------------------------------------------------------------------------------------------------------------------------------
-------------------------------- BID TOTAL: 9,047,700.00 -------------------------------- EX-10.113 20 CONTRACT BETWEEN REGISTRANT AND UT DEPT OF TRANS. \ EXHIBIT 10.113 CONTRACT THIS AGREEMENT, made and executed in Four (3) original counterparts this 26/th/ day of July ___________________ A.D. 1999 between the Utah Department of Transportation, hereinafter called "Department," first party, and Meadow Valley Contractor's, Inc. hereinafter called "Contractor," second party. WITNESSETH, That for and in consideration of payments, hereinafter mentioned, to be made by the Department, the Contractor agrees to furnish all labor and equipment; to furnish and deliver all materials not specifically mentioned as being furnished by the Department and to do and perform all work in the Construction of Cherry Hill Interchange in Davis County, State of Utah, a State Funded project, the same being identified as *HDP-9124(003) for the approximate sum of Seventeen Million Five Hundred Twenty One Thousand and 00/100 Dollars ($17,521,000.00). The Contractor further covenants and agrees that all of said work and labor shall be done and performed in the best and most workmanlike manner and in strict conformity with the plans, and specifications. The said plans and specifications and the notice to contractors, instruction to bidders, the proposal, special provisions and contract bond are hereby made a part of this agreement as fully and to the same effect as if the same had been set forth at length herein. In consideration of the foregoing premises, the Department agrees to pay to Contractor in the manner and in the amount provided in the said specification and proposal. IN WITNESS WHEREOF, the parties hereto have subscribed their names through their proper officers thereunto duly authorized as of the day and year first above written. Attest: UTAH DEPARTMENT OF TRANSPORTATION /s/ [ILLEGIBLE]^^ - ------------------------------ /s/ [ILLEGIBLE]^^ Secretary ----------------------------------------- Director of Transportation - First Party Witnesses: /s/ [ILLEGIBLE]^^ - ------------------------------ Meadow Valley Contractor's Inc. ______________________________ ----------------------------------------- Second Party Approved as to form: by /s/ [ILLEGIBLE]^^ --------------------------------------- /s/ [ILLEGIBLE]^^ UTAH AREA MANAGER - ------------------------------ --------------------------------------- Assistant Attorney General Title APPROVED _____________________ _______________________________________ Director of Finance Utah Contractor License Number FUNDS AVAILABLE________________________ /s/ Janet Steadman 8/03/99 ------------------------ ------------- Budget Officer Date EX-10.114 21 CONTRACT BETWEEN REGISTRANT AND FLOOD CONTROL EXHIBIT 10.114 CONTRACT AGREEMENT THIS AGREEMENT, made and entered into this 30th day of December, 1999 by and ---- -------------- between the FLOOD CONTROL DISTRICT OF MARICOPA COUNTY, hereinafter called the Owner, acting by and through its BOARD OF DIRECTORS, and Meadow Valley ------------- Contractors, Inc., hereinafter called the Contractor. - ----------------- WITNESSETH: That the said Contractor, for and in the consideration of the sum of thirteen million, thirty-seven thousand, seven hundred forty-one dollars - --------------------------------------------------------------------------- ($13,037,741.00) to be paid to him by the Owner, in the manner and at the times - --------------- hereinafter provided, and of the other covenants and agreements herein contained, hereby agrees for himself, heirs, executors, administrators, successors, and assigns as follows: ARTICLE I - SCOPE OF WORK: THE Contractor shall construct, and complete in a workmanlike and substantial manner and to the satisfaction of the Chief ----- Engineer and General Manager, a project for the Flood Control District of - ---------------------------- ------------------------- Maricopa County, designated as Contract FCD 99-05 - Phase 3 of the Santa - --------------- ----------------------------------------- Collector Channel Project, and furnish at its own cost and expense all - ------------------------- necessary machinery, equipment, tools, apparatus, materials, and labor to complete the work in the most substantial and workmanlike manner according to the Plans and Construction Specifications on file with the Flood Control ------------- District of Maricopa County, 2801 West Durango Street, Phoenix, Arizona, and - ----------------------------------------------------------------------- such modifications of the same and other directions that may be made by the Flood Control District of Maricopa County as provided herein. - ----------------------------------------- ARTICLE II - CONTRACT DOCUMENTS: The Construction Specifications, i.e. Invitation to Bid, Plans, Standard Specifications and Details, Supplementary General Conditions, Special Provisions, Addenda, if any, Proposal, Affidavits, Performance Bond, Payment Bond, Certificates of Insurance, and Change Orders, if any, are by this reference made a part of this Contract and shall have the same effect as though all of the same were fully inserted herein. ARTICLE III - TIME OF COMPLETION: The Contractor further covenants and agrees at its own proper cost and expense, to do all work as aforesaid for the construction of said improvements and to completely construct the same and install the material therein, as called for by this agreement free and clear of all claims, liens, and charges whatsoever, in the manner and under the conditions specified within three hundred sixty-five (365) calendar days following notice to proceed. ARTICLE IV - PAYMENTS: For and in consideration of the faithful performance of the work herein embraced as set forth in the Contract Documents, which are a part hereof and in accordance with the directions of the Owner, through its Engineer and to its satisfaction, the Owner agrees to pay the said Contractor the amount earned, computed from actual quantities of work performed and accepted or materials furnished at the unit bid price on the Proposal made a part hereof, and to make such payment in accordance with the requirements of A.R.S. Section 34-221, as amended. The Contractor agrees to discharge its obligations and make payments to its subcontractors and suppliers in accordance with A.R.S. Section 34-221. Page 20 of 29 ARTICLE V - TERMINATION: The Owner hereby gives notice that pursuant to A.R.S. Section 38-511(A) this contract may be canceled without penalty or further obligation within three years after execution if any person significantly involved in initiation, negotiation, securing, drafting or creating a contract on behalf of the Owner is, at any time while the contract or any extension of the contract is in effect, an employee or agent of any other party to the contract in any capacity or a consultant to any other party of the contract with respect to the subject matter of the contract. Cancellation under this section shall be effective when written notice from the Chief Engineer and General Manager of the Owner is received by all of the parties to the contract. In addition, the Owner may recoup any fee for commission paid or due to any person significantly involved in initiation, negotiation, securing, drafting or creating the contract on behalf of the Owner from any other party to the contract arising as a result of the contract. ARTICLE VI - NEGOTIATION CLAUSE: Recovery of damages related to expenses incurred by the Contractor for a delay for which the Owner is responsible, which is unreasonable under the circumstances and which was not within the contemplation of the parties to the contract, shall be negotiated between the Contractor and the Owner. This provision shall be construed so as to give full effect to any provision in the contract which requires notice of delays, provides for arbitration or other procedure for settlement or provides for liquidated damages. ARTICLE VII - COMPLIANCE WITH LAWS: The Contractor is required to comply with all Federal, State and local ordinances and regulation. The Contractor's signature on this contract certifies compliance with the provisions of the I-9 requirements of the Immigration Reform Control Act of 1986 for all personnel that the Contractor and any subcontractors employ to complete this project. It is understood that the Owner shall conduct itself in accordance with the provisions of the Maricopa County Procurement Code. ARTICLE VIII - MBE/WBE PROGRAM: The Owner will endeavor to ensure in every way possible that minority and women-owned business enterprises shall have every opportunity to participate in providing professional services, purchased goods, and contractual services to the Owner without being discriminated against on the grounds of race, religion, sex, age, disability, or national origin. The City of Phoenix and Maricopa County Minority, Woman and Disadvantaged Business Enterprise Program is incorporated by reference. ARTICLE IX - ANTI-DISCRIMINATION PROVISION: The Contractor agrees not to discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, age, or disability and further agrees not to engage in any unlawful employment practices. The Contractor further agrees to insert the foregoing provision in all subcontracts hereunder. Page 21 of 29 IN WITNESS WHEREOF: Five (5) identical counterparts of this Contract, each of which shall for all purposes be deemed an original thereof, have been duly executed by the parties hereinabove named, on the date and year first above written. Meadow Valley Contractors, Inc. - -------------------------------------- Party of the First Part By /s/ Bradley E. Larson ----------------------------------- (Printed Name) (Signature) Title: BRADLEY E. LARSON PRESIDENT ------------------------------- Date: 12/17/99 -------------------------------- 07334324-B - -------------------------------------- Tax Identification Number FLOOD CONTROL DISTRICT OF MARICOPA COUNTY PARTY OF THE SECOND PART RECOMMENDED BY: /s/ [ILLEGIBLE]^^ 12/24/99 By: /s/ [ILLEGIBLE]^^ 12/30/99 - ------------------------------------------------- ---------------------------------------- Chief Engineer and General Manager Date Chairman, Board of Directors Date Flood Control District of Maricopa County ATTEST: /s/ [ILLEGIBLE]^^ 12/30/99 ------------------------------------------ Clerk of the Board 072699 Date
LEGAL REVIEW - ------------ Approved as to form and within the powers and authority granted under the laws of the State of Arizona to the Flood Control District. By: /s/ Julie M. Lemmon 12/23/99 ---------------------------------- District, General Counsel Date Page 22 of 29 EX-10.115 22 CONTRACT BETWEEN REGISTRANT AND JOHNSON DANLEY EXHIBIT 10.115 JOHNSON AND DANLEY CONSTRUCTION CO. SUBCONTRACT AGREEMENT Subcontract No. 9924-01 SUBCONTRACTOR: MEADOW VALLEY CONTRACTORS, INC. PO BOX 60726 PHOENIX, AZ 85082-0726 TELEPHONE: (602) 437-4111 FAX: (602) 437-4114 OWNER: NEW MEXICO STATE HIGHWAY AND TRANSPORTATION DEPARTMENT PROJECT: ALAMOGORDO RELIEF ROUTE, PHASE II NMSH&TD PROJECT NO. SP-4916(202) NMSH&TD CONTROL NO. 3650 J & D PROJECT NO. 9924 SUBCONTRACTORS' NEW MEXICO CONTRACTOR'S LICENSE NO. 068526 In consideration of the mutual promises made herein this 14/th/ day of July, 1999, Johnson & Danley Construction Co. ("Contractor"), and Meadow Valley Contractors, Inc. ("Subcontractor"), a corporation enter into this agreement (the "Subcontract") and agree as follows: 1. Contract Documents. ------------------ 1.1 As used herein, the term "Contract Documents" shall refer to and include this Subcontract and its exhibits, the terms and conditions of the contract between the Contractor and the Owner (the "Prime Contract") along with the drawings, standard specifications, supplementary and special provisions, Contractor's Project schedule, and all addenda, amendments or modifications thereto, the invitation and instruction to bidders, and all other exhibits or documents that form or are made a part of the Prime Contract. The parties agree that the Contract Documents are incorporated herein by reference. 1.2 Subcontractor represents and warrants that it (1) has carefully examined and understands the Contract Documents, (2) is familiar with the conditions and circumstances under which its work will be performed, and (3) is in no way relying upon any opinion or representation of Contractor. 1.3 Subcontractor agrees to comply with and be bound to Contractor by the terms of the Contract Documents and to assume toward Contractor all the duties and obligations that Contractor assumes in the Contract Documents toward the Owner. In case of conflicts or inconsistencies between this Subcontract and the other Contract Documents, the Subcontract shall control. Subcontractor shall bind lower tier subcontractors and suppliers to full compliance with the Contract Documents. 1 17. Miscellaneous. ------------- 17.1 In the event Subcontractor rents, borrows, or otherwise uses any of Contractor's equipment, scaffolding, or other appliances, Subcontractor agrees to accept such items "as is." Any such use shall be at the sole risk of Subcontractor, who hereby agrees to defend, hold harmless and indemnify Contractor against any and all claims, losses, or damages arising from such use. 17.2 Subcontractor shall have available at the job site a supervisory and authorized representative whose qualifications and attendance at the Project site shall be subject to review by the Contractor. Failure to comply with this requirement shall be sufficient grounds for withholding monies due Subcontractor until a qualified supervisor is made available. 17.3 At no time prior to the expiration of any warranty period required by the Contract Documents shall Subcontractor perform any work directly for or deal directly with the Owner or its representatives concerning the Project unless otherwise directed in writing by Contractor. 17.4 Contractor's waiver of any of the provisions of the Subcontract, or Contractor's failure to exercise any options or legal remedies provided herein, shall not be construed as a general waiver of its right thereafter to require such compliance or to exercise such option or remedy. 17.5 This Subcontract constitutes the entire agreement between the parties and supersedes all prior proposals, negotiations and agreements. If any provision of this agreement is found to be invalid or otherwise unenforceable, then the remaining provisions shall remain in full force and effect. 17.6 To be effective, all modifications or amendments to the Subcontract must be in writing. 17.7 This agreement is not effective until signed by the Contractor and delivered or mailed to Subcontractor. 17.8 The Subcontract shall be construed and interpreted according to the laws or the state where the Project is located. 17.9 Initial project survey and staking will be provided by the contractor. Any additional survey will be provided at the following rates: 2 person party - $85.00 per hour, 3 person party - $ 10.00 per hour. JOHNSON AND DANLEY CONSTRUCTION. MEADOW VALLEY CONTRACTORS, INC By /s/ Joel Danley By /s/ Samuel J. Grasmick ------------------------------ -------------------------------------- Title President Title Area Manager -------------------------- ---------------------------------- Date 7/28/99 Date 7/14/99 --------------------------- ----------------------------------- 11 MVCI(SUB) PROJECT: ALAMOGORDO RELIEF ROUTE - PHASE 2 SP-4916 (202): CN 3650 OTERO COUNTY, NEW MEXICO PROJECT NO. 9924 OWNER: NMSH&TD SUBCONTRACTOR: MEADOW VALLEY CONTRACTORS, INC. P.O. BOX 60726 PHOENIX, ARIZONA 85082-4119
- ---------------------------------------------------------------------------------------------- BID UNIT ITEM DESCRIPTION QUANTITY UNIT PRICE AMOUNT - ---------------------------------------------------------------------------------------------- 203011 ENVIRONMENT MONITOR'G 1.00 LS 9,000.00 9,000.00 511000A RDWY STR. CONC. CL.A 1,212.00 CY 260.00 315,120.00 511700 REINF.CONC.MINOR STR. 19.00 CY 550.00 10,450.00 540200 WELDED WIRE FABRIC 24,980.00 LB 1.05 26,229.00 541200 STR.STL FOR MISC STR. 7,814.00 LB 2.50 19,535.00 601000 REM.STR. & OBSTR'NS 1.00 LS 23,900.00 23,900.00 618000 TRAFF.CONTROL MGMT 1.00 LS 95,000.00 95,000.00 620001 NOXIOUS WEED MGMT 1.00 LS 22,300.00 22,300.00 621100 CONTRACTOR QC 1.00 LS 92,000.00 92,000.00 622002 T2 FIELD LAB 1.00 EA 25,000.00 25,000.00 622100 SUPPL. FIELD LAB 1.00 EA 5,252.25 5,252.25 622110 SUPERPAVE FIELD LAB 1.00 EA 25,000.00 25,000.00 702238 8' BARRICADE 8.00 EA 350.00 2,800.00 702800 TRAFFIC CONTROL PLAN 1.00 LS 25,000.00 25,000.00 801000 CONSTRUCTION STAKING 1.00 LS 125,000.00 125,000.00 210000 BRIDGE EXCAV. & BKFL 1,420.00 CY 20.00 28,400.00 502400 SOIL BORINGS 120.00 LF 55.00 6,600.00 505000 X-HOLE SONIC LOGGING 32.00 EA 800.00 25,600.00 505010 LOW STRAIN INT.TESTING 2.00 EA 3,200.00 6,400.00 511000 STRUCT.CONC. CL.A 3,062.00 CY 230.00 704,260.00 511230 4" STRUCT.CONC. CL.B 2,257.00 SY 38.00 85,766.00 511300 SUBSTRUCT.CONC. CL.A 382.00 CY 260.00 99,320.00 511700 REINF.CONC. FOR MINOR 107.00 CY 265.00 28,355.00 512000 SUPERSTRUCT. CONC. 1,123.00 CY 280.00 314,440.00 513054 T54 PS BRIDGE MEMBER 2,295.00 LF 13.00 29,835.00 514032 32" BARRIER RAILING 576.00 SF 43.00 24,768.00 532100 ANTI-GRAFFITI COATING 5,206.00 LB 2.10 10,932.60 540200 WELDED WIRE FABRIC 6,846.00 LB 0.60 4,107.60 541000 STR.STL FOR BRIDGES 9,048.00 LB 2.60 23,524.80 562000 BRIDGE JT STRIP SL 215.00 LF 105.00 22,575.00 562100 T-A POLYMER BRIDGE JT 274.00 LF 30.00 8,220.00 - ---------------------------------------------------------------------------------------------- 2,244,690.25 ------------
INCLUSIONS: ALL ABOVE ENUMERATED WORK ITEMS COMPLETE, UNLESS SPECIFICALLY EXCLUDED BELOW. EXCLUSIONS: GROSS RECEIPTS TAXES AND BONDS. Page 1 of 1 New Mexico State Highway and Transportation Department PERMISSION TO SUBCONTRACT REQUEST No. 9924-01 --------------- Date July 14, 1999 -------------- I/We requested your permission to subcontract the work listed below in connection with my/our Project No. SP-4916(202) Control No. 3650 ------------------------------- ------------------- to Meadow Valley Contractors, Inc. ----------------------------------------------------------------------------- whose address is P0 Box 60726, Phoenix, AZ 85082 --------------------------------------------------------------- whose license no. is 068526 ------------------------------------------------------------ and whose license classification is ____________________________________________ This subcontractor (a) N/A is (b) N/A is not (check (a) (b) as ----------- ------- appropriate) a DBE Firm. WORK TO BE SUBCONTRACTED
Contract Item No. Description Unit Quantity Unit Price Amount - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- SEE ATTACHED SCOPE OF WORK - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- TOTAL SUBCONTRACTED AMT $ 2,244,690.25 ------------------
This subcontracted amount is 18.1296 % of $ 12,381,289.00 the total contract --------- --------------- amount. Previous amount subcontracted under this contract... $ 0.00 --------------- Total Amount subcontracted to date.................. $2,244,690.25 --------------- Total % subcontracted to date....................... 18.1296 % ---------------
I/We verify that the subcontractor has the appropriate license classification to perform the work, certify that the same plans, specifications, special provisions, and all other contract provisions are to apply to the work under the subcontract as apply to the prime contract, and guarantee that they will be observed and followed by the subcontractor. Copies of the following documents are hereby attached to this application: letters of consent from the bonding company; copy of subcontract; a copy of the subcontractor's "wallet card" issued by the Construction and Industries Division of the Regulation and Licensing Department; assignment of antitrust claims signed by the subcontractor; Form No. A-571 previous performance certification signed by the subcontractor; and if applicable, Form No. A585, DB-A1, Contract Goal for Disadvantage Business in Highway Construction. I/We certify that the following checked provisions are incorporated into the subcontract and that the subcontractor has these provisions in his possession with a signed original form of the subcontract. * N/A Form FHWA-1273 (rev.8-89) * N/A Requirement For Affirmative X NM Minimum wage rates - -------- -------- -------- * N/A Special Provision Specific Action to Ensure Decision No. OT 99-1061A - -------- ------------ EEO Resp.(23 U.S.C. 140) EEO (E.O. 11246) X Wage Rates Notice to -------- * N/A Std. EEO Const. Contract * N/A Notices to Prospective Fed. Aid Contractors - -------- -------- Specification (E.0. 11246) Const. Contractors (9-18-75) X Special Provisions for -------- * N/A Notice to contractors * N/A General wage decision, No.____________ submission of weekly payrolls - -------- -------- modifying above item N/A Special Provision for X Special Provision for -------- -------- * N/A Training Special Provisions DBE participation Apprentices - --------
*NOT REQUIRED ON 100% STATE FUNDED PROJECTS I/We certify that the provisions checked above are in my/our possession and attached to my/our copy of the subcontract. Meadow Valley Contractors, Inc. /s/ Samuel J. Grasmick 7/14/99 - ------------------------------------------------------------------------------------------------------------------------------------ Name of Subcontracting Firm Signature and Title of Official from Subcontracting Firm Date
I/We certify this to be correct and agree to allow audit verification by the New Mexico State Highway and Transportation Department Johnson and Danley Construction Co. /s/ Joel Danley 7/28/99 - ------------------------------------------------------------------------------------------------------------------------------------ Name of Prime Contracting Firm Signature and Title of Official from Prime Contracting Firm Date
RECOMMENDED: __________________________________________ Project Manager Date CONCURRED: APPROVED: ________________________________________________________________________________ District Construction Engineer District Engineer Date EX-27 23 FINANCIAL DATA SCHEDULE
5 12-MOS DEC-31-1999 JAN-01-1999 DEC-31-1999 8,320,996 0 28,213,139 97,324 3,603,517 41,234,240 17,009,945 1,932,272 58,425,361 35,067,079 9,540,448 0 0 3,601 14,809,222 58,425,361 210,002,272 210,002,272 200,070,826 200,070,826 0 0 209,872 3,930,586 1,590,480 2,340,106 0 0 0 2,340,106 .67 .66
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