-----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, F+puLehCXpDDu60RcOihTAZXMxZuYlQ88dEce+3ZxJerdR1Dp2+9Qs2acqW5pQlL Qs/ljcWl6LNWQ8yFg73JHQ== 0000927356-01-000340.txt : 20010330 0000927356-01-000340.hdr.sgml : 20010330 ACCESSION NUMBER: 0000927356-01-000340 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 33 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010329 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: 1584261 BUSINESS ADDRESS: STREET 1: 4411 S 40TH ST STREET 2: STE D-11 CITY: PHOENIX STATE: AZ ZIP: 85040 BUSINESS PHONE: 6024375400 MAIL ADDRESS: STREET 1: 4411 S 40TH ST STREET 2: STE D-11 CITY: PHOENIX STATE: AZ ZIP: 85040 10-K 1 0001.txt 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, 2000 [ ] 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 --- Indicate 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 22, 2001, the aggregate market value of the registrant's voting stock held by non-affiliates was $9,864,628 On February 22, 2001, there were 3,559,938 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 to be disseminated in connection with its Annual Meeting of Shareholders for the year ended December 31, 2000. MEADOW VALLEY CORPORATION ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2000 TABLE OF CONTENTS
PART I PAGE Item 1. Business 3 Item 2. Properties 10 Item 3. Legal Proceedings 11 Item 4. Submission of Matters to a Vote of Security Holders 12 PART II Item 5. Market for the Registrant's Common Stock and Related Stockholders Matters 12 Item 6. Selected Financial Data 13 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 14 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 19 Item 8. Financial Statements and Supplementary Data 20 Item 9. Change in and Disagreements with Accountants on Accounting and Financial Disclosure 20 PART III Item 10. Directors and Executive Officers of the Registrant 20 Item 11. Executive Compensation 20 Item 12. Security Ownership of Certain Beneficial Owners and Management 20 Item 13. Certain Relationships and Related Transactions 20 PART IV Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K 21
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. ("MVCI") 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. MVCI 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 MVCI. In October and November 1995, the Company sold 1,926,250 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 exercisable to purchase one additional share of common stock at $7.20 per share until October 16, 2000. In September 2000, the exercise price of the warrants was reduced to $5.00 per share and the exercise period was extended until June 30, 2002. The Company currently has two subsidiaries. Through Meadow Valley Contractors, Inc., the Company primarily operates as a heavy construction contractor. Through Ready Mix, Inc., the Company is a producer and supplier of construction materials. On the construction side, the Company specializes in public 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. On the construction materials side, the Company operates several sand and gravel pits and quarries from which it manufactures rock and sand products. These products are sold to third parties or are incorporated into ready mix concrete or asphalt, which the Company may use on its own projects. Consistent with the Company's dual interests in construction and construction materials, the Company owns and leases portable hot mix asphalt plants, related asphalt paving equipment, a rubberized asphalt plant, portable wet batch concrete plant and related concrete paving equipment. The portability of these asphalt and concrete paving capabilities provides the Company with an opportunity to expand its existing geographic market, enhance its construction operations in its existing market, improve its competitiveness and generate increased revenues on projects that call for large quantities of asphaltic concrete or Portland cement concrete, recycled asphalt, rubberized asphalt or Portland cement concrete paving. These capabilities also afford the Company the opportunity to provide construction materials or to subcontract its services to other construction companies. The Company's backlog (anticipated revenue from the uncompleted portions of awarded projects) was approximately $75 million at December 31, 2000, which included the remainder of a $96 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, the remainder of the $13.0 million Storm Drain Channel construction, in Chandler, AZ, the remainder of $10.9 million of highway construction and street renovation in Prescott, AZ, the remainder of the $13.9 million renovation and widening of US95 in North Las Vegas, NV, the remainder of the approximately $14.3 million in various highway projects throughout rural Arizona, the remainder of approximately $10.7 million in various highway projects throughout rural Utah, and 3 approximately $5.1 million of work remaining in New Mexico. Approximately $70 million of the Company's backlog is scheduled for completion during 2001. 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 into the construction materials industry with the formation of Ready Mix, Inc. ("RMI") as a wholly owned subsidiary. RMI manufactures and distributes ready mix concrete and owns and operates four ready mix concrete batch plants - two in the Las Vegas, NV area and two in the Phoenix, AZ area and 93 ready mix trucks. RMI also produces the majority of its own rock and sand for its Nevada plants from a crushing and screening plant in Moapa, NV. RMI primarily targets prospective customers such as concrete subcontractors, prime contractors, homebuilders, commercial and industrial property developers, pool builders and homeowners. RMI began its ready mix concrete operation from its first location in North Las Vegas in March 1997, began processing rock and sand from its Moapa pit in November 1999 and expanded into the Phoenix market with two plants in 2000. 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). Business Strategy The Company seeks to grow revenue and improve profitability by continuing to pursue the following business strategy: (i) Expand construction-related niche markets. The Company continues to explore niche markets, which may increase the Company's competitiveness, diversify its revenue base, increase project revenue and improve profitability. (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. The Company owns 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 and strengthen its market 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. By controlling aggregate resources, the Company seeks to enhance its 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 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. The Company may expand or strengthen its construction materials operations by acquiring additional mineral leases on strategic aggregate reserves or acquire other similar businesses. 4 Market Overview According to recent economic forecasts, the total construction market for 2001 is expected to decline only slightly from the robust levels experienced over most of the past decade. While this decline in the total construction market will likely have some affect on the Company, it is believed that it will be minimal due to the fact that public works represent the primary source of the Company's revenue. The Transportation Equity Act for the 21st Century ("TEA 21"), enacted in 1998, and the annual appropriation levels authorized under this legislation give some assurance of continued federal funding through 2003 for transportation infrastructure. Funding from TEA 21, approximately 40% more than previous funding levels from 1993 to 1997, has been slow to materialize in the form of increased construction contracts but it is almost universally believed that the delays in actual construction funding have been primarily due to environmental, planning and design bottlenecks. The anticipated flow in 2001 of federal funds from TEA-21 combined with the existing high volume of infrastructure work in the healthy construction economy of the Company's four-state market leads the Company to concur with most construction forecasts that infrastructure construction (primarily highways, bridges, overpasses, tunnels, airport runways and taxiways and other transportation and heavy civil projects) in the western United States will increase slightly, by from 2% to 6%, over 2000 levels. For the fifth consecutive year, growth in the Company's four-state market has outperformed other 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. According to the 2000 Census published by the U.S. Department of Commerce and the U.S. Census Bureau, the top five states in terms of percentage growth from 1990 to 2000 were: Nevada (+66.3%), Arizona (+40.0%), Colorado (+30.6%), Utah (+29.6%) and Idaho (+28.5%). Fails Management Institute ("FMI"), a leading construction consulting firm, released a ranking of U.S. metropolitan areas in terms of construction growth. For actual dollar growth, Phoenix-Mesa, AZ was ranked first with an expected increase of 26.2% from 2000 to 2001. Tucson, AZ was ranked eighth with an expected increase of 32.3%. Freeway construction programs, funded by sales tax measures, continue to create opportunities for the Company in Phoenix and Las Vegas. The Company's construction materials operations are impacted to a greater degree by the conditions of the residential and commercial sectors of the construction economy. Residential and commercial construction activity in 2001 in Las Vegas, Nevada and Phoenix, Arizona is expected to be less than 2000 levels. Since the primary customers of RMI, the Company's wholly-owned ready mix concrete subsidiary, are residential and commercial builders and subcontractors, the Company may be faced with increased competition from other local suppliers of ready mix concrete, which could, in turn, force materials prices down. 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, Springville, Utah and Alamogordo, 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 for 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-at-completion reports allow project, area and corporate management to be as responsive as possible to cost overruns or other problems that may affect profitability. 5 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, 2000 was approximately $17.2 million. During 2000, the Company acquired approximately $5.7 million of equipment, related primarily to the construction material processing plants and additional equipment needed for its 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, and 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 four ready mix concrete batch plants - two in the Las Vegas, NV area and two in the Phoenix, AZ area and a total of 93 ready mix trucks. Most of RMI's internal sand and gravel requirements in the Las Vegas market are manufactured from its rock quarry in Moapa, Nevada. Production capacity at the Moapa quarry was increased substantially during 1999 with further refinements added in 2000. A fulltime sales staff promotes sales of ready mix concrete, rock and sand products and landscape rock. Through mineral leases, the Company also controls pits or quarries in Nephi, UT, Ruidoso, NM, Alamogordo, NM, Chino Valley, AZ and Prescott Valley, AZ. These locations operate under Meadow Valley Contractors, Inc. subsidiary since most of the products are used on MVCI projects. From these locations, MVCI manufactures and sells rock and sand products, and from time to time asphalt or concrete from portable plants, to its own projects or to third parties. During 2000, the Company initiated and/or expanded its production capabilities at its Prescott Valley, AZ quarry, the Chino Valley, AZ pit and the Nephi, UT pit. The Company applied for and was granted a mining exemption from Yavapai County applicable to all 320 acres of the Prescott Valley mineral lease, which is currently being appealed by local residents. The mining exemption allows the Company to operate, at that location, both a ready mix concrete batch plant and a hot mix asphalt plant in conjunction with the mining and processing of the sand and rock. Ultimately, it remains the Company's intent to generate approximately one-third of its revenue from commercial material sales through RMI and MVCI. 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, 2000, revenue generated from six projects in Nevada, Arizona and Utah represented 47% 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 its future results of operations. For the years ended December 31, 1998, 1999 and 2000, 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, ---------------------------------- 1998 1999 2000 ------ ------ ------ Arizona Department of Transportation 29.9% 26.2% 17.5% Clark County General Services 12.5% 28.7% 16.3% Nevada Department of Transportation 24.3% 17.2% 23.0%
6 Backlog The Company's backlog (anticipated revenue from the uncompleted portions of awarded projects) was approximately $75 million at December 31, 2000, compared to approximately $104 million at December 31, 1999. At December 31, 2000, the Company's backlog included approximately $70 million of work that is scheduled for completion during 2001. Accordingly, revenue in the future will be significantly reduced if the Company is unable to obtain substantial new projects in 2001. 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. 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 heavy construction industry are price, reputation for quality work, financial strength, 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 Washington Construction Group among others), many of whom have larger net worth, higher bonding capacity 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. In the event of a decrease of work available in the private construction market, it is foreseeable that contractors may exit the private market and enter the public market segment resulting in increased competition. The Company has received single project bond approval up to $110 million and has had an aggregate program bond capacity of over $300 million. The Company believes its bonding capacity remains sufficient to sustain anticipated growth. Larger competitors typically have practically unlimited bonding capacity and, therefore, are 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. Often, 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, Kiewit, 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 a top priority. To accomplish this, the Company recognizes it must provide quality products and service to its construction materials customers. 7 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 (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 20% 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. These provisions in the past have not materially adversely affected the Company. The contractor is also obligated to perform work as directed to do so by the owner. If the contractor believes the directives to be outside the scope of the original bid documents, or if the physical conditions as found on the project are different than provided in the bid documents, or for any variety of reasons the contractor believes the directive to perform the work creates costs that could not reasonably be ascertained from the bid documents, the contract permits the contractor to make a claim for equitable adjustment to the contract price. Such equitable adjustment requests are often called contract claims. The process for resolving claims may vary from one contract to another, but in general there is a process to attempt resolution at the project supervisory level or with higher levels of management within the organizations of the contractor and the owner. Depending upon the terms of the contract, claim resolution may employ a variety of resolution methods including mediation, arbitration, binding arbitration, litigation or other methods. Regardless of the process, it is typical that when a potential claim arises on a project, the contractor fulfills the obligation to perform the work and must incur the costs in doing so. The contractor does not recoup the costs until the claim is resolved. It is not uncommon for the claim resolution process to take months, or, if it entails litigation, years to resolve. 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, the customer may retain a portion of billings, generally not exceeding 10%, 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 8 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 $26 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 dependents upon management's assessment of individual project risk versus the cost of insurance. 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 based upon 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 bond approval of up to $110 million and has had an aggregate program bond capacity of over $300 million. The Company believes its bonding capacity is sufficient to sustain anticipated growth. 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. 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. 9 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, 2000, the Company employed approximately 112 salaried employees (including its management personnel and executive officers) and approximately 439 hourly employees. The number of hourly employees varies depending upon the amount of construction in progress. For the year ended December 31, 2000, the number of hourly employees ranged from approximately 439 to approximately 630 and averaged approximately 585. At December 31, 2000, the Company was party to six project agreements in Arizona with the Arizona State District Council of Carpenters, AFL-CIO that covers approximately 10% of the Company's hourly workforce. At December 31, 2000, the Company believed its relations with its employees are satisfactory. Item 2. Properties The Company leased the following properties at December 31, 2000: (1) 8,300 square feet of executive office space at 4411 South 40th Street, Suites D-8, D-10 and D-11, Phoenix, Arizona, 85040, pursuant to a lease that expires in December 2003, at a monthly rental rate of $8,280 through December 2001, $8,694 from January 2002 through December 2002 and $9,108 from January 2002 through December 2002. (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 April 2001, at a monthly rental rate of $3,105. (3) 2,260 square feet of office space for the Company's ready mix operations, at 2601 E. Thomas Road, Suite 235, Phoenix, Arizona, 89121, pursuant to a lease that expires August 2003, at a average monthly rental rate of $3,074. (4) 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 related party of the Company. The Company believes that its Moapa rental rate is fair, reasonable and consistent with rates charges 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 under contract to be sold. The Company has determined that the above properties are sufficient to meet the Company's current needs. 10 Item 3. Legal Proceedings The Company is a party to legal proceedings in the ordinary course of its business. With the exception of those matters detailed below, 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 other pending proceedings are material to its financial condition. The following proceedings represent matters that may become material and have already been or may soon be referred to legal counsel for further action: Requests for Equitable Adjustment to Construction Contracts. The Company has or - ----------------------------------------------------------- will make claims as described below on the following contracts: (1) Five contracts with the New Mexico State Highway and Transportation Department - The approximate total value of claims on these projects is $19,050,000 of which approximately $12,550,000 is on behalf of MVCI and the balance of $6,500,000 is on behalf of the prime contractor or subcontractors. The primary issues are changed conditions, plan errors and omissions, contract modifications and associated delay costs. In addition, the projects were not completed within the adjusted contract time because of events giving rise to the claims. The prosecution of the claims will include the appropriate extensions of contract time to offset any potential liquidated damages. (2) Village of Ruidoso Downs - The approximate total value of claims for additional compensation on this project is $477,000 of which approximately $277,000 is on behalf of subcontractors. This claim amount could increase by approximately $400,000 if the Company is directed to place an additional lift of asphalt on the existing runway. The primary issues concern quality control and acceptance of materials furnished by MVCI and related penalties, errors in sampling and testing, wrongful withholding of payment and associated delay costs and finance charges. (3) Clark County, Nevada - The approximate total value of claims on this project is $18,382,196 of which approximately $10,595,559 is on behalf of subcontractors. The primary issues are changed conditions, plan errors and omissions, contract modifications and associated delay costs. The above claims combined total approximately $37,909,196. Of that sum, MVCI's portion of the claims total approximately $20,536,637 and the balance of approximately $17,372,559 pertains to prime contractor or subcontractors' claims. Relative to the aforementioned claims, the Company has recorded approximately $5,850,000 in claim revenue to offset costs incurred to-date on the claims. Although the Company believes this represents a reasonably conservative posture, any claims proceeds ultimately awarded to the Company less than $5,850,000 will result in a reduction in income. Conversely, any amount of claims proceeds in excess of $5,850,000 will be an increase in income. Lawsuits Filed Against Meadow Valley Contractors, Inc. - ----------------------------------------------------- (1) Innovative Construction Systems, Inc. ("ICS"), District Court, Clark County, NV - ICS was a subcontractor to MVCI on several projects. ICS failed to make payments of payroll, pension fund contributions and other taxes for which the Internal Revenue Service garnished any future payments due ICS on MVCI projects. As a result, ICS failed to supply labor to perform its work and defaulted on its subcontracts. MVCI terminated the ICS subcontracts and performed the work with MVCI personnel. ICS alleges it was wrongfully terminated and is asserting numerous claims for damages. ICS claims against MVCI total approximately $15,000,000. The Company does not believe ICS' claims have merit and intends to vigorously defend against these claims and will eventually seek to recover the damages ICS has caused the Company through its failure to perform. (2) AnA Enterprises, LLC ("AnA"), District Court, Clark County, NV- AnA supplied equipment to MVCI on a project under terms of a variety of agreements. AnA is suing MVCI for non-payment. MVCI has counter-sued for cost overruns deemed to be the responsibility of AnA. AnA's suit against MVCI is for approximately $3,000,000. MVCI's countersuit against AnA is for approximately $2,000,000. The Company does not believe AnA's claims have merit and intends to vigorously defend against these claims. 11 (3) 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. 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, 2000. 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. 1999 2000 ------------------ ----------------- High Low High Low First Quarter 5 7/16 4 4 3 1/2 Second Quarter 4 3/4 4 4 1/62 3 1/8 Third Quarter 4 9/16 3 15/16 3 7/16 2 1/8 Fourth Quarter 4 3/8 3 3/8 3 1/8 2 9/23 Holder of Record As of February 22, 2001, there were 501 record and beneficial owners of the Company's Common Stock. 12 Item 6. Selected Financial Data
Years Ended December 31, ------------------------------------------------------------------------------- 1996 1997 1998 1999 2000 --------------- --------------- --------------- --------------- --------------- Statement of Operations Data: Revenue $ 133,723,645 $ 146,273,286 $ 187,036,077 $ 210,002,272 $ 163,573,258 Gross Profit 2,810,585 7,861,972 9,444,231 9,931,446 4,638,155 Income (loss) from operations (255,072) 3,172,430 3,084,983 3,260,411 (2,139,685) Interest Expense 611,828 624,048 435,358 209,872 250,996 Income (loss) from continuing operations before income taxes (30,410) 3,235,458 3,592,019 3,930,586 (1,859,447) Net income (loss) from continuing operations (37,531) 2,072,567 2,169,579 2,340,106 (1,574,586) 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) (85,228) 1,211,615 (415,667) 2,340,106 (1,574,586) Basic net income (loss) per common share: Income (loss) from continuing operations $ (0.01) $ 0.58 $ 0.60 $ 0.67 $ (0.44) Loss from discontinued operations (0.01) (0.24) (0.18) - - Estimated loss on disposal of net assets of discontinued operations - - (0.54) - - Basic net income (loss) per common share $ (0.02) $ .34 $ (0.12) $ 0.67 $ (0.44) Diluted net income (loss) per common share: Income (loss) from continuing operations $ (0.01) $ .57 $ 0.60 $ 0.66 $ (0.44) Loss from discontinued operations (0.01) (0.24) (0.17) - - Estimated loss on disposal of net assets of discontinued operations - - (0.54) - - Diluted net income (loss) per common share $ (0.02) $ 0.33 $ (0.11) $ 0.66 $ (0.44) Basic weighted average common shares outstanding 3,601,250 3,601,250 3,601,250 3,518,510 3,549,458 Diluted weighted average common shares outstanding 3,601,250 3,651,360 3,644,651 3,529,705 3,549,458 Financial Position Data: Working capital $ 8,689,123 $ 5,152,550 $ 5,760,414 $ 6,167,161 $ 5,900,087 Total assets 42,171,030 47,737,762 49,297,063 58,425,361 55,386,030 Long-term debt 4,631,377 5,847,659 5,977,643 7,121,634 11,278,148 Stockholders' equity 11,676,769 12,888,384 12,472,717 14,812,823 13,238,237
(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. 13 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. At the beginning of last year, we embarked upon an expansion plan that was designed to significantly increase the revenue from our construction materials operations compared to 1999. While revenue from this business increased 33% for 2000, and represented 12% of our total revenue for the year, this was below our expectations. This was primarily because of start-up issues in several of our new locations in Arizona and Nevada, including permitting delays and adverse weather conditions. We still were able to accomplish a great deal that we expect to contribute to improved results in the future. During 2000, we brought into operation our ready mix concrete batch plant in Henderson, Nevada, which gives the Company two operating plants and a fleet of 57 ready mix trucks in the Las Vegas area. We also finalized our property lease and aggregate supply agreements and erected two ready mix concrete plants in the Phoenix, Arizona area and we are currently running 36 ready mix trucks out of the two Phoenix locations. We also successfully completed the installation of our crushing and screening operations in a quarry at Prescott Valley, Arizona and an aggregate pit in Chino Valley, Arizona. In addition, we completed the pit improvements and installation of our crushing, screening and wash plant in our aggregate pit in Nephi, Utah. As a result of these major accomplishments in 2000, we expect revenue from our construction materials operations to approximately double in 2001. Longer term, it remains our objective to generate approximately one third of our total revenue from sales of construction materials and two-thirds from heavy construction contracts. We expected our heavy construction operations to earn substantial profits for 2000 during the start-up phase of the construction materials expansion program. Our construction operations in Nevada, Arizona and Utah met our profit plan for the year. Results in our Nevada area operations were particularly outstanding. However, our New Mexico operations reported a net loss of $4.2 million, offsetting the profits earned elsewhere. In 1997, Meadow Valley was the low bidder and was awarded contracts by the New Mexico State Highway and Transportation Department ("NMSHTD") on several projects in the Ruidoso and Alamogordo areas that totaled in excess of $50 million. The technical difficulties and issues we encountered on these projects were similar to those routinely encountered on other highway construction projects in other states. But the difference in New Mexico was the magnitude of the deficiencies and the ambivalence of the NMSHTD in solving the problems actually caused by factors completely within their control (accuracy of plan documents and design, advance location and relocation of utilities, site conditions and related geotechnical information, right-of-way issues, resultant delays, numerous changes and weather impacts resulting from the delays, etc.). The problems stem from NMSHTD's inability or unwillingness to accept responsibility for the cost and time impacts that resulted from NMSHTD's acts and omissions, defective design documents and numerous modifications to our contracts. We are proud of the Company's long history of working with project owners to resolve construction related problems or contract disputes and have earned numerous awards for our cooperative and problem-solving nature. Our success in every other state speaks volumes. What has occurred in New Mexico is not characteristic of our Company but more reflective of the competence and atmosphere in New Mexico. Under the terms of our contracts with the NMSHTD, when we incur costs that we believe are compensable, our only recourse is to notify the NMSHTD of our intent to submit a claim to recover such costs. As a prime contractor or a subcontractor, we have submitted a number of claims for compensable costs to the NMSHTD that to-date approximate $19 million. Of that amount, approximately $12.5 million pertains solely to Meadow Valley. To-date we have booked slightly more than $4.6 million of anticipated claim revenue (out of the $12.5 million) to offset a portion of those costs. The $4.6 million represents a conservative approach to the accounting of these claims at this time and is not reflective of the merits of the individual claims. We are aggressively pursuing our claims against the NMSHTD, although we cannot estimate when or how claims may be resolved. If the claims are rejected, the Company could experience an adverse financial impact. 14 The Company's backlog at December 31, 2000 was approximately $75 million compared to a backlog of approximately $104 million at December 31, 1999. Reported backlog consists of anticipated revenue from the uncompleted portions of awarded projects. As of December 31, 2000, the Company was the apparent low bidder on approximately $11 million of additional work that was pending award in January 2001. 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, ----------------------------------------- 1998 1999 2000 ---------- --------- -------- Revenue 100.00% 100.00% 100.00% Cost of revenue 94.95 95.27 97.16 Gross profit 5.05 4.73 2.84 General and administrative expenses 3.40 3.18 4.14 Income (loss) from operations 1.65 1.55 (1.30) Interest income 0.46 0.32 .40 Interest expense (.23) (.10) (.15) Other income (expense) 0.05 0.10 (.07) Net income (loss) from continuing operations 1.16 1.11 (.96) Loss from discontinued operations (.34) 0 0 Estimated loss on disposal of net assets of discontinued operations (1.04) 0 0 Net income (loss) (.22) 1.11 (.96)
Year Ended December 31, 2000 compared to Year Ended December 31, 1999 Revenue and Backlog. Revenue decreased 22.1% to $163.5 million for the year ended December 31, 2000 from $210.0 million for the year ended December 31, 1999. The decrease was the result of a $51.0 million decrease in contract revenue offset by a $4.6 million increase in revenue generated from construction materials production and manufacturing sold to non-affiliates. Backlog decreased to $75.0 million at December 31, 2000 compared to $104.0 million at December 31, 1999. Revenue is impacted in any one period by the backlog at the beginning of the period. Year end backlog does not include $11 million in apparent low bids pending award in January 2001. Gross Profit. As a percentage of revenue, consolidated gross profit margin decreased from 4.73% for 1999 to 2.84% for 2000. The decrease in gross profit margin was the result of costs related to claims and cost overruns on certain projects, offset, in part, by increased profit recognition related to several projects nearing completion at December 31, 2000 and by recording, in advance of receipt, conservative estimates of revenue from claims. 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 $6.78 million for 2000 from $6.67 million for 1999. The increase resulted primarily from a $1 million increase in general and administrative expenses attributable to expanding construction material operations offset, in part, by a $.9 million reduction of general and administrative expenses related to heavy construction and home office of which various employee incentive plans amounted to approximately $.8 million. Interest Income and Expense. Interest income for 2000 decreased to $.6 million from $.7 million for 1999 resulting primarily from a decrease in invested cash reserves. Interest expense increased for 2000 to $.3 million from $.2 million for 1999, due primarily to the Company borrowing on the line of credit. 15 Net Income (loss) from Continuing Operations After Income Taxes. Net income (loss) from continuing operations after income taxes was $(1.6) million for 2000 as compared to $2.3 million for 1999. The decrease resulted from lower revenues along with decreased gross profit margins. 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 $1.95 million charge (net of income tax benefit of $1.3 million), related to the disposal of assets for the Prestressed Products business, which included a provision of $1.35 million for estimated operating losses during the phase-out period. During the year ended December 31, 1999, $.6 million of the expected losses was incurred (net of income tax benefit of $.4 million). Net Income (loss). Net income (loss), after discontinued operations, for 1999 was $2.3 million as compared to $(1.6) million for 2000. 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 $6.4 million for 1998 to $6.7 million for 1999. The increase resulted, in part, from costs related to various employee incentive plans amounting to $.2 million, $.04 million in costs related to the education and training of corporate and area personnel, $.07 million 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 $.7 million from $.9 million for 1998 resulting primarily from a decrease in invested cash reserves. Interest expense decreased for 1999 to $.2 million from $.4 million for 1998 due primarily to a $1.0 million 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 $2.3 million for 1999 as compared to $2.2 million 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. 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 $1.95 million charge (net of income tax benefit of $1.3 million), related to the disposal of assets for the Prestressed Products business, which included a provision of $1.35 million for estimated operating losses during the phase-out period. During the years ended December 31, 1998 and 1999, $1.1 million and $.6 million of the expected losses were incurred (net of income tax benefit of $.8 million and $.4 million). Net Income (loss). Net income (loss), after discontinued operations, for 1999 was $2.3 million as compared to $(.4) million for 1998. 16 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 previously discussed. Historically, the Company's primary source of cash has been from operations. The Company's expansion into construction materials has required capital to finance expanded receivables, increased inventories and capital expenditures as well as to address fluctuations in the work-in-progress 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, ---------------------------------------------- 1998 1999 2000 ------------ ------------ ------------ Cash Provided By (Used in) Operating Activities $10,889,235 $(2,248,335) $(3,749,390) Cash Provided By (Used in) Investing Activities 331,646 681,483 (945,193) Cash Provided By (Used in) Financing activities (3,043,020) (3,248,684) 339,692
Although the Company may experience increased profitability as the Company expands its operations, particularly its aggregate, ready mix concrete and asphalt production, cash may be used to finance receivables, build inventories and for customer cash retention required under contracts subject to completion. It is not unusual for cash flows from construction projects nearing the final stages of completion to have negative cash flows. The recent completion of several large projects combined with claim-related costs expended on projects and the start-up costs of the business expansion have resulted in a significant decline in the Company's cash reserves. Accordingly, during the year ended December 31, 2000, the Company entered into a revolving loan agreement ("line of credit"). Under the terms of the agreement, the Company may borrow $7,000,000 at Chase Manhattan Bank's prime, plus 0.25% through December 31, 2001. The line of credit is secured by all of the Company's assets. Under the line of credit, the Company is required to maintain a certain level of tangible net worth. At December 31, 2000, the Company is in compliance with all covenants under the line of credit. The line of credit expires December 31, 2001 at which time the line of credit converts to a term agreement requiring monthly principal and interest payments through December 31, 2005. The Company believes the line of credit, together with the Company's historical ability to acquire new work may be sufficient to meet the Company's cash requirements for the next twelve months. As of December 31, 2000, the Company had withdrawn $3,037,848 from the line of credit. As of March 26, 2001, the Company had withdrawn an additional $2,004,126 from the line of credit. 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 operating activities during 2000 amounted to $3.7 million, primarily the result of an decrease in net billings in excess of costs of $3.4 million, an decrease in accounts payable of $3.2 million, an increase in inventory of $1.6 million, an decrease in accrued liabilities of $1.1 million, net loss of $1.6 million, an increase in income tax receivable of $.8 million, offset in part by an decrease in accounts receivable of $5.0 million, an decrease in prepaid expenses and other of $.6 million and depreciation and amortization of $2.5 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. 17 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. Cash used by investing activities during 2000 amounted to $.9 million related primarily to the purchase of property and equipment of $1.6 million, offset by proceeds from the sale of property and equipment in the amount of $.3 million and an decrease in restricted cash of $.3 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. Cash provided by financing activities during 2000 amount to $.3 million related primarily to the proceeds received from a note payable of $6.0 million, offset by the repayment of notes payable and lease obligations in the amount of $5.7 million. 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. Recent Accounting Pronouncements In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("FAS 133"), as amended by FAS No. 137 and FAS No. 138. FAS 133 requires the Company to record all derivatives on the balance sheet at fair value commencing with the first quarter of 2001. Changes in derivative fair values will either be recognized in earnings as offsets to the changes in fair value of related hedged assets, liabilities and firm commitments or, for forecasted transactions, deferred and recorded as a component of stockholders' equity until the hedged transactions occur and are recognized in earnings. The ineffective portion of a hedging derivative's change in fair value will be immediately recognized in earnings. Based on our current analysis, FAS 133 will not have a material impact on the consolidated financial statements of the Company. In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 101 "Revenue Recognition" which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. SAB No. 101 is applicable beginning with our fourth quarter fiscal 2001 consolidated financial statements. Based on our current analysis of SAB No. 101, management does not believe it will have a material impact on the financial results of the Company. In March 2000, the FASB issued Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation, the Interpretation of APB Opinion No. 25" ("FIN 44"). The Interpretation is intended to clarify certain problems that have arisen in practice since the issuance of APB No. 25, "Accounting for Stock Issued to Employees." The effective date of the Interpretation was July 1, 2000. The provisions of the Interpretation apply prospectively, but they will also cover certain events occurring after December 15, 1998 and after January 12, 2000. The Company believes the adoption of FIN 44 has not had a material adverse affect on the current and historical consolidated financial statements. Known and Anticipated Future Trends and Contingencies 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. 18 The Company believes that government at all levels will continue to be the primary source of funding for infrastructure work. The national transportation legislation, TEA-21, establishes a total budget authority of $215 billion over the six-year period 1998-2003. TEA-21 ensures that tax 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. Annual spending authorizations under TEA-21 have been consistent anticipated levels, however, since the beginning of TEA-21, the amount of funds actually reaching the construction phase has been slowed by bureaucratic, design and environmental bottlenecks. It is expected that the flow of TEA-21 funds will be seen more noticeably beginning in 2001. 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. There is also trend toward local and state legislation regulating growth and urban sprawl. The passage of such legislation and the degree of growth limits imposed by it could dramatically affect the nature of the Company's markets. 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 Market risk generally represents the risk that losses may occur in the values of financial instruments as a result of movements in interest rates, foreign currency exchange rates and commodity prices. The Company does not have foreign currency exchange rate and commodity price market risk. Interest Rate Risk - From time to time the Company temporarily invests its excess cash and restricted cash in interest-bearing securities issued by high-quality issuers. The Company's management monitors risk exposure to monies invested in securities of any one financial institution. Due to the short time the investments are outstanding and their general liquidity, these instruments are classified as cash equivalents in the consolidated balance sheet and do not represent a material interest rate risk to the Company. The Company's primary market risk exposure for changes in interest rates relates to the Company's long-term debt obligations. The Company manages its exposure to changing interest rates principally through the use of a combination of fixed and floating rate debt. The Company evaluated the potential effect that near term changes in interest rates would have had on the fair value of its interest rate risk sensitive financial instruments at December 31, 2000. Assuming a 100 basis point increase in the prime interest rate at December 31, 2000 the potential increase in the fair value of the Company's debt obligations would have been approximately $60,835 at December 31, 2000. See note 8 and 9 in the accompanying consolidated financial statement. 19 Item 8. Financial Statements and Supplementary Data The Company's Consolidated Financial Statements are indexed on page F-1. 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, 2000, which is hereby incorporated by reference. The untimely passing of the Company's Chief Operating Officer and Director, Paul R. Lewis saddened the Company and many of our clients and associates. Mr. Lewis passed away on February 19, 2001. Accordingly, the Company will be reorganizing its management structure. 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, 2000, which is hereby incorporated by reference. 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, 2000, 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, 2000, which is hereby incorporated by reference. 20 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, 1998, 1999 and 2000. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the fourth quarter ended December 31, 2000. (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) 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 Registant 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) 21 Exhibit No. Title ------- ----------------------------------------------------------------- 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 Contract 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) 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 Transportion (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 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) 22 Exhibit No. Title ------- --------------------------------------------------------------- 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) 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) 10.86 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 the 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 (5) 10.96 Promissory Note executed by General Electric Capital Corporation (5) 10.97 Promissory Note executed by John Deere Construction Equipment Company (5) 10.98 Promissory Note executed by John Deere Construction Equipment Company (5) 10.99 Transfer and Assumption Agreement executed by Associates Leasing, Inc. (5) 10.100 Lease Agreement with Banc One Leasing Corp. (5) 10.101 Lease Agreement with Caterpillar Financial Services (5) 23 Exhibit No. Title ------- ----------------------------------------------------------------- 10.102 Lease Agreement with Trinity Capital Corporation (5) 10.103 Lease Agreement with Banc One Leasing Corp. (5) 10.104 Wheeler Machinery Co. Installment Sale Contract (5) 10.105 Wheeler Machinery Co. Installment Sale Contract (5) 10.106 Bank One, Arizona Restated Revolving Line of Credit Note (5) 10.107 Promissory Note executed by General Electric Capital Corportion (5) 10.108 Employment Agreement with Mr. Larson (5) 10.109 Lease Agreement with Banc One Leasing Corp. (5) 10.110 Master Lease Agreement with Banc One Leasing Corp. (5) 10.111 Contract between Registrant and Arizona Department of Transportation (5) 10.112 Contract between Registrant and Arizona Department of Transportation (5) 10.113 Contract between Registrant and Utah Department of Transportation (5) 10.114 Contract between Registrant and Flood Control District of Maricopa County (5) 10.115 Contract between Registrant and Johnson and Danley Construction Co., Inc. (5) 10.116 Master Lease Agreement with The CIT Group/Equipment Financing, Inc. 10.117 Lease Agreement with The CIT Group/Equipment Financing, Inc. 10.118 Lease Agreement with The CIT Group/Equipment Financing, Inc. 10.119 Lease Agreement with The CIT Group/Equipment Financing, Inc. 10.120 Master Lease Agreement with The CIT Group/Equipment Financing, Inc. 10.121 Lease Agreement with The CIT Group/Equipment Financing, Inc. 10.122 Master Security Agreement with The CIT Group/Equipment Financing, Inc. 10.123 Security Agreement with The CIT Group/Equipment Financing, Inc. 10.124 Security Agreement with The CIT Group/Equipment Financing, Inc. 10.125 Security Agreement with The CIT Group/Equipment Financing, Inc. 10.126 Security Agreement with The CIT Group/Equipment Financing, Inc. 10.127 Security Agreement with The CIT Group/Equipment Financing, Inc. 10.128 Master Security Agreement with The CIT Group/Equipment Financing, Inc. 10.129 Security Agreement with The CIT Group/Equipment Financing, Inc. 10.130 Office lease of the Registrant 10.131 Transfer and Assumption Agreement with Caterpillar Financial Services Corporation 10.132 Installment Sale Contract with Caterpillar Financial Services Corporation 10.133 Property Lease and Aggregate Supply Agreement with Sun State Rock & Materials Corp. 10.134 Property Lease and Aggregate Supply Agreement with Clay R. Oliver d.b.a. Oliver Mining Company 10.135 Security Agreement with John Deere Construction Equipment Company 10.136 Master Lease Agreement with The CIT Group/Equipment Financing, Inc. 10.137 Lease Agreement with The CIT Group/Equipment Financing, Inc. 10.138 Lease Agreement with The CIT Group/Equipment Financing, Inc. 10.139 Security Agreement with Associates Leasing, Inc. 10.140 Revolving Loan Agreement with The CIT Group/Equipment Financing, Inc. 10.141 Lease Agreement with Banc One Leasing Corporation 10.142 Office lease of the Registrant 10.143 Security Agreement with John Deere Construction Equipment Company 10.144 Contract between Registrant and Nevada Department of Transportation 10.145 Contract between Registrant and Arizona Department of Transportation 10.146 Joint Venture Agreement between Registrant and R.E. Monks Construction Co., LLC 10.147 Contract between Registrant and Nevada Department of Transportation 24 Exhibit No. Title ------- ----------------------------------------------------------------- 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) (1) Incorporation 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 (5) Incorporated by reference to the Company's December 31, 1999 Annual Report on Form 10-K 25 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 29, 2001 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 Officer Director Date: March 29, 2001 Date: March 29, 2001 /s/ Kenneth D. Nelson /s/ Alan A. Terril - ---------------------------------------------------- ------------------------------------------------------ Kenneth D. Nelson Alan A. Terril Director, Chief Administrative Officer and Director and Vice President - Nevada Operations Vice President Date: March 29, 2001 Date: March 29, 2001 /s/ Charles E. Cowan /s/ Gary A. Agron - ---------------------------------------------------- ------------------------------------------------------ Charles E. Cowan Gary A. Agron Director Director Date: March 29, 2001 Date: March 29, 2001 /s/ Charles R. Norton /s/ Nicole R. Smith - ---------------------------------------------------- ------------------------------------------------------ Charles R. Norton Nicole R. Smith Director Treasurer, Secretary and Principal Accounting Officer Date: March 29, 2001 Date: March 29, 2001
26 INDEX TO FINANCIAL STATEMENTS Meadow Valley Corporation and Subsidiaries Report of Independent Certified Public Accountants F-2 Consolidated Balance Sheets at December 31, 1999 and 2000 F-3 Consolidated Statements of Operations for the years ended December 31, 1998, 1999 and 2000 F-4 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 1998, 1999 and 2000 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1999 and 2000 F-6 Notes to Consolidated Financial Statements F-8
F-1 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors Meadow Valley Corporation Phoenix, Arizona We have audited the accompanying consolidated balance sheets of Meadow Valley Corporation as of December 31, 1999 and 2000, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall 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 financial position of Meadow Valley Corporation at December 31, 1999 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the Unites States of America. /s/ BDO Seidman, LLP March 15, 2001 F-2 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
December 31, December 31, 1999 2000 ------------ ------------ Assets: Current Assets: Cash and cash equivalents (Notes 1 and 2) $6,177,489 $1,822,598 Restricted cash (Notes 1, 2 and 16) 2,143,507 1,783,005 Accounts receivable, net (Notes 1, 3, 10 and 16) 19,256,882 14,297,564 Prepaid expenses and other 1,193,912 749,708 Inventory (Note 1) 3,603,517 5,242,148 Income tax receivable (Notes 1 and 11) - 774,000 Costs and estimated earnings in excess of billings on uncompleted contracts (Note 4) 8,858,933 9,828,009 ----------- ----------- Total Current Assets 41,234,240 34,497,032 Property and equipment, net (Notes 1, 5, 8, 10 and 12) 15,077,673 18,111,506 Deferred tax asset (Notes 1 and 11) 129,461 873,441 Refundable deposits 83,680 176,565 Goodwill, net (Note 1) 1,580,762 1,500,733 Mineral rights 255,168 226,753 Net assets of discontinued operations (Note 19) 193,838 - ----------- ----------- Total Assets $58,554,822 $55,386,030 =========== =========== Liabilities and Stockholders' Equity: Current Liabilities: Accounts payable (Notes 6 and 10) $20,807,792 $17,606,113 Accrued liabilities (Note 7) 3,387,320 2,289,698 Notes payable (Note 8) 1,304,092 1,604,399 Obligations under capital leases (Note 12) 1,114,722 1,041,921 Billings in excess of costs and estimated earnings on uncompleted contracts (Note 4) 8,453,153 6,054,814 ----------- ----------- Total Current Liabilities 35,067,079 28,596,945 Deferred tax liability (Notes 1 and 11) 1,553,286 2,272,700 Notes payable, less current portion (Notes 8 and 9) 2,710,780 7,674,608 Obligations under capital leases, less current portion (Note 12) 4,410,854 3,603,540 ----------- ----------- Total Liabilities 43,741,999 42,147,793 ----------- ----------- Commitments and contingencies (Notes 9, 10, 12 and 14) Stockholders' Equity: Preferred stock - $.001 par value; 1,000,000 shares authorized, none issued and outstanding (Note 13) - - Common stock - $.001 par value; 15,000,000 shares authorized, 3,601,250 issued and 3,559,938 outstanding (Notes 13 and 17) 3,601 3,601 Additional paid-in capital 10,943,569 10,943,569 Capital adjustments (799,147) (799,147) Retained earnings 4,664,800 3,090,214 ----------- ----------- Total Stockholders' Equity 14,812,823 13,238,237 ----------- ----------- Total Liabilities and Stockholders' Equity $58,554,822 $55,386,030 =========== ===========
The Accompanying Notes are an Integral Part of the Financial Statements F-3 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, ------------------------------------------------------- 1998 1999 2000 ------------- ------------- ------------- Revenue (Notes 10 and 16) $ 187,036,077 $ 210,002,272 $ 163,573,258 Cost of revenue (Note 10) 177,591,846 200,070,826 158,935,103 ------------- ------------- ------------- Gross Profit 9,444,231 9,931,446 4,638,155 General and administrative expenses (Note 10) 6,359,248 6,671,035 6,777,840 ------------- ------------- ------------- Income (loss) from Operations 3,084,983 3,260,411 (2,139,685) ------------- ------------- ------------- Other Income (Expense): Interest income 856,191 668,928 646,480 Interest expense (Note 10) (435,358) (209,872) (250,996) Other income (expense) 86,203 211,119 (115,246) ------------- ------------- ------------- 507,036 670,175 280,238 ------------- ------------- ------------- Income (loss) from continuing operations before Income taxes 3,592,019 3,930,586 (1,859,447) Income tax benefit (expense) (1,422,440) (1,590,480) 284,861 ------------- ------------- ------------- Net income (loss) from continuing operations 2,169,579 2,340,106 (1,574,586) Discontinued operations (Note 19): Loss from operations of Prestressed Products subsidiary, net of income tax benefit of $423,497 (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 17) $ (415,667) $ 2,340,106 $ (1,574,586) ============= ============= ============= Basic net income (loss) per common share (Note 18): Income (loss) from continuing operations $ 0.60 $ 0.67 $ (0.44) Loss from operations of Prestressed Products subsidiary (0.18) - - Estimated loss on disposal of net assets of Prestressed Products subsidiary (0.54) - - ------------- ------------- ------------- Basic net income (loss) per common share $ (0.12) $ 0.67 $ (0.44) ============= ============= ============= Diluted net income (loss) per common share (Note 18): Income (loss) from continuing operations $ 0.60 $ 0.66 $ (0.44) Loss from operations of Prestressed Products subsidiary (0.17) - - Estimated loss on disposal of net assets of Prestressed Products subsidiary (0.54) - - ------------- ------------- ------------- Diluted net income (loss) per common share $ (0.11) $ 0.66 $ (0.44) ============= ============= ============= Basic weighted average common shares outstanding (Note 18) 3,601,250 3,518,510 3,549,458 ============= ============= ============= Diluted weighted average common shares outstanding (Note 18) 3,644,651 3,529,705 3,549,458 ============= ============= =============
The Accompanying Notes are an Integral Part of the Financial Statements F-4 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY For the Years Ended December 31, 1998, 1999 and 2000
Common Stock --------------------------------- Number of Shares Paid-in Capital Retained Outstanding Amount Capital Adjustment Earnings --------------- ---------------- ---------------- ---------------- ----------------- Balance at January 1, 1998 3,601,250 $ 3,601 $ 10,943,569 $ (799,147) $2,740,361 Net loss (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 2,340,106 --------------- --------------- --------------- --------------- ---------------- Balance at December 31, 1999 3,501,250 3,601 10,943,569 (799,147) 4,664,800 Net loss (1,574,586) --------------- --------------- --------------- --------------- ---------------- Balance at December 31, 2000 3,501,250 $ 3,601 $ 10,943,569 $ (799,147) $3,090,214 =============== =============== =============== =============== ================
The Accompanying Notes are an Integral Part of the Financial Statements F-5 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, ------------------------------------------------------- 1998 1999 2000 ------------- ------------- ------------- Increase (Decrease) in Cash and Cash Equivalents: Cash flows from operating activities: Cash received from customers $ 200,534,004 $ 198,476,899 $ 164,946,410 Cash paid to suppliers and employees (188,760,555) (200,249,598) (169,013,765) Interest received 878,517 695,759 643,705 Interest paid (488,474) (235,899) (250,996) Income taxes paid (1,274,257) (935,496) (74,744) ------------- ------------- ------------- Net cash provided by (used in) operating activities 10,889,235 (2,248,335) (3,749,390) ------------- ------------- ------------- Cash flows from investing activities: Decrease (increase) in restricted cash (1,958,917) 1,535,178 360,502 Collection of note receivable - related party 257,575 - - Collection of note receivable - other 2,466 208,807 - Proceeds from sale of property and equipment 165,182 361,138 320,039 Purchase of property and equipment (588,784) (1,399,815) (1,625,734) Purchase of mineral rights - (255,168) - Decrease (increase) in net assets of discontinued operations 2,454,124 231,343 - ------------- ------------- ------------- Net cash provided by (used in) investing activities 331,646 681,483 (945,193) ------------- ------------- ------------- Cash flows from financing activities: Repayment of capital lease obligations (645,534) (882,677) (1,183,847) Proceeds received from notes payable - other - - 6,055,556 Repayment of notes payable - other (897,486) (1,366,007) (4,532,017) Repayment of notes payable - related party (1,500,000) (1,000,000) - ------------- ------------- ------------- Net cash provided by (used in) financing activities (3,043,020) (3,248,684) 339,692 ------------- ------------- ------------- Net increase (decrease) in cash and cash equivalents 8,177,861 (4,815,536) (4,354,891) Cash and cash equivalents at beginning of year 2,815,164 10,993,025 6,177,489 ------------- ------------- ------------- Cash and cash equivalents at end of year $ 10,993,025 $ 6,177,489 $ 1,822,598 ============= ============= =============
The Accompanying Notes are an Integral Part of the Financial Statements F-6 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
For the Years Ended December 31, ----------------------------------------------------- 1998 1999 2000 ---------- ----------- ------------- 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) $ (415,667) $ 2,340,106 $ (1,574,586) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 1,849,628 2,012,592 2,530,914 (Gain) loss on sale of property and equipment (29,777) 11,886 (106,280) Deferred taxes, net 377,166 634,098 (24,566) Changes in Operating Assets and Liabilities: Accounts receivable, net 8,707,867 (3,822,391) 4,959,318 Prepaid expenses and other (801,540) 643,386 638,042 Inventory - (3,603,517) (1,638,631) Income tax receivable (228,983) 20,886 (774,000) Costs and estimated earnings in excess of billings on uncompleted contracts 62,856 (5,008,314) (969,076) Refundable deposits - (26,027) (92,885) Accounts payable (4,573,921) 7,010,356 (3,201,679) Accrued liabilities 1,301,618 321,985 (1,097,622) Interest payable (53,116) 107,461 - Billings in excess of costs and estimated earnings on uncompleted contracts 4,693,104 (2,890,842) (2,398,339) ------------ ------------ ------------- Net cash provided by (used in) operating activities $ 10,889,235 $ (2,248,335) $ (3,749,390) ============ ============ ============
The Accompanying Notes are an Integral Part of the Financial Statements F-7 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies and Use of Estimates: 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. ("MVCI") and Ready Mix, Inc. ("RMI"). MVCI 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 manufactures and distributes ready mix concrete in the Las Vegas and Phoenix metropolitan areas. 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 MVCI and RMI. Intercompany transactions and balances have been eliminated in consolidation. Reclassifications: Certain balances as of December 31, 1999 and the year then ended have been reclassified in the accompanying consolidated financial statements to conform with the current year presentation. These classifications had no effect on previously reported net income or stockholders' equity. 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, 2000, revenue from anticipated claim proceeds increased by $2,320,904 to $5,820,904 from $3,500,000 for the year ended December 31, 1999. The estimated total claims that have been filed or will be filed increased by $27,703,985 from $10,205,211 at December 31, 1999 to approximately $37,909,196 at December 31, 2000. The Company's portion of the total claims amount, excluding claims filed by other prime contractors or on behalf of the Company's subcontractors, total approximately $20,536,637. 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, 1999 and 2000 funds in the amount of $2,143,507 and $1,783,005 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. F-8 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. Summary of Significant Accounting Policies and Use of Estimates (Continued): Accounts Receivable: Included in accounts receivable are trade receivables that represent amounts billed but uncollected on completed construction contracts and construction contracts in progress. 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, 1999 and 2000 the Company had established an allowance for potentially uncollectible accounts receivable in the amounts of $97,324 and $399,219. During the years ended December 31, 1998, 1999 and 2000 the Company incurred bad debt expense in the amounts of $59,273, $79,681 and $489,379. Property and Equipment: Property and equipment are recorded at cost. Depreciation charged to operations during the years ended December 31, 1998, 1999 and 2000 was $1,757,422, $1,932,272 and $2,422,470. Depreciation is provided for on the straight-line method, over the following estimated useful lives. Leasehold improvements are recorded at cost and are amortized over their estimated useful lives or the lease term, whichever is shorter. Plants 6-15 years Computer Equipment 5-7 years Equipment 5-10 years Vehicles 5 years Office furniture and equipment 7 years Improvements 2-10 years At December 31, 1999 and 2000, property and equipment with a net book value of $10,872,442 and $18,111,506 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, 1998, 1999 and 2000 was $80,029. The carrying value of goodwill is periodically reviewed by the Company and impairments, if any, are recognized when expected future operating cash flows derived from goodwill is less than its carrying value. 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 MVCI and RMI 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, costs and estimated earnings in excess of billings on uncompleted contracts, certain current maturities of long-term debt, 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-9 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. Summary of Significant Accounting Policies and Use of Estimates (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 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. The Company periodically reviews the carrying value of its long-lived assets and impairments, if any, are recognized when expected future operating cash flows from long-lived assets is less than its carrying value. 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 reflect the potential dilution of securities that could share in the earnings of an entity, similar to fully diluted earnings per share. Accounting for Derivative Instruments and Hedging Activities: Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("FAS 133"), as amended by FAS No. 137 and FAS No. 138. FAS 133 requires companies to record all derivatives on the balance sheet at fair value commencing with the first quarter of 2001. Changes in derivative fair values will either be recognized in earnings as offsets to the changes in fair value of related hedged assets, liabilities and firm commitments or, for forecasted transactions, deferred and recorded as a component of stockholders' equity until the hedged transactions occur and are recognized in earnings. The ineffective portion of a hedging derivative's change in fair value will be immediately recognized in earnings. Based on our current analysis, FAS 133 will not have a material impact on the consolidated financial statements of the Company. Revenue Recognition: The Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 101 "Revenue Recognition" which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. SAB No. 101 is applicable beginning with our fourth quarter fiscal 2001 consolidated financial statements. Based on our current analysis of SAB No. 101, management does not believe it will have a material impact on the financial results of the Company. Accounting for Certain Transactions Involving Stock Compensation: The FASB issued Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation, the Interpretation of APB Opinion No. 25" ("FIN 44"). The Interpretation is intended to clarify certain problems that have arisen in practice since the issuance of APB No. 25, "Accounting for Stock Issued to Employees." The effective date of the Interpretation was July 1, 2000. The provisions of the Interpretation apply prospectively, but they will also cover certain events occurring after December 15, 1998 and after January 12, 2000. The Company believes the adoption of FIN 44 has not had a material adverse affect on the current and historical consolidated financial statements. 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, 1999 and 2000, the Company has uninsured cash, cash equivalents, and restricted cash in the amounts of $9,682,808 and $5,322,475. 3. Accounts Receivable: Accounts receivable consists of the following:
December 31, December 31, 1999 2000 ------------ ------------ Contracts in progress $ 8,046,857 $ 6,382,925 Contracts in progress - retention 7,543,315 4,041,781 Completed contracts 3,000 - Completed contracts - retention 598,408 121,376 Other trade receivables 3,068,583 4,000,003 Other receivables 94,043 150,698 ----------- ----------- 19,354,206 14,696,783 Less: Allowance for doubtful accounts (97,324) (399,219) ----------- ----------- $19,256,882 $14,297,564 =========== ===========
F-10 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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, 1999 2000 ------------- ------------- Costs incurred on uncompleted contracts $ 395,414,292 $ 425,863,961 Estimated earnings to date 19,077,844 18,838,396 ------------- ------------- 414,492,136 444,702,357 Less: billings to date (414,086,356) (440,929,162) ------------- ------------- $ 405,780 $ 3,773,195 ============= =============
Included in the accompanying balance sheets under the following captions:
December 31, December 31, 1999 2000 ------------- ------------- Costs and estimated earnings in excess of billings on uncompleted contracts $ 8,858,933 $ 9,828,009 Billings in excess of costs and estimated earnings on uncompleted contracts (8,453,153) (6,054,814) ------------- ------------- $ 405,780 $ 3,773,195 ============= =============
5. Property and Equipment: Property and equipment consists of the following:
December 31, December 31, 1999 2000 ------------- ------------- Land $ 852,243 $ 827,639 Plants 6,013,967 9,395,274 Computer equipment 324,710 341,783 Equipment 10,389,473 12,089,702 Vehicles (Note 12) 2,449,844 2,068,654 Office furniture and fixtures 50,311 62,420 Improvements 8,926 364,766 ------------- ------------- 20,089,474 25,150,238 Accumulated depreciation (5,011,801) (7,038,732) ------------- ------------- $ 15,077,673 $ 18,111,506 ============= =============
6. Accounts Payable: Accounts payable consists of the following:
December 31, December 31, 1999 2000 ------------- ------------- Trade $ 13,934,908 $ 14,069,299 Retentions 6,872,884 3,536,814 ------------- ------------- $ 20,807,792 $ 17,606,113 ============= =============
F-11 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 7. Accrued Liabilities: Accrued liabilities consists of the following:
December 31, December 31, 1999 2000 ------------ ------------ Compensation $ 1,516,610 $ 765,497 Outside services 524,780 - Taxes 534,388 641,464 Insurance 224,456 77,208 Other 587,086 805,529 ------------ ------------ $ 3,387,320 $ 2,289,698 ============ ============
8. Notes Payable: Notes payable consists of the following:
December 31, December 31, 1999 2000 ------------ ------------ Notes payable, interest rates ranging from 3.9% to 9% with monthly payments of $97,671, due dates ranging from January 1, 2003 to June 4, 2004, collateralized by equipment $ 3,616,047 $ 2,397,756 Notes payable, interest rates ranging from 9.0% to 9.33% with monthly payments of $9,958, due dates ranging from August 15, 2003 to December 31, 2004, collateralized by land 398,825 313,067 Notes payable, interest rates ranging from 0% to 8.11% with monthly payments of $18,680, due dates ranging from July 5, 2002 to November 1, 2004, collateralized by equipment - 484,677 Notes payable, variable interest rate currently at 9.5%, interest rate based on Chase Manhattan Bank's prime, with monthly principal payments of $35,953, due dates ranging from July 14, 2005 to October 3, 2009, collateralized by equipment - 3,045,659 Note payable, variable interest rate currently at 9.75%, interest rate based on Chase Manhattan Bank's prime plus .25%, with interest only payments until January 31, 2002, due December 31, 2005, collaterzlized by all assets of the Company (See Note 9) - 3,037,848 ------------ ------------ 4,014,872 9,279,007 Less: current portion (1,304,092) (1,604,399) ------------ ------------ $ 2,710,780 $ 7,674,608 ============ ============
F-12 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 8. Notes Payable (Continued): Following are maturities of long-term debt for each of the next 5 years: 2001 $ 1,604,399 2002 2,213,118 2003 1,825,533 2004 1,360,978 2005 1,298,071 Subsequent to 2005 976,908 ----------- $ 9,279,007 =========== 9. Line of Credit: In July 2000, the Company entered into a revolving loan agreement ("line of credit"). Under the terms of the agreement, the Company may borrow up to $7,000,000 at Chase Manhattan Bank's prime, plus .25% through December 31, 2001 at which time the line of credit converts to a term agreement requiring monthly principal and interest payments through December 31, 2005. The line of credit is collateralized by all of the Company's assets. Under the terms of the line of credit, the Company is required to maintain certain levels of tangible net worth. As of December 31, 2000, the Company was in compliance with all such covenants and had withdrawn $3,037,848 from the line of credit. As of March 26, 2001, the Company had withdrawn an additional $2,004,126 from the line of credit. 10. Related Party Transactions: Management believes that the fair value of the following transactions reflect current amounts that the Company could have consummated transactions with other third parties. Revenue: During the year ended December 31, 2000 the Company provided construction materials to various related parties in the amount of $26,556. Included in accounts receivable at December 31, 2000 are amounts due from related parties, in the amount of $15,132. 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, 1998, 1999 and 2000, a related party rendered professional services to the Company in the amounts of $10,904, $7,944 and $23,342. During the years ended December 31, 1998, 1999 and 2000, the Company paid $5,000, $5,000 and $30,000 to outside members of the board of directors. Subcontractor/Supplier: Various related parties provided materials and equipment used in the Company's construction business during the years ended December 31, 1998, 1999 and 2000, in the amounts of $191,694, $65,441 and $535,694. Included in accounts payable at December 31, 1999 and 2000 are amounts due to related parties, in the amounts of $821 and $154,861, related to supplies. Royalties: During the years ended December 31, 1998, 1999 and 2000, the Company paid various related parties mining royalties in the amounts of $186,949, $182,061 and $328,310. Included in accounts payable at December 31, 1999 and 2000 are amounts due to related parties, in the amounts of $1,158 and $0, related to royalties. F-13 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 10. Related Party Transactions (Continued): Accrued Interest: During the year ended December 31, 1998, the Company incurred interest expense in the amount of $243,322 related to a note payable to a principal stockholder. Commitments: The Company leases office space in Moapa, Nevada on a month-to-month basis, at a rental rate of $840 per month, from a related party of the Company. 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, 1998, 1999 and 2000 amount to $10,040, $10,080 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 discontinued operations of PPI. Rent expense under the lease for the year ended December 31, 1998 amounted to $42,369. 11. Income Taxes: The provisions for income taxes benefit (expense) from continuing operations consist of the following:
For the Years Ended December 31, -------------------------------------------------------- 1998 1999 2000 ---------------- ---------------- ---------------- Current: Federal $ (932,032) $ (851,180) $ 231,663 State (113,242) (105,202) 28,632 ---------------- ---------------- ---------------- (1,045,274) (956,382) 260,295 Deferred (377,166) (634,098) 24,566 ---------------- ---------------- ---------------- $ (1,422,440) $ (1,590,480) $ 284,861 ================ ================ ================
The Company's deferred tax asset (liability) consists of the following:
December 31, December 31, 1999 2000 ----------------- ----------------- Deferred tax asset: Other $ 129,461 $ 269,137 NOL carryforward - 604,304 ----------------- ----------------- 129,461 873,441 Deferred tax liability: Depreciation (1,553,286) (2,272,700) ----------------- ----------------- Net deferred tax liability $ (1,423,825) $ (1,399,259) ================= =================
For the years ended December 31, 1998, 1999 and 2000, the effective tax rate differs from the federal statutory rate primarily due to state income taxes and permanent differences. F-14 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 12. Commitments: The Company is currently leasing office space in Phoenix, Arizona under a non-cancelable operating lease agreement expiring in December 2003. During December 1998, the Company amended the original lease. The amended lease agreement provides for monthly payments of $8,280 through December 31, 2001, $8,694 from January 1, 2002 through December 31, 2002 and $9,108 from January 1, 2003 through December 31, 2003. The lease also requires the Company to pay common area maintenance, taxes, insurance and other costs. Rent under the aforementioned operating lease was $66,117, $89,152 and $96,765 for the years ended December 31, 1998, 1999 and 2000. The Company leases batch plants, equipment, mixer trucks, property and aggregate supply under operating leases expiring in various years through 2010. Rent under the aforementioned operating leases were $1,839,891, $2,374,109 and $4,369,138 for the years ended December 31, 1998, 1999 and 2000. Minimum future rental payments under non-cancelable operating leases having remaining terms in excess of one year as of December 31, 2000 for each of the next five years and in aggregate are: 2001 $ 6,903,599 2002 5,810,327 2003 5,484,142 2004 5,115,259 2005 3,063,638 Subsequent to 2005 5,291,637 ------------------ $31,668,602 ================== 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. As of the end of December 31, 1998, 1999 and 2000, the total commitments, excluding benefits and incentives amount to $1,011,250, $1,530,438 and $870,188. The Company is the lessee of batch plants, equipment and vehicles 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 1998, 1999 and 2000 was $533,008, $559,348 and $762,548. At December 31, 1999 and 2000, property and equipment included $7,121,713 and $6,895,120 of vehicles and equipment under capital leases. Minimum future lease payments under capital leases as of December 31, 2000 for each of the next five years and in aggregate are: 2001 $ 1,380,605 2002 1,198,031 2003 1,045,432 2004 932,377 2005 631,541 Subsequent to 2005 414,717 ----------------- Total minimum payments 5,602,703 Less: executory costs (5,781) ----------------- Net minimum lease payments 5,596,922 Less: amount representing interest (951,461) ----------------- Present value of net minimum lease payment 4,645,461 Less: current portion (1,041,921) ----------------- $ 3,603,540 =================
F-15 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 13. 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. 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. In September 2000, the exercise price of the warrants was reduced to $5.00 per share and the exercise period was extended until June 30, 2002. 14. Litigation and Claim Matters: The Company is a party to legal proceedings in the ordinary course of its business. With the exception of those matters detailed below, 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 other pending proceedings are material to its financial condition. The following proceedings represent matters that may become material and have already been or may soon be referred to legal counsel for further action: Requests for Equitable Adjustment to Construction Contracts. The Company has or - ----------------------------------------------------------- will make claims as described below on the following contracts: (1) Five contracts with the New Mexico State Highway and Transportation Department - The approximate total value of claims on these projects is $19,050,000 of which approximately $12,550,000 is on behalf of MVCI and the balance of $6,500,000 is on behalf of the prime contractor or subcontractors. The primary issues are changed conditions, plan errors and omissions, contract modifications and associated delay costs. In addition, the projects were not completed within the adjusted contract time because of events giving rise to the claims. The prosecution of the claims will include the appropriate extensions of contract time to offset any potential liquidated damages. (2) Village of Ruidoso Downs - The approximate total value of claims for additional compensation on this project is $477,000 of which approximately $277,000 is on behalf of subcontractors. This claim amount could increase by approximately $400,000 if the Company is directed to place an additional lift of asphalt on the existing runway. The primary issues concern quality control and acceptance of materials furnished by MVCI and related penalties, errors in sampling and testing, wrongful withholding of payment and associated delay costs and finance charges. (3) Clark County, Nevada - The approximate total value of claims on this project is $18,382,196 of which approximately $10,595,559 is on behalf of subcontractors. The primary issues are changed conditions, plan errors and omissions, contract modifications and associated delay costs. The above claims combined total approximately $37,909,196. Of that sum, MVCI's portion of the claims total approximately $20,536,637 and the balance of approximately $17,372,559 pertains to prime contractor or subcontractors' claims. Relative to the aforementioned claims, the Company has recorded approximately $5,850,000 in claim revenue to offset costs incurred to-date on the claims. Although the Company believes this represents a reasonably conservative posture, any claims proceeds ultimately awarded to the Company less than $5,850,000 will result in a reduction in income. Conversely, any amount of claims proceeds in excess of $5,850,000 will be an increase in income. F-16 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 14. Litigation and Claim Matters (Continued): Lawsuits Filed Against Meadow Valley Contractors, Inc. - ----------------------------------------------------- (1) Innovative Construction Systems, Inc. ("ICS"), District Court, Clark County, NV - ICS was a subcontractor to MVCI on several projects. ICS failed to make payments of payroll, pension funds contributions and other taxes for which the Internal Revenue Service garnished any future payments due ICS on MVCI projects. As a result, ICS failed to supply labor to perform its work and defaulted on its subcontracts. MVCI terminated the ICS subcontracts and performed the work with MVCI personnel. ICS alleges it was wrongfully terminated and is asserting numerous claims for damages. ICS claims against MVCI total approximately $15,000,000. The Company does not believe ICS' claims have merit and intends to vigorously defend against these claims and will eventually seek to recover the damages ICS has caused the Company through its failure to perform. (2) AnA Enterprises, LLC ("AnA"), District Court, Clark County, NV - AnA supplied equipment to MVCI on a project under terms of a variety of agreements. AnA is suing MVCI for non-payment. MVCI has counter-sued for cost overruns deemed to be the responsibility of AnA. AnA's suit against MVCI is for approximately $3,000,000. MVCI's countersuit against AnA is for approximately $2,000,000. The Company does not believe AnA's claims have merit and intends to vigorously defend against these claims. (3) The Company is defending a claimed preference in connection with a payment made to it by an insurance company in the approximate amounts of $100,000. The Company believes that the payment is not a preference, and is vigorously defending the action. 15. 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, 1998, 1999 and 2000, the Company financed the purchase of property, plant and equipment in the amount of $3,273,137, $4,987,308 and $4,044,329. During the year ended December 31, 1999, the Company received $135,000 trade in value on equipment. During the year ended December 31, 2000, the Company sold a piece of equipment for a total purchase price of $80,000. The Company received a cash payment in the amount of $20,000; a piece of equipment valued at $20,000 and accepted the remaining $40,000 to be paid in two equal installments of $20,000. Included in account receivable, net at December 31, 2000 is $40,000 related to the aforementioned sale. 16. Significant Customers: For the years ended December 31, 1998, 1999 and 2000, the Company recognized a significant portion of its revenue from three Customers (shown as an approximate percentage of total revenue): For the Years Ended December 31, ------------------------------------------------------- 1998 1999 2000 --------------- ----------------- ----------------- A 29.9% 26.2% 17.5% B 12.5% 28.7% 16.3% C 24.3% 17.2% 23.0% At December 31, 1999 and 2000, amounts due from the aforementioned Customers included in restricted cash and accounts receivables, are as follows: For the Years Ended December 31, ------------------------------------- 1999 2000 ----------------- ----------------- A $ 4,947,425 $ 2,968,786 B 8,866,348 1,855,666 C 1,082,888 1,124,196 F-17 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 17. 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% 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 summarized the stock option transactions:
Weighted Average Shares Price 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 Forfeited (101,525) 5.23 ----------------- Outstanding December 31, 2000 671,350 5.11 =================
Information relating to stock options at December 31, 2000 summarized by exercise price is as follows:
Outstanding Exercisable ---------------------------------------------------- -------------------------------------- Weighted Average Weighted Average ---------------------------------- ----------------- -------------------- Exercise Price Per Share Shares Life (Year) Exercise Price Shares Exercise Price - ---------------------------- ---------------- ---------------- ----------------- ----------------- -------------------- $6.25 162,300 10 $ 6.25 162,300 $ 6.25 $5.41 5,000 10 5.41 5,000 5.41 $4.375 171,850 10 4.375 171,850 4.375 $5.31 80,000 10 5.31 80,000 5.31 $5.875 109,800 10 5.875 73,204 5.875 $4.563 20,000 10 4.563 6,667 4.563 $4.00 20,000 10 4.00 6,667 4.00 $3.875 102,400 10 3.875 34,133 3.875 - ---------------------------- ---------------- ---------------- ----------------- ----------------- -------------------- $3.875 to $6.25 671,350 10 $ 5.11 539,821 $ 5.11 ============================ ================ ================ ================= ================= ====================
F-18 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 17. 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, 1998, 1999 and 2000. 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, 1998, 1999 and 2000 would have been reduced to the proforma amounts presented below:
1998 1999 2000 ----------------- ---------------- ----------------- Net income (loss) As Reported $ (415,667) $2,340,106 $ (1,574,586) Proforma (933,371) 1,784,024 (1,721,988) Basic net income (loss) per common share As Reported $ (0.12) $ 0.67 $ (0.44) Proforma (0.24) 0.51 (0.49) Diluted net income (loss) per common share As Reported $ (0.11) $ 0.66 $ (0.44) Proforma (0.26) 0.51 (0.49)
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 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 1998 and 1999 approximated $1.44 and $1.13. 18. Basic Earnings (Loss) Per Share: The Company's basic net income (loss) per share at December 31, 1998, 1999 and 2000 were computed by dividing net income for the period by 3,601,250, 3,518,510 and 3,549,458, respectively, the basic weighted average number of common shares outstanding during the period. 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. The Company's diluted net income per common share at December 31, 2000 is computed based on the weighted average number of shares of common stock outstanding during the period. Options to purchase 671,350 at a range of $3.875 to $6.25 per share were outstanding during 2000, 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-19 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 19. 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 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). The revenue of PPI for the years ended December 31, 1998 and 1999 was $5,419,036 and $1,460,381. These amounts are not included in revenue in the accompanying statements of operations. The accompanying consolidated balance sheet as of December 31, 1999 reflects the net liabilities and the estimated loss as a single amount as follows: December 31, 1999 ----------------- Current assets $ 653,668 Non-current assets - Liabilities (242,113) ----------------- Net assets 411,555 Estimated loss on disposition (217,717) ----------------- Net asset of discontinued operations $ 193,838 ================= 20. Subsequent Events: In January 2001, the Company entered into a purchase agreement with an officer to buy a piece of land owned by the Company in Moapa, Nevada. In January 2001, the Company was awarded $31 million in new contracts. These new contracts included apparent low bids prior to December 31, 2000 and new contracts bid and awarded in January 2001. The Company's backlog as of January 31, 2001 is approximately $97 million compared to approximately $106 million as of January 31, 2000. In February 2001, the Company financed the purchase of equipment in the amount of $68,077. The note payable obligation has an interest rate of 8.84%, with monthly payments of $1,690, and is due February 13, 2005. 21. Other Informative Disclosures: In recent years, the Company's strategies have resulted in the successful initiation and growth in the area of construction materials. The production and retail sale of construction materials represented 12% of total revenue in 2000. The construction materials operation manufactures and distributes ready mix concrete and sand and gravel products in the Las Vegas, NV and Phoenix, AZ markets. Prospective customers include concrete subcontractors, prime contractors, homebuilders, commercial and industrial property developers, pool builders and homeowners. Construction materials sales first began from a single location in March 1997 and, by the end of 2000, expanded to two locations in Las Vegas, NV vicinity, one location in the Moapa, NV vicinity and two locations in Phoenix, AZ vicinity. The construction services operation of the Company generates revenue by providing construction services, usually under terms of a contract with an owner or a subcontract with another contractor. F-20 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 21. Other Informative Disclosures (Continued): The following is a summary of certain financial items of the Company's two main areas of operations for 1998, 1999 and 2000:
Construction Construction Services Materials -------------------- -------------------- For the twelve months ended December 31, 2000 Gross revenue $144,608,886 $20,330,715 Intercompany revenue - 1,366,343 Cost of revenue 140,684,222 19,617,224 Interest income 614,118 32,362 Interest expense (177,850) (73,146) Depreciation and amortization 1,868,378 662,536 Income (loss) before taxes (532,354) (1,327,093) Income tax benefit (expense) (210,145) 495,006 Net income (loss) (742,499) (832,087) Total assets 42,043,028 13,343,002 For the twelve months ended December 31, 1999 Gross revenue $195,589,962 $15,664,030 Intercompany revenue - 1,251,720 Cost of revenue 187,258,844 14,063,702 Interest income 648,922 20,006 Interest expense (132,637) (77,235) Depreciation and amortization 1,733,422 279,170 Income (loss) before taxes 3,493,888 436,698 Income tax benefit (expense) (1,427,294) (163,186) Net income (loss) 2,066,594 273,512 Total assets 48,664,190 9,890,632 For the twelve months ended December 31, 1998 Gross revenue $174,669,177 $15,156,886 Intercompany revenue 1,825,783 964,203 Cost of revenue 166,847,072 13,534,760 Interest income 830,365 25,826 Interest expense (346,366) (88,992) Depreciation and amortization 1,649,920 199,708 Income (loss) before taxes 2,953,073 638,946 Income tax benefit (expense) (1,216,877) (205,563) Net income (loss) 1,736,196 433,383 Total assets 44,205,741 5,091,322
There are no differences in accounting principles between the operations. All centrally incurred costs are allocated to the construction services operation. Intercompany revenue is eliminated at cost to arrive at consolidated revenue and cost of revenue. 22. Quarterly Financial Data (Unaudited):
March 31, June 30, September 30, December 31, ------------ ------------ ------------ ------------ 2000 Revenue $ 38,589,472 $ 45,378,857 $ 44,434,571 $ 35,170,358 Gross Profit 1,784,830 1,413,572 1,742,034 (302,281) Income (loss) from operations 210,286 (61,337) (50,655) (2,237,979) Net income (loss) 227,164 15,366 17,515 (1,834,631) Basic net income (loss) per common share 0.06 0.01 - (0.51) Diluted net income (loss) per common share 0.06 0.01 - (0.51) Basic weighted average common shares outstanding 3,518,018 3,559,938 3,559,938 3,559,938 Diluted weighted average common shares outstanding 3,518,018 3,559,938 3,559,938 3,559,938 1999 Revenue $ 58,274,203 $ 54,201,337 $ 51,440,091 $ 46,086,640 Gross Profit 2,743,186 2,672,293 2,471,529 2,044,438 Income from operations 787,617 1,054,801 857,465 560,526 Net income 551,812 676,539 732,772 378,983 Basic net income per common share 0.15 0.20 0.21 0.11 Diluted net income per common share 0.15 0.19 0.21 0.11 Basic weighted average common shares outstanding 3,571,250 3,501,250 3,501,250 3,501,250 Diluted weighted average common shares outstanding 3,608,009 3,509,272 3,501,250 3,601,250
F-21 EX-10.116 2 0002.txt MASTER LEASE AGREEMENT EXHIBIT 10.116 Master Lease Agreement MASTER LEASE AGREEMENT ("Master Lease") dated as of March 10, 2000 between The -------------- CIT Group/Equipment Financing, Inc. (Lessor), having a place of business at P 0 Box 27248 Tempe AZ 85285-7248 -------------------------------------------------- Address City State Zip Code and Ready Mix, Inc ("Lessee"), ---------------------------------------------------------------- having a place of business at 2601 E. Thomas Ste 235 Phoenix AZ 85008 -------------------------------------------------- Address City State Zip Code This Master Lease Agreement provides a set of terms and conditions that the parties hereto intend to be applicable to various transactions for the lease of personal property. Each lease contract shall be evidenced by an equipment schedule ("Schedule") executed by Lessor and Lessee that explicitly incorporates the provisions of this Master Lease Agreement and that sets forth specific terms of that particular lease contract. Where the provisions of a Schedule conflict with the terms hereof, the provisions of the Schedule shall prevail. Each Schedule shall constitute a complete and separate lease agreement, independent of all other Schedules, and without any requirement of being accompanied by an originally executed copy of this Master Lease Agreement. The term "Lease" when used herein shall refer to an individual Schedule. One originally executed copy of the Schedule shall be denominated "Originally Executed Copy No. 1 of 1 originally executed copies" and such copy shall be retained by Lessor. If more than one copy of the Schedule is executed by Lessor and Lessee, all such other copies shall be numbered consecutively with numbers greater than 1. Only transfer of possession by Lessor of the originally executed copy denominated "Originally Executed Copy No. 1" shall be effective for purposes of perfecting an interest in such Schedule by possession. 1. Equipment Leased and Term. This Lease shall cover such personal property as is described in any Schedule executed by or pursuant to the authority of Lessee, accepted by Lessor in writing and identified as a part of this Lease (which personal property with all replacement parts, additions, repairs, accessions and accessories incorporated therein and/or affixed thereto is hereinafter called the "Equipment"). Lessor hereby leases to Lessee and Lessee hereby hires and takes from Lessor, upon and subject to the covenants and conditions hereinafter contained, the Equipment described in any Schedule. Notwithstanding the commencement date of the term of this Lease with respect to any item of Equipment, Lessee agrees that all risk of loss of the Equipment shall be on Lessee from and after shipment of the Equipment to Lessee by the seller thereof, F.O.B. seller's point of shipment, the date of such shipment being hereinafter called "date of shipment." The term of this Lease with respect to any item of Equipment shall be for the period as set forth in the Schedule. Lessee hereby gives Lessor authority to insert the actual commencement date and date of first monthly rental for any item of Equipment in any Schedule as well as such items as serial numbers if such are not already inserted when such Schedule is executed by Lessee. "Seller" as used in this Lease means the supplier from which Lessor acquires any item of Equipment. 2. Rent. Lessee shall pay to Lessor rent for each item of Equipment in the amounts and at the times specified in the Schedule. Any payment not made when due shall, at the option of Lessor, bear late charges thereon calculated at the rate of 1 1/2% per month, but in no event greater than the highest rate permitted by relevant law. All rent shall be paid at Lessor's place of business shown above, or such other place as Lessor may designate by written notice to the Lessee. All rents shall be paid without notice or demand and without abatement, deduction or set off of any amount whatsoever. The operation and use of the Equipment shall be at the risk of Lessee and not of Lessor and the obligation of Lessee to pay rent hereunder shall be unconditional. 3. No Warranties by Lessor; Maintenance and Compliance with Laws. Lessor, not being the manufacturer of the Equipment, nor manufacturer's agent, MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE FITNESS, QUALITY, DESIGN, CONDITION, CAPACITY, SUITABILITY, MERCHANTABILITY OR PERFORMANCE OF THE Equipment OR OF THE MATERIAL OR WORKMANSHIP THEREOF, IT BEING TO BE BORNE BY LESSEE AT ITS SOLE RISK AND EXPENSE, Lessee accordingly agrees not to assert any claim whatsoever against Lessor based thereon. Lessee further agrees, regardless of cause, not to assert any claim whatsoever against Lessor for loss of anticipatory profits or consequential damages. Lessor shall have no obligation to install, erect, test, adjust or service the Equipment. Lessee shall look to the manufacturer and/or Seller for any claims related to the Equipment. Lessor hereby acknowledges that any manufacturer's and/or Seller's warranties are for the benefit of both Lessor and Lessee. No oral agreement, guaranty, promise, condition, representation or warranty shall be binding; all prior conversations, agreements or representations related hereto and/or to the Equipment are integrated herein, and no modification hereof shall be binding unless in writing signed by Lessor. Lessee agrees, at its own cost and expense: (a) to pay all shipping charges and other expenses incurred in connection with the shipment of the Equipment by the Seller to Lessee; (b) to pay all charges and expenses in connection with the operation of each item of Equipment; (c) to comply with all governmental laws, ordinances, regulations, requirements and rules with respect to the use, maintenance and operation of the Equipment; and (d) to make all repairs and replacements required to be made to maintain the Equipment in the condition set forth in Rider A to the Schedule. 4. Insurance. Lessee shall maintain at all times on the Equipment, at its expense, all-risk physical damage insurance and comprehensive general and/or automobile (as appropriate) liability insurance (covering bodily injury and property damage exposures including, but not limited to, contractual liability and products liability) in such amounts, against such risks, in such form and with such insurers as shall be satisfactory to Lessor; provided, that the amount of all-risk physical damage insurance shall not on any date be less than the greater of the full replacement value or the Stipulated Loss Value of the Equipment as of such date. Each physical damage insurance policy will name Lessor as loss payee. Each liability insurance policy will name Lessor as additional insured. Each insurance policy will also require that the insurer give Lessor at least thirty (30) days prior written notice of any alteration in or cancellation of the terms of such policy and require that Lessor's interests be continued insured regardless of any breach or violation by Lessee or others of any warranties, declarations or conditions contained in such insurance policy. In no event shall Lessor be responsible for premiums, warranties or representations to any insurer or any agent thereof. Lessee shall furnish to Lessor a certificate or other evidence satisfactory to Lessor that such insurance coverage is in effect, but Lessor shall be under no duty to ascertain the existence or adequacy of such insurance. The insurance maintained by Lessee shall be primary without any right of contribution from insurance which may be maintained by Lessor. Lessee shall be liable for all deductible portions of all required insurance. Lessor may, at its own expense, for its own benefit, purchase insurance in excess of that required under this Lease Agreement Physical damage insurance proceeds shall be applied as set forth in Section 5. 5. Loss and Damage. Lessee agrees to assume and bear the entire risk of any partial or complete loss with respect to the Equipment from any and every cause whatsoever including theft, loss, damage, destruction or governmental taking, whether or not such loss is covered by insurance or caused by any default or neglect of Lessee. Lessee agrees to give Lessor prompt notice of any damage to or loss of any Equipment. All physical damage insurance proceeds shall be payable directly to Lessor. If any of the Equipment is lost, destroyed, damaged beyond repair, or taken by governmental action, Lessee shall pay to Lessor on the next rent payment date following such loss or taking the Stipulated Loss Value for such Equipment (computed as of the rent payment date on or immediately preceding the date of such loss or taking), and any other amounts then due and owing hereunder (including all rent payments due on or prior to the date of such Stipulated Loss Value payment) with respect to that Equipment, and the Lease for such Equipment shall terminate when such payment is made. Following payment of any Stipulated Loss Value, and if no Event of Default as defined in Section 10 has occurred and remains continuing, Lessor will then: (a) transfer to Lessee Lessor's rights to such Equipment "as-is, where-is and with all defects," without recourse and without representation or warranty, express or implied, other than a warranty that the Equipment is free and clear of any liens created by Lessor; and (b) remit to Lessee any physical damage insurance proceeds arising out of such loss up to the amount of the Stipulated Loss Value paid. Lessee shall determine in the exercise of its reasonable judgment whether the Equipment is damaged beyond repair, subject to Lessor's approval. In the event of damage or loss which does not result in damage beyond repair or a total loss of the Equipment or any item thereof, Lessee shall cause the affected Equipment to be restored to the condition required by the terms of this Lease. Upon completion of such repair and after supplying Lessor with satisfactory evidence thereof (and provided no Event of Default has occurred and remains continuing), Lessee shall be entitled to receive any insurance proceeds or other recovery to which Lessor would otherwise be entitled in connection with such loss up to the amount expended by Lessee in making the repair. Lessor shall not be obligated to undertake by litigation or otherwise the collection of any claim against any person for loss of, damage to, or governmental taking of the Equipment, but Lessor will cooperate with Lessee at Lessee's expense to pursue such claims. Except as expressly provided above, the total or partial destruction of any Equipment or Lessee's total or partial loss of use or possession thereof shall not release or relieve Lessee from its obligations under this Master Lease or any Schedule including the duty to pay the rent(s) herein provided. 6. Taxes. Lessee shall pay, and shall indemnify and hold Lessor harmless from and against, on an after-tax basis, all fees, taxes, withholdings, assessments and other governmental charges, however designated together with any penalties, fines or interest, if any, thereon, (collectively, the "Impositions") which are at any time levied or imposed against Lessor, Lessee, this Lease, the Equipment or any part thereof by any Federal, state, local or foreign government or taxing authority upon, with respect to, as a result of or measured by (i) the Equipment (or any part thereof), or this Lease or the interest of the Lessor therein; or (ii) the purchase, ownership, delivery, leasing, possession, maintenance, use, operation, return, sale or other disposition of the Equipment or any part thereof; or (iii) the rentals, receipts or earnings payable under this Lease or otherwise arising from the Equipment or any part thereof; excluding, however, taxes based on or measured by the net income of Lessor. Lessor (a) shall pay, and promptly upon receipt of Lessor's invoice therefor Lessee shall reimburse Lessor for paying, any Impositions, and (b) in case any report or return is required to be filed with respect to any Impositions, Lessor will make such report or return to show Lessor's ownership of the Equipment. Lessor and Lessee may instead agree in writing that Lessee will pay any Impositions directly or file any such reports or returns. Lessee's obligations under this Section shall survive the expiration or termination of this Lease. 7. Lessors Title, Right of Inspection and Identification of Equipment. Title to the Equipment shall at all times remain in Lessor and Lessee will at all times protect and defend, at its own cost and expense, the title of Lessor from and against all claims, liens and legal processes of creditors of Lessee and keep all the Equipment free and clear from all such claims, liens and processes. The Equipment is and shall remain personal property. Upon the expiration or termination of this Lease with respect to any item of Equipment Lessee shall return such Equipment in accordance with the provisions set forth in Rider A to the Schedule. Lessor shall have the right from time to time during reasonable business hours to enter upon Lessee's premises or elsewhere for the purpose of confirming the existence, condition and proper maintenance of the Equipment and during any period of storage Lessor shall also have the right to demonstrate and show the Equipment to others. The foregoing rights of entry are subject to any applicable governmental laws, regulations and rules concerning industrial security. Lessee shall, upon the request of Lessor, and at its own expense firmly affix to the Equipment, in a conspicuous place, such a decalcomania or metal plate as shall be supplied by Lessor showing the Lessor as the owner and lessor of such Equipment. 8. Possession, Use and Changes in Location of Equipment. So long as Lessee shall not be in default under the Lease it shall be entitled to the possession and use of the Equipment in accordance with the terms of this Lease. The Equipment shall be used in the conduct of the lawful business of Lessee, and no item of Equipment shall be removed from its location shown on the Schedule, without the prior written consent of Lessor. Lessee shall not, without Lessor's prior written consent, part with possession or control of the Equipment or attempt or purport to sell, pledge, mortgage or otherwise encumber any of the Equipment or otherwise dispose of or encumber any interest under this Lease. 9. Performance of Obligations of Lessee by Lessor. In the event that the Lessee shall fail duly and promptly to perform any of its obligations under the provisions of Sections 3, 4, 5, 6, and 7 of this Lease, Lessor may, at its option, perform the same for the account of Lessee without thereby waiving such default, and any amount paid or expense (including reasonable attorneys' fees), penalty or other liability incurred by Lessor in such performance, together with interest at the rate of 1 1/2% per month thereon (but in no event greater than the highest rate permitted by relevant law) until paid by Lessee to Lessor, shall be payable by Lessee upon demand as additional rent for the Equipment Lessee shall be responsible for and pay to Lessor a returned check fee, not to exceed the maximum permitted by law, which fee will be equal to the sum of (i) the actual bank charges incurred by Lessor plus (ii) all other actual costs and expenses incurred by Lessor. The returned check fee is payable upon demand as additional rent under this Lease. 10. Default. An Event of Default shall occur if: (a) Lessee fails to pay when due any installment of rent and such failure continues for a period of 10 days; (b) Lessee shall fail to perform or observe any covenant, condition or agreement to be performed or observed by it hereunder and such failure continues uncured for 15 days after written notice thereof to Lessee by Lessor; (c) Lessee ceases doing business as a going concern, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts as they become due, files a voluntary petition in bankruptcy, is adjudicated a bankrupt or an insolvent, files a petition seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar arrangement under any present or future statute, law or regulation or files an answer admitting the material allegations of a petition filed against it in any such proceeding, consents to or acquiesces in the appointment of a trustee, receiver, or liquidator of it or of all or any substantial part of its assets or properties, or if it or its shareholders shall take any action looking to its dissolution or liquidation; (d) within 60 days after the commencement of any proceedings against Lessee seeking reorganization, arrangement, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceedings shall not have been dismissed, or if within 60 days after the appointment without Lessee's consent or acquiescence of any trustee, receiver or liquidator of it or of all or any substantial part of its assets and properties, such appointment shall not be vacated; (e) Lessee attempts to remove, sell, transfer, encumber, part with possession or sublet the Equipment or any item thereof; (f) Lessee defaults in payment or performance of any obligation or indebtedness of any kind or description, whether direct, indirect, absolute or contingent, due or to become due, now existing or hereafter arising owing to Lessor or any of its agents or affiliates; or (g) Any warranty, representation or statement made or furnished to Lessor by or on behalf of Lessee in or in connection with this Lease proves to have been false in any material respect when made or furnished. 11. Remedies Upon Default. Upon the occurrence of an Event of Default, Lessor shall have all the rights and remedies provided by applicable law and by this Lease. Notwithstanding that this Agreement is a lease and title to the Equipment is at all times in Lessor, Lessor may nevertheless at its option choose those rights and remedies of a secured party under the Uniform Commercial Code. In addition, Lessor, at its option, may: (a) by notice to Lessee terminate this Lease effective on the date such Event of Default first occurred; (b) proceed by appropriate court action or actions or other proceedings either at law or equity to enforce performance by the Lessee of any and all covenants of this Lease and to recover damages for the breach thereof; (c) Lessor and/or its agents may without notice or liability or legal process, enter into any premises of or under control or jurisdiction of Lessee or any agent of Lessee where the Equipment may be or by Lessor is believed to be, and repossess all or any item thereof, disconnecting and separating all thereof from any other property and using all force necessary or permitted by applicable law so to do, Lessee hereby expressly waiving all further rights to possession of the Equipment and all claims for injuries suffered through or loss caused by such repossession or demand that Lessee deliver the Equipment forthwith to Lessor at Lessee's expense at such place as Lessor may designate; and (d) elect to sell, release or otherwise dispose of all or part of the Equipment or to retain all or part thereof, in such manner and on such terms and conditions as Lessor may determine in its sole discretion, with or without notice to Lessee which Lessee hereby waives to the extent permitted by applicable law (Lessor may sell or lease the Equipment at a time and location of its choosing provided that the Lessor acts in good faith and in a commercially reasonable manner); (e) declare immediately due and payable any unpaid rent, late charges and any other amounts due hereunder that accrued on or before the occurrence of the Event of Default, plus as liquidated damages for loss of the bargain and not as a penalty, an amount equal to the Stipulated Loss Value for the Equipment as of the rent payment date immediately preceding the date Lessor declares the Lease in default, and, in addition, all attorney and court costs incurred by Lessor relating to the enforcement of its rights under the Lease. Lessor may sell the Equipment at private or public sale, in bulk or in parcels, with or without notice, without having the Equipment present at the place of sale; or Lessor may lease, otherwise dispose of or keep idle all or part of the Equipment, subject, however, to its obligation to mitigate damages; and Lessor may use Lessee's premises for any or all of the foregoing. The proceeds of sale, lease or other disposition, if any, of the Equipment shall be applied (1) to all Lessor's costs, charges and expenses incurred in taking, removing, holding, repairing and selling, leasing or otherwise disposing of the Equipment including attorney fees; then (2) to the extent not previously paid by Lessee, to pay Lessor the Stipulated Loss Value of the Equipment plus any accrued and unpaid rent, late charges, indemnities and any other amounts then remaining unpaid under the Lease; then (3) to reimburse to Lessee any such sums previously paid by Lessee as liquidated damages; (4) any surplus shall be retained by Lessor. In no event shall Lessee upon demand by Lessor for payment hereunder or otherwise be obligated to pay any amount in excess of that permitted by law. The waiver by Lessor of any breach of any obligation of Lessee shall not be deemed a waiver of any future breach of the same or any other obligation. No remedy of Lessor hereunder shall be exclusive of any remedy herein or by law provided, but each shall be cumulative and in addition to every other remedy. 12. Indemnity. Lessee agrees that Lessor shall not be liable to Lessee for, and Lessee shall indemnify and save Lessor harmless from and against any and all liability, loss, damage, expense, causes of action, suits, claims or judgments arising from or caused directly or indirectly by: (a) Lessee's failure to promptly perform any of its obligations under the provisions of Sections 3, 4, 5, 6 and 7 of this Lease; or (b) injury to persons or damage to property resulting from or based upon actual or alleged use, operation, delivery or transportation of any or all of the Equipment or its location or condition; or (c) inadequacy of the Equipment, or any part thereof, for any purpose or any deficiency or defect therein or the use or maintenance thereof or any repairs, servicing or adjustments thereto or any delay in providing or failure to provide any thereof or any interruption or loss of service or use thereof or any loss of business; and shall, at its own cost and expense, defend any and all suits which may be brought against Lessor, either alone or in conjunction with others upon any such liability or claim or claims and shall satisfy, pay and discharge any and all judgments and fines that may be recovered against Lessor in any such action or actions, provided, however, that Lessor shall give Lessee written notice of any such claim or demand. Lessee agrees that its obligations under this Section 12 shall survive the expiration or termination of this Lease. 13. Lessee's Warranties. Lessee warrants that each item of Equipment has the recovery period under Section 168(c) of the Internal Revenue Code of 1986 as amended or any comparable successor law ("Code") as set forth on the Schedule and will be eligible for depreciation deductions determined by using the method specified in Section 168(b)(i) of the Code commencing with the taxable year of Lessor that includes the delivery date and using a basis equal to Lessor's cost as set forth on the Schedule; a reasonable estimate of the useful life of each item of Equipment is at least 125% of its lease term; a reasonable estimate of the fair market value of each item of Equipment at the end of its lease term is at least 20% of Lessor's cost therefor; and Lessee will not use the Equipment in a manner which will result in foreign source income for Lessor, and this Lease constitutes a "qualified motor vehicle operating agreement" within the meaning of Section 7701(h)(2) of the Code, the Equipment constitutes "motor vehicles" within the meaning of such Section 7701(h)(2) and the provisions of Section 18 hereof constitute a "terminal rental adjustment clause" within the meaning of Section 7701(h)(3) of the Code. 14. Tax Indemnity. Lessor has calculated the rent payments and Stipulated Loss Values for each Schedule based in part on Lessee's warranties herein and on the assumptions that Lessor shall be entitled to all tax benefits of ownership with respect to the Equipment (the "Tax Benefits"), including but not limited to, (i) the accelerated cost recovery deductions determined in accordance with Section 168(b)(1) of the Code for each item of Equipment based on the cost and depreciable life thereof specified on the Schedule, (ii) deductions for interest on any indebtedness incurred by Lessor to finance any item of Equipment and (iii) sourcing of income and losses attributable to this Lease to the United States. Lessee agrees to take no action inconsistent with the foregoing or which would result in the loss, disallowance or unavailability to Lessor of all or any part of the Tax Benefits. Lessee, for any reason whatsoever, including as a result of any amendment to the Code or any other change in tax law occurring after the date of the Lease ("Tax Law Change"), hereby indemnifies and holds harmless Lessor from and against (i) any of the following: (1) the loss, disallowance, unavailability or recapture of all or any part of the Tax Benefits, if Lessor shall not be entitled or shall determine that it shall not have substantial authority to claim, shall suffer a disallowance of, or shall be required to recapture all or any part of the Tax Benefits; (2) Lessor's originally contemplated after-tax rate of return ("Net Return") is otherwise adversely affected by a Tax Law Change (including a tax rate change); (3) Lessor shall be required to include in its gross income for any period before the expiration or termination of this Lease any amount other than (a) the rent in the respective specified monthly payment amounts and not prior to the respective periods to which rent is allocable under the terms of this Lease and (b) any other amounts to the extent not offset by deductions for such amounts in Lessor's taxable year in which such amount are includible in gross income; or (4) any item of income, gain, loss, deduction or credit with respect to the Equipment shall be treated or derived from, or allocable to, sources without the United States and consequently Lessor shall be able to utilize as a credit against its Federal Income tax liability in any year, a smaller amount of foreign taxes than it would have been able to utilize had such item of income, gain, loss, deduction or credit not been treated as derived from, or allocable to sources without the United States; plus (ii) all interest, penalties, fines or additions to tax resulting from such loss, disallowance, unavailability or recapture; plus (iii) all taxes required to be paid by Lessor upon receipt of the indemnity set forth in this paragraph which shall be computed at the highest marginal statutory tax rate then applicable to Lessor. Any indemnity payments made by Lessee shall be calculated so as to allow Lessor to maintain its Net Return with respect to the Lease. Payment shall be made in immediately available funds within 30 days after receipt of a written demand therefor from Lessor. In the event of an indemnity payment, Stipulated Loss Values shall be adjusted by Lessor to those values determined by Lessor as necessary to maintain Lessor's Net Return. For the purposes of this Section, "Lessor" includes for all tax purposes the consolidated taxpayer group of which Lessor is part. 15. Assignment, Notices and Waivers. This Lease and all rights of Lessor hereunder shall be assignable by Lessor without Lessee's consent, but Lessee shall not be obligated to any assignee of Lessor except after written notice of such assignment from Lessor. Following such assignment, solely for the purpose of determining assignee's rights hereunder, the term "Lessor" shall be deemed to include or refer to Lessor's assignee. Without the prior written consent of Lessor, Lessee shall not assign this Lease or its interests hereunder or enter into any sub-lease with respect to the Equipment covered hereby. All notices to Lessor shall be delivered in person to an officer of the Lessor, or shall be sent certified mail return receipt requested to Lessor at its address shown herein or at any later address last known to the sender. All notices to Lessee shall be in writing and shall be delivered by mail at its address shown herein or at any later address last known to the sender. A waiver of a default shall not be a waiver of any other or a subsequent default. 16. Further Assurances. Lessee shall execute and deliver to Lessor, upon Lessor's request such instruments and assurances as Lessor deems necessary or advisable for the confirmation or perfection of this Lease and Lessor's rights hereunder and to enable Lessor to fulfill all of its tax filing obligations. Lessee may not terminate any Schedule without the written consent of Lessor. If Lessor in good faith believes itself insecure or performance impaired, it may declare a default hereunder or, instead of declaring a default, Lessor may demand, and Lessee hereby agrees to give, additional Equipment or other collateral as security for the obligations hereunder. 17. Lease Irrevocability. This Lease is irrevocable for the full terms thereof as set forth in any Schedule and for the aggregate rentals therein reserved and the rent shall not abate by reason of termination of Lessee's right of possession and/or the taking of possession by the Lessor or for any other reason. 18. Terminal Rental Adjustment Clause. (a) Sale of Equipment Subject to Subsection 18(b) hereof, the fair market sale value of Equipment as of the final day of the lease term (the "Expiration Date") shall be determined, and the Equipment shall be sold, as follows: (i) Purchase by Highest Bidder. During the 90-day period prior to the Expiration Date, Lessor shall obtain bids for all items of Equipment from prospective purchasers. Lessee shall be free to bid on such Equipment during such period. Lessor shall sell such Equipment to the highest bidder on an "as-is, where-is" basis within ten (10) days after the Expiration Date, by delivery of a bill of sale, without representation or warranty, express or implied, except as to the absence of liens created by Lessor, provided that the conditions of such sale shall not be deemed to limit Lessee's obligations under Section 7 hereof. Lessor shall inform each bidder, including Lessee, of the amount of all bids received from other bidders before and after receipt of a bid from such bidder and each bidder, including Lessee, may bid as many times as it chooses during the 100-day aggregate period referred to above. Lessee shall pay or reimburse to Lessor all taxes (other than income taxes on any gain on such sale), costs and expenses (including legal fees and expenses) incurred or paid by Lessor in connection with such sale or of the sale described in Subsection 18(a)(ii). The Actual Residual Value shall be deemed to equal the purchase price received for such Equipment by Lessor net of all amounts referred to in the preceding sentence. (ii) No Available Bidder. In the event no bids are received or the Equipment is not sold during the 100-day aggregate period referred to above, Lessee and Lessor agree that a disposition of such Equipment shall have occurred and, in view of the uncertainties of market conditions and the parties' inability to predict what the actual sale price of such Equipment would be, that the Actual Residual Value shall equal zero for purposes of the rental adjustment set forth in Subsection 18(b) hereof, provided that if and when Lessor sells such Equipment, the Actual Residual Value shall be deemed to equal the purchase price received for such Equipment by Lessor net of all amounts referred to in the fifth sentence of the preceding paragraph, and the rental adjustment set forth in Subsection 18(b) hereof shall be recomputed and payable on such basis, without interest. (b) Rent Adjustment. (i) In the event (1) that the Actual Residual Value of the Equipment is less than the percentage ("TRAC percentage") of the aggregate Lessor's cost set forth in the Schedule (the "Estimated Residual Value"), then Lessee shall pay to Lessor, as an adjustment to the rent payable on the Expiration Date, an amount equal to the excess of the Estimated Residual Value over such Actual Residual Value and (2) that if the Actual Residual Value of the Equipment is greater than the Estimated Residual Value, then Lessor shall pay to Lessee, as an adjustment to the rent payable on the Expiration Date, an amount equal to the excess of such Actual Residual Value. (ii) In the event that the Equipment is sold by Lessor pursuant to Section 11 hereof and the amount realized on such sale, net of all taxes, costs and expenses (including without limitation, legal fees and expenses) incurred or paid by Lessor in connection with such sale of such Equipment, is in excess of the sum of (1) the Stipulated Loss Value determined as of the rent payment date on or immediately preceding the date of such sale, and (2) all accrued and unpaid rent for such Equipment due on all rent payment dates up to and on the date of such sale (together with interest on such amounts at the late charge rate from such rent payment dates), then Lessor shall pay to Lessee, as an adjustment to the rent payable hereunder, an amount equal to such excess. (iii) Any payments required to be made by this Subsection 18(b) shall be made, in the event the Equipment is not sold, on the Expiration Date, and, in the event such Equipment is sold, on the date of such sale. Lessor's obligation to sell such Equipment to Lessee under Subsection 18(a) hereof is contingent upon receipt by Lessor of the Equipment and the amount, if any, payable to Lessor by Lessee under this Subsection 18(b). 19. Miscellaneous. (a) This Lease constitutes the entire agreement between Lessor and Lessee with respect to the Equipment and supersedes all prior correspondence between the parties. No covenant, condition or other term of provision hereof shall be deemed waived, amended, or modified by either party unless such waiver, amendment, or modification is in writing and signed by each of the parties hereto. Section headings are for convenience only and shall not be construed as part of this Lease. Lessee's initials /s/ KND --------------------- (b) This Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except as otherwise provided herein. (c) Any provision of this Lease which may be prohibited or unenforceable in any jurisdiction shall not, as to such jurisdiction, invalidate the remaining provisions hereof and shall not invalidate or render unenforceable such provision in any other jurisdiction. (d) LESSOR AND LESSEE IN ANY LITIGATION RELATING TO OR IN CONNECTION WITH THIS LEASE IN WHICH THEY SHALL BE ADVERSE PARTIES WAIVE TRIAL BY JURY. (e) In the event this Lease or any part hereof is deemed to be a lease intended as security, Lessee grants Lessor a security interest in each item of Equipment as security for all of Lessee's indebtedness and obligations owing under this Lease and under each Schedule as well as all other present and future indebtedness and obligations of Lessee to Lessor of every kind and nature whatsoever. If Lessee is a corporation, this Lease is executed by authority of its Board of Directors. If Lessee is a partnership or joint venture, this Lease is executed by authority of all its partners or co-venturers. Dated: 3-10-2000 --------------- Lessee: Ready Mix, Inc. - --------------------------------------------------------------------------- Name of individual, corporation or partnership By /s/ Kenneth D. Nelson Title Vice President ---------------------------------------- -------------------------- If corporation, have signed by President, Vice President or Treasurer, and give official title. If owner or partner, state which. THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ Kathy Taylor Title Agent ---------------------------------------- -------------------------- ________________________________________________________________________________ If Lessee is a partnership, enter. Partners' names Home addresses - --------------- -------------- EX-10.117 3 0003.txt LEASE AGREEMENT EXHIBIT 10.117 Equipment Schedule No. 1 -------------------------- Dated as of March 10, 2000 ------------------------------------- To Master Lease Agreement dated March 10, 2000 ----------------- Acceptance Date March 10, 2000 ------------------------ Commencement Date March 10, 2000 ---------------------- Equipment Schedule to MASTER LEASE AGREEMENT dated as of March 10, 2000 ----------------------- between THE CIT GROUP/EQUIPMENT FINANCING, INC., as Lessor and Ready Mix, Inc. ----------------- - -------------------------------- as Lessee. This Equipment Schedule incorporates the terms and conditions of the above- referenced Master Lease Agreement. This is Originally Executed Copy No. ___ of ___ originally executed copies. Only transfer of possession by Lessor of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. 1. EQUIPMENT DESCRIPTION:
Quantity Manufacturer Model/Feature Serial Number Description Cost Per Unit -------- ------------ ------------- ------------ ----------- -------------
See Schedule "A" consisting of 2 pages attached hereto and made a part hereof, for equipment description 2. LESSOR'S AGGREGATE COST OF EQUIPMENT. $2,076,000.00 . ------------------- 3. EQUIPMENT LOCATION 2601 E. Thomas Ste 235 Phoenix AZ 85008. ------------------------------------------------------- 4. ACCEPTANCE: Lessee confirms that (a) the Equipment described herein has been delivered to it in good working order and condition, and has been inspected and accepted by Lessee as of the Acceptance Date set forth above, (b) no Event of Default exists, (c) no Event of Default will be caused by the execution of this Schedule, (d) all Lessee's representations and warranties are true and correct, and (e) the terms and provisions of the Master Lease are hereby incorporated by reference and reaffirmed. 5. LEASE TERM. a. Interim Lease Term. The interim term of the lease of the Equipment shall commence on the Acceptance Date and shall continue until the commencement of the Primary Lease Term defined below. b. Primary Lease Term. The primary term of the lease of Equipment shall commence on the Commencement Date and shall continue for a term of 60 -- months from such Commencement Date. 6. RENT PAYMENTS. a. Interim Rent. The rent for each item of Equipment during the Interim Lease Term shall be an amount be an amount equal to 1/30th of the Primary Rent (defined below) multiplied by the number of days from and including the Acceptance Date to the Commencement Date which amount shall be payable on the Commencement Date. b. Primary Rent. The rent for each item of Equipment during the Primary Lease Term shall consist of _________ payments of $33,475.50 , payable monthly commencing on the Commencement ---------------- Date and a like sum on the same day of each month thereafter. 7. STIPULATED LOSS VALUES. The Stipulated Loss Values, expressed as a percentage of Lessor's cost of the Equipment, are set forth in Exhibit A attached hereto. The Stipulated Loss Value with respect to any item of Equipment as of any rent payment date shall be an amount determined by multiplying Lessor's cost of the item by the applicable percentage set forth on Exhibit A. Any Stipulated Loss Value determined as of a date after the final rent payment date will be determined by using the percentage for the final rent payment date. 8. RETURN, OPERATION, MAINTENANCE, ADDITIONS. The return, operation, maintenance and additions provisions applicable to the Equipment are set forth in Rider A attached hereto. 9. DEPRECIATION TAX ASSUMPTIONS. Equipment has a recovery period of 5 years. - 10. TRAC PERCENTAGE. 30.00% ----- 11. NONREFUNDABLE PROCESSING/ORIGINATION FEE payable to The CIT Group/Equipment Financing, Inc. $0.00 ---------------------- 12. ADDITIONAL PROVISIONS: Year 2000. The Lessee shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Lessee represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December31, 1999) will not result in a material adverse effect on the Lessee's business condition or ability to perform hereunder. Upon request, the Lessee shall provide assurance acceptable to the Lessor that the Lessee's computer systems and software are or will be Year 2000 compliant on a timely basis. The Lessee shall immediately advise Lessor in writing of any material changes in the Lessee's Year 2000 plan, timetable or budget. IN WITNESS WHEREOF, this Equipment Schedule has been signed as of the date set forth above. Lessee: Ready Mix, Inc. - --------------------------------------------------------------------------- By /s/ Kenneth D. Nelson Title Vice President ------------------------------------- ------------------------- KENNETH D. NELSON - --------------------------------------------------------------------------- Print or Type Name Lessor: The CIT Group/Equipment Financing, Inc. - --------------------------------------------------------------------------- By /s/ Kathy Taylor Title Agent ------------------------------------- ------------------------- Kathy Taylor - --------------------------------------------------------------------------- Print or Type Name EX-10.118 4 0004.txt LEASE AGREEMENT EXHIBIT 10.118 Equipment Schedule No. 2 ------------ Dated as of 5-11-00 ---------------------- To Master Lease Agreement dated March 10, 2000 ---------------- Acceptance Date 5-11-00 ------- Commencement Date 6-15-00 ------- Equipment Schedule to MASTER LEASE AGREEMENT dated as of March 10, 2000 -------------- between THE CIT GROUP/EQUIPMENT FINANCING, INC., as Lessor and Ready Mix, Inc. --------------- as Lessee. This Equipment Schedule incorporates the terms and conditions of the above-referenced Master Lease Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Lessor of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. 1. EQUIPMENT DESCRIPTION:
Quantity Manufacturer Model/Feature Serial Number Description Cost Per Unit -------- ------------ ------------- ------------- ----------- -------------
SEE SCHEDULE "A" CONSISTING OF 2 PAGES ATTACHED HERETO AND MADE A PART HEREOF, FOR EQUIPMENT DESCRIPTION. 2. LESSOR'S AGGREGATE COST OF EQUIPMENT. $2,429,570.00 ------------- 3. EQUIPMENT LOCATION 4411 South 40th Street Phoenix AZ 85040. ---------------------------------------- 4. ACCEPTANCE: Lessee confirms that (a) the Equipment described herein has been delivered to it in good working order and condition, and has been inspected and accepted by Lessee as of the Acceptance Date set forth above, (b) no Event of Default exists, (c) no Event of Default will be caused by the execution of this Schedule, (d) all Lessee's representations and warranties are true and correct, and (e) the terms and provisions of the Master Lease are hereby incorporated by reference and reaffirmed. 5. LEASE TERM. a. Interim Lease Term. The interim term of the lease of the Equipment shall commence on the Acceptance Date and shall continue until the commencement of the Primary Lease Term defined below. b. Primary Lease Term. The primary term of the lease of Equipment shall commence on the Commencement Date and shall continue for a term of 60 months from such Commencement Date. 6. RENT PAYMENTS. a. Interim Rent. The rent for the Equipment during the Interim Lease Term shall be an amount equal to 1/30th of the Primary Rent (defined below) multiplied by the number of days from and including the Acceptance Date to the Commencement Date which amount shall be payable on the Commencement Date. b. Primary Rent. The rent for the Equipment during the Primary Lease Term shall consist of 60 payments of $39,337.00, payable monthly commencing on the Commencement Date and a like sum on the same day of each month thereafter. 7. STIPULATED LOSS VALUES. The Stipulated Loss Values, expressed as a percentage of Lessor's cost of the Equipment, are set forth in Exhibit A attached hereto. The Stipulated Loss Value with respect to any item of Equipment as of any rent payment date shall be an amount determined by multiplying Lessor's cost of the item by the applicable percentage set forth on Exhibit A. Any Stipulated Loss Value determined as of a date after the final rent payment date will be determined by using the percentage for the final rent payment date. 8. RETURN, OPERATION, MAINTENANCE, ADDITIONS. The return, operation, maintenance and additions provisions applicable to the Equipment are set forth in Rider A attached hereto. 9. DEPRECIATION TAX ASSUMPTIONS. Equipment has a recovery period of 5 years. 10. TRAC PERCENTAGE 30.00% 11. NONREFUNDABLE PROCESSING/ORIGINATION FEE payable to The CIT Group/Equipment Financing, Inc. $0.00 12. ADDITIONAL PROVISIONS: Year 2000. The Lessee shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Lessee represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December 31, 1999) will not result in a material adverse effect on the Lessee's business condition or ability to perform hereunder. Upon request, the Lessee shall provide assurance acceptable to the Lessor that the Lessee's computer systems and software are or will be Year 2000 compliant on a timely basis. The Lessee shall immediately advise Lessor in writing of any material changes in the Lessee's Year 2000 plan, timetable or budget. IN WITNESS WHEREOF, this Equipment Schedule has been signed as of the date set forth above. Lessee: Ready Mix, Inc. - ----------------------------------------------------------------- By /s/ Kenneth D. Nelson Title Vice President --------------------------- ---------------------- KENNETH D. NELSON - ----------------------------------------------------------------- Print or Type Name Lessor: The CIT Group Equipment Financing, Inc. - ----------------------------------------------------------------- By /s/ [ILLEGIBLE]^^ Title Agent ---------------------------- ------------------------ ILLEGIBLE - ----------------------------------------------------------------- Print or Type Name EX-10.119 5 0005.txt LEASE AGREEMENT EXHIBIT 10.119 Equipment Schedule No. 3 Dated as of 7-11-00 To Master Lease Agreement dated March 10, 2000 Acceptance Date 7-17-2000 Commencement Date 8-17-2000 Equipment Schedule to MASTER LEASE AGREEMENT dated as of March 10, 2000 between The CIT GROUP/EQUIPMENT FINANCING, INC., as Lessor and Ready Mix, Inc., ____________________________________________________________________ as Lessee. This Equipment Schedule incorporates the terms and conditions of the above- referenced Master Lease Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Lessor of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. 1. EQUIPMENT DESCRIPTION: Quantity Manufacturer Model/Feature Serial Number Description Cost Per Unit - -------- ------------ ------------- ------------- ----------- ------------- SEE SCHEDULE "A" CONSISTING OF "2" PAGES ATTACHED HERETO AND MADE A PART HEREOF, FOR EQUIPMENT DESCRIPTIONS 2. LESSOR'S AGGREGATE COST OF EQUIPMENT. $2,134,390.00. 3. EQUIPMENT LOCATION 109 Delhi North Las Vegas NV 89030. 4. ACCEPTANCE: Lessee confirms that (a) the Equipment described herein has been delivered to it in good working order and condition, and has been inspected and accepted by Lessee as of the Acceptance Date set forth above, (b) no Event of Default exists, (c) no Event of Default will be caused by the execution of this Schedule, (d) all Lessee's representations and warranties are true and correct, and (e) the terms and provisions of the Master Lease are hereby incorporated by reference and reaffirmed. 5. LEASE TERM. a. Interim Lease Term. The interim term of the lease of the Equipment shall commence on the Acceptance Date and shall continue until the commencement of the Primary Lease Term defined below. b. Primary Lease Term. The primary term of the lease of Equipment shall commence on the Commencement Date and shall continue for a term of 60 months from such Commencement Date. 6. RENT PAYMENTS. a. Interim Rent. The rent for each item of Equipment during the Interim Lease Term shall be an amount equal to 1/30th of the Primary Rent (defined below) multiplied by the number of days from and including the Acceptance Date to the Commencement Date which amount shall be payable on the Commencement Date. b. Primary Rent. The rent for each item of Equipment during the Primary Lease Term shall consist of 60 payments of $34,723.06, payable monthly commencing on the Commencement Date and a like sum on the same day of each month thereafter. 7. STIPULATED LOSS VALUES. The Stipulated Loss Values, expressed as a percentage of Lessor's cost of the Equipment, are set forth in Exhibit A attached hereto. The Stipulated Loss Value with respect to any item of Equipment as of any rent payment date shall be an amount determined by multiplying Lessor's cost of the item by the applicable percentage set forth on Exhibit A. Any Stipulated Loss Value determined as of a date after the final rent payment date will be determined by using the percentage for the final rent payment date. 8. RETURN, OPERATION, MAINTENANCE, ADDITIONS. The return, operation, maintenance and additions provisions applicable to the Equipment are set forth in Rider A attached hereto. 9. DEPRECIATION TAX ASSUMPTIONS. Equipment has a recovery period of 5 years. 10. TRAC PERCENTAGE. 30.00%. 11. NONREFUNDABLE PROCESSING/ORIGINATION FEE payable to The CIT Group/Equipment Financing, Inc. $0.00 12. ADDITIONAL PROVISIONS: Year 2000. The Lessee shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Lessee represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December 31, 1999) will not result in a material adverse effect on the Lessee's business condition or ability to perform hereunder. Upon request, the Lessee shall provide assurance acceptable to the Lessor that the Lessee's computer systems and software are or will be Year 2000 compliant on a timely basis. The Lessee shall immediately advise Lessor in writing of any material changes in the Lessee's Year 2000 plan, timetable or budget. IN WITNESS WHEREOF, this Equipment Schedule has been signed as of the date set forth above. Lessee: Ready Mix, Inc. - ---------------------------------------------------------- By /s/ Kenneth D. Nelson Title Vice President ------------------------- ---------------------- KENNETH D. NELSON - ---------------------------------------------------------- Print or Type Name Lessor: The CIT Group/Equipment Financing, Inc. - ----------------------------------------------------------- By /s/ Heather Meheut Title Agent ------------------------- ---------------------- HEATHER MEHEUT - ----------------------------------------------------------- Print or Type Name SCHEDULE "A" Attached to and made a part of Equipment Schedule No. 3 dated 7-11-2000 a part of Master Lease dated March 10, 2000, between Ready Mix, Inc. as Lessee and The CIT Group/Equipment Financing, Inc. as Lessor . One (1) 2000 IHC Model 5500I Truck VIN # 1HTXLAHT0YJ004990, with 11.0 Yard Bridgemaster V Mixer S/N 56643-15728 . One (1) 2000 IHC Model 5500I Truck VIN # 1HTXLAHT2YJ004991, with 11.0 Yard Bridgemaster V Mixer S/N 56713-15769 . One (1) 2000 IHC Model 5500I Truck VIN # 1HTXLAHT8YJ004994; with 11.0 Yard Bridgemaster V Mixer S/N 56807-15824 . One (1) 2000 IHC Model 5500I Truck VIN # 1HTXLAHT6YJ004993, with 11.0 Yard Bridgemaster V Mixer S/N 57160-16026 . One (1) 2001 IHC Model 5500I Truck VIN # 1HTXLAHT21J005550, with 11.0 Yard Bridgemaster V Mixer S/N 57276-16094 . One (1) 2001 IHC Model 5500I Truck VIN # 1HTXLAHT71J00S415, with 11.0 Yard Bridgemaster V Mixer S/N 57279-16097 . One (1) 2001 IHC Model 5500I Truck VIN # 1HTXLAHT91J005416, with 11.0 Yard Bridgemaster V Mixer S/N 57291-16100 . One (1) 2001 IHC Model 5500I Truck VIN # 1HTXLAHT91J005490, with 11.0 Yard Bridgemaster V Mixer S/N 57414-16173 . One (1) 2000 Kenworth Truck Model W900 VIN # 1NKWL00X7YR858912, with 11.0 Yard Bridgemaster V Mixer S/N 57216-16057 . One (1) 2000 Kenworth Truck Model W900 VIN # INKL00X9YR858913, with 11.0 Yard Bridgemaster V Mixer S/N 57249-16077 . One (1) 2000 Kenworth Truck Model W900 VIN # 1NKWL00X0YR858914, with 11.0 Yard Bridgemaster V Mixer S/N 57273-16091 . One (1) 2000 Kenworth Truck Model W900 VIN # 1NKWL00X8YR858918, with 11.0 Yard Bridgemaster V Mixer 57272-16090 . One (1) 2000 Kenworth Truck Model W900 VIN # 1NKWL00X4YS854275, with 11.0 Yard Bridgemaster V Mixer S/N 57296-16104 . One (1) 2000 Kenworth Truck Model W900 VIN # 1NKWL00X2YS854274, with 11.0 Yard Bridgemaster V Mixer S/N 57321-16119 . One (1) 2000 Kenworth Truck Model W900 VIN # 1NKWL00X6YS854276, with 11.0 Yard Bridgemaster V Mixer S/N 57297-16105 . One (1) 2000 Kenworth Truck Model W900 VIN # 1NKWL00XXYS854278, with 11.0 Yard Bridgemaster V Mixer S/N 57331-16127 . One (1) 2000 Kenworth Truck Model W900 VIN # 1NKWL00X3YR858910, with 11.0 Yard Bridgemaster V Mixer S/N 57342-16133 All of the above to include tires, wheels, additions, substitutions, attachments, replacements and Accessions thereof, plus the proceeds of all the foregoing. Lessee: Lessor Ready Mix, Inc. The CIT Group/Equipment Financing, Inc. By: /s/ Kenneth D. Nelson By: /s/ Heather Meheut ------------------------ ----------------------------------- Title: VICE PRESIDENT Title: AGENT --------------------- --------------------------------- EX-10.120 6 0006.txt MASTER LEASE AGREEMENT EXHIBIT 10.120 Master Lease Agreement MASTER LEASE AGREEMENT ("Master Lease") dated as of 3-23-2000 between The CIT Group/Equipment Financing, Inc. (Lessor), having a place of business at: P.O. Box 27248 Tempe AZ 85285-7248 - -------------------------------------------------------------------------------- Address City State Zip Code and Meadow Valley Contractors, Inc. -------------------------------------------------------------------------- ("Lessee"), having a place of business at 4411 South 40th Street Phoenix AZ 85040 - ------------------------------------------------------------------------------ Address City State Zip Code This Master Lease Agreement provides a set of terms and conditions that the parties hereto intend to be applicable to various transactions for the lease of personal property. Each lease contract shall be evidenced by an equipment schedule ("Schedule") executed by Lessor and Lessee that explicitly incorporates the provisions of this Master Lease Agreement and that sets forth specific terms of that particular lease contract. Where the provisions of a Schedule conflict with the terms hereof, the provisions of the Schedule shall prevail. Each Schedule shall constitute a complete and separate lease agreement, independent of all other Schedules, and without any requirement of being accompanied by an originally executed copy of this Master Lease Agreement. The term "Lease" when used herein shall refer to an individual Schedule. One originally executed copy of the Schedule shall be denominated "Originally Executed Copy No. 1 of 1 originally executed copies" and such copy shall be retained by Lessor. If more than one copy of the Schedule is executed by Lessor and Lessee, all such other copies shall be numbered consecutively with numbers greater than 1. Only transfer of possession by Lessor of the originally executed copy denominated "Originally Executed Copy No. 1" shall be effective for purposes of perfecting an interest in such Schedule by possession. 1. Equipment Leased and Term. This Lease shall cover such personal property as is described in any Schedule executed by or pursuant to the authority of Lessee, accepted by Lessor in writing and identified as a part of this Lease (which personal property with all replacement parts, additions, repairs, accessions and accessories incorporated therein and/or affixed thereto is hereinafter called the "Equipment"). Lessor hereby leases to Lessee and Lessee hereby hires and takes from Lessor, upon and subject to the covenants and conditions hereinafter contained, the Equipment described in any Schedule. Notwithstanding the commencement date of the term of this Lease with respect to any item of Equipment, Lessee agrees that all risk of loss of the Equipment shall be on Lessee from and after shipment of the Equipment to Lessee by the seller thereof, F.O.B. seller's point of shipment, the date of such shipment being hereinafter called "date of shipment." The term of this Lease with respect to any item of Equipment shall be for the period as set forth in the Schedule. Lessee hereby gives Lessor authority to insert the actual commencement date and date of first monthly rental for any item of Equipment in any Schedule as well as such items as serial numbers if such are not already inserted when such Schedule is executed by Lessee. "Seller" as used in this Lease means the supplier from which Lessor acquires any item of Equipment. 2. Rent. Lessee shall pay to Lessor rent for each item of Equipment in the amounts and at the times specified in the Schedule. Any payment not made when due shall, at the option of Lessor, bear late charges thereon calculated at the rate of 1 1/2% per month, but in no event greater than the highest rate permitted by relevant law. All rent shall be paid at Lessor's place of business shown above, or such other place as Lessor may designate by written notice to the Lessee. All rents shall be paid without notice or demand and without abatement, deduction or set off of any amount whatsoever. The operation and use of the Equipment shall be at the risk of Lessee and not of Lessor and the obligation of Lessee to pay rent hereunder shall be unconditional. 3. No Warranties by Lessor; Maintenance and Compliance with Laws. Lessor, not being the manufacturer of the Equipment, nor manufacturer's agent, MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE FITNESS, QUALITY, DESIGN, CONDITION, CAPACITY, SUITABILITY, MERCHANTABILITY OR PERFORMANCE OF THE Equipment OR OF THE MATERIAL OR WORKMANSHIP THEREOF, IT BEING AGREED THAT THE Equipment IS LEASED "AS IS" AND THAT ALL SUCH RISKS, AS BETWEEN LESSOR AND LESSEE, ARE TO BE BORNE BY LESSEE AT ITS SOLE RISK AND EXPENSE, Lessee accordingly agrees not to assert any claim whatsoever against Lessor based thereon. Lessee further agrees, regardless of cause, not to assert any claim whatsoever against Lessor for loss of anticipatory profits or consequential damages. Lessor shall have no obligation to install, erect, test, adjust or service the Equipment. Lessee shall look to the manufacturer and/or Seller for any claims related to the Equipment. Lessor hereby acknowledges that any manufacturer's and/or Seller's warranties are for the benefit of both Lessor and Lessee. No oral agreement, guaranty, promise, condition, representation or warranty shall be binding; all prior conversations, agreements or representations related hereto and/or to the Equipment are integrated herein, and no modification hereof shall be binding unless in writing signed by Lessor. Lessee agrees, at its own cost and expense: (a) to pay all shipping charges and other expenses incurred in connection with the shipment of the Equipment by the Seller to Lessee; (b) to pay all charges and expenses in connection with the operation of each item of Equipment; (c) to comply with all governmental laws, ordinances, regulations, requirements and rules with respect to the use, maintenance and operation of the Equipment; and (d) to make all repairs and replacements required to be made to maintain the Equipment in the condition set forth in Rider A to the Schedule. 4. Insurance. Lessee shall maintain at all times on the Equipment, at its expense, all-risk physical damage insurance and comprehensive general and/or automobile (as appropriate) liability insurance (covering bodily injury and property damage exposures including, but not limited to, contractual liability and products liability) in such amounts, against such risks, in such form and with such insurers as shall be satisfactory to Lessor; provided, that the amount of all - risk physical damage insurance shall not on any date be less than the greater of the full replacement value or the Stipulated Loss Value of the Equipment as of such date. Each physical damage insurance policy will name Lessor as loss payee. Each liability insurance policy will name Lessor as additional insured. Each insurance policy will also require that the insurer give Lessor at least thirty (30) days prior written notice of any alteration in or cancellation of the terms of such policy and require that Lessor's interests be continued insured regardless of any breach or violation by Lessee or others of any warranties, declarations or conditions contained in such insurance policy. In no event shall Lessor be responsible for premiums, warranties or representations to any insurer or any agent thereof. Lessee shall furnish to Lessor a certificate or other evidence satisfactory to Lessor that such insurance coverage is in effect, but Lessor shall be under no duty to ascertain the existence or adequacy of such insurance. The insurance maintained by Lessee shall be primary without any right of contribution from insurance which may be maintained by Lessor. Lessee shall be liable for all deductible portions of all required insurance. Lessor may, at its own expense, for its own benefit, purchase insurance in excess of that required under this Lease Agreement. Physical damage insurance proceeds shall be applied as set forth in Section 5. 5. Loss and Damage. Lessee agrees to assume and bear the entire risk of any partial or complete loss with respect to the Equipment from any and every cause whatsoever including theft, loss, damage, destruction or governmental taking, whether or not such loss is covered by insurance or caused by any default or neglect of Lessee. Lessee agrees to give Lessor prompt notice of any damage to or loss of any Equipment. All physical damage insurance proceeds shall be payable directly to Lessor. If any of the Equipment is lost, destroyed, damaged beyond repair, or taken by governmental action, Lessee shall pay to Lessor on the next rent payment date following such loss or taking the Stipulated Loss Value for such Equipment (computed as of the rent payment date on or immediately preceding the date of such loss or taking), and any other amounts then due and owing hereunder (including all rent payments due on or prior to the date of such Stipulated Loss Value payment) with respect to that Equipment, and the Lease for such Equipment shall terminate when such payment is made. Following payment of any Stipulated Loss Value, and if no Event of Default as defined in Section 10 has occurred and remains continuing, Lessor will then: (a) transfer to Lessee Lessors rights to such Equipment "as-is, where-is and with all defects," without recourse and without representation or warranty, express or implied, other than a warranty that the Equipment is free and clear of any liens created by Lessor; and (b) remit to Lessee any physical damage insurance proceeds arising out of such loss up to the amount of the Stipulated Loss Value paid. Lessee shall determine in the exercise of its reasonable judgment whether the Equipment is damaged beyond repair, subject to Lessor's approval. In the event of damage or loss which does not result in damage beyond repair or a total loss of the Equipment or any item thereof, Lessee shall cause the affected Equipment to be restored to the condition required by the terms of this Lease. Upon completion of such repair and after supplying Lessor with satisfactory evidence thereof (and provided no Event of Default has occurred and remains continuing), Lessee shall be entitled to receive any insurance proceeds or other recovery to which Lessor would otherwise be entitled in connection with such loss up to the amount expended by Lessee in making the repair. Lessor shall not be obligated to undertake by litigation or otherwise the collection of any claim against any person for loss of, damage to, or governmental taking of the Equipment, but Lessor will cooperate with Lessee at Lessee's expense to pursue such claims. Except as expressly provided above, the total or partial destruction of any Equipment or Lessee's total or partial loss of use or possession thereof shall not release or relieve Lessee from its obligations under this Master Lease or any Schedule including the duty to pay the rent(s) herein provided. 6. Taxes. Lessee shall pay, and shall indemnify and hold Lessor harmless from and against, on an after-tax basis, all fees, taxes, withholdings, assessments and other governmental charges, however designated together with any penalties, fines or interest, if any, thereon, (collectively, the "Impositions") which are at any time levied or imposed against Lessor, Lessee, this Lease, the Equipment or any part thereof by any Federal, state, local or foreign government or taxing authority upon, with respect to, as a result of or measured by (i) the Equipment (or any part thereof), or this Lease or the interest of the Lessor therein; or (ii) the purchase, ownership, delivery, leasing, possession, maintenance, use, operation, return, sale or other disposition of the Equipment or any part thereof; or (iii) the rentals, receipts or earnings payable under this Lease or otherwise arising from the Equipment or any part thereof; excluding, however, taxes based on or measured by the net income of Lessor. Lessor (a) shall pay, and promptly upon receipt of Lessor's invoice therefor Lessee shall reimburse Lessor for paying, any Impositions, and (b) in case any report or return is required to be filed with respect to any Impositions, Lessor will make such report or return to show Lessor's ownership of the Equipment. Lessor and Lessee may instead agree in writing that Lessee will pay any Impositions directly or file any such reports or returns. Lessee's obligations under this Section shall survive the expiration or termination of this Lease. 7. Lessor's Title, Right of Inspection and Identification of Equipment. Title to the Equipment shall at all times remain in Lessor and Lessee will at all times protect and defend, at its own cost and expense, the title of Lessor from and against all claims, liens and legal processes of creditors of Lessee and keep all the Equipment free and clear from all such claims, liens and processes. The Equipment is and shall remain personal property. Upon the expiration or termination of this Lease with respect to any item of Equipment Lessee shall return such Equipment in accordance with the provisions set forth in Rider A to the Schedule. Lessor shall have the right from time to time during reasonable business hours to enter upon Lessee's premises or elsewhere for the purpose of confirming the existence, condition and proper maintenance of the Equipment and during any period of storage Lessor shall also have the right to demonstrate and show the Equipment to others. The foregoing rights of entry are subject to any applicable governmental laws, regulations and rules concerning industrial security. Lessee shall, upon the request of Lessor, and at its own expense firmly affix to the Equipment, in a conspicuous place, such a decalcomania or metal plate as shall be supplied by Lessor showing the Lessor as the owner and lessor of such Equipment. 8. Possession, Use and Changes in Location of Equipment. So long as Lessee shall not be in default under the Lease it shall be entitled to the possession and use of the Equipment in accordance with the terms of this Lease. The Equipment shall be used in the conduct of the lawful business of Lessee, and no item of Equipment shall be removed from its location shown on the Schedule, without the prior written consent of Lessor. Lessee shall not, without Lessors prior written consent, part with possession or control of the Equipment or attempt or purport to sell, pledge, mortgage or otherwise encumber any of the Equipment or otherwise dispose of or encumber any interest under this Lease. 9. Performance of Obligations of Lessee by Lessor. In the event that the Lessee shall fail duly and promptly to perform any of its obligations under the provisions of Sections 3, 4, 5, 6, and 7 of this Lease, Lessor may, at its option, perform the same for the account of Lessee without thereby waiving such default, and any amount paid or expense (including reasonable attorneys' fees), penalty or other liability incurred by Lessor in such performance, together with interest at the rate of 1 1/2% per month thereon (but in no event greater than the highest rate permitted by relevant law) until paid by Lessee to Lessor, shall be payable by Lessee upon demand as additional rent for the Equipment. 10. Default. An Event of Default shall occur if: (a) Lessee fails to pay when due any installment of rent and such failure continues for a period of 10 days; (b) Lessee shall fail to perform or observe any covenant, condition or agreement to be performed or observed by it hereunder and such failure continues uncured for 15 days after written notice thereof to Lessee by Lessor, (c) Lessee ceases doing business as a going concern, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts as they become due, files a voluntary petition in bankruptcy, is adjudicated a bankrupt or an insolvent, files a petition seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar arrangement under any present or future statute, law or regulation or files an answer admitting the material allegations of a petition filed against it in any such proceeding, consents to or acquiesces in the appointment of a trustee, receiver, or liquidator of it or of all or any substantial part of its assets or properties, or if it or its shareholders shall take any action looking to its dissolution or liquidation; (d) within 60 days after the commencement of any proceedings against Lessee seeking reorganization, arrangement, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceedings shall not have been dismissed, or if within 60 days after the appointment without Lessee's consent or acquiescence of any trustee, receiver or liquidator of it or of all or any substantial part of its assets and properties, such appointment shall not be vacated; (e) Lessee attempts to remove, sell, transfer, encumber, part with possession or sublet the Equipment or any item thereof; (f) Lessee defaults in payment or performance of any obligation or indebtedness of any kind or description, whether direct, indirect, absolute or contingent, due or to become due, now existing or hereafter arising owing to Lessor or any of its agents or affiliates; or (g) Any warranty, representation or statement made or furnished to Lessor by or on behalf of Lessee in or in connection with this Lease proves to have been false in any material respect when made or furnished. 11. Remedies Upon Default. Upon the occurrence of an Event of Default, Lessor shall have all the rights and remedies provided by applicable law and by this Lease. Notwithstanding that this Agreement is a lease and title to the Equipment is at all times in Lessor, Lessor may nevertheless at its option choose those rights and remedies of a secured party under the Uniform Commercial Code. In addition, Lessor, at its option, may: (a) by notice to Lessee terminate this Lease effective on the date such Event of Default first occurred; (b) proceed by appropriate court action or actions or other proceedings either at law or equity to enforce performance by the Lessee of any and all covenants of this Lease and to recover damages for the breach thereof; (c) Lessor and/or its agents may without notice or liability or legal process, enter into any premises of or under control or jurisdiction of Lessee or any agent of Lessee where the Equipment may be or by Lessor is believed to be, and repossess all or any item thereof, disconnecting and separating all thereof from any other property and using all force necessary or permitted by applicable law so to do, Lessee hereby expressly waiving all further rights to possession of the Equipment and all claims for injuries suffered through or loss caused by such repossession or demand that Lessee deliver the Equipment forthwith to Lessor at Lessee's expense at such place as Lessor may designate; and (d) elect to sell, release or otherwise dispose of all or part of the Equipment or to retain all or part thereof, in such manner and on such terms and conditions as Lessor may determine in its sole discretion, with or without notice to Lessee which Lessee hereby waives to the extent permitted by applicable law; (e) declare immediately due and payable any unpaid rent, late charges and any other amounts due hereunder that accrued on or before the occurrence of the Event of Default, plus as liquidated damages for loss of the bargain and not as a penalty, an amount equal to the Stipulated Loss Value for the Equipment as of the rent payment date immediately preceding the date Lessor declares the Lease in default, and, in addition, all attorney and court costs incurred by Lessor relating to the enforcement of its rights under the Lease. Lessor may sell the Equipment at private or public sale, in bulk or in parcels, with or without notice, without having the Equipment present at the place of sale; or Lessor may lease, otherwise dispose of or keep idle all or part of the Equipment, subject, however, to its obligation to mitigate damages; and Lessor may use Lessee's premises for any or all of the foregoing. Lessor may sell or lease the Equipment at a time and location of its choosing provided that the Lessor acts in good faith and in a commercially reasonable manner. The proceeds of sale, lease or other disposition, if any, of the Equipment shall be applied (1) to all Lessor's costs, charges and expenses incurred in taking, removing, holding, repairing and selling, leasing or otherwise disposing of the Equipment including attorney fees; then (2) to the extent not previously paid by Lessee, to pay Lessor the Stipulated Loss Value of the Equipment plus any accrued and unpaid rent, late charges, indemnities and any other amounts then remaining unpaid under the Lease; then (3) to reimburse to Lessee any such sums previously paid by Lessee as liquidated damages; (4) any surplus shall be retained by Lessor. In no event shall Lessee upon demand by Lessor for payment hereunder or otherwise be obligated to a any amount in excess of that permitted by law. The waiver by Lessor of any breach of any obligation of Lessee shall not be deemed a waiver of any future breach of the same or any other obligation. No remedy of Lessor hereunder shall be exclusive of any remedy herein or by law provided, but each shall be cumulative and in addition to every other remedy. 12. Indemnity. Lessee agrees that Lessor shall not be liable to Lessee for, and Lessee shall indemnify and save Lessor harmless from and against any and all liability, loss, damage, expense, causes of action, suits, claims or judgements arising from or caused directly or indirectly by: (a) Lessee's failure to promptly perform any of its obligations under the provisions of Sections 3, 4, 5, 6 and 7 of this Lease; or (b) injury to persons or damage to property resulting from or based upon actual or alleged use, operation, delivery or transportation of any or all of the Equipment or its location or condition; or (c) inadequacy of the Equipment, or any part thereof, for any purpose or any deficiency or defect therein or the use or maintenance thereof or any repairs, servicing or adjustments thereto or any delay in providing or failure to provide any thereof or any interruption or loss of service or use thereof or any loss of business; and shall, at its own cost and expense, defend any and all suits which may be brought against Lessor, either alone or in conjunction with others upon any such liability or claim or claims and shall satisfy, pay and discharge any and all judgments and fines that may be recovered against Lessor in any such action or actions, provided, however, that Lessor shall give Lessee written notice of any such claim or demand. Lessee agrees that its obligations under this Section 12 shall survive the expiration or termination of this Lease. 13. Lessee's Warranties. Lessee warrants that each item of Equipment has the recovery period under Section 168(c) of the Internal Revenue Code of 1986 as amended or any comparable successor law ("Code") as set forth on the Schedule and will be eligible for depreciation deductions determined by using the method specified in Section 168(b)(i) of the Code commencing with the taxable year of Lessor that includes the delivery date and using a basis equal to Lessor's cost as set forth on the Schedule; a reasonable estimate of the useful life of each item of Equipment is at least 125% of its lease term; a reasonable estimate of the fair market value of each item of Equipment at the end of its lease term is at least 20% of Lessor's cost therefor; and Lessee will not use the Equipment in a manner which will result in foreign source income for Lessor. 14. Tax Indemnity. Lessor has calculated the rent payments and Stipulated Loss Values for each Schedule based in part on Lessee's warranties herein and on the assumptions that Lessor shall be entitled to all tax benefits of ownership with respect to the Equipment (the "Tax Benefits"), including but not limited to, (i) the accelerated cost recovery deductions determined in accordance with Section 168(b)(1) of the Code for each item of Equipment based on the cost and depreciable life thereof specified on the Schedule, (ii) deductions for interest on any indebtedness incurred by Lessor to finance any item of Equipment and (iii) sourcing of income and losses attributable to this Lease to the United States. Lessee agrees to take no action inconsistent with the foregoing or which would result in the loss, disallowance or unavailability to Lessor of all or any part of the Tax Benefits. Lessee, for any reason whatsoever, including as a result of any amendment to the Code or any other change in tax law occurring after the date of the Lease ("Tax Law Change"), hereby indemnifies and holds harmless Lessor from and against (i) any of the following: (1) the loss, disallowance, unavailability or recapture of all or any part of the Tax Benefits, if Lessor shall not be entitled or shall determine that it shall not have substantial authority to claim, shall suffer a disallowance of, or shall be required to recapture all or any part of the Tax Benefits; (2) Lessor's originally contemplated after-tax rate of return ("Net Return") is otherwise adversely affected by a Tax Law Change (including a tax rate change); (3) Lessor shall be required to include in its gross income for any period before the expiration or termination of this Lease any amount other than (a) the rent in the respective specified monthly payment amounts and not prior to the respective periods to which rent is allocable under the terms of this Lease and (b) any other amounts to the extent not offset by deductions for such amounts in Lessor's taxable year in which such amounts are includible in gross income; or (4) any item of income, gain, loss, deduction or credit with respect to the Equipment shall be treated or derived from, or allocable to sources without the United States and consequently Lessor shall be able to utilize as a credit against its Federal Income tax liability in any year, a smaller amount of foreign taxes than it would have been able to utilize had such item of income, gain, loss, deduction or credit not been treated as derived from, or allocable to sources without the United States; plus (ii) all interest, penalties, fines or additions to tax resulting from such loss, disallowance, unavailability or recapture; plus (iii) all taxes required to be paid by Lessor upon receipt of the indemnity set forth in this paragraph which shall be computed at the highest marginal statutory tax rate then applicable to Lessor. Any indemnity payments made by Lessee shall be calculated so as to allow Lessor to maintain its Net Return with respect to the Lease. Payment shall be made in immediately available funds within 30 days after receipt of a written demand therefor from Lessor. In the event of an indemnity payment, Stipulated Loss Values shall be adjusted by Lessor to those values determined by Lessor as necessary to maintain Lessor's Net Return. For the purposes of this Section, "Lessor" includes for all tax purposes the consolidated taxpayer group of which Lessor is a part. 15. Assignment, Notices and Waivers. This Lease and all rights of Lessor hereunder shall be assignable by Lessor without Lessee's consent, but Lessee shall not be obligated to any assignee of Lessor except after written notice of such assignment from Lessor. Following such assignment, solely for the purpose of determining assignee's rights hereunder, the term "Lessor" shall be deemed to include or refer to Lessor's assignee. Without the prior written consent of Lessor, Lessee shall not assign this Lease or its interests hereunder or enter into any sub-lease with respect to the Equipment covered hereby. All notices to Lessor shall be delivered in person to an officer of the Lessor, or shall be sent certified mail return receipt requested to Lessor at its address shown herein or at any later address last known to the sender. All notices to Lessee shall be in writing and shall be delivered by mail at its address shown herein or at any later address last known to the sender. A waiver of a default shall not be a waiver of any other or a subsequent default. 16. Further Assurances. Lessee shall execute and deliver to Lessor, upon Lessor's request such instruments and assurances as Lessor deems necessary or advisable for the confirmation or perfection of this Lease and Lessor's rights hereunder and to enable Lessor to fulfill all of its tax filing obligations. Lessee may not terminate any Schedule without the written consent of Lessor. If Lessor in good faith believes itself insecure or performance impaired, it may declare a default hereunder or, instead of declaring a default, Lessor may demand, and Lessee hereby agrees to give, additional Equipment or other collateral as security for the obligations hereunder. 17. Lease Irrevocability and Charges. This Lease is irrevocable for the full terms thereof as set forth in any Schedule and for the aggregate rentals therein reserved and the rent shall not abate by reason of termination of Lessee's right of possession and/or the taking of possession by the Lessor or for any other reason. Lessee shall be responsible for and pay to Lessor a returned check fee, not to exceed the maximum permitted by law, which fee will be equal to the sum of (i) the actual bank charges incurred by Lessor plus (ii) all other actual costs and expenses incurred by Lessor. The returned check fee is payable upon demand as additional rent under this Lease. 18. Purchase Option. So long as no Event of Default shall have occurred and be continuing, Lessee may, at the expiration of an applicable lease term and upon payment of all sums due under the Lease, purchase the Equipment for its fair market sale value as of that expiration date. If Lessee elects to purchase hereunder, it must give irrevocable written notice to Lessor at least 90 days (but not more than 360 days) prior to the expiration date of the lease term applicable to the Equipment. Any purchase must apply to all (but not less than all) of the Equipment on a Schedule. The fair market sale value of the Equipment as of any date shall be the cash price that an informed and willing purchaser (other than a lessee currently in possession or a used equipment or scrap dealer) unrelated to Lessor or Lessee would pay to purchase the Equipment in an arm's length transaction. This fair market sale value shall be determined by an independent appraiser (at Lessee's expense) selected by Lessor. The appraiser shall determine such value without deduction for any expenses of dismantling or removal of the Equipment and on the assumption that the item is in the condition required by the terms of this Lease. If Lessee elects to purchase hereunder, Lessee will also pay all taxes (other than taxes based on Lessor's income), costs and expenses (including legal fees) incurred in connection with the sale. After Lessee exercises the option, Lessor shall transfer title to Lessee "as-is, where-is," without recourse, representation or warranty of any kind except that Lessor will warrant that the item of Equipment is free and clear of any liens created by Lessor. 19. Miscellaneous. (a) This Lease constitutes the entire agreement between Lessor and Lessee with respect to the Equipment and supersedes all prior correspondence between the parties. No covenant, condition or other term of provision hereof shall be deemed waived, amended, or modified by either party unless such waiver, amendment, or modification is in writing and signed by each of the parties hereto. Section headings are for convenience only and shall not be construed as part of this Lease. Lessee's initials KDN ----- (b) This Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except as otherwise provided herein. (c) Any provision of this Lease which may be prohibited or unenforceable in any jurisdiction shall not, as to such jurisdiction, invalidate the remaining provisions hereof and shall not invalidate or render unenforceable such provision in any other jurisdiction. (d) LESSOR AND LESSEE IN ANY LITIGATION RELATING TO OR IN CONNECTION WITH THIS LEASE IN WHICH THEY SHALL BE ADVERSE PARTIES WAIVE TRIAL BY JURY. (e) In the event this Lease or any part hereof is deemed to be a lease intended as security, Lessee grants Lessor a security interest in each item of Equipment as security for all of Lessee's indebtedness and obligations owing under this Lease and under each Schedule as well as all other present and future indebtedness and obligations of Lessee to Lessor of every kind and nature whatsoever. 20. Special Provisions. If Lessee is a corporation, this Lease is executed by authority of its Board of Directors. If Lessee is a partnership or joint venture, this Lease is executed by authority of all its partners or co-venturers. Dated: 3-23-00 Lessee: Meadow Valley Contractors, Inc. - ----------------------------------------------------------- Name of individual, corporation or partnership By /s/ Kenneth D. Nelson Title Vice President -------------------------------------- -------------------------- If corporation, have signed by President, Vice President or Treasurer, and give official title. If owner or partner, state which. Lessor: THE CIT GROUP/EQUIPMENT FINANCING, INC. By/s/ Kathy TAYLOR Title Agent ------------------------------------ -------------------- _________________________________________________________________________ If Lessee is partnership, enter: Partners' names Home address - --------------- ------------ March 28, 2000 Attn: Kenneth Nelson Meadow Valley Contractors, Inc. 4411 South 40/th/ Street Phoenix, AZ 85040 RE: Master Lease Agreement dated March 23, 2000 wherein Meadow Valley Contractors, Inc. is Lessee and The CIT Group/Equipment Financing, Inc. is Lessor. Mr. Nelson: This is written to confirm the above referenced master lease is amended as follows: Section 10. Default shall have the following language added: Any default under the guaranty of Meadow Valley Corporation shall be a default hereunder. Sincerely, The CIT Group/Equipment Financing, Inc. /s/ Kathy Taylor Kathy Taylor Senior Transaction Coordinator Consented to this 28th day of March, 2000. Meadow, Valley Contractors, Inc. By: /s/ Kenneth D. Nelson Title: Vice President ---------------------- --------------- EX-10.121 7 0007.txt LEASE AGREEMENT EXHIBIT 10.121 Equipment Schedule No. 1 --------- Dated as of 3-23-00 ----------------------------------- To Master Lease Agreement dated 3-23-00 --------------- Acceptance Date 3-23-00 ----------------------- Commencement Date --------------------- Equipment Schedule to MASTER LEASE AGREEMENT dated as of 3-23-00 --------------------------------------------- between
THE CIT GROUP/EQUIPMENT FINANCING, INC., as Lessor and Meadow Valley Contractors, Inc. as Lessee. -------------------------------------------------------------- This Equipment Schedule incorporates the terms and conditions of the above-referenced Master Lease Agreement. This is Originally Executed Copy No 1 of 1 originally executed copies. Only transfer of possession by Lessor of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. 1. EQUIPMENT DESCRIPTION: Quantity Manufacturer Model/Feature Serial Number Description Cost Per Unit -------- ----------- ------------- ------------ ----------- -------------
SEE SCHEDULE "A" ATTACHED HERETO AND MADE A PART HEREOF 2. LESSOR'S AGGREGATE COST OF EQUIPMENT. $2,921,325.73 ------------------ 3. EQUIPMENT LOCATION. 4411 South 44th St., Phoenix, AZ 85040 -------------------------------------------------------------------------------------------
4. ACCEPTANCE: Lessee confirms that (a) the Equipment described herein has been delivered to it in good working order and condition, and has been inspected and accepted by Lessee as of the Acceptance Date set forth above, (b) no Event of Default exists, (c) no Event of Default will be caused by the execution of this Schedule, (d) all Lessee's representations and warranties are true and correct, and (e) the terms and provisions of the Master Lease are hereby incorporated by reference and reaffirmed. 5. LEASE TERM. a. Interim Lease Term. The interim term of the lease of the Equipment shall commence on the Acceptance Date and shall continue until the commencement of the Primary Lease Term defined below. b. Primary Lease Term. The primary term of the lease of Equipment shall commence on the Commencement Date and shall continue for a term of 72 -- months from such Commencement Date. 6. RENT PAYMENTS. a. Interim Rent. The rent for each item of Equipment during the Interim Lease Term shall be an amount equal to 1/30th of the Primary Rent (defined below) multiplied by the number of days from and including the Acceptance Date to the Commencement Date which amount shall be payable on the Commencement Date. b. Primary Rent. The rent for each item of Equipment during the Primary Lease Term shall consist of 72 payments of $46,357.40 -- -------------------, payable monthly commencing on the Commencement Date and a like sum on the same day of each month thereafter. 7. STIPULATED LOSS VALUES. The Stipulated Loss Values, expressed as a percentage of Lessor's cost of the Equipment, are set forth in Exhibit A attached hereto. The Stipulated Loss Value with respect to any item of Equipment as of any rent payment date shall be an amount determined by multiplying Lessor's cost of the item by the applicable percentage set forth on Exhibit A. Any Stipulated Loss Value determined as of a date after the final rent payment date will be determined by using the percentage for the final rent payment date. 8. RETURN, OPERATION, MAINTENANCE, ADDITIONS. The return, operation, maintenance and additions provisions applicable to the Equipment are set forth in Rider A attached hereto. 9. DEPRECIATION TAX ASSUMPTIONS. Equipment has a recovery period of 5 --- years. 10. NONREFUNDABLE PROCESSING/ORIGINATION FEE payable to The CIT Group/Equipment Financing, Inc. $0.00 ------------------------ 11. ADDITIONAL PROVISIONS: Year 2000. The Lessee shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Lessee represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December 31, 1999) will not result in a material adverse effect on the Lessee's business condition or ability to perform hereunder. Upon request, the Lessee shall provide assurance acceptable to the Lessor that the Lessee's computer systems and software are or will be Year 2000 compliant on a timely basis. The Lessee shall immediately advise Lessor in writing of any material changes in the Lessee's Year 2000 plan, timetable or budget. IN WITNESS WHEREOF this Equipment Schedule has been signed as of the date set forth above. Lessee: Meadow Valley Contractors, Inc. ------------------------------------------------------------------- By /s/ Kenneth D. Nelson Title Vice President ------------------------------------- ---------------------- Kenneth D. Nelson ------------------------------------------------------------------- Print or Type Name Lessor: THE CIT GROUP/EQUIPMENT F1NANCING, INC. By /s/ Kevin Wyatt Title [ILLEGIBLE] ------------------------------------- ---------------------- Kevin Wyatt ------------------------------------------------------------------ Print or Type Name EX-10.122 8 0008.txt MASTER SECURITY AGREEMENT EXHIBIT 10.122 Master Security Agreement This Master Security Agreement provides a set of terms and conditions that the parties hereto intend to be applicable to various loan transactions secured by personal property. Each such loan and security agreement shall be evidenced by a schedule of indebtedness and collateral ("Schedule") executed by Secured Party and Debtor that explicitly incorporates the provisions of this Master Security Agreement and that sets forth specific terms of that particular loan and security contract. Where the provisions of a Schedule conflict with the terms hereof, the provisions of the Schedule shall prevail. Each Schedule shall constitute a complete and separate loan and security agreement, independent of all other Schedules, and without any requirement of being accompanied by an originally executed copy of this Master Security Agreement. The term "Security Agreement" when used herein shall refer to an individual Schedule. One originally executed copy of the Schedule shall be denominated "Originally Executed Copy No. 1 of 1 originally executed copies" and such copy shall be retained by Secured Party. If more than one copy of the Schedule is executed by Secured Party and Debtor, all such other copies shall be numbered consecutively with numbers greater than 1. Only transfer of possession by Secured Party of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in such Schedule by possession. 1. Grant of Security Interest; Description of Collateral. Debtor grants to Secured Party a security interest in the property described in the Schedules now or hereafter executed by or pursuant to the authority of the Debtor and accepted by Secured Party in writing, along with all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy, all hereinafter referred to collectively as "Collateral." Each Schedule shall be serially numbered. Unless and only to the extent otherwise expressly provided in a Schedule, no Schedule shall replace any previous Schedule but shall be supplementary to all previous Schedules. 2. What Obligations the Collateral Secures. Each item of Collateral shall secure not only the specific amount which Debtor promises to pay in each Schedule, but also all other present and future indebtedness or obligations of Debtor to Secured Party of every kind and nature whatsoever. 3. Promise to Pay; Terms and Place of Payment. Debtor promises to pay Secured Party the amounts set forth on each Schedule at the rate and upon such terms as provided therein. 4. Use and Location of Collateral. Debtor warrants and agrees that the Collateral is to be used primarily for: [x] business or commercial purposes (other than agricultural), [_] agricultural purposes (see definition on the final page), or [_] both agricultural and business or commercial purposes. Location: 4411 South 40th Street Phoenix Maricopa AZ 85040 ----------------------------------------------------------------- Address City County State Zip Code Debtor and Secured Party agree that regardless of the manner of affixation, the Collateral shall remain personal property and not become part of the real estate. Debtor agrees to keep the Collateral at the location set forth above, and will notify Secured Party promptly in writing of any change in the location of the Collateral within such State, but will not remove the collateral from such State without the prior written consent of Secured Party (except that in the State of Pennsylvania, the Collateral will not be moved from the above location without such prior written consent. 5. Late Charges and Other Fees. Any payment not made when due shall, at the option of Secured Party, bear late charges thereon calculated at the rate of 1 1/2% per month, but in no event greater than the highest rate permitted by relevant law. Debtor shall be responsible for and pay to Secured Party a returned check fee, not to exceed the maximum permitted by law, which fee will be equal to the sum of (i) the actual bank charges incurred by Secured Party plus (ii) all other actual costs and expenses incurred by Secured Party. The returned check fee is payable upon demand as indebtedness secured by the Collateral under this Security Agreement. 6. Debtor's Warranties and Representations. Debtor warrants and represents: (a) that Debtor is justly indebted to Secured Party for the full amount of the indebtedness set forth on each Schedule; (b) that except for the security interest granted hereby, the Collateral is free from and will be kept free from all liens, claims, security interests and encumbrances; (c) that no financing statement covering the Collateral or any proceeds thereof is on file in favor of anyone other than Secured Party, but if such other financing statement is on file, it will be terminated or subordinated; (d) that all information supplied and statements made by Debtor in any financial, credit or accounting statement or application for credit prior to, contemporaneously with or subsequent to the execution of this Security Agreement with respect to this transaction are and shall be true, correct, valid and genuine; and (e) that Debtor has full authority to enter into this agreement and in so doing it is not violating its charter or by -laws, any law or regulation or agreement with third parties, and it has taken all such action as may be necessary or appropriate to make this Security Agreement binding upon it. 7. Debtor's Agreements. Debtor agrees: (a) to defend at Debtor's own cost any action, proceeding, or claim affecting the Collateral; (b) to pay reasonable attorneys' fees (at least 15% of the unpaid balance if not prohibited by law) and other expenses incurred by Secured Party in enforcing its rights against Debtor under this Security Agreement; (c) to pay promptly all taxes, assessments, license fees and other public or private charges when levied or assessed against the Collateral or this Security Agreement, and this obligation shall survive the termination of this Security Agreement; (d) that if a certificate of title be required or permitted by law, Debtor shall obtain such certificate with respect to the Collateral, showing the security interest of Secured Party thereon and in any event do everything necessary or expedient to preserve or perfect the security interest of Secured Party; (e) that Debtor will not misuse, fail to keep in good repair, secrete or without the prior written consent of Secured Party, sell, rent, lend, encumber or transfer any of the Collateral notwithstanding Secured Party's right to proceeds; (f) that Secured Party may enter upon Debtor's premises or wherever the Collateral may be located at any reasonable time to inspect the Collateral and Debtor's books and records pertaining to the Collateral, and Debtor shall assist Secured Party in making such inspection; and (g) that the security interest granted by Debtor to Secured Party shall continue effective irrespective of any retaking or redelivery of any Collateral and irrespective of the payment of the amount described in any Schedule so long as there are any obligations of any kind, including obligations under guaranties or assignments, owed by Debtor to Secured Party, provided, however, upon any assignment of this Security Agreement the Assignee shall thereafter be deemed for the purpose of this Paragraph the Secured Party under this Security Agreement. 8. Insurance and Risk of Loss. All risk of loss, damage to or destruction of the Collateral shall at all times be on Debtor. Debtor will procure forthwith and maintain at Debtor's expense insurance against all risks of loss or physical damage to the Collateral for the full insurable value thereof for the life of this Security Agreement plus breach of warranty insurance and such other insurance thereon in amounts and against such risks as Secured Party may specify, and shall promptly deliver each policy to Secured Party with a standard long-form mortgagee endorsement attached thereto showing loss payable to Secured Party; and providing Secured Party with not less than 30 days written notice of cancellation; each such policy shall be in form, terms and amount and with insurance carriers satisfactory to Secured Party; Secured Party's acceptance of policies in lesser amounts or risks shall not be a waiver of Debtor's foregoing obligations. As to Secured Party's interest in such policy, no act or omission of Debtor or any of its officers, agents, employees or representatives shall affect the obligations of the insurer to pay the full amount of any loss. Debtor hereby assigns to Secured Party any monies which may become payable under any such policy of insurance and irrevocably constitutes and appoints Secured Party as Debtor's attorney in fact (a) to hold each original insurance policy, (b) to make, settle and adjust claims under each policy of insurance, (c) to make claims for any monies which may become payable under such and other insurance on the Collateral including returned or unearned premiums, and (d) to endorse Debtor's name on any check, draft or other instrument received in payment of claims or returned or unearned premiums under each policy and to apply the funds to the payment of the indebtedness owing to Secured Party; provided, however, Secured Party is under no obligation to do any of the foregoing. Should Debtor fail to furnish such insurance policy to Secured Party, or to maintain such policy in full force, or to pay any premium in whole or in part relating thereto, then Secured Party, without waiving or releasing any default or obligation by Debtor, may (but shall be under no obligation to) obtain and maintain insurance and pay the premium therefor on behalf of Debtor and charge the premium to Debtor's indebtedness under this Security Agreement. The full amount of any such premium paid by Secured Party shall be payable by Debtor upon demand, and failure to pay same shall constitute an event of default under this Security Agreement. 9. Events of Default; Acceleration. A very important element of this Security Agreement is that Debtor make all its payments promptly as agreed upon. It is essential that the Collateral remain in good condition and adequate security for the indebtedness. The following are events of default under this Security Agreement which will allow Secured Party to take such action under this Paragraph and under Paragraph 10 as it deems necessary: (a) any of Debtor's obligations to Secured Party under any agreement with Secured Party is not paid promptly when due; (b) Debtor breaches any warranty or provision hereof, or of any note or of any other instrument or agreement delivered by Debtor to Secured Party in connection with this or any other transaction; (c) Debtor dies, becomes insolvent or ceases to do business as a going concern; (d) it is determined that Debtor has given Secured Party materially misleading information regarding its financial condition; (e) any of the Collateral is lost or destroyed; (f) a complaint in bankruptcy or for arrangement or reorganization or for relief under any insolvency law is filed by or against Debtor or Debtor admits its inability to pay its debts as they mature; (g) property of Debtor is attached or a receiver is appointed for Debtor; (h) whenever Secured Party in good faith believes the prospect of payment or performance is impaired or in good faith believes the Collateral is insecure; (i) any guarantor, surety or endorser for Debtor dies or defaults in any obligation or liability to Secured Party or any guaranty obtained in connection with this transaction is terminated or breached. If Debtor shall be in default hereunder, the indebtedness described in each Schedule and all other indebtedness then owing by Debtor to Secured Party under this or any other present or future agreement (collectively, the "Indebtedness") shall, if Secured Party shall so elect, become immediately due and payable. After acceleration: (a) the unpaid principal balance of the indebtedness described in any Schedule in which interest has been precomputed shall bear interest at the rate of 18% per annum (or, if less, the maximum rate permitted by law) until paid in full; and (b) the unpaid principal balance of the indebtedness described in any Schedule in which interest has not been precomputed shall bear interest at the same rate as before acceleration until paid in full. In no event shall the Debtor upon demand by Secured Party for payment of the Indebtedness, by acceleration of the maturity thereof or otherwise, be obligated to pay any interest in excess of the amount permitted by law. Any acceleration of the indebtedness, if elected by Secured Party, shall be subject to all applicable laws, including laws relating to rebates and refunds of unearned charges. 10. Secured Party's Remedies After Default; Consent to Enter Premises. Upon Debtor's default and at any time thereafter, Secured Party shall have all the rights and remedies of a secured party under the Uniform Commercial Code and any other applicable laws, including the right to any deficiency remaining after disposition of the Collateral for which Debtor hereby agrees to remain fully liable. Debtor agrees that Secured Party, by itself or its agent, may without notice to any person and without judicial process of any kind, enter into any premises or upon any land owned, leased or otherwise under the real or apparent control of Debtor or any agent of Debtor where the Collateral may be or where Secured Party believes the Collateral may be, and disassemble, render unusable and/or repossess all or any item of the Collateral, disconnecting and separating all Collateral from any other property and using all force necessary. Debtor expressly waives all further rights to possession of the Collateral after default and all claims for injuries suffered through or loss caused by such entering and/or repossession. Secured Party may require Debtor to assemble the Collateral and return it to Secured Party at a place to be designated by Secured Party which is reasonably convenient to both parties. Secured Party may sell or lease the Collateral at a time and location of its choosing provided that the Secured Party acts in good faith and in a commercially reasonable manner. Secured Party will give Debtor reasonable notice of the time and place or any public sale of the Collateral or of the time after which any private sale or any other intended disposition of the Collateral is to be made. Unless otherwise provided by law, the requirement of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of Debtor shown herein at least ten days before the time of the sale or disposition. Expenses of retaking, holding, preparing for sale, selling and the like shall include reasonable attorneys' fees (at least 15% of the outstanding principal balance if not prohibited by law) and other legal expenses. Debtor understands that Secured Party's rights are cumulative and not alternative. 11. Waiver of Defaults; Agreement Inclusive. Secured Party may in its sole discretion waive a default, or cure, at Debtor's expense, a default. Any such waiver in a particular instance or of a particular default shall not be a waiver of other defaults or the same kind of default at another time. No modification or change in this Security Agreement or any related note, instrument or agreement shall bind Secured Party unless in writing signed by Secured Party. No oral agreement shall be binding. 12. Financing Statements; Certain Expenses. If permitted by law Debtor authorizes Secured Party to file a financing statement with respect to the Collateral signed only by Secured Party, and to file a carbon, photograph or other reproduction of this Security Agreement or of a financing statement. At the request of Secured Party, Debtor will execute any financing statements, agreements or documents, in form satisfactory to Secured Party which Secured Party may deem necessary or advisable to establish and maintain a perfected security interest in the Collateral and will pay the cost of filing or recording the same in all public offices deemed necessary or advisable by Secured Party. Debtor also agrees to pay all costs and expenses incurred by Secured Party in conducting UCC, tax or other lien searches against the Debtor or the Collateral and such other fees as may be agreed. 13. Waiver of Defenses Acknowledgment. If Secured Party assigns this Security Agreement to a third party ("Assignee"), then after such assignment: (a) Debtor will make all payments directly to such Assignee at such place as Assignee may from time to time designate in writing; (b) Debtor agrees that it will settle all claims, defenses, setoffs and counterclaims it may have against Secured Party directly with Secured Party and will not set up any such claim, defense, setoff or counterclaim against Assignee, Secured Party hereby agreeing to remain responsible therefor; (c) Secured Party shall not be Assignee's agent for any purpose and shall have no authority to change or modify this Security Agreement or any related document or instrument; and (d) Assignee shall have all of the rights and remedies of Secured Party hereunder but none of Secured Party's obligations. 14. Miscellaneous. Debtor waives all exemptions. Secured Party may correct patent errors herein and fill in such blanks as serial numbers, date of first payment and the like. Any provisions hereof contrary to, prohibited by or invalid under applicable laws or regulations shall be inapplicable and deemed omitted herefrom, but shall not invalidate the remaining provisions hereof. Debtor and Secured Party each hereby waive any right to a trial by jury in any action or proceeding with respect to, in connection with, or arising out of this Security Agreement, or any note or document delivered pursuant to this Security Agreement. Except as otherwise provided herein or by applicable law, the Debtor shall have no right to prepay the indebtedness described in any Schedule. Debtor acknowledges receipt of a true copy and waives acceptance hereof. If Debtor is a corporation, this Security Agreement is executed pursuant to authority of its Board of Directors. Except where the context otherwise requires, "Debtor" and "Secured Party" include the heirs, executors or administrators, successors or assigns of those parties; nothing herein shall authorize Debtor to assign this Security Agreement or its rights in and to the Collateral. If more than one Debtor executes this Security Agreement, their obligations under this Security Agreement shall be joint and several. If at any time this transaction would be usurious under applicable law, then regardless of any provision contained in this Security Agreement or in any other agreement made in connection with this transaction, it is agreed that: (a) the total of all consideration which constitutes interest under applicable law that is contracted for, charged or received upon this Security Agreement or any such other agreement shall under no circumstances exceed the maximum rate of interest authorized by applicable law and any excess shall be credited to the Debtor; and (b) If Secured Party elects to accelerate the maturity of, or if Secured Party permits Debtor to prepay the indebtedness described in Paragraph 3, any amounts which because of such action would constitute interest may never include more than the maximum rate of interest authorized by applicable law and any excess interest, if any, provided for in this Security Agreement or otherwise, shall be credited to Debtor automatically as of the date of acceleration or prepayment. 15. Special Provisions. See Special Provisions Instructions. Dated: 4-5-2000 ------------------- Debtor. Meadow Valley Contractors, Inc. - -------------------------------------------------------------- Name of individual, corporation or partnership By /s/ Kenneth D. Nelson Title Vice President ------------------------------------------- --------------- If corporation, have signed by President, Vice President or Treasurer, and give official title. If owner or partner, state which. 4411 South 40th Street - --------------------------------------------------- Address Phoenix AZ 85040 - ------------------------------------------------------------------ CitY State Zip Code Secured Party: The CIT Group/Eguipment Financing, Inc. - --------------------------------------------------------------------- Name of individual, corporation or partnership By /s/ Kathy Taylor Title Agent ------------------------------------------- --------------- If corporation, give official title. If owner or partner, state which. P.O. Box 27248 - --------------------------------------------------------------------- Address Tempe AZ 85285-7248 - ----------------------------------------------------------------- City State Zip Code EX-10.123 9 0009.txt SECURITY AGREEMENT EXHIBIT 10.123 Schedule No. 1 Schedule of Indebtedness and Collateral To Master Security Agreement, dated 4-5-00, between the undersigned Secured Party and Debtor. This Schedule of Indebtedness and Collateral incorporates the terms and conditions of the above-referenced Master Security Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Secured Party of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. The equipment listed on this Schedule will be located at: 4411 South 40th Street Phoenix AZ 85040 - ------------------------------------------------------------------------------ Address City State Zip Code Debtor grants to Secured Party a security interest in the property described below, along with all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy, all hereinafter referred to collectively as "Collateral". Collateral Description (Describe Collateral fully including make, kind of unit, model and serial numbers and any other pertinent information.) One (1) Grove Model RT865 65 Ton Rough Terrain Crane, S/N 48759 and all additions, substitutions, attachments, replacements and accessions thereof, plus the proceeds of all the foregoing. Debtor promises to pay Secured Party (i) the total principal sum of $163,556.25 in 72 (total number) principal payments of $2,271.61 each, commencing on 5-10-00 and a like sum on a like date of each month thereafter until fully paid, provided, however, that the final payment shall be in the amount of the unpaid balance, plus (ii) interest payable monthly at 0% in excess of the "governing rate" on unpaid principal balances, but in no event greater than the highest rate permitted by relevant law in effect from time to time during the term of this Security Agreement even if this Security Agreement shall state a minimum rate of interest. "Governing rate" shall mean a rate equal to the highest of (i) the Prime Rate of The Chase Manhattan Bank or its successors or (ii) "The Wall Street Journal Prime Rate" or (iii) the commercial paper rate in effect from time to time. Interest shall be computed on the basis of a year of 360 days. The Prime Rate of The Chase Manhattan Bank or its successors shall mean the rate of interest publicly announced by The Chase Manhattan Bank or its successors in New York from time to time as its Prime Rate. The Prime Rate of The Chase Manhattan Bank or its successors is not intended to be the lowest rate of interest charged by The Chase Manhattan Bank or its successors to its borrowers "The Wall Street Journal Prime Rate" shall mean the Prime Rate listed by the Wall Street Journal. If more than one Prime Rate is listed in the Wall Street Journal, then the highest rate shall apply. "Commercial paper rate" shall mean the average rate quoted by the Wall Street Journal or such other source as Secured Party may determine for 30-day dealer commercial paper. The Debtor shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Debtor represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December 31, 1999) will not result in a material adverse effect on the Debtor's business condition or ability to perform hereunder. Upon request, the Debtor shall provide assurance acceptable to the Secured Party that the Debtor's computer systems and software are or will be Year 2000 compliant on a timely basis. The Debtor shall immediately advise Secured Party in writing of any material changes in the Debtor's Year 2000 plan, timetable or budget. See Special Provisions Instructions below. SEE FINANCIAL REPORT COVENANT RIDER CONSISTING OF ONE (1) PAGE ATTACHED HERETO AND MADE A PART HEREOF. NO PREPAYMENT PENALTY ALLOWED YEAR ONE: NO PENALTY ASSESSED THEREAFTER. Accepted 4-5-00 -------------------- Secured Party: THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ Kathy Taylor Title Agent -------------------------------------------- ------------------- Executed on 4-5-00 ------------------ Meadow Valley Contractors, Inc. - -------------------------------------------------------------------------- Name of individual, corporation or partnership By /s/ Kenneth D. Nelson Title Vice President -------------------------------------------- ------------------- 4-5-00 ------------ Date THE CIT GROUP/EQUIPMENT FINANCING, INC. P.O. Box 27248 - ----------------------------------------------------------------- Address Tempe AZ 85285-7248 - ----------------------------------------------------------------- City State Zip Code Gentlemen: You are irrevocably instructed to disburse the proceeds of your loan to us, evidenced by the Security Agreement dated 4-5-00 as follows: ------------------ Payee Names and Addresses Amount - ------------------------------------------------------- -------------- Meadow Valley Contractors, Inc. $ 163,556.25 ------------ $ ____________ $ ____________ $ ____________ $ ____________ $ ____________ $ ____________ $ ____________ Total Proceeds $ 163,556.25 ------------ Very truly yours, Meadow Valley Contractors, Inc. - ----------------------------------------------------------------------- By /s/ Kenneth D. Nelson Title Vice President --------------------------------- ------------------ EX-10.124 10 0010.txt SECURITY AGREEMENT EXHIBIT 10.124 Schedule No. 2 - Schedule of Indebtedness and Collateral To Master Security Agreement, dated April 5, 2000, between the undersigned Secured Party and Debtor. This Schedule of Indebtedness and Collateral incorporates the terms and conditions of the above-referenced Master Security Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Secured Party of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. The equipment listed on this Schedule will be located at 4411 S. 40th Street Phoenix AZ 85040 - ---------------------------------------------------------------- Address City State ZipCode Debtor grants to Secured Party a security interest in the property described below, along with all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy, all hereinafter referred to collectively as "Collateral". Collateral Description (Describe Collateral fully including make, kind of unit, model and serial numbers and any other pertinent information.) One (1) New CMI Model PR800-7/12 Pavement Profiler S/N 550121 --------- Including all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy. Debtor promises to pay Secured Party (i) the total principal sum of $561,034.00 in 72 (total number) principal payments of $7,792.13 each, commencing on 7-5-00, and a like sum on a like date of each month thereafter until fully paid, provided, however, that the final payment shall be in the amount of the unpaid balance, plus (ii) interest payable monthly at 0.00% in excess of the "governing rate" on unpaid principal balances, but in no event greater than the highest rate permitted by relevant law in effect from time to time during the term of this Security Agreement even if this Security Agreement shall state a minimum rate of interest. "Governing rate" shall mean a rate equal to the highest of (i) the Prime Rate of The Chase Manhattan Bank or its successors or (ii) "The Wall Street Journal Prime Rate" or (iii) the commercial paper rate in effect from time to time, Interest shall be computed on the basis of a year of 360 days. The Prime Rate of The Chase Manhattan Bank or its successors shall mean the rate of interest publicly announced by The Chase Manhattan Bank or its successors in New York from time to time as its Prime Rate. The Prime Rate of The Chase Manhattan Bank or its successors is not intended to be the lowest rate of interest charged by The Chase Manhattan Bank or its successors to its borrowers. "The Wall Street Journal Prime Rate" shall mean the Prime Rate listed by the Wall Street Journal. If more than one Prime Rate is listed in the Wall Street Journal, then the highest rate shall apply. "Commercial paper rate" shall mean the average rate quoted by the Wall Street Journal or such other source as Secured Party may determine for 3O-day dealer commercial paper. The Debtor shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Debtor represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December 31, 1999) will not result in a material adverse effect on the Debtor's business condition or ability to perform hereunder. Upon request, the Debtor shall provide assurance acceptable to the Secured Party that the Debtor's computer systems and software are or will be Year 2000 compliant on a timely basis. The Debtor shall immediately advise Secured Party in writing of any material changes in the Debtor's Year 2000 plan, timetable or budget. See Special Provisions Instructions below. If this Schedule of Indebtedness No. 2 is prepaid prior to the date provided for repayment in the Schedule of Indebtedness No.___, the debtor agrees to pay the following fees: During the First Year--NO PREPAYMENT IS ALLOWED: NO PENALTY WILL BE ASSESSED THEREAFTER Accepted 5-22-00 ------------- Secured Party: THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ [ILLEGIBLE]^^ Title____________________ ----------------------- Executed on 5-22-00 -------------- Debtor: Meadow Valley Contractors, Inc. - ------------------------------------------------------------ Name of individual, corporation or partnership By /s/ Kenneth D. Nelson Title Vice President - ------------------------ ------------------------- 5-22-00 ------------- Date THE CIT GROUP/EQUIPMENT FINANCING, INC. P.O. Box 27248 - ------------------------------------------------------------- Address Tempe AZ 85285-7248 - ------------------------------------------------------------- City State Zip Code. Gentlemen: You are irrevocably instructed to disburse the proceeds of your loan to us, evidenced by the Schedule of Indebtedness No. ____dated _____ , To Master Security Agreement dated_______ as follows: Payee Names and Addresses Amount - ----------------------------------------- -------------- CMI Sales Co. $ 561,034.00 -------------- $_____________ $ ____________ $ ____________ $ ____________ $ ____________ $_____________ Total Proceeds $ 561,034.00 -------------- Very truly yours, Meadow Valley Contractors, Inc. - -------------------------------------------------------- By /s/ Kenneth D. Nelson Title Vice President ---------------------- ----------------------- EX-10.125 11 0011.txt SECURITY AGREEMENT EXHIBIT 10.125 Schedule No. 3 Schedule of Indebtedness and Collateral To Master Security Agreement, dated 4-5-00 between the undersigned Secured Party and Debtor. This Schedule of Indebtedness and Collateral incorporates the terms and conditions of the above-referenced Master Security Agreement. This is Originally Executed Copy No. 1 of 1. originally executed copies. Only transfer of possession by Secured Party of Originally Executed Copy No.1 shall be effective for purposes of perfecting an interest in this Schedule by possession. The equipment listed on this Schedule will be located at: 4411 S. 40th Street Phoenix AZ 85040 - ------------------------------------------------------------------- Address City State ZipCode Debtor grants to Secured Party a security interest in the property described below, along with all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy, all hereinafter referred to collectively as "Collateral". Collateral Description (Describe Collateral fully including make, kind of unit, model and serial numbers and any other pertinent information.) See Exhibit "A and B" Consisting of four (4) pages attached hereto and made a part hereof Debtor promises to pay Secured Party (i) the total principal sum of $1,507,500.00 in 1(total number) principal payments of $1,507,500.00 each, commencing on 1/31/02 and a like sum on a like date of each month thereafter until fully paid, provided, however, that the final payment shall be in the amount of the unpaid balance, plus (ii) interest payable monthly at .25% in excess of the "governing rate" on unpaid principal balances, but in no event greater than the highest rate permitted by relevant law in effect from time to time during the term of this Security Agreement even if this Security Agreement shall state a minimum rate of interest. "Governing rate" shall mean a rate equal to the highest of (i) the Prime Rate of The Chase Manhattan Bank or its successors or (ii) "The Wall Street Journal Prime Rate" or (iii) the commercial paper rate in effect from time to time. Interest shall be computed on the basis of a year of 360 days. The Prime Rate of The Chase Manhattan Bank or its successors shall mean the rate of interest publicly announced by The Chase Manhattan Bank or its successors in New York from time to time as its Prime Rate. The Prime Rate of The Chase Manhattan Bank or its successors is not intended to be the lowest rate of interest charged by The Chase Manhattan Bank or its successors to its borrowers. "The Wall Street Journal Prime Rate" shall mean the Prime Rate listed by the Wall Street Journal. If more than one Prime Rate is listed in the Wall Street Journal, then the highest rate shall apply. "Commercial paper rate" shall mean the average rate quoted by the Wall Street Journal or such other source as Secured Party may determine for 30-day dealer commercial paper. The Debtor shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Debtor represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December 31, 1999) will not result in a material adverse effect on the Debtor's business condition or ability to perform hereunder. Upon request, the Debtor shall provide assurance acceptable to the Secured Party that the Debtor's computer systems and software are or will be Year 2000 compliant on a timely basis. The Debtor shall immediately advise Secured Party in writing of any material changes in the Debtor's Year 2000 plan, timetable or budget. See Special Provisions Instructions below. Accepted 6-12-00 ------------------ Secured Party: THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ [ILLEGIBLE]^^ Title [ILLEGIBLE]^^ ---------------------- -------------- Executed on June 12, 2000 ------------- Debtor: Meadow Valley Contractors, Inc. - -------------------------------------- Name of individual, corporation or partnership By /s/ Kenneth D. Nelson Title Vice President ---------------------- ------------------ EXHIBIT "A" TO SCHEDULE NO.______ SCHEDULE OF INDEBTEDNESS AND COLLATERAL DEBTOR: SECURED PARTY: Meadow Va1ley Contractors, Inc. The CIT Group/Equipment Financing, Inc. 4411 South 40/th/ Street P.O. Box 27248 Phoenix, AZ 85040 Tempe, AZ 85285-7248 Description of Collateral: - ------------------------- All of the Debtor's property, or interests in property, whether now owned or existing or hereafter acquired or arising and wheresoever located, whether tangible or intangible, including without limitation, all of the Debtor's accounts, inventory, goods, furniture, machinery, equipment, fixtures, investment property, general intangibles (including without limitation, goodwill, inventions, designs, patents, patent applications, trademarks, trademark applications, service marks, trade names, licenses, leasehold interests in real and personal property, franchises, tax refund claims, and guarantee claims, security interests or other security held by or granted to Debtor to secure payment of Debtor's accounts, investment property, general intangibles, instruments, and notes), tax refunds, chattel paper, contract rights, instruments, documents, notes, returned and repossessed goods, together with all accessions to, substitutions for, and all replacements, products and proceeds of the foregoing (including, without limitation, proceeds of insurance policies insuring any of the foregoing), all books and records (including, without limitation, customer lists, credit files, computer programs, printouts and other computer materials and records) pertaining to any of the foregoing, and all insurance policies insuring any of the foregoing. Date: June 12, 2000 Meadow Valley Contractors, Inc. By: /s/ Kenneth D. Nelson Title: Vice President ----------------------- -------------- Name: Kenneth D. Nelson ----------------- EXHIBIT "B" TO SCHEDULE NO._______ SCHEDULE OF INDEBTEDNESS AND COLLATERAL 1/16/95 AZ9716 173 IGCFC24K8NE197356 92 Chevy 3/4 Ton 14,404.50 1/16/95 AZ9811 174 IGCFC24K5NE226912 92 Chevy 3/4 Ton 14,404.50 3/23/95 AZ9716 178 IGCFC24K8NE206119 92 Chevy 3/4 Ton 13,275.48 3/23/95 AZ9917 187 IGCFC24K2NE201580 92 Chevy 3/4 Ton 13,275.00 9/15/95 AZ9811 193 IGCFC2KXNE200970 92 Chevy 3/4 Ton 12,150.00 6/24/98 UT9910 195 IGCGC29K8SE180615 3/4 Ton Chevy 3,491.25 1/10/96 MOAPA 200 INKDL28X211512441 1988 KW Truck 74,517.42 8/19/99 NM9727 202 1FTYR82A8HVA45196 1987 Ford Service Truck 12,527.52 6/30/88 NV 203 T16DA9V6D1383 Chevy Pickup 0.00 9/3/92 AZ 1001 206 1HTAA192LDHA30353 IHC Lube Truck 43,034.29 8/28/97 WHT PAV 207 1GBXC34J4TJJ08435 96 Chevy 1 Ton 9,307.75 8/15/97 WHT PAV 208 FS8JV005056 Flatbed Pickup 3,093.72 12/10/97 WHT PAV 209 1FTXR9DL2FVA23813 Ford Model LN 9000 Truck 13,886.96 2/27/87 AZ 210 1XP4LA9X1FD185772 Peterbilt Water Truck 22,020.13 6/25/98 MM 9810 213 436 1980 Ford Service Truck 3,718.74 9/29/89 NV 9729 214 1XP4LA9X9FN190650 Diamond REO Boom Truck 5,538.14 5/28/98 NV 9729 215 1HSZEGGR9JH576203 1988 Ford Water Truck 7,546.89 6/26/98 WHT PAV 216 1GDH7D163EV535279 1984 GMC Truck 7,700.01 6/25/98 MM PIT 217 4785 10,000 Gallon Water Tower 3,062.49 11/12/98 AZ 218 S/N 17870 1984 International Fuel Truck 2,552.08 8/8/96 NV 9729 229 VG6M118B6RB301203 1994 Mack MS300P Sweeper 23,648.87 4/10/97 AZ 231 87570 Broce RJ30D Self-Propelled Broom 4,988.23 l/15/98 NM 9727 402 JJM021879L Case Model 480FLL Skip Loader 4,917.26 1/23/96 AZ 9716 410 JJG0218767 Case Model 480FLL Skip Loader 16,732.70 3/1/89 AZ 501 ETW3101JDS182TN Lull Model 622 Reach Lift 6,055.53 4/8/96 WHT PAV 502 1448225 Gradall Model 534B-8 Forklift 14,747.99 12/27/94 AZ9811 507 0144435J Forklift 26,683.10 4/29/99 AZ9811 509 152870 Ingersoll Rand Model VR90B Reach Lift 6,366.21 NM 637 PRZ714418 Flatbed Fruahauf 0.00 AZ 638 AZ184865 Flatbed Custom Built 0.00 5/5/99 PIT II 653 1WC200L266W403424D 1998 Wells Cargo Trailer 1,548.44 11/22/95 NV9814 701 4805-11 3664-12 Truck Crane 79,895.84 8/22/89 AZ 706 Grove Model RT522 Crane 28,255.38 12/3/86 AZ9811 751 739A163751A-11 1977 Clark/Lima 90 Ton Crane 2,109.31 5/6/87 NV 755 49581 American Model 599 Crawler Crane 3,500.84 2/19/99 AZ9811 760 31622 1994 Grove Model MZ90C Manlift 11,931.56 10/5/99 AZ 801 Walk behind Roller 598.96 5/27/98 NM9729 802 Rammax Vibratory Trench Roller 5,857.57 2/12/95 NV 806 135756U83957 IR Model 185CFM Portable Air Comp. 4,447.96 10/29/98 AZ9811 808 IR Model 185CFM Portable Air Comp. 1,985.88 1/23/99 AZ9811 811 SE366988 1978 250KW Generator 2,114.58 9/3/92 AZ 831 0.00 9/3/92 NV 832 44,763.73
8/8/96 NV CRUSHER 33 JAF0161974 1995 Case 1845C Skid Steer 9,203.64 12/18/96 NV CRUSHER 35 9-36-751188 Conveyor 6,819.74 12/18/96 NV CRUSHER 36 9-30-728488 Lattice Conveyor 12,980.24 5/14/97 NV CRUSHER 37 34A0693 Eljay 27,317.10 11/18/97 NV CRUSHER 41 137 Rock Hammer 19,561.77 12/10/97 NV CRUSHER 42 WP13450488 Sand Screw 12,566.94 12/10/97 NV CRUSHER 43 5288 Feeder 6,676.18 1/6/98 NV CRUSHER 44 7822 140 Foot Scal 59,056.44 1/6/98 NV CRUSHER 45 S625863 Electrical Van 92,275.67 1/9/98 NV CRUSHER 47 1GDL7D1F7JV535216 Water Truck 20,046.09 4/7/98 NM 9807 100 GMC Model ______ Truck 8,609.23 8/8/98 AZ9716 101 1FACP5242PG106639 1993 Ford Taurus 4,236.67 1/1/96 NM9810 106 1FTCR14XINPA87339 1992 Ford Ranger Extra Cab 802.87 8/27/98 AZ19 107 1FTHF25H2RLA23884 1994 3/4 Ton Ford Truck 6,628.33 1/1/96 AZ9716 111 1FETEX15Y9RKB50308 1994 Ford F-150 Truck 1,302.45 6/11/98 AZ19 112 1GCGCZ4K0LEI88281 1990 3/4 Ton Chevy Truck 4,549.84 6/19/98 AZ19 113 1GOCS1441T8112242 1996 Chevy S-10 5,524.99 8/11/98 NM9727 115 1FTEF15N8TLB464714 8,131.67 10/16/98 AZ19 117 1FTHF25H3NLA96885 1992 Ford F250 Truck 7,525.00 11/3/98 AZ9811 122 2FTEF25HIPCA54151 Ford Model F250 Truck 7,150.00 8/29/89 AZ19 126 1GBHC34J7CV136880 1 Ton Chevy Truck 0.00 9/10/97 AZ19 129 Ford Ranger Pick Up 5,169.53 9/10/97 AZ9913 130 1FTEF15N4TLB99894 Ford Model F150 Truck 5,169.53 9/10/97 AZ19 131 1FTCR10A8TUD10458 Ford Model F150 Truck 6,203.44 3/1/98 NM9809 132 955195409 1995 Dodge 1 Ton 11,399.99 5/14/98 NM 139 1FTEF15N2TLB22117 1996 Ford Pick Up 7,536.67 5/14/98 NM9727 141 1FTEF15NTTLB28995 1996 Ford 1/2 Ton Pick Up 7,536.67 5/14/98 NM9810 142 1FTHF25HXSNB26190 1995 Ford 3/4 Ton Pick Up 5,450.79 4/1/92 AZ9716 143 1GCFC24K7LE207890 1990 Chevy Pick Up 0.00 5/19198 NM9810 147 1996 Ford 1/2 Ton Pick Up 7,536.67 4/14/98 AZ9811 150 1FTCR10U6TPA94408 1996 Ford Ranger 6,686.84 4/3/98 AZ9913 151 2FTHF25H8SCA42410 Ford F250 Pick Up 7,708.34 5/15/98 AZ9908 152 1FTHF25H6KLB31057 1989 Ford F250 3,483.33 12/4/92 AZ9716 153 1FTEX15N6KKA48721 1989 Ford F250 0.00 12/4/92 AZ9811 154 1FTHF25Y2KLA25527 1989 Ford F150 0.00 8/20/97 WHT PAV 157 2FTEF25NXLCA48221 1990 Ford Truck 1,094.75 8/20/97 WHT PAV 158 1FTHX26H2KK561240 1989 Ford Truck 2,182.25 8/2/97 WHT PAV 159 2FTHF26H2LCA77864 1990 Ford Truck 1,880.17 8/20/97 WHT PAV 160 1FTEF26N1LPA81072 1990 Ford Truck 3,269.75 1/1/94 AZ1001 165 1GCGC24K5ME128689 Chevy Truck 0.00 5/19/98 NM9809 170 1996 Ford 1/2 Ton Pick Up 7,536.67
6/15/99 AZ9716 834 BR84556-2-75 Bidwell 20,843.76 10/29/98 NMPIT 848 292235 Ingersoll Rand P185WJD Compressor 10,235.00 1/22/98 NMPIT 1022 60703 Truck Scale 60 Ton 15,348.96 3/19/98 NMPIT 1023 GPN00387 Caterpillar Gen Set Model_______ 26,078.03 2/23/98 NMPIT 1025 R820000189 Profilegraph 12,400.78 4/17/98 NMPIT 1026 22295 Scalping Screen 8,383.60 10/22/98 NMPIT 1063 88-164A CMI Clarco 851 Windrow Elevator 13,989.59 8/10/99 NMPIT 1065 Truck Scale and Computer 37,421.72 4/10/97 WHT PAV 1103 FW51252 1973 Fruehauf Van Trailer 9,028.16 4/10/97 WHT PAV 1104 M687509C 1963 Brown 40 Foot Parts Van Trailer 6,687.53 8/29/97 NMPIT 1109 N/A Conveyor 42' X 25" 3,286.98 8/21/97 NMPIT 1110 N/A Radial Stacker 50hp Electric Motor 26,812.50 2/23/98 WHT PAV 1121 CMI Trimmer 24' X 28' 59,166.67 6/7/99 WHT PAV 1125 Coldcrete Model CC2200 Chiller 42,694.34 11/5/99 AZ 1300 110' Truck Scale 11,955.72 6/15/98 NV 2322 1FTZF1722WNV39271 Ford Pick Up 9,100.02 4/30/98 UTMAIN 2123 1FTHX26F8VEC19756 Ford F250 Pick Up 11,955.72 7/27/98 WHT PAV 2225 1FTHF25H4TLA72348 1996 Ford 3/4 Ton Pick Up 5,993.34 3/4/96 UT 2307 2GBEC19Z4P1118088 1993 Chevy Pick Up 2,400.00 5/1/95 NM 2311 1993 Ford Exployer 475.93 3/12/98 AZ9811 2321 VG6M111B2FB021235 1985 Mack Truck 7,029.00 10/30/96 CRUSHER 2839 Portable Belt Feeder/Hopper 12,916.67 5/23/96 NVCRUSHER 2840 12153 Sand Screw 22,280.64 1/25/00 RMI 3000 Remco Sandmax 8000 with/mot 83,870.00 1/25/00 RMI 3001 Sand Plant Motor Control 49,000.00 1/1/98 WHT PAV 1111A 6' X 20' Control House 8,433.49 9/14/98 RMI 1150A 7813 Batch Plant 17,416.38 9/9/98 RMI 1150C 7813 Plant 42,250.00 6/22/99 WHT PAV Flatbed 849.99 6/30/99 WHT PAV Trailer 1,213.34
Meadow Valley Contractors, Inc. By: /s/ Kenneth D. Nelson Title: Vice President ------------------------ ------------------ 6-12-00 ---------------- Date THE CIT GROUP/EQUIPMENT FINANCING, INC. P.O. Box 27248 - ------------------------------------------------------------- Address Tempe AZ 85285--7248 - ------------------------------------------------------------- City State Zip Code Gentlemen: You are irrevocably instructed to disburse the proceeds of your loan to us, evidenced by the Schedule of Indebtedness No. 3 dated 6-12-00 To Master Security ------------------------------ ------- Agreement dated ________ as follows: Payee Names and Addresses Amount - ------------------------------------------------ -------------- Meadow Valley Contractors, Inc. $ 1,500,000.00 -------------- The CIT Group/Equipment Financing, Inc. $ 7,500.00 -------------- (NON-REFUNDABLE ORIGINATION FEE) $ -------------- $ -------------- $ -------------- $ -------------- $ -------------- Total Proceeds $ 1,507,500.00 -------------- Very truly yours, Meadow Valley Contractors, Inc. - ------------------------------------------------------------ By /s/ Kenneth D. Nelson Title: Vice President - ------------------------------------------------------------ EX-10.126 12 0012.txt SECURITY AGREEMENT EXHIBIT 10.126 Schedule No. 4 Schedule of Indebtedness and Collateral To Master Security Agreement, dated 4-5-00 between the undersigned Secured Party and Debtor. This Schedule of Indebtedness and Collateral incorporates the terms and conditions of the above-referenced Master Security Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Secured Party of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. The equipment listed on this Schedule will be located at: 4411 S. 40th Street Phoenix AZ 85040 - ------------------------------------------------------------------------------- Address City State Zip Code Debtor grants to Secured Party a security interest in the property described below, along with all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy, all hereinafter referred to collectively as "Collateral". Collateral Description (Describe Collateral fully including make, kind of unit, model and serial numbers and any other pertinent information.) One (1) 1999 Peterbilt Model 330 Medium Duty Chassis VIN # 38PNHD7X2XF482183 With a Heavy Duty Service Body S/N N/A Including all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy. Debtor promises to pay Secured Party (i) the total principal sum of $81,059.10 in 60 (total number) principal payments of $1,351 each, commencing on 8/14/00, and a like sum on a like date of each month thereafter until fully paid, provided, however, that the final payment shall be in the amount of the unpaid balance, plus (ii) interest payable monthly at 0.00% in excess of the "governing rate" on unpaid principal balances, but in no event greater than the highest rate permitted by relevant law in effect from time to time during the term of this Security Agreement even if this Security Agreement shall state a minimum rate of interest. "Governing rate" shall mean a rate equal to the highest of (i) the Prime Rate of The Chase Manhattan Bank or its successors or (ii) "The Wall Street Journal Prime Rate" or (iii) the commercial paper rate in effect from time to time. Interest shall be computed on the basis of a year of 360 days. The Prime Rate of The Chase Manhattan Bank or its successors shall mean the rate of interest publicly announced by The Chase Manhattan Bank or its successors in New York from time to time as its Prime Rate. The Prime Rate of The Chase Manhattan Bank or its successors is not intended to be the lowest rate of interest charged by The Chase Manhattan Bank or its successors to its borrowers. "The Wall Street Journal Prime Rate" shall mean the Prime Rate listed by the Wall Street Journal, If more than one Prime Rate is listed in the Wall Street Journal, then the highest rate shall apply. "Commercial paper rate" shall mean the average rate quoted by the Wall Street Journal or such other source as Secured Party may determine for 30-day dealer commercial paper. The Debtor shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Debtor represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December 31, 1999) will not result in a material adverse effect on the Debtor's business condition or ability to perform hereunder. Upon request, the Debtor shall provide assurance acceptable to the Secured Party that the Debtor's computer systems and software are or will be Year 2000 compliant on a timely basis. The Debtor shall immediately advise Secured Party in writing of any material changes in the Debtor's Year 2000 plan, timetable or budget. See Special Provisions Instructions below. Accepted 7-12-2000 ----------------------- Secured Party: THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ Heather Meheut Title AGENT ------------------------------ ------------------------- Executed on 6-28-00 --------------------- Debtor: Meadow Valley Contractors, Inc. - ----------------------------------------------------------------- Name of individual, corporation or partnership By /s/ Kenneth D. Nelson Title Vice President ------------------------------ -------------------------- 7-13-00 --------------- Date THE CIT GROUP/EQUIPMENT FINANCING, INC. P. O. BOX 27248 - ----------------------------------------- Tempe AZ 85285-7248 - ----------------------------------------- City State Zip Code Gentlemen: You are irrevocably instructed to disburse the proceeds of Schedule of Indebtedness and Collateral No. 4 dated June 28, 2000 between Meadow Valley Contractors, Inc. as Debtor and The CIT Group/Equipment Financing, Inc. as Secured Party as follows: Payee Names and Addresses Amount - -------------------------------------------------------------------------------- Associates Leasing, Inc. (Acct # 00-007690) $ 56,818.27 ----------- Information Leasing Corp. $ 19,507.77 ----------- Jerry's Custom Service $ 4,733.06 ----------- Very Truly Yours, Jerry Slusher dba Jerry's Custom Service By: /s/ Jerry Slusher Title: Individual --------------------------------------------- ------------------------- 1 EX-10.127 13 0013.txt SECURITY AGREEMENT EXHIBIT 10.127 Schedule No. 6 Schedule of Indebtedness and Collateral To Master Security Agreement, dated April 5, 2000, between the undersigned Secured Party and Debtor. This Schedule of indebtedness and Collateral incorporates the terms and conditions of the above-referenced Master Security Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Secured Party of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. The equipment listed on this Schedule will be located at: 4411 South 40th Street Phoenix AZ 85040 - -------------------------------------------------------------------------------- Address City State Zipcode Debtor grants to Secured Party a security interest in the property described below, along with all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy, all hereinafter referred to collectively as "Collateral. Collateral Description (Describe Collateral fully including make, kind of unit, model and serial numbers and any other pertinent information.) See Schedule "A" consisting of one (1) attached hereto and made a part hereof. Debtor promises to pay Secured Party (i) the total principal sum of $2,062,127.92 in 101 (total number) principal payments of $*20,417.11 each, commencing on 6/3/01, and a like sum on a like date of each month thereafter until fully paid, provided, however, that the final payment shall be in the amount of the unpaid balance, plus (ii) interest payable monthly at 0% in excess of the "governing rate" on unpaid principal balances, but in no event greater than the highest rate permitted by relevant law in effect from time to time during the term of this Security Agreement even if this Security Agreement shall state a minimum rate of interest. "Governing rate" shall mean a rate equal to the highest of (i) the Prime Rate of The Chase Manhattan Bank or its successors or (ii) "The Wall Street Journal Prime Rate" or (iii) the commercial paper rate in effect from time to time. Interest shall be computed on the basis of a year of 360 days. The Prime Rate of The Chase Manhattan Bank or its successors shall mean the rate of interest publicly announced by The Chase Manhattan Bank or its successors in New York from time to time as its Prime Rate. The Prime Rate of The Chase Manhattan Bank or its successors is not intended to be the lowest rate of interest charged by The Chase Manhattan Bank or its successors to its borrowers. "The Wall Street Journal Prime Rate" shall mean the Prime Rate listed by the Wall Street Journal. If more than one Prime Rate is listed in the Wall Street Journal, then the highest rate shall apply. "Commercial paper rate" shall mean the average rate quoted by the Wall Street Journal or such other source as Secured Party may determine for 30-day dealer commercial paper. Special Provisions. * First seven (7) months will be interest only with payments of $20,417.11 beginning on 6/3/01 Accepted 9/29/00 ------------------------------ Secured Party: THE CIT GROUP/EQUIPMENT FINANCING, INC. By ____________________________________ Title __________________________ Executed on 9-29-00 --------------------------- Debtor: Meadow Valley Contractors, Inc. - -------------------------------------------------------------------------- Name of individual, corporation or partnership By /s/ Kenneth D. Nelson Title Vice President ------------------------------------ -------------------------- SCHEDULE "A" ------------ Attached to and made a part of Equipment Schedule 6 dated 9/29/00, between Meadow Valley Contractors, Inc. as Debtor and The CIT Group/Equipment Financing, Inc. as Secured Party. Equipment Description - --------------------- One (1) CMI Model PTD-400-189 Portable Triple Drum Asphalt Plant With the Following: One (1) Portable Triple Drum S/N PTD000400189 One (1) CMI Model RA-220S-132 Baghouse S/N RA200020S132 One (1) Bin Assembly Model SAB-532-126 S/N SAB532000126 One (1) CMI Stationary 30" x 50' Conveyor S/N OSC05000165 One (1) Recycle Bin Model SRB-132-167 S/N SRB132000167 One (1) Stationary 30" x 70' Conveyor S/N TSC307000131 One (1) Silo Model CE-200P-108 S/N OCE00200P108 One (1) Silo Model CE-200P-109 S/N OCE00200P109 One (1) Traverse Drag Model TDC-3017-314 S/N TDC003017314 One (1) Drag Chain Model Ce-200-106 S/N OCE00200D106 One (1) Heater Model CT-30S0380 S/N 0CT30S000380 One (1) Impulse System S/N CS1002300000 One (1) 12 x 30 Control House S/N SEC2UO230000 One (1) Mineral Fill Model MFS-700S-134 S/N MFS700STA134 One (1) CMI Model 3FT12010 Pitsaver III Truck Scale S/N 0342 All of the above to include tires, wheels, additions, substitutions, attachments, replacements, and accessions thereof, plus the proceeds of all the foregoing. Secured Party: Debtor: THE CIT GROUP/EQUIPMENT MEADOW VALLEY CONTRACTORS, INC. FINANCING, INC. By: /s/ [ILLEGIBLE]^^ By: /s/ Kenneth D. Nelson ----------------------------- -------------------------- Title: Manager Title: Vice President --------------------------- ----------------------- EX-10.128 14 0014.txt MASTER SECURITY AGREEMENT EXHIBIT 10.128 Master Security Agreement This Master Security Agreement provides a set of terms and conditions that the parties hereto intend to be applicable to various loan transactions secured by personal property. Each such loan and security agreement shall be evidenced by a schedule of indebtedness and collateral ("Schedule") executed by Secured Party and Debtor that explicitly incorporates the provisions of this Master Security Agreement and that sets forth specific terms of that particular loan and security contract. Where the provisions of a Schedule conflict with the terms hereof, the provisions of the Schedule shall prevail. Each Schedule shall constitute a complete and separate loan and security agreement, independent of all other Schedules, and without any requirement of being accompanied by an originally executed copy of this Master Security Agreement. The term "Security Agreement" when used herein shall refer to an individual Schedule. One originally executed copy of the Schedule shall be denominated "Originally Executed Copy No. 1 of 1 originally executed copies" and such copy shall be retained by Secured Party. If more than one copy of the Schedule is executed by Secured Party and Debtor, all such other copies shall be numbered consecutively with numbers greater than 1. Only transfer of possession by Secured Party of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in such Schedule by possession. 1. Grant of Security Interest; Description of Collateral. Debtor grants to Secured Party a security interest in the property described in the Schedules now or hereafter executed by or pursuant to the authority of the Debtor and accepted by Secured Party in writing, along with all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy, all hereinafter referred to collectively as "Collateral" Each Schedule shall be serially numbered. Unless and only to the extent otherwise expressly provided in a Schedule, no Schedule shall replace any previous Schedule but shall be supplementary to all previous Schedules. 2. What Obligations the Collateral Secures. Each item of Collateral shall secure not only the specific amount which Debtor promises to pay in each Schedule, but also all other present and future indebtedness or obligations of Debtor to Secured Party of every kind and nature whatsoever. 3. Promise to Pay; Terms and Place of Payment. Debtor promises to pay Secured Party the amounts set forth on each Schedule at the rate and upon such terms as provided therein. 4. Use and Location of Collateral. Debtor warrants and agrees that the Collateral is to be used primarily for: [X] business or commercial purposes (other than agricultural), [_] agricultural purposes (see definition on the final page), or [_] both agricultural and business or commercial purposes. Location: 109 Delhi North Las Vegas NV 89030 -------------------------------------------------------------------- Address City County State Zip Code Debtor and Secured Party agree that regardless of the manner of affixation, the Collateral shall remain personal property and not become part of the real estate. Debtor agrees to keep the Collateral at the location set forth above, and will notify Secured Party promptly in writing of any change in the location of the Collateral within such State, but will not remove the collateral from such State without the prior written consent of Secured Party (except that in the State of Pennsylvania, the Collateral will not be moved from the above location without such prior written consent. 5. Late Charges and Other Fees. Any payment not made when due shall, at the option of Secured Party, bear late charges thereon calculated at the rate of 1 1/2% per month, but in no event greater than the highest rate permitted by relevant law. Debtor shall be responsible for and pay to Secured Party a returned check fee, not to exceed the maximum permitted by law, which fee will be equal to the sum of (i) the actual bank charges incurred by Secured Party plus (ii) all other actual costs and expenses incurred by Secured Party. The returned check fee is payable upon demand as indebtedness secured by the Collateral under this Security Agreement. 6. Debtor's Warranties and Representations. Debtor warrants and represents: (a) that Debtor is justly indebted to Secured Party for the full amount of the indebtedness set forth on each Schedule; (b) that except for the security interest granted hereby, the Collateral is free from and will be kept free from all liens, claims, security interests and encumbrances; (c) that no financing statement covering the Collateral or any proceeds thereof is on file in favor of anyone other than Secured Party, but if such other financing statement is on file, it will be terminated or subordinated; (d) that all information supplied and statements made by Debtor in any financial, credit or accounting statement or application for credit prior to, contemporaneously with or subsequent to the execution of this Security Agreement with respect to this transaction are and shall be true, correct, valid and genuine; and (e) that Debtor has full authority to enter into this agreement and in so doing it is not violating its charter or by-laws, any law or regulation or agreement with third parties, and it has taken all such action as may be necessary or appropriate to make this Security Agreement binding upon it. 7. Debtor's Agreements. Debtor agrees: (a) to defend at Debtor's own cost any action, proceeding, or claim affecting the Collateral; (b) to pay reasonable attorneys' fees (at least 15% of the unpaid balance if not prohibited by law) and other expenses incurred by Secured Party in enforcing its rights against Debtor under this Security Agreement; (C) to pay promptly all taxes, assessments, license fees and other public or private charges when levied or assessed against the Collateral or this Security Agreement, and this obligation shall survive the termination of this Security Agreement, (d) that if a certificate of title be required or permitted by law, Debtor shall obtain such certificate with respect to the Collateral, showing the security interest of Secured Party thereon and in any event do everything necessary or expedient to preserve or perfect the security interest of Secured Party; (e) that Debtor will not misuse, fail to keep in good repair, secrete or without the prior written consent of Secured Party, sell, rent, lend, encumber or transfer any of the Collateral notwithstanding Secured Party's right to proceeds; (f) that Secured Party may enter upon Debtor's premises or wherever the Collateral may be located at any reasonable time to inspect the Collateral and Debtor's books and records pertaining to the Collateral, and Debtor shall assist Secured Party in making such inspection; and (g) that the security interest granted by Debtor to Secured Party shall continue effective irrespective of any retaking or redelivery of any Collateral and irrespective of the payment of the amount described in any Schedule so long as there are any obligations of any kind, including obligations under guaranties or assignments, owed by Debtor to Secured Party, provided, however, upon any assignment of this Security Agreement the Assignee shall thereafter be deemed for the purpose of this Paragraph the Secured Party under this Security Agreement 8. Insurance and Risk of Loss. All risk of loss, damage to or destruction of the Collateral shall at all times be on Debtor. Debtor will procure forthwith and maintain at Debtor's expense insurance against all risks of loss or physical damage to the Collateral for the full insurable value thereof for the life of this Security Agreement plus breach of warranty insurance and such other insurance thereon in amounts and against such risks as Secured Party may specify, and shall promptly deliver each policy to Secured Party with a standard long-form mortgagee endorsement attached thereto showing loss payable to Secured Party; and providing Secured Party with not less than 30 days written notice of cancellation; each such policy shall be in form, terms and amount and with insurance carriers satisfactory to Secured Party; Secured Party's acceptance of policies in lesser amounts or risks shall not be a waiver of Debtor's foregoing obligations. As to Secured Party's interest in such policy, no act or omission of Debtor or any of its officers, agents, employees or representatives shall affect the obligations of the insurer to pay the full amount of any loss. Debtor hereby assigns to Secured Party any monies which may become payable under any such policy of insurance and irrevocably constitutes and appoints Secured Party as Debtor's attorney in fact (a) to hold each original insurance policy, (b) to make, settle and adjust claims under each policy of insurance, (c) to make claims for any monies which may become payable under such and other insurance on the Collateral including returned or unearned premiums, and (d) to endorse Debtor's name on any check, draft or other instrument received in payment of claims or returned or unearned premiums under each policy and to apply the funds to the payment of the indebtedness owing to Secured Party; provided, however, Secured Party is under no obligation to do any of the foregoing. Should Debtor fail to furnish such insurance policy to Secured Party, or to maintain such policy in full force, or to pay any premium in whole or in part relating thereto, then Secured Party, without waiving or releasing any default or obligation by Debtor, may (but shall be under no obligation to) obtain and maintain insurance and pay the premium therefor on behalf of Debtor and charge the premium to Debtor's indebtedness under this Security Agreement. The full amount of any such premium paid by Secured Party shall be payable by Debtor upon demand, and failure to pay same shall constitute an event of default under this Security Agreement. 9. Events of Default; Acceleration. A very important element of this Security Agreement is that Debtor make all its payments promptly as agreed upon. It is essential that the Collateral remain in good condition and adequate security for the indebtedness. The following are events of default under this Security Agreement which will allow Secured Party to take such action under this Paragraph and under Paragraph 10 as it deems necessary; (a) any of Debtor's obligations to Secured Party under any agreement with Secured Party is not paid promptly when due; (b) Debtor breaches any warranty or provision hereof, or of any note or of any other instrument or agreement delivered by Debtor to Secured Party in connection with this or any other transaction; (c) Debtor dies, becomes insolvent or ceases to do business as a going concern; (d) it is determined that Debtor has given Secured Party materially misleading information regarding its financial condition; (e) any of the Collateral is lost or destroyed; (f) a complaint in bankruptcy or for arrangement or reorganization or for relief under any insolvency law is filed by or against Debtor or Debtor admits its inability to pay its debts as they mature; (g) property of Debtor is attached or a receiver is appointed for Debtor, (h) whenever Secured Party in good faith believes the prospect of payment or performance is impaired or in good faith believes the Collateral is insecure; (i) any guarantor, surety or endorser for Debtor dies or defaults in any obligation or liability to Secured Party or any guaranty obtained in connection with this transaction is terminated or breached. If Debtor shall be in default hereunder, the indebtedness described In each Schedule and all other indebtedness then owing by Debtor to Secured Party under this or any other present or future agreement (collectively the "Indebtedness") shall, if Secured Party shall so elect, become immediately due and payable. After acceleration: (a) the unpaid principal balance of the indebtedness described in any Schedule in which interest has been precomputed shall bear interest at the rate of 18% per annum (or, if less, the maximum rate permitted by law) until paid in full; and (b) the unpaid principal balance of the indebtedness described in any Schedule in which interest has not been recomputed shall bear interest at the same rate as before acceleration until paid in full. In no event shall the Debtor upon demand by Secured Party for payment of the Indebtedness, by acceleration of the maturity thereof or otherwise, be obligated to pay any interest in excess of the amount permitted by law. Any acceleration of the Indebtedness, if elected by Secured Party, shall be subject to all applicable laws, including laws relating to rebates and refunds of unearned charges. 10. Secured Party's Remedies After Default; Consent to Enter Premises. Upon Debtor's default and at any time thereafter, Secured Party shall have all the rights and remedies of a secured party under the Uniform Commercial Code and any other applicable laws, including the right to any deficiency remaining after disposition of the Collateral for which Debtor hereby agrees to remain fully liable. Debtor agrees that Secured Party, by itself or its agent, may without notice to any person and without judicial process of any kind, enter into any premises or upon any land owned, leased or otherwise under the real or apparent control of Debtor or any agent of Debtor where the Collateral may be or where Secured Party believes the Collateral may be, and disassemble, render unusable and/or repossess all or any item of the Collateral, disconnecting and separating all Collateral from any other property and using all force necessary. Debtor expressly waives all further rights to possession of the Collateral after default and all claims for injuries suffered through or loss caused by such entering and/or repossession. Secured Party may require Debtor to assemble the Collateral and return it to Secured Party at a place to be designated by Secured Party which is reasonably convenient to both parties. Secured Party may sell or lease the Collateral at a time and location of its choosing provided that the Secured Party acts in good faith and in a commercially reasonable manner. Secured Party will give Debtor reasonable notice of the time and place of any public sale of the Collateral or of the time after which any private sale or any other intended disposition of the Collateral is to be made. Unless otherwise provided by law, the requirement of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of Debtor shown herein at least ten days before the time of the sale or disposition. Expenses of retaking holding, preparing for sale, selling and the like shall include reasonable attorneys' fees (at least 15% of the outstanding principal balance if not prohibited by law) and other legal expenses. Debtor understands that Secured Party's rights are cumulative and not alternative. 11. Waiver of Defaults; Agreement Inclusive. Secured Party may in its sole discretion waive a default, or cure, at Debtor's expense, a default. Any such waiver in a particular instance or of a particular default shall not be a waiver of other defaults or the same kind of default at another time. No modification or change in this Security Agreement or any related note, instrument or agreement shall bind Secured Party unless in writing signed by Secured Party. No oral agreement shall be binding. 12. Financing Statements; Certain Expenses. If permitted by law Debtor authorizes Secured Party to file a financing statement with respect to the Collateral signed only by Secured Party, and to file a carbon, photograph or other reproduction of this Security Agreement or of a financing statement. At the request of Secured Party, Debtor will execute any financing statements, agreements or documents, in form satisfactory to Secured Party which Secured Party may deem necessary or advisable to establish and maintain a perfected security interest in the Collateral and will pay the cost of filing or recording the same in all public offices deemed necessary or advisable by Secured Party. Debtor also agrees to pay all costs and expenses incurred by Secured Party in conducting UCC, tax or other lien searches against the Debtor or the Collateral and such other fees as may be agreed. 13. Waiver of Defenses Acknowledgment. If Secured Party assigns this Security Agreement to a third party ("Assignee"), then after such assignment: (a) Debtor will make all payments directly to such Assignee at such place as Assignee may from time to time designate in writing; (b) Debtor agrees that it will settle all claims, defenses, setoffs and counterclaims it may have against Secured Party directly with Secured Party and will not set up any such claim, defense, setoff or counterclaim against Assignee, Secured Party hereby agreeing to remain responsible therefor, (c) Secured Party shall not be Assignee's agent for any purpose and shall have no authority to change or modify this Security Agreement or any related document or instrument; and (d) Assignee shall have all of the rights and remedies of Secured Party hereunder but none of Secured Party's obligations. 14. Miscellaneous. Debtor waives all exemptions. Secured Party may correct patent errors herein and fill in such blanks as serial numbers, date of first payment and the like. Any provisions hereof contrary to, prohibited by or invalid under applicable laws or regulations shall be inapplicable and deemed omitted herefrom, but shall not invalidate the remaining provisions hereof. Debtor and Secured Party each hereby waive any right to a trial by jury in any action or proceeding with respect to, in connection with, or arising out of this Security Agreement, or any note or document delivered pursuant to this Security Agreement. Except as otherwise provided herein or by applicable law, the Debtor shall have no right to prepay the indebtedness described in any Schedule. Debtor acknowledges receipt of a true copy and waives acceptance hereof. If Debtor is a corporation, this Security Agreement is executed pursuant to authority of its Board of Directors. Except where the context otherwise requires, "Debtor" and "Secured Party" include the heirs, executors or administrators, successors or assigns of those parties; nothing herein shall authorize Debtor to assign this Security Agreement or its rights in and to the Collateral. If more than one Debtor executes this Security Agreement, their obligations under this Security Agreement shall be joint and several. If at any time this transaction would be usurious under applicable law, then regardless of any provision contained in this Security Agreement or in any other agreement made in connection with this transaction, it is agreed that (a) the total of all consideration which constitutes interest under applicable law that is contracted for, charged or received upon this Security Agreement or any such other agreement shall under no circumstances exceed the maximum rate of interest authorized by applicable law and any excess shall be credited to the Debtor; and (b) If Secured Party elects to accelerate the maturity of, or if Secured Party permits Debtor to prepay the indebtedness described in Paragraph 3, any amounts which because of such action would constitute interest may never include more than the maximum rate of interest authorized by applicable law and any excess interest, if any, provided for in this Security Agreement or otherwise, shall be credited to Debtor automatically as of the date of acceleration or prepayment. 15. Special Provisions. See Special Provisions Instructions. Dated: 4-5-00 ---------------- Debtor: Ready Mix, Inc. - --------------------------------------------------- Name of individual, corporation or partnership By /s/ Kenneth D. Nelson Title Vice President ---------------------------- --------------------- If Corporation, have signed by President, Vice President or Treasurer, and give official title. If owner or partner, state which. 109 Delhi - --------------------------------------------------------------- Address North Las Vegas NV 89O30 - --------------------------------------------------------------- City State Zip Code Secured Party: The CIT Group/Equipment. Financing, Inc. - --------------------------------------------------------------- Name of individual, corporation or partnership By /s/ Kathy Taylor Title Agent ------------------------------ ------------------- If corporation,give official title. If owner or partner, state which. P.O. Box 27248 - --------------------------------------------------------------- Address Tempe AZ 85285-7248 - --------------------------------------------------------------- City State Zip Code EX-10.129 15 0015.txt SECURITY AGREEMENT EXHIBIT 10.129 Schedule No. 1 Schedule of Indebtedness and Collateral To Master Security Agreement, dated 4-5-00, between the undersigned Secured Party and Debtor. This Schedule of Indebtedness and Collateral incorporates the terms and conditions of the above-referenced Master Security Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Secured Party of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. The equipment listed on this Schedule will be located at: 109 Delhi North Las Vegas NV 89030 - -------------------------------------------------------------------------------- Address City State ZipCode Debtor grants to Secured Party a security interest in the property described below, along with all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy, all hereinafter referred to collectively as "Collateral". Collateral Description (Describe Collateral fully including make, kind of unit, model and serial numbers and any other pertinent information.) See Schedule "A" consisting of 1 page attached hereto and made a part hereof. Debtor promises to pay Secured Party (i) the total principal sum of $296,716.00 in 72 (total number) principal payments of $4,121.06 each, commencing on 5-11-00, and a like sum on a like date of each month thereafter until fully paid, provided, however, that the final payment shall be in the amount of the unpaid balance, plus (ii) interest payable monthly at 0% in excess of the "governing rate" on unpaid principal balances, but in no event greater than the highest rate permitted by relevant law in effect from time to time during the term of this Security Agreement even if this Security Agreement shall state a minimum rate of interest. "Governing rate" shall mean a rate equal to the highest of (i) the Prime Rate of The Chase Manhattan Bank or its successors or (ii) "The Wall Street Journal Prime Rate" or (iii) the commercial paper rate in effect from time to time. Interest shall be computed on the basis of a year of 360 days. The Prime Rate of The Chase Manhattan Bank or its successors shall mean the rate of interest publicly announced by The Chase Manhattan Bank or its successors in New York from time to time as its Prime Rate. The Prime Rate of The Chase Manhattan Bank or its successors is not intended to be the lowest rate of interest charged by The Chase Manhattan Bank or its successors to its borrowers. "The Wall Street Journal Prime Rate" shall mean the Prime Rate listed by the Wall Street Journal. If more than one Prime Rate is listed in the Wall Street Journal, then the highest rate shall apply. "Commercial paper rate" shall mean the average rate quoted by the Wall Street Journal or such other source as Secured Party may determine for 30-day dealer commercial paper. The Debtor shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Debtor represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December 31, 1999) will not result in a material adverse effect on the Debtor's business condition or ability to perform hereunder. Upon request, the Debtor shall provide assurance acceptable to the Secured Party that the Debtor's computer systems and software are or will be Year 2000 compliant on a timely basis. The Debtor shall immediately advise-Secured Party in writing of any material changes in the Debtor's Year 2000 plan, timetable or budget. See Special Provisions Instructions below. No Prepayment Penalty Allowed First-Year; No Penalty Assessed Thereafter. Accepted 4-11-00 ----------------------------- Secured Party: THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ Kathy Taylor Title Agent ------------------------------------ ----------------------- Executed on 4-5-00 --------------------------- Debtor: Ready Mix, Inc. - ------------------------------------------------------------------------ Name of individual, corporation or partnership By /s/ Kenneth D. Nelson Title Vice President ------------------------------------ ------------------------ EX-10.130 16 0016.txt OFFICE BUILDING LEASE EXHIBIT 10.130 LEASE ADDENDUM -------------- NO. 1 ----- TO -- OFFICE BUILDING LEASE --------------------- This lease addendum constitutes an addendum to that certain Office Building Lease (the "Agreement") dated April 10, 2000, including all exhibits and prior addenda between Dixie Sun Ventures, LLC, a Utah Limited Liability Company, as "Lessor", and Meadow Valley Contractors, Inc., a Nevada Corporation, as "Lessee", for the premises located at 2250 West Center Street Building 2, Springville, Utah 84663. The following terms are hereby incorporated as part of the Agreement, and to the extent that they modify or conflict with any provisions of the same, these terms shall control. All other terms and conditions shall remain the same. 49. INITIAL POSSESSION AND RENT PRORATION ------------------------------------- Lessee is taking possession of the premises commencing April 10, 2000. Therefore, the prorated rent due upon occupancy from April 10, 2000 through April 30, 2000 is $2,380.00. Lessee hereby pays and Lessor hereby acknowledges receipt of the aforementioned prorated rent. 50. OFFICIAL LEASE COMMENCEMENT --------------------------- In reference to Section 4. of the agreement the initial lease term shall commence May 1, 2000 and shall expire April 30, 2003. 51. ACCEPTANCE ---------- This Lease Addendum is signed and accepted by both Lessee and Lessor on this 10th day of April 2000 . ---- ------------ LESSOR: LESSEE: DIXIE SUN VENTURES, LLC/ MEADOW VALLEY CONTRACTORS, INC. By: /s/ Bradley W. Wilkinson By: /s/ Robert Alan Terril ------------------------------ ------------------------------------- Bradley W. Wilkinson, Manager Robert Alan Terril, Utah Area Manager WITNESS: /s/ Bailey H. Butters WITNESS: /s/ Bailey H. Butters ------------------------- -------------------------------- Bailey H. Butters Bailey H. Butters - ---------------------------------- ----------------------------------------- Print Name Print Name EX-10.131 17 0017.txt SECURITY AGREEMENT EXHIBIT 10.131 TRANSFER AND ASSUMPTION OF INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT) This Agreement, dated as of April 28, 2000, is between Skyview Excavation and Grading, Inc. ("Transferor") of 446 East Young Street, Morgan, Utah 84050 and Meadow Valley Contractors, Inc. ("Transferee") of 4411 S. 40th Street, Suite D-11, Phoenix, Arizona 85040. WHEREAS, Transferor and Wheeler Machinery Co. ("Dealer") have entered into that certain Installment Sale Contract ("Security Agreement"), dated as of August 3, 1999, a copy of which is attached hereto (the "Contract"), pursuant to which Dealer sold certain equipment to Transferor (the "Property"); and WHEREAS, the Dealer assigned all of its rights and interest in the Contract and the Property to Caterpillar Financial Services Corporation ("Caterpillar") pursuant to that certain Assignment entered between Dealer and Caterpillar dated as of the 6/th/ day of August 1999; and WHEREAS, the installments remaining due under the Contract as of April 14, 2000, are Twenty-eight (28) installments of Two-thousand, Eight-hundred, Twenty-five dollars and Thirty-two cents ($2,825.32), each with the next installment due on May 3, 2000; and WHEREAS, Transferee wishes to assume all and whatever interest Transferor has in and to the Contract and the Property and all duties and obligations of the Transferor under the Contract; and WHEREAS, under the terms of the Contract, Transferor may not assign the Contract or any right or obligation thereunder or any right in the Property without the prior written consent of Caterpillar. NOW, THEREFORE, for valuable consideration received, Transferor and Transferee agree as follows: 1. Transferor hereby grants and conveys to Transferee, its successors and assigns, all of Transferor's right, title and interest in and to the Contract and the Property, subject, however, to the Contract and all the terms, conditions and provisions thereof, and upon the condition that (i) the Consent set forth below be executed and delivered by Caterpillar and (ii) Transferee executes all agreements, statements and related documents Caterpillar may reasonably require to effect and maintain Caterpillar's first priority security interest in the Property. 2. Transferee hereby unconditionally assumes, becomes a party to, and agrees to perform the Contract and all the terms, conditions and provisions thereof and further agrees to pay all amounts that become due under the Contract, as though Transferee were the purchaser named in the Contract. 3. Transferee agrees not to assert against Caterpillar any defense, setoff, recoupment, claim or counterclaim which Transferee might have against Transferor arising from the assumption of the Contract or otherwise. Transferor and Transferee hereby waive and discharge any defense or claim each or both may have against Caterpillar arising from or in relation to the Contract, this Agreement, or the Property. 4. Transferee will not sell, rent, transfer, encumber or dispose of any of the Property without the prior written consent of Caterpillar, its successors or assigns. Transferee acknowledges having read the Contract and agrees to be fully bound by all terms, conditions and provisions of the Contract. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement. Skyview Excavation and Grading, Inc. Meadow Valley Contractors, Inc. Transferor Transferee Signature /s/ Ann Wardell Signature /s/ Kenneth D. Nelson ----------------------------- ----------------------------- Title President Title Vice President --------------------------------- --------------------------------- Date__________________________________ Date__________________________________ FORM OF CONSENT: Caterpillar Financial Services Corporation hereby accepts and consents to the foregoing Transfer and Assumption of this Installment Sale Contract ("Security Agreement") this 28th day of April, 2000. Caterpillar Financial Services Corporation Signature /s/ Nancy Goodall ------------------------------ Name (PRINT) Nancy Goodall --------------------------- Title Customer Service Representative ---------------------------------- INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT) PURCHASER(S) SELLER (DEALER): SKYVIEW EXCAVATION AND WHEELER MACHINERY CO. GRADING, INC. 446 EAST YOUNG STREET 4901 WEST 2100 SOUTH MORGAN, UT 84050 SALT LAKE CITY UT 84120-1227 County: MORGAN - -------------------------------------------------------------------------------- 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) USED 1981 D8K CATERPILLAR TRACK-TYPE TRACTOR 77V16709 86,376.00 - ---------------------------------------------------------------------------------------------------------- FIRST DESCRIPTION OF ADDITIONAL SECURITY Sub-Total............................... $ 86,376.00 USED (MAKE, MODEL & SERIAL NUMBER) Sales Tax............................... $ 5,397.50 - ------------------------------------------ 1. Total Cash Sale Price .................. $ 91,773.50 Cash Down Pay 0.00 - ------------------------------------------ Net Trade-in Allow 0.00 FIRST DESCRIPTION OF TRADE-IN EQUIPMENT 2. Total Down Payment...................... $ 0.00 USED (MAKE, MODEL & SERIAL NUMBER) 3. Unpaid Balance of Cash Price (1 -2)..... $ 91,773.50 - ------------------------------------------ 4. Official Fees (Specify)................. $ 150.00 NONE Documentation Fee 150.00 5. Physical Damage Insurance............... $ 6. Principal Balance (Amount Financed) (3 + 4 + 5)........... $ 91,923.50 - ------------------------------------------ 7. Finance Charge Trade-in Value 0.00 (Time Price Differential)............... $ 9,788.02 Less Owing to (___ n/a ___) 0.00 8. Time Balance Net Trade-in Allowance 0.00 (Total of Payments) (6 + 7)............. $ 101,711.52 9. Time Sale Balance Location of Units: 446 EAST YOUNG STREET (Total of Payment Price) (2 + 8)........ $ 101,711.52 MORGAN, UT 84050 MORGAN 10. Annual Percentage Rate 6.69% 11. Date FINANCE CHARGE begins to accrue AUG 03 1999
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 36 equal monthly installments of $2,825.32 each, with the first - - installment due on SEP 03 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 AUG 03 1999. Purchaser(s): Seller: SKYVIEW EXCAVATION AND WHEELER MACHINERY CO. GRADING, INC. By /s/ Ann Wardell By /s/ [ILLEGIBLE]^^ -------------------------- --------------------------- Name (PRINT) Ann Wardell Name (PRINT)_________________ ---------------- Title President Title Vice Pres ----------------------- ------------------------ 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 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 judgement 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 Units(s). 3. POSSESSION, USE AND MAINTENANCE: Purchaser shall not (a) use any Unit improperly, carelessly, unsafely or in violation of any law or regulations 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 right 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 of motatorium 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 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 as 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 delegate 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 Section 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 acquired to Seller hereunder shall impair any such right or remedy nor shall it be construed to be a waiver of any breach of default of Purchaser. Any waiver or consent by Seller under this Contract must be in writing specifically as 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. EX-10.132 18 0018.txt SECURITY AGREEMENT EXHIBIT 10.132 INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT) PURCHASER(S): SELLER (DEALER): MEADOW VALLEY CASHMAN EQUIPMENT COMPANY CONTRACTORS, INC. 3101 EAST CRAIG ROAD 4411 S. 40TH, SUITE D11 P.O. BOX 271630 P.O. BOX 60726 LAS VEGAS, NV 89127-1630 PHOENIX, AZ 8504082-0726 County: MARICOPA #136261 - -------------------------------------------------------------------------------- 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) 14H CATERPILLAR MOTOR GRADER 7WJ00561 273,500.00 - --------------------------------------------------------------- FIRST DESCRIPTION OF ADDITIONAL SECURITY USED (MAKE, MODEL & SERIAL NUMBER) - --------------------------------------------------------------- NONE - --------------------------------------------------------------- FIRST DESCRIPTION OF TRADE-IN EQUIPMENT USED (MAKE, MODEL & SERIAL NUMBER) - --------------------------------------------------------------- NONE - --------------------------------------------------------------- Trade-in Value 0.00 Less Owing to ( n/a ) 0.00 --------- Net Trade-in Allowance Location of Units: 4411 S. 40TH, SUITE D11 PHOENIX, AZ 85040 MARICOPA Sub-Total................................... $ 273,500.00 Sales Tax................................... $ 19,828.75 1. Total Cash Sale Price....................... $ 293,328.75 Cash Down Pay 130,530.27 Net Trade-in Allow 0.00 2. Total Down Payment $ 130,530.27 3. Unpaid Balance of Cash Price (1 - 2) $ 162,798.48 4. Official Fees (Specify)..................... $ 250.00 DOCUMENTATION FEE 250.00 5. Physical Damage Insurance................... $ 6. Principal Balance (Amount Financed)(3 + 4 + 5)................ $ 163,048.48 7. Finance Charge (Time Price Differential)................... $ 28,419.20 8. Time Balance (Total of Payments)(6 + 7).................. $ 191,467.68 9. Time Sale Balance (Total of Payment Price(2 + 8).............. $ 312,997.95 10. Annual Percentage Rate 8.11% 11. Date FINANCE CHARGE begins to accrue May 11 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 $3,988.91 each, with the first - --- installment due June 11 2000, and the balance of the installments due on the like day of each month thereafter, (except no payments shall be due during the months(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 of May 11 2000. Purchaser(s): Seller: MEADOW VALLEY CASHMAN EQUIPMENT COMPANY CONTRACTORS, INC. By /s/ Kenneth D. Nelson By /s/ Mary Kaye Cashman --------------------------- ------------------------------ TITLE Vice President Name (PRINT) MARY KAYE CASHMAN ------------------------ -------------------- NAME KENNETH D. NELSON Title CEO ------------------------- --------------------------- 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 to 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 Contact. 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 perfrm 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 Contact is and shall be true, correct and complete. 10. ASSIGNMENT; COUNTERPARTS: The rights and remedies of Seller under this Contract may be assigned by Selller 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 goverened 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 May 11, 2000 by MEADOW VALLEY CORPORATION, (hereinafter, referred to as "Guarantor"), in favor of CASHMAN EQUIPMENT COMPANY, 3101 EAST CRAIG ROAD, P.O. BOX 271630, LAS VEGAS, NV 89127-1630 (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 Gurantor 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 SALE CONTRACT by and between Obligor and Seller dated May 11 2000, 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 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 Gurantor 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 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 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 has 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. Guaranty - ----------------------------------------------------------------- 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 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 SNN:____________________________________________________________ -----------------------------------------------------
RIDER NO 1 TO INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT) DATED AS OF MAY 11 2000 BETWEEN CASHMAN EQUIPMENT CO. ("SELLER") AND MEADOW VALLEY CONTRACTORS, INC. ("PURCHASER") AND ASSIGNED TO CATERPILLAR FINANCIAL SERVICES CORPORATION SUBLEASING BY PURCHASER Purchaser may sublease the Units provided each sublease is expressly subject and subordinate to the terms and provision of the Installment Sale Contract and not inconsistent therewith and in no way relieves Purchaser of its obligations under the Installment Sale Contract. Moreover, Purchaser shall not sell, assign or transfer (except to Caterpillar Financial Services Corporation) any of its rights under any sublease or otherwise create or incur or suffer to be created or incurred or to exist any lien, claim or security interest or encumbrance (except in favor of Caterpillar Financial Services Corporation) of any kind on or in any of its rights under sublease. MEADOW VALLEY CONTRACTORS, INC. ("Purchaser") Signature: /s/ Kenneth D. Nelson -------------------------- Name(Print): KENNETH D. NELSON ------------------------ Title: Vice President ------------------------------ Date: 5-11-00 ------------------------------- EX-10.133 19 0019.txt AGREEMENT EXHIBIT 10.133 AGREEMENT --------- This Agreement is made as of this 30th day of May, 2000 by and between ---- --- Sun State Rock & Materials Corp., an Arizona corporation, hereinafter referred to as "Sun State" and Ready Mix, Inc., a Nevada corporation, hereinafter referred to as "Ready Mix." WITNESSETH: ---------- WHEREAS, Sun State leases certain real property located in the general vicinity of 115th Avenue and Beardsley Road, Maricopa County, Arizona, and depicted and legally described on Exhibits A and B attached hereto and incorporated herein by this reference (the property described on Exhibit A is hereinafter referred to as the "Sun State Property"), pursuant to that certain Sand and Gravel Pit Lease, dated April 16, 1998 (hereinafter referred to as the "Lease"), between Sun State, as lessee, and Hope Enterprises, LLC and W.A.W., LLC as lessors (hereinafter referred to as "Owner"); and WHEREAS, pursuant to the terms of the Lease, Sun State has the right to extract sand and rock (hereinafter referred to collectively as "materials") from the Sun State Property and to permit the use of the Sun State Property by a third party in connection with the processing of such materials; and WHEREAS, Ready Mix desires to utilize that portion of the Sun State Property depicted and legally described on Exhibit C attached hereto and incorporated herein by this reference (the "Ready Mix Site") and to purchase sand and rock from Sun State, all for the purpose of producing and selling Portland Cement Concrete and redi-mix products. NOW, THEREFORE, in consideration of the mutual promises herein contained, and of other good and valuable consideration, Sun State and Ready Mix do hereby covenant and agree as follows: 1. Term: Unless sooner terminated as otherwise provided herein, the term ---- of this Agreement shall be for a period of ten (10) years, commencing on June 1, 2000 and ending on May 31, 2010 (the "Initial Term"). Upon the expiration of the Initial Term, the parties may, if both parties desire, extend the term of this Agreement for such period of time and upon such terms and conditions as are mutually acceptable to the parties. 2. Use by Ready Mix: ---------------- A. During the term of this Agreement, Ready Mix shall have the exclusive right to use the Ready Mix Site for the purpose of operating a business for the production and sale of Portland Cement Concrete and the sale of redi-mix products and performing those acts which are ancillary to the operation of such a business, including, without limitation, the processing, manufacture, storage, and sale of such products and the disposal of any waste materials generated as a result thereof. Ready Mix may locate such items of equipment and machinery and any structures and fixtures on the Ready Mix Site as it deems necessary for the operation of its business, and any such items, fixtures and structures shall remain the property of Ready Mix, subject to removal at Ready Mix's will during the term of this Agreement and for a period of one hundred twenty (120) days thereafter. Ready Mix shall not use the Ready Mix Site for any purpose not related or ancillary to the operation of its business, without the prior consent of Sun State. B. In addition to the right to use the Ready Mix Site as set forth above, Ready Mix shall have the right to use other portions of the Sun State Property for purposes related to its business operations on the Ready Mix Site, as follows: i. Ready Mix, its employees, agents, invitees and customers shall have the right to use a portion of the Sun State Property to be designated by mutual agreement of Sun State and Ready Mix for access to and from the Ready Mix Site necessary for Ready Mix's operations. If Sun State proposes to change the location of Ready Mix's access to the site, Sun 2 State shall notify Ready Mix of the proposed change for Ready Mix's approval. Ready Mix shall not unreasonably withhold approval of a proposed change in the location of Ready Mix's access as long as the proposed change in access does not significantly increase the length of travel or significantly reduce the convenience to Ready Mix of the access route originally designated by the parties. Ready Mix also shall have the right to use a portion of the Sun State property to be designated by mutual agreement of Sun State and Ready Mix for placement of utilities necessary for Ready Mix's operations. ii. Ready Mix shall have the right to use a portion of the pit area located on the Sun State Property to dispose of any waste concrete and other materials reasonably resulting from the operation of its business on the Ready Mix Site; provided that Sun State shall from time to time designate and direct the method of disposal and the particular area or areas to be used for such purpose; and provided further that Ready Mix shall conduct any such disposal in accordance with all applicable laws and shall be responsible, at its sole cost, for obtaining any required licenses and permits. 3. Washed Sand and Rock: Water: --------------------------- A. Sun State shall use its best efforts to supply to Ready Mix washed sand and rock, in quantities and quality required by Ready Mix for its production of Portland Cement Concrete and sale of redi-mix products at the Ready Mix Site. The sand supplied by Sun State shall meet the ASTM C-33 specification for fine aggregates, and Sun State shall use all good faith efforts to maintain the average values of daily tests performed within the FM range of 2.70 and 2.95 and within the SE range of 80 and 90. SE tests will be performed in accordance with ASTM D 2419-95 (utilizing sample prep procedure A). The pea gravel and rock supplied by Sun State shall meet the ASTM C-33 specification for #5 and #7 course aggregates. 3 B. Sun State shall use its best efforts to maintain a reasonable stockpile of washed sand and rock to supply Ready Mix's immediate requirements for production of Portland Cement Concrete and sale of redi-mix products, and Ready Mix shall keep Sun State generally informed of such requirements. C. Nothing contained in this Agreement shall be interpreted to prevent, restrict or otherwise limit Sun State from making unlimited sales of the sand, pea gravel and rock aggregate it produces to third parties or to allow the use of the Sun State Property, other than the Ready Mix Site, for any purpose. 4. Imported Sand and Rock: If Sun State is unable, notwithstanding its ---------------------- best efforts, to supply Ready Mix with all its requirements for washed sand, pea gravel and rock meeting the specifications set forth in this Agreement in connection with Ready Mix's operation on the Ready Mix Site, Ready Mix may, at its option, import additional sand, pea gravel and rock from other locations for use in the production and sale of Portland Cement Concrete and the sale of redimix products in accordance with this Section. Ready Mix shall notify Sun State, in writing, at least three (3) business days before importing any sand, pea gravel, or rock for use at the Ready Mix Site. The written notice shall describe the type and amount of material that Ready Mix intends to import. If Sun State cannot supply the material specified in the notice within three (3) business days after receipt of the written notice, Ready Mix may obtain the materials described in the notice for use at the Ready Mix Site. Sun State shall pay Ready Mix an amount equal to fifty percent (50%) of the amount by which Ready Mix's cost for the material imported in accordance with this Section exceeded the amount that Ready Mix would have paid Sun State for the same type of material under this Agreement. Ready Mix shall submit an invoice and documentation showing the type, amount and cost of the imported material and the amount due under this Section to Sun State. Sun State shall pay Ready Mix the amount due under this Section within thirty (30) days after receipt of an 4 invoice under this Section. Except as otherwise provided in this Section, Ready Mix shall obtain all sand, pea gravel and rock used for production of Portland Cement Concrete and redi-mix products on the Ready Mix Site from Sun State. 5. Payment Terms: ------------- A. Ready Mix agrees to pay Sun State (i) an initial price of S5.60 per ton of concrete sand, (ii) an initial price of $5.55 per ton of pea gravel (ASTM 3/8"), and (iii) an initial price of $5.00 per ton of concrete rock (1" and 1/2" minus), payable in accordance with Subsection 5.C below. Said prices shall each be adjusted each year in accordance with Subsection 5.B below. These prices include loading of the material into Ready Mix's bins by Sun State. B. Commencing on the first anniversary of the date of this Agreement and on each anniversary thereafter, the prices for sand, pea gravel and rock listed in Subsection 5.A hereof shall be adjusted for the next succeeding year based on the following formula: PPIE ---- IP x PPIB = Adjusted Price Where: IP = The initial price as listed in Subsection 5.A hereof. PPIE = Producer Price Index - Table 6 Commodity Code 1321, construction sand, gravel and crushed stone, as published by the U.S. Department of Labor, Bureau of Labor Statistics, for May in the year just ending; PPIB = Producer Price Index - Table 6 Commodity Code 1321, construction sand, gravel and crushed stone, as published by The U.S. Department of Labor, Bureau of Labor Statistics, for May, 2000. provided, however, that in the event that the quotient of said ratio (PPIE/PPIB) in any given year is less than 1.00, then in such event, 1.00 shall be substituted for such ratio and utilized in the formula for calculating the adjusted prices to be paid by Ready Mix (i.e., the Adjusted Price shall never be less than the initial price set forth in Subsection 5.A hereof). 5 The Producer Price Index Table 6 Commodity Code is currently indexed to the base year 1982. In the event of a change in base years during this Agreement, the Producer Price Index numbers used in the calculation shall also be adjusted for relativity with one another with respect to the new base year, if necessary, to proportionately adjust the price for the relative percentage change in the index. In the event the Producer Price Index shall cease to be published, then Sun State and Ready Mix shall agree upon another index to be substituted therefor, and if they are unable to agree upon a substitute index within a reasonable time, such matter shall be determined by arbitration in accordance with this Agreement. C. Sun State shall be entitled to payment for sand, pea gravel and rock supplied to Ready Mix pursuant to the terms of this Agreement at such time as the materials are used by Ready Mix in the production of concrete including drum cleanout or, if not used to produce concrete, at such time as Ready Mix removes the materials from the Sun State Property. Payments from Ready Mix to Sun State shall be made monthly, on or before the fifteenth (15/th/) day of each month following the month in which the materials were used in production or removed from the Ready Mix Site. D. i. Ready Mix agrees that, commencing in the month of January, 2001 and for each month thereafter as long as this Agreement remains in effect, the monthly payment Sun State receives shall not be less than an amount (the "Monthly Minimum Payment") calculated on the basis of minimum monthly sales volumes of sand and rock and the prices of sand and rock during the month pursuant to Subsection 5.B. For the months of January through May 2001, the Monthly Minimum Payment shall be $65,875, which is based on the monthly minimum volumes of 6,875 tons of rock and 5,625 tons of sand. Beginning in June 2001, the Monthly Minimum Payment shall be calculated based on the minimum monthly sales volume of 6,750 tons of sand and 8,250 tons of rock multiplied by the respective prices calculated pursuant to Subsection 6 5.B. Beginning in June 2002 and thereafter as long as this Agreement remains in effect, the Monthly Minimum Payment shall be adjusted each year on the anniversary date of this Agreement based on the Adjusted Price for sand and rock determined in accordance with Section 5.B hereof, but never below the Monthly Minimum Payment for June 2001. ii. The Monthly Minimum Payment shall be applied to adjust the monthly payment pursuant to Subsection 5.C as follows. If the monthly payment due under Subsection 5.C in a given month does not equal or exceed the Monthly Minimum Payment for that month, Ready Mix shall increase the monthly payment for that month to equal the Monthly Minimum Payment. If, in any month, the monthly payment due under Subsection 5.C is less than the Monthly Minimum Payment because inclement weather prevented Ready Mix from using sufficient materials to cover the Monthly Minimum Payment, Ready Mix shall be entitled to a credit equal to the difference between the Monthly Minimum Payment and the monthly payment that would have been due under Subsection 5.C. Ready Mix shall provide written notice to Sun State of the amount of the credit claimed along with the payment submitted for that month. Ready Mix may use the credit to reduce the amount of any future monthly payment that exceeds the Monthly Minimum Payment for that month, provided that the payment for any month shall not be less than the Monthly Minimum Payment. Any unused credit shall expire if not used within twelve months. All credits shall expire upon any termination of this Agreement, except that if Sun State terminates this Agreement pursuant to Section 16, Sun State shall compensate Ready Mix for the amount of any unused and unexpired credits. iii. During any month in which Sun State is unable to furnish, within a reasonable time after receiving an order from Ready Mix, sufficient materials to meet Ready Mix's order, Ready Mix shall not be liable for the Monthly Minimum Payment, and the 7 monthly payment due for that month shall be the amount due under Subsection 5.C for the materials supplied by Sun State and used by Ready Mix. 6. Measurement: Measurement of materials used by Ready Mix for ----------- payment purposes pursuant to Section 5 hereof shall be made by Ready Mix. For materials used in the production of Portland Cement Concrete, measurements shall be based upon the quantities of sand, pea gravel and rock as shown on Ready Mix's computer printouts for the plant located on the Ready Mix Site; provided, however, that if Ready Mix utilizes imported sand, pea gravel or rock pursuant to Sections 4 or 8 hereof, then the sand, pea gravel and rock quantities to be paid for by Ready Mix shall be the total sand, pea gravel and rock quantities shown on such printouts reduced by the total quantity of imported sand, pea gravel and rock documented by certified truck-scaled tickets and batched by Ready Mix during the applicable monthly period. Sun State may implement reasonable monitoring procedures to insure proper measurement of the imported sand, pea gravel and rock, provided that any such procedures shall be at no cost or expense to Ready Mix. Upon request, Ready Mix shall supply Sun State with quantity usages each day for the previous day. For sand, pea gravel and rock not used in the production of concrete on the Ready Mix Site, measurements shall be based on the quantities of rock, pea gravel and sand removed from the Sun State Property as shown on Sun State's truck scales. Upon written request, Sun State shall have the right to audit Ready Mix's books and records for the purpose of quantity verification and shall otherwise be allowed to verify the quantities of materials being utilized pursuant to this Agreement, including, but not limited to, checking the calibration of Ready Mix's computer equipment to verify its accuracy. Ready Mix shall make its books and records available to Sun State within ten (10) days after written request is made. 8 7. Taxes: ----- A. Each party shall pay personal property taxes assessed on any personal property owned or leased by that party, regardless of who is using the equipment. Each party shall pay real property taxes assessed on property owned by that party, regardless of who is using or occupying the real property. B. Ready Mix agrees that it is responsible to pay Sun State any and all transaction privilege or mining taxes legally owed as a result of sales of material from Sun State to Ready Mix. Sun State is responsible to remit those taxes per current law. Ready Mix agrees to be responsible for collecting and remitting all privilege or mining taxes legally incurred as a result of the sale of material purchased by Ready Mix from Sun State and sold by Ready Mix to another party. C. Any and all other privilege tax (or any other tax), fees, permits, licenses, assessments, or similar items incurred and legally due with respect to any real or personal property will be the responsibility of the party owning the personal or real property on which the obligation is imposed by law, in accordance with Subsection A of this Section. D. Any new taxes or fees enacted subsequent to this agreement with respect to any real or personal property shall be the responsibility of the party who owns or leases the personal or real property, consistent with Subsection A of this Section. E. Any new taxes resulting from the sale of materials will be the responsibility of the party who would be responsible for the tax pursuant to Subsection B of this Section. 8. Force Majeure: Both parties shall be excused from their ------------- performance hereunder so long as, and to the extent that, performance is prevented by reason of fire, storm, flood, war, rebellion, insurrection, riot, strike, labor disturbance, earthquake, failure of transportation or 9 delivery facilities, acts, orders or regulations imposed by Federal, State, or other authorized governmental authority, or other causes beyond the reasonable control of either party, hereunder, whether similar or dissimilar to the foregoing ("Force Majeure Event"), but specifically excluding therefrom any mechanical or other failure of production or processing machinery or equipment; provided, however, that in no event shall any Force Majeure Event operate to terminate this Agreement except as otherwise provided herein. In the event that Sun State is prevented from supplying Ready Mix with sand and/or rock as a result of a Force Majeure Event, then Ready Mix may import sand and/or rock for so long as such Force Majeure Event shall continue in effect and until such time as Sun State is able to resume supplying sand and/or rock, and Ready Mix shall not be liable for the Monthly Minimum Payment during any such period. 9. Interpretation: It is the mutual intention of the parties hereto -------------- that this Agreement shall be governed by the laws of the State of Arizona as to the execution, authentication, construction, the legal obligations arising hereunder, and as to what is to be deemed a performance, satisfaction or discharge thereof. 10. Utilities Generally: Ready Mix shall be responsible to obtain all ------------------- utilities necessary for its operations, including water, power, communications, and sewage disposal. Access for any utility lines across the Sun State Property shall be determined in accordance with Section 2.B.i. Sun State shall have no obligation to furnish any utilities for Ready Mix's operations. Upon Ready Mix's request, and in Sun State's sole discretion, Sun State shall agree to provide water to Ready Mix. Ready Mix shall reimburse Sun State for the cost of any water furnished by Sun State and used by Ready Mix for the operation of its plant within, ten (10) days after receipt of statements from Sun State evidencing the cost thereof. 10 11. Indemnification: Ready Mix agrees to indemnify, protect and save --------------- Sun State and Owner harmless from any and all actions, claims, costs, losses, damages (including, without limitation, compensatory and punitive damages), fines, penalties, expenses, attorneys fees, litigation expenses or liabilities from any accident, injury or damage to person or property or violation of law occurring in, on or about the Ready Mix Site during the term of this Agreement or in connection with the Ready Mix's operations on the Ready Mix Site, including, without limitation, any claims relating to Ready Mix's emissions, disposal, discharge, deposit, dumping, leaking, spilling, placing, or escape of any toxic or hazardous substance or waste, pollutant or contaminant (as those terms may be defined from time to time under federal, state or local laws) on, in, under or from the Sun State Property or compliance with any applicable environmental law; provided, however, that this provision shall not be construed so as to have the effect of indemnifying or holding harmless Sun State or Owner for, from and against any actions, claims, costs, losses, damages (including without limitation compensatory and punitive damages), expenses, attorneys' fees or liabilities which shall arise solely out of the acts or omissions of Sun State and/or Owner. 12. Insurance: Ready Mix shall maintain in effect insurance policies --------- for the Ready Mix Site and Ready Mix's operation on the Ready Mix Site or other portions of the Sun State Property against such risks as are regularly insured by reasonable prudent business persons operating concrete batching plants in Arizona. Such insurance shall include, without limitation, (i) a policy or policies insuring against liability resulting from injury or death occurring to persons in, on or about the Ready Mix Site, or otherwise related to Ready Mix's business operations on the Ready Mix Site, and from damage to property, the liability coverage under such insurance to be not less than $2,000,000 for one person injured, $2,000,000 for any one accident and $2,000,000 for property damage, and (ii) comprehensive automobile liability coverage for vehicles used in the operation of the Ready Mix Site, the liability on such insurance to be not less than $2,000,000 for 11 any one person insured, $5,000,000 for any one accident and $500,000 for property damage. Sun State shall be named as an additional insured under such policies. Insurance coverage to satisfy such requirements may be obtained through Primary and Umbrella Excess Liability policies. At Sun State's request, certificates of insurance shall be furnished to Sun State evidencing such insurance coverage. These Certificates shall contain a provision that coverage afforded under the policy or policies will not be cancelled until at least thirty (30) days' prior notice has been given to Sun State. Insurance requirements hereunder are not a limitation of Ready Mix's liability and obligation to indemnify Sun State and Owner, but are simply additional security to Sun State and Owner. 13. Notices: Any notice to be given to the parties pursuant to the ------- terms of this Agreement shall be given by U.S. Mail, certified mail, return receipt requested or by personal delivery, addressed as follows: if to Sun State at P. 0. Box 1340, Sun City, Arizona, 85372, with a copy to Dalva L. Moellenberg, Gallagher & Kennedy, P.A., 2575 East Camelback Road, Phoenix, Arizona 85016-9225, and if to Ready Mix at 3430 E. Flamingo Road, Suite 100, Las Vegas, Nevada 89121. Notices shall be deemed given when deposited, if mailed by certified mail, otherwise when received. 14. Independent Contractor Operation: Each party shall perform this -------------------------------- Agreement as an independent contractor, and in no event shall either party be deemed to be or act as an agent or employee of the other. Ready Mix shall be solely and completely responsible for the operation and care of its plant and the Ready Mix Site and Sun State shall be solely and completely responsible for its operations and the remainder of the Sun State Property. 15. Termination of Agreement: If either party fails to perform or ------------------------ abide by any of the conditions or covenants of this Agreement, the other party may terminate this Agreement (and in the event of a default by Ready Mix, Sun State may terminate Ready Mix's right 12 to possession of the Ready Mix Site); provided that the non-defaulting party has first given the defaulting party written notice of any such default and thirty (30) days thereafter to cure the same, and the defaulting party has not perfected a cure in such 30-day period. The foregoing shall not limit any rights or remedies otherwise available at law or in equity to the non-defaulting party and the right of Sun State to receive payment for any materials already purchased by Ready Mix. 16. Termination by Sun State: In the event that the character of the ------------------------ raw material being utilized by Sun State to produce the washed sand and rocks changes, and such change results in the total of all costs directly or indirectly related to the production of said washed sand and rock exceeding the prices being paid by Ready Mix for said materials, Sun State may, at its option. terminate this Agreement without further liability whatsoever to Ready Mix. In the event of a termination of this Agreement pursuant to this Section 16, Ready Mix may, at its option, notify Sun State in writing within thirty (30) days after receipt of notice of termination that it desires to enter into a ground lease to maintain its operations on the Ready Mix site at a monthly lease rate to be negotiated by the parties in good faith. If Ready Mix does not elect to enter into a ground lease, or if the parties are unable to negotiate a lease, the parties shall mutually agree to a time schedule during which Ready Mix shall be allowed to remain on the Ready Mix Site before having to vacate; provided however, that such time period shall not exceed six (6) months after the notification by Sun State to Ready Mix of its intent to terminate the Agreement pursuant to this Section. 17. Assignment: Ready Mix shall not: (i) assign, transfer, pledge or ---------- hypothecate its rights under this Agreement without Sun State's prior written consent, (ii) sublet or lend the Ready Mix Site or any part thereof to any unaffiliated party, or; (iii) permit the Ready Mix Site, or any part thereof, to be used by anyone other than Ready Mix and Ready Mix's employees and agents performing activities authorized pursuant to the terms of this Agreement. 13 18. Laws and Permits: Ready Mix, at its sole cost and expense, shall ---------------- comply with all laws, ordinances and regulations, now or hereafter in effect, relating to the possession, operation, or maintenance of its plant and the Ready Mix Site, and shall obtain any licenses or permits necessary for the operation of its plant. 19. Right of Inspection. Sun State shall have the right at all ------------------- reasonable times to enter upon the Ready Mix Site, and shall be given free access thereto for the purpose of inspection and verification of compliance with this Agreement. 20. Merger: This writing represents the entire Agreement between the ------ parties. No other writings, verbal understandings or agreements of any nature exist between the parties concerning the subject matter of this Agreement. 21. Changes: Any changes, modifications or addenda to this Agreement ------- must be evidenced in a writing which is signed by all parties hereto before such shall be considered binding. 22. Arbitration: All claims, disputes and other matters in question ------------ between the parties hereto arising out of, or relating to, this Agreement or the breach thereof shall be decided by arbitration unless the parties mutually agree otherwise. In any such event, the party desiring arbitration shall give notice to that effect to the other party, specifying in such notice the name and address of the person designated to act as an arbitrator on its behalf. Within fifteen (15) days after receipt of such notice, the other party shall give written notice to the first party specifying the name and address of the person designated to act as arbitrator on its behalf. If the second party fails to notify the first party of the appointment of its arbitrator within such 15-day period, then the appointment of a second arbitrator shall be made by the then presiding Judge of the Superior Court of the State of Arizona for the County of Maricopa upon the request of the first party, and the second party shall not raise any question as to the Court's full power and jurisdiction to entertain the application and make the appointment and the person so appointed shall be the second arbitrator. 14 The arbitrators so chosen shall meet within ten (10) days after the second arbitrator is appointed. If the two arbitrators shall not agree upon the decision to be made in such dispute, they shall, themselves, appoint a third arbitrator who shall be a competent and impartial person, and in the event they are unable to agree upon such appointment within ten (10) days, the, third arbitrator shall be selected by the parties themselves if they can agree thereon within a further period of fifteen (15) days. If the parties do not so agree, then either party, on behalf of both, may request the then presiding Judge of the Superior Court of the State of Arizona for the County of Maricopa to appoint such third arbitrator, and the other party shall not raise any question as to the Court's full power and jurisdiction to entertain the application and make the appointment and the person so appointed shall be the third arbitrator. The decision of the arbitrators so chosen shall be given within a period of thirty (30) days after appointment of such third arbitrator. The decision in which any two of the arbitrators so appointed and acting hereunder concur shall in all cases be binding and conclusive upon the parties. Each party shall pay the fees and expenses of the arbitrator appointed by such party, or in whose stead as above provided such arbitrator was appointed, and the fees and expenses of the third arbitrator, if any, shall be borne equally by both parties. Any such arbitration shall be conducted in accordance with the rules then in effect of the American Arbitration Association. The foregoing agreement to arbitrate shall be specifically enforceable under the laws of the State of Arizona. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable laws in any court having jurisdiction thereof. Any demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen, and in no event shall it be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations. Unless otherwise agreed in writing, the parties shall carry on the work required hereunder during any arbitration proceedings. 15 23. Warranty of Title: Sun State represents and warrants that (i) it ----------------- is presently the lessee of the Sun State Property, and (ii) it has the authority to enter into this Agreement and perform its obligations hereunder and to grant to Ready Mix all rights granted hereby. Sun State further represents and warrants that it will not do or suffer anything to be done in connection with the Lease which will interfere with or impair the rights of Ready Mix hereunder. 24. Binding Effect: This Agreement shall inure to the benefit of and -------------- be binding on the parties hereto, their successors, assigns, heirs and personal representatives. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement in duplicate as of the date first hereinabove written. SUN STATE ROCK & MATERIALS CORP. /s/ [ILLEGIBLE]^^ /s/ Deloris C Walker - --------------------------- ---------------------------------- Attest By: Deloris Walker Its: President READY MIX, INC. /s/ [ILLEGIBLE]^^ /s/ Robert A DeRuiter - --------------------------- ---------------------------------- Attest. By: Robert DeRuiter Its: General Manager 16 EX-10.134 20 0020.txt LEASE AND BATCH AGREEMENT EXHIBIT 10.134 LEASE AND BATCH PLANT AGREEMENT This Lease and Mining Agreement (the "Lease") is dated June 26, 2000 (the "Lease"), by and between Ready Mix, Inc., a Nevada corporation and Clay R. Oliver d.b.a. Oliver Mining Company ("Oliver)"). RECITALS A. Oliver owns that certain gravel plant located at 39353 North Schnepf Road, Queen Creek, Arizona as more particularly described and indicated on Exhibit A attached hereto (the "Premises"). --------- B. Oliver desires to lease the Premises to Ready Mix, Inc. and Ready Mix, Inc. desires to lease the Premises from Oliver for the purpose of setting, managing and operating a concrete batch plant on the Premises all upon the terms and conditions hereinafter set forth. C. The parties desire to enter into this Lease upon the terms and conditions set forth. AGREEMENTS NOW THEREFORE, in consideration of the foregoing and the covenants contained herein, the parties hereto agree as follows: 1. Lease. Oliver hereby leases the Premises to Ready Mix, Inc. and Ready ----- Mix, Inc. leases the Premises from Oliver Mining, on the terms and conditions set forth herein. 2. Term. Lessor does hereby lease and rent to Lessee the above described ---- premises for the period of five (5) years commencing July 1, 2000 and ending June 31, 2005. a) A five (5) year option is subject to the compliance of the specifications and conditions of Exhibit B. --------- b) The option to extend the Lease for an additional term is subject to the specifications and conditions of Exhibit C. --------- 3. Earnest Monies. Lessee shall pay Lessor Five Thousand ($5000) earnest -------------- monies, non-refundable, upon mutual signing of the Lease. Earnest monies can be credited against the payment of rent or the minimum monthly aggregate purchases, if Lessor so deems appropriate. 4. Rent. ---- (a) Beginning July 1, 2000, Lessee shall pay rent for the leased premises as set forth in the schedule attached hereto as Exhibit ------- C and by this reference incorporated herein. Lessee shall - continue to pay monthly rent until the amount of material surpasses the amount of rent due. (b) In addition to all of the rents above specified to be paid by Lessee to Lessor, the Lessee shall pay all taxes or assessments, if any, levied and assessed upon or against the rents payable under this Lease. 5. Licenses and Permits. Lessee shall obtain and keep current all -------------------- necessary licenses and permits as deemed necessary by any governmental entity whether local, state or federal relating to conducting business on the Premises. If such licenses and/or permits were unattainable, this Lease would be in default. 6. Possession and Enjoyment. ------------------------ (a) Lessor agrees that Lessee, paying the rent and performing the other terms and conditions of this Lease, may peaceably hold and enjoy the leased premises during the leased term without any interruption by Lessor or any person lawfully claiming by, through or under Lessor. Lessor shall have the right during the term of this Agreement to enter upon the leased premises during the normal business hour for the purpose of inspection and determination of compliance with the mining specifications and conditions. (b) Lessee acknowledges that it has examined the premises and knows the condition thereof and that no representations have been made as to the condition or state thereof, and Lessee accepts the premises in its present condition. 7. Business. Lessee shall use the leased premises exclusively for the -------- purpose of conduction and operating a concrete batch plant business and other lawful business in connection therewith. No landfill or dumping of broken concrete, debris or other material is permitted under this agreement. 8. Use of Premises. Lessee shall at all times keep and maintain the --------------- premises in a clean, orderly and sanitary condition, and shall comply with all environmental rules and regulations. No storage of hazardous materials is permitted, unless expressly used in the operation of the concrete batch plant. An area will be established to washout concrete trucks and properly dispose of returned concrete. 9. Improvements. Lessee may at its own expense construct such buildings, ------------ structures and other improvements on the premises as are reasonably necessary for the conduct of its business. All such permanent buildings, structures and improvements constructed by Lessee shall either become the property of the Lessor and remain on and be surrendered with the premises as a part thereof at the termination of this Lease or at the Lessor's option must be removed at the Lessee's expense. The Lessor grants the Lessee the right to remove and recover the concrete batch plant, other portable buildings and equipment at the termination of this Lease. Lessee agrees to maintain at its own expense the interior and exterior of any buildings, structures and improvements it may construct thereon in good condition and repair. 10. Occupancy Expenses and Property Taxes. Lessee shall promptly pay when ------------------------------------- due all gas, light, heat, power, plumbing, water and other occupancy expenses of whatsoever kind or nature, including utility deposits, connection fees and running of utilities to the premises, and shall pay all property taxes on equipment and improvements placed on the subject property by Lessee. 11. Damage to Property and Persons. All property of any kind which may ------------------------------ be on the premises during the term of this Lease shall be at the sole risk of the Lessee; and Lessor shall not liable to lessee, its agents, guests, customers, employees, for any damage caused to their person or property by water, rain, snow, sleet, fire, storms and accidents, or by breakage, stoppage or leakage of water, gas, electricity, heating, sewer pipes or plumbing on, about or adjacent to the premises; and in the event of any breakage, stoppage or leakage, Lessee shall promptly remedy the same at its expense. 12. Insurance. Lessee shall provide and obtain and maintain in full force --------- during the leased term, for the benefit of both parties hereto, as their respective interests may appear, liability insurance in a company satisfactory to Lessor, general liability insurance in the minimum amount of One Million Dollars ($1,000,000) with respect to injuries to any one person; Two Million Dollars ($2,000,000) with respect to injuries in any one accident and One Million Dollars ($1,000,000) with respect to property damage. Ready Mix, Inc. shall have Oliver listed as an additional inured on all insurance policies and shall furnish certificates evidencing the existence of all policies to Oliver as and when reasonably requested by Oliver. 13. Indemnity. Lessee shall indemnify and save harmless Lessor from and --------- against any and all claims, liability, penalties, damages, expenses and judgements for injuries or accidents to persons or property, in connection with Ready Mix Inc.'s operations, occurring on or about the premises and the driveways and streets adjacent hereto, during the leased term, any extensions thereof, and any other period of occupancy, including all costs, expenses and attorney's fees incurred by Lessor in defense of any such claims, whether the same be or not be covered adequately by insurance. The indemnification in this Paragraph 13 shall survive the termination of this Lease. 14. Insolvency or Bankruptcy. In the event of the insolvency of Lessee, or ------------------------ the filing of by it or against it of any voluntary or involuntary petition under the Bankruptcy Act, or a partial or a general assignment by it for the benefit of creditors, or any proceedings whereby its full rights to the use, control and occupancy of the premises may be impaired or transferred, in whole or in part, then this Lease, at the option of the Lessor, may be immediately terminated. 15. Delivery at Termination. Upon the expiration or sooner termination of ----------------------- this Lease, Lessee shall immediately deliver to Lessor quiet and peaceable possession of the leased premises, together with any buildings, structures, equipment and improvements thereon constructed by Lessee, with the exception so noted in paragraph 9 of this Lease, with the keys to the same, cleared of all persons and property not belonging to Lessor, in good, clean and orderly condition. No demand or notice of such delivery shall be necessary. 16. Default. ------- (a) If Lessee neglects to pay when due any of the sums provided in this Lease and the neglect or failure shall continue for more than thirty (30) days after notice to Lessee, or if Lessee neglects or fails to perform fully and fulfill any of the other terms and conditions of this Lease and such neglect or failure shall continue more than thirty (30) days after notice to Lessee, this Lease may be immediately terminated, at the option of Lessor, without further notice and without any obligation whatsoever to Lessor. (b) Lessee shall pay Lessor for all costs and expenses, including reasonable attorney's fees, incurred by Lessor in connection with recovery of any rent due and unpaid under the terms of this lease, or the breach of any of the terms and conditions contained herein, or the recovery of possession of the premises. 17. Specification and Conditions of Batch Plant. The specifications and ------------------------------------------- conditions imposed upon the batch plant operation and Activities of Lessee are set forth in detail in the schedule attached hereto as Exhibit "B", and made part hereto of this reference. 18. Holding Over. In the event a new Lease Agreement is not executed prior ------------ to the end of this Lease term, there shall be no holding over at the end of said term and immediate possession of the property shall be turned over to Lessor. The Lessee may cancel this lease at the end of any anniversary of said Lease. 19. Notice. All notices and other communication required or permitted ------ under this Lease shall be in writing and shall be deemed to have been duly given made and received when delivered against receipt requested, or twenty-four hours after sending via facsimile, addressed as set forth below or such other addresses as the parties hereto may designate in writing: LESSOR: CLAY R. OLIVER d.b.a. OLIVER MINING COMPANY. P.O. BOX 630 QUEEN CREEK, ARIZONA 85242-0630 LESSEE: READY MIX, INC. 3430 E. FLAMINGO ROAD SUITE 100 LAS VEGAS, NEVADA 89121 20. Time is of the Essence. Time is of the essence in the performance of ---------------------- each and every requirement set forth in this Lease. 21. Further Assurance. Each of the parties hereto shall execute and ----------------- deliver all other instruments and take all such actions as any party hereto may reasonably request from time to time in order to effectuate the purposes of this Lease and the transactions provided for herein. 22. Controlling Law. This Lease and all questions relating to its --------------- validity, interpretation performance and enforcement shall be governed by and construed, interpreted and enforced in accordance with the laws of the State of Arizona notwithstanding any Arizona or other conflict-of-law rules to the contrary. 23. Nature of Relationship Between Parties. The sole relationship between -------------------------------------- the parties created by this agreement is that of Lessor and Lessee. Nothing contained in the Lease shall be deemed, held or construed as creating a joint venture or partnership between the parties. 24. Amendments, Changes or Modifications. This Lease may be amended, ------------------------------------ changed or modified only by an instrument in writing executed by both Lessor and Lessee. 25. Succession and Assignment. The provisions of this Lease shall be ------------------------- binding upon and insure to the benefit of the parties hereto, their heirs, executors, administrators, successors, and assigns. In the event of any subletting, the Lessee shall not be discharged of its obligations under this Lease but shall remain liable therefore unless Lease is cancelled in writing by the Lessor and Lessee. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Lease as of the date first above written. CLAY R. OLIVER d.b.a. OLIVER MINING COMPANY By: ________________________________ Its: _______________________________ READY MIX, INC. a Nevada corporation. By: /s/ Robert A. DeRuiter --------------------------------- Its: General Manager -------------------------------- EX-10.135 21 0021.txt SECURITY AGREEMENT EXHIBIT 10.135
LOAN CONTRACT - SECURITY AGREEMENT - ------------------------------------------------------------------------------------------------------------------------------------ GOODS PREVIOUSLY CONSTRUCTION DEALER ACCOUNT DEALER PHONE NO. APPLICATION DATE DATA ACCEPTED BY JOHN DEERE CONTRACT NO. ------------ SETTLED FOR? NUMBER CONST. FQMT CO. YES [_] NO [X] NEW [X] USED [_] 17-0908 801-262-7441 26JUN2000 OFFICE USE ONLY 17-880171959 - ------------------------------------------------------------------------------------------------------------------------------------ Seller's Name and Address SCOTT MACHINERY 4055 SO, 500 WEST SALT LAKE CITY, UTAH 84123 - ------------------------------------------------------------------------------------------------------------------------------------ Borrower's (Debtor's) Name (Last Name First) and Mailing Address Borrower's (Debtor's) Name (Last Name First) and Mailing (Including County and Zip) Address (Including County and Zip) MEADOW VALLEY CONTRACTORS, INC. ATT: KEN NELSON PO BOX 60726 PHEONIX, AZ, 85082 - ------------------------------------------------------------------------------------------------------------------------------------ Borrower's (Debtor's) Borrower (Debtor) Resides in Borrower (Debtor) Place of Filing (Town & State) Phone No. (County/State) Agrees to Keep Goods in 602-437-5400 MARICOPA AZ County/State MARICOPA AZ AZ SOS - ------------------------------------------------------------------------------------------------------------------------------------ Borrower's Social Security Number (First Signer) Type of Business Name and Title of Signing Officer or Tax Id Number --------------------------------------- (If Corporation or LLC) 880171959 Proprietor [X] Partner [_] Corporation [_] KEN NELSON, VICE PRESIDENT L.L.C. [_] - ------------------------------------------------------------------------------------------------------------------------------------
APPLICATION AND PROMISSORY NOTE: I hereby apply to John Deere Construction Equipment Company (together with its assigns, the "Lender") for a Loan in the amount of the Principal Balance shown below. The amount of the unpaid balance on line 3 is to be used to finance the Balance Due on the purchase order executed in connection with the purchase from the Seller of the equipment described below (the "Goods"). If this Loan Contract is accepted by Lender, I promise to pay to the order of Lender, the Principal Balance, shown on line 7 below, and finance charges thereon computed on the daily unpaid balance of the Principal Balance and to pay the installments shown below, with such adjustments in the amount or number of installments as may be necessary to reflect actual finance charges earned. If more than one person signs this Agreement as "Borrower"), we will be jointly and severally liable for all amounts due under this Agreement. Except for the Notice to Borrower section, In this Agreement, the words "I", "me" and "my" mean the persons, whether one or more, who sign it as the "Borrower".
- ----------------------------------------------------------------------------------------------------------------------------------- Quantity New/Used Manufacturer Model Goods(Equipment) Product Identification No. Delivered Cash Price - -------- ----------- ------------- --------- ----------------- -------------------------------- ----------------------------------- 1 N JOHN DEERE 650G CRAWLER DOZER T0650GH851874 $81,500.00 - -------- ----------- ----------------------- ----------------- -------------------------------- ----------------------------------- $ 0.00 - -------- ----------- ----------------------- ----------------- -------------------------------- ----------------------------------- $ 0.00 - -------- ----------- ----------------------- ----------------- -------------------------------- ----------------------------------- $ 0.00 - ----------------------------------------------------------------------------------------------------------------------------------- Quantity Manufacturer Model Description of Trade-In (From Purchase Order) Product Identification No. Amount - -------- -------------- -------- --------------------------------------------- -------------------------------- ------------------- $ 0.00 - -------- -------------- -------- --------------------------------------------- -------------------------------- ------------------- $ 0.00 - -------- -------------- -------- --------------------------------------------- -------------------------------- ------------------- $ 0.00 - ------------------------------------------------------------------------------ -------------------------------- ------------------- CASH DOWN PAYMENT: $8,675.25 TOTAL TRADE-IN: $ 0.00 - ------------------------------------------------------------------------------------------------------------------------------------ MONTHLY INSTALLMENTS - -------------------------------------------------- Number of Amount of First Payment Payments Each Payment Due Date ITEMIZATION OF AMOUNT FINANCED - ------------------------------------------------------------------------------------------------------------------------------------ 24 $3,262.50 8/10/00 - ------------------------------------------------------------------------------------------------------------------------------------ 0 $ 0.00 Sales Tax Paid to Government Agencies $ 5,175.25 - ------------------------------------------------------------------------------------------------------------------------------------ 0 $ 0.00 Cash Price (Including Tax) 1 $86,675.25 - ------------------------------------------------------------------------------------------------------------------------------------ 0 $ 0.00 Total Down Payment. Sum of Trade-In and Cash Down Payment 2 $ 8,675.25 - ------------------------------------------------------------------------------------------------------------------------------------ 0 $ 0.00 Unpaid Balance of Cash Price (Paid to Seller) 3 $78,000.00 - ------------------------------------------------------------------------------------------------------------------------------------ 0 $ 0.00 Official Fees (Paid to Public Officials) 4 $ 0.00 - ------------------------------------------------------------------------------------------------------------------------------------ 0 $ 0.00 Administrative Fees 5 $ 300.00 - ------------------------------------------------------------------------------------------------------------------------------------ Insurance - Credit Life and/or Physical Damage 6 $ 0.00 - ------------------------------------------------------------------------------------------------------------------------------------ Payments are due each successive month on the Principal Balance (Lines 3, 4, 5 and 6) same day of the month as the first payment The amount of credit provided to Borrower(s) 7 $78,300.00 except as follows: - ------------------------------------------------------------------------------------------------------------------------------------ Finance Charge (Based on Line 7) The dollar amount the credit will cost Borrower(s) 8 $ 0.00 - ------------------------------------------------------------------------------------------------------------------------------------ Total (Lines 7 and 8). (Principal Balance plus Finance Charge) 9 $78,300.00 - ------------------------------------------------------------------------------------------------------------------------------------ Annual Interest Rate: DATE FINANCE CHARGE BEGINS: 7/10/00 The cost of the Borrower(s) credit as a yearly rate. 0.00% - ------------------------------------------------------------------------------------------------------------------------------------
SECURITY AGREEMENT: To secure the indebtedness evidenced by this contract I grant you a Security Interest in the Goods (which term includes items, if any, listed as "Security" or "additional security") and all parts and accessories now or hereafter incorporated in or on such Goods by way of addition, accession or replacement and any proceeds arising therefrom, including, without limitation, insurance proceeds. I agree that I have received the Goods. Lender can inspect the Goods at any reasonable time. I REPRESENT THAT THE GOODS ARE BEING PURCHASED FOR A BUSINESS OR COMMERCIAL PURPOSE. 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 penalties will be imposed for early payment). DELINQUENCY CHARGE; NSF FEES: For each installment not paid when due, I promise to pay Lender a delinquency charge calculated at the rate of 1.5% per month for the period of the delinquency or, at Lender's option, 5% of such installment provided that such a delinquency charge is not prohibited by law, otherwise at the highest rate allowed by applicable law. I agree to repay immediately to Lender in the enforcement or administration of its rights under this Agreement, including, without limitation, any amount paid by Lender to a depository institution because a check, draft or order made or drawn by or for the benefit of me is returned unpaid for any reason. If any payment is made by a check which is dishonored, I agree to pay Lender a fee of $20 or such lesser amount specified by applicable law. STATE LAW APPLYING: THE CONSTRUCTION AND VALIDITY OF THIS AGREEMENT SHALL BE CONTROLLED BY THE LAW OF IOWA, 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. - -------------------------------------------------------------------------------- ADDITIONAL PROVISIONS CONCERNING RIGHTS OF THE PARTIES ON REVERSE SIDE ARE PART OF THIS CONTRACT - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ INSURANCE DISCLOSURES: I may obtain Physical Damage Insurance NO. PREMIUM I want Physical Damage Insurance (Sign in this from anyone I want that is acceptable to Lender. If I get this MOS. $0.00 box) insurance through Lender, I will pay the Premium shown at 0 right. No insurance will be provided unless I sign at the right, the premium is shown and Lender accepts the contract. - ------------------------------------------------------------------------------------------------------------------------------------ Credit Life Insurance is not required to obtain credit and NO. PREMIUM I want Credit Life Insurance (Sign in this will not be provided unless I sign at the right, the MOS. $0.00 box) premium is shown and Lender accepts this contract. 0 Age: 0 - ------------------------------------------------------------------------------------------------------------------------------------
NOTICE TO BORROWERS: 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 rights. 3. Under the law, you may have the right to redeem the property if repossessed for a default within the time provided by law. 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 --------------------------------------------------------------- Accepted by: JOHN DEERE CONSTRUCTION EQUIPMENT COMPANY /s/ Kenneth D. Nelson VP 6-29-00 (Lender/Secured Party - ----------------------------------------------------- ---------------------------------------------------------------------------- Borrower's (Debtor's) Signature KEN NELSON Title Date At: 1415 28th Street P.O. Box 65090 West Des Moines, Iowa 0090 -------------------------------------------------------------- _____________________________________________________ __________ By: (Authorized Signature) Date Borrower's (Debtor's) Signature Title Date --------------------------------------------------------------- _____________________________________________________ __________ Borrower's (Debtor's) Signature Title Date
ADDITIONAL PROVISIONS CONCERNING RIGHTS OF THE PARTIES APPLICATION OF PAYMENTS: Any sums received from me may be applied at Lender's discretion to obligations hereunder or to any other indebtedness owed by me to Lender despite directions, if any, appearing on the remittance, and to interest before principal, and if permitted by law to past due interest before installments. If any proceeds from the sale of the Goods or insurance are applied to the debt, I remain liable to make each monthly payment described in this contract until it is paid in full. Lender may accept payments marked "paid in full" or with other restrictive endorsements, without losing any of your rights under this Agreement. DEFAULT: This contract shall be in default (a) if I fail to pay any installment when due; (b) if I attempt to sell or encumber any interest in the Goods; (c) if I institute or have instituted against me proceedings under any bankruptcy or insolvency law; (d) if I make an assignment for the benefit of creditors; (e) if I fail to pay taxes levied on the Goods; (f) if any attachment, execution, writ, or other process is levied against any of my property; (g) if I fail at any time to keep the Goods properly insured as described below; (h) if I remove the Goods, without prior written notice to Lender, from the location in which I have agreed to keep them; (i) if I fail to maintain the Goods in good condition and repair or permit its value to be impaired; (j) if I permit the Goods to be used in violation of any law, regulation or policy of insurance; (k) if any representation, warranty or statement is made to Lender in connection with this agreement which is false in any material respect when made; (l) if any legal entity such as a partnership, limited liability company or corporation) that has agreed to pay this agreement ceases to do business, dissolves, liquidates its assets or terminates or fails to maintain its legal existence; (m) if I fail to comply with any other provision of this contract: or (n) if for any reason Lender deems the debt or security unsafe. In any such event Lender may take possession of any Goods in which Lender has a Security Interest and exercise any other remedies provided by law. In such event I agree, upon demand, to assemble the Goods at a location designated by Lender, and Lender may immediately and without notice declare the entire balance of this contract due and payable. In addition, to the extent permitted by law, Lender may collect all reasonable expenses, including attorney's fees, incurred in realizing on the security interest granted hereunder, or otherwise enforcing the terms of this contract. If I reside in Texas, I agree that any remaining amounts due under this contract after any default by me shall be payable to Lender or its order at Dallas, in Dallas County, Texas. If Lender takes possession of the Goods after I default, it shall be commercially reasonable for Lender to sell; (i) the Goods at a private sale; (ii) at wholesale to a dealer in used goods of like kind; or (iii) at retail to a purchaser directly or through a dealer in such used goods. The enumeration of the foregoing methods of disposition are without limitation to the Lender's right to dispose of the Goods by any other manner or method (whether by sale, lease, or otherwise) in a commercially reasonable manner. Lender also has the right to take possession of the Goods or render the Goods unusable. Upon default, I grant Lender permission to cancel any insurance on the Goods and if allowed by law, to apply any premium refunds to my debt to Lender with any excess returned to me. Waiver of any breach or default shall not constitute a waiver of any other or subsequent breach or default. RISK OF LOSS AND OTHER AGREEMENTS. I hold the Goods at my risk and expense with no abatement in any obligation on account of loss or damage. I will settle all claims of any kind against the seller of the Goods directly with the seller and I will not use any such claim as a defense, setoff or counterclaim against any effort by Lender to enforce this Contract. I authorize Lender to file (or to execute on my behalf and file) a financing statement (or statements) in order to perfect the security interest granted herein, indicating the type of items described herein or describing such items. Each person who signs this Agreement agrees that any carbon signature, facsimile signature or electronic signature shall constitute an original signature within the meaning of applicable law, for all purposes, including the filing of financing statements. Lender may correct patent or clerical errors in the Agreement, or any purchase order or financing statement executed in connection with the transactions contemplated in this Agreement. Any provision of this Agreement prohibited by law shall be ineffective and deemed deleted to the extent of such prohibition and shall not invalidate any other provision hereof. INSURANCE: Except to the extent this Agreement is for service work, I will at all times keep the Goods insured against all risk of loss, damage or destruction for greater or their full insurable value or the then outstanding amount of this Loan. Lender must be listed as a loss payee. I may choose the person through whom I obtain the insurance but the insurance must be acceptable to Lender. Such insurance will provide that it may not be canceled by me without Lender's consent and may not be canceled by the insurance company without at least ten (10) days written notice to Lender. I will provide Lender with evidence of the paid-up insurance on the Goods within fifteen (15) days of the date of this contract and at least thirty (30) days before the renewal date. If I fail to provide evidence of the insurance within the time periods specified in the preceding sentence, then I will reimburse Lender for the cost of any insurance Lender purchased until the date such evidence is provided by me. If I fail to keep the Goods properly insured, Lender may, but is under no obligation to, buy insurance to protect the Goods and add the cost to my debt to Lender, and I promise to pay additional cost upon Lender's demand. To the fullest extent permitted by law, I will pay Lender a reasonable administrative fee for obtaining and canceling such insurance. I may meet this insurance requirement by having Lender purchase such insurance. Inclusion of any amount of Physical Damage Insurance in the Insurance Disclosure box on the front of this contract will be election to do this, but such insurance will only be purchased if Lender accepts this Agreement. Such insurance will cover only the fair market value of the Goods at the time of the loss. If the term of such insurance is less than the term of this Agreement, I will, upon termination of such insurance, purchase insurance to fulfill my obligation to insure hereunder. EX-10.136 22 0022.txt MASTER LEASE AGREEMENT EXHIBIT 10.136 Master Lease Agreement MASTER LEASE AGREEMENT ("Master Lease") dated as of June 20, 2000 between The ------------- CIT Group/Equipment Financing, Inc. (Lessor), having a place of business at P.O. Box 27248 Tempe AZ 85285-7248 - -------------------------------------------------------------------------------- Address City State Zip Code and Ready Mix, Inc. - -------------------------------------------------------------------------------- ("Lessee") having a place of business at 3430 E. Flamingo Road Suite 100 Las Vegas NV 89121 - -------------------------------------------------------------------------------- Address City State Zip Code This Master Lease Agreement provides a set of terms and conditions that the parties hereto intend to be applicable to various transactions for the lease of personal property. Each lease contract shall be evidenced by an equipment schedule ("Schedule") executed by Lessor and Lessee that explicitly incorporates the provisions of this Master Lease Agreement and that sets forth specific terms of that particular lease contract. Where the provisions of a Schedule conflict with the terms hereof, the provisions of the Schedule shall prevail. Each Schedule shall constitute a complete and separate lease agreement, independent of all other Schedules, and without any requirement of being accompanied by an originally executed copy of this Master Lease Agreement. The term "Lease" when used herein shall refer to an individual Schedule. One originally executed copy of the Schedule shall be denominated "Originally Executed Copy No. 1 of __________ originally executed copies" and such copy shall be retained by Lessor. If more than one copy of the Schedule is executed by Lessor and Lessee, all such other copies shall be numbered consecutively with numbers greater than 1. Only transfer of possession by Lessor of the originally executed copy denominated "Originally Executed Copy No. 1" shall be effective for purposes of perfecting an interest in such Schedule by possession. 1. Equipment Leased and Term. This Lease shall cover such personal property as is described in any Schedule executed by or pursuant to the authority of Lessee, accepted by Lessor in writing and identified as a part of this Lease (which personal property with all replacement parts, additions, repairs, accessions and accessories incorporated therein and/or affixed thereto is hereinafter called the "Equipment"), Lessor hereby leases to Lessee and Lessee hereby hires and takes from Lessor, upon and subject to the covenants and conditions hereinafter contained, the Equipment described in any Schedule. Notwithstanding the commencement date of the term of this Lease with respect to any item of Equipment, Lessee agrees that all risk of loss of the Equipment shall be on Lessee from and after shipment of the Equipment to Lessee by the seller thereof, F.O.B. seller's point of shipment, the date of such shipment being hereinafter called "date of shipment" The term of this Lease with respect to any item of Equipment shall be for the period as set forth in the Schedule. Lessee hereby gives Lessor authority to insert the actual commencement date and date of first monthly rental for any item of Equipment in any Schedule as well as such items as serial numbers if such are not already inserted when such Schedule is executed by Lessee. "Seller" as used in this Lease means the supplier from which Lessor acquires any item of Equipment 2. Rent. Lessee shall pay to Lessor rent for each item of Equipment in the amounts and at the times specified in the Schedule. Any payment not made when due shall, at the option of Lessor, bear late charges thereon calculated at the rate of 1 1/2% per month, but in no event greater than the highest rate permitted by relevant law. All rent shall be paid at Lessor's place of business shown above, or such other place as Lessor may designate by written notice to the Lessee. All rents shall be paid without notice or demand and without abatement, deduction or set off of any amount whatsoever. The operation and use of the Equipment shall be at the risk of Lessee and not of Lessor and the obligation of Lessee to pay rent hereunder shall be unconditional. 3. No Warranties by Lessor; Maintenance and Compliance with Laws. Lessor, not being the manufacturer of the Equipment, nor manufacturer's agent, MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE FITNESS, QUALITY, DESIGN, CONDITION, CAPACITY, SUITABILITY, MERCHANTABILITY OR PERFORMANCE OF THE Equipment OR OF THE MATERIAL OR WORKMANSHIP THEREOF, IT BEING AGREED THAT THE Equipment IS LEASED "AS IS" AND THAT ALL SUCH RISKS, AS BETWEEN LESSOR AND LESSEE, ARE TO BE BORNE BY LESSEE AT ITS SOLE RISK AND EXPENSE, Lessee accordingly agrees not to assert any claim whatsoever against Lessor based thereon. Lessee further agrees, regardless of cause, not to assert any claim whatsoever against Lessor for loss of anticipatory profits or consequential damages. Lessor shall have no obligation to install, erect, test, adjust or service the Equipment. Lessee shall look to the manufacturer and/or Seller for any claims related to the Equipment. Lessor hereby acknowledges that any manufacturer's and/or Seller's warranties are for the benefit of both Lessor and Lessee. No oral agreement, guaranty, promise, condition, representation or warranty shall be binding; all prior conversations, agreements or representations related hereto and/or to the Equipment are integrated herein, and no modification hereof shall be binding unless in writing signed by Lessor. Lessee agrees, at its own cost and expense: (a) to pay all shipping charges and other expenses incurred in connection with the shipment of the Equipment by the Seller to Lessee; (b) to pay all charges and expenses in connection with the operation of each item of Equipment; (c) to comply with all governmental laws, ordinances, regulations, requirements and rules with respect to the use, maintenance and operation of the Equipment; and (d) to make all repairs and replacements required to be made to maintain the Equipment in the condition set forth in Rider A to the Schedule. 4. Insurance. Lessee shall maintain at all times on the Equipment, at its expense, all-risk physical damage insurance and comprehensive general and/or automobile (as appropriate) liability insurance (covering bodily injury and property damage exposures including, but not limited to, contractual liability and products liability) in such amounts, against such risks, in such form and with such insurers as shall be satisfactory to Lessor; provided, that the amount of all-risk physical damage insurance shall not on any date be less than the greater of the full replacement value or the Stipulated Loss Value of the Equipment as of such date. Each physical damage insurance policy will name Lessor as loss payee. Each liability insurance policy will name Lessor as additional insured. Each insurance policy will also require that the insurer give Lessor at least thirty (30) days prior written notice of any alteration in or cancellation of the terms of such policy and require that Lessor's interests be continued insured regardless of any breach or violation by Lessee or others of any warranties, declarations or conditions contained in such insurance policy. In no event shall Lessor be responsible for premiums, warranties or representations to any insurer or any agent thereof. Lessee shall furnish to Lessor a certificate or other evidence satisfactory to Lessor that such insurance coverage is in effect, but Lessor shall be under no duty to ascertain the existence or adequacy of such insurance. The insurance maintained by Lessee shall be primary without any right of contribution from insurance which may be maintained by Lessor. Lessee shall be liable for all deductible portions of all required insurance. Lessor may, at its own expense, for its own benefit, purchase insurance in excess of that required under this Lease Agreement. Physical damage insurance proceeds shall be applied as set forth in Section 5. 5. Loss and Damage. Lessee agrees to assume and bear the entire risk of any partial or complete loss with respect to the Equipment from any and every cause whatsoever including theft, loss, damage, destruction or governmental taking, whether or not such loss is covered by insurance or caused by any default or neglect of Lessee Lessee agrees to give Lessor prompt notice of any damage to or loss of any Equipment. All physical damage insurance proceeds shall be payable directly to Lessor. If any of the Equipment is lost, destroyed, damaged beyond repair, or taken by governmental action, Lessee shall pay to Lessor on the next rent payment date following such loss or taking the Stipulated Loss Value for such Equipment (computed as of the rent payment date on or immediately preceding the date of such loss or taking), and any other amounts then due and owing hereunder (including all rent payments due on or prior to the date of such Stipulated Loss Value payment) with respect to that Equipment, and the Lease for such Equipment shall terminate when such payment is made. Following payment of any Stipulated Loss Value, and if no Event of Default as defined in Section 10 has occurred and remains continuing, Lessor will then: (a) transfer to Lessee Lessor's rights to such Equipment "as-is, where-is and with all defects," without recourse and without representation or warranty, express or implied, other than a warranty that the Equipment is free and clear of any liens created by Lessor; and (b) remit to Lessee any physical damage insurance proceeds arising out of such loss up to the amount of the Stipulated Loss Value paid. Lessee shall determine in the exercise of its reasonable judgment whether the Equipment is damaged beyond repair, subject to Lessor's approval. In the event of damage or loss which does not result in damage beyond repair or a total loss of the Equipment or any item thereof, Lessee shall cause the affected Equipment to be restored to the condition required by the terms of this Lease. Upon completion of such repair and after supplying Lessor with satisfactory evidence thereof (and provided no Event of Default has occurred and remains continuing), Lessee shall be entitled to receive any insurance proceeds or other recovery to which Lessor would otherwise be entitled in connection with such loss up to the amount expended by Lessee in making the repair. Lessor shall not be obligated to undertake by litigation or otherwise the collection of any claim against any person for loss of, damage to, or governmental taking of the Equipment, but Lessor will cooperate with Lessee at Lessee's expense to pursue such claims. Except as expressly provided above, the total or partial destruction of any Equipment or Lessee's total or partial loss of use or possession thereof shall not release or relieve Lessee from its obligations under this Master Lease or any Schedule including the duty to pay the rent(s) herein provided. 6. Taxes. Lessee shall pay, and shall indemnify and hold Lessor harmless from and against, on an after-tax basis, all fees, taxes, withholdings, assessments and other governmental charges, however designated together with any penalties, fines or interest, if any, thereon, (collectively, the "Impositions") which are at any time levied or imposed against Lessor, Lessee, this Lease, the Equipment or any part thereof by any Federal, state, local or foreign government or taxing authority upon, with respect to, as a result of or measured by (i) the Equipment (or any part thereof), or this Lease or the interest of the Lessor therein; or (ii) the purchase, ownership, delivery, leasing, possession, maintenance, use, operation, return, sale or other disposition of the Equipment or any part thereof; or (iii) the rentals, receipts or earnings payable under this Lease or otherwise arising from the Equipment or any part thereof; excluding, however, taxes based on or measured by the net income of Lessor. Lessor (a) shall pay, and promptly upon receipt of Lessor's invoice therefor Lessee shall reimburse Lessor for paying, any Impositions, and (b) in case any report or return is required to be filed with respect to any Impositions, Lessor will make such report or return to show Lessor's ownership of the Equipment. Lessor and Lessee may instead agree in writing that Lessee will pay any Impositions directly or file any such reports or returns. Lessee's obligations under this Section shall survive the expiration or termination of this Lease. 7. Lessor's Title, Right of Inspection and Identification of Equipment. Title to the Equipment shall at all times remain in Lessor and Lessee will at all times protect and defend, at its own cost and expense, the title of Lessor from and against all claims, liens and legal processes of creditors of Lessee and keep all the Equipment free and clear from all such claims, liens and processes. The Equipment is and shall remain personal property. Upon the expiration or termination of this Lease with respect to any item of Equipment Lessee shall return such Equipment in accordance with the provisions set forth in Rider A to the Schedule. Lessor shall have the right from time to time during reasonable business hours to enter upon Lessee's premises or elsewhere for the purpose of confirming the existence, condition and proper maintenance of the Equipment and during any period of storage Lessor shall also have the right to demonstrate and show the Equipment to others. The foregoing rights of entry are subject to any applicable governmental laws, regulations and rules concerning industrial security. Lessee shall, upon the request of Lessor, and at its own expense firmly affix to the Equipment, in a conspicuous place, such a decalcomania or metal plate as shall be supplied by Lessor showing the Lessor as the owner and lessor of such Equipment. 8. Possession, Use and Changes in Location of Equipment. So long as Lessee shall not be in default under the Lease it shall be entitled to the possession and use of the Equipment in accordance with the terms of this Lease. The Equipment shall be used in the conduct of the lawful business of Lessee, and no item of Equipment shall be removed from its location shown on the Schedule, without the prior written consent of Lessor. Lessee shall not, without Lessor's prior written consent, part with possession or control of the Equipment or attempt or purport to sell, pledge, mortgage or otherwise encumber any of the Equipment or otherwise dispose of or encumber any interest under this Lease. 9. Performance of Obligations of Lessee by Lessor. In the event that the Lessee shall fail duly and promptly to perform any of its obligations under the provisions of Sections 3, 4, 5, 6, and 7 of this Lease, Lessor may, at its option, perform the same for the account of Lessee without thereby waiving such default, and any amount paid or expense (including reasonable attorneys' fees), penalty or other liability incurred by Lessor in such performance, together with interest at the rate of 1 1/2% per month thereon (but in no event greater than the highest rate permitted by relevant law) until paid by Lessee to Lessor, shall be payable by Lessee upon demand as additional rent for the Equipment. 10. Default An Event of Default shall occur if: (a) Lessee fails to pay when due any installment of rent and such failure continues for a period of 10 days; (b) Lessee shall fail to perform or observe any covenant, condition or agreement to be performed or observed by it hereunder and such failure continues uncured for 15 days after written notice thereof to Lessee by Lessor; (c) Lessee ceases doing business as a going concern, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts as they become due, files a voluntary petition in bankruptcy, is adjudicated a bankrupt or an insolvent, files a petition seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar arrangement under any present or future statute, law or regulation or files an answer admitting the material allegations of a petition filed against it in any such proceeding, consents to or acquiesces in the appointment of a trustee, receiver, or liquidator of it or of all or any substantial part of its assets or properties, or if it or its shareholders shall take any action looking to its dissolution or liquidation; (d) within 60 days after the commencement of any proceedings against Lessee seeking reorganization, arrangement, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceedings shall not have been dismissed, or if within 60 days after the appointment without Lessee's consent or acquiescence of any trustee, receiver or liquidator of it or of all or any substantial part of its assets and properties, such appointment shall not be vacated; (e) Lessee attempts to remove, sell, transfer, encumber, part with possession or sublet the Equipment or any item thereof; (f) Lessee defaults in payment or performance of any obligation or indebtedness of any kind or description, whether direct, indirect, absolute or contingent, due or to become due, now existing or hereafter arising owing to Lessor or any of its agents or affiliates; or (g) Any warranty, representation or statement made or furnished to Lessor by or on behalf of Lessee in or in connection with this Lease proves to have been false in any material respect when made or furnished. 11. Remedies Upon Default. Upon the occurrence of an Event of Default, Lessor shall have all the rights and remedies provided by applicable law and by this Lease. Notwithstanding that this Agreement is a lease and title to the Equipment is at all times in Lessor, Lessor may nevertheless at its option choose those rights and remedies of a secured party under the Uniform Commercial Code. In addition, Lessor, at its option, may: (a) by notice to Lessee terminate this Lease effective on the date such Event of Default first occurred; (b) proceed by appropriate court action or actions or other proceedings either at law or equity to enforce performance by the Lessee of any and all covenants of this Lease and to recover damages for the breach thereof; (c) Lessor and/or its agents may without notice or liability or legal process, enter into any premises of or under control or jurisdiction of Lessee or any agent of Lessee where the Equipment may be or by Lessor is believed to be, and repossess all or any item thereof, disconnecting and separating all thereof from any other property and using all force necessary or permitted by applicable law so to do, Lessee hereby expressly waiving all further rights to possession of the Equipment and all claims for injuries suffered through or loss caused by such repossession or demand that Lessee deliver the Equipment forthwith to Lessor at Lessee's expense at such place as Lessor may designate; and (d) elect to sell, release or otherwise dispose of all or part of the Equipment or to retain all or part thereof, in such manner and on such terms and conditions as Lessor may determine in its sole discretion, with or without notice to Lessee which Lessee hereby waives to the extent permitted by applicable law; (e) declare immediately due and payable any unpaid rent, late charges and any other amounts due hereunder that accrued on or before the occurrence of the Event of Default, plus as liquidated damages for loss of the bargain and not as a penalty, an amount equal to the Stipulated Loss Value for the Equipment as of the rent payment date immediately preceding the date Lessor declares the Lease in default, and, in addition, all attorney and court costs incurred by Lessor relating to the enforcement of its rights under the Lease. Lessor may sell the Equipment at private or public sale, in bulk or in parcels, with or without notice, without having the Equipment present at the place of sale; or Lessor may lease, otherwise dispose of or keep idle all or part of the Equipment, subject, however, to its obligation to mitigate damages; and Lessor may use Lessee's premises for any or all of the foregoing. Lessor may sell or lease the Equipment at a time and location of its choosing provided that the Lessor acts in good faith and in a commercially reasonable manner. The proceeds of sale, lease or other disposition, if any, of the Equipment shall be applied (1) to all Lessor's costs, charges and expenses incurred in taking, removing, holding, repairing and selling, leasing or otherwise disposing of the Equipment including attorney fees; then (2) to the extent not previously paid by Lessee, to pay Lessor the Stipulated Loss Value of the Equipment plus any accrued and unpaid rent, late charges, indemnities and any other amounts then remaining unpaid under the Lease; then (3) to reimburse to Lessee any such sums previously paid by Lessee as liquidated damages; (4) any surplus shall be retained by Lessor. In no event shall Lessee upon demand by Lessor for payment hereunder or otherwise be obligated in excess of that permitted by law. The waiver by Lessor of any breach of any obligation of Lessee shall not be deemed a waiver of any future breach of the same or any other obligation. No remedy of Lessor hereunder shall be exclusive of any remedy herein or by law provided, but each shall be cumulative and in addition to every other remedy. 12. Indemnity. Lessee agrees that Lessor shall not be liable to Lessee for, and Lessee shall indemnify and save Lessor harmless from and against any and all liability, loss, damage, expense, causes of action, suits, claims or judgments arising from or caused directly or indirectly by: (a) Lessee's failure to promptly perform any of its obligations under the provisions of Sections 3, 4, 5, 6 and 7 of this Lease; or (b) injury to persons or damage to property resulting from or based upon actual or alleged use, operation, delivery or transportation of any or all of the Equipment or its location or condition; or (c) inadequacy of the Equipment, or any part thereof, for any purpose or any deficiency or defect therein or the use or maintenance thereof or any repairs, servicing or adjustments thereto or any delay in providing or failure to provide any thereof or any interruption or loss of service or use thereof or any loss of business; and shall, at its own cost and expense, defend any and all suits which may be brought against Lessor, either alone or in conjunction with others upon any such liability or claim or claims and shall satisfy, pay and discharge any and all judgments and fines that may be recovered against Lessor in any such action or actions, provided, however, that Lessor shall give Lessee written notice of any such claim or demand. Lessee agrees that its obligations under this Section 12 shall survive the expiration or termination of this Lease. 13. Lessee's Warranties. Lessee warrants that each item of Equipment has the recovery period under Section 168(c) of the Internal Revenue Code of 1986 as amended or any comparable successor law ("Code") as set forth on the Schedule and will be eligible for depreciation deductions determined by using the method specified in Section 168(b)(i) of the Code commencing with the taxable year of Lessor that includes the delivery date and using a basis equal to Lessor's cost as set forth on the Schedule; a reasonable estimate of the useful life of each item of Equipment is at least 125% of its lease term; a reasonable estimate of the fair market value of each item of Equipment at the end of its lease term is at least 20% of Lessor's cost therefor; and Lessee will not use the Equipment in a manner which will result in foreign source income for Lessor. 14. Tax Indemnity. Lessor has calculated the rent payments and Stipulated Loss Values for each Schedule based in part on Lessee's warranties herein and on the assumptions that Lessor shall be entitled to all tax benefits of ownership with respect to the Equipment (the "Tax Benefits"), including but not limited to, (i) the accelerated cost recovery deductions determined in accordance with Section 168(b)(1) of the Code for each item of Equipment based on the cost and depreciable life thereof specified on the Schedule, (ii) deductions for interest on any indebtedness incurred by Lessor to finance any item of Equipment and (iii) sourcing of income and losses attributable to this Lease to the United States. Lessee agrees to take no action inconsistent with the foregoing or which would result in the loss, disallowance or unavailability to Lessor of all or any part of the Tax Benefits. Lessee, for any reason whatsoever, including as a result of any amendment to the Code or any other change in tax law occurring after the date of the Lease ("Tax Law Change"), hereby indemnifies and holds harmless Lessor from and against (i) any of the following: (1) the loss, disallowance, unavailability or recapture of all or any part of the Tax Benefits, if Lessor shall not be entitled or shall determine that it shall not have substantial authority to claim shall suffer a disallowance of, or shall be required to recapture all or any part of the Tax Benefits; (2) Lessor's originally contemplated after-tax rate of return ("Net Return") is otherwise adversely affected by a Tax Law Change (including a tax rate change); (3) Lessor shall be required to include in its gross income for any period before the expiration or termination of this Lease any amount other than (a) the rent in the respective specified monthly payment amounts and not prior to the respective periods to which rent is allocable under the terms of this Lease and (b) any other amounts to the extent not offset by deductions for such amounts in Lessor's taxable year in which such amounts are includible in gross income; or (4) any item of income, gain, loss, deduction or credit with respect to the Equipment shall be treated or derived from, or allocable to sources without the United States and consequently Lessor shall be able to utilize as a credit against its Federal Income tax liability in any year, a smaller amount of foreign taxes than it would have been able to utilize had such item of income gain, loss, deduction or credit not been treated as derived from, or allocable to sources without the United States; plus (ii) all interest, penalties, fines or additions to tax resulting from such loss, disallowance, unavailability or recapture; plus (iii) all taxes required to be paid by Lessor upon receipt of the indemnity set forth in this paragraph which shall be computed at the highest marginal statutory tax rate then applicable to Lessor. Any indemnity payments made by Lessee shall be calculated so as to allow Lessor to maintain its Net Return with respect to the Lease. Payment shall be made in immediately available funds within 30 days after receipt of a written demand therefor from Lessor. In the event of an indemnity payment, Stipulated Loss Values shall be adjusted by Lessor to those values determined by Lessor as necessary to maintain Lessor's Net Return. For the purposes of this Section, "Lessor" includes for all tax purposes the consolidated taxpayer group of which Lessor is a part. 15. Assignment, Notices and Waivers. This Lease and all rights of Lessor hereunder shall be assignable by Lessor without Lessee's consent, but Lessee shall not be obligated to any assignee of Lessor except after written notice of such assignment from Lessor. Following such assignment, solely for the purpose of determining assignee's rights hereunder, the term "Lessor" shall be deemed to include or refer to Lessor's assignee. Without the prior written consent of Lessor, Lessee shall not assign this Lease or its interests hereunder or enter into any sub-lease with respect to the Equipment covered hereby. All notices to Lessor shall be delivered in person to an officer of the Lessor, or shall be sent certified mail return receipt requested to Lessor at its address shown herein or at any later address last known to the sender. All notices to Lessee shall be in writing and shall be delivered by mail at its address shown herein or at any later address last known to the sender. A waiver of a default shall not be a waiver of any other or a subsequent default. 16. Further Assurances. Lessee shall execute and deliver to Lessor, upon Lessor's request such instruments and assurances as Lessor deems necessary or advisable for the confirmation or perfection of this Lease and Lessor's rights hereunder and to enable Lessor to fulfill all of its tax filing obligations. Lessee may not terminate any Schedule without the written consent of Lessor. If Lessor in good faith believes itself insecure or performance impaired, it may declare a default hereunder or, instead of declaring a default, Lessor may demand, and Lessee hereby agrees to give, additional Equipment or other collateral as security for the obligations hereunder. 17. Lease Irrevocability and Charges. This Lease is irrevocable for the full terms thereof as set forth in any Schedule and for the aggregate rentals therein reserved and the rent shall not abate by reason of termination of Lessee's right of possession and/or the taking of possession by the Lessor or for any other reason. Lessee shall be responsible for and pay to Lessor a returned check fee, not to exceed the maximum permitted by law, which fee will be equal to the sum of (i) the actual bank charges incurred by Lessor plus (ii) all other actual costs and expenses incurred by Lessor. The returned check fee is payable upon demand as additional rent under this Lease. 18. Purchase Option. So long as no Event of Default shall have occurred and be continuing, Lessee may, at the expiration of an applicable lease term and upon payment of all sums due under the Lease, purchase the Equipment for its fair market sale value as of that expiration date. If Lessee elects to purchase hereunder, it must give irrevocable written notice to Lessor at least 90 days (but not more than 360 days) prior to the expiration date of the lease term applicable to the Equipment. Any purchase must apply to all (but not less than all) of the Equipment on a Schedule. The fair market sale value of the Equipment as of any date shall be the cash price that an informed and willing purchaser (other than a lessee currently in possession or a used equipment or scrap dealer) unrelated to Lessor or Lessee would pay to purchase the Equipment in an arm's length transaction. This fair market sale value shall be determined by an independent appraiser (at Lessee's expense) selected by Lessor. The appraiser shall determine such value without deduction for any expenses of dismantling or removal of the Equipment and on the assumption that the item is in the condition required by the terms of this Lease. If Lessee elects to purchase hereunder, Lessee will also pay all taxes (other than taxes based on Lessor's income), costs and expenses (including legal fees) incurred in connection with the sale. After Lessee exercises the option, Lessor shall transfer title to Lessee "as-is, where-is," without recourse, representation or warranty of any kind except that Lessor will warrant that the item of Equipment is free and clear of any liens created by Lessor. 19. Miscellaneous. (a) This Lease constitutes the entire agreement between Lessor and Lessee with respect to the Equipment and supersedes all prior correspondence between the parties. No covenant, condition or other term of provision hereof shall be deemed waived, amended, or modified by either party unless such waiver, amendment, or modification is in writing and signed by each of the parties hereto. Section headings are for convenience only and shall not be construed as part of this Lease. Lessee's Initials _______________ (b) This Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except as otherwise provided herein. (c) Any provision of this Lease which may be prohibited or unenforceable in any jurisdiction shall not, as to such jurisdiction, invalidate the remaining provisions hereof and shall not invalidate or render unenforceable such provision in any other jurisdiction. (d) LESSOR AND LESSEE IN ANY LITIGATION RELATING TO OR IN CONNECTION WITH THIS LEASE IN WHICH THEY SHALL BE ADVERSE PARTIES WAIVE TRIAL BY JURY. (e) In the event this Lease or any part hereof is deemed to be a lease intended as security, Lessee grants Lessor a security interest in each item of Equipment as security for all of Lessee's indebtedness and obligations owing under this Lease and under each Schedule as well as all other present and future indebtedness and obligations of Lessee to Lessor of every kind and nature whatsoever. 20. Special Provisions. If Lessee is a corporation, this Lease is executed by authority of its Board of Directors. If Lessee is a partnership or joint venture, this Lease is executed by authority of all its partners or co-venturers. Dated: 6-20-00 ------------- Lessee: Ready Mix, Inc. - ---------------------------------------------------------------------------- Name of individual, corporation or partnership By /s/ Kenneth D. Nelson Title Vice President ------------------------------ ---------------------------------- If corporation, have signed by President, Vice President or Treasurer, and give official title. If owner or partner, state which. Lessor: THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ [ILLEGIBLE]^^ Title /s/ [ILLEGIBLE]^^ ------------------------------ ---------------------------------- ________________________________________________________________________________ If Lessee is partnership, enter: Partners' names Home addresses - --------------- -------------- EX-10.137 23 0023.txt LEASE AGREEMENT EXHIBIT 10.137 Equipment Schedule No. 1 Dated as of 6-20-00 To Master Lease Agreement dated 6-20-00 Acceptance Date 06-20-00 Commencement Date 07-26-00 Equipment Schedule to MASTER LEASE AGREEMENT dated as of 6-20-00 between THE CIT GROUP/EQUIPMENT FINANCING, INC., as Lessor and Ready Mix, Inc. as Lessee. This Equipment Schedule incorporates the terms and conditions of the above-referenced Master Lease Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Lessor of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. 1. EQUIPMENT DESCRIPTION:
Quantity Manufacturer Model/Feature Serial Number Description Cost Per Unit - -------- ------------ ------------- ------------- ----------- ------------- One Besser M-12 32917 12 Yard Mobile 543,313.00 Batch Plant with Surge Hopper
2. LESSOR'S AGGREGATE COST OF EQUIPMENT. $543,313.00 3. EQUIPMENT LOCATION. 109 Delhi, North Las Vegas, NV 89030 4. ACCEPTANCE: Lessee confirms that (a) the Equipment described herein has been delivered to it in good working order and condition, and has been inspected and accepted by Lessee as of the Acceptance Date set forth above, (b) no Event of Default exists, (c) no Event of Default will be caused by the execution of this Schedule, (d) all Lessee's representations and warranties are true and correct, and (e) the terms and provisions of the Master Lease are hereby incorporated by reference and reaffirmed. 5. LEASE TERM. a. Interim Lease Term. The interim term of the lease of the Equipment shall commence on the Acceptance Date and shall continue until the commencement of the Primary Lease Term defined below. b. Primary Lease Term. The primary term of the lease of Equipment shall commence on the Commencement Date and shall continue for a term of 72 months from such Commencement Date. 6. RENT PAYMENTS. b. Primary Rent. The rent for each item of Equipment during the Primary Lease Term shall consist of 72 payments of $8,682.64, payable monthly commencing on the Commencement Date and a like sum on the same day of each month thereafter. 7. STIPULATED LOSS VALUES. The Stipulated Loss Values, expressed as a percentage of Lessor's cost of the Equipment, are set forth in Exhibit A attached hereto. The Stipulated Loss Value with respect to any item of Equipment as of any rent payment date shall be an amount determined by multiplying Lessor's cost of the item by the applicable percentage set forth on Exhibit A. Any Stipulated Loss Value determined as of a date after the final date will be determined by using the percentage for the final rent payment date. 8. RETURN, OPERATION, MAINTENANCE, ADDITIONS. The return, operation, maintenance and additions provisions applicable to the Equipment are set forth in Rider A attached hereto. 9. DEPRECIATION TAX ASSUMPTIONS. Equipment has a recovery period of 5 years. 10. NONREFUNDABLE PROCESSING/ORIGINATION FEE payable to The CIT Group/Equipment Financing, Inc. $0.00 11. ADDITIONAL PROVISIONS: Year 2000. The Lessee shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Lessee represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December 31, 1999) will not result in a material adverse effect on the Lessee's business condition or ability to perform hereunder. Upon request, the Lessee shall provide assurance acceptable to the Lessor that the Lessee's computer systems and software are or will be Year 2000 compliant on a timely basis. The Lessee shall immediately advise Lessor in writing of any material changes in the Lessee's Year 2000 plan, timetable or budget. IN WITNESS WHEREOF, this Equipment Schedule has been signed as of the date set forth above. Lessee: Ready Mix, Inc. - --------------------------------------------------------- By /s/ Kenneth D. Nelson Title Vice President --------------------------- ------------------- KENNETH D. NELSON - --------------------------------------------------------- Print or Type Name EX-10.138 24 0024.txt LEASE AGREEMENT EXHIBIT 10.138 Equipment Schedule No. 2 Dated as of 8-22-00 To Master Lease Agreement dated 6-20-00 Acceptance Date 8/25/00 Commencement Date 9/25/00 Equipment Schedule to MASTER LEASE AGREEMENT dated as of 8-22-00 between THE CIT GROUP/EQUIPMENT FINANCING, INC., as Lessor and Ready Mix, Inc. as Lessee. This Equipment Schedule incorporates the terms and conditions of the above- referenced Master Lease Agreement. This is Originally Executed Copy No 1 of 1 originally executed copies. Only transfer of possession by Lessor of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. 1. EQUIPMENT DESCRIPTION:
Quantity Manufacturer Model/Feature Serial Number Description Cost Per Unit - -------- ------------ ------------- ------------- ----------- ------------- One Besser M-12 4022-329187 Mobile Batch 569,039.00 Plant Two Tyco R & R UL N/A 142 Tanks 52,762.50 One Southwestern 7560+60 002020-002021 Scale 50,851.00
All of the above to include additions, substitutions, attachments, replacements and accessions thereof, plus the proceeds of the foregoing. 2. LESSOR'S AGGREGATE COST OF EQUIPMENT. $672,652.50 3. EQUIPMENT LOCATION. 3730 E. Flamingo Rd., ste 100 North Las Vegas, NV 89032 4. ACCEPTANCE: Lessee confirms that (a) the Equipment described herein has been delivered to it in good working order and condition, and has been inspected and accepted by Lessee as of the Acceptance Date set forth above, (b) no Event of Default exists, (c) no Event of Default will be caused by the execution of this Schedule, (d) all Lessee's representations and warranties are true and correct, and (e) the terms and provisions of the Master Lease are hereby incorporated by reference and reaffirmed. 5. LEASE TERM. a. Interim Lease Term. The interim term of the lease of the Equipment shall commence on the Acceptance Date and shall continue until the commencement of the Primary Lease Term defined below. b. Primary Lease Term. The primary term of the lease of Equipment shall commence on the Commencement Date and shall continue for a term of 72 months from such Commencement Date. 6. RENT PAYMENTS. a. Interim Rent. The rent for each item of Equipment during the Interim Lease Term shall be an amount equal to 1/30th of the Primary Rent (defined below) multiplied by the number of days from and including the Acceptance Date to the Commencement Date which amount shall be payable on the Commencement Date. b. Primary Rent. The rent for each item of Equipment during the Primary Lease Term shall consist of 72 payments of $10,836.61, payable monthly commencing on the Commencement Date and a like sum on the same day of each month thereafter. 7. STIPULATED LOSS VALUES. The Stipulated Loss Values, expressed as a percentage of Lessor's cost of the Equipment, are set forth in Exhibit A attached hereto. The Stipulated Loss Value with respect to any item of Equipment as of any rent payment date shall be an amount determined by multiplying Lessor's cost of the item by the applicable percentage set forth on Exhibit A. Any Stipulated Loss Value determined as of a date after the final rent payment date will be determined by using the percentage for the final rent payment date. 8. RETURN, OPERATION, MAINTENANCE, ADDITIONS. The return, operation, maintenance and additions provisions applicable to the Equipment are set forth in Rider A attached hereto. 9. DEPRECIATION TAX ASSUMPTIONS. Equipment has a recovery period of 5 years. 10. NONREFUNDABLE PROCESSING/ORIGINATION FEE payable to The CIT Group/Equipment Financing, Inc. $ 0 11. ADDITIONAL PROVISIONS: Year 2000. The Lessee shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Lessee represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December 31, 1999) will not result in a material adverse effect on the Lessee's business condition or ability to perform hereunder. Upon request, the Lessee shall provide assurance acceptable to the Lessor that the Lessee's computer systems and software are or will be Year 2000 compliant on a timely basis. The Lessee shall immediately advise Lessor in writing of any material changes in the Lessee's Year 2000 plan, timetable or budget. See Rider "B" consisting of one page attached hereto and made a part hereof. IN WITNESS WHEREOF, this Equipment Schedule has been signed as of the date set forth above. Lessee: Ready Mix, Inc. - ---------------------------------------------------- By /s/ Kenneth D. Nelson Title Vice President ----------------------- ------------------ KENNETH D. NELSON - ---------------------------------------------------- Print or Type Name Lessor: THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ [ILLEGIBLE]^^ Title Manager ----------------------- ------------------ - ---------------------------------------------------- Print or Type Name EX-10.139 25 0025.txt SECURITY AGREEMENT EXHIBIT 10.139 INGERSOLL-RAND SECURITY AGREEMENT - ------------------ (Conditional Sale Contract) FINANCIAL SERVICES a division of Associates Commercial Corporation The undersigned buyer, meaning all buyers jointly and severally ("Buyer"), having been quoted both a time sale price and cash sale price, has elected to purchase and hereby purchases from the undersigned seller ("Seller") for the time sale price shown below, under the terms and provisions of this agreement, the following described property (herein, with all present and future attachments, accessories, replacement parts, repairs, additions, and all proceeds thereof, referred to as ("Collateral"): One (1) Ingersoll-RandVR-90C Reach Forklift, SN 156221 One (1) Ingersoll-RandVR-90C Reach Forklift, SN 166220 The Equipment will be used primarily for: [X] business or commercial use other than farming operations; [_] farming operations. When not in use, the Equipment will be kept at: 4411 S. 40th St., Ste. D-11; Phoenix, AZ 85040 and, when in use, will be used only in the following State(s): Arizona - -------------------------------------------------------------------------------- INSURANCE COVERAGE Description of Trade-In: LIABILITY INSURANCE COVERAGE FOR BODILY INJURY AND PROPERTY DAMAGE CAUSED TO OTHERS IS NOT INCLUDED IN THIS AGREEMENT Gross Allowance............................. $ 0.00 ----------------- PHYSICAL DAMAGE INSURANCE COVERING THE COLLATERAL IS Less Amount Owing To: REQUIRED; however, Buyer has the option of furnishing the required insurance through an agent or broker of Buyer's ............................................ $ 0.00 choice. ----------------- CHECK ONE Trade-in (Net Allowance).................... $ 0.00 [_] Buyer requests and authorizes Seller to obtain ----------------- insurance coverage in the nature of "All Risk" (Enter above and in 2(b) - DOWN PAYMENT) insurance (Fire, extended coverage, vandalism, ---------------------------------------------------------------- theft and collision and containing exclusions from coverage acceptable to Seller) on the Equipment for 1. CASH SALE PRICE.......................... $ 174,225.30 ___________ months from the date of this Agreement, ----------------- and for the premium of $_________ with a $__________ deductible per occurrence. 2. (a) Cash Down Payment........ $ 0.00 ----------- [X] Buyer has obtained the required coverages through: (b) Trade-in (See above)..... $ 0.00 ----------- (c) Net Rental Credit........ $ 60,700.00 ----------- - -------------------------------------------------------------- TOTAL DOWN PAYMENT (a + b + c)........... $ 60,700.00 (Agent's Name and Address) ----------------- 3. UNPAID BALANCE OF CASH - -------------------------------------------------------------- SALE PRICE (1 Minus 2)................... $ 113,525.30 (Name of Insurance Company) ----------------- Phone # 4. OTHER CHARGES - -------------------------------------------------------------- (a) Physical Damage Insurance................ $ 0.00 Buyer hereby authorizes Seller and any assignee to release to ----------- any insurance company affiliated with Seller or any assignee any information relating to a contract or policy of insurance (b) Credit Insurance......... $ 0.00 which is providing or may provide insurance coverage against ----------- physical damage to the Equipment. (c) Official Fees............ $ 0.00 - -------------------------------------------------------------- ----------- CREDIT INSURANCE, if included, is not a factor in the approval (d) Other.................... $ 250.00 of credit, is not required by the Seller and is for the term ----------- of the credit only. (Describe) Administrative Fees CHECK ONE [_] Buyer desires Credit Insurance: Premium $ ________________ (Enter above and in 4(b) - OTHER CHARGES) TOTAL OTHER CHARGES (a + b + c + d)....... $ 250.00 ----------------- Buyer hereby requests and authorizes Seller to obtain Credit Insurance, if checked above, to the extent the 5. PRINCIPLE BALANCE (3 + 4)................. $ 113,775.30 cost thereof is included in Item 4(b) - Other Charges. ----------------- [X] Buyer does not want Credit Insurance. 6. FINANCE CHARGE............................ $ 7,850.70 ----------------- BUYER _______________________ Date ___________________________ 7. UNPAID TIME BALANCE (5 + 6)............... $ 121,626.00 (Only one person may sign above, and any credit insurance ----------------- covers only that person. Credit insurance does not cover any co-buyer.) 8. TIME SALE PRICE (1 + 4 + 6)............... $ 182,326.00 ----------------- - ---------------------------------------------------------------------------------------------------------------------------------
Page 1 of 4 of Security Agreement dated 07/05/00 between Meadow Valley Contractors, Inc. (Buyer) and Ingersoll-Rand Equipment Sales (Seller) which includes, without limitation, an item of Collateral with the following serial number: 156221 PAYMENT SCHEDULE: Buyer promises to pay Seller the UNPAID TIME BALANCE (Item 7 above) in 24 installments as follows: --------------------------- (Total No. of Installments) For equal (a) $ 5,067.75 on 08/05/2000 and a like sum on the like date of each successive monthly ---------------------------------- ---------- installments: Date month thereafter until fully paid, (b) For other than equal successive monthly installments:
provided, however, that the final installments shall be in the amount of the remaining unpaid balance. 1. DELINQUENCY, RETURNED CHECKS AND ACCELERATION INTEREST. For each installment not paid when due, Buyer agrees to pay to Seller a delinquency charge calculated thereon at the rate of 1 1/2% per month for the period of delinquency or, at Seller's option, 5% of such installment, provided that such a delinquency charge is not prohibited by law, otherwise at the highest rate Buyer can legally obligate itself to pay and/or Seller can legally collect. Buyer agrees to reimburse Seller immediately upon demand for any amount charged to Seller by any depositary institution because a check, draft or other order made or drawn by or for the benefit of Buyer is returned unpaid for any reason and, if allowed by law, to pay Seller an additional handling charge in the amount of $25.00 or in the event applicable law limits or restricts the amount of such reimbursement and/or handling charge, the amounts chargeable under this provision will be limited and/or restricted in accordance with applicable law. Buyer agrees to pay Seller, upon acceleration of Buyer's indebtedness, interest on all sums then owing hereunder at the rate of 1 1/2% per month if not prohibited by law, otherwise at the highest rate Buyer can legally obligate itself to pay and/or Seller can legally collect. Any note take herewith evidences indebtedness and not payment. All amounts payable hereunder are payable at Seller's address shown below or at such other address as Seller may specify from time to time in writing. 2. PURCHASE MONEY SECURITY INTEREST AND ALLOCATION OF PAYMENTS. Seller retains and is taking a security interest ("PMSI") in that portion of the Equipment (such portion, together with any proceeds thereof, is referred to as the "Collateral") that was acquired by Buyer for the UNPAID BALANCE OF CASH SALE PRICE (item 3 above) (the "PMSI Debt") plus any down payment listed above. The Collateral shall secure only the PMSI Debt. The PMSI Debt shall be secured only by the Collateral and no other property of Buyer. All payments made by Buyer to Seller with reference to this Agreement shall be applied first to delinquency charges, then to finance charges, then to insurance payments, then to any other fees or other amounts payable hereunder other than the PMSI Debt, until all such indebtedness is paid in full, and then to the PMSI Debt, and all proceeds of the Collateral shall be applied only to the payment of PMSI Debt. Upon payment in full of the PMSI Debt, all security interests of Seller in the Collateral shall be terminated. This provision controls over any conflicting provision or language in this Agreement or in any other agreement between Seller and Buyer unless the parties mutually agree in writing in a subsequent agreement to override this provision. 3. PREPAYMENT. Buyer may prepay Buyer's obligations under this Agreement in full at any time. Upon prepayment Buyer will receive a rebate of the unearned portion of the finance charge calculated using an actuarial method or such other method as is required by any applicable law minus, if the prepayment is made prior to the last twelve months of the contract, a prepayment processing fee equal to the lesser of (a) one percent (1%) of the amount prepaid for each full twelve month period remaining under the term of this Agreement as of prepayment and (b) the maximum prepayment and/or acquisition charge allowed by applicable law. All accrued and unpaid late charges and other amounts chargeable to Buyer under this Agreement will be payable immediately upon such prepayment. 4. DISCLAIMER. There are no warranties other than those provided by the Manufacturer of the Collateral. SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS TO THE QUALITY, WORKMANSHIP, DESIGN, MERCHANTABILITY, SUITABILITY, OR FITNESS OF THE COLLATERAL FOR ANY PARTICULAR PURPOSE, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, unless such warranties are in writing and signed by Seller. Seller shall not under any circumstances be liable for loss of anticipatory profits or for consequential damages. 5. TRADE IN AND DOWN PAYMENT. Buyer warrants that (a) check or other instrument presented to Seller as any portion of the "Cash Down Payment" indicated above represents funds immediately available to Seller and will not be returned or dishonored for any reason; and (b) Buyer has title to and full right and authority to convey title to any Trade-In listed on the reverse side of this Agreement to Seller and, upon the payment to the party listed on the reverse side of this Agreement (if any) of the amount indicated, buyer shall have title to the Trade-In free and clear of any lien, claim, security interest or other interest of any party other than those claiming by or through Seller. 6. ADDITIONAL WARRANTIES AND AGREEMENTS. Buyer warrants and agrees that: the execution of and performance by Buyer under the terms of this Agreement has been approved for Buyer by all necessary action and by Buyer's partners or board of directors, as applicable; the Equipment was delivered to and accepted by Buyer in satisfactory condition; the Equipment will be maintained in good operating condition, repair and appearance and will be used and operated with care only by qualified personnel in the regular course of Buyer's business and in conformity with all applicable governmental laws and regulations, manufacturer's specifications and the restrictions contained in any insurance policy insuring the Equipment; the Equipment will not be used in conjunction with the storage, transportation or disposal of substances considered to be toxic and/or hazardous or in conjunction with any activity or for any use that would subject the Equipment to seizure or confiscation by any governmental body; and the Equipment will be kept by Buyer at the location set forth for it on the reverse side of this Agreement and will not be removed from said location without prior written consent of Seller, except that if the Equipment is of a type which is mobile and normally used by Buyer at more than one location, Buyer may use the Equipment away from said location in the regular course of Buyer's business provided that (a) if the Equipment is not returned to said location within 30 days, Buyer will immediately thereafter, and each 30 days thereafter until the Equipment is returned, report the then current location of the Equipment to Seller in writing and (b) the Equipment shall not be removed from the State(s) of use indicated on the reverse side of this Agreement. Seller shall have the right to inspect the Equipment at all reasonable times and from time to time. Buyer further warrants and agrees that: the title to and security interest in the Collateral taken and/or retained by Seller is and shall continue to be superior to any title to or interest in the Equipment now or hereafter held or claimed by any other party; the Collateral is free from and will be kept from all liens, claims, security interests and encumbrances (whether superior or inferior to the interests of Seller) other than that created by this Agreement; notwithstanding Seller's interest in proceeds, Buyer will not allow any other party to consign, sell, rent, lend, encumber, pledge, transfer, secrete or otherwise dispose of any other Collateral without Seller's prior written consent; Buyer shall do everything Seller deems necessary or expedient to perfect or preserve the interests granted to Seller under this Agreement and the first priority of such interests; any Manufacturer's Statement or Certificate of Origin relating to the Equipment shall be immediately delivered to Seller and, if a Certificate of Title or registration is required for any item of Equipment, Buyer will cooperate with Seller in obtaining the Certificate of Title or registration disclosing the interests of Buyer and Seller in the Equipment; Buyer shall defend any action, proceeding or claim affecting the Collateral or the interests of Seller in the Collateral; Buyer shall promptly pay all amounts payable in conjunction with the storage, maintenance or repair of the Equipment and all taxes, assessments, license fees and other public or private charges levied or assessed in conjunction with the operation or use of the Equipment or levied or assessed against the Collateral, this Agreement or any accompanying note except for those which are being contested by Buyer in good faith by appropriate proceedings and which do not constitute a lien or encumbrance upon the Collateral; and Buyer shall from time to time furnish Seller with such financial statements and other information as Seller may reasonably request. Page 2 of 4 of Security Agreement dated 07/05/00 between Meadow Valley -------- ------------- Contractors, Inc. (Buyer) and Ingersoll-Rand Equipment Sales (Seller) which - ----------------- ------------------------------ includes, without limitation, an item of Collateral with the following serial number: 156221 ------ 7. INSURANCE AND RISK OF LOSS. Buyer shall at all times bear all risk of loss of, damage to or destruction of the Equipment. Buyer agrees to immediately procure and maintain insurance on the Equipment, for the full insurable value thereof and for the life of this Agreement, in the form of "All Risk" or similar insurance (insuring the Equipment for fire, extended coverage, vandalism, theft and collision and containing only those exclusions from coverage which are acceptable to Seller) plus such other insurance as Seller may specify from time to time, all in form and amount and with insurers satisfactory to Seller. Buyer agrees to deliver promptly to Seller certificates or, if requested, policies of insurance satisfactory to Seller, each with a standard long-form loss-payable endorsement naming Seller or assigns as loss-payee and providing that Seller's rights under such policy will not be invalidated by any act, omission or neglect of anyone other than Seller, and containing the insurer's agreement to give 30 days prior written notice to Seller before any cancellation or material change in the policy(s) will be effective as to Seller, whether such cancellation or change is at the direction of Buyer or insurer. Seller's acceptance of policies in lesser amounts or risks will not be a waiver of Buyer's obligation to procure insurance complying with the provisions hereof promptly after notice from Seller. Buyer assigns to Seller all proceeds of any physical damage or credit insurance for which a charge is stated in this Agreement or which is maintained by Buyer in accordance herewith, including returned and unearned premiums, up to the amount owing hereunder by Buyer. Seller will not have the right to cancel any such insurance without Buyer's consent prior to the occurrence of an event of default and the repossession, loss or destruction of the Equipment. Buyer directs all insurers to pay such proceeds solely to the order of Seller for application to Buyer's indebtedness to Seller. Seller may, at its option, apply any such proceeds received by Seller to he final maturing installments due hereunder in the inverse order of their maturity. 8. PERFORMANCE BY SELLER. If Buyer fails to perform any of Buyer's obligations pursuant to Paragraphs 6 of 7 above, Seller may perform the same for the account of Buyer. Any such action by Seller shall be in Seller's sole discretion and Seller shall not be obligated in any was to do so. Seller's performance on behalf of Buyer shall not obligate Seller to perform the same or any similar act in the future and shall not cure or waive Buyer's failure of performance as an event of default hereunder. All sums advanced or costs and expenses incurred by Seller pursuant to this Paragraph, including the reasonable fees of any attorney retained by Seller, shall be for the account of Buyer, shall constitute indebtedness secured by Seller's security interest in the Collateral, shall bear interest at the rate as specified on the reverse side of this Agreement in the event of acceleration and, unless Seller, in Seller's sole discretion agrees otherwise in writing, shall be immediately due and payable. 9. EVENT OF DEFAULT. Time is of the essence. An event of default shall occur if: (a) Buyer fails to pay when due any amount owed by it to Seller under this Agreement; (b) Buyer fails to perform in compliance with any of its agreements hereunder or any warranty made by Buyer in this Agreement is or becomes incorrect; (c) any information, representation, or warranty furnished by Buyer to Seller or to any affiliate of Seller is inaccurate or incorrect in any material respect when furnished; (d) Buyer becomes insolvent or ceases to do or is prohibited by any court order or governmental action from conducting the business in which Buyer is principally engaged on the date of this Agreement as a going concern; (e) any surety or bonding company assumes any of Buyer's responsibilities under any contract or job; (f) if any of the Equipment is lost, stolen, destroyed, confiscated by any governmental agency, abandoned, or relocated, used or maintained in violation of the terms hereof or if Buyer attempts to consign, sell, rent, lend or encumber any of the Equipment; (g) Buyer files a petition in bankruptcy, or for an arrangement, reorganization, or similar relief, or makes an assignment for the benefit or creditors, or applies for the appointment of a receiver or trustee for a substantial part of its assets or for any of the Equipment, or attempts to take advantage of any process or proceeding for the relief of debtors, or if any such action is taken against Buyer; (h) any other party attempts to attach, repossess or execute upon any of the Collateral; (i) Buyer ceases to exist as a legal entity or Buyer or any party in control of Buyer takes any action looking to Buyer's dissolution as a legal entity; (j) Seller in good faith believes that the prospect of payment or performance hereunder is impaired; or (k) there shall be a material change in the management, ownership of control of Buyer. Seller's inaction with respect to an event of default shall not be a waiver of such default and Seller's waiver of any default shall not be a waiver of any other default. 10. REMEDIES UPON DEFAULT. Upon the occurrence of an event of default, and at any time thereafter as long as the default continues, Seller may, at its option, with or without notice to Buyer (i) declare this Agreement to be in default, (ii) declare the indebtedness hereunder to be immediately due and payable, (iii) declare all other debts then owing by Buyer to Seller to be immediately due and payable, (iv) cancel any insurance and credit any refund to the indebtedness, and (v) exercise all of the rights and remedies of a Seller under the Uniform Commercial Code and any other applicable laws, including, without limitation, the right to require Buyer to assemble the Equipment and deliver it to Seller at a place to be designated by Seller which is reasonably convenient to both parties, and to lawfully enter any premises where the Collateral may be without judicial process and take possession thereof. Acceleration of any or all indebtedness, if so elected by Seller, shall be subject to all applicable laws including those pertaining to refunds and rebates of unearned charges. Any property other than the Collateral which is in or upon the Equipment at the time of repossession may be taken and held without liability until its return is requested by Buyer. Any sale or other disposition of any of the Equipment may be made at public or private sale or through public auction at the option of Seller. Seller may buy at any sale and become the owner of the Equipment. Unless otherwise provided by law, any requirement of reasonable notice which Seller may be obligated to give regarding the sale or other disposition of Collateral will be met if such notice is given to Buyer at least ten days before the time of sale or other disposition. Buyer agrees that Seller may bring any legal proceedings it deems necessary to enforce the payment and performance or Buyer's obligations hereunder in any court in the State shown in Seller's address set forth herein, and service of process may be made upon Buyer by mailing a copy of the summons to Buyer. All notices to Buyer relating to this Agreement will be considered received when delivered in person (including by facsimile transmission) or mailed to Buyer at the address of Buyer contained in this Agreement or at any address later designated by Buyer to Seller in writing. The filing by Seller of any action or proceeding with respect to the Equipment or any of Buyer's obligations hereunder shall not constitute an election by Seller of Seller's remedies or a waiver of Seller's rights to take possession of the Equipment as provided above. Expenses of retaking, holding, preparing for sale, selling and the like shall include (a) the reasonable fees of any attorneys retained by Seller, (b) any amounts advanced or expenses incurred by Seller pursuant to Paragraph 8 hereof and (c) all other legal and other expenses incurred by Seller. Buyer agrees that it is liable for an will promptly pay any deficiency resulting from any disposition of Collateral after default and all costs and expenses, including the reasonable fees of any attorney, incurred by Seller in the collection of any such deficiency. 11. MISCELLANEOUS. (A) All of Seller's rights hereunder are cumulative and not alternative. (B) The inclusion of a trade name or division name in the identification of Buyer hereunder shall not limit Seller's rights, after the occurrence of an event of default, to proceed against all of Buyer's assets, including those held or used by Buyer individually or under another trade or division name. (C) If permitted by law, Buyer agrees that a carbon, photographic or other reproduction of this Agreement or of a financing statement may be filed as a financing statement. (D) Seller may correct patent errors herein and fill in blanks. (E) All of the terms and provisions hereof shall apply to and be binding upon Buyer, its heirs, personal representatives, successors and assigns and shall inure to the benefit of Seller, its successors and assigns. (F) Buyer and Seller hereby waive any right to trial by jury in any action or proceeding relating to this Agreement or the transaction contemplated hereby. (G) If allowed by law, "the reasonable fees of attorney" retained by Seller shall include the amount of any flat fee, retainer, contingent fee or the hourly charges of any attorney retained by Seller in enforcing any of Seller's rights hereunder or in the prosecution or defense of any litigation related to this Agreement or the transactions contemplated by this Agreement. (H) To the extent allowed by law, Buyer hereby waives any exemptions or appraisals. (I) No waiver or change in this Agreement or in any related note shall be binding upon Seller, or Seller's assignee, unless such waiver or change is in writing and signed by one of its officers and any such waiver or change shall then be effective only upon the terms and to the extent provided in such writing. (J) The acceptance by Seller of any remittance from a party other than Buyer shall in no way constitute Seller's consent to the transfer of any of the Equipment to such party. (K) Any captions or headings included in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of any provision contained in this Agreement. (L) Any provision contained herein which is contrary to, prohibited by or invalid under applicable laws or regulations shall be deemed inapplicable and omitted herefrom, but shall not invalidate the remaining provisions hereof. (M) The only copy of this Agreement which constitutes "chattel paper" is the original executed copy designated as "Original For Associates". 12. ASSIGNMENT. Buyer shall not assign this Agreement without the prior written consent of Seller. Seller may assign this Agreement with or without notice to or the consent of Buyer. Upon assignment, the term "Seller" shall mean and refer to any assignee who is the holder of this Agreement. The assignor will not be the assignee's agent for any purpose and Buyer's obligations to the assignee will be absolute and unconditional and, to the extent permitted by applicable law, will not be subject to any abatement, reduction, recoupment, defense, set-off or counterclaim available to Buyer for breach or warranty or for any other reason whatsoever. Upon full payment of all obligations secured by this Agreement, the assignee may deliver all original papers to the assignor for Buyer. Page 3 of 4 of Security Agreement dated 07/05/00 between Meadow Valley -------- -------------- Contractors, Inc. (Buyer) and Ingersoll-Rand Equipment Sales (Seller) which - ----------------- ------------------------------- includes, without limitation, an item of Collateral with the following serial number: 156221 -------- 13. POWER OF ATTORNEY AND FINANCING STATEMENT. DEBTOR HEREBY APPOINTS SECURED OR ANY OFFICER, ESIGNEE OF SECURED PARTY OR ANY ASSIGNEE OF SECURED PARTY (OR ANY DESIGNEE OF SUCH ASSIGNEE) AS DEBTOR'S ATTORNEY-IN-FACT TO, IN DEBTOR'S OR SECURED PARTY'S NAME, TO: (a) PREPARE, EXECUTE AND SUBMIT ANY NOTICE OR PROOF OF LOSS IN ORDER TO REALIZE THE BENEFITS OF ANY INSURANCE POLICY INSURING THE EQUIPMENT; (b) PREPARE, EXECUTE AND FILE NAY INSTRUMENT WHICH, IN SECURED PARTY'S OPINION, IS NECESSARY TO PERFECT AND/OR GIVE PUBLIC NOTICE OF THE INTERESTS OF SECURED PARTY IN THE EQUIPMENT; AND (c) ENDORSE DEBTOR'S NAME ON ANY REMITTANCE REPRESENTING PROCEEDS OF ANY INSURANCE RELATING TO THE EQUIPMENT OR THE PROCEEDS OF THE SALE LEASE OR OTHER DISPOSITION OF THE EQUIPMENT (WHETHER OR NOT THE SAME IS A DEFAULT HEREUNDER). This power is coupled with an interest and is irrevocable so long as any indebtedness hereunder remains unpaid. Debtor agrees to execute and deliver Secured Party, upon Secured Party's request such documents and assurances as Secured Party deems necessary or advisable for the confirmation or perfection of this Security Agreement and Secured Party's rights hereunder, including such documents as Secured Party may require for filing or recording. 14. CHATTEL PAPER. This specific Security Agreement is to be sold only to ASSOCIATES FIRST CAPITAL CORPORATION or one of its affiliates or subsidiaries ("ASSOCIATES") and is subject to the security interest of ASSOCIATES. The only copy of this Security Agreement which constitutes Chattel Paper for all purposes of the Uniform Commercial Code is the copy marked "ORIGINAL FOR ASSOCIATES" which is delivered to and held by ASSOCIATES. Any change in the name of the assignee of this Security Agreement from ASSOCIATES shall render the copy of this Security Agreement so changed VOID and of no force and effect. No assignee or secured party other than Associates Commercial Corporation will under any circumstances acquire any rights in, under or to this Security Agreement or any sums due hereunder. - -------------------------------------------------------------------------------- DELIVERY AND ACCEPTANCE OF EQUIPMENT (Check Appropriate Box) [_] On ________________, the Equipment was delivered to Buyer with all installation and other work necessary for the proper use of the Equipment completed at the location agreed upon by Buyer and Seller; the Equipment was inspected by Buyer and found to be in satisfactory condition in all respects and delivery was unconditionally accepted by Buyer. [_] The Equipment has not yet been delivered to or accepted by Buyer and, upon delivery, Buyer agrees to execute a delivery and acceptance certificate in a form acceptable to Seller or Seller's assignee. - -------------------------------------------------------------------------------- THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Buyer and Seller agree that this is a four page agreement and each page hereof constitutes a part of this agreement. NOTICE TO BUYER - DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT OR IF IT CONTAINS ANY BLANK SPACES. YOU ARE ENTITLED TO A COPY OF THE AGREEMENT YOU SIGN. Buyer's Social or Federal Taxpayer Identification Number is: 880171959 and ------------- Co-Buyer's is: ________________________ Buyer hereby acknowledges receipt of an exact copy of this contract. Dated 07/05/00 --------------------------------- Seller: Ingersoll-Rand Equipment Sales Buyer(s) Meadow Valley Contractors, Inc. By /s/ [ILLEGIBLE]^^ By /s/ Bradley E. Larson ----------------------------------- ---------------------------------- Title President ---------------------------------- (If corporation, authorized party must sign and show corporate title. If partnership, a general partner must sign. If owner(s) or partner, show which.) Title [ILLEGIBLE]^^ -------------------------------- (If corporation, authorized party must sign and show corporate title. If partnership, a general partner must sign. If owner or partner, show which.) By __________________________________ Title __________________________________ (If co-buyer, co-partner or co-officer, sign here and show which 4323 E. Winslow Ave. 4411 S. 40th St., Ste. D-11 - ------------------------------------- ---------------------------------------- (Street Address) (Street Address) Phoenix AZ 85040 Phoenix Maricopa AZ 85040 - ------------------------------------- ---------------------------------------- (City, State and Zip Code) (City, COUNTY, State, and Zip Code), Page 4 of 4 of Security Agreement dated 07/05/00 between Meadow Valley Contractors, Inc. (Buyer) and Ingersoll-Rand Equipment Sales (Seller) which includes, without limitation, an item of Collateral with the following serial number: 156221 EX-10.140 26 0026.txt REVOLVING LOAN AGREEMENT EXHIBIT 10.140 Revolving Loan Agreement AGREEMENT between the undersigned (the "Company") and The CIT Group/Equipment Financing, Inc. ("CIT"). 1. Loans. CIT agrees, subject to the terms of this Agreement, to make loans to the Company (the "Loans") from time to time from the date hereof to and including December 31, 2001 (the "Termination Date"), up to but not exceeding, in the aggregate principal amount, at any one time outstanding, the sum of $7,000,000.00 (the "Line of Credit"). Except for the initial Loan made hereunder, each Loan shall be in the minimum amount or $25,000.00 or a multiple thereof. All Loans made hereunder will be repayable at CIT's address set forth herein or at such other address as CIT may from time to time direct. 2. Condition Precedent to All Loans. CIT shall not be obligated to make any Loan under this Agreement if, at the time of the making of the proposed Loan: (a) an Event of Default, as defined in Section 13, has occurred and is continuing; (b) the aggregate principal amount of Loans outstanding exceeds the Available Line of Credit as defined in Section 7.1; or (c) there has been a material adverse change in the Company's financial condition from that shown in the Company's financial statement dated December 31, 1999 3. Loan Account; Monthly Statements. All Loans will be charged, and payments received on account of such Loans credited, to an account maintained in the Company's name on CIT's books (the "Loans Account"). Each month CIT will render to the Company a statement of the Loan Account which shall constitute an account stated and shall be deemed to be correct, accepted by and binding upon the Company unless CIT shall receive a written statement of exceptions from the Company within 30 days after such statement has been rendered to the Company. In the event CIT should so request, the Company agrees to execute and deliver to CIT such promissory notes of the Company as CIT shall request in order to evidence the Loans, but unless and until CIT should so request, the Loan Account and the monthly statements thereof rendered by CIT to the Company shall constitute the primary evidence of the Loans. 4. Repayment of Loans. 4.1 At any time prior to Termination Date, the Company may make payments to CIT on account of the Loans, provided that the Company may not make any payment which results in the outstanding principal amount owing under the Loan Account to be less than $250,000.00. All such payments may, at CIT's option, be applied first to the payment of accrued interest and then to principal. 4.2 The Company promises to pay the outstanding principal amount owing under the Loan Account as of the Termination Date in 48 equal successive monthly installments, commencing on, January 31, 2002 and on a like date of each month thereafter until such amount has been paid in full, provided, however, that the final installment shall be in the amount of the then unpaid principal amount. 4.3 At any time on or after the Termination Date, the Company may pay the then outstanding principal amount owning on the Loan Account in whole or in part, without penalty, provided that interest accrued to the date of such payment is paid with such payment. Each such partial principal payments shall be in an amount equal to the amount of a monthly installment determined under Section 4.2 or a multiple thereof. All such partial principal payments shall be applied to the monthly installments due under Section 4.2 in the inverse order of their maturities. 5. Interest. All Loans shall bear interest payable monthly at a rate per annum equal to the "governing rate" plus .25% on the average daily unpaid balance of principal outstanding on all such Loans during the month, but in no event greater than the highest rate permitted by applicable law, even if this Agreement shall state a minimum rate of interest. Interest shall be payable within 5 business days after the Company's receipt of CIT's interest statement. "Governing rate" shall mean a rate equal to the highest of (1) the Prime Rate of the Chase Manhattan Bank or its successors or (ii) "The Wall Street Journal Prime Rate" or (iii) the commercial paper rate in effect from time to time. Interest shall be computed on the basis of a year of 360 days. The Prime Rate of The Chase Manhattan Bank or its successors shall mean the rate of interest publicly announced by The Chase Manhattan Bank or its successors in New York from time to time as its Prime Rate. The Prime Rate of The Chase Manhattan Bank or its successors is not intended to be the lowest rate of interest charged by The Chase Manhattan Bank or its successors to its borrowers. "The Wall Street Journal Prime Rate" shall mean the Prime Rate listed by the Wall Street Journal. If more than one Prime Rate is listed in the Wall Street Journal, then the highest rate shall apply. "Commercial paper rate" shall mean the average rate quoted by the Wall Street Journal or such other source as CIT may determine for 30-day dealer commercial paper. The Governing Rate on the date of this Agreement is 9.5% per annum. 6.6. Definitions; Standards of Eligibility. 6.1 "Receivables" shall mean accounts, contract rights, chattel paper, notes, drafts, rental receivables, conditional sale contracts, security agreements, installment paper, installment sales, revolving charge accounts, and other obligations for the payment of money, including inter- company accounts and notes receivables, and all documents, contracts, invoices and instruments evidencing or constituting the same and all security instruments and security agreements relating thereto, which are created or acquired by the Company, all property the sale or lease of which gives rise or purports to give rise to Receivables, and all cash and non- cash proceeds thereof, including any merchandise returned or rejected by, or repossessed from customers. 6.2 "Eligible Receivables" shall mean Receivables created or acquired by the Company in the regular course of its business as presently conducted, which are and at all times continue to be acceptable to CIT in all respects and which are payable within ninety (90) days of invoice date. In general, no Receivable shall be deemed eligible unless: the credit of the obligor on such Receivable is and continues to be acceptable to CIT; such Receivable represents an existing, valid and legally enforceable indebtedness based upon an actual and bona fide sale and delivery or lease of property or rendition of services to the named obligor, which has been finally accepted by the obligor and for which the obligor is unconditionally liable to make payment in the amount stated in each invoice, document or instrument evidencing, constituting or accompanying the Receivable in accordance with the terms thereof, without rights of rejection or return or offset, defense, counterclaim or claim of discount or dedication; all statements made and all unpaid balances appearing in the invoices, documents and instruments representing or constituting the Receivables, are true and correct and are in all respects what they purport to be, and all signatures and endorsements that appear thereon are genuine and all signatories and endorsers, if any, have full capacity to contract, and the obligor owing such Receivable is not affiliated with or employed by the Company; absolute title to each Receivable, free and clear of any liens and encumbrances or claims of others, including liens or encumbrances or claims of ownership on the property the sale or lease of which purports to give rise to such Receivables, is vested absolutely in the Company and no other assignment of or security interest or other interest in the Receivable in favor of others is then in effect; the transactions underlying or giving rise to any Receivable do not violate any applicable state or federal law or regulation and all documents relating to the Receivables are legally sufficient under such laws and regulations and are legally enforceable in accordance with their terms; and any contract under which any Receivable arises does not contain a prohibition against assignment or require the consent of or notice to the obligor with respect to any assignment of monies arising thereunder. A Receivable will not be deemed an Eligible Receivable if any of the following is the case; it is ninety (90) or more days past due; it represents a COD sale; it is a contra account; it is an employee/officer account; it is a retainage account; the obligor owing such Receivable resides outside of the United States. 6.3 "Inventory" shall have the same meaning as such term is defined under the Uniform Commercial Code, including all goods acquired or manufactured for sale or lease, and any parts, accessories, piece goods, raw materials, work in process and finished merchandise, and all proceeds thereof. 6.4 "Eligible Inventory" shall mean the portion, excluding work in process, of Inventory consisting of saleable or leasable merchandise which has been acquired or manufactured by the Company in the regular course of business for sale or resale or lease to customers, which is owned by the Company free and clear of all liens, encumbrances or claims in favor of others, and which at all times continues to be acceptable to CIT for Eligible Inventory and Eligible Equipment purposes. 6.5 "Equipment" shall have the same meaning as such term is defined under the Uniform Commercial Code. 6.6 "Eligible Equipment" shall mean all of the Equipment which is owned by the Company free and clear of all liens, encumbrances or claims in trust of others, and which at all times continues to be acceptable to CIT for Eligible Inventory and Eligible Equipment purposes. 6.7 "Obligations" shall mean all loans and advances from time to time made by CIT to the Company hereunder and to others at the request of or for the account of or for the benefit of the Company, all other indebtedness and obligations which may be now or hereafter owing by the Company to CIT under this Agreement or any other agreement which may now or hereafter be entered into by CIT with the Company, howsoever arising, whether absolute or contingent, joint or several, matured or unmatured, direct or indirect, primary or secondary, including, but not limited to, CIT's interest or other charges hereunder or under any other agreement between the Company and CIT. The Company hereby agrees to pay on demand all costs and fees CIT may incur in the event of default by the Company hereunder, all costs and expenses (including, all out-of-pocket expenses and attorneys' fees actually paid by CIT) incurred by CIT, its employees or agents in protecting, maintaining, preserving, enforcing or foreclosing CIT's security interest in any Eligible Inventory and Eligible Equipment, including all efforts made to enforce collection of any Receivable, whether through judicial proceedings or otherwise, or in defending or prosecuting any action or proceeding arising out of or relating to CIT's transactions with the Company, all of which are hereby also included in the definition of "Obligations" and which may be charged at CIT's option to the Loan Accounts in the event the same are not promptly paid after demand. Standards of eligibility or acceptability for Eligible Inventory and Eligible Equipment purposes and determination of value shall be fixed and may be revised from time to time solely by CIT in its exclusive judgment, exercised reasonably and in good faith. Reliance by CIT from time to time on listings, reports and other information relating to any Eligible Inventory and Eligible Equipment furnished by or obtained from the Company shall not be deemed to limit CIT's right to revise standards of eligibility or acceptability and determination of value at any time and from time to time. 7. Grant of Security Interest; Eligible Inventory and Eligible Equipment. 7.1 As security for the prompt payment in full of present and future Obligations, the Company hereby grants to CIT a security interest in and hereby assigns and pledges to CIT, its successors and assigns (which grant, assignment and pledge shall continue until payment in full of all Obligations, whether or not this Agreement shall have sooner terminated), all right, title and interest of the Company in and to the following (which, together with any other security at any time pledged, assigned or delivered by the Company to CIT or received by CIT in connection with any Obligations are herein sometimes collectively called "Eligible Inventory and Eligible Equipment"): All Receivables of the Company, whether or not the same be Eligible Receivables and whether or not specifically listed on any schedules, assignments or reports furnished to CIT from time to time, whether now existing or arising or created or acquired at any time hereafter, together with all rights to any and all sums due and to become due on Receivables, all proceeds of Receivables in whatever form, including cash, checks, notes, drafts and other instruments for the payment of money, and all right, title and interest in and to any merchandise the sale or lease of which gives rise to, or purports to create any Receivable or which secures any Receivable, all property allocable to unshipped orders and all merchandise returned by or reclaimed or repossessed from customers, all rights of stoppage in transit, replevin, repossession and reclamation and all other rights of any unpaid vendor or lienor. The continuing general assignment and pledge of and security interest in Receivables contained herein shall include all accounts, all documents, instruments, contracts, liens and security instruments, all credit insurance policies and other insurance and all guarantees relating to Receivables, all books and records evidencing, securing or relating to Receivables, all Eligible Inventory and Eligible Equipment, deposits, dealer reserves, or other security securing the obligation of any person under or relating to Receivables, all credit balances in favor of the Company on CIT's books, and all rights and remedies of whatever kind or nature the Company may hold or acquire for the purpose of securing or enforcing Receivables, and all general intangibles relating to or arising out of Receivables; (a) All Inventory in which the Company now or at any time hereafter may have an interest, whether or not the same be Eligible Inventory and whether or not such Inventory is specifically listed or described in this Agreement or in any Inventory reports furnished to CIT from time to time, whether or not the same is in transit or in the constructive, actual or exclusive occupancy or possessing of the Company or is held by the Company or by others for the Company's account, including, without limitation, all goods covered by purchase orders and contracts with suppliers and all goods billed and held by suppliers, all Inventory which may be located on premises of the Company or of any carriers, forwarding agents, truckers, warehousemen, vendors, selling agents or third parties, and all general intangibles relating to or arising out of Inventory. This continuing general lien on and security interest in Inventory shall extend and attach to all Inventory through all stages of manufacture, production or processing, to all raw materials, goods in process and finished products, and to all additions thereto, and to all insurance policies and proceeds therefore covering Inventory, and shall automatically attach to all Receivables and all other cash and non-cash proceeds resulting from the sale, lease or disposition of Inventory, including any trade-ins. With respect to after- acquired Inventory, CIT's security interest shall be deemed to be a purchase money security interest; (b) All other personal property of the Company, now existing or hereafter arising or acquired, including without limitation all of the Company's accounts, goods, furniture, machinery, equipment, fixtures, investment property, general intangibles (including, without limitation, goodwill, inventions, designs, patents, patent applications, trademarks, trademark applications, service marks, trade names, licenses, leasehold interests in real and other security held by or granted to the Company to secure payment of the Company's accounts, investment property, general intangibles, instruments, and notes), tax refunds, chattel paper, contract rights, instruments, documents, notes, returned and repossessed goods, together with all accessions to, substitutions for, and all replacements, products and proceeds of the foregoing (including, without limitation, proceeds of insurance policies insuring any of the foregoing), all books and records (including, without limitation, customer lists, credit files, computer programs, printouts, and other computer materials and records) pertaining to any of the foregoing, and all insurance policies insuring any of the foregoing. The Obligations shall also be secured by any property in which the company may granted, or may in the future grant, a security interest to CIT pursuant to any other agreement, including, but not limited to, any such agreement which CIT acquires by the way of purchase, assignment or otherwise. 8. Available Line of Credit. 8.1 The maximum principal amount of Loans that may, from time to time, be outstanding under this Agreement, and which in no event shall exceed the Line of Credit, is hereinafter referred to as the "Available Line of Credit." 8.2 The Available Line of Credit, at any time and from time to time, shall be an amount equal to the following: (a) Thirty percent (50%) of the amount owing on Eligible Receivables as computed from monthly aging reports to be submitted to CIT by Company. (b) Eighty-Three (83%) of the aggregate appraised value of the Eligible Inventory and the Eligible Equipment. 8.3 The total of Eligible Receivables as of the date 6-30-00 is $10,949,525.04. ------- -------------- The aggregate appraised value of Eligible Inventory and Eligible Equipment described in Schedule A as of the date hereof is $1,560,984.92 . Fifty ------------- percent (50%) of the amount owing on Eligible Receivables as of the date hereof is $5,474,762.52 (80%) of the Eligible Equipment as of ------------- ------------ the date hereof is $129,561.48. The Available Line of Credit as of the date ----------- hereof is $7,000,000.00. ------------- 8.4 The fair and correct appraised value of each item of Eligible Inventory and Eligible Equipment shall be deemed to be the amount set forth opposite each such item in Schedule A attached hereto. 8.5 The Company may, from time to time, up to and including the Termination Date add additional items of Eligible Inventory and Eligible Equipment to Schedule A, provided that each such item of Eligible Inventory and Eligible Equipment must be acceptable to CIT in all respects. The appraised value of any such item of new Eligible Inventory and Eligible Equipment shall be 90% of the cash price (exclusive of taxes and charges) paid by the Company for such equipment and the appraised value of any such item of used Eligible Inventory shall be 80% of cash price (exclusive of taxes & charges). 8.6 The appraised value of each item of Eligible Inventory and Eligible Equipment shall be deemed to depreciate at the rate of 1.5% of the original appraised value of such item per month, effective the first day of each month, commencing_________, or, in the event that Schedule A is subsequently amended to add other Eligible Inventory and Eligible Equipment, commencing on the first day of the month following the month in which such Eligible Inventory and Eligible Equipment was added to Schedule A. 8.7 Any Eligible Inventory and Eligible Equipment which is subsequently sold or otherwise disposed of, lost or destroyed, or which in the opinion of CIT has for any other reason lost all Eligible Inventory and Eligible Equipment value, shall be deemed to have an appraised value of zero. 8.8 Notwithstanding anything to the contrary contained in Section 4.2, if at any time the aggregate principal amount of all Loans outstanding exceeds the Available Line of Credit then in effect, the Company will, within 10 days after CIT'S request therefor, either: (a) add such additional Eligible Inventory and Eligible Equipment to Schedule A to increase the Available Line of Credit to an amount equal to the aggregate principal amount of all loans then outstanding; or (b) pay CIT such amount so that the amount of the Loans outstanding does not exceed the Available Line of Credit. 9. Location of Eligible Inventory and Eligible Equipment. The Company and CIT agree that regardless of the manner of affixation, the Eligible Inventory and Eligible Equipment shall remain personal property and not become part of any real estate. The Company agrees that the Eligible Inventory and Eligible Equipment will be kept at the location or locations specified on Schedule A and will notify CIT promptly in writing of any change in the location of the Eligible Inventory and Eligible Equipment within a state specified in Schedule A, but will not remove the Eligible Inventory and Eligible Equipment from any such state without the prior written consent of CIT. 10. Representations and Warranties. The Company represents and warrants to CIT that: 10.1 except for the security interest granted hereby, the Eligible Inventory and Eligible Equipment is and will remain free from all liens, claims, security interests and encumbrances; 10.2 no financing statement covering the Eligible Inventory and Eligible Equipment or any proceeds thereof is on file in favor of anyone other than CIT, but if such other financing statement is on file, it will be terminated or subordinated in a manner satisfactory to CIT; 10.3 all information supplied and statements made by the Company in any financial, credit or accounting statement or application for credit prior to, contemporaneously with or subsequent to the execution of this Agreement, are and shall be true, correct, valid and genuine; 10.4 the Company has full authority to enter into and to perform under this Agreement and in so doing, it is not violating its charter or by-laws, any law or regulation or agreement with third parties, and it has taken all such action as may be necessary or appropriate to make this Agreement binding upon it; and 10.5 this Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company that is enforceable against it in accordance with the terms hereof, except as such enforcement may be limited by bankruptcy or other similar laws affecting the rights of creditors generally. 11. Company's Agreements. The Company agrees: 11.1 to defend at Company's own cost any action, proceeding, or claim affecting the Eligible Inventory and Eligible Equipment; 11.2 to pay reasonable attorney's fees and other expenses incurred by CIT in enforcing its rights and remedies under this Agreement; 11.3 to pay promptly all taxes, assessments, license fees and other public or private charges when levied or assessed against the Eligible Inventory and Eligible Equipment or this Agreement; 11.4 that, if any item of Eligible Inventory and Eligible Equipment is a motor vehicle or other property for which a certificate of title is required or permitted by law, Company shall obtain such certificate with respect to the Eligible Inventory and Eligible Equipment showing the security interest of CIT thereon and in any event shall do everything necessary or expedient to preserve or perfect the security interest of CIT; 11.5 that the Company will not misuse, fail to keep in good repair, secrete, or without the prior written consent of CIT, sell, rent, lend, encumber or transfer any of the Eligible Inventory and Eligible Equipment notwithstanding CIT's right to proceeds; 11.6 that CIT may, at any reasonable time, enter upon the Company's premises or wherever any of the Eligible Inventory and Eligible Equipment may be located, inspect the Eligible Inventory and Eligible Equipment and/or the Company's books and records pertaining to the Eligible Inventory and Eligible Equipment, and Company shall assist CIT in making such inspection; 11.7 that the security interest granted by the Company to CIT shall continue to be effective as long as there are any Obligations owed by the Company to CIT or this Agreement shall remain in effect. 11.8 to preserve and maintain its corporate existence and good standing in the jurisdiction of its incorporation, and qualify and remain qualified as a foreign corporation in each jurisdiction in which such qualification is required; and 12. Insurance and Risk of Loss. All risk of loss, damage to or destruction of the Eligible Inventory and Eligible Equipment shall at all times be on the Company. The Company will procure forthwith and maintain at the Company's expense insurance against all risks of loss or physical damage to the Eligible Inventory and Eligible Equipment for the full insurable value thereof for the life of this Agreement plus breach of warranty insurance and such other insurance thereon in amounts and against such risks as CIT may specify, and shall promptly deliver each policy to CIT with a standard long-form mortgagee endorsement attached thereto showing loss payable to CIT; and providing CIT with not less than 30 days written notice of cancellation; each policy shall be in form, terms and amount and with insurance carriers satisfactory to CIT; CIT's acceptance of policies lesser amounts or risks shall not be a waiver of the Company's foregoing obligations. As to CIT's interest in such policy, no act or omission of the Company or any of its officers, agents, employees or representatives shall affect the obligations of the insurer to pay the full amount of any loss. The Company hereby assigns to CIT any monies which may become payable under any such policy of insurance and irrevocably constitutes and appoints CIT as the Company's attorney in fact (a) to hold each original insurance policy, (b) to make, settle and adjust claims under each policy of insurance, (c) to make claims for any monies which may become payable under such and other insurance on the Eligible Inventory and Eligible Equipment including returned or unearned premiums, and (d) to endorse the Company's name on any check draft or other instrument received in payment of claims or returned or unearned premiums under each policy and to apply the funds to the payment of the indebtedness owing to CIT; provided, however, CIT is under no obligation to do any of the foregoing. Should the Company fail to furnish such insurance policy to CIT, or to maintain such policy in full force, or to pay any premium in whole or in part relating thereto, then CIT, without waiving or releasing any default or obligation by the Company, may (but shall be under no obligation to) obtain and maintain insurance and pay the premium therefor on behalf of the Company and charge the premium to the Company's indebtedness under this Agreement. The full amount of any such premium paid by CIT shall be payable by the Company upon demand, and failure to pay same shall constitute an event of default under this Agreement. 13. Financial Reports. The Company agrees that, until the Loans have been paid in full, it will furnish CIT: (a) within 90 days after the end of each fiscal year of the Company, a balance sheet of the Company as at the end of such fiscal year and statements of profit and loss and surplus, all prepared in accordance with generally accepted principles and practices of accounting consistently applied, and certified by independent certified public accountants selected by the Company and satisfactory to CIT; (b) within 60 days after the end of each of the first three quarters of each fiscal year of the Company, a balance sheet of the Company as at the end of such quarter and statements of profit and loss and surplus for such period, all prepared in accordance with generally accepted principles and practices of accounting consistently applied and certified by the chief financial officer of the Company; and (c) from time to time, such further information regarding the business affairs and financial condition of the Company as CIT may reasonably require. 14. Events of Default. The occurrence of any of the following events shall constitute an "Event of Default": 14.1 the Company fails to pay any Obligation when due and payable (whether due at scheduled maturity, required prepayment, acceleration or otherwise); 14.2 the Company fails or neglects to perform, keep or observe any term, provision, condition, covenant, representation or warranty contained in this Agreement or in any other present or future agreement between the Company and CIT; 14.3 the Company becomes insolvent or ceases to do business as a going concern; 14.4 the filing by or against the Company of any petition or complaint or the commencement of any case under any provision of the Federal bankruptcy laws of the Company admits its inability to pay or fails to to pay its debts generally as they mature; 14.5 the Company makes an assignment for the benefit of creditors, its property is attached or a receiver is appointed for the Company or any other insolvency proceedings are instituted by or against the Company; 14.6 whenever CIT, in good faith, believes the prospect of payment or performance is impaired or in good faith believes that the Eligible Inventory and Eligible Equipment is not adequate security for the Obligations or in good faith otherwise deems itself to be insecure; 14.7 any information furnished by or on behalf of the Company relating to the Eligible Inventory and Eligible Equipment or the financial condition or business affairs of the Company is determined by CIT to be false or misleading in any material respect; 14.8 any guarantor dies or defaults in the payment or performance of any Obligation to CIT or any guaranty obtained in connection with this Agreement ceases to be in full force and effect; or 14.9 a surety, bonding company or guarantor takes over the Company's performance of any job contracted by the Company. 15. Acceleration of Obligations and Remedies. 15.1 Upon the occurrence of an Event of Default, the outstanding balance owing under this Agreement and all other Obligations shall, if CIT shall so elect, become immediately due and payable without notice to or demand upon the Company of any kind and the Loans shall bear interest at the same rate as before maturity until paid in full. In no event shall the Company, upon acceleration of the maturity of the Obligations by CIT, or otherwise, be required to pay any interest in excess of the maximum amount permitted by law. Any accelration of the Obligations, if elected by CIT, shall be subject to all applicable laws, including laws as to rebates and refunds of unearned charges. 15.2 Upon the occurrence of an Event of Default and at any time thereafter, CIT shall have all the rights and remedies of a secured party under the Uniform Commercial Code and any other applicable laws, including the right to any deficiency remaining after disposition of the Eligible Inventory and Eligible Equipment for which deficiency Company hereby agrees to remain fully liable. The Company agrees that CIT, by itself or its agent, may without notice to any person and without judicial process of any kind, enter into any premises or upon any land owned, leased or otherwise under the real or apparent control of the Company or any agent of the Company where the Eligible Inventory and Eligible Equipment may be or where CIT believes the Eligible Inventory and Eligible Equipment may be, and disassemble, render unusable and/or repossess all or any item of the Eligible Inventory and Eligible Equipment, and disconnect and separate all Eligible Inventory and Eligible Equipment from any other property. The Company expressly waives all further rights to possession of the Eligible Inventory and Eligible Equipment after default and all claims for injuries suffered through or loss caused by such entering and/or repossession. CIT may require the Company to assemble the Eligible Inventory and Eligible Equipment and return it to CIT at a place to be designated by CIT which is reasonbly convenient to both parties. CIT will give the Company reasonable notice of the time and place of any public sale of the Eligible Inventory and Eligible Equipment or of the time after which any private sale or any other intended disposition of the Eligible Inventory and Eligible is to be made. Unless otherwise provided by law, the requirement of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of the Company shown herein at least 10 days before the time of the sale or disposition. The proceeds of any such sale or other disposition of the Eligible Inventory and Eligible Equipment shall be applied first to the payment of all expenses of retaking, holding, storing and preparing for sale, selling and the like, next to the payment of reasonable attorney's fees and other legal expenses incurred by CIT in connection with enforcing any of its rights under this Agreement and then to the payment of the Obligations in such order as CIT, in its sole discretion, may elect. All of CIT's rights are cumulative and not alternative. 16. Waiver of Defaults; Agreement Inclusive. CIT may in its sole discretion waive a default, or cure at the Company's expense, a default. Any such waiver in a particular instance or of a particular default shall not be a waiver of other defaults or the same kind of default at another time. No modification or change in this Agreement or any related note, instrument or agreement shall bind CIT unless such changes or modifications shall be in writing signed by CIT. No oral agreement shall be binding on either party. 17. Financing Statements; Certain Expenses. If permitted by law, the Company authorizes CIT to file financing statement with respect to the Eligible Inventory and Eligible Equipment signed only by CIT and to file a carbon, photograph or other reproduction of this Agreement or of a financing statement. At the request of CIT, the Company will execute any financing statements, agreements or documents, in form satisfactory to CIT which CIT may deem necessary or advisable to establish and maintain a perfected security interest in the Eligible Inventory and Eligible Equipment, and will pay the cost of filing or recording the same in all public offices deemed necessary or advisable by CIT. The Company also agrees to pay all costs and expenses incurred by CIT in conducting UCC, tax or other lien searches against the Company or the Eligible Inventory and Eligible Equipment and such other fees as may be agreed. The Company will reimburse CIT for all out-of-pocket expenses incurred by CIT for any appraisals of equipment and charges made by anyone other than members of CIT's own staff in connection with the processing of the Company's Loan application. 18. Guaranties. At, or prior to the making of the initial loan hereunder, the Company will furnish or cause to be furnished to CIT, an unconditional guaranty of the payment and performance of the Company's Obligations, in form and substance satisfactory to CIT, from Meadow Valley Corporation - -------------------------------------------------------------------------------- _______________________________________________________________________________. 19. Approval of Documentation. All documentation and other matters relating to the transactions contemplated by this Agreement, including but not limited to the validity and enforceability of the guaranties, the first priority security interest in CIT's favor on the property described in Schedule A, and any releases or subordinations covering such property, shall be satisfactory and acceptable to CIT and its counsel prior to disbursements of any and all Loans hereunder. 20. Late Charges. Any payment not made when due shall, at the option of CIT, bear late charges thereon calculated at the rate of 1 1/2% per month, but in no event greater than the highest rate permitted by relevant law. 21. Inventory Reports; Assignment of Receivables. In furtherance or the continuing assignment and security interest herein contained, the Company will execute and make available to CIT from time to time in such form and manner and with such frequency as may be required by CIT, solely for CIT's convenience in maintaining a record of the Eligible Inventory and Eligible Equipment, such confirmatory Inventory reports and confirmatory assignments of Receivables, designating, identifying or describing the Eligible Inventory and Eligible Equipment and copies of invoices to customers, agreements of any kind with its customers, copies of suppliers' invoices, evidence of shipment and delivery and such further documentation and information relating to the Eligible Inventory and Eligible Equipment as CIT may require, provided, however, that if the Company should fail to execute and deliver such reports or assignments, such failure shall not affect, diminish, modify or otherwise limit CIT's security interest in all present and future Inventory and Receivables of the Company and the proceeds thereof. The Company will furnish to CIT within ten (10) days after the end of each month, an aging report of the Company's customers and amounts owing, prepared as at the end of such month end. The Company agrees to advise CIT promptly of any substantial change relating to the type, quantity or quality of Eligible Inventory and Eligible Equipment or of any event which would have a material effect on the value of the Eligible Inventory and Eligible Equipment or on the security interested granted to CIT therein. 22. Conditions Precedent The making of any Loan hereunder at any time by CIT in its sole discretion is subject, among other things, to compliance in full by the Company with all of the terms and provisions of this Agreement, as at any time amended, and to the further condition that at the time of the proposed making of any such Loan there shall have been no material adverse change in the financial condition or business of the Company, and that no Event of Default, and no event which with the lapse of time or the notice and lapse of time specified for the purpose of constituting such an Event of Default, has occurred and is continuing at the time of such proposed Loan. 23. Additional Covenants of the Company. See attached Financial Report Covenant Rider consisting of one (1) page attached hereto and made a part hereof. As long as any Obligations remain outstanding hereunder, the Company, in addition to the covenants made elsewhere in this Agreement, will, unless CIT shall otherwise consent in writing: All accounting terms used herein shall be interpreted in accordance with generally accepted accounting principles, consistently applied. 24. Notices. Any notice or request required or permitted to be given under this Agreement shall be sufficient if in writing and sent by hand or by Certified Mail, in either case return receipt requested, to the parties at the following addresses, or at such other address as to which either party shall notify the other in writing: The CIT Group/Equipment Financing, Inc.: 1540 West Fountainhead Pkwy. Tempe, AZ 85282 Attn: Gerald Rickman Meadow Valley Contractors, Inc. 4411 South 40/th/ Street Phoenix, AZ 85040 25. Miscellaneous Any provisions hereof contrary to, prohibited by or invalid under applicable laws or regulations shall be inapplicable and deemed omitted here from, but shall not invalidate the remaining provisions hereof. If the Company is a corporation, the Company represents that this Agreement is executed pursuant to the authority of its Board of Directors. The Company and CIT each hereby waive any right to a trial by jury in any action or proceeding with respect to, in connection with, or arising out of this Agreement, or any note or document delivered pursuant to this Agreement. This agreement shall be binding upon and inure to the benefit of the Company and CIT and their respective successors and assigns, except that the Company may not assign or transfer any of its rights under this Agreement without the prior written consent of CIT. Section headings are included in this Agreement for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. If at any time this transaction would usurious under applicable law, then regardless of any provision contained in this Agreement in any other agreement made in connection with this transaction, it is agreed that: (a) the total of all consideration which constitutes interest under applicable law that is contracted for, charged or received upon this agreement or any such other agreement shall under no circumstances exceed the maximum rate of interest authorized by applicable law and any excess shall be credited to the Company; and (b) if CIT elects to accelerate the maturity of, or if CIT permits the Company to prepay the Indebtedness, any amounts which because of such action would constitute interest may never include more than the maximum rate of interest authorized by applicable law, and any excess interest, if any, provided for in this Agreement or otherwise, shall be credited to the Company automatically as of the date of acceleration or prepayment. 26. Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of Arizona. 27. Special Provisions. (See Special Provisions Instructions below.) Year 2000. The Company shall take all action necessary to assure that its computer-based systems are able to effectively process data including dates and date sensitive functions. The Company represents and warrants that the Year 2000 problem (that is, the inability of certain computer applications to recognize and correctly perform properly date-sensitive functions involving certain dates prior to and after December 31, 1999) will not result in a material adverse effect on the Company's business condition or ability to perform hereunder. Upon request, the Company shall provide assurance acceptable to the CIT that the Company's computer systems and software are or will be Year 2000 compliant on a timely basis. The Company shall immediately advise CIT in writing of any material changes in the Company's Year 2000 plan, timetable or budget. See Exhibit "A" consisting of one (1) page attached hereto and made a part hereof. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date shown below. Dated: 7-17-2000 THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ W. E. Carver Title V.P. -------------------------------- ------------------- P.O. Box 27248 - --------------------------------------------------------------------- Address Tempe AZ 85285-7248 - --------------------------------------------------------------------- City State Zip Code Meadow Valley Contractors, Inc. - --------------------------------------------------------------------- Company By /s/ Kenneth D. Nelson Title VICE PRESIDENT ------------------------------------- --------------------- 4411 South 40th Street - --------------------------------------------------------------------- Principal Place of Business Phoenix AZ 85040 - --------------------------------------------------------------------- City State Zip Code - -------------------------------------------------------------------------------- SPECIAL PROVISIONS INSTRUCTIONS - The notations to be entered in the Special Provisions section of this document for use in ALABAMA, FLORIDA, GEORGIA, IDAHO, NEVADA, NEW HAMPSHIRE, OREGON, SOUTH DAKOTA and WISCONSIN are shown in the applicable State pages of the Loans and Motor Vehicles Manual - -------------------------------------------------------------------------------- EXHIBIT "A" TO REVOLVING LOAN AGREEMENT DEBTOR: SECURITY PARTY: Meadow Valley Contractors, Inc. The CIT Group/Equipment Financing, Inc. 4411 South 40th Street P.O. Box 27248 Phoenix, AZ 85040 Tempe, AZ 85285-7248 Description of Collateral: - -------------------------- All of the Debtor's property, or interests in property, whether now owned or existing or hereafter acquired or arising and wheresoever located, whether tangible or intangible, including without limitation, all of Debtor's accounts, inventory, goods, furniture, machinery, equipment, fixtures, investment property, general intangibles (including, without limitation, goodwill, inventions, designs, patents, patent applications, trademarks, trademark applications, service marks, trade names, licenses, leasehold interests in real and personal property, franchises, tax refund claims, and guarantee claims, security interests or other security held by or granted to Debtor to secure payment of Debtor's accounts, investment property, general intangibles, instruments, and notes,) tax refunds, chattel paper, contract rights, instruments, documents, notes, returned and repossessed goods, together with all accessions to, substitutions for, and all replacements, products and proceeds of the foregoing (including, without limitation, proceeds of insurance policies insuring any of the foregoing), all books and records (including, without limitation, customer lists, credit files, computer programs, printouts and other computer materials and records) pertaining to any of the foregoing, and all insurance policies insuring any of the foregoing. Date: 7-17-2000 -------------------------------- Meadow Valley Contractors, Inc. By: /s/ Kenneth D. Nelson Title: Vice President ------------------------------ ----------------- Name: FINANCIAL REPORT COVENANT RIDER ------------------------------- ATTACHED TO AND BY THIS REFERENCE MADE A PART OF REVOLVING LOAN AGREEMENT WHEREIN MEADOW VALLEY CONTRACTORS, INC. IS COMPANY AND THE CIT GROUP/EQUIPMENT FINANCING, INC. IS CIT DATED 7/17/00. COMPANY COVENANTS AND AGREES THAT DURING THE TERM OF THIS AGREEMENT, IT WILL PROVIDE TO CIT (1) WITHIN 60 DAYS, SEMI-ANNUAL STATEMENTS AND (2) WITHIN 90 DAYS AFTER THE END OF ITS FISCAL YEAR, A BALANCE SHEET AND INCOME STATEMENT OF COMPANY'S PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES CONSISTENTLY AND REVIEWED BY AUDITOR. DURING ALL TIMES DURING THE COMPANY'S FISCAL YEAR 2000, THE COMPANY'S TANGIBLE NET WORTH WILL NOT BE LESS THAN $6,500,000.00. FOR EACH FISCAL YEAR THEREAFTER, THE COMPANY'S TANGIBLE NET WORTH SHALL NOT BE LESS THAN THE MINIMUM TANGIBLE NET WORTH REQUESTED TO BE MAINTAINED IN THE PREVIOUS FISCAL YEAR, THE MINIMUM TANGIBLE NET WORTH REQUIRED TO BE MAINTAINED PURSUANT TO THIS SECTION SHALL NOT BE DECREASED IF IN ANY FISCAL YEAR THE COMPANY HAS A DEFICIT NET INCOME AFTER TAXES. Debtor: Meadow Valley Contractors, Inc. - ------------------------------- By: /s/ Kenneth D. Nelson Title: Vice President --------------------- -------------- [LOGO OF CIT] July 21, 2000 Meadow Valley Contractors, Inc. Meadow Valley Corporation 4411 South 40th Street Phoenix, AZ 85040 RE: Revolving Loan Agreement dated July 17, 2000 between Meadow Valley Contractors, Inc. and The CIT Group/Equipment Financing, Inc. Gentlemen: By this letter, the Revolving Loan Agreement and all related documents are amended as follows: 1. Revolving Loan Agreement Section 1, the "Termination Date" to be changed from December 31, 2000 to December 31, 2001. 2. Revolving Loan Agreement, Section 7(b) will be amended to add the following language: "..goods, furniture, machinery, equipment, including but not ----------------- limited to the equipment listed on Schedule A attached hereto and made a part ----------------------------------------------------------------------------- hereof, fixtures, investment property..." ------ 3. Revolving Loan Agreement, Section 8.2 will be amended to read as follows: The Available Line of Credit, at any time and from any time, shall be an amount equal to the following: (a) Fifty percent (50%) of the amount owing on Eligible Receivables as computed from monthly aging reports to be submitted to CIT by Company, plus, (b) Eighty-three percent (83%) of aggregate appraised value of the Eligible Equipment, plus, (c) Fifty percent (50%) of Eligible Inventory. 4. Revolving Loan Agreement, Section 8.3 will be amended to read as follows: The total of Eligible Receivables as of the date June 30, 2000 is $10,949,525.04. The aggregate appraised value of Eligible Equipment described in Schedule A as of the date hereof is $1,560,984.92. The total of Eligible Inventory as of the date May 31, 2000 is $2,754,447.51. Fifty percent (50%) of the amount owing on Eligible Receivables as of the date hereof is $5,474,762.52. Eighty- three (83%) of the Eligible Equipment as of the date hereof is $1,295,617.48. Fifty percent (50%) of the Eligible Inventory as of the date hereof is $1,377,223.78. The Available Line of Credit as of the date hereof is $7,000,000.00. 5. Revolving Loan Agreement, Section 23(a), (b) and (c) will be deleted. 6. Financial Report Covenant Rider, Paragraph 2, the Company's Tangible Net Worth for the year 2000 will not be less than $6,500,000.00. All other terms and conditions of the above referenced Revolving Loan Agreement shall remain in full force and effect and are reaffirmed as of this date. Sincerely, The CIT Group/Equipment Financing, Inc. /s/ Heather Meheut Heather Meheut Transaction Coordinator Read and agreed to this ___ day of July, 2000. Debtor: Meadow Valley Contractors, Inc. By /s/ Kenneth D. Nelson Title Vice President ------------------------------------- -------------------------- Guarantor: Meadow Valley Corporation By_____________________________________ Title Vice President -------------------------- EX-10.141 27 0027.txt LEASE AGREEMENT EXHIBIT 10.141 [LOGO OF BANK ONE] LEASE SCHEDULE NO.:1000105783 FINANCING LEASE ---------- (Per Diem Interim Rent) Master Lease Agreement dated 07-01-1999 ---------- 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 with 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: $303,233.00 Set-Up/Filing Fee: $ 500.00 Miscellaneous: Sales Tax: $ 0.00 Total: $303,733.00 ----------- 4. FINANCING TERM. The Base Term of this Schedule shall be 72 months and the -- Base Term shall commence on 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): 72 MON $5,565.69 (2) Frequency of installment payments during the Base Term: Monthly ------- [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) $500.00 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 this 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 [LOGO OF BANK 1 ONE] 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 judgement, 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 judgement 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. [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: 9-1-00 Witness: /s/ Nicole R. Smith ----------- --------------------- Banc One Leasing Corporation SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER QUANTITY DESCRIPTION PAGE 1 ================================================================== EQUIPMENT LOCATION: 4411 S. 40TH ST PHOENIX, AZ 85040 COUNTY : MARICOPA COST : $303,233.00 (1) 57S GYRASPHERE S/N-202M10203 TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS, IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO. This Schedule is A-1 attached to and made a part of Lease Number 1000105783 and ---------- constitutes a true and accurate description of the equipment. Lessee: READY MIX, INC. By: /s/ Kenneth D. Nelson ----------------------- Date: 8-30-00 --------------- EX-10.142 28 0028.txt SEVENTH AMENDMENT TO LEASE EXHIBIT 10.142 SEVENTH AMENDMENT TO LEASE -------------------------- This Seventh Amendment to Lease Agreement ("Seventh Amendment") is entered into as of the 18/th/ day of October, 2000 between SOFI IV-SPM Portfolio XI, L.L.C., a Delaware limited liability company ("Landlord") and MEADOW VALLEY CONTRACTORS, INC., a Nevada corporation ("Tenant"). RECITALS -------- Broadway Commerce Centre Limited Partnership, as landlord, and Tenant entered into that certain Lease Agreement dated May 16, 1995, as amended by the First Amendment to Lease dated June 22, 1995, the Second Amendment to Lease dated April 1, 1996, the Third Amendment to Lease dated April 15, 1996, the Fourth Amendment to Lease dated September 1, 1997, a Fifth Amendment to Lease dated December 15, 1997 between Landlord and Tenant, and a Sixth Amendment to Lease dated December 29, 1998 (collectively the "Lease"), covering the office space located at 4411 S. 40th Street and 4001 East Broadway Road, Suites D-8, D-10, D-11 consisting of approximately 2,093, 1,177 and 5,010 rentable square feet, respectively (the "Premises"). Landlord is successor-in-interest to Broadway Commerce Centre Limited Partnership under the Lease. Subsequent to execution of the Sixth Amendment to Lease, Landlord and Tenant relocated Tenant's storage space from Suite B-11B to Suite B-13A, consisting of approximately 659 rentable square feet. Landlord and Tenant wish to extend the term of the Lease and to make other amendments to the Lease. Landlord and Tenant agree the Lease is amended as follows: AGREEMENT --------- 1. Effective Date. The effective date of the Lease amendments set forth -------------- herein is January 1, 2001 (the "Effective Date"). 2. Defined Terms. Capitalized terms used but not defined herein shall ------------- have the meanings ascribed to them in the Lease. 3. Extended Lease Term. The term of the Lease will be extended through ------------------- December 31, 2003 (the "3/rd/ Extended Term"). The 3/rd/ Extended Term will be deemed to commence on the Effective Date and will be on the same terms and conditions as the Lease, except as otherwise provided in this Seventh Amendment. During the 3rd Extended Term, all references in the Lease to the "Lease term" or to the "term" will mean the 3/rd/ Extended Term. 4. Designation and Size of Premises and Storage. From and after the -------------------------------------------- Effective Date, for all purposes under the Lease, the Premises will be known as Suite D-11, consisting of 8,280 rentable square feet, and the Storage space will be known as Suite B-13A consisting of 659 rentable square feet. 5. Rent For Premises. During the 3/rd/ Extended Term, Tenant's monthly ----------------- base rent for the Premises will be as follows: 1/1/01 - 12/31/01 $8,280.00 (@ $1.00/r.s.f.) 1/1/02 - 12/31/02 $8,694.00 (@ $1.05/r.s.f.) 1/1/03 - 12/31/03 $9.108.00 (@ $1.10/r.s.f.) These amounts do not include Rental Taxes, Tenant's share of Taxes and Costs of Operating and Maintaining the Property, storage charges or any other sums payable to Landlord under the Lease, all of which sums will remain payable during the 3/rd/ Extended Term. 5. Storage Rental. During the 3/rd/ Extended Term, Tenant shall lease -------------- Suite B-13A as Storage space at $350.00, per month, plus rental taxes thereon. As of the Effective Date, Section 3.2 of the Lease shall not apply to the Storage space. 6. Security Deposit. Tenant currently has deposited with Landlord a ---------------- Security Deposit in the amount of $5,731.14. Upon execution of this Seventh Amendment, Tenant will increase the Security Deposit by $2,268.86 for a total Security Deposit in the amount of $8,000.00. 7. Improvements. Following full execution of this Seventh Amendment and ------------ at a time convenient to Tenant during the 3rd Extended Term, Landlord will, at Landlord's expense, repaint the walls and install new carpet (building standard) throughout the Premises. 8. Early Termination. Notwithstanding anything to the contrary in the ----------------- Lease, provided Tenant is not in default under the Lease, Landlord agrees to provide Tenant the option to terminate this Lease effective as of 12/31/02, subject to the following terms and conditions: a. Tenant gives Landlord ninety (90) day prior written notice of Tenant's intent to terminate pursuant to this Section 8; and b. Tenant surrenders the Premises pursuant to Article 21 of the Lease. From and after such time as Tenant gives notice of its intent to terminate under this Section 8, Landlord shall have the right to show the Premises to prospective tenants, with reasonable notice to Tenant. 9. Remaining Lease Terms. Except as expressly amended by this Seventh --------------------- Amendment, all the terms, covenants and conditions of the Lease remain in full force and effect. In the event of any conflict between the provisions of the Lease and this Seventh Amendment, this Seventh Amendment will control. IN WITNESS WHEREOF, Landlord and Tenant have executed this Seventh Amendment as of the date written above. "LANDLORD" "TENANT" SOFI IV-SPM PORTFOLIO XI, L.L.C., MEADOW VALLEY CONTRACTORS, INC., a Delaware limited liability company a Nevada corporation By: Scottsdale Property Management 97, By: /s/ Kenneth D. Nelson ----------------------- L.L.C., Its: Vice President ---------------- Its Agent Notice Address: By: /s/ [ILLEGIBLE]^^ P.O. Box 60726 ----------------------- ________________________(street addr) Authorized Signatory Phoenix, Arizona 85082 ATTN: Ken Nelson EX-10.143 29 0029.txt SECURITY AGREEMENT EXHIBIT 10.143 LOAN CONTRACT - SECURITY AGREEMENT
- ----------------------------------------------------------------------------------------------------------------------------------- GOODS PREVIOUSLY CONSTRUCTION DEALER ACCOUNT DEALER PHONE NO. APPLICATION DATE DATE ACCEPTED BY JOHN DEERE CONTRACT NO. SETTLED FOR? NUMBER CONST EQMT CO YES [_] NO [_] NEW [_] USED [X] 17-0908 801-262-7441 19 OCT 00 OFFICE USE ONLY 17-880171959 - ----------------------------------------------------------------------------------------------------------------------------------- Seller's Name and Address SCOTT MACHINERY CO. 4055 S. 500 W. SALT LAKE CITY, UT 84123 - ----------------------------------------------------------------------------------------------------------------------------------- Borrower's (Debtor's) Name (Last Name First) and Mailing Address Borrower's (Debtor's) Name (Last Name First) and Mailing Address (Including County and Zip) (Including County and Zip) MEADOW VALLEY CONTRACTORS INC PO BOX 60726 PHOENIX, AZ 85082 - ----------------------------------------------------------------------------------------------------------------------------------- Borrower's (Debtor's) Phone No. Borrower (Debtor) Resides in (County/State) Borrower (Debtor) Agent to keep Goods in 602-437-5400 PHOENIX, AZ County/State PHOENIX, AZ Place of Filing (Town & State) AZ-SOS - ----------------------------------------------------------------------------------------------------------------------------------- Borrower's Social Security Number (First Signer) or Tax Id Number Type of Business ---------------------------------------------------- Proprietor [_] Partner [_] Corporation [_] L.L.C [_] Name and Title of Signing Officer (If Corporation or LLC) BRADLEY LARSON PRESIDENT - -----------------------------------------------------------------------------------------------------------------------------------
APPLICATION AND PROMISSORY NOTE: I hereby apply to John Deere Construction Equipment Company (together with its assigns, the "Lender") for a Loan in the amount of the Principal Balance shown below. The amount of the unpaid balance on line 3 is to be used to finance the Balance Due on the purchase order executed in connection with the purchase from the Seller of the equipment described below (the "Goods"). If this Loan Contract is accepted by Lender, I promise to pay to the order of Lender, the Principal Balance, shown on line 7 below, and finance charges thereon computed on the daily unpaid balance of the Principal Balance and to pay the installments shown below, with such adjustments in the amount or number of installments as may be necessary to reflect actual finance charges earned. If more than one person signs this Agreement as "Borrower"), we will be jointly and severally liable for all amount due under this Agreement. Except for the Notice to Borrower section. In this Agreement, the words "I" and "me" and "my" mean the persons, whether one or more, who sign it as the "Borrower".
- ----------------------------------------------------------------------------------------------------------------------------------- Quality New/Used Manufacturer Model Goods (Equipment) Product Identification No. Delivered Cash Price - ----------------------------------------------------------------------------------------------------------------------------------- 1 U JOHN DEERE 270LC 1997 EXCAVATOR FF0270X070059 $169,000.00 - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Quantity Manufacturer Model Description of Trade-In (From Purchase Order) Product Identification No. Amount - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- CASH DOWN PAYMENT: $30,200.00 TOTAL TRADE-IN: $0.00 - ----------------------------------------------------------------------------------------------------------------------------------- MONTHLY INSTALLMENTS - ---------------------------------------- Number of Amount of First Payment Payments Each Payment Due Date ITEMIZATION OF AMOUNT FINANCED - ---------------------------------------- 48 $3,535.36 12/1/00 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Sales Tax Paid to Government Agencies $ 8,813.80 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Cash Price (including Tax) 1 $177,813.80 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Total Down Payment. Sum of Trade-in and Cash Down Payment 2 $ 30,200.00 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Unpaid Balance of Cash Price (Paid to Seller) 3 $147,613.80 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Official Fees (Paid to Public Officials) 4 $ 10.00 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Administrative Fees 5 $ 300.00 - ---------------------------------------------------------------------------------------------------------------------------------- Insurance - Credit Life and/or Physical Damage 6 $ 0.00 - ---------------------------------------------------------------------------------------------------------------------------------- Payments are due each successive month on Principal Balance (Lines 3, 4, 5 and 6) the same day of the month as the first The amount of credit provided to Borrower(s) 7 $147,923.80 payment except as follows: - ---------------------------------------------------------------------------------------------------------------------------------- Finance Charge (Based on Line 7) The dollar amount the credit will cost Borrower(s) 8 $ 21,773.48 - ---------------------------------------------------------------------------------------------------------------------------------- Total (Lines 7 and 8). (Principal Balance plus Finance Charge) 9 $169,697.28 - ---------------------------------------------------------------------------------------------------------------------------------- DATE FINANCE CHARGE BEGINS: 11/1/00 Annual Interest Rate: The cost of the Borrower(s) credit as a yearly rate. 6.90% - ----------------------------------------------------------------------------------------------------------------------------------
SECURITY AGREEMENT: To secure the indebtedness evidenced by the contract I grant you a Security Interest in the Goods (which term includes items, if any, listed as "Security" or "additional security") and all parts and accessories now or hereafter incorporated in or on such Goods by way of addition, accession or replacement and any proceeds arising therefrom, including, without limitation, insurance proceeds. I agree that I have received the Goods. Lender can inspect the Goods at any reasonable time. I REPRESENT THAT THE GOODS ARE BEING PURCHASED FOR A BUSINESS OR COMMERCIAL PURPOSE. EARLY PAYMENT: I may prepay may obligation in full at any time prior to the original or any extended maturity and will be charged only for earned Finance Charges. No penalties will be imposed for early payment). DELINQUENCY CHARGE; NSF FEES: For each installment not paid when due, I promise to pay Lender a delinquency charge calculated at the rate of 1.5% per month for the period of the delinquency or, at Lender's option, 5% of such installment provided that such a delinquency charge is not prohibited by law, otherwise at the highest rate allowed by applicable law. I agree to repay immediately to Lender in the enforcement or administration of its rights under this Agreement, including, without limitation, any amount paid by Lender to a depository institution because a check, draft or order made or drawn by or for the benefit of me is returned unpaid for any reason. If any payment is made by a check which is dishonored, I agree to pay Lender a fee of $20 or such lesser amount specified by applicable law. STATE LAW APPLYING: THE CONSTRUCTION AND VALIDITY OF THIS AGREEMENT SHALL BE CONTROLLED BY THE LAW OF IOWA, 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. - ----------------------------------------------------------------------------- ADDITIONAL PROVISIONS CONCERNING RIGHTS OF THE PARTIES ON REVERSE SIDE ARE A PART OF THIS CONTRACT - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE DISCLOSURES: I may obtain Physical Damage Insurance No. I want Physical Damage Insurance (Sign in this box) from anyone I want that is acceptable to Lender. If I get MOS PREMIUM this insurance through Lender, I will pay the Premium shown 0 $0.00 at right. No insurance will be provided unless I sign at the right, the premium is shown and Lender accepts the contract. - ----------------------------------------------------------------------------------------------------------------------------------- Credit Life Insurances is not required to obtain credit and No. I want Credit Life Insurance (Sign in this box) will not be provided unless I sign at the right, the premium MOS PREMIUM is shown and Lender accepts this contract. 0 $0.00 Age: - -----------------------------------------------------------------------------------------------------------------------------------
NOTICE TO BORROWERS: 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 rights. 3. Under the law, you may have the right to redeem the property if repossessed for a default within the time provided by law. 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/ Kenneth D. Nelson VICE PRES 10-24-00 Accepted by: JOHN DEERE CONSTRUCTION EQUIPMENT COMPANY - ------------------------------------------------------------- ---------- Borrower's (Debtor's) Signature KENNETH D NELSON Title Date (Leader/Secured Party) Ads: 1415 28th Street PO Box 65090, West Des Monies, Iowa 50265-0090 -------------------------------------------------- _____________________________________________________________ __________ Borrower's (Debtor's) Signature Title Date By: ________________________ _____________________ (Authorized Signature) Date _____________________________________________________________ __________ ------------------------------------------------------- Borrower's (Debtor's) Signature Title Date
ADDITIONAL PROVISIONS CONCERNING RIGHTS OF THE PARTIES APPLICATION OF PAYMENTS: Any sums received from me may be applied at Lender's discretion to obligations hereunder or to any other indebtedness owed by me to Lender despite directions, if any, appearing on the remittance, and to interest principal, and if permitted by law to past due interest before installments. If any proceeds from the sale of the Goods or insurance are applied to the debt, I remain liable to make each monthly payment described in this contract until it is paid in full. Lender may accept payments marked "paid in full" or with other restrictive endorsements, without losing any of your rights under this Agreement. DEFAULT: This contract shall be in default (a) if I fail to pay any installment when due; (b) if I attempt to sell or encumber any interest in the Goods; (c) if I institute or have instituted against me proceedings under any bankruptcy or insolvency law; (d) if I make an assignment for the benefit of creditors; (e) if I fail to pay taxes levied on the Goods; (f) if any attachment, execution, writ, or other process is levied against any of my property; (g) if I fail at any time to keep the Goods properly insured as described below; (i) if I fail to maintain the Goods in good condition and repair or permit its value to be impaired; (j) if I permit the Goods to be used in violation of any law, regulation or policy of insurance; (k) if any representation, warranty or statement is made to Lender in connection with this agreement which is false in any material respect when made; (l) if any legal entity such as a partnership, limited liability company or corporation) that has agreed to pay this agreement ceases to do business, dissolves, liquidates its assets or terminates or fails to maintain its legal existence; (m) if I fail to comply with any other provision of this contract: or (n) if for any reason Lender deems the debt or security unsafe. If any such event Lender may take possession of any Goods in which Lender has a Security Interest and exercise any other remedies provided by law. In such event I agree, upon demand, to assemble the Goods at a location designated by Lender, and Lender may immediately and without notice declare the entire balance of this contract due and payable. In addition, to the extent permitted by law, Lender may collect all reasonable expenses, including attorney's fees, incurred in realizing on the security interest granted hereunder, or otherwise enforcing the terms of this contract. If I reside in Texas, I agree that any remaining amounts due under this contract after any default by me shall be payable to Lender or its order at Dallas, in Dallas County, Texas. If Lender takes possession of the Goods after I default, it shall be commercially reasonable for Lender to sell; (i) the Goods at a private sale; (ii) at wholesale to a dealer in used goods of like kind; or (iii) at retail to a purchaser directly or through a dealer in such used goods. The enumeration of the foregoing methods of disposition are without limitation to the Lender's right to dispose of the Goods by any other manner or method (whether by sale, lease, or otherwise) in a commercially reasonable manner. Lender also has the right to take possession of the Goods or render the Goods unusable. Upon default, I grant Lender permission to cancel any insurance on the Goods and if allowed by law, to apply an premium refunds to my debt to Lender with any excess returned to me. Waiver of any breach or default shall not constitute a waive of any other or subsequent breach or default. RISK OF LOSS AND OTHER AGREEMENTS. I hold the Goods at my risk and expense with no abatement in any obligation on account of loss or damage. I will settle all claims of any kind against the seller of the Goods directly with the seller and I will not use any such claim as a defense, setoff or counterclaim against any effort by Lender to enforce this Contract. I authorize Lender to file (or to execute on my behalf and file) a financing statement (or statements) in order to perfect the security interest granted herein, indicating the type of items described herein or describing such items. Each person who signs this Agreement agrees that any carbon signature, facsimile signature or electronic signature shall constitute an original signature within the meaning of applicable law, for all purposes, including the filing of financing statements. Lender may correct patent or clerical errors in the Agreement, or any purchase order or financing statement executed in connection with the transactions contemplated in this Agreement. Any provision of this Agreement prohibited by law shall be ineffective and deemed deleted to the extent of such prohibition and shall not invalidate any other provision hereof. INSURANCE: Except to the extent this Agreement is for service work, I will at all times keep the Goods insured against all risk of loss, damage or destruction for greater or their full insurable value or the then outstanding amount of this Loan. Lender must be listed as a loss payee. I may choose the person through whom I obtain the insurance but the insurance must be acceptable to Lender. Such insurance will provide that it may not be canceled by me without Lender's consent and may not be canceled by the insurance company without at least (10) days written notice to Lender. I will provide Lender with evidence of the paid-up insurance on the Goods within fifteen (15) days of the date of this contract and at least thirty (30)days before the renewal date. If I fail to provide evidence of the insurance within the time periods specified in the preceding sentence, then I will reimburse Lender for the cost of any insurance Lender purchased until the date such evidence is provided by me. If I fail to keep the Goods properly insured, Lender may, but is under no obligation to, buy insurance to protect the Goods and add the cost to my debt to Lender, and I promise to pay additional cost upon Lender's demand. To the fullest extent permitted by law, I will pay Lender a reasonable administrative fee for obtaining and canceling such insurance. I may meet this insurance requirement by having Lender purchase such insurance. Inclusion of any amount of Physical Damage Insurance in the Insurance Disclosure box on the front of this contract will be election to do this, but such insurance will only be purchased if Lender accepts this Agreement. Such insurance will cover only the fair market value of the Goods at the time of the loss. If the term of such insurance is less than the term of this Agreement, I will, upon termination of such insurance, purchase insurance to fulfill my obligation to insure hereunder. EX-10.144 30 0030.txt CONTRACT AGREEMENT EXHIBIT 10.144 CONTRACT This Agreement, Made and entered into this 23rd day of February, Two Thousand, in quadruplicate between the State of Nevada, Department of Transportation thereof, party of the first part, and Meadow Valley Contractors, Inc., P.O. Box 549, of Moapa, NV 89025, party of the second part, hereinafter called the Contractor. Witnesseth, That the said party of the second part agrees with the said party of the first part, for the consideration and agreements hereinafter mentioned and contained to be made and performed by the said party of the first part, and under the conditions expressed in a bond bearing even date with these presents, and hereunto annexed, that he, the said party of the second part, shall and will at his own proper cost and expense, do all the work and furnish all the materials necessary for the substantial construction and completion, and to the satisfaction of said party of the first part, of a portion of the system of Highways of the State of Nevada, being in the County of Clark, on I-15 from 1.76 kilometers south of the Erie Union Pacific Railroad Grade Separation to 0.96 kilometers north of Sloan; on I-15 Interchanges at Primm, Jean and Sloan; on I-15 at the Nevada Highway Patrol Sloan Inspection Station; on I-15 from 6.00 kilometers north of Jean to 0.96 kilometers north of Sloan and on I-15 from 0.96 kilometers north of Sloan to I-215, Route Sections 015-1 Mileposts IR 15 CL-20.67 to CL 26.12, IR 15 CL-0.46 to CL-25.96, IR 15 CL-25.26, IR 15 CL-16.35 to CL-26.12 and IR 15 CL-26.12 to CL-34.82, in strict conformity, in every part and particular, with the annexed special provisions and specifications, and the plans entitled "State of Nevada, Department of Transportation; Construction Plans of Proposed State Highway in the County of Clark, from the California/Nevada State Line to 2.42 miles (3.895 kilometers) east of the Junction with Route US 093, Route Sections 015-1" approved by the Director of the Department of Transportation on September 24, 1999, which special provisions, specifications and plans are made a part hereof, and in full compliance with the terms of this agreement. And the Contractor hereby further agrees to receive and accept the prices set forth in the Proposal Schedule, hereto annexed and thereby made a part of this agreement, as full compensation for furnishing all materials and labor, and the doing of all work, in strict accordance with the plans, special provisions and specifications hereinbefore mentioned, to the satisfaction of the Engineer and in the manner and under the conditions hereinbefore specified. The said party of the First part hereby promises and agrees with the said Contractor, to employ, and does hereby employ, the said Contractor to provide the materials and do the work according to the terms and conditions herein contained and referred to, for the prices aforesaid, and hereby contracts to pay the same at the time, in the manner, and upon the conditions above set forth; and the said parties themselves, their heirs, executors, administrators, successors, and assigns, do hereby agree to the full performance of the covenants herein contained. The Contractor further agrees that no moneys payable under this contract shall be assigned by power of attorney, or otherwise, except upon the written consent of the Department. It is further agreed, by and between the parties hereto, that should there be any conflict between the terms of this instrument and the bid or proposal of said Contractor, then this instrument shall control, and nothing herein shall be considered an acceptance of the said terms of said proposal conflicting therewith. And the said Contractor hereby further agrees that the payment of the final amount due under this contract shall release the State of Nevada and the Department of Transportation from any and all claims or liability on account of work performed under this contract other than such claims, if any, as may be specifically excepted by the Contractor in writing at the time final payment is made. CONTRACT In Witness Whereof, The parties to these presents have hereunto set their hands and seals the year and date first above written. Attested: STATE OF NEVADA Through the Department of Transportation /s/ [ILLEGIBLE]^^ Dated March 29 , 2000 - ---------------------------------------- ------------------------------------- ------------- (Director, Department of Transportation) /s/ [ILLEGIBLE]^^ Approved as to Form & Legality ------------------------------------------------------------ (Chairman, Board of Directors, Department of Transportation) Meadow Valley Contractors, Inc. ------------------------------------------------------------ /s/ Brian Hutchins (Contractor) - ---------------------------------------- (Deputy Attorney General Chief Counsel) By /s/ Alan Terril --------------------------------------------------------- Vice-President ------------------------------------------------------------
CONTRACTOR'S ACKNOWLEDGEMENT [use (a) or (b)] (a) For an Individual or Partnership STATE OF ___________________________ } } SS COUNTY OF __________________________ } On this ________________ day of _________________, A.D. _________________, personally appeared before me, a _______________________________________, in and (Notary Public, Judge or other Officer) for __________________________ County, State of ________________________, _____________________________________________________________, known (or proved) (Name) to me to be person(s) described in and executed the foregoing instrument, who acknowledged to me that he (they) executed the same freely and voluntarily and for the uses and purposes therein mentioned. _________________________________________ (Notary Public, Judge or other officer) (b) For a Corporation STATE OF NEVADA ------------------------- } COUNTY OF CLARK } SS ------------------------ } On this 6th day of March , A.D. 2000 , ---------------- ------------------ ----------------- personally appeared before me, a Notary Public , in and --------------------------------------- (Notary Public, Judge or other officer) for Clark County, State of Nevada , Alan Terril , known (or proved) ------------- --------- --------------- (Name) to me to be Vice-President -------------------------------------------- (President, Vice President or Secretary) of the corporation that executed the foregoing instrument, and, upon oath, did depose that he is the officer of said corporation as above designated; that he is acquainted with the seal of said corporation and that the seal affixed to said instrument is the corporate seal of said corporation; that the signatures to said instrument were made by officers of said corporation as indicated after said signatures; and that the said corporation executed the said instrument freely and voluntarily and for the uses and purposes therein mentioned. /s/ Nancy A. McCafferty ------------------------------------------ (Notary Public, Judge or other Officer) EX-10.145 31 0031.txt CONTRACT AGREEMENT EXHIBIT 10.145 CONTRACT AGREEMENT THIS AGREEMENT, made and entered into this 23rd day of May, 2000, 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. / R.E. MONKS CONSTRUCTION CO. LLC (JV) 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 317 H507801C S-366-548 PRESCOTT-COTTONWOOD HIGHWAY (US 89-Jct SR 89A) 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 Specification 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. 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 317 H507801C S-366-548 PRESCOTT-COTTONWOOD HIGHWAY (US 89-Jct SR 89A) Witness our hands and seals this 23rd day of May 2000 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./ R. E. MONKS CONSTRUCTION CO., LLC (JV) _____________________________________________ By: /s/ Bradley E. Larson /s/ Richard D. Monks -------------------------------------------- Contractor Bradley E. Larson Richard D. Monks President Vice President Attest: /s/ Robert W. Bottcher PARTY OF THE SECOND PART ----------------------- Seal EX-10.146 32 0032.txt JOINT VENTURE AGREEMENT EXHIBIT 10.146 This Joint Venture Agreement, made and entered into this 1st day of June, 2000, by and between R. E. Monks Construction Co., LLC, a Colorado Company, (hereinafter referred to as "R. E. Monks"), and Meadow Valley Contractors, Inc., a Nevada corporation, (hereinafter referred to as "MCVI"). WITNESSETH WHEREAS, the Arizona Department of Transportation, hereinafter called the owner, advertised for bids for construction of Project No. S-366-548, Tracs No. 089 YV 317 H507801C, PRESCOTT-COTTONWOOD HIGHWAY (US 89- Junction SR 89A) in Yavapai county (hereinafter referred to as the Construction Contract), which bids were received on May 3, 2000. WHEREAS, the parties hereto desire to form a joint venture to enter into and thereafter to perform a contract with the Arizona Department of Transportation, for the performance of said work; and WHEREAS, the parties desire to enter into this joint venture agreement in order to fix between themselves their respective responsibilities, interest and liabilities in connection with such bid and the performance of such Construction Contract. NOW, THEREFORE, the parties hereto hereby agree to constitute themselves as joint venturers for the purpose of entering into, performing and completing the Construction Contract subject to the following terms and conditions: 1. The Construction Contract shall be entered into and performed, insofar as the Owner is concerned, by and in the names of the parties hereto as joint venturers. The Joint Venture shall be known and designated as Meadow Valley Contractors, Inc./R.E. Monks Construction Company, L. L. C., A Joint Venture. 2. As between the parties hereto, the Construction Contract shall be performed and the rights and obligations of the parties with respect thereto shall be determined in the following manner: R. E. Monks - See attachment "A" MVCI - See attachment "A" CLARIFICATION OF DUTIES: The Joint venture will provide the following items to or for the Joint Venture at no cost to the other partner and will handle all jobsite and management correspondence with the Arizona Department of Transportation, Project management personnel will be mutually agreed upon by both parties at the following positions: Project Manager, and Project Engineer. Items to be furnished by MVCI: a. Project Manager b. Project Engineer c. Management and control of Traffic Control operations d. Initial project survey layout and staking. Staking to be in accordance with the attached scope of work provided by the survey subcontractor. The cost of replacing lost or destroyed stakes will be reimbursed to Meadow Valley by R. E. Monks or the responsible party at the actual pre-approved cost. Quality control testing per the Project Specifications. Additional testing and/or re-testing will be billed at the invoiced rate. Items to be furnished by R. E. Monks: a. All water supply and dust control used on the project. b. Access to all structures suitable for appropriate cranes, drilling equipment, and structure equipment. c. Semi belly dump trucks fully operated and maintained at $55.00 per hour. Items to be shared by both MVCI and R. E. Monks: a. Yard site rent and fencing at the Joint Venture yard site. (50/50) b. Security, if needed and agreed to by the both Parties, at the job site. c. Set up costs for utilities at the Joint Venture yard site. d. Meadow Valley will furnish and R. E. Monks will place and install geocomposite drain at the structures. Meadow Valley to provide hilti guns, fastners, and training for R. E. Monks' employees. All extra costs, back charges, or other items not included in this agreement shall be agreed upon in writing on a daily basis. The reference to items is to the bid items specified in the Construction Contract. The foregoing division of the work under the Construction Contract between the parties hereto is intended to result in the performance of the Prescott- Cottonwood Highway (US89- 2 Junction SR 89A), complete. Any work provided for in change or extra work orders shall be performed in accordance with the foregoing division of work between the parties hereto, but if any work so ordered does not fall within the present bid items of the Construction Contract, it shall be performed in such manner as the parties may mutually agree. Each party hereto shall separately and individually enter into such subcontract, purchase orders, equipment rental agreements and shall employ sufficient workmen to enable it to perform the items of work as hereinabove divided between them in a diligent and satisfactory manner. The parties agree to split, in proportion to their respective shares of the work completed, all miscellaneous fees/charges necessary to establish the Joint Venture accounts. 3. The Parties agree that payment from the owner for work performed hereunder shall be made directly to the Joint Venture. The Joint Venture shall establish an account at a mutually acceptable financial institution, and management of said account shall be at the direction of the Management Committee established in paragraph 10 herein. Within three(3) days of the date that the funds are collected from the Owner by the Joint Venture, each Party shall be paid for the sums due them based on their portions of the Work completed as indicated in the progress estimates accompanying such payment less the appropriate amount of sales tax which will be paid from the Joint Venture account. Any retained funds by the owner shall be shared by the Parties in proportion to their respective shares of the work completed. Should any value engineering proposals be submitted, negotiated, and monetary gains realized by the Joint Venture for any work, the savings shall be divided between the partners in an equitable manner. In general, the division of any such gains should be commensurate with each parties risk, and participation in the entire change of scope to the project. It is agreed that, in all cases, the method of determining the division of any value engineering or cost reduction gain will be agreed upon prior to submittal of the proposal to the owner. In the event that an initial proposal changes significantly in scope through the course of discovery, the percentage split will be immediately reevaluated and agreed upon by both parties. In the event no agreement is reached prior to submittal, the following method of division will be implemented as a default: 3 If changes in the scope of work affect only one party to this joint venture with no significant involvement of the other party, the affected party will receive full benefit from the monetary gain. If changes in the scope of work affect both parties to the joint venture, the benefit will be divided according to each parties share in the entire joint venture. 4. R. E. Monks and MVCI shall, and hereby do, assume all obligations of the Joint Venture under the Construction Contract with respect to the bid items assigned to them, respectively, as above provided, and each of them shall hold the other and the Joint Venture free and harmless from any and all liability or responsibility with respect to the bid items as so divided. With respect to Equal Employment Opportunity Affirmative Action Programs, Safety Programs and the like, each joint venturer shall be responsible for its respective part or proportionate share and shall undertake to satisfy all such requirements pertinent to the items of work assigned to it, at its own expense. 5. With respect to any bond or bonds required of the Joint Venture by Owner in connection with the Construction Contract, R. E. Monks and MVCI shall apply for and obtain such bonds and shall arrange for interests in the performance of the Construction Contract as the bid items thereof are hereinabove divided and the premiums for such bond or bonds shall be paid for by each Joint Venture partner respectively as outlined in attachment 'A'. 6. Each Joint Venture partner shall procure, pay for, and maintain its own Workmen's Compensation, Automobile Liability, including owned, non owned, and hired automobiles, and Mobile Equipment Liability Policies. 7. The Joint Venture shall obtain, carry and maintain: a. A Comprehensive General Liability Insurance Policy with single limit coverage for each occurrence of: $1,000,000 including coverage for: i. Completed Operations and Products Liability ii. Broad Form Property Damage Liability, and iii. Liability which such party may incur as a result of the operations, acts or omissions of its 4 subcontractors, suppliers or materialsmen, and their agents or employees, b. Each party shall pay its proportionate share of the premium due for the above policy in the performance of the Construction Contract. The proportionate share is defined as the percentage of the total contract revenue that each party completes as defined in attachment 'A'. It is anticipated that the cost of said premium will be 0.15% of the contract revenue. c. The joint Venture Policy will name the parties as insured on the umbrella liability policy. The policy shall be written on an occurrence-type basis. 8. Each party shall furnish to the other party certificates from approved insurance companies evidencing that all the foregoing insurance is in force and will not be canceled, reduced or modified without thirty (30) days prior written notice to the other party. Such policies shall be endorsed to designate the other party hereto and this Joint Venture as additional insured. 9. Should any penalty be assessed because of delay in the completion of the work under said Construction Contract, such penalty shall be charged against the party assigned the particular item or items of the work which caused the delay in completion of the entire contract; and if both parties hereto should contribute to the delay, the penalty shall be charged or prorated to each of the respective parties in proportion to the respective items of work involved in the delay. Should penalties be assessed due to poor planning or decision making on the part of the mutually selected management personnel as described herein, such penalties will be charged proportionately between the parties as related to their share of the Construction Contract. 10. Should any dispute arise between the parties hereto for any reason including the payment or division of any penalty or savings, such dispute shall first be attempted to be resolved by the Management Committee established in paragraph 13 herein. If the Management Committee cannot resolve the dispute, then the dispute shall be resolved as follows: a) Partnering: Both parties will agree upon a facilitator and shall convene a partnering session which shall include the Management Committee, the Project Staff, and the Estimating/Support Staff from both companies. The session shall be conducted in accordance 5 with the standard guidelines for partnering as established by the Arizona Department of Transportation and Maricopa County. The goal of the partnering session shall be to reach an equitable resolution of the dispute with the realization that Arbitration and/or Litigation can be very expensive and is therefore undesirable. b) Arbitration: If the dispute cannot be resolved by Partnering then each of the parties hereto shall choose an arbitrator, and the two arbitrators so chosen shall select a third arbitrator. Each arbitrator shall be a person skilled and having knowledge and experience in construction work similar to this project. The Board of Arbitrators so chosen shall have full power to hear and determine all matters so in dispute, and their decision of an award when signed by two or more of them shall be final and conclusive as to all matters submitted to them and shall be binding upon both parties hereto. The expenses of any such arbitration shall be paid as follows: Each party shall pay the arbitrator chosen by such party, and the charges of the third arbitrator shall be paid equally by the parties hereto. 11. Each party shall indemnify, defend and save harmless each other party, its members, directors, officers, and employees, from and against any and all claims, damages (including direct, liquidated, consequential, incidental or other damages), losses, liabilities, attorneys fees, costs and expenses whatsoever kind or nature at any time arising out of any failure of such party to perform any of its obligations with respect to the items of work by it to be performed or arising under this Joint Venture Agreement or which are in any manner directly or indirectly caused or occasioned by, or contributed to, any act, omission, fault or negligence, whether active or passive, in whole or in part, of anyone acting under its direction or control, or on its behalf in connection with or incidental to such work, even though the same may have resulted from the joint, concurring or contributory act, omission, fault or negligence, whether active or passive, or the other party, Owner or any other person, unless the same is caused by the sole negligence or willful misconduct of the other party, its agents, servants or independent contractors who are directly responsible to it. 12. R. E. Monks and MVCI each shall furnish all working capital, when and as required, for the prosecution of the bid items to be performed by them, and by reason thereof it is not contemplated that 6 the Joint Venture will itself require any working capital. Each party shall be entitled to the profit and shall bear the loss, if any, with respect to each bid item of work assigned to it. Each of the parties shall maintain adequate books of account with respect to its operations. The Joint Venture shall request securities in lieu of retention and each party shall fund his proportionate share. Earnings from the securities account will be distributed to each party in proportion to its respective funding amount at the time of earnings distribution. 13. MVCI shall be the sponsor of this Joint Venture and the Managing Party with respect to all work to be performed under the Construction Contract. MVCI is authorized to execute, on behalf of the Joint Venture, all contracts and any related documents. R. E. Monks and MVCI shall be responsible for the overall prosecution, scheduling and coordination of the work to be performed under the Construction Contract, but shall not be entitled to a fee therefore. The Project Manager, shall be employed by MVCI but will be mutually agreed upon by both parties. This employee shall act on behalf of and in the best interest of the Joint Venture without regard to their employment by either party. To facilitate handling of matters and questions in connection with the performance of the Contract and the Work, a Management Committee of three persons will be created consisting of one appointee from each Party and the Project Manager. Each of the Parties shall advise the other in writing as to the name of the person appointed by it as its representative in the Management Committee. Each Party may, at any time and from time to time, change its representative by filing with the other written notice of such change. The said representatives shall meet from time to time, as necessary to act on all necessary matters pertaining to the work of the Joint Venture. The Parties shall endeavor to reach unanimous decisions on all matters. In the event that unanimity is not reached, either party may request a resolution as described in paragraph 10. If at any time one of the venturers has reasonable cause to suspect that any employee, of either party or subcontractor or supplier, is acting in a manner that is unsafe or otherwise injurious to the welfare of the Joint Venture (including the parties thereto and their employees), as managing partner, MVCI will be responsible to act in a responsible and timely fashion to counsel, remove, or otherwise correct the situation. This responsibility to correct these situations does not 7 however change MVCI liabilities from those described herein in any way. 14. This Joint Venture Agreement extends only to the performance of the Construction Contract, including any extra work orders, and/or change orders in connection therewith, or any contract supplemental thereto. In no event shall this agreement extend to or cover any other or different work, and upon the completion of performance of the Construction Contract and the distribution by the Joint Venture to the Joint Venturers of the payments from Owner as herein provided, the Joint Venture shall terminate. 15. If any party hereto (if any individual) shall die or become incompetent, or if any party (not an individual) shall dissolve, or if any party hereto shall become bankrupt, or file a voluntary petition in bankruptcy, this Joint Venture shall not terminate, but the right of the disabled party to continue to participate in the Joint Venture shall, except as hereafter provided, terminate, and the remaining parties shall do all things necessary to complete performance of the Construction Contract and then to wind up all of the Joint Venture affairs, including the collection of all monies and property due this Joint Venture and the distribution of its assets. The disabled party, or its representative, shall have no further voice in the performance of the Construction Contract or in the management of this Joint Venture. The disabled party, shall be entitled to that share of the profits of this Joint Venture earned with respect to the items of work assigned to the disabled party measured by the ratio of dollar value of the items of work performed by such party in relation to the total dollar value of all of such items, but such disabled party and its representatives shall be charged with and shall be liable for its full share of any and all losses that may be suffered by this Joint Venture with respect to the entirety of all items of work assigned to the disabled party. 16. Any assignment of this agreement, in whole or in part, or any transfer of any rights hereunder, or any delegation of any duties to be performed hereunder, made by either party hereto, whether by operation of law or otherwise, without the prior written consent of the other party hereto shall be void. 17. Subject to the foregoing provisions, this agreement shall insure to the benefit of and be binding upon the parties hereto, their heirs, successors, assigns and legal representatives. 8 18. As used herein, the neuter gender includes the masculine or feminine gender and the plural includes the singular, as the context may require. All parties agree to comply with all federal, state and local laws, codes, ordinances and regulations in performing work under this agreement, including, but not limited to, the Occupation Safety and Health Act of 1970, Mine Safety and Health Act, Environmental Protection Agency laws and regulations, the Immigration Reform and Control act of 1986, the Americans with Disabilities Act, and the Contract Work Hours and Safety Standards Act. This agreement shall be interpreted in accordance with the laws of the State of Arizona. Venue shall be Maricopa County, Arizona unless otherwise specifically agreed between parties. If in the event any provision of this agreement is found to be unenforceable, the remaining provisions shall survive to the fullest possible extent. This document constitutes the entire agreement between the parties and any additions, deletions, or modifications must be in writing and signed by both parties in order to be effective. IN WITNESS WHEREOF, the parties hereto have executed this Joint Venture agreement on the date first hereinabove written. WITNESS R. E. Monks Construction, LLC /s/ [ILLEGIBLE]^^ /s/ Richard D. Monks - ---------------------------------- ---------------------------------- Richard D. Monks Vice President ATTEST Meadow Valley Contractors, Inc. /s/ Robert W. Bottcher /s/ Bradley E. Larson - ---------------------------------- ---------------------------------- (seal) Bradley E. Larson President 9 EX-10.147 33 0033.txt CONTRACT AGREEMENT EXHIBIT 10.147 CONTRACT This Agreement, Made and entered into this 13th day of September, Two Thousand, in quadruplicate between the State of Nevada, Department of Transportation thereof, party of the first part, and Meadow Valley Contractors, Inc., P.O. Box 549 of Moapa, NV 89025, party of the second part, hereinafter called the Contractor. Witnesseth, That the said party of the second part agrees with the said party of the first part, for the consideration and agreements hereinafter mentioned and contained to be made and performed by the said party of the first part, and under the conditions expressed in a bond bearing even date with these presents, and hereunto annexed, that he, the said party of the second part, shall and will at his own proper cost and expense, do all the work and furnish all the materials necessary for the substantial construction and completion, and to the satisfaction of said party of the first part, of a portion of the system of Highways of the State of Nevada, being in the County of Clark, on US 95 from Rainbow Boulevard Interchange to Cheyenne Avenue Interchange, Route Section 095-2 Mileposts US 95 CL-80.93 to 83.62, in strict conformity, in every part and particular, with the annexed special provisions and specifications, and the plans entitled "State of Nevada, Department of Transportation; Construction Plans of Proposed State Highway in the County of Clark, from the Junction of IR 15 and IR 515 at the Downtown Expressway Interchange in Las Vegas westerly and northerly, then northwesterly to the Junction of SR 374 in Beatty", Route Section 095-2" approved by the Director of the Department of Transportation on June 19, 2000, which special provisions, specifications and plans are made a part hereof, and in full compliance with the terms of this agreement. And the Contractor hereby further agrees to receive and accept the prices set forth in the Proposal Schedule, hereto annexed and thereby made a part of this agreement, as full compensation for furnishing all materials and labor, and the doing of all work, in strict accordance with the plans, special provisions and specifications hereinbefore mentioned, to the satisfaction of the Engineer and in the manner and under the conditions hereinbefore specified. The said party of the First part hereby promises and agrees with the said Contractor, to employ, and does hereby employ, the said Contractor to provide the materials and do the work according to the terms and conditions herein contained and referred to, for the prices aforesaid, and hereby contracts to pay the same at the time, in the manner, and upon the conditions above set forth; and the said parties themselves, their heirs, executors, administrators, successors, and assigns, do hereby agree to the full performance of the covenants herein contained. The Contractor further agrees that no moneys payable under this contract shall be assigned by power of attorney, or otherwise, except upon the written consent of the Department. It is further agreed, by and between the parties hereto, that should there be any conflict between the terms of this instrument and the bid or proposal of said Contractor, then this instrument shall control, and nothing herein shall be considered an acceptance of the said terms of said proposal conflicting therewith. And the said Contractor hereby further agrees that the payment of the final amount due under this contract shall release the State of Nevada and the Department of Transportation from any and all claims or liability on account of work performed under this contract other than such claims, if any, as may be specifically excepted by the Contractor in writing at the time final payment is made. CONTRACT In Witness Whereof, The parties to these presents have hereunto set their hands and seals the year and date first above written. Attested: STATE OF NEVADA Through the Department of Transportation /s/ [ILLEGIBLE]^^ - ---------------------------------------- (Director, Department of Transportation) Dated October 12, 2000 /s/ [ILLEGIBLE]^^ Approved as to Form & Legality -------------------------------- (Chairman, Board of Directors, Department of Transportation) Meadow Valley Contractors, Inc. --------------------------------- (Contractor) /s/ [ILLEGIBLE]^^ - ---------------------------------------- (Deputy Attorney General Chief Counsel) By /s/ Alan Terril ----------------------------- Vice-President ----------------------------- CONTRACTOR'S ACKNOWLEGEMENT [use (a) or (b)] (a) For an individual or Partnership STATE OF________________________________} } SS COUNTY OF_______________________________} On this _______________________ day of __________________, A.D. _______________, personally appeared before me, a _______________________________________________ (Notary Public, Judge or other officer) in and for _____________ County, State of __________________________________, ______________________________________________________________ known (or proved) (Name) to me to be the person(s) described in and executed the foregoing instrument, who acknowledged to me that he (they) executed the same freely and voluntarily and for the uses and purposes therein mentioned. _______________________________________ (Notary Public, Judge or other officer) (b) For a Corporation STATE OF Nevada ------------------------} } SS COUNTY OF Clark } -----------------------} On this 25th day of September, A.D. 2000, personally appeared before me, a Notary Public , in and for Clark County, State of - ------------------------------------------ (Notary Public, Judge or other officer) Nevada, Alan Terril, known (or proved) to me to be the - -------- ------------- (Name) Vice-President of the corporation that executed the - ----------------------------------------- (President, Vice President or Secretary) foregoing instrument, and, upon oath, did depose that he is the officer of said corporation as above designated; that he is acquainted with the seal of said corporation and that the seal affixed to said instrument is the corporate seal of said corporation; that the signatures to said instrument were made by officers of said corporation as indicated after said signatures; and that the said corporation executed the said instrument freely and voluntarily and for the uses and purposes therein mentioned. /s/ Nancy A. McCafferty --------------------------------------- (Notary Public, Judge or other officer) -----END PRIVACY-ENHANCED MESSAGE-----