-----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, OH1iNWcY2pdPhVPzoPf5kwCKn/GC5ssRLLLDPVcIKfqFHxmkERzYd2n8l8PYL/cc 5ZcEblvcnAKOro8+Y4glOA== 0000927356-99-000429.txt : 19990325 0000927356-99-000429.hdr.sgml : 19990325 ACCESSION NUMBER: 0000927356-99-000429 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 20 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990324 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: 99571755 BUSINESS ADDRESS: STREET 1: PO BOX 60726 CITY: PHOENIX STATE: AZ ZIP: 85082 BUSINESS PHONE: 6024375400 MAIL ADDRESS: STREET 1: P O BOX 60726 CITY: PHOENIX STATE: AZ ZIP: 85082 10-K 1 FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended December 31, 1998 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 (NO FEE REQUIRED) 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 incorporation or organization) (I.R.S. Employer Identification Number) 4411 South 40th Street, Suite D-11, Phoenix, AZ 85040 - ---------------------------------------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code)
(602) 437-5400 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Title of each class: Name of exchange on which registered: Common stock, $.001 par value Nasdaq National Market Common stock purchase warrants Nasdaq National Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ___ --- Indicated by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. On February 16, 1999, the aggregate market value of the registrant's voting stock held by non-affiliates was $16,409,738. On February 16, 1999, there were 3,601,250 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE The registrant incorporates by reference into Part III of this Report, information contained in its definitive proxy statement disseminated in connection with its Annual Meeting of Shareholders for the year ended December 31, 1998. 1 PART I ITEM 1. BUSINESS GENERAL The following is a summary of certain information contained in this Report and is qualified in its entirety by the detailed information and financial statements that appear elsewhere herein. Except for the historical information contained herein, the matters set forth in this Report include forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties are detailed throughout this Report and will be further discussed from time to time in the Company's periodic reports filed with the Commission. The forward-looking statements included in this Report speak only as of the date hereof. Meadow Valley Corporation (the "Company") was incorporated in Nevada on September 15, 1994. On October 1, 1994, the Company purchased all of the outstanding Common Stock of Meadow Valley Contractors, Inc. ("MVC") for $11.5 million comprised of a $10 million promissory note and $1.5 million paid by the issuance of 500,000 restricted shares of the Company's Common Stock valued at $3.00 per share. On January 4, 1999, the $10 million promissory note was paid in full. MVC was founded in 1980 as a heavy construction contractor and has been engaged in that activity since inception. References to the Company's history include the history of MVC. On October 16, 1995, the Company sold 1,675,000 Units of its securities to the public at $6.00 per Unit (the "Public Offering"). Each Unit consisted of one share of $.001 par value common stock and one common stock purchase warrant. In November 1995, the Company sold an additional 251,250 Units pursuant to its underwriters' overallotment option. Operating through MVC, the Company is a heavy construction contractor specializing in structural concrete construction of highway bridges and overpasses and the paving of 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 believes that specializing in structural concrete construction has contributed significantly to its revenue growth and provides it with an advantage in the competitive bidding process. However, such specialization limits the types and sizes of projects upon which the Company bids and may be a competitive disadvantage for projects in which the amount of work proposed to be completed by the prime contractor (as compared to the amount of work which will be subcontracted by the prime contractor) is a consideration in the bidding process. The Company primarily seeks public sector customers because public sector projects are less cyclical than private sector projects, payment is more reliable, work required by the project is generally standardized and little marketing expense is incurred in obtaining projects. The Company had a project backlog of approximately $220 million at December 31, 1998, which included the remainder of a $92.1 million portion of the reconstruction of the core of the interchange at I-15 and US 95 in Las Vegas, NV, the remainder of a $38.7 million portion of the Squaw Peak Pkwy Freeway Continuation in Phoenix, AZ, the remainder of a $56.6 million portion of the Pima Freeway Continuation, in Phoenix, AZ and the remainder of $84.6 million of projects which are portions of the Beltway Continuation projects in Las Vegas, Nevada. The Company's backlog includes approximately $186 million of work that is scheduled for completion during 1999. 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 Department of Transportation and the City of Phoenix. In 1996, the Company acquired certain assets, including the tradename, of AKR Contracting ("AKR"), an unaffiliated Company in Phoenix, Arizona. AKR previously specialized in earthwork, grading and paving of residential subdivisions and commercial centers, but has since become increasingly involved in small publicly funded projects in Arizona and New Mexico. Through AKR, the Company entered into operating leases for a portable hot mix asphalt plant and related paving equipment and a rubberized asphalt plant. The asphalt paving capabilities provide the Company the opportunity to expand its 2 existing geographic market and enhance its construction operations in its existing market. To date, AKR has assisted the Company in its expansion into New Mexico and a broadening of the work it performs in Arizona. Moreover, the Company believes the AKR equipment improves its competitiveness and may generate increased revenues on projects that call for large quantities of asphaltic concrete, recycled asphalt or rubberized asphalt. In 1996, the Company expanded its Nevada construction industry activities with the formation of Ready Mix, Inc. ("RMI") as a wholly-owned subsidiary. RMI manufactures and distributes ready mix concrete in Las Vegas, NV, and targets prospective customers such as concrete subcontractors, prime contractors, home builders, commercial and industrial property developers, pool builders and homeowners. RMI began operations from its first location in March 1997. Financed with internal funds, a $2 million line of credit, notes payable and operating leases, RMI intends to operate from two or more sites using at least 40 mixer trucks. 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. Management anticipates that the remaining contracts will be completed before the end of April 1999 and the collection of outstanding receivables and the disposition of assets will be completed before the end of the second quarter 1999. In 1997, financed through internal funds and operating leases, the Company obtained equipment and experienced personnel to expand its construction capabilities to include the performance of concrete or "white" paving. By performing white paving work, the Company may be able to increase its project revenue and earnings, reduce reliance on white paving subcontractors, maintain greater control over project schedules and improve the likelihood of being awarded projects in which the amount of work proposed to be completed on a project by the prime contractor is a consideration in the competitive bidding process. BUSINESS STRATEGY The Company seeks to generate revenue growth and profitability by pursuing the following business strategy: (i) Expand construction-related niche markets. The Company will continue to explore niche markets which may increase the Company's competitiveness, diversify its revenue base, increase project revenue and improve profitability. This may include acquiring equipment and personnel to increase the amount of work performed by the Company itself as opposed to subcontracted to others. (ii) Increase the Company's ownership and/or control of strategic aggregate resources. The Company has successfully obtained mineral leases on a number of aggregate resources strategically located near geographic locations in which the Company is currently competing. Control of aggregate resources may enhance the Company's competitiveness on work it performs while adding a new source of revenue and potential profit for materials sold to third parties. (iii) Solidify market position. The Company intends to continue to expand its construction and materials operations in Nevada, Arizona, Utah and New Mexico and will consider expansion into other western states. The Company intends to further develop its position as a commercial supplier and producer of aggregates and related materials such as ready mix concrete and asphalt. (iv) Seek to acquire other businesses. The Company may seek to acquire other businesses that provide subcontracting services used by the Company in its projects, complement the Company's existing construction expertise or offer construction 3 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 a joint venture, the Company may elect to pursue projects which might otherwise exceed its staffing or bonding resources, including design-build type projects within the Company's existing market. (iv) Increase bonding capacity. The Company will continue to seek to increase its bonding capacity in order to allow it to increase its volume of bids and work. See "Insurance and Bonding." MARKET OVERVIEW The Company believes that infrastructure construction (primarily highways, bridges, overpasses, tunnels and other transportation projects) in the western United States is substantial and will generate continued federal, state and local government expenditures. On June 9, 1998, the Transportation Equity Act for the 21st Century ("TEA 21") was signed into law. This bill 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. Growth in the Company's market continues to outperform many areas of the country. The states of Arizona, Nevada and Utah are among the leaders in key growth statistics such as population growth and employment. On a percentage basis, Nevada led the nation for 1998 in population growth, with Arizona in second place. Nevada, Arizona, Utah, Idaho and Georgia have been the fastest growing states in the United States in the 1990's. This growth has led to record levels of residential and commercial construction and to increased transportation infrastructure work. Consensus among forecasters is that this growth will slow from 1998 to 1999, with the exception of the transportation infrastructure segment. Over the six year term of TEA 21, the annual average funding for transportation infrastructure will increase by 61.8% in Nevada, 59.5% in Arizona, 57.8% in Utah and 45.3% in New Mexico. The state departments of transportation, along with metropolitan planning organizations will be the primary parties responsible for administering the TEA 21 funds. In addition to TEA 21 funds, existing local funding mechanisms will continue to provide for construction of key transportation facilities through 2015 to fund construction of multi-billion dollar freeway transportation facilities. Airports in Phoenix, Las Vegas and Salt Lake City also have substantial capital improvement programs in excess of $500 million each. RMI, the Company's ready mix concrete subsidiary, is affected most by the amount of new residential and commercial construction in the Las Vegas, NV area. Forecasts for 1999 predict that residential and commercial construction in the Las Vegas, NV area will be less than 1998 levels. RMI's primary customers have been residential builders and residential construction is expected to decline. As a result, the Company may be faced with increased competition from other local suppliers of ready mix concrete. RMI plans to increase its activity in the infrastructure portion of the market and may more frequently provide concrete to its sister company, MVC. The Company believes the overall economic health in its existing market will present opportunities for improved performance. OPERATIONS In addition to the construction of highways, bridges, overpasses and airport runways, the Company constructs other heavy civil projects. From its Phoenix, Arizona corporate office and area offices in Phoenix, Arizona, Moapa, Nevada, Salt Lake City, Utah and Ruidoso, New Mexico, the Company markets (primarily by responding to solicitations for competitive bids) and manages all of its projects. Project management is also located on-site to provide direct supervision to the operations. In addition to profitability, the Company considers a number of factors when determining whether to bid on a project, including the location of the project, likely competitors and the Company's current and projected workloads. The Company uses a computer-based project estimating system which reflects its bidding and construction experience and which the Company believes best identifies a project's risks and opportunities. The Company develops comprehensive estimates with each project 4 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 the estimated costs to complete permit project, area and corporate management to be as responsive as possible to cost overruns or other problems that may affect profitability. The Company owns some of the equipment used in its business lines, including cranes, backhoes, scrapers, graders, loaders, trucks, trailers, pavers, rollers, batch plants and related equipment. The net book value of the Company's equipment at December 31, 1998 was approximately $11.0 million. During 1998, the Company's acquired $3.9 million of property and equipment, primarily the acquisition of a second asphalt plant and additional equipment needed for the added construction workload. The Company leases a significant portion of its equipment and attempts to keep the equipment as fully utilized as possible. It may rent equipment on a short-term basis to subcontractors. The Company's corporate management oversees operational and strategic issues and, through the corporate accounting staff, provides administrative support services to subsidiary managers, area managers and individual project management at the project site. The latter are responsible for planning, scheduling and budgeting operations, equipment maintenance and utilization and customer satisfaction. Subsidiary managers, area managers and project managers monitor project costs on a daily and weekly basis while corporate management monitors such costs monthly. Raw materials (primarily concrete, aggregate and steel) used in the Company's operations are available from a number of sources. There are a sufficient number of materials suppliers within the Company's market area to assure the Company of adequate competitive bids for supplying such raw materials. Generally, the Company will obtain several bids from competing concrete, asphalt or aggregate suppliers whose reserves of such materials will normally extend beyond the expected completion date of the project. Costs for raw materials vary depending upon project duration, construction season, or other factors; but, generally, prices quoted to the Company for raw materials are fixed for the project's duration. Increased construction activity in the western United States has created temporary scarcity of key construction materials, primarily cement powder. It is foreseeable that shortages of cement supply might reoccur which could result in unexpected and uncontrollable reductions in sales of ready mix concrete from RMI, the Company's ready mix concrete subsidiary. The Company strives to obtain supply commitments from a number of suppliers, but their supply capacity is occasionally exceeded by spot demands. The Company has not yet been impacted by any cement shortages on its construction projects, as it normally obtains guaranteed commitments for supply of cement powder for the duration of the contracts and any damages incurred by lack of supply could be assessed back to the supplier. 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, 1998, revenue generated from six projects in Nevada, Arizona and Utah represented 60% of the Company's revenue. The discontinuance of any projects, a general economic downturn or a reduction in the number of projects let out for bid in any of the states in which the Company operates, could have an adverse effect on the Company's results of operations. In each of the three years ended December 31, 1996, 1997 and 1998 Clark County General Services and the Arizona Department of Transportation each accounted for over 10% of the Company's consolidated revenue. Additionally, the Nevada Department of Transportation accounted for over 10% of the Company's consolidated revenue during the year ended December 31, 1998. The following table describes all projects substantially completed by the Company in each of the three years ended December 31, 1996, 1997 and 1998. Contract amounts include agreed upon change orders, if any, and represent the total dollar value of the contract to the Company. 5
CONTRACT COMPLETION CUSTOMER PROJECT DESIGNATION LOCATION AMOUNT DATE - ------------------------------------------------------------------------------------------------------------------------- Arizona Department of Transportation Highway at Heber Heber, AZ $ 5,535,662 April 1996 Arizona Department of Transportation I-17 Widening Phoenix, AZ 8,832,295 October 1996 DG Fenn Baptist Retirement Phoenix, AZ 78,468 October 1996 Salt Lake City Airport Authority South Cargo Salt Lake City, UT 1,517,428 October 1996 Intermountain Roadbuilders Davis Monthan - Streets Tucson, AZ 344,418 April 1996 Town of Youngtown Youngtown Streets Youngtown, AZ 77,423 February 1996 Arizona Department of Transportation Pima Freeway Phoenix, AZ 7,546,838 May 1996 Salt Lake City Salt Lake Airport Authority Salt Lake City Airport City, UT 27,364,636 January 1996 Clark County Nevada General Services South Beltway Las Vegas, NV 16,175,964 January 1996 Arizona Department of Transportation Dunlap Phoenix, AZ 8,198,181 January 1996 VFL Technology Corporation Chevron Cell Construction Salt Lake City, UT 1,362,974 June 1996 Arizona Department of Transportation Chandler Boulevard Phoenix, AZ 2,209,435 May 1996 Utah Department of Transportation Snow Canyon Southern, UT 4,138,290 January 1996 Arizona Department of Transportation Navajo Papermill Road Phoenix, AZ 641,061 January 1996 Intermountain Roadbuilders Intermountain Roadbuilders Phoenix, AZ 264,845 January 1996 Arizona Department of Transportation Goodyear Urban Goodyear, AZ 463,665 August 1996 Crescent Run LLP Crescent Run Mesa, AZ 262,261 April 1996 Wespac Lost Canyon II Scottsdale, AZ 152,778 October 1996 City of Winslow City of Winslow Winslow, AZ 1,402,868 September 1996
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CONTRACT COMPLETION CUSTOMER PROJECT DESIGNATION LOCATION AMOUNT DATE - ------------------------------------------------------------------------------------------------------------------------- Clark County Dept. of Aviation Searchlight Searchlight, NV $ 707,977 January 1996 Arizona Department of Transportation Nogales Connection Nogales, AZ 11,327,515 October 1996 Clark County Dept. of Aviation Jean Airport Jean, NV 3,897,065 March 1997 Clark County Dept. of Aviation McCarran Garage Infrastructure Las Vegas, NV 6,203,284 November 1997 Intermountain Roadbuilders Davis Monthan - Taxiway Tucson, AZ 162,677 March 1997 City of Henderson Equestrian Detention Henderson, NV 5,436,067 March 1997 Homes by Dave Brown Country Estates Gilbert, AZ 215,770 July 1997 Chanen Midwestern University II Glendale, AZ 230,579 January 1997 Moapa Water District Moapa Water District Moapa, NV 903,919 January 1997 City of Phoenix Collector Street Overlay Phoenix, AZ 1,820,288 January 1997 Triton Builders AT&T Expansion Mesa, AZ 246,080 January 1997 City of Phoenix Skunk Creek Landfill Phoenix, AZ 2,845,955 January 1997 City of Las Vegas Detention Facility Las Vegas, NV 430,700 February 1997 Robert Ewing Lone Butte 3 & 4 Maricopa County 201,979 February 1997 Frehner Construction Precast Las Vegas, NV 89,924 January 1997 City of Gilbert Municipal Parking Expansion Gilbert, AZ 154,492 January 1997 Kay Rogers/ADA Construction Legacy II Phoenix, AZ 194,023 August 1997 United States Dept. of Agriculture Tonto Forest Arizona 99,515 July 1997 Mayo Clinic/Ryan Cos. Mayo Arrowhead Glendale, AZ 155,165 October 1997 Robert Ewing Lone Butte Industrial Maricopa County 225,000 February 1997 Nevada Department of Transportation Eastern State Highway System Las Vegas, NV 2,260,492 October 1997
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CONTRACT COMPLETION CUSTOMER PROJECT DESIGNATION LOCATION AMOUNT DATE - ------------------------------------------------------------------------------------------------------------------------- City of Bisbee Bisbee Municipal Airport Bisbee, AZ $ 295,712 January 1997 Clark County General Services CCPW Bridge Repair Las Vegas, NV 42,214 December 1997 Clark County, Nevada McCarran Airport Parking General Services Garage Las Vegas, NV 60,299,916 March 1998 Clark County Department of Aviation Runway Extension Las Vegas, NV 11,062,630 March 1998 Clark County Department of Aviation Union Pacific R.R.Relocation Las Vegas, NV 2,019,620 March 1998 Dept. of United States Army White Sands Missile Range New Mexico 2,106,670 June 1998 Dept. of Transportation Hwy. Administration Wiggins Crossing Arizona 794,611 March 1998 Clark County Department of Aviation McCarran Air Cargo Expansion Las Vegas, NV 2,543,872 March 1998 New Mexico Department of Transportation I-25/Socorro New Mexico 3,315,876 June 1998 Jackson Properties Country Meadows Maricopa County 812,706 February 1998 United States Marine Corp. Yuma Taxiway Repair Yuma, AZ 708,220 March 1998 Arizona Department of Transportation Douglas Rodeo Highway Douglas, AZ 1,435,326 March 1998 City of Mesa City of Mesa Sealcoat Mesa, AZ 83,913 March 1998 Clark County General Services Sloan Channel Las Vegas, NV 1,296,493 March 1998 Nevada Department of Transportation NDOT Bike Path Las Vegas, NV 1,620,687 March 1998 Clark County General Services Channel Repair Las Vegas, NV 198,882 May 1998 Clark County General Services Russell Road Las Vegas, NV 4,892,226 March 1998 Arizona Department of Transportation White River Arizona 673,362 March 1998 City of Phoenix City of Phoenix Overlay II Phoenix, AZ 2,182,882 February 1998
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CONTRACT COMPLETION CUSTOMER PROJECT DESIGNATION LOCATION AMOUNT DATE - ------------------------------------------------------------------------------------------------------------------------- Coconino County, Fann Construction Clint's Well AZ $ 676,092 March 1998 Dept. of United States Army White Sands MissileRange New Mexico 855,108 June 1998 Clark County Department of Public Works LV Beltway Las Vegas, NV 29,169,402 March 1998
The following table describes all projects of the Company in progress as of December 31, 1998. Current contract amounts include agreed upon change orders, if any, and represent the dollar value of the contract to the Company.
CURRENT AWARD DATE/ CONTRACT ESTIMATED CUSTOMER PROJECT DESIGNATION LOCATION AMOUNT COMPLETION DATE - ---------------------------------------------------------------------------------------------------------------------------- Arizona Department of Phoenix - Casa Grande November 1995/ Transportation (Joint Venture) Phoenix, AZ $ 20,991,224 April 1999 Clark County Department June 1996/ of Aviation Ticketing Facility Las Vegas, NV 9,097,786 March 1999 Clark County Department August 1996/ of Aviation Terminal D Sitework Las Vegas, NV 39,516,609 April 1999 Arizona Department of Squaw Peak Shea-TBird October 1996/ Transportation Continuation Phoenix, AZ 38,747,627 November 1999 United States Forest Roosevelt Lake, October 1996/ Service School House Campground AZ 4,833,884 January 1999 Utah Department of October 1996/ Transportation I-15/Woods Crossing Salt Lake, UT 19,066,321 March 1999 Arizona Department of February 1997/ Transportation Payson Show-Low Payson, AZ 4,002,855 February 1999 Arizona Department of Coconino County, June 1997/ Transportation Blueridge-Forest AZ 2,401,933 February 1999 Clark County General September 1997/ Services McCarran Mobil Home Park Las Vegas, NV 8,958,184 June 1999 Arizona Department of June 1997/ Transportation Pima Freeway Phoenix, AZ 56,588,647 September 2000 Utah Department of Salt Lake City, August 1997/ Transportation Bangerter Highway UT 21,045,091 March 1999
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CURRENT AWARD DATE/ CONTRACT ESTIMATED CUSTOMER PROJECT DESIGNATION LOCATION AMOUNT COMPLETION DATE - ---------------------------------------------------------------------------------------------------------------------------- Salt Lake City Airport Salt Lake City, August 1997/ Authority Utah Taxiway UT $ 9,537,445 March 1999 Arizona Department of August 1997/ Transportation Ashfork Devildog Williams, AZ 3,646,313 February 1999 Maricopa County Dept. Maricopa County, September 1997/ of Parks & Recreation Lake Pleasant AZ 1,584,813 January 1999 September 1997/ Victory Valley Land Lake Mead Henderson, NV 3,273,464 December 1999 September 1997/ City of Showlow City of Showlow Showlow, AZ 2,469,918 March 1999 New Mexico Department Donna Ana County, December 1997/ of Transportation I-15/Hatch NM 3,732,191 March 1999 New Mexico Department December 1997/ of Transportation NM Ruidoso Ruidoso, NM 9,367,476 November 1999 Arizona Department of Coconino County, December 1997/ Transportation SR87-Blueridge AZ 2,417,485 February 1999 Nevada Department of December 1997/ Transportation Spaghetti Bowl Las Vegas, NV 92,096,200 November 2000 Clark County General April 1998/ Services Yamashita Street Overton, NV 2,061,295 July 1999 Clark County General May 1998/ Services LV Beltway Sec 4 Las Vegas, NV 29,284,659 December 1999 Arizona Department of April 1998/ Transportation Pima-Red Mountain Phoenix, AZ 11,199,664 January 2000 Arizona Department of October 1998/ Transportation Pineveta/Ashfork Payson, AZ 3,324,644 October 1999 New Mexico Department May 1998/ of Transportation Ski Basin Road Ruidoso, NM 879,905 March 1999 Salt Lake City, May 1998/ Ralph Wadsworth Wadsworth/Bangerter UT 4,701,767 May 1999 New Mexico Department June 1998/ of Transportation Alamagordo Alamogordo, NM 7,084,058 December 1999 New Mexico Department July 1998/ of Transportation Ruidoso II Ruidoso, NM 7,564,710 November 2000
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CURRENT AWARD DATE/ CONTRACT ESTIMATED CUSTOMER PROJECT DESIGNATION LOCATION AMOUNT COMPLETION DATE - ---------------------------------------------------------------------------------------------------------------------------- New Mexico Department Ruidoso Downs, August 1998/ of Transportation US 70 NM $ 7,659,877 May 2000 Arizona Department of September 1998/ Transportation Sunflower Sunflower, AZ 30,564,147 September 2001 New Mexico Department November 1998/ of Transportation Alamagordo II Alamagordo, NM 2,243,292 December 1999 Utah Department of October 1998/ Transportation Grassy Mountain Delle, UT 3,475,328 August 1999 Clark County General September 1998/ Services LV Beltway Section 7, 8 & 9 Las Vegas, NV 55,397,771 June 2000 October 1998/ Victory Valley Land Black Mountain Industrial Las Vegas, NV 1,557,992 December 2000 Maricopa County Department December 1998/ of Transportation Eagle Eye Road Elloy, AZ 2,447,357 May 1999
BACKLOG The Company's backlog (anticipated revenue from the uncompleted portions of awarded projects) was approximately $220 million at December 31, 1998, compared to approximately $214 million at December 31, 1997. At December 31, 1998, the Company's backlog included approximately $186 million of work that is scheduled for completion during 1999. 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 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 Morrison Knudsen), many of whom have larger net worths, higher bonding capacities and more construction personnel than the Company. Due to currently favorable market conditions in Nevada, Arizona, Utah and New Mexico, which have resulted in an increase in heavy construction projects in these states, 11 additional competition may be expected. Such additional competition could reduce the Company's profit margins on certain projects. The Company has received single project bond approval up to $110 million and has an aggregate program bond capacity of over $300 million. The Company believes its bonding capacity is sufficient to sustain anticipated growth. Larger competitors typically have unlimited bonding capacity and, therefore, may be able to bid on more work than the Company. Except for bonding capacity, the Company does not believe it is at a competitive disadvantage in relation to its larger competitors. With respect to its smaller competitors, the Company believes that its larger bonding capacity, long relationships with subcontractors and suppliers and the perceived stability of having been in business since 1980 may be competitive advantages. The Company does not believe that the competitive environment is materially different in other western states in which the Company may expand. Initially, the Company will be at a competitive disadvantage in new geographic locations until it obtains information on those locations and develops relationships with local subcontractors. 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 21% of the projects upon which it has bid. A substantial portion of the Company's revenue is derived from projects that involve "fixed unit price" contracts under which the Company is committed to provide materials or services at fixed unit prices (such as dollars per cubic yard of earth or concrete, or linear feet of pipe). The unit price is determined by a number of factors including haul distance between the construction site and the warehouses or supply facilities of local material suppliers and to or from disposal sites, site characteristics and the type of equipment to be used. While the fixed unit price contract generally shifts the risk of estimating the quantity of units for a particular project to the customer, any increase in the Company's unit cost over its unit bid price, whether due to inefficiency, faulty estimates, weather, inflation or other factors, must be borne by the Company. Most public sector contracts provide for termination of the contract at the election of the customer. In such event the Company is generally entitled to receive a small cancellation fee in addition to reimbursement for all costs it incurred on the project. Many of the Company's contracts are subject to completion requirements with liquidated damages assessed against the Company if schedules are not met. The Company has not been materially adversely affected by these provisions in the past. Contracts often involve work periods in excess of one year. Revenue on uncompleted fixed price contracts is recorded under the percentage of completion method of accounting. The Company begins to recognize revenue on its contracts when it first accrues direct costs. Pursuant to construction industry practice, a portion of billings, generally not exceeding 10%, may be retained by the customer until the project is completed and all obligations of the contractor are paid. The Company has not been subject to a loss in connection with any such retention. The Company acts as prime contractor on most of its construction projects and subcontracts certain jobs such as electrical, mechanical, guardrail and fencing, signing and signals, foundation drilling, steel erection and other specialty work to others. As prime contractor, the Company bills the customer for work performed and pays the subcontractors from funds received from the customer. Occasionally the Company provides its services as a subcontractor to another prime contractor. As a subcontractor, the Company will generally receive the same or similar profit margin as it would as a prime contractor, although revenue to the Company will be smaller because the Company only contracts a part of the project. As prime contractor, the Company is responsible for the performance of the entire contract, including work assigned to subcontractors. Accordingly, 12 the Company is subject to liability associated with the failure of subcontractors to perform as required under the contract. The Company occasionally requires its subcontractors to furnish bonds guaranteeing their performance, although affirmative action regulations require the Company to use its best efforts to hire minority subcontractors for a portion of the project and some of these subcontractors may not be able to obtain surety bonds. On average, the Company has required performance bonds for less than 10% of the dollar amount of its subcontracted work. However, the Company is generally aware of the skill levels and financial condition of its subcontractors through its direct inquiry of the subcontractors and contract partners of the subcontractors, as well as its review of financial information provided by the subcontractors and third party reporting services including credit reporting agencies and bonding companies. The Company has not been materially adversely affected by subcontractor related losses over the past five years. As the Company expands into new geographic areas, it expects to obtain references and examine the financial condition of prospective subcontractors before entering into contracts with them, requiring bonding as deemed appropriate. In connection with public sector contracts, the Company is required to provide various types of surety bonds guaranteeing its own performance. The Company's ability to obtain surety bonds depends upon its net worth, working capital, past performance, management expertise and other factors. Surety companies consider such factors in light of the amount of the Company's surety bonds then outstanding and the surety companies' current underwriting standards, which may change from time to time. See "Insurance and Bonding". INSURANCE AND BONDING The Company maintains general liability and excess liability insurance covering its owned and leased construction equipment and workers' compensation insurance in amounts it believes are consistent with its risks of loss and in compliance with specific insurance coverages required by its customers as a part of the bidding process. The Company carries liability insurance of $16 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 is required to provide a surety bond on most of its projects. The Company's ability to obtain bonding, and the amount of bonding required, is primarily determined by the Company's management experience, net worth, liquid working capital (consisting of cash and accounts receivable in excess of accounts payable and accrued liabilities), the Company's performance history, the number and size of projects under construction and other factors. Surety companies consider such factors in light of the amount of the Company's surety bonds then outstanding and the surety companies' current underwriting standards, which may change from time to time. The larger the project and/or the more projects in which the Company is engaged, the greater the Company's bonding, net worth and liquid working capital requirements. Bonding requirements vary depending upon the nature of the project to be performed. The Company generally pays a fee to bonding companies of 1/2% to 1% of the amount of the contract to be performed. Because these fees are generally payable at the beginning of a project, the Company must maintain sufficient working capital to satisfy the fee prior to receiving revenue from the project. The Company has received single project bonding approval up to $110 million and has an aggregate program bond capacity of over $300 million. MARKETING The Company obtains its projects primarily through the process of competitive bidding. Accordingly, the Company's marketing efforts are limited to subscribing to bid reporting services and monitoring trade journals and other industry sources for bid solicitations by various government authorities. In response to a bid request, the Company submits a proposal detailing its qualifications, the services to be provided and the cost of the services to the soliciting entity which then, based on its evaluation of the proposals submitted, awards the contract to the successful bidder. Generally, the contract for a project is awarded to the lowest bidder, although other factors may be taken into consideration such as the bidder's track record for compliance with bid specifications and procedures and its construction experience. For its ready mix operations which the Company pursues through its RMI subsidiary, a more focused marketing effort is required. Certification of plant and facilities must be obtained and maintained in order to comply with certain project requirements. Membership and participation in selected industry associations help increase the Company's exposure to potential 13 clients and are two means by which the Company stays informed on industry developments and future prospects within the marketplace. Customer care and service are important tools for RMI which focuses more on private owners than public works. Building and maintaining customer relations and reputation for quality work are essential elements to the marketing efforts of RMI. GOVERNMENT REGULATION The Company's operations are subject to compliance with regulatory requirements of federal, state and municipal authorities, including regulations covering labor relations, safety standards, affirmative action and the protection of the environment including requirements in connection with water discharge, air emissions and hazardous and toxic substance discharge. Under the Federal Clean Air Act and Clean Water Act, the Company must apply water or chemicals to reduce dust on road construction projects and to contain water contaminants in run-off water at construction sites. The Company may also be required to hire subcontractors to dispose of hazardous wastes encountered on a project. The Company believes that it is in substantial compliance with all applicable laws and regulations. However, amendments to current laws or regulations imposing more stringent requirements could have a material adverse effect on the Company. EMPLOYEES On December 31, 1998, the Company employed approximately 81 salaried employees (including its management personnel and executive officers) and approximately 469 hourly employees. The number of hourly employees varies depending upon the amount of construction in progress. For the year ended December 31, 1998, the number of hourly employees ranged from approximately 450 to approximately 550 and averaged approximately 525. At December 31, 1998, the Company is party to four project agreements in Arizona with the Arizona State District Council of Carpenters, AFL-CIO which covers approximately 15% of the Company's hourly workforce. At December 31, 1998, the Company believes its relations with its employees are satisfactory. ITEM 2. PROPERTIES The following properties were leased by the Company at December 31, 1998: (1) 8,300 square feet of executive office space at 4411 South 40th Street, Suites D-10 and D-11, Phoenix, Arizona, 85040, pursuant to a lease which expires in December 2000, at a monthly rental rate of $6,998 per month. (2) 1,800 square feet of office space at 1598 North 400 West, Suite C, Layton, Utah 84041, on a month-to-month basis, at a rental rate of $1,600 per month. (3) 2,000 square feet of office space for the Company's ready mix operations, at 3430 E. Flamingo , Suite 100, Las Vegas, Nevada, on a month-to-month basis, at a rental rate of $2,575. (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 Company controlled by Kim A. Marshall, a principal stockholder. The Company believes that its rental rates are fair, reasonable and consistent with rates charged by unaffiliated third parties in the same market area. (5) 17,500 square feet of property at 1501 Highway 168, Moapa, Nevada 89025, on a month-to-month basis, at a rental rate of $2,500 per month, from a Company controlled by Kim A. Marshall, a principal stockholder. The Company used the property for its manufacturing of prestressed concrete products, a discontinued operation. The lease terminates January 31, 1999 under the plan to discontinue operations of PPI. The Company believes that its rental rates are fair, reasonable and consistent with rates charged by unaffiliated third parties in the same market area. The Company owns approximately five acres of land at 109 W. Delhi, North Las Vegas, NV 89030, which is used for the manufacturing of ready mix concrete. 14 The Company owns approximately 24.5 acres of property in Moapa, Nevada, which is currently being readied for use as a storage yard. The Company has determined that the above properties are suitable and adequate for their intended use. ITEM 3. LEGAL PROCEEDINGS The Company is a party to legal proceedings in the ordinary course of its business. The Company believes that the nature of these proceedings (which generally relate to disputes between the Company and its subcontractors, material suppliers or customers regarding payment for work performed or materials supplied) are typical for a construction firm of its size and scope, and that none of these proceedings are material to its financial condition. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year ended December 31, 1998. 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.
1997 1998 ------------------------------------------ HIGH LOW HIGH LOW ------------------------------------------ First Quarter........ 5 5/8 3 9/16 6 5/8 5 1/8 Second Quarter....... 5 7/8 3 1/2 7 5 1/2 Third Quarter........ 6 1/4 5 5/16 7 1/4 5 Fourth Quarter....... 6 9/16 5 1/2 6 1/4 4 5/8
HOLDERS OF RECORD As of February 16, 1999 there were 775 record and beneficial owners of the Company's Common Stock. 15 ITEM 6. SELECTED FINANCIAL DATA
YEARS ENDED DECEMBER 31, PROFORMA - ---------------------------------------------------- COMBINED (1) INCOME STATEMENT DATA: 1994 1995 1996 1997 1998 ------------ ----------- ------------ ------------ ------------ Revenue............................................. $80,220,521 $90,048,523 $133,723,645 $146,273,286 $187,036,077 Gross Profit........................................ 5,472,878 4,354,455 2,810,585 7,861,972 9,444,231 Income (loss) from Operations....................... 4,704,425 2,364,676 (255,072) 3,172,430 3,084,983 Interest Expense.................................... 500,000 1,116,464 611,828 624,048 435,358 Income (loss) from continuing operations before income taxes (2).......................... 4,565,398 1,608,997 (30,410) 3,235,458 3,592,019 Net income (loss) from continuing operations........ 2,824,776 1,059,347 (37,531) 2,072,567 2,169,579 Discontinued Operations: Loss from discontinued operations (4)............ - - (47,697) (860,952) (635,246) Estimated loss on disposal of net assets......... - - - - (1,950,000) of discontinued operations (5) Net income (loss)................................... 2,824,776 1,059,347 (85,228) 1,211,615 (415,667) Basic net income (loss) per common share: Income (loss) from continuing operations......... $ 0.84 $ 0.65 $ (.01) $ 0.58 $ 0.60 Loss from discontinued operations................ - - (.01) (.24) (.18) Estimated loss on disposal of net assets of discontinued operations..................... - - - - (.54) Basic net income (loss) per common share ........... $ 0.84 $ 0.65 $ (.02) $ .34 $ (.12) Diluted net income (loss) per common share: Income (loss) from continuing operations......... $ 0.84 $ 0.65 $ (.01) $ 0.57 $ 0.60 Loss from discontinued operations................ - - (.01) (.24) (.17) Estimated loss on disposal of net assets of discontinued operations..................... - - - - (54) Diluted net income (loss) per common share ......... $ 0.84 $ 0.65 $ (.02) $ .33 $ (.11) Basic weighted average common shares outstanding (3).................................. 3,350,000 1,641,663 3,601,250 3,601,250 3,601,250 Diluted weighted average common shares outstanding...................................... 3,350,000 1,641,663 3,601,250 3,651,360 3,644,651 FINANCIAL POSITION DATA: Working capital (deficiency)........................ $(3,348,451) $11,319,107 $ 8,689,123 $ 5,152,550 $ 5,760,414 Total assets........................................ 22,375,168 28,909,786 42,171,030 47,737,762 49,297,063 Long-term debt...................................... - 3,689,055 4,631,377 5,847,659 5,977,643 Stockholders' equity (deficit)...................... (232,770) 11,761,997 11,676,769 12,888,384 12,472,717
(1) Effective October 1, 1994, the Company acquired all the outstanding shares of Meadow Valley Contractors, Inc. ("MVC") in a transaction accounted for by the purchase method of accounting whereby the basis of certain assets was revalued for accounting purposes. To arrive at this proforma presentation, the MVC financial statements for the 1994 period prior to October 1, 1994 have been combined with the Company's financial statements for the period ending December 31, 1994. 16 (2) Includes the effect of proforma income tax adjustments reflecting additional income taxes that would have been reported had MVC been subject to federal and state income taxes for the periods presented through September 30, 1994. Prior to October 1, 1994, MVC was a S Corporation and, therefore, did not pay income taxes. (3) The average shares outstanding and net income (loss) per share for 1994 are computed upon the number of shares of the Company's Common Stock outstanding as of December 31, 1994, including the assumed issuance of 500,000 shares of restricted Common Stock in the MVC acquisition, which were issued during October 1995. (4) 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. (5) 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. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The following is a summary of certain information contained in this Report and is qualified in its entirety by the detailed information and financial statements that appear elsewhere herein. Except for the historical information contained herein, the matters set forth in this Report include forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties are detailed throughout the Report and will be further discussed from time to time in the Company's periodic reports filed with the Commission. The forward-looking statements included in the Report speak only as of the date hereof. The Company was incorporated in Nevada on September 15, 1994. On October 1, 1994, the Company purchased all of the outstanding Common Stock of Meadow Valley Contractors, Inc. ("MVC"), for $11.5 million comprised of a $10 million promissory note and $1.5 million paid by the issuance of 500,000 restricted shares of the Company's Common Stock valued at $3.00 per share. On January 4, 1999, the $10 million promissory note was paid in full. MVC was founded in 1980 as a heavy construction contractor and has been engaged in that activity since inception. References to the Company's history include the history of MVC. Operating through MVC, the Company is a heavy construction contractor specializing in structural concrete construction of highway bridges and overpasses and the paving of 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 believes that specializing in structural concrete construction has contributed significantly to its revenue growth and provides it with an advantage in the competitive bidding process. However, such specialization limits the types and sizes of projects upon which the Company bids and may be a competitive disadvantage for projects in which the amount of work proposed to be completed by the prime contractor (as compared to the amount of work which will be subcontracted by the prime contractor) is a consideration in the bidding process. 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. In 1996, the Company acquired certain assets, including the tradename, of AKR Contracting ("AKR"), an unaffiliated Company in Phoenix, Arizona. AKR previously specialized in earthwork, grading and paving of residential subdivisions and commercial centers, but has since become increasingly involved in small publicly funded projects in Arizona and New Mexico. Through AKR, the Company entered into operating leases for a portable hot mix asphalt plant and related paving equipment and a rubberized asphalt plant. The asphalt paving capabilities provide the Company the opportunity to expand its existing geographic market and enhance its construction operations in its existing market. To date, AKR has assisted the Company in its expansion into New Mexico and a broadening of the work it performs in Arizona. Moreover, the Company believes the AKR equipment improves its competitiveness and may generate increased revenues on projects that call for large quantities of asphaltic concrete, recycled asphalt or rubberized asphalt. 17 In 1996, the Company expanded its Nevada construction industry activities with the formation of Ready Mix, Inc. ("RMI") as a wholly-owned subsidiary. RMI manufactures and distributes ready mix concrete in Las Vegas, NV, and targets prospective customers such as concrete subcontractors, prime contractors, home builders, commercial and industrial property developers, pool builders and homeowners. RMI began operations from its first location in March 1997. Financed with internal funds, a $2 million line of credit, notes payable and operating leases, RMI intends to operate from two or more sites using at least 40 mixer trucks. 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. Management anticipates that the remaining contracts will be completed before the end of April 1999 and the collection of outstanding receivables and the disposition of assets will be completed before the end of the second quarter 1999. In 1997, financed through internal funds and operating leases, the Company obtained equipment and experienced personnel to expand its construction capabilities to include the performance of concrete or "white" paving. By performing white paving work, the Company may be able to increase its project revenue and earnings, reduce reliance on white paving subcontractors, maintain greater control over project schedules and improve the likelihood of being awarded projects in which the amount of work proposed to be completed on a project by the prime contractor is a consideration in the competitive bidding process. The Company has historically relied upon a small number of projects to generate a significant portion of its revenue. For instance, revenue generated from six projects represented 60% of the Company's revenue for the year ended December 31, 1998. Results for any one calender quarter may fluctuate widely depending upon the stage of completion of the Company's active projects. 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, ------------------------------------------ 1996 1997 1998 ------------ ------------ ------------ Revenue........................................... 100.00% 100.00% 100.00% Cost of revenue................................... 97.90 94.63 94.95 Gross profit...................................... 2.10 5.37 5.05 General and administrative expenses............... 2.29 3.21 3.40 Income (loss) from operations..................... (.19) 2.16 1.65 Interest income................................... .55 .46 .46 Interest expense.................................. (.46) (.43) (.23) Other income...................................... .07 .01 .05 Net income (loss) from continuing operations...... (.03) 1.42 1.16 Loss from discontinued operations................. (.03) (.59) (.34) Estimated loss on disposal of net assets of discontinued operations......................... - - (1.04) Net income (loss)................................. (.06) .83 (.22)
18 YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997 Revenue and Backlog. Revenue increased 27.9% to $187.0 million for the year ended December 31, 1998 from $146.3 million for the year ended December 31, 1997. The increase was the result of an increase in contract revenue of $36.6 million and a $4.1 million increase in revenue generated from construction materials production and manufacturing sold to non-affiliates. Backlog increased to $220 million at December 31, 1998 compared to $214 million at December 31, 1997. Revenue is impacted in any one period by the backlog at the beginning of the period. Gross Profit. As a percentage of revenue, consolidated gross profit decreased from 5.37% in 1997 to 5.05% in 1998. The decrease in MVC's gross profit margin was the result of (i) cost overruns on certain projects (ii) subcontractor difficulties and (iii) costs related to plan or specification errors. Gross profit margins are affected by a variety of factors including construction delays and difficulties due to weather conditions, availability of materials, the timing of work performed by other subcontractors and the physical and geological condition of the construction site. General and Administrative Expenses. General and administrative expenses increased to $6,359,248 for 1998 from $4,689,542 for 1997. The increase resulted, in part, from costs associated with expansion into the white paving market amounting to approximately $323,000, $267,000 in corporate labor, $871,000 in costs related to various employee incentive plans, $120,000 in legal costs, $35,000 in costs related to the Company's safety plan, $32,000 in costs related to the administration of various employee incentive and benefit plans and a variety of other costs related to the administration of the corporate and area offices. Interest Income and Expense. Interest income for 1998 increased to $856,191 from $666,397 in 1997 due to an increase in cash reserves resulting primarily from billings in excess of costs and estimated earnings on uncompleted projects. Interest expense decreased in 1998 to $435,358 from $624,048, due to a $1,000,000 reduction in related party debt during the fourth quarter 1997 and a $1,500,000 reduction in 1998. At December 31, 1998 the remaining balance on the related party promissory note was $1,000,000. During January 1999, the Company made the final principal payment of $1,000,000. Net Income from Continuing Operations After Income Taxes. Net income from continuing operations after income taxes was $2,169,579 in 1998 as compared to $2,072,567 for 1997. The slight increase resulted from higher revenues offset by increased general and administrative expenses and decreased gross profit margins, as well as higher interest income and lower interest expense. Discontinued Operations. In June 1998, due to continuing operating losses, the Company decided to dispose of its wholly-owned subsidiary Prestressed Products Incorporated. Accordingly, the Company has reclassified the operations of Prestressed Products Incorporated as discontinued operations in the accompanying financial statements. In June 1998, the Company accrued a $1,950,000 charge (net of income tax benefit of $1,300,000), related to the disposal of assets for the Prestressed Products business, which included a provision of $1,350,000 for estimated operating losses during the phase-out period. During the year ended December 31, 1998, $1,134,112 of the expected losses were incurred (net of income tax benefit of $756,073). The cessation of the Prestressed Products business is expected to be completed during the second quarter 1999. Net Loss. Net loss, after discontinued operations, for 1998 was $415,667 YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996 Revenue and Backlog. Revenue increased 9.4% to $146.3 million for the year ended December 31, 1997, from $133.7 million for the year ended December 31, 1996. The increase results primarily from a $12.0 million increase in revenue generated from construction materials production and manufacturing sold to non-affiliates. Gross Profit. As a percentage of revenue, gross profit increased from 2.10% in 1996 to 5.37% in 1997. The increase in the gross profit margin was the result of decreased gross profit margins experienced during 1996 related to (i) omission of costs from bid estimates (ii) difficulties assembling an adequate skilled labor force due to physical location of a construction site (iii) 19 erroneous assumptions at bid time regarding the Company's construction productivity and (iv) inadequate field and corporate supervision. General and Administrative Expenses. General and administrative expenses increased from $3,065,657 for 1996 to $4,689,542 for 1997. The increase results, in part, from the costs associated with the Company's wholly-owned ready-mix concrete subsidiary, the Company's continued expansion in Utah and expansion into white paving. The additional costs associated with the Company's wholly- owned ready-mix concrete subsidiary and the continued expansion in Utah and expansion into white paving amounted to approximately $887,000. The remainder of the increase was $365,948 in corporate labor and a variety of costs including costs in excess of $79,000 related to enhancements in the safety plan, $75,000 related to non-recurring consulting studies and $53,000 related to corporate travel. Interest Income and Expense. Interest income decreased in 1997 to $666,397 from $741,270 in 1996, due to a decrease in cash reserves resulting primarily from the expansion into the production and manufacturing of construction materials and the purchase of equipment. Interest expense increased slightly in 1997 to $624,048 from $611,828 in 1996, due primarily to financing certain of the property and equipment additions. Net Income from Continuing Operations After Income Taxes. Net income from continuing operations after taxes for 1997 was $2,072,567 compared to a net loss from continuing operations after income taxes for 1996 of $(37,531). The increase primarily resulted from the increase in revenue and gross profit margin offset, in part, by higher general and administrative expenses as discussed above. Discontinued Operations. In June 1998, 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. The statements of operations for the years ended December 31, 1996 and 1997 have been restated and operating results of PPI are shown separately. During the years ended December 31, 1996 and 1997, PPI incurred losses in the amounts of $47,697 and $860,952, net of income tax benefits of $28,756 and $443,520. The cessation of the Prestressed Products business is expected to be completed during the second quarter 1999. LIQUIDITY AND CAPITAL RESOURCES The Company's primary need for capital has been to finance growth in its core business as a heavy construction contractor and its expansion into the other construction and construction related businesses heretofore discussed. Annual revenue has grown from approximately $134.0 million in 1996 to $187.0 million in 1998. Growth has resulted in the need for additional capital to finance increased receivables, retentions and capital expenditures, and to address fluctuations in the work-in-process billing cycle. The following table sets forth, for the periods presented, certain items from the Statements of Cash Flows of the Company.
FOR THE YEARS ENDED DECEMBER 31, ------------------------------------------------ 1996 1997 1998 Cash Provided By (Used in) Operating Activities....... $ (3,090,919) $ 7,545,827 $ 10,889,235 Cash Provided By (Used in) Investing Activities....... (579,183) (4,432,322) 331,646 Cash Used in Financing Activities..................... (247,283) (1,738,860) (3,043,020)
Although the Company may experience increased profitability as operations increase, cash may be reduced to finance receivables and for customer cash retention required under contracts subject to completion. Management continually monitors the Company's cash requirements to maintain adequate cash reserves, and the Company believes that its cash balances were and, together with the operating lines of credit described below, are sufficient. 20 Cash used in operating activities during 1996 amounted to $3.1 million, primarily the result of an increase in accounts receivable and prepaid expenses of $14.1 million, offset by an increase in accounts payable of $8.6 million along with an increase in net billings in excess of costs of $1.6 million and depreciation and amortization of $.8 million. Cash provided by operating activities during 1997 amounted to $7.5 million, primarily the result of net income of $1.2 million, depreciation and amortization of $1.3 million, a decrease in accounts receivable of $2.8 million, an increase in net billings in excess of costs of $3.1 million, $.4 million increase in deferred income tax payable, offset by a decrease in accounts payable of $1.3 million. Cash provided by operating activities during 1998 amounted to $10.9 million, primarily the result of a decrease in accounts receivable of $8.7 million, depreciation and amortization of $1.8 million, an increase in net billings in excess of costs of $4.8 million, an increase in accrued liabilities of $1.3 million, offset by a decrease in accounts payable of $4.6 million and an increase in prepaid expenses and other of $.8 million and a net loss of $.4 million. Cash used in investing activities during 1996 amounted to $.6 million, primarily the result of the purchase of property and equipment of $1.7 million and the investment in and advances to Prestressed Products Incorporated of $.2 million, offset by a decrease in restricted cash of $1.2 million and proceeds from the sale of property and equipment of $.1 million. The decrease in restricted cash during 1996 is a result of the partial release of funds held in escrow accounts pending the completion of three large volume projects. Cash used in investing activities during 1997 amounted to $4.4 million related primarily to an increase in net assets of discontinued operations of $2.6 million and the purchase of property and equipment of $1.8 million. Cash provided by investing activities during 1998 amounted to $.3 million related primarily to the decrease in related party note receivable of $.3 million, a decrease in net assets of discontinued operations of $2.5 million and proceeds from the sale of property and equipment in the amount of $.2 million, offset by the increase in restricted cash of $2.0 million and the purchase of property and equipment of $.6 million. The aforementioned note receivable related party was due from Paul R. Lewis, an officer and director of the Company. Cash used in financing activities during 1996 included lease payments of $.1 million and equipment loan payments of $.1 million, a total of approximately $.2 million. Cash used in financing activities during 1997 amounted to $1.7 million including $.5 million repayment of a loan from a related party plus $.5 million prepayment of a loan from a related party and repayments of notes payable and capital lease obligations in the amount of $.7 million. Cash used in financing activities during 1998 amounted to $3.0 million including a total of $1.5 million of prepayments of a loan from a related party and repayments of notes payable and capital lease obligations in the amount of $1.5 million. The aforementioned note payable related party was due to a principal shareholder of the Company, the Richard C. Lewis Family Revocable Trust I. The Company currently has available from a commercial bank a $2,000,000 operating line of credit at an interest rate of the commercial bank's prime plus .50%, and a $2,000,000 operating line of credit at an interest rate of the commercial bank's prime plus .25% ("lines of credit"). At December 31, 1998, and as of the filing date of this report, nothing had been drawn on either of the lines of credit. Under the lines of credit, the Company is required to maintain certain levels of working capital, to promptly pay all its obligations and is precluded from conveying, selling or leasing all or substantially all of its assets. At December 31, 1998, the Company was in full compliance with all such covenants and there are no material covenants or restrictions in the lines of credit which the Company believes would impair its operations. The lines of credit expire September 15, 1999. The Company anticipates that a substantial portion of the costs associated with a planned second ready-mix plant and related equipment will be financed through bank financing and operating leases. In addition, the Company is currently leasing approximately 40 ready-mix trucks with estimated annual lease payments of $800,000. 21 Management believes that the Company's cash reserves, together with its lines of credit and its capacity to enter into other financing arrangements are sufficient to fund its cash requirements for the next 12 months and that the Company's working capital will be adequate to fund its short term and long term requirements. NEW ACCOUNTING PRONOUNCEMENTS Disclosures about Segments of an Enterprise and Related Information: Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information," (SFAS 131) issued by the FASB is effective for financial statements with fiscal years beginning after December 15, 1997. Earlier application is permitted. SFAS 131 requires that public companies report certain information about operating segments, products, services and geographical areas in which they operate and their major customers. The Company adopted this accounting standard on January 1, 1998. IMPACT OF INFLATION The Company believes that inflation has not had a material impact on its operations. However, substantial increases in labor costs, worker compensation rates and employee benefits, equipment costs, material or subcontractor costs could adversely affect the operations of the Company for future periods. YEAR 2000 The Company's has completed a comprehensive assessment of the internal information systems and applications that will be impacted by the year 2000. The Company expects to make the necessary revisions or upgrades to its systems to render it year 2000 compliant. The Company's accounting software currently utilizes a four digit year field. Attention is also being focused on compliance efforts of key suppliers and customers. The Company could potentially experience disruptions to some aspects of its various activities and operations as a result of non-compliant systems utilized by the Company or unrelated third parties. Contingency plans are therefore under development to mitigate the extent of any such potential disruption to business operations. Based on preliminary information, the costs to the Company of addressing potential year 2000 issues are not expected to have a material adverse impact on the Company's consolidated results of operations or financial position. There can be no assurance that the efforts or the contingency plans related to the Company's systems, or those of the other entities relied upon will be successful or that any failure to convert, upgrade or appropriately plan for contingencies would not have a material adverse effect on the Company. KNOWN AND ANTICIPATED FUTURE TRENDS AND CONTINGENCIES The Company has increasingly drawn the interest and attention of an AFL-CIO-funded organization known as the Building Trades Organizing Project ("BTOP"). The stated purpose of the BTOP is to organize the workforce of non-union companies. Notwithstanding its stated purpose and the fact that it currently owns 263 shares of the Company's Common Stock, the actions taken by the BTOP relative to the Company have generally been contrary to the interests of the Company's other shareholders. These actions include hindering the Company's productivity by organizing pickets on certain Nevada job sites, filing unfounded unfair labor charges (to date the Company has successfully prevailed on all charges brought against the Company) and interfering with the work of subcontractors and suppliers. In addition, the BTOP has issued press releases wherein the facts were incomplete, mistaken, misleading, blatantly false or stated erroneous conclusions. Unfortunately, all too frequently the wire services have mistakenly attributed to the Company statements made in the BTOP press releases. On one occasion, this caused a dramatic decline in the value of the Company's Common Stock. The BTOP is now seeking to inhibit the Company's ongoing operations by requesting that all transactions with related parties be subject to shareholder approval. The BTOP has also had direct contact with two of the Company's customers, the Nevada Department of Transportation and the New Mexico State Highway and Transportation Department, with the apparent intent of restricting the Company's contractual rights and its ability to continue to obtain future contracts. The Company has successfully minimized the impact of the BTOP's actions on the construction projects, but has, as yet, been unable to prevent BTOP from issuing damaging press releases. It can be 22 anticipated that, barring successful legal action, if any, by the Company the BTOP will continue to use the same tactics in dealing with the Company in the future. Subject to the Company's profitability and increases in retained earnings, it is anticipated that the bonding limits will increase proportionately, thereby allowing the Company to bid on and perform more and larger projects. The Company believes that government at all levels will continue to be the primary source of funding for infrastructure work. One June 9, 1998, the Transportation Equity Act for the 21st Century ("TEA 21") was signed into law. This bill 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. See "Market Overview". The competitive bidding process will continue to be the dominant method for determining contract award. However, other innovative bidding methods will be tried and may gain favor, namely "A Plus B" contracts, where the bidders' proposals are selected on both price and scheduling criteria. Design-build projects are becoming more common and are likely to increase in frequency. Design-build projects also tend to be of more worth to the owner when the contract size is substantial, usually $50 million or more. In light of the rising needs for infrastructure work throughout the nation and the tendency of the current needs to out-pace the supply of funds, it is anticipated that alternative funding sources will continue to be sought. Funding for infrastructure development in the United States is coming from a growing variety of innovative sources. An increase of funding measures is being undertaken by various levels of government to help solve traffic congestion and related air quality problems. Sales taxes, fuel taxes, user fees in a variety of forms, vehicle license taxes, private toll roads and quasi-public toll roads are examples of how transportation funding is evolving. Transportation norms are being challenged by federally mandated air quality standards. Improving traffic movement, eliminating congestion, increasing public transit, adding or designating high occupancy vehicle (HOV) lanes to encourage car pooling and other solutions are being considered in order to help meet EPA-imposed air quality standards. SEASONALITY The construction industry is seasonal, generally due to inclement weather occurring in the winter months. Accordingly, the Company may experience a seasonal pattern in its operating results with lower revenue in the first and fourth quarters of each calendar year than other quarters. Quarterly results may also be affected by the timing of bid solicitations by governmental authorities, the stage of completion of major projects and revenue recognition policies. Results for any one quarter, therefore, may not be indicative of results for other quarters or for the year. ITEM 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 23 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, 1998, which is hereby incorporated by reference. ITEM 11. EXECUTIVE COMPENSATION Information on executive compensation will be included under the caption "Compensation of Executive Officers" of the Company's definitive Proxy Statement relating to the Annual Meeting of Shareholders for the year ended December 31, 1998, 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, 1998, 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 "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, 1998, which is hereby incorporated by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a)(1) Financial Statements See Item 8 of Part II hereof. (a)(2) Financial Statement Schedules The schedules specified under Regulation S-X are either not applicable or immaterial to the Company's consolidated financial statements for the years ended December 31, 1996, 1997 and 1998. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the fourth quarter ended December 31, 1998. (c) Exhibits EXHIBIT NO. TITLE ------- ----------------------------------------------------- 1.01 Form of Underwriting Agreement with Spelman & Co., Inc. (1) 24 EXHIBIT NO. TITLE ------- ------------------------------------------------------------ 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 Registrant and St. Paul Fire & Marine Insurance Company (1) 10.06 Surety Bond between the Registrant and United States Fidelity and Guaranty Company (1) 10.07 Contract between Clark County, Nevada and the Registrant dated October 6, 1992 (1) 10.08 Surety Bond between the Registrant and St. Paul Fire and Marine Insurance Company (1) 10.09 Agreement between Salt Lake City Corporation and the Registrant dated May 5, 1993 (1) 10.10 Contract between Clark County, Nevada and the Registrant dated July 21, 1993 (1) 10.11 Contract between Clark County, Nevada and the Registrant dated August 17, 1993 (1) 10.12 Promissory Note executed by Robert C. Lewis and Richard C. Lewis (1) 10.13 Promissory Note executed by Moapa Developers, Inc. (1) 25 EXHIBIT NO. TITLE ------- ------------------------------------------------------------ 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 Transportation (2) 10.44 Promissory Note executed by Nevada State Bank (2) 10.45 Escrow Settlement Documents and related Promissory Note (2) 10.46 Conveyor Sales Contract and Security Agreement (2) 10.47 CAT Financial Installment Sale Contract (2) 10.48 Second and Third Amendments to Office Lease of the Registrant (2) 10.49 Lease Agreement with US Bancorp (2) 26 EXHIBIT NO. TITLE ------- ------------------------------------------------------------ 10.50 Lease Agreement with CIT Group (2) 10.51 CAT Financial Installment Sale Contract (3) 10.52 CAT Financial Installment Sale Contract (3) 10.53 CAT Financial Installment Sale Contract (3) 10.54 CAT Financial Installment Sale Contract (3) 10.55 CAT Financial Installment Sale Contract (3) 10.56 Escrow Settlement Documents (3) 10.57 Promissory Note executed by General Electric Capital Corporation (3) 10.58 Promissory Note executed by General Electric Capital Corporation (3) 10.59 Promissory Note executed by General Electric Capital Corporation (3) 10.60 Promissory Note executed by General Electric Capital Corporation (3) 10.61 Promissory Note executed by Nevada State Bank (3) 10.62 KDC Sales Contract (3) 10.63 Lease Agreement with CIT (3) 10.64 Lease Agreement with CIT (3) 10.65 Contract between Registrant and Utah Department of Transportation (3) 10.66 Contract between Registrant and Clark County, Nevada (3) 10.67 Contract between Registrant and New Mexico State Highway and Transportation Department (3) 10.68 Contract between Registrant and Salt Lake City Corporation (3) 10.69 Contract between Registrant and Utah Department of Transportation (3) 10.70 Contract between Registrant and Arizona Department of Transportation (3) 10.71 Contract between Registrant and Nevada Department of Transportation (3) 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. 10.78 Lease Agreement with Banc One Leasing Corp. 10.79 Lease Agreement with Banc One Leasing Corp. 10.80 Lease Agreement with US Bancorp. 10.81 Security Agreement with Associates Commercial Corporation 10.82 Lease Agreement with Caterpillar Financial Services 10.83 Contract between Registrant and Clark County, Nevada 10.84 Contract between Registrant and Arizona Department of Transportation 10.85 Contract between Registrant and New Mexico State Highway and Transportation Department 27 EXHIBIT NO. TITLE ------- ------------------------------------------------------------ 10.86 Contract between Registrant and New Mexico State Highway and Transportation Department 10.87 Contract between Registrant and New Mexico State Highway and Transportation Department 10.88 Joint Venture Agreement between Registrant and R.E. Monks Construction Co. 10.89 Contract between Meadow Valley Contractors, Inc./R.E. Monks Construction Co. (JV) and Arizona Department of Transportation 10.90 Contract between the Registrant and Utah Department of Transportation 10.91 Contract between the Registrant and Clark County, Nevada 10.92 General Agreement of Indemnity between the Registrant and Liberty Mutual Insurance Company 10.93 Employment Agreement with Mr. Larson 10.94 Lease Agreement between the Registrant and Ken Nosker 16.01 Letter re: Change in Certifying Accountant (1) 21.01 Subsidiaries of the Registrant (1) 23.01 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.02 Consent of Semple & Cooper (Meadow Valley Corporation)(1) 23.03 Consent of Gary A. Agron, Esq. (See 5.01, above.)(1) 23.04 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.05 Consent of BDO Seidman, LLP (Meadow Valley Corporation)(1) 23.06 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.07 Consent of BDO Seidman, LLP (Meadow Valley Corporation) (1) 23.08 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.09 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.)(1) 23.10 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.11 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.)(1) 23.12 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1) 23.13 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.)(1) 23.14 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1) 23.15 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.)(1) 27 Financial Data Schedule _____________ (1) Incorporated by reference to the Company's Registration Statement on Form S-1, File Number 33-87750 declared effective on October 16, 1995. (2) Incorporated by reference to the Company's December 31, 1996 Annual Report on Form 10-K. (3) Incorporated by reference to the Company's December 31, 1997 Annual Report on Form 10-K 28 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MEADOW VALLEY CORPORATION /s/ Bradley E. Larson --------------------------------------- Bradley E. Larson President and Chief Executive Officer Date: March 15, 1999 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/ Gary W. Burnell - ------------------------------------- --------------------------------------- Bradley E. Larson, Gary W. Burnell, Director, President and Vice President, Treasurer and Chief Executive Officer Chief Financial Officer Date: March 15, 1999 Date: March 15, 1999 /s/ Kenneth D. Nelson /s/ Paul R. Lewis - ------------------------------------- --------------------------------------- Kenneth D. Nelson, Paul R. Lewis, Director, Chief Administrative Director and Chief Operating Officer Officer and Vice President Date: March 15, 1999 Date: March 15, 1999 /s/ Alan A. Terril /s/ Gary A. Agron - ------------------------------------- --------------------------------------- Alan A. Terril, Gary A. Agron, Director and Vice President - Director Nevada Operations Date: March 15, 1999 Date: March 15, 1999 /s/ Charles E. Cowan /s/ Julie L. Bergo - ------------------------------------- --------------------------------------- Charles E. Cowan, Julie L. Bergo Director Secretary and Principal Accounting Date: March 15, 1999 Officer Date: March 15, 1999 29 INDEX TO FINANCIAL STATEMENTS MEADOW VALLEY CORPORATION AND SUBSIDIARIES Independent Certified Public Accountants' Report .............................................................. F-2 Consolidated Balance Sheets at December 31, 1997 and 1998 .............................................................. F-3 Consolidated Statements of Operations for the years ended December 31, 1996, 1997, and 1998............................. F-4 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 1996, 1997 and 1998... F-5 Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1997 and 1998.............................. F-6 Notes to Consolidated Financial Statements.................... F-8
F-1 INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT To the Stockholders and Board of Directors of Meadow Valley Corporation We have audited the accompanying consolidated balance sheets of Meadow Valley Corporation and Subsidiaries as of December 31, 1997 and 1998, and the related consolidated statements of operations, changes in stockholders' equity and cash flows for each of the years ended December 31, 1996, 1997 and 1998. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted audit standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe our audits of the consolidated financial statements provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Meadow Valley Corporation and Subsidiaries as of December 31, 1997 and 1998, and the consolidated results of their operations, and cash flows for each of the years ended December 31, 1996, 1997 and 1998, in conformity with generally accepted accounting principles. BDO Seidman, LLP Los Angeles, California February 17, 1999 F-2 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
DECEMBER 31, DECEMBER 31, Assets 1997 1998 -------------- ------------ Current Assets: Cash and cash equivalents (Notes 1 and 2).................................... $ 2,815,164 $ 10,993,025 Restricted cash (Notes 1, 2 and 17).......................................... 1,719,768 3,678,685 Accounts receivable, net (Notes 1, 3 and 17)................................. 24,142,358 15,434,491 Prepaid expenses and other................................................... 891,359 1,858,184 Note receivable - related party (Note 11).................................... 257,575 - Note receivable - other (Note 10)............................................ 2,009 2,386 Costs and estimated earnings in excess of billings on uncompleted contracts (Note 4)......................................................... 3,913,475 3,850,619 ------------- -------------- Total Current Assets................................................... 33,741,708 35,817,390 Property and equipment, net (Notes 1, 5, 8, 11 and 21)............................ 9,026,751 10,995,846 Refundable deposits............................................................... 127,736 191,433 Note receivable - other (Note 10)................................................. 209,264 206,421 Goodwill, net (Note 1)............................................................ 1,740,821 1,660,792 Tradename, net (Note 1)........................................................... 12,177 - Net assets of discontinued operations............................................. 2,879,305 425,181 ------------- -------------- Total Assets...................................................... $ 47,737,762 $ 49,297,063 ============== =============== Liabilities and Stockholders' Equity: Current Liabilities: Note payable - related party (Notes 11 and 21)............................... $ 500,000 $ - Notes payable - other (Notes 8 and 21)....................................... 818,846 1,145,621 Obligations under capital leases (Note 13)................................... 405,204 678,562 Accounts payable (Notes 6 and 11)............................................ 18,371,357 13,797,436 Accrued liabilities (Notes 7 and 11)......................................... 1,842,860 3,091,362 Billings in excess of costs and estimated earnings on uncompleted contracts (Note 4)........................................................... 6,650,891 11,343,995 ------------- -------------- Total Current Liabilities.............................................. 28,589,158 30,056,976 Deferred income taxes (Notes 1 and 12)............................................ 412,561 789,727 Obligations under capital leases (Note 13......................................... 973,847 2,031,316 Note payable - related party (Notes 11 and 21).................................... 2,000,000 1,000,000 Notes payable - other (Notes 8 and 21)............................................ 2,873,812 2,946,327 ------------- -------------- Total Liabilities........................................................ 34,849,378 36,824,346 ------------- -------------- Commitments and contingencies (Notes 9, 11, 13 and 15) Stockholders' Equity: Preferred stock - $.001 par value; 1,000,000 shares authorized, none issued and outstanding (Note 14)...................................................... - - Common stock - $.001 par value; 15,000,000 shares authorized, 3,601,250 issued and outstanding (Notes 14 and 18)....................................... 3,601 3,601 Additional paid-in capital...................................................... 10,943,569 10,943,569 Capital adjustments............................................................. (799,147) (799,147) Retained earnings............................................................... 2,740,361 2,324,694 ------------- -------------- Total Stockholders' Equity............................................... 12,888,384 12,472,717 ------------- -------------- Total Liabilities and Stockholders' Equity............................... $ 47,737,762 $ 49,297,063 ============= ==============
The Accompanying Notes are an Integral Part of the Consolidated Financial Statements F-3 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, ------------------------------------------------------------- 1996 1997 1998 ------------------------------------------------------------- Revenue (Note 17)........................................... $ 133,723,645 $ 146,273,286 $ 187,036,077 Cost of revenue (Note 11)................................... 130,913,060 138,411,314 177,591,846 ---------------- ---------------- ---------------- Gross profit................................................ 2,810,585 7,861,972 9,444,231 General and administrative expenses (Note 11)............... 3,065,657 4,689,542 6,359,248 ---------------- ---------------- ---------------- Income (loss) from operations............................... (255,072) 3,172,430 3,084,983 ---------------- ---------------- ---------------- Other Income (Expense): Interest income............................................. 741,270 666,397 856,191 Interest expense (Note 11).................................. (611,828) (624,048) (435,358) Other income................................................ 95,220 20,679 86,203 ---------------- ---------------- ---------------- 224,662 63,028 507,036 ---------------- ---------------- ---------------- Income (loss) from continuing operations before income taxes (30,410) 3,235,458 3,592,019 Income tax expense (Note 12)................................ (7,121) (1,162,891) (1,422,440) ---------------- ---------------- ---------------- Net income (loss) from continuing operations................ (37,531) 2,072,567 2,169,579 Discontinued operations (Note 20): Loss from operations of Prestressed Products subsidiary, net of income tax benefit of $28,756, $443,520 and $423,497................................................. (47,697) (860,952) (635,246) Estimated loss on disposal of net assets of Prestressed Products subsidiary (net of income tax benefit of $1,300,000), including $1,350,000 for operating losses during phase-out period.................................. - - (1,950,000) ---------------- ---------------- ---------------- Net income (loss) (Note 18)................................. $ (85,228) $ 1,211,615 $ (415,667) ================ ================ ================ Basic net income (loss) per common share (Note 19): Income (loss) from continuing operations.................. $ (.01) $ .58 $ .60 Loss from operations of Prestressed Products subsidiary... (.01) (.24) (.18) Estimated loss on disposal of net assets of Prestressed Products subsidiary...................................... - - (.54) ---------------- ---------------- ---------------- Basic net income (loss) per common share.................... $ (.02) $ .34 $ (.12) ================ ================ ================ Diluted net income (loss) per common share (Note 19): Income (loss) from continuing operations................. $ (.01) $ .57 $ .60 Loss from operations of Prestressed Products subsidiary.. (.01) (.24) (.17) Estimated loss on disposal of net assets of Prestressed Products subsidiary..................................... - - (.54) ---------------- ---------------- ---------------- Diluted net income (loss) per common share.................. $ (0.2) $ .33 $ (.11) ================ ================ ================ Basic weighted average common shares outstanding (Note 19)................................................. 3,601,250 3,601,250 3,601,250 ================ ================ ================ Diluted weighted average common shares outstanding (Note 19)................................................ 3,601,250 3,651,360 3,644,651 ================ ================ ================
The Accompanying Notes are an Integral Part of the Consolidated Financial Statements F-4 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
COMMON STOCK ----------------------------- NUMBER OF SHARES PAID-IN CAPITAL RETAINED OUTSTANDING AMOUNT CAPITAL ADJUSTMENT EARNINGS ---------------- ------------ -------------- -------------- -------------- Balance at December 31, 1995................... 3,601,250 $ 3,601 $ 10,943,569 $ (799,147) $ 1,613,974 Net loss for the year.......................... (85,228) ---------------- ------------ -------------- -------------- -------------- Balance at December 31, 1996................... 3,601,250 3,601 10,943,569 (799,147) 1,528,746 Net income for the year........................ 1,211,615 ---------------- ------------ -------------- -------------- -------------- Balance at December 31, 1997................... 3,601,250 3,601 10,943,569 (799,147) 2,740,361 Net loss for the year.......................... (415,667) ---------------- ------------ -------------- -------------- -------------- Balance at December 31, 1998................... 3,601,250 $ 3,601 $ 10,943,569 $ (799,147) $ 2,324,694 ================ ============ ============== ============== ==============
The Accompanying Notes are an Integral Part of the Consolidated Financial Statements F-5 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, -------------------------------------------------------- 1996 1997 1998 ----------------- ---------------- ----------------- Increase (Decrease) in Cash and Cash Equivalents: Cash flows from operating activities: Cash received from customers...............................$ 122,322,752 $ 152,130,455 $ 200,534,004 Cash paid to suppliers and employees....................... (124,400,016) (143,994,944) (188,760,555) Interest Received.......................................... 685,738 615,008 878,517 Interest paid.............................................. (642,344) (658,622) (488,474) Income taxes paid.......................................... (1,057,049) (546,070) (1,274,257) ----------------- ----------------- ----------------- Net cash provided by (used in) operating activities...... (3,090,919) 7,545,827 10,889,235 ----------------- ----------------- ----------------- Cash flows from investing activities: Purchase of AKR Contracting tradename...................... (36,531) - - Decrease (increase) in restricted cash..................... 1,213,972 (304,191) (1,958,917) Collection of notes receivable - related party............. - - 257,575 Collection of note receivable - other...................... 876 1,184 2,466 Proceeds from sale of property and equipment............... 126,431 322,960 165,182 Proceeds from sale of rental real estate................... 16,866 - - Purchase of property and equipment......................... (1,653,806) (1,819,960) (588,784) Decrease (increase) in net assets of discontinued operations.............................................. (246,991) (2,632,315) 2,454,124 ----------------- ----------------- ----------------- Net cash provided by (used in) investing activities..... (579,183) (4,432,322) 331,646 ----------------- ----------------- ----------------- Cash flows from financing activities: Repayment of capital lease obligations..................... (124,333) (319,428) (645,534) Repayment of notes payable - other......................... (122,950) (419,432) (897,486) Repayment of note payable - related party.................. - (1,000,000) (1,500,000) ----------------- ----------------- ----------------- Net cash used in financing activities................. (247,283) (1,738,860) (3,043,020) ----------------- ----------------- ----------------- Net increase (decrease) in cash and cash equivalents............ (3,917,385) 1,374,645 8,177,861 Cash and cash equivalents at beginning of year.................. 5,357,904 1,440,519 2,815,164 ================= ================= ================= Cash and cash equivalents at end of year........................$ 1,440,519 $ 2,815,164 $ 10,993,025 ================= ================= =================
The Accompanying Notes are an Integral Part of the Consolidated Financial Statements F-6 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
For the Years Ended December 31, ---------------------------------------------------------- 1996 1997 1998 ----------------- ---------------- ----------------- 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)....................................................$ (85,228) $ 1,211,615 $ (415,667) Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization....................................... 763,886 1,277,764 1,849,628 Gain on sale of property and equipment.............................. (38,170) (24,890) (29,777) Gain on sale of rental real estate.................................. (11,316) - - Deferred income taxes payable....................................... (21,635) 399,951 377,166 Changes in Assets and Liabilities: Accounts receivable............................................. (13,095,536) 2,770,489 8,685,541 Prepaid expenses and other...................................... (968,247) (152,550) (801,540) Costs and estimated earnings in excess of billings on uncompleted contracts.......................................... (1,005,150) (187,147) 62,856 Interest payable................................................ (30,516) (34,574) (53,116) Accounts payable................................................ 8,644,352 (1,258,450) (4,573,921) Accrued liabilities............................................. 767,429 100,100 1,301,618 Billings in excess of costs and estimated earnings on uncompleted contracts......................................... 2,654,059 3,278,038 4,693,104 Interest receivable............................................. (55,532) (51,389) 22,326 Income tax receivable........................................... - 216,870 (228,983) Income taxes payable............................................ (609,315) - - ----------------- ---------------- ----------------- Net cash provided by (used in) operating activities..................$ (3,090,919) $ 7,545,827 $ 10,889,235 ----------------- ---------------- -----------------
The Accompanying Notes are an Integral Part of the Consolidated Financial Statements F-7 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Nature of the Corporation: Meadow Valley Corporation (the "Company") was organized under the laws of the State of Nevada on September 15, 1994. The principal business purpose of the Company is to operate as the holding Company of Meadow Valley Contractors, Inc. (MVC) and Ready Mix, Inc. (RMI). MVC is a general contractor, primarily engaged in the construction of structural concrete highway bridges and overpasses, and the paving of highways and airport runways in the states of Nevada, Arizona, Utah and New Mexico. RMI is a producer and retailer of ready-mix concrete operating in the Las Vegas metropolitan area. Formed by the Company, RMI commenced operations in 1997. Principles of Consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries MVC and RMI. Intercompany transactions and balances have been eliminated in consolidation. Accounting Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are used when accounting for the percentage of completion and the estimated gross profit on projects in progress, allowance for doubtful accounts, depreciation and amortization, accruals, taxes, contingencies and goodwill, which are discussed in the respective notes to the consolidated financial statements. Revenue and Cost Recognition: Revenues and costs from fixed-price and modified fixed-price construction contracts are recognized for each contract on the percentage-of-completion method, measured by the percentage of costs incurred to date to the estimated total of direct costs. Direct costs include, among other things, direct labor, field labor, equipment rent, subcontracting, direct materials, and direct overhead. General and administrative expenses are accounted for as period costs and are, therefore, not included in the calculation of the estimates to complete construction contracts in progress. Project losses are provided in the period in which such losses are determined, without reference to the percentage-of- completion. As contracts can extend over one or more accounting periods, revisions in costs and earnings estimated during the course of the work are reflected during the accounting period in which the facts that required such revisions become known. 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, 1997 and December 31, 1998 funds in the amount of $1,719,768 and $3,678,685 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. 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, 1997 and December 31, 1998 the Company had established an allowance for potentially uncollectible accounts receivable in the amounts of $35,441 and $59,178. During the years ended December 31, 1996, 1997 and 1998 the Company incurred bad debt expense in the amounts of $0, $35,441 and $59,273. F-8 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): Property and Equipment: Property and equipment are recorded at cost. Depreciation charged to operations during the years ended December 31, 1996, 1997 and 1998 was $671,269, $1,185,147 and $1,757,422. Depreciation is provided for on the straight-line method, over the following estimated useful lives. Plant 15 years Computer equipment 5-7 years Equipment 3-10 years Vehicles 5 years Office furniture and equipment 5-7 years Leasehold Improvements 5 years At December 31, 1998, property and equipment with a net book value of $6,799,459 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, 1996, 1997 and 1998 was $80,029. The carrying value of goodwill will be periodically reviewed by the Company and impairments, if any, will be recognized when expected future operating cash flows derived from goodwill is less than its carrying value. Tradename: On January 2, 1996, the Company acquired the tradename of AKR Contracting in the amount of $36,531. The tradename amortization is provided for on a straight line basis over three years. Amortization expense charged to operations in each of the years ended December 31, 1996, 1997 and 1998 was $12,177. Income Taxes: The Company accounts for income taxes in accordance with the Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). SFAS 109 requires the Company to recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in a Company's financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company files consolidated tax returns with MVC, RMI and PPI for federal and state tax reporting purposes. Cash Flow Recognition: For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an initial maturity of three (3) months or less to be cash equivalents. Fair Value of Financial Instruments: The carrying amounts of financial instruments including cash, restricted cash, accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts, prepaid expenses and other, current portion of notes receivable, current maturities of long-term debt, accounts payable, billings in excess of costs and estimated earnings on uncomplete contracts and accrued liabilities approximate fair value because of their short maturity. The carrying amount of long-term debt approximates fair value because the interest rates on these instruments approximate the rates at which the Company could borrow at December 31, 1997 and 1998. F-9 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of: Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" (SFAS 121) establishes new guidelines regarding when impairment losses on long- lived assets, which include plant and equipment, and certain identifiable intangible assets, should be recognized and how impairment losses should be measured. The Company has adopted this accounting standard and its effects on the financial position and results of operations were immaterial. 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. The Company adopted this accounting standard on January 1, 1996. SFAS 123 also encourages, but does not require companies to record compensation cost for stock-based employee compensation. The Company has chosen to continue to account for stock-based compensation utilizing the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." Accordingly, compensation cost for stock options is measured as the excess, if any, of the fair market price of the Company's stock at the date of grant over the amount an employee must pay to acquire the stock. Earnings per Share: Statement of Financial Accounting Standards No. 128, "Earnings per Share," ("SFAS 128") provides for the calculation of Basic and Diluted earnings per share. Basic earnings per share includes no dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of an entity, similar to fully diluted earnings per share. The Company adopted this accounting standard on December 15, 1997. The effect of adopting this standard was that diluted earnings per share for the year ended December 31, 1997, decreased by $.01 over the calculations under APB Opinion No. 15. There was no effect on prior years. Reporting Comprehensive Income: Statement of Financial Accounting Standard No. 130, "Reporting Comprehensive Income," ("SFAS 130") establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. The Company adopted this accounting standard on December 15, 1997. There was no effect on the financial position or results of operations. Disclosures about Segments of an Enterprise and Related Information: Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information," ("SFAS 131") requires that public companies report certain information about operating segments, products, services and geographical areas in which they operate and their major customers. The Company adopted this accounting standard on December 15, 1997. There was no material effect on the financial position or results of operations. Reporting on the Costs of Start-Up Activities: Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities", ("SOP 98-5"), issued by the American Institute of Certified Public Accountants is effective for years beginning after December 15, 1998. Early adoption is permitted. SOP 98-5 requires that costs of start-up activities should be expensed as incurred. The Company does not expect adoption of SOP 98-5 to have a material effect, if any, on its financial position or results of operations. F-10 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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, 1997 and December 31, 1998, the Company has uninsured cash, cash equivalents, and restricted cash in the amount of $8,460,365 and $16,909,324. 3. ACCOUNTS RECEIVABLE: Following is a summary of receivables at December 31, 1997 and December 31, 1998:
DECEMBER 31, DECEMBER 31, 1997 1998 ------------ ------------ Contracts in progress....................... $ 16,328,688 $ 9,249,373 Contracts in progress - retention........... 5,344,958 2,627,812 Completed contracts......................... 29,361 10,063 Completed contracts - retention............. 138,163 412,310 Other trade receivables..................... 1,665,832 2,624,593 Other receivables........................... 670,797 569,518 ------------ ------------ 24,177,799 15,493,669 Less: Allowance for doubtful accounts....... (35,441) (59,178) ------------ ------------ $ 24,142,358 $ 15,434,491 ============ ============
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, 1997 1998 -------------- -------------- Costs incurred on uncompleted contracts..... $ 244,707,543 $ 314,134,398 Estimated earnings to date.................. 12,772,635 17,538,432 -------------- -------------- 257,480,178 331,672,830 Less: billings to date...................... (260,217,594) (339,166,206) -------------- -------------- $ (2,737,416) $ (7,493,376) ============== ==============
Included in the accompanying balance sheet under the following captions: Costs and estimated earnings in excess of billings on uncompleted contracts ................................. $ 3,913,475 $ 3,850,619 Billings in excess of costs and estimated earnings on uncompleted contracts.................................. (6,650,891) (11,343,995) ------------- -------------- $ (2,737,416) $ (7,493,376) ============= ==============
F-11 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 5. PROPERTY AND EQUIPMENT: Property and equipment consists of the following:
DECEMBER 31, DECEMBER 31, 1997 1998 -------------- -------------- Land................................................ $ 788,379 $ 827,206 Plant............................................... 1,576,294 2,804,757 Computer equipment.................................. 283,291 306,902 Equipment........................................... 5,849,024 7,746,895 Vehicles (Note 13).................................. 2,427,910 2,808,540 Office furniture and equipment...................... 45,816 50,311 Leasehold improvements.............................. 6,863 6,863 -------------- -------------- 10,977,577 14,551,474 Accumulated depreciation............................ (1,950,826) (3,555,628) -------------- -------------- $ 9,026,751 $ 10,995,846 ============== ==============
6. ACCOUNTS PAYABLE: Accounts payable consist of the following:
DECEMBER 31, DECEMBER 31, 1997 1998 -------------- -------------- Trade............................................... $ 13,080,929 $ 10,027,339 Retentions.......................................... 5,290,428 3,770,097 ============== ============== $ 18,371,357 $ 13,797,436 ============== ==============
7. ACCRUED LIABILITIES: Accrued liabilities consist of the following:
DECEMBER 31, DECEMBER 31, 1997 1998 -------------- -------------- Compensation......................................... $ 935,597 $ 1,275,775 Interest............................................. 79,143 26,027 Taxes................................................ 289,741 610,254 Insurance............................................ 373,801 534,699 Other................................................ 164,578 644,607 ============== ============== $ 1,842,860 $ 3,091,362 ============== ==============
F-12 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 8. NOTES PAYABLE - OTHER: Notes payable - other consist of the following
DECEMBER 31, DECEMBER 31, 1997 1998 -------------- -------------- Notes payable, interest rates ranging from 6.382% to 10% with monthly payments of $79,110, due dates ranging from 12/18/99 to 1/1/03, collateralized by equipment........................... $ 3,144,590 $ 2,330,458 Notes payable, interest rates ranging from 9.0% to 9.33% with monthly payments of $9,958, due dates ranging from 8/15/03 to 12/31/04, collateralized by land.............................. 548,068 476,330 Note payable, interest rate of 6.47% with monthly payments of $13,216, due 11/20/00, collateralized by equipment............ - 285,160 Note payable, interest rate of 6.6% with monthly payments of $19,613, due 1/1/03, collateralized by equipment.............. - 1,000,000 -------------- -------------- 3,692,658 4,091,948 Less: current portion (818,846) (1,145,621) -------------- -------------- $ 2,873,812 $ 2,946,327 ============== ==============
Following are maturities of long-term debt for each of the next 5 years: 1999............................ $ 1,145,621 2000............................ 1,098,996 2001............................ 811,854 2002............................ 693,613 2003............................ 310,655 Subsequent to 2003.............. 31,209 =========== $ 4,091,948 ===========
9. LINES OF CREDIT: At December 31, 1998, the Company had available from a commercial bank a $2,000,000 operating line of credit ("line of credit") at an interest rate of the commercial bank's prime plus .50%, and a $2,000,000 operating line of credit at an interest rate of the commercial bank's prime plus .25%. At December 31, 1998, nothing had been drawn on either of the lines of credit. Under the lines of credit, the Company is required to maintain certain levels of working capital, to promptly pay all its obligations and is precluded from conveying, selling or leasing all or substantially all of its assets. At December 31, 1998, the Company was in compliance with all such covenants. The lines of credit expires September 15, 1999. 10. NOTE RECEIVABLE - OTHER: Note receivable - other consist of the following:
December 31, December 31, 1997 1998 ------------ ------------ 8% note receivable, 84 monthly payments in the amount of $1,565 commencing July 19, 1996, balloon payment in the amount of $197,282 due June 19, 2003, collateralized by deed of trust........ $ 211,273 $ 208,807 Less: current portion.............................................. (2,009) (2,386) ------------ ------------ $ 209,264 $ 206,421 ============ ============
F-13 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 11. RELATED PARTY TRANSACTIONS: Note receivable - related party: Note receivable - related party consists of a 6% note receivable from a corporate officer, dated December 15, 1994, due June 15, 1997, collateralized by 100,000 share of the Company's common stock. During June 1997, the Company extended the due date to June 15, 1998. Note receivable - related party was $257,575 at December 31, 1997. During January 1998, the note receivable - related party was paid in full. Equipment: During the years ended December 31, 1997 and 1998, the Company purchased equipment used in the construction business from a related party in the amounts of $2,500 and $295,000. Professional Services: During the years ended December 31, 1997 and 1998, a related party rendered professional services to the Company in the amounts of $16,060 and $10,904. During each of the years ended December 31, 1997 and 1998, the Company paid outside board of directors a total of $5,000. Subcontractor/Supplier: Various related parties provided materials and equipment used in the Company's construction business during the years ended December 31, 1996, 1997 and 1998, in the amounts of $246,051, $153,189 and $191,694. Included in accounts payable at December 31, 1997 and 1998 are amounts due to related parties, in the amount of $5,495 and $1,114. Royalties: During the years ended December 31, 1997 and 1998, the Company paid various related parties mining royalties in the amounts of $76,392 and $186,949. Included in accounts payable at December 31, 1997 and 1998 are amounts due to related parties, in the amount of $6,810 and $10,424. Accrued Interest: During the years ended December 31, 1996, 1997 and 1998, the Company incurred interest expense in the amounts of $438,699, $412,842 and $243,322 related to notes payable to a principal stockholder. Included in accrued liabilities at December 31, 1997 and December 31, 1998 are amounts due to related parties, in the amounts of $61,644 and $26,027. Included in accounts receivable at December 31, 1997 is interest due from a related party in the amount of $15,455. During January 1998, the accrued interest receivable in the amount of $15,793 was paid in full. Note payable - related party:
DECEMBER 31, DECEMBER 31, 1997 1998 ------------ ------------ 12.5% note payable from a related party, due October 16, 2000, due in equal annual installments of $1,000,000 plus accrued interest....... $ 2,500,000 $ 1,000,000 Less: current portion.................................................. (500,000) - ------------ ------------ $ 2,000,000 $ 1,000,000 ============ ============
Commitments: The Company leases office space in Moapa, Nevada on a month-to-month basis from a Company controlled by a principal stockholder with monthly payments of $840. The lease terms also require the Company to pay common area maintenance, taxes, insurance and other costs. Rent expense under the lease for the year ended December 31, 1996, 1997 and 1998 amounted to $9,600, $9,600 and $10,040, respectively. F-14 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 11. RELATED PARTY TRANSACTIONS (CONTINUED): The Company leases 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 terminates January 31, 1999 under the plan to discontinue operations of PPI. Rent expense under the lease for the years ended December 31, 1996, 1997 and 1998 amounted to $15,000, $30,000 and $42,369. 12. INCOME TAXES: The provisions for income taxes (benefit) from continuing operations consist of the following:
FOR THE YEARS ENDED DECEMBER 31, ------------------------------------------- 1996 1997 1998 ----------- ------------ ------------ Current: Federal................................. $ 28,756 $ 669,566 $ 932,032 State................................... - 93,374 113,242 ----------- ------------ ------------ - 762,940 1,045,274 Deferred..................................... (21,635) 399,951 377,166 =========== ============ ============ $ 7,121 $ 1,162,891 $ 1,422,440 =========== ============ ============
The Company's deferred tax liability consists of the following, all of which is long-term in nature:
DECEMBER 31, -------------------------------- 1997 1998 ------------- ------------- Deferred tax asset: Other....................................... $ 13,822 $ 34,107 Deferred tax liability: Depreciation................................ (426,383) (823,834) ------------- ------------- Net deferred tax liability....................... $ (412,561) $ (789,727) ============= =============
For the years ended December 31, 1996, 1997 and 1998, the effective tax rate differs from the federal statutory rate primarily due to state income taxes. 13. COMMITMENTS: The Company is currently leasing office space in Phoenix, Arizona under a non-cancelable operating lease agreement expiring in December 2000. During December 1998, the Company amended the original lease. The amended lease agreement provides for monthly payments of $6,998 through December 31, 1999 and $7,431 from January 1, 2000 through December 31, 2000. The lease also requires the Company to pay common area maintenance, taxes, insurance and other costs. Rent under the aforementioned operating lease was $44,481, $56,576 and $66,117 for the years ended December 31, 1996, 1997 and 1998. F-15 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 13. COMMITMENTS (CONTINUED): The Company leases equipment under operating leases expiring on various years through 2003, Minimum future rental payments under non-cancelable operating leases having remaining terms in excess of one year as of December 31, 1998 for each of the next five years in aggregate are:
YEAR ENDED DECEMBER 31, AMOUNT -------------------------------------------------------------------- 1999........................................... $ 2,170,064 2000........................................... 2,171,319 2001........................................... 1,867,775 2002........................................... 998,673 2003........................................... 496,448 --------------- Total minimum payments $ 7,704,279 ===============
The Company has entered into employment contracts with each of its executive officers that provide for an annual salary, issuance of the Company's common stock and various other benefits and incentives. At December 31, 1997 and 1998, the total commitments, excluding benefits and incentives amount to $1,582,500 and $1,011,250. The Company is the lessee of vehicles and equipment under capital leases expiring in various years through 2005. The assets and liabilities under a capital lease are initially recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. Each asset is depreciated over its expected useful life. Depreciation on the assets under capital leases charged to expense in 1997 and 1998 was $298,283 and $533,008. At December 31, 1997 and 1998, property and equipment included $1,401,948 and $2,785,777, net of accumulated depreciation, of vehicles and equipment under capital leases. Minimum future lease payments under capital leases as of December 31, 1998 for each of the next five years and in aggregate are:
YEAR ENDED DECEMBER 31, AMOUNT ---------------------------------------------------------------------- 1999........................................... $ 767,480 2000........................................... 717,349 2001........................................... 544,523 2002........................................... 362,442 2003........................................... 241,743 Subsequent to 2003............................. 260,632 -------------- Total minimum payments......................... 2,894,169 Less: executory costs.......................... (37,057) -------------- Net minimum lease payments..................... 2,857,112 Less: amount representing interest............. (147,234) -------------- Present value of net minimum lease payment .... $ 2,709,878 ==============
14. STOCKHOLDERS' EQUITY: Preferred Stock: The Company has authorized 1,000,000 shares of $.001 par value preferred stock to be issued, with such rights, preferences, privileges, and restrictions as determined by the Board of Directors. F-16 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 14. STOCKHOLDERS' EQUITY (CONTINUED): Initial Public Offering: During October 1995, the Company completed an initial public offering ("Offering") of Units of the Company's securities. Each unit consisted of one share of $.001 par value common stock and one redeemable common stock purchase warrant ("Warrant"). Each Warrant is exercisable to purchase one share of common stock at $7.20 per share for a period of 5 years from the date of the Offering. The Offering included the sale of 1,926,250 Units at $6.00 per Unit. Net proceeds of the Offering, after deducting underwriting commissions and offering expenses of $2,122,080, amounted to $9,435,420. In connection with the Offering, the Company granted the underwriters warrants to purchase 167,500 shares of common stock at $7.20 per share for a period of twelve months from the date of the offering and for a period of four years thereafter. 15. LITIGATION MATTERS: The Company is defending a claimed preference in connection with a payment made to it by an insurance Company in the approximate amount of $100,000. The Company believes that the payment is not a preference, and is vigorously defending the action. The Company is party to a legal action taken by the Nevada Airport Authority/Clark County that will result in the Company repairing or replacing certain items related to a completed contract. The items which are being requested to be repaired or replaced are related to the past performance of a subcontractor and are subject to indemnity and hold harmless obligations by the subcontractor to the Company. The Company has estimated the costs related to the replacement to be approximately $450,000, which may initially be required to be paid by the Company. Under the indemnity and hold harmless obligations, the Company expects to recover all costs incurred. 16. STATEMENT OF CASH FLOWS: Non-Cash Investing and Financing Activities: The Company recognized investing and financing activities that affected assets, liabilities, and equity, but did not result in cash receipts or payments. These non-cash activities are as follows: During the years ended December 31, 1996, the Company financed the purchase of construction vehicles and equipment in the amount of $1,719,685. During the year ended December 31, 1996, the Company financed the purchase of land in the amount of $420,000. During the year ended December 31, 1996, the Company financed the sale of real estate in the amount of $213,333. During the years ended December 31, 1997 and 1998, the Company financed the purchase of property, plant and equipment in the amount of $3,658,608 and $3,273,137. F-17 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 17. SIGNIFICANT CUSTOMERS: For the years ended December 31, 1996, 1997 and 1998, the Company recognized a significant portion of its revenue from four Customers (shown as an approximate percentage of total revenue):
FOR THE YEARS ENDED DECEMBER 31, ---------------------------------------------------------- 1996 1997 1998 ------------------- ------------------ ------------------ A...................................................... 23.7% 27.8% 29.9% B...................................................... 41.3% 33.0% 12.5% C...................................................... - - 8.2% D...................................................... - 7.6% 24.3%
At December 31, 1997 and December 31 ,1998, amounts due from the aforementioned Customers included in restricted cash and accounts receivables, are as follows:
DECEMBER 31, -------------------------------------- 1997 1998 ------------------ ------------------ A..................................................... $ 4,276,679 $ 8,369,999 B..................................................... 13,735,567 1,805,712 C..................................................... 2,936,029 1,646,442 D..................................................... 112,173 1,709,294
18. STOCK OPTION PLAN: In November, 1994, the Company adopted a Stock Option Plan providing for the granting of both qualified incentive stock options and non-qualified stock options. The Company reserved 700,000 shares of its common stock for issuance under the Plan. Granting of the options is at the discretion of the Board of Directors and may be awarded to employees and consultants. Consultants may receive only non-qualified stock options. The maximum term of the stock options are 10 years and may be exercised as follows: 33.3% after one year of continuous service, 66.6% after two years of continuous service and 100.0% after three years of continuous service. The exercise price of each option is equal to the market price of the Company's common stock on the date of grant. The following summarizes the stock option transactions:
WEIGHTED AVERAGE SHARES PRICE PER SHARE --------------------- ------------------------- Outstanding December 31, 1996........................................... 478,925 $5.87 Granted............................................................ 80,000 5.87 Forfeited......................................................... (34,900) 5.87 --------------------- Outstanding December 31, 1997........................................... 524,025 5.87 Granted............................................................ 144,350 5.28 Forfeited.......................................................... (46,300) 5.28 --------------------- Outstanding December 31, 1998........................................... 622,075 5.43 =====================
F-18 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 18. STOCK OPTION PLAN (CONTINUED): Information relating to stock options at December 31, 1998 summarized by exercise price are as follows:
OUTSTANDING EXERCISABLE ------------------------------------------------ ---------------------------------- WEIGHTED AVERAGE WEIGHTED AVERAGE ---------------------------------- ---------------------- EXERCISE EXERCISE PRICE PER SHARE SHARES LIFE (YEAR) PRICE SHARES EXERCISE PRICE - --------------------------------- ----------- ----------------- --------------- ---------- ---------------------- $6.25 199,500 10 $6.25 199,500 $6.25 $4.375 to $5.41 200,025 10 5.36 133,350 5.36 $5.31 80,000 10 5.31 26,667 5.31 $5.875 142,550 10 5.875 - - - --------------------------------- ----------- ----------------- --------------- ---------- ---------------------- $4.375 to $6.25 622,075 10 $5.43 359,517 $5.43 ================================= =========== ================= =============== ========== ======================
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, 1996, 1997 and 1998. 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, 1996, 1997 and 1998 would have been reduced to the proforma amounts presented below:
1996 1997 1998 ----------------- ----------------- ----------------- Net income (loss) As reported..................................... $ ( 85,228) $ 1,211,615 $ (415,667) Proforma........................................ (179,877) 989,003 (933,371) Net income (loss) per share As reported..................................... $ (.02) $ .34 $ (.12) Proforma........................................ (.05) .26 (.24)
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 1996, 1997 and 1998: expected life of options of 5 years, expected volatility of 48.65%, risk-free interest rates of 8.0%, and a 0% dividend yield. The weighted average fair value at date of grant for options granted during 1996, 1997 and 1998 approximated $1.23, $1.01 and $1.44. 19. BASIC EARNINGS (LOSS) PER SHARE: The Company's basic net income (loss) per share at December 31, 1996, 1997 and 1998 was computed by dividing net income for the period by 3,601,250, the basic weighted average number of common shares outstanding during the period. Options to purchase 444,025 at a range of $4.375 to $6.25 per share were outstanding during 1996, but were not included in the computation of diluted net loss 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, 1997 includes 50,110 common shares that would be issued upon exercise of outstanding stock options. Options to purchase 217,200 at $6.25 per share were outstanding during 1997, but were not included in the computation of diluted net income per common share because the options' exercise price was greater than the average market price of the common share. F-19 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 19. BASIC EARNINGS (LOSS) PER SHARE (CONTINUED): 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. 20. DISCONTINUED OPERATIONS: In June 1998, the Company adopted a formal plan ( the "plan") to discontinue the operations of Prestressed Products Incorporated ("PPI"). The plan included the completion of approximately $2.8 million of uncompleted contracts and the disposition of approximately $1.2 million of equipment. Accordingly, the Company has reclassified the operations of PPI as discontinued operations in the accompanying statements of operations. The Company recorded an estimated loss of $1,950,000 (net of income tax benefit of $1,300,000), related to the disposal of assets for PPI, which included a provision of $1,350,000 for estimated operating losses during the phase-out period. During the year ended December 31, 1998, $1,134,112 of the expected losses were incurred (net of income tax benefit of $756,073). Operating results of PPI for the six months ended June 30, 1998 are shown separately in the accompanying statement of operations. The statements of operations for the years ended December 31, 1996 and 1997 have been restated and operating results of PPI are also shown separately. The revenue of PPI for the years ended December 31, 1996, 1997 and 1998 were $0, $3,706,109 and $5,419,036. These amounts are not included in revenue in the accompanying statements of operations. The accompanying consolidated balance sheets as of December 31, 1997 and December 31, 1998, have been restated to reflect the net liabilities and the estimated loss as a single amount as follows:
DECEMBER 31, -------------------------------------- 1997 1998 ------------------ ------------------- Current assets............................... $ 3,020,023 $ 1,204,192 Non-current assets........................... 1,184,717 481,331 Liabilities.................................. (1,325,435) (444,454) ------------------ ------------------- Net liabilities.......................... 2,879,305 1,241,069 Estimated loss on disposition................ - (815,888) ------------------ ------------------- Net liabilities of discontinued operations... $ 2,879,305 $ 425,181 ================== ===================
21. SUBSEQUENT EVENTS: During January 1999, the Company made the final principal payment on the $10.0 million promissory note (original 1994 promissory note balance) totaling $1.0 million to the Kim A. Lewis Survivors Trust and the Richard C. Lewis Marital Trust, each of which was created pursuant to the Richard C. Lewis Family Revocable Trust I. During January 1999, the Company made interest payments totaling $27,397, related to the $10 million promissory note (original 1994 promissory note balance), to the Kim A. Lewis Survivors Trust and the Richard C. Lewis Marital Trust, each of which was created pursuant to the Richard C. Lewis Family Revocable Trust I. During January 1999, the Company financed the purchase of equipment in the amount of $365,940. The note payable has a 6.96% interest rate with monthly payments of $7,239, due January 2004. F-20 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 21. SUBSEQUENT EVENTS (CONTINUED): During February 1999, the Company financed the purchase of equipment in the amount of $278,250. The note payable has a 7.15% interest rate with monthly payments of $5,529, due February 2004. During February 1999, the Company renegotiated a note payable reducing the interest rate from 10% to 8.5%, effective February 4, 1999. At December 31, 1998, the balance on the note payable was $234,204. 22. OTHER INFORMATIVE DISCLOSURES: Ready Mix, Inc., (a wholly-owned subsidiary), manufactures and distributes ready mix concrete in Las Vegas, NV, and targets prospective customers such as concrete subcontractors, prime contractors, home builders, commercial and industrial property developers, pool builders and homeowners. RMI began operations from its first location in March 1997. Financed with internal funds, a $2 million line of credit, notes payable and operating leases, the Company intends for RMI to operate from two or more sites using at least 40 mixer trucks. The following is a summary of the subsidiary's 1997 and 1998 revenue, property and equipment and total assets:
1997 1998 ------------------ -------------------- Revenue.........................................$ 9,498,757 $ 15,156,886 Property and equipment, net..................... 2,453,144 2,291,170 Total assets.................................... 4,615,940 5,091,32
EX-10.77 2 FINANCING LEASE NO. 1000065543 EXHIBIT 10.77 LEASE SCHEDULE NO. 1000065543 FINANCING LEASE ---------- Master Lease Agreement dated April 24, 1998 Lessor: Banc One Leasing Corporation Lessee: MEADOW VALLEY CONTRACTORS, INC. 1. GENERAL. This Lease Schedule is signed and delivered under the Master Lease Agreement identified above, as amended from time to time ("Master Lease"), between Lessee and Lessor. Capitalized terms defined in the Master Lease will have the same meanings when used in this Schedule. 2. FINANCING. Lessor finances for Lessee, and Lessee finances with Lessor, all of the property ("Equipment") described below or in Schedule A-1 attached hereto (and Lessee represents that all Equipment is new unless specifically identified as used): 3. AMOUNT FINANCED. $256,320.00 4. FINANCING TERM. The Lease Term of this Schedule shall be Sixty (60) months. The Lease Term begins on the Commencement Date and continues for the number of months after the Commencement Date as stated above. The Acceptance Date is the date that Lessor accepts this Schedule as stated below Lessor's signature. The Commencement Date is the 24th day of the month in which the Acceptance Date occurs. 5. INSTALLMENT PAYMENTS. 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. MONTHLY INSTALLMENT PAYMENT (excluding Taxes): $5,115.45 FREQUENCY & TIMING OF INSTALLMENT PAYMENTS: monthly in arrears NUMBER OF INSTALLMENT PAYMENTS: Sixty (60) INSTALLMENT PAYMENT DUE DATES: The first installment payment shall be paid one month from the Commencement Date and all subsequent installment payments shall be paid on the same day of each month thereafter. SET-UP/FILING FEE: $200.00 which shall be paid on the Commencement Date. SECURITY DEPOSIT: $0.00 which shall be paid on the Commencement Date. 6. SECURITY INTEREST. This Schedule is intended to be a secured debt financing Transaction, not a true lease. See paragraph 7 below regarding Lessee's ownership of the Equipment. As collateral security for payment and performance of all Secured Obligations (defined in Paragraph 8 below) and to induce Lessor to extend credit from time to time to Lessee (under the Lease or otherwise), Lessee hereby grants to Lessor a first priority security interest in all of Lessee's right, title and interest in the Equipment, whether now existing or hereafter acquired, any sums specified in this Schedule as a "Security Deposit", and in all Proceeds (defined in Paragraph 8 below). At its option, Lessor may apply all or any part of any Security Deposit to cure any default of Lessee under the Lease. If upon final termination of this Schedule, Lessee has fulfilled all of the terms and conditions hereof, then Lessor shall pay to Lessee upon Lessee's written request any remaining balance of the Security Deposit for this Schedule, without interest. Page 1 of 3 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 BANC 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 to 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) and 23(d) are deleted; (e) subsection 23(b) and the last sentence of section 4 will apply only if an event of default occurs; and (f) all references in the Lease as it relates to this Schedule to "Lessee" and "Lessor" shall be changed to "Borrower" and "Lender" respectively. 10. STIPULATED LOSS VALUE. FOR PURPOSES OF THIS SCHEDULE ONLY, the "Stipulated Loss Value" of any item of Equipment during its Lease Term equals the aggregate of the following as of the date specified by Lessor: (a) all accrued and unpaid interest, late charges and other amounts due under this Schedule and the Master Lease to the extent it relates to this Schedule as of such specified date, plus (b) the remaining principal balance due and payable by Lessee under this Schedule as of such specified date, plus (c) interest on the amount described in the foregoing clauses (a) and (b) at the Overdue Rate commencing with the specified date; provided, that the foregoing calculation shall not exceed the maximum amount which may be collected by Lessor from Lessee under applicable law in connection with enforcement of Lessor's rights under this Schedule and the Master Lease to the extent it relates to this Schedule. 11. LESSEE TO PAY ALL TAXES. FOR PURPOSES OF THIS SCHEDULE AND ITS EQUIPMENT ONLY: Lessee shall pay any and all Taxes relating to this Schedule and its Equipment directly to the applicable taxing authority; Lessee shall prepare and file all reports or returns concerning any such Taxes as may be required by applicable law or regulation (provided, that Lessor shall not be identified as the owner of the Equipment in such reports or returns); and Lessee shall, upon Lessor's request, send Lessor evidence of payment of such Taxes and copies of any such reports or returns. 12. LESSEE'S ASSURANCES. Lessee irrevocably and unconditionally: (a) reaffirms all of the terms and conditions of the Master Lease and agrees that the Master Lease remains in full force and effect; (b) agrees that the Equipment is and will be used at all times solely for commercial purposes, and not for personal, family or household purposes; and (c) incorporates all of the terms and conditions of the Master Lease as if fully set forth in this Schedule. 13. REPRESENTATIONS AND WARRANTIES: Lessee represents and warrants that: (a) Lessee is a corporation, partnership or proprietorship duly organized, validly existing and in good standing under the laws of the state of its organization and is qualified to do business and is in good standing under the laws of each other state in which the Equipment is or will be located; (b) Lessee has full power, authority and legal right to sign, deliver and perform the Master Lease, this Schedule and all related documents and such actions have been duly authorized by all necessary corporate/partnership/proprietorship action; and (c) the Master Lease, this Schedule and each related document duly signed and delivered by Lessee and each Page 2 of 3 such document constitutes a legal, valid and binding obligation of Lessee enforceable in accordance with its terms. 14. CONDITIONS. No lease of Equipment under this Schedule shall be binding on Lessor, and Lessor shall have no obligation to purchase the Equipment covered hereby, unless: (a) Lessor has received evidence of all required insurance; (b) in Lessor's sole judgment, there has been no material adverse change in the financial condition or business of Lessee or any guarantor; (c) Lessee has signed and delivered to Lessor this Schedule, which must be satisfactory to Lessor, and Lessor has signed and accepted this Schedule; (d) no change in the Code or any regulation thereunder, which in Lessor's sole judgment would adversely affect the economics to Lessor of the lease transaction, shall have occurred or shall appear to be imminent; (e) Lessor has received, in form and substance satisfactory to Lessor, such other documents and information as Lessor shall reasonably request; and (f) Lessee has satisfied all other reasonable conditions established by Lessor. 15. OTHER DOCUMENTS: EXPENSES: Lessee agrees to sign and deliver to Lessor any additional documents deemed desirable by Lessor to effect the terms of the Master Lease or this Schedule including, without limitation, Uniform Commercial Code financing statements which Lessor is authorized to file with the appropriate filing officers. Lessee hereby irrevocably appoints Lessor 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 of the funding and closing of this Schedule. 16. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (i) Lessor has not selected, manufactured, sold or supplied any of the Equipment, (ii) Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has received a copy of, and approved, the purchase orders or purchase contracts for the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (A) LESSEE HAS RECEIVED, INSPECTED AND APPROVED ALL OF THE EQUIPMENT; (B) ALL EQUIPMENT IS IN GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND ALL APPLICABLE SPECIFICATIONS; (C) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR PURPOSES OF THE LEASE "AS-IS, WHERE-IS" WITH ALL FAULTS; AND (D) LESSEE UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF THE EQUIPMENT. LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE AGREES THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING THE EQUIPMENT OR THIS SCHEDULE. BANC ONE LEASING CORPORATION MEADOW VALLEY CONTRACTORS, INC. (Lessor) (Lessee) By: /s/ [SIGNATURE By: /s/ Gary W. Burnell -------------------------------- ---------------------------------- Title: MGR, FUNDING Title: VP/CFO ----------------------------- ------------------------------- Acceptance Date: 4/24/98 Witness: /s/ Tortina M. Bunton ------------------- ----------------------------- Page 3 of 3 EX-10.78 3 FINANCING LEASE NO. 1000065542 EXHIBIT 10.78 LEASE SCHEDULE NO. 1000065542 FINANCING LEASE Master Lease Agreement dated April 24, 1998 Lessor: Banc One Leasing Corporation Lessee: MEADOW VALLEY CONTRACTORS, INC. 1. GENERAL. This Lease Schedule is signed and delivered under the Master Lease Agreement identified above, as amended from time to time ("Master Lease"), between Lessee and Lessor. Capitalized terms defined in the Master Lease will have the same meanings when used in this Schedule. 2. FINANCING. Lessor finances for Lessee, and Lessee finances with Lessor, all of the property ("Equipment") described below or in Schedule A-1 attached hereto (and Lessee represents that all Equipment is new unless specifically identified as used): 3. AMOUNT FINANCED. $1,091,685.00 4. FINANCING TERM. The Lease Term of this Schedule shall be Eighty-four (84) months. The Lease Term begins on the Commencement Date and continues for the number of months after the Commencement Date as stated above. The Acceptance Date is the date that Lessor accepts this Schedule as stated below Lessor's signature. The Commencement Date is the 24th day of the month in which the Acceptance Date occurs. 5. INSTALLMENT PAYMENTS. As financing for the Equipment, Lessee shall pay to Lesser all amounts stated below on the due dates stated below. There shall be added to each installment payment all applicable Taxes as in affect from time to time. MONTHLY INSTALLMENT PAYMENT (excluding Taxes): $16,669.24 FREQUENCY & TIMING OF INSTALLMENT PAYMENTS: monthly in arrears NUMBER OF INSTALLMENT PAYMENTS: Eighty-four (84) INSTALLMENT PAYMENT DUE DATES: The first installment payment shall be paid one month from the Commencement Date and all subsequent installment payments shall be paid on the same day of each month thereafter. SET-UP/FILING FEE: $200.00 which shall be paid on the Commencement Date. SECURITY DEPOSIT: $0.00 which shall be paid on the Commencement Date. 6. SECURITY INTEREST. This Schedule is intended to be a secured debt financing transaction, not a true lease. See Paragraph 7 below regarding Lessee's ownership of the Equipment. As collateral security for payment and performance of all Secured Obligations (defined in Paragraph 8 below) and to induce Lessor to extend credit from time to time to Lessee (under the Lease or otherwise), Lessee hereby grants to Lessor a first priority security interest in all of Lessee's right, title and interest in the Equipment, whether now existing or hereafter acquired, any sums specified in this Schedule as a "Security Deposit", and in all Proceeds (defined in Paragraph 8 below). At its option, Lessor may apply all or any part of any Security Deposit to cure any default of Lessee under the Lease. If upon final termination of this Schedule, Lessee has fulfilled all of the terms and conditions hereof, then Lessor shall pay to Lessee upon Lessee's written request any remaining balance of the Security Deposit for this Schedule, without interest. Page 1 of 3 7. TITLE TO EQUIPMENT; FIRST PRIORITY LIEN. Lease 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 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 BANC 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), 23(c) and 23(d) are deleted; (e) subsection 23(b) and the last sentence of section 4 will apply only if an event of default occurs; and (f) all references in the Lease as it relates to this Schedule to "Lessee"and "Lessor" shall be changed to "Borrower" and "Lender" respectively. 10. STIPULATED LOSS VALUE. For purposes of this Schedule only, the "Stipulated Loss Value" of any item of Equipment during its Lease Term equals the aggregate of the following as of the date specified by Lessor: (a) all accrued and unpaid interest, late charges and other amounts due under this Schedule and the Master Lease to the extent it relates to this Schedule as of such specified date, plus (b) the remaining principal balance due and payable by Lessee under this Schedule as of such specified date, plus (c) interest on the amount described in the foregoing clauses (a) and (b) at the Overdue Rate commencing with the specified date; provided, that the foregoing calculation shall not exceed the maximum amount which may be collected by Lessor from Lessee under the 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 Page 2 of 3 such document constitutes a legal, valid and binding obligation of Lessee enforceable in accordance with its terms. 14. CONDITIONS. No lease of Equipment under this Schedule shall be binding on Lessor, and Lessor shall have no obligation to purchase the Equipment covered hereby unless: (a) Lessor has received evidence of all required insurance; (b) in Lessor's sole judgment, there has been no material adverse change in the financial condition or business of Lessee or any guarantor; (c) Lessee has signed and delivered to Lessor this Schedule, which must be satisfactory to Lessor, and Lessor has signed and accepted this Schedule; (d) no change in the Code or any regulation thereunder, which in Lessor's sole judgment would adversely affect the economics to Lessor of the lease transaction, shall have occurred or shall appear to be imminent; (e) Lessor has received, in form and substance satisfactory to Lessor, such other documents and information as Lessor shall reasonably request; and (f) Lessee has satisfied all other reasonable conditions established by Lessor. 15. OTHER DOCUMENTS: EXPENSES: Lessee agrees to sign and deliver to Lessor any additional documents deemed desirable by Lessor to effect the terms of the Master Lease or this Schedule including, without limitation, Uniform Commercial Code financing statements which Lessor is authorized to file with the appropriate filing officers. Lessee hereby irrevocably appoints Lessor as Lessee's attorney-in-fact with full power and authority in the place of Lessee and in the name of Lessee to prepare, sign, amend, file or record any Uniform Commercial Code financing statements or other documents deemed desirable by Lessor to perfect, establish or give notice of Lessor's interests in the Equipment or in any collateral as to which Lessee has granted Lessor a security interest. Lessee shall pay upon Lessor's written request any actual out-of-pocket costs and expenses paid or incurred by Lessor in connection with the above terms of this section or the funding and closing of this Schedule. 16. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (i) Lessor has not selected, manufactured, sold or supplied any of the Equipment, (ii) Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has received a copy of, and approved, the purchase orders or purchase contracts for the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (A) LESSEE HAS RECEIVED, INSPECTED AND APPROVED ALL OF THE EQUIPMENT; (B) ALL EQUIPMENT IS IN GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND ALL APPLICABLE SPECIFICATIONS; (C) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR PURPOSES OF THE LEASE "AS-IS, WHERE-IS" WITH ALL FAULTS; AND (D) LESSEE UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF THE EQUIPMENT. LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE AGREES THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING THE EQUIPMENT OR THIS SCHEDULE. BANC ONE LEASING CORPORATION MEADOW VALLEY CONTRACTORS, INC. (Lessor) (Lessee) By: [SIGNATURE By: /s/ Gary W. Burnell ------------------------ --------------------------- Title: MGR, FUND/NG Title: VP/CFO --------------------- ------------------------ Acceptance Date: 4/24/98 Witness: Tortina M. Bunton ----------- ---------------------- Page 3 of 3 EX-10.79 4 FINANCING LEASE NO. 1000066385 EXHIBIT 10.79 LEASE SCHEDULE NO. 1000066385 FINANCING LEASE ---------- (Per Diem Interim Rent) Master Lease Agreement dated April 24, 1998 Lessor: Banc One Leasing Corporation Lessee: Meadow Valley Contractors, Inc. 1. GENERAL. This Lease Schedule is signed and delivered under the Master Lease Agreement identified above, as amended from time to time ("Master Lease"), between Lessee and Lessor. Capitalized terms defined in the Master Lease will have the same meanings when used in this Schedule. 2. FINANCING. Lessor finances for Lessee, and Lessee finances with Lessor, all of the property ("Equipment") described in Schedule A-1 attached hereto (and Lessee represents that all Equipment is new unless specifically identified as used): 3. AMOUNT FINANCED: Equipment Cost: $349,592.00 Set-up/Filing Fee: $ 0.00 Miscellaneous: $ 0.00 Sales Tax: $ 0.00 Total: $349,592.00 ----------- 4. FINANCING TERM. The Base Term of this Schedule shall be SIXTY(60) months and the Base Term shall commence on 7/01/98 ("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 simple interest at 7.34% on $349,592 principal, only for the number of days in the Interim Term. (b) During the Base Term, Lessee shall pay to Lessor monthly installment payments of principal and interest with each such periodic installment payment being in the amount of $6,978.56. The first installment payment in the Base Term in the amount of $6,978.56 (includes applicable tax) shall be paid in arrears and all subsequent installment payments shall be paid on the same day of each payment thereafter. The remaining principal balance and all accrued interest shall be due and payable in full on the last day of the Lease Term. (c) Lessee shall pay Lessor a Set-Up/Filing Fee as follows: (1) $200.00 shall be paid on the Acceptance Date, or (2) $ 0.00 has been included in the above Lessor's Cost of the Equipment. PAGE 1 (d) Security Deposit: $0.00. On the Acceptance Date, Lessee shall pay Lessor said Security Deposit which shall be held in accordance with paragraph 6 below. 6. SECURITY INTEREST. This Schedule is intended to be a secured debt financing transaction, not a true lease. See Paragraph 7 below regarding Lessee's --- ownership of the Equipment. As collateral security for payment and performance of all Secured Obligations (defined in Paragraph 8 below) and to induce Lessor to extend credit from time to time to Lessee (under the Lease or otherwise), Lessee hereby grants to Lessor a first priority security interest in all of Lessee's right, title and interest in the Equipment, whether now existing or hereafter acquired, any sums specified in this Schedule as a "Security Deposit", and in all Proceeds (defined in Paragraph 8 below). At its option, Lessor may apply all or any part of any Security Deposit to cure any default of Lessee under the Lease. If upon final termination of this Schedule, Lessee has fulfilled all of the terms and conditions hereof, then Lessor shall pay to Lessee upon Lessee's written request any remaining balance of the Security Deposit for this Schedule, without interest. 7. TITLE TO EQUIPMENT; FIRST PRIORITY LIEN. Lessee represents, warrants and agrees: that Lessee currently is the lawful owner of the Equipment; that good and marketable title to the Equipment shall remain with Lessee at all times; that Lessee has granted to Lessor a first priority security interest in the Equipment and all Proceeds; and that the Equipment and all Proceeds are, and at all times shall be, free and clear of any Liens other than Lessor's security interest therein. Lessee at its sole expense will protect and defend Lessor's first priority security interest in the Equipment against all claims and demands whatsoever. 8. CERTAIN DEFINITIONS. "Secured Obligations" means (a) all payments and other obligations of Lessee under or in connection with this Schedule, and (b) all payments and other obligations of Lessee (whether now existing or hereafter incurred) under or in connection with the Master Lease and all present and future Lease Schedules thereto, and (c) all other leases, indebtedness, liabilities and/or obligations of any kind (whether now existing or hereafter incurred, absolute or contingent, direct or indirect) of Lessee to Lessor or to any affiliate of either Lessor or BANC ONE CORPORATION. "Proceeds" means all cash and non-cash proceeds of the Equipment including, without limitation, proceeds of insurance, indemnities and/or warranties. 9. AMENDMENT 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) and 23(d) are deleted; (e) subsection 23(b) and the last sentence of section 4 will apply only if an event of default occurs; and (f) all references in the Lease as it relates to this Schedule to "Lessee" and "Lessor" shall be changed to "Borrower" and "Lender" respectively. 10. STIPULATED LOSS VALUE. For purposes of this Schedule only, the "Stipulated Loss Value" of any item of Equipment during its Lease Term equals the aggregate of the following as of the date specified by Lessor: (a) all accrued and unpaid interest, late charges and other amounts due under this Schedule and the Master Lease to the extent it relates to this Schedule as of such specified date, plus (b) the remaining principal balance due and payable by Lessee under this Schedule as of such specified date, plus (c) interest on the amount described in the foregoing clauses (a) and (b) at the Overdue Rate commencing with the specified date; provided, that the foregoing calculation shall not exceed the maximum amount which may be collected by Lessor from Lessee under applicable law in connection with enforcement of Lessor's rights under this Schedule and the Master Lease to the extent it relates to this Schedule. 11. LESSEE TO PAY ALL TAXES. For purposes of this Schedule and its Equipment only: Lessee shall pay any and all Taxes relating to this Schedule and its Equipment directly to the applicable taxing authority; Lessee shall prepare and file all reports or returns concerning any such Taxes as may be required by PAGE 2 applicable law or regulation (provided, that Lessor shall not be identified as the owner of the Equipment in such reports or returns); and Lessee shall, upon Lessor's request, send Lessor evidence of payment of such Taxes and copies of any such reports or returns. 12. LESSEE'S ASSURANCES. Lessee irrevocably and unconditionally: (a) reaffirms all of the terms and conditions of the Master Lease and agrees that the Master Lease remains in full force and effect; (b) agrees that the Equipment is and will be used at all times solely for commercial purposes, and not for personal, family or household purposes; and (c) incorporates all of the terms and conditions of the Master Lease as if fully set forth in this Schedule. 13. REPRESENTATIONS AND WARRANTIES; Lessee represents and warrants that: (a) Lessee is a corporation, partnership or proprietorship duly organized, validly existing and in good standing under the laws of the state of its organization and is qualified to do business and is in good standing under the laws of each other state in which the Equipment is or will be located; (b) Lessee has full power, authority and legal right to sign, deliver and perform the Master Lease, this Schedule and all related documents and such actions have been duly authorized by all necessary corporate/partnership/proprietorship action; and (c) the Master Lease, this Schedule and each related document has been duly signed and delivered by Lessee and each such document constitutes a legal, valid and binding obligation of Lessee enforceable in accordance with its terms. 14. CONDITIONS. No lease of Equipment under this Schedule shall be binding on Lessor, and Lessor shall have no obligation to purchase the Equipment covered hereby, unless: (a) Lessor has received evidence of all required insurance; (b) in Lessor's sole judgment, there has been no material adverse change in the financial condition or business of Lessee or any guarantor; (c) Lessee has signed and delivered to Lessor this Schedule, which must be satisfactory to Lessor, and Lessor has signed and accepted this Schedule; (d) no change in the Code or any regulation thereunder, which in Lessor's sole judgment would adversely affect the economics to Lessor of the lease transaction, shall have occurred or shall appear to be imminant; (a) 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 as Lessee's attorney-in-fact with full power and authority in the place of Lessee and in the name of Lessee to prepare, sign, amend, file or record any Uniform Commercial Code financing statements or other documents deemed desirable by Lessor to perfect, establish or give notice of Lessor's interests in the Equipment or in any collateral as to which Lessee has granted Lessor a security interest. Lessee shall pay upon Lessor's written request any actual out-of- pocket costs and expenses paid or incurred by Lessor in connection with the above terms of this section or the funding and closing of this Schedule. 16. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (i) Lessor has not selected, manufactured, sold or supplied any of the Equipment, (ii) Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has received a copy of, and approved, the purchase orders or purchase contracts for the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (a) LESSEE HAS RECEIVED, INSPECTED AND APPROVED ALL OF THE EQUIPMENT: (b) ALL EQUIPMENT IS IN GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND ALL APPLICABLE SPECIFICATIONS; (C) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR PURPOSES OF THE LEASE "AS-IS, WHERE-IS" WITH ALL FAULTS; AND (d) LESSEE UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF THE EQUIPMENT. PAGE 3 LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE AGREES THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING THE EQUIPMENT OR THIS SCHEDULE. BANC ONE LEASING CORPORATION MEADOW VALLEY CONTRACTORS, INC. (Lessor) (Lessee) By: /s/ [SIGNATURE By: /s/ GARY W. BURNELL ------------------------------- --------------------------------- Title: MGR FUNDING Title: VP/CFO ---------------------------- --------------------------------- Acceptance Date: 6/22/98 Witness: /s/ Tortina Bunton ------------------ ---------------------------- finperd PAGE 4 EX-10.80 5 SCHEDULE TO MASTER LOAN AGREEMENT EXHIBIT 10.80 SCHEDULE TO MASTER LOAN AGREEMENT [LOGO OF U.S. BANCORP] MEADOW VALLEY CONTRACTORS, INC. P.O. B0X 60726 Phoenix, Arizona 85802-0726 $1,000,000.00 Effective Date December 30, 1998 LOAN TRANSACTION NUMBER 1. THIS SCHEDULE is made between Meadow Valley Contractors, Inc., as Debtor, and U.S. BANCORP LEASING & FINANCIAL (which, together with its successor and assigns, will be called the "Secured Party") pursuant to the Master Loan Agreement dated as of December 17, 1998 (the "Loan Agreement"), the terms of which (including the definitions) are incorporated herein. If any terms hereof are inconsistent with the terms of the Loan Agreement, the terms hereof shall prevail. 2. FOR VALUE RECEIVED, Debtor hereby promises to pay to the order of Secured Party the principal amount of One Million and 00/100 Dollars ($1,000,000.00) with interest on any outstanding principal balance at the rate(s) specified herein from the Effective Date hereof until this Schedule shall have been paid in full in accordance with the following payment schedule: 48 installments of $19,613.02 each, plus an estimated final payment of $227,153.98, including the entire amount of interest accrued on this Schedule at the time of payment of each installment. The first payment shall be due on February 1, 1999 and a like payment shall be due on the same day of each succeeding month thereafter until the entire principal and interest have been paid. At the time of the final installment hereon, all unpaid principal and interest shall be due and owing. Each payment shall be applied first to accrued and unpaid interest, and the balance to the outstanding principal hereof. As a result, such final installment may be substantially more or substantially less than the installments specified herein. 3. The Debtor promises to pay interest on the principal balance outstanding at a rate of 6.60 percent per annum. 4. The Debtor may prepay this Schedule, in whole or in part, by paying simultaneously with and in addition to the prepayment, a premium for such prepayment privilege equal to the specified percent of the amount prepaid in accordance with the following schedule: one (1) to thirty (30) months 1%, thirty-one (31) through forty-eight (48) months 0%. Additionally, the Debtor may prepay up to $150,000.00 annually without incurring a prepayment penalty. Notwithstanding the foregoing, payments made within 30 days of the date an installment is due which do not exceed the scheduled amount of such installment shall not be considered prepayments. 5. Each of Debtor, if more than one, and all other parties who at any time may be liable hereon in any capacity, hereby jointly and severally waive diligence, demand, presentment, presentment for payment, protest, notice of protest and notice of dishonor of this Schedule, and authorize the Secured Party, without notice, to grant extensions in the time of payment of and reductions in the rate of interest on any moneys owing on this Schedule. 6. The following property is hereby made Collateral for all purposes under the Loan Agreement: One (1) 1996 Remco Sandmax 9000 Impact Crusher, s/n 90S0496-174 One (1) 1984 CAT 950E Loader, s/n 31R00591 One (1) 1988 CAT 936E Loader, s/n 33Z3330 One (1) 1987 International 4,000 gal Water Truck, s/n 1HTLKTVR2HH473124 One (1) 1987 International 4,000 gal Water Truck, s/n 1HTLKTVR8HH473127 One (1) 1985 Peterbilt 4,000 gal Water Truck, s/n 1XP4LA9X1FD185772 One (1) 1993 Ford F-700 1,800 gal Water Truck, s/n 1FDPK74C8PVA37845 One (1) 1985 Peterbilt 4,000 gal Water Truck, s/n 1XP4LA9X9FN190650 ADDRESS FOR ALL NOTICES: P.O. BOX 2177, 7659 S.W. Mohawk Street Tualatin, Oregon 97062-2177 2 One (1) 1995 International 2,200 gal Water Truck, s/n 1HTSDZ7R1MH312201 One (1) 1994 Ford LTN8000 4,000 gal Water Truck, s/n 1FDYW82EGRVA07118 One (1) CAT D-8L Dozer, s/n 53Y01797 One (1) CAT 950B Loader, s/n 22Z01565 One (1) CAT 966E Loader, s/n 99Y06390 One (1) CAT 966F Loader, s/n 3XJ00607 One (1) Case 580SK 4x4 Backhoe Hertz, s/n JJGO183417 One (1) Case 580SK 4x4 Backhoe, s/n JJG01179261 One (1) CAT RT100 Forklift, s/n 1GJ00919 One (1) Grove 22 ton Crane, s/n 49581 One (1) 1994 CAT 140G Blade, s/n 5MDO2761 One (1) CMI SF550 Concrete Paver, s/n 5PD47 Each of the above units are complete as equipped including, but not limited to, all attachments, accessories & replacements relating thereto. 7. The Collateral hereunder shall be based at the following location(s): 4411 S. 40th Street, Suite D-11 Phoenix, Arizona 85040 COUNTY: Maricopa IN WITNESS WHEREOF, Debtor has executed this Schedule this 30th day of December, 1998. Meadow Valley Contractors, Inc. ------------------------------ By: /s/ Gary W. Burnell --------------------------- Gary W. Burnell Vice President & Chief Financial Officer ADDRESS FOR ALL NOTICES: P. O. Box 2177, 7659 S. W. Mohawk Street Tualatin, Oregon 97062-2377 MASTER LOAN AGREEMENT [LOGO OF U.S. BANCORP] 1.0 PARTIES, COLLATERAL AND OBLIGATIONS 1.1 This Agreement is dated as of December 17, 1998. For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Meadow Valley Contractors, Inc. (hereinafter called "Debtor") with offices at P.O. Box 60726, Phoenix, Arizona 85040 intending to be legally bound, hereby promises to pay to U.S. BANCORP LEASING & FINANCIAL, an Oregon corporation having offices at P.O. Box 2177, 7659 S.W. Mohawk Street, Tualatin, Oregon 97062-2177 (hereinafter called "Secured Party"), any amounts set forth on any Schedule to Master Loan Agreement hereunder (the "Schedule(s)", all the terms of which are incorporated herein) and grants a security interest in and assigns, transfers and sets over to and to the successors and assigns thereof, the property specified in any Schedule hereunder wherever located, and any and all proceeds thereof, insurance recoveries, and all replacements, additions, accessions, accessories and substitutions thereto or therefor (hereinafter called the "Collateral"). The security interest granted hereby is to secure payment of any and all liabilities or obligations of Debtor to the Secured Party, matured or unmatured, direct or indirect, absolute or contingent, heretofore arising, now existing or hereafter arising, and whether under this Agreement or under any other writing between Debtor and Secured Party (all hereinafter called the "obligations" and/or the "liabilities"). 1.2 JOINT AND SEVERAL LIABILITY; PAYMENT TERMS. In the event there is more than one Debtor, all obligations shall be considered as joint and several obligations of all Debtors regardless of the source of Collateral or the particular Debtor with which the obligation originated. Interest shall be calculated on the basis of a 360-day year. All payments on any Schedule hereunder shall be made in lawful money of the United States at the post office address of the Secured Party or at such other place as the Secured Party may designate to Debtor in writing from time to time. In no event shall any Schedule hereunder be enforced in any way which permits Secured Party to collect interest in excess of the maximum lawful rate. Should interest collected exceed such rate, Secured Party shall refund such excess interest to Debtor. In such event, Debtor agrees that Secured Party shall not be subject to any penalties for contracting for or collecting interest in excess of the maximum lawful rate. 1.3 LATE CHARGE. If any of the obligations remains overdue for more than ten (10) days, Debtor hereby agrees to pay on demand, as a late charge, an amount equal to the lesser of (i) five percent (5.0%) of each such overdue amount; or (ii) the maximum percentage of any such overdue amount permitted by applicable law as a late charge. Debtor agrees that the amount of such late charge represents a reasonable estimate of the cost to Secured Party of processing a delinquent payment and that the acceptance of any late charge shall not constitute a waiver of default with respect to the overdue amount or prevent Secured Party from exercising any other available rights and remedies. 2.0 WARRANTIES AND COVENANTS OF DEBTOR. DEBTOR HEREBY REPRESENTS, WARRANTS AND COVENANTS THAT: 2.1 BUSINESS ORGANIZATION STATUS AND AUTHORITY. (i) Debtor is duly organized, validly existing and in good standing under the laws of the state of its organization and is qualified to do business in all states and countries in which such qualification is necessary; (ii) Debtor has the lawful power and authority to own its assets and to conduct the business in which it is engaged; and to execute and comply with the provisions of this Agreement and any related documents; (iii) the execution and delivery of this Agreement and any related documents have been duly authorized by all necessary action; (iv) no authorization, consent, approval, license or exemption of, or filing or registration with, any or all of the owners of Debtor or any governmental entity was, is or will be necessary to the valid execution, delivery, performance or full enforceability of this Agreement and any related documents. Except as specifically disclosed to Secured Party, Debtor utilizes no trade names in the conduct of its business and/or has not changed its name within the past five years. 2.2 MERGER: TRANSFER OF ASSETS. Debtor will not consolidate or merge with or into any other entity, liquidate or dissolve, distribute, sell, lease, transfer or dispose of all of its properties or assets or any substantial portion thereof other than in the ordinary course of its business, unless the Secured Party shall give its prior written consent, and the surviving, or successor entity or the transferee of such assets, as the case may be, shall assume, by a written instrument which is legal, valid and enforceable against such surviving or successor entity or transferee, all of the obligations of Debtor to Secured Party or any affiliate of Secured Party. 2.3 NO VIOLATION OF COVENANTS OR LAWS. Debtor is not party to any agreement or subject to any restriction which materially and adversely affects its ability to perform its obligations under this Agreement and any related documents. The execution of and compliance with the terms of this Agreement and any related documents does not and will not (i) violate any provision of law, or (ii) conflict with or result in a breach of any order, injunction, or decree of any court or governmental authority or the formation documents of Debtor, or (iii) constitute or result in a default under any agreement, bond or indenture by which Debtor is bound or to which any of its property is subject or (iv) result in the imposition of any lien or encumbrance upon any of Debtor's assets, except for any liens created hereunder or under any related documents. 2.4 ACCURATE INFORMATION. All financial information submitted to the Secured Party in regard to Debtor or any shareholder, officer director, member, or partner thereof, or any guarantor of any of the obligations thereof, was prepared in accordance with generally accepted accounting principles, consistently applied, and fairly and accurately depicts the financial position and results of operations of Debtor or such other person, as of the respective dates or for the respective periods, to which such information pertains. Debtor had good, valid and marketable title to all the properties and assets reflected as being owned by it on any balance sheets of Debtor submitted to Secured Party as of the dates thereof. 2.5 JUDGMENTS; PENDING LEGAL ACTION. There are no judgments outstanding against Debtor, and there are no actions or proceedings pending or, to the best knowledge of Debtor, threatened against or affecting Debtor or any of its properties in any court or before any governmental entity which, if determined adversely to Debtor, would result in any material adverse change in the business, properties or assets, or in the condition, financial or otherwise, of Debtor or would materially and adversely affect the ability of Debtor to satisfy its obligations under this Agreement and any related documents. ADDRESS FOR ALL NOTICES: P.O. Box 2177, 7659 S.W. Mohawk Street Tualatin, Oregon 97062-2177 2.6 NO BREACH OF OTHER AGREEMENTS; COMPLIANCE WITH APPLICABLE LAWS. Debtor is not in breach of or in default under any loan agreement, indenture, bond, note or other evidence of indebtedness, or any other material agreement or any court order, injunction or decree or any lien, statute, rule or regulation. The operations of Debtor comply with all laws, ordinances and governmental rules and regulations applicable to them. Debtor has filed all Federal, state and municipal income tax returns which are required to be filed and has paid all taxes as shown on said returns and on all assessments billed to it to the extent that such taxes or assessments have become due. Debtor does not know of any other proposed tax assessment against it or of any basis for one. 2.7 SALE PROHIBITED. Debtor will not sell, dispose of or offer to sell or otherwise transfer the Collateral or any interest therein without the prior written consent of Secured Party. 2.8 LOCATION OF COLLATERAL. The Collateral will be primarily based at the location(s) shown on the Schedule(s) hereunder and Debtor will promptly notify Secured Party of any change in its chief executive office location(s). 2.9 COLLATERAL NOT A FIXTURE. The Collateral in not attached, and Debtor will not permit the Collateral to become attached, to real estate in such a way that it would be considered part of the realty or designated a "fixture." Notwithstanding any presumption of applicable law, and irrespective of any manner of attachment, the Collateral shall not be deemed real property but shall retain its character as personal property. However, Debtor will at the option of Secured Party furnish the latter with a waiver or waivers in recordable form, signed by all persons having an interest in the real estate, of any interest in the Collateral which is or might be deemed to be prior to Secured Party's interest. 2.10 PERFECTION OF SECURITY INTEREST. Except for (i) the security interest granted hereby and (ii) any other security interest previously disclosed by Debtor to Secured Party in writing, Debtor is the owner of the Collateral free from any adverse lien, security interest or encumbrance. Debtor will defend the Collateral against all claims and demands of all persons at any time claiming any interest therein. Except as previously disclosed in writing to Secured Party, no financing statement covering any Collateral or any proceeds thereof is on file in any public office. At the request of Secured Party, Debtor will execute, acknowledge and deliver to Secured Party in recordable or fileable form, any document or instrument required by Secured Party to further the purposes of this Agreement, or to perfect its interest in the Collateral or to maintain such perfected interest in full force an effect, including (without limitation) any fixture filings and financing statements and any amendments and continuation statements thereto pursuant to the Uniform Commercial Code, in form satisfactory to Secured Party, and will pay the cost of filing the same or filing or recording this Agreement in all public offices wherever filing or recording is deemed by Secured Party to be necessary or desirable. Debtor hereby agrees that this Agreement shall be and constitute a financing statement for purposes of the Uniform Commercial Code. 2.11 INSURANCE. Unless otherwise agreed, Debtor will have and maintain insurance from financially sound carriers at times with respect to all Collateral against risks of the fire (including so-called extended coverage), theft, collision, flood, earthquake, "mysterious disappearance" and such other risks as Secured Party may require, containing such terms, in such form, for such periods and written by such companies as my be satisfactory to Secured Party; each insurance policy shall name Secured Party as loss payee and shall be payable to Secured Party and Debtor as their interests may appear, all policies of insurance shall provide for ten days' written minimum cancellation notice to Secured Party; Debtor shall furnish Secured Party with certificates or other evidence satisfactory to Secured Party of compliance with the foregoing insurance provisions. 2.12 USE OF THE COLLATERAL. Debtor will use the Collateral for business purposes only and operate it by qualified personnel in accordance with applicable manufacturers' manuals. Debtor will keep the Collateral free from any adverse lien or encumbrance and in good working order, condition and repair and will not waste or destroy the Collateral or any part thereof: Debtor will keep the Collateral appropriately protected from the elements, and will furnish all required parts and servicing (including any contract service necessary to maintain the benefit of any warranty of the manufacturer); Debtor will not use the Collateral in violation of any statute, ordinance, regulation or order, and Secured Party may examine and inspect the Collateral and any and all books and records of Debtor during business hours at any time; such right of inspection shall include the right to copy Debtor's books and records and to converse with Debtor's officers, employees, agents, and independent accountants. 2.13 TAXES AND ASSESSMENTS. Debtor will pay promptly when due all taxes, assessments, levies, imposts, duties and charges, of any kind or nature, imposed upon the Collateral or for its use or operation or upon this Agreement or upon any instruments evidencing the obligations. 2.14 FINANCIAL STATEMENTS. Debtor shall furnish Secured Party within ninety (90) days after the close of each fiscal year of Debtor, its financial statements (including without limitation, a balance sheet, a statement of income and surplus account and a statement of changes in financial position) for the immediately preceding fiscal year, setting forth the corresponding figures for the prior fiscal year in comparative form, all in reasonable detail without any qualification or exception deemed material by Secured Party. Such financial statements shall be prepared at least as a review by Debtor's independent certified accountants and, if prepared as an audit, shall be certified by such accountants. Debtor shall also furnish Secured Party with any other financial information deemed necessary by Secured Party. Each financial statement submitted by Debtor to Secured Party shall be accompanied by a certificate signed by the chief executive officer, the chief operating officer or the chief financial officer of Debtor, certifying that (i) such financial statement was prepared in accordance with generally accepted accounting principles consistently applied and fairly and accurately presents the Debtor's financial condition and results of operations for the period to which it pertains, and (ii) no event of default has occurred under this Agreement during the period to which such financial statement pertains. 30. EVENTS OF DEFAULT 3.1 The following shall be considered events of default: (i) failure on the part of Debtor to promptly perform in complete accordance with its representations, warranties and covenants made in this Agreement or in any other agreement with Secured Party, including, but not limited to, the payment of any liability, with interest, when due, or default by Debtor under the provisions of any other material agreement to which Debtor is party.(ii)the death of Debtor if an individual or the dissolution of Debtor if a business organization; (iii) the filing of any petition or complaint under the Federal Bankruptcy Code or other federal or state acts of similar nature, by or against Debtor, or an assignment for the benefit of creditors by Debtor; (iv) an application for or the appointment of a Receiver, Trustee or Conservator, voluntary or involuntary, by or against Debtor or for any substantial assets of Debtor; (v) insolvency of Debtor under either the Federal Bankruptcy Code or applicable principles of equity; (vi) entry of judgment, issuance of any garnishment or attachment, or filing of any lien, claim or government ADDRESS FOR ALL NOTICES: P.O Box 2177, 7659 S.W. Mohawk Street Tualatin, Oregon 97062-2177 attachment against the Collateral or which, in Secured party's sole discretion, might impair the Collateral; (vii) the determination by Secured Party that a material misrepresentation of fact has been made by Debtor in this Agreement or in any writing supplementary or ancillary hereto; (viii) a determination by Secured Party that Debtor has suffered a material adverse change in its financial condition, business or operations from the date of this Agreement, or (ix) bankruptcy, insolvency, termination, death, dissolution or default of any guarantor for Debtor. 4.0 REMEDIES 4.1 Upon the happening of any event of default which is not cured within ten (10) days, or at any time thereafter, (i) all liabilities of Debtor shall, at the option of Secured Party, become immediately due and payable; (ii) Secured Party shall have and may exercise all of the rights and remedies granted to a secured party under the Uniform Commercial Code; (iii) Secured Party shall have the right, immediately, and without notice or other action, to set-off against any of Debtor's liabilities to Secured Party any money owed by Secured Party in any capacity to Debtor, whether or not due, and Secured Party shall be deemed to have exercised such right of set-off and to have made a charge against any such money immediately upon the occurrence of such default event though actual book entries may be made at some time subsequent thereto; (iv) Secured Party may proceed with or without judicial process to take possession of all or any part of the Collateral; Debtor agrees that upon receipt of notice of Secured Party's intention to take possession of all or any part of said Collateral, Debtor will do everything necessary to make same available to Secured Party (including, without limitation, assembling the Collateral and making it available to Secured Party at a place designated by Secured Party which is reasonably convenient to Debtor and Secured Party); and so long as Secured Party acts in a commercially reasonable manner, Debtor agrees to assign, transfer and deliver at any time the whole or any portion of the Collateral or any rights or interest therein in accordance with the Uniform Commercial Code and without limiting the scope of Secured Party's rights thereunder; (v) Secured Party may sell the Collateral at public or private sale or in any other commercially reasonable manner and, at the option of Secured Party, in bulk or in parcels and with or without having the Collateral at the sale or other disposition, and Debtor agrees that in case of sale or other disposition of the Collateral, or any portion thereof, Secured Party shall apply all proceeds first to all costs and expenses of disposition, including attorneys' fees, and then to Debtor's obligations to Secured Party; (vi) Secured Party may elect to retain the Collateral or any part thereof in satisfaction of all sums due from Debtor upon notice to Debtor and any other party as may be required by the Uniform Commercial Code. All remedies provided in this paragraph shall be cumulative. Secured Party may exercise any one or more of such remedies in addition to any and all other remedies Secured Party may have under any applicable law or in equity. 4.2 EXPENSES; DISPOSITION. Upon default, all amounts due and to become due hereunder shall, without notice, bear interest at the lesser of (i) fifteen percent (15%) per annum or (ii) the maximum rate per annum which Secured Party is permitted by law to charge from the date such amounts are due until paid. Debtor shall pay all reasonable expenses of realizing upon the Collateral hereunder upon default and collecting all liabilities of Debtor to Secured Party, which reasonable expenses shall include attorneys' fees, whether or not litigation is commenced and whether incurred at trial, on appeal, or in any other proceeding. Any notification of a sale or other disposition of Collateral or of other action by Secured Party required to be given by Secured Party, will be sufficient if given personally, mailed, or delivered by facsimile machine or overnight carrier not less than five (5) days prior to the day on which such sale or other disposition will be made or action taken, and such notification shall be deemed reasonable notice. 5.0 MISCELLANEOUS 5.1 NO IMPLIED WAIVERS; ENTIRE AGREEMENT. The waiver by Secured Party of any default hereunder or of any provisions hereof shall not discharge any party hereto from liability hereunder and such waiver shall be limited to the particular event of default and shall not operate as a waiver of any subsequent default. This Agreement and any Schedule hereunder are non- cancelable. No modification of this Agreement or waiver of any right of Secured Party hereunder shall be valid unless in writing and signed by an authorized officer of Secured Party. No failure on the part of Secured Party to exercise, or delay in exercising, any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy. The provisions of this Agreement and the rights and remedies granted to Secured Party herein shall be in addition to, and not in limitation of those of any other agreement with Secured Party or any other evidence of any liability held by Secured Party. This Agreement and any Schedule hereunder (a "Transaction") embody the entire agreement between the parties and supersede all prior agreements and understandings relating to the same subject matter, except in any case where the Secured Party takes an assignment from a vendor of its security interest in the same Collateral, in which case the terms of the Transaction shall be incorporated into the assigned agreement and shall prevail over any inconsistent terms therein but shall not be construed to create a new contract. 5.2 CHOICE OF LAW. This Agreement and the rights of the parties hereto shall be governed by applicable Federal law and the laws of the State of Oregon. Any action arising out of this Agreement may be litigated under the laws of Oregon and submitted to the jurisdiction of Oregon, and that service of process of certified mail, return receipt requested, will be sufficient to confer personal jurisdiction over the Debtor. SECURED PARTY AND DEBTOR EACH WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING FROM OR RELATED TO THIS AGREEMENT. 5.3 PROTECTION OF THE COLLATERAL. At its option, Secured Party may discharge taxes, liens or other encumbrances at any time levied or placed on the Collateral, may pay for insurance on the Collateral and may pay for the maintenance and preservation of the Collateral. Debtor agrees to reimburse Secured Party on demand for any payment made or any expense incurred by Secured Party pursuant to the foregoing authorization. Any payments made by Secured Party shall be immediately due and payable by Debtor and shall bear interest at the rate of fifteen percent (15%) per annum. Until default, Debtor may retain possession of the Collateral and use it in any lawful manner not inconsistent with the provisions of this Agreement and any other agreement between Debtor and Secured Party, and not inconsistent with any policy of insurance thereon. 5.4 BINDING AGREEMENT; TIME OF THE ESSENCE. This Agreement shall take effect as a sealed instrument and shall be binding upon and shall inure to the benefit of the parties hereto, their respective heirs, executors, administrators, successors, and assigns. Time is of the essence with respect to the performance of Debtors' obligations under this Agreement and any other agreement between Debtor and Secured Party. 5.5 ENFORCEABILITY. Any term, clause or provision of this Agreement or of any evidence of indebtedness from Debtor to Secured Party which is unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of each prohibition or unenforceability without invalidating the remaining terms or clauses of such provision or the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not ADDRESS FOR ALL NOTICES: P.O. BOX 2177, 7659 S.W. Mohawk Street Tualarin, Oregon 97062-2177 invalidate or render unenforceable such term, clause or provision in any other jurisdiction. 5.6 NOTICES. Any notices or demands required to be given herein shall be given to the parties in writing by United States first class mail (express, certified or otherwise) at the addresses set forth on page 1 of this Agreement or to such other addresses as the parties may hereafter substitute by written notice given in the manner prescribed in this paragraph. 5.7 ADDITIONAL SECURITY. If there shall be any other collateral for any of the obligations, or for the obligations of any guarantor thereof, Secured Party may proceed against and/or enforce any or all of the Collateral and such collateral in whatever order it may, in its sole discretion, deem appropriate. Any amount(s) received by Secured Party from whatever source and applied by it to any of the obligations shall be applied in such order of application as Secured Party shall from time to time, in its sole discretion, elect. 6.0 ASSIGNMENT 6.1 SECURED PARTY MAY SELL OR ASSIGN ANY AND ALL RIGHT, TITLE AND INTEREST IT HAS IN THE COLLATERAL AND/OR ARISING UNDER THIS AGREEMENT. DEBTOR SHALL, UPON THE DIRECTION OF SECURED PARTY: 1) EXECUTE ALL DOCUMENTS NECESSARY TO EFFECTUATE SUCH ASSIGNMENT AND, 2) PAY DIRECTLY AND PROMPTLY TO SECURED PARTY'S ASSIGNEE WITHOUT ABATEMENT, DEDUCTION OR SET-OFF, ALL AMOUNTS WHICH HAVE BECOME DUE UNDER THE ASSIGNED AGREEMENTS. SECURED PARTY'S ASSIGNEE SHALL HAVE ANY AND ALL RIGHTS, IMMUNITIES AND DISCRETION OF SECURED PARTY HEREUNDER AND SHALL BE ENTITLED TO EXERCISE ANY REMEDIES OF SECURED PARTY HEREUNDER. ALL REFERENCES HEREIN TO SECURED PARTY SHALL INCLUDE SECURED PARTY'S ASSIGNEE (EXCEPT THAT SAID ASSIGNEE SHALL NOT BE CHARGEABLE WITH ANY OBLIGATIONS OR LIABILITIES HEREUNDER OR IN RESPECT HEREOF). DEBTOR WILL NOT ASSERT AGAINST SECURED PARTY'S ASSIGNEE ANY DEFENSE, COUNTERCLAIM OR SET-OFF WHICH DEBTOR MAY HAVE AGAINST SECURED PARTY. 6.2 DEBTOR SHALL NOT ASSIGN OR IN ANY WAY DISPOSE OF ALL, OR ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR ENTER INTO ANY AGREEMENT REGARDING OF ALL OR ANY PART OF THE COLLATERAL WITHOUT THE PRIOR WRITTEN CONSENT OF SECURED PARTY WHICH SHALL NOT BE UNREASONABLY WITHHELD. IN CONNECTION WITH THE GRANTING OF SUCH CONSENT AND THE PREPARATION OF NECESSARY DOCUMENTATION, A FEE SHALL BE ASSESSED EQUAL TO ONE PERCENT (1%) OF THE TOTAL REMAINING BALANCE THEN DUE HEREUNDER. NOTWITHSTANDING THE ABOVE, THE FEE FOR ANY SUBSTITUTION OF ANY PART OF THE COLLATERAL SHALL BE $500 FOR EACH SUBSTITUTION AFTER THE FIRST ONE (FOR WHICH THERE SHALL BE NO FEE), SECURED PARTY'S PRIOR WRITTEN CONSENT (WHICH SHALL NOT BE UNREASONABLY WITHHELD) SHALL BE REQUIRED FOR EACH SUBSTITUTION. 7.0 POWER OF ATTORNEY 7.1 Secured Party is hereby appointed Debtor's attorney-in-fact to sign Debtor's name and to make non-material amendments (including completing and conforming the description of the Collateral) on any document in connection with this Agreement (including any financing statement) and to obtain, adjust, settle, and cancel any insurance required by this Agreement and to endorse any drafts in connection with such insurance. 8.0 NOTICE 8.1 Under Oregon law, most agreements, promises and commitments made ---------------------------------------------------------------- by Debtor, after October 3, 1989, concerning loans and other credit ------------------------------------------------------------------- extensions which are not for personal, family or household purposes or ---------------------------------------------------------------------- secured solely by the Debtor's residence must be in writing, express -------------------------------------------------------------------- consideration and be signed by Debtor to be enforceable. ------------------------------------------------------- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed the 30 day of December, 1998. U.S. BANCORP LEASING & FINANCIAL MEADOW VALLEY CONTRACTORS, INC. [DEBTOR] By: ____________________________ By: /s/ Gary W. Burnell An authorized officer thereof -------------------------- Gary W. Burnell Vice President & Chief Financial Officer ADDRESS FOR ALL NOTICES: P.O. Box 2177, 7659 S. W. Mohawk Street Tualatin, Oregon 97062-2177 EX-10.81 6 SECURITY AGREEMENT EXHIBIT 10.81 [LOGO] SECURITY AGREEMENT The undersigned debtor, meaning all debtors jointly and severally ("DEBTOR"), to secure the obligations set forth herein grants to the secured party named below (herein, with its successors and assigns, called "SECURED PARTY") under the terms and provisions of this agreement (this "AGREEMENT") a security interest in the following described property (herein, with all present and future attachments, accessories, replacement parts, repairs and additions or substitutions, referred to collectively as "EQUIPMENT"): ONE (1) HITACHI MODEL EX700 HYDRAULIC EXCAVATOR S/N 172-1691 EQUIPPED WITH ONE (1) 72 INCH BUCKET S/N RH66636 ONE (1) VOLVO MODEL A25C 4X4 ARTICULATED TRUCK S/N 68139 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: 1501 HIGHWAY 168, MOAPA and, when in use, will be used only in the following State(s): NV
- ------------------------------------------------------------------------------------------------------------------------------------ PAYMENT SCHEDULE USE OF PROCEEDS Debtor promises to pay Secured Party the Total Amount of Secured Party is hereby irrevocably authorized and directed to disburse $ 317,176.80 (the "Total Amount") in 24 installments as the proceeds of this Agreement as follows: follows: (a) $ 13,215.70 on 12/20/98, and a like sum on the Amount Payee (Name and Address) like date of each month thereafter until fully paid. $ 296,181.35 DeNardi Equipment Company, Inc. or ------------ ------------------------------------------------------ ______________________________________________________ (b) ______________________________________________________ $ 595.00 Associates Commercial Corporation ------------ ------------------------------------------------------ Administrative Fees ------------------------------------------------------ ______________________________________________________ $ 296,776.35 TOTAL ------------ ------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------ Debtor hereby acknowledges and agrees that the proceeds of this Agreement will be used for commercial, business or agricultural provided, however, that the final installment will be in purposes and will not be used for personal, family or household the amount of the then remaining unpaid balance. All purposes. Secured Party may disburse the proceeds using checks, drafts, amounts payable under this Agreement are payable at orders, transfer funds, or any other method or media Secured Party Secured Party's address shown below or at such other deems desirable. Disbursement may be made in Secured Party's name on address as Secured Party may specify from time to time in Debtor's behalf or in Debtor's name. Disbursement in accordance with writing. Any note taken in conjunction with this Agreement the above instructions or any written supplement to these instructions evidences indebtedness and not payment. will constitute payment and delivery to and receipt by Debtor of all such proceeds. - ------------------------------------------------------------------------------------------------------------------------------------
INSURANCE: Physical damage insurance covering the equipment is required. Debtor can furnish this insurance through an agent or broker of Debtor's choice. Debtor hereby authorizes Secured Party and any assignee to release to any insurance company affiliated with Secured Party or any assignee any information relating to a contract or policy of insurance which is providing or may provide insurance coverage against physical damage to the Equipment. - -------------------------------------------------------------------------------- TOTAL AMOUNT: The Total Amount consists of $ 296,776.35 of principal and precomputed interest in the amount of $ 20,400.45 computed on the basis of 6.47% per annum on the assumption that all payments will be made on their respective due dates. DELINQUENCY, RETURNED CHECKS AND ACCELERATION INTEREST: For each installment not paid when due, Debtor agrees to pay to Secured Party a delinquency charge calculated thereon at the rate of 1 1/2% per month for the period of delinquency or, at Secured Party's option, 5% of such installment, provided that such a delinquency charge is not prohibited by law, otherwise at the highest rate Debtor can legally obligate itself to pay and/or Secured Party can legally collect. Debtor agrees to reimburse Secured Party immediately upon demand for any amount charged to Secured Party by any depositary institution because a check, draft or other order made or drawn by or for the benefit of Debtor is returned unpaid for any reason and, if allowed by law, to pay Secured Party 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. Debtor agrees to pay Secured Party, upon acceleration of Debtor'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. Debtor can legally obligate itself to pay and/or Secured Party can legally collect. Any note take herewith evidences indebtedness and not payment. All amounts payable hereunder are payable at Secured Party's address shown below or at such other address as Secured Party may specify from time to time in writing. SECURITY INTEREST: To secure payment of the Total Amount and all of Secured Party's obligations under this Agreement or with respect to the Equipment, Debtor hereby grants to Secured Party a first priority security interest in the Equipment and in all cash and non-cash proceeds thereof (the Equipment and all such proceeds are herein called the "COLLATERAL") regardless of any retaking and/or redelivery of the Collateral to Debtor. CROSS SECURITY: Debtor grants to Secured Party a security interest in the Collateral (separate and distinct from and subordinate to that security interest granted pursuant to Secured Party pursuant to Section 2 above) to secure the payment of all absolute and all contingent obligations and liabilities of Debtor to Secured Party, or to any assignee of Secured Party, now existing of hereafter arising, whether under this agreement or any other agreement and whether due directly or by assignment; provided, however, upon any assignment of this Agreement by Secured Party, the assignee shall be deemed for the purpose of this paragraph as the only party with a security interest in the Collateral. PREPAYMENT: Debtor may prepay Debtor's obligations under this Agreement in full at any time. Upon prepayment Debtor 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 Debtor under this Agreement will be payable immediately upon such prepayment. Page 1 of 3 of Security Agreement dated 11/19/98 between Meadow Valley Contractors, Inc. (Debtor) and Associates Commercial Corporation (Secured Party) which includes, without limitation, an item of Collateral with the following serial number: 172-1691. Debtor's Initials GB ------------------------- /s/ SIGNATURE ILLEGIBLE ------------------------- 1. ADDITIONAL WARRANTIES AND AGREEMENTS. Debtor warrants and agrees that: the execution of and performance by Debtor under the terms of this Agreement has been approved for Debtor by all necessary action and by Debtor's partners or board of directors, as applicable; the Equipment is currently and will continue be maintained in good operating condition, repair and appearance and is currently and will continue be used and operated with care only by qualified personnel in the regular course of Debtor'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 is not currently and 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 is currently located at and will be kept by Debtor at the location set forth for it on the reverse side of this Agreement and will not be removed from said location without the prior written consent of Secured Party, except that if the Equipment is of a type which is mobile and normally used by Debtor at more than one location, Debtor may use the Equipment away from said location in the regular course of Debtor's business provided that (a) if the Equipment is not returned to said location within 30 days, Debtor will immediately thereafter, and each 30 days thereafter until the Equipment is returned, report the then current location of the Equipment to Secured Party in writing and (b) the Equipment shall not be removed from the State(s) of use indicated on the reverse side of this Agreement. Secured Party shall have the right to inspect the Equipment at all reasonable times and from time to time. Debtor further warrants and agrees that: the security interest in the Collateral granted to and/or retained by Secured Party is and will 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 free from all liens, claims, security interests and encumbrances (whether superior or inferior to the interests of Secured Party) other than that created by this Agreement; notwithstanding Secured Party's interest in proceeds, Debtor will not and will not allow any other party to consign, sell, rent, lend, encumber, pledge, transfer, secrete or otherwise dispose of any of the Collateral without Secured Party's prior written consent; Debtor will do everything Secured Party deems necessary or expedient to perfect or preserve the interests granted to Secured Party under this Agreement and the first priority of such interests; any Manufacturer's Statement or Certificate of Origin or Certificate of Title relating to the Equipment shall be immediately delivered to Secured Party and, if a Certificate of Title or registration is required for any item of Equipment, Debtor will cooperate with Secured Party in obtaining the Certificate of Title or registration disclosing the interests of Debtor and Secured Party in the Equipment; Debtor will defend any action, proceeding or claim affecting the Collateral or the interests of Secured Party in the Collateral; Debtor 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 Debtor in good faith by appropriate proceedings and which do not constitute a lien or encumbrance upon the Collateral; and Debtor will from time to time furnish Secured Party with such financial statements and other information as Secured Party may reasonably request. 2. INSURANCE AND RISK OF LOSS. Debtor shall at all times bear all risk of loss of, damage to or destruction of the Equipment. Debtor 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 Secured Party) plus such other insurance as Secured Party may specify from time to time, all in form and amount and with insurers satisfactory to Secured Party. Debtor agrees to deliver promptly to Secured Party certificates or, if requested, policies of insurance satisfactory to Secured Party, each with a standard long-form loss-payable endorsement naming Secured Party or assigns as loss-payee and providing that Secured Party's rights under such policy will not be invalidated by any act, omission or neglect of anyone other than Secured Party, and containing the insurer's agreement to give 30 days prior written notice to Secured Party before any cancellation of or material change in the policy(s) will be effective as to Secured Party, whether such cancellation or change is at the direction of Debtor or insurer. Secured Party's acceptance of policies in lesser amounts or risks will not be a waiver of Debtor's obligation to procure insurance complying with the provisions hereof promptly after notice from Secured Party. Debtor assigns to Secured Party all proceeds of any physical damage or credit insurance for which a charge is stated in this Agreement or which is maintained by Debtor in accordance herewith, including returned and unearned premiums, up to the amount owing hereunder by Debtor. Secured Party will not have the right to cancel any such insurance without Debtor's consent prior to the occurrence of an event of default and the repossession, loss or destruction of the Equipment. Debtor directs all insurers to pay such proceeds solely to the order of Secured Party for application to Debtor's indebtedness to Secured Party. Secured Party may, at its option, apply any such proceeds received by Secured Party to the final maturing installments due hereunder in the inverse order of their maturity. 3. PERFORMANCE BY SECURED PARTY. If Debtor fails to perform any of Debtor's obligations pursuant to Paragraphs 1 or 2 above, Secured Party may perform the same for the account of Debtor. Any such action by Secured Party will be in Secured Party's sole discretion and Secured Party will not be obligated in any way to do so. Secured Party's performance on behalf of Debtor will not obligate Secured Party to perform the same or any similar act in the future and will not cure or waive Debtor's failure of performance as an event of default hereunder. All sums advanced or costs and expenses incurred by Secured Party pursuant to this Paragraph, including the reasonable fees of any attorney retained by Secured Party, will be for the account of Debtor, will constitute indebtedness secured by Secured Party's security interest in the Collateral, will bear interest at the rate as specified on the reverse side of this Agreement in the event of acceleration and, unless Secured Party, in Secured Party's sole discretion agrees otherwise in writing, shall be immediately due and payable. 4. EVENTS OF DEFAULT. Time is of the essence. An event of default will occur if: (a) Debtor fails to pay when due any amount owed by it to Secured Party under this Agreement or under the terms of any promissory note delivered in conjunction with this Agreement or if Debtor fails to pay when due any amount owed by it to Secured Party or to any affiliate of Secured Party under any other document, agreement or instrument; (b) Debtor fails to perform in compliance with any of its agreements hereunder or any warranty made by Debtor in this Agreement is or becomes incorrect or if Debtor fails to perform or observe any term or provision to be performed or observed by it under any other document, instrument or agreement furnished by Debtor to Secured Party or any affiliate of Secured Party or otherwise acquired by Secured Party or any affiliate of Secured Party; (c) any information, representation, or warranty furnished by Debtor to Secured Party or to any affiliate of Secured Party is inaccurate or incorrect in any material respect when furnished; (d) Debtor becomes insolvent or ceases to do or is prohibited by any court order or governmental action from conducting the business in which Debtor is principally engaged on the date of this Agreement as a going concern; (e) any surety or bonding company assumes any of Debtor'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 Debtor attempts to consign, sell, rent, lend or encumber any of the Equipment or allows another to do so; (g) Debtor files a petition in bankruptcy, or for an arrangement, reorganization, or similar relief, or makes an assignment for the benefit of 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 Debtor; (h) any other party attempts to attach, repossess or execute upon any of the Collateral; (i) Debtor ceases to exist as a legal entity or Debtor or any party in control of Debtor takes any action looking to Debtor's dissolution as a legal entity; (j) there shall be a material change in the management, ownership or control of Debtor; or (k) Secured Party in good faith believes that the prospect of payment or performance hereunder is impaired. Secured Party's inaction with respect to an event of default shall not be a waiver of such default and Secured Party's waiver of any default shall not be a wiver of any other default. 5. REMEDIES UPON DEFAULT. Upon the occurrence of an event of default, and at any time thereafter as long as the default continues, Secured Party may, at its option, with or without notice to Debtor (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 Debtor to Secured Party 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 Secured Party under the Uniform Commercial Code and any other applicable laws, including, without limitation, the right to require Debtor to assemble the Equipment and deliver it to Secured Party at a place to be designated by Secured Party 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 Secured Party, 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 Debtor. 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 Secured Party. Secured Party may buy at any sale and become the owner of the Equipment. Unless otherwise provided by law, any requirement of reasonable notice which Secured Party may be obligated to give regarding the sale or other disposition of Collateral will be met if such notice is given to Debtor at least ten days before the time of sale or other disposition. Debtor agrees that Secured Party may bring any legal proceedings it deems necessary to enforce the payment and performance of Debtor's obligations hereunder in any court in the State shown in Secured Party's address set forth herein, and service of process may be made upon Debtor by mailing a copy of the summons to Debtor. All notices to Debtor relating to this Agreement will be considered received when delivered in person (including by facsimile transmission) or mailed to Debtor at the address of Debtor contained in this Agreement or at any address later designated by Debtor to Secured Party in writing. The filing by Secured Party of any action or proceeding with respect to the Equipment or any of Debtor's obligations hereunder shall not constitute an election by Secured Party of Secured Party's remedies or a waiver of Secured Party'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 Secured Party, (b) any amounts advanced or expenses incurred by Secured Party pursuant to Paragraph 9 hereof and (c) all other legal and other expenses incurred by Secured Party, Debtor 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 Secured Party in the collection of any such deficiency. Page 2 of 3 of Security Agreement dated 11/19/98 between Meadow Valley Contractors, Inc. (Debtor) and Associates Commerical Corporation (Secured Party) which includes, without limitation, an item of Collateral with the following serial number: 172-1691. 6. POWER OF ATTORNEY. DEBTOR HEREBY APPOINTS SECURED PARTY OR ANY OFFICER, EMPLOYEE OR DESIGNEE OF SECURED PARTY OR ANY ASSIGNEE OF SECURED PARTY (OR ANY DESIGNEE OF SUCH ASSIGNEE) AS DEBTOR'S ATTORNEY-IN-FACT, 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 ANY 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 (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 to 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 recordings. 7. ASSIGNMENT. Debtor shall not assign this Agreement without the prior written consent of Secured Party. Secured Party may assign this Agreement with or without notice to or the consent of Debtor. Upon assignment, the term "Secured Party" shall mean and refer to any assignee who is the holder of this Agreement. After assignment of this Agreement by Secured Party, the assignor will not be the assignee's agent for any purpose and Debtor'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 Debtor for breach of 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 Debtor. 8. MISCELLANEOUS. (A) All of Secured Party's rights hereunder are cumulative and not alternative. (B) The inclusion of a trade name or division name in the identification of Debtor hereunder does not limit Secured Party's rights, after the occurrence of an event of default, to proceed against all of Debtor's assets, including those held or used by Debtor individually or under another trade or division name. (C) If permitted by law, Debtor agrees that a carbon, photographic or other reproduction of this Agreement or of a financing statement may be filed as a financing statement. (D) Secured Party may correct patent errors herein and fill in blanks. (E) All of the terms and provisions hereof will apply to and be binding upon Debtor, its heirs, personal representatives, successors and assigns and shall inure to the benefit of Secured Party, its successors and assigns. (F) Debtor and Secured Party hereby waive any right to trial by jury in any action or proceeding relating to this Agreement or the transaction contemplated hereby. (G) Debtor hereby expressly waives notice of nonpayment, presentment, protest, dishonour, default, intent to accelerate the maturity hereof and of acceleration of the maturity hereof. (H) If allowed by law, "the reasonable fees of attorneys" retained by Secured Party shall include the amount of any flat fee, retainer, contingent fee and/or the hourly charges of any attorney retained by Secured Party in enforcing any of Secured Party's rights hereunder in the prosecution or defense of any litigation related to this Agreement or the transactions contemplated by this Agreement. (I) To the extent allowed by law, Debtor hereby waives any exemptions or appraisals. (J) No waiver or change in this Agreement or in any related note will be binding upon Secured Party, or Secured Party'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. (K) The acceptance by Secured Party of any remittance from a party other than Debtor will in no way constitute Secured Party's consent to the transfer of any of the Collateral to such Party. (L) 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. (M) Any provision contained herein which is contrary to, prohibited by or invalid under applicable laws or regulations will be deemed inapplicable and omitted herefrom, but shall not invalidate the remaining provisions hereof. (N) The only copy of this Agreement which constitutes "chattel paper" is the original executed copy designated as "Original For Associates". - -------------------------------------------------------------------------------- DELIVERY AND ACCEPTANCE OF EQUIPMENT (Check Appropriate Box) Debtor's obligations and liabilities to Secured Party are absolute and unconditional under all circumstances and regardless of any failure of operation or Debtor's loss of possession of any item of Equipment or the cessation or interruption of Debtor's business for any reason whatsoever. [_] On ____________ the Equipment being purchased with the proceeds of this Agreement was delivered to Debtor with all installation and other work necessary for the proper use of the Equipment completed at a location agreed upon by Debtor; the Equipment was inspected by Debtor and found to be in satisfactory condition in all respects and delivery was unconditionally accepted by Debtor. [_] The Equipment being purchased with the proceeds of this Agreement has not yet been delivered to or accepted by Debtor and, upon delivery, Debtor agrees to execute such delivery and acceptance certificate as Secured Party requires. [X] All of the Equipment was acquired by Debtor prior to the date hereof and was previously delivered to and unconditionally accepted by Debtor. - -------------------------------------------------------------------------------- ADDITIONAL TERMS AND ORAL AGREEMENTS: Debtor and Secured Party agree that this is a three page agreement and each page hereof constitutes a part of this agreement. 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. Debtor's Social Security or Federal Taxpayer Identification Number is 88-0171959 and Co-Debtor's is:______________. Dated 11/19/98 DEBTOR HEREBY ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF THIS CONTRACT. Secured Party Associates Commercial Corporation Debtor(s) MEADOW VALLEY CONTRACTORS, INC. (Name of Individual, corporation or partnership.) (Name of individual(s) or partnership. Give trade style, if any, after name.) By /s/ Gary W. Burnell Title VP/CFO --------------------------- ----------------- (If corporation, authorized party must sign and show corporate title. If partnership, a general partner must sign. If owner(s) or partner, show which.) By _________________________________________________________ Title _______________________________________________________ (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) P O BOX 2340 - ---------------------------------------------------------------- (Street Address) NEWPORT BEACH CA 92658 4411 S. 40th STREET, SUITE D-11 - ---------------------------------------------------------------- ----------------------------------------------------------- (City, State and Zip Code) (Street Address) PHOENIX MARICOPA AZ 85040 ----------------------------------------------------------- (City, COUNTY, State, and Zip Code)
Page 3 of 3 of Security Agreement dated 11/19/98 between Meadow Valley Contractors, Inc. (Debtor) and Associates Commercial Corporation (Secured Party) which includes, without limitation, an item of Collateral with the following serial number: 172-1891. ORIGINAL EX-10.82 7 CATERPILLAR FINANCIAL SERVICES CORPORATION EXHIBIT 10.82 Dated as of JUN 1 1998 ---------------- LESSEE: MEADOW VALLEY LESSOR: CATERPILLAR FINANCIAL SERVICES CONTRACTORS, INC. CORPORATION ADDRESS: 4411 S. 40TH, SUITE D11 ADDRESS: 4976 Preston Park Blvd. P.O. BOX 60726 PHOENIX, AZ 85040 Plano, TX 75093 Lessor, in reliance on Lessee's selection of the equipment described below ("Unit" or "Units"), agrees to acquire and lease the Units to Lessee, and Lessee agrees to lease the Units from Lessor, subject to the terms and conditions below and on the reverse side:
DESCRIPTION OF UNIT(S) SERIAL# MONTHLY RENT FINAL PAYMENT - ---------------------- ------- ---------------- ------------- (1) CTO85 OLYMPIA PACKAGED GENERATOR SET 2010549 # 1-18 @ $519.46 $13,995.03* 69KW PRIME POWER, 75KW STANDBY #19-30 @ $519.46 $ 8,749,87* POWER, 120/240/480 VOLT SINGLE #31-42 @ $519.46 $ 3,041.08* & THREE PHASE SELECTABLE, SKID #43-48 @ $519.46 $ 0.00 MOUNTED UNIT W/SOUND ATTENUATED ENCLOSURE. BASE MOUNTED FUEL TANK W/150 GALLON CAPACITY.
RENT TO BE PAID: in arrears (starts one month after Delivery Date) and every month thereafter. Lease Term: 48 Months Utilization Date: AUGUST 31, 1998 The [_] Mandatory Final Payment (Section 13)[X] Optional Final Payment (Section 14) is applicable to this Lease (check one) Location of Unit(s): 89 U.S. HWY. 380, WHITE SANDS MISSILE RANGE SAN ANTONIO, NM 87832 ADDITIONAL PROVISIONS RIDERS: FLEX OPTION AMENDMENT NO. 1 ENGINE APPLICATION SURVEY TERMS AND CONDITIONS 1. LEASE TERM: The lease term for each Unit shall start on its Delivery Date (the date (a) Lessor executes this Lease, (b) Lessor takes title to the Unit, or (c) Lessee or its agent takes control of physical possession of the Unit, whichever is latest), provided the Delivery Date is not on or before the utilization date stated above, and shall continue for the number of months stated above. If the Delivery Date is not on or before the utilization date Lessee shall, at the option of Lessor, assume Lessor's obligations to purchase and pay for the Unit. Lessee shall execute and send Lessor's delivery supplement to Lessor promptly after delivery of a Unit. 2. RENT: Lessee shall pay to Lessor, at the address stated above or such other location Lessor designates in writing, rent for each Unit as stated above starting (a) on its Delivery Date if the rent is to be paid in advance, or (b) one month (or other period as stated above) after its Delivery Date if the rent is to be paid in arrears. An amount equal to the first rent payment for each Unit must accompany this document when it is submitted to Lessor. If Lessor executes this document, the amount shall be the first rent payment. If Lessor does not execute this document, the amount shall be returned to Lessee. If Lessor does not receive a rent payment on the date it is due, Lessee shall pay to Lessor, on demand, a late payment charge equal to five percent (5%) of the rent payment not paid when due or the highest charge allowed by law, whichever is less. 3. NO ABATEMENT: Lessee shall not be entitled to abatement or reduction of rent or setoff against rent for any reason whatsoever. Except as otherwise provided, this Lease shall not terminate because of, nor shall the obligations of Lessor or Lessee be affected by damage to, any defect in, destruction of, or loss of possession or use of a Unit; the attachment of any lien, security interest or other claim to a Unit; any interference with Lessee's use of a Unit; Lessee's insolvency or the commencement of any bankruptcy or similar proceeding by or against Lessee, or any other cause whatsoever. 4. DISCLAIMER OF WARRANTIES: Lessee acknowledges and agrees that (a) each Unit is of a size, design and make selected by Lessee, (b) each Unit is suitable for Lessee's purposes, (c) each Unit contains all safety features deemed necessary by Lessee, (d) Lessor is not the manufacturer of any Unit, (e) the vendor of any Unit is not an agent of Lessor, and (f) LESSOR HAS NOT MADE, AND DOES NOT HEREBY MAKE, ANY REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, WITH RESPECT TO THE MERCHANTABILITY, CONDITION, QUALITY, DESCRIPTION, OR DURABILITY OF A UNIT, OR ITS FITNESS FOR A PARTICULAR PURPOSE. Lessor assigns to Lessee, to the extent assignable, any warranties of a Unit by its manufacturers and/or vendor, provided that any action taken by Lessee by reason thereof shall be at the expense of the Lessee. 5. POSSESSION, USE AND MAINTENANCE: Lessee shall not (a) use, operate, maintain or store a Unit improperly, carelessly, unsafely or in violation of any applicable law or regulation or for any purpose other than in the conduct of Lessee's business; (b) abandon a Unit; (c) sublease a Unit, permit the use of a Unit by anyone other than Lessee, change the user of unit from that specified in the Application Survey/Usage Rider attached hereto, or change the location of a Unit from that specified above, without the prior written consent of Lessor; or (d) create or allow to exist any lien, claim, security interest or encumbrance on any of its rights hereunder of a Unit. A Unit is and shall remain personal property regardless of its use or manner of attachment to realty. Lessor and its agent shall have the right (but not the obligation) to inspect a Unit and maintenance records relating to it and observe its use. Lessee, at its expense, shall maintain each Unit in good operating order, repair and condition and shall perform maintenance at least as frequently as stated in any applicable operator's guide, service manual, or lubrication and maintenance guide. Lessee shall not alter any Unit or affix any accessory or equipment to it if doing so will impair its originally intended function or use or reduce its value. Any alteration or addition to a Unit shall be the responsibility of and at the sole risk of Lessee. All parts, accessories and equipment affixed to a Unit shall be subject to the security interest of Lessor. SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS Lessee: MEADOW VALLEY LESSOR: CATERPILLAR FINANCIAL SERVICES CONTRACTORS, INC. CORPORATION By: /s/ Gary W. Burnell By: /s/ Evelyn Martinez ---------------------------- --------------------------------------- Name (PRINT) GARY W. BURNELL Name (PRINT) EVELYN MARTINEZ --------------------- ----------------------------- Title VP/CFO Title CREDIT ANALYST -------------------------- --------------------------------- Date 6/2/98 Date JUN 1 1998 --------------------------- ---------------------------------- 6. TAXES: Lessee shall promptly pay or reimburse Lessor for all fees, charges and taxes of any nature, including, without limitation, personal property taxes, together with any penalties, fines or additions to tax and interest thereon (collectively, "Taxes") levied on or assessed against Lessor in connection with the ownership, leasing, rental, sale, possession, purchase, or use of a Unit; excluding however, all charges or taxes on or measured by Lessor's net income, or charges or taxes levied on or assessed against Lessor in connection with a Unit after the Unit is returned to Lessor in accordance with the terms of this Lease. If the reimbursement to Lessor of Taxes constitutes income for federal, state or local tax purposes and if the Lessor is not entitled to a deduction for the full amount of the reimbursement, the Lessee shall pay the Lessor an additional amount such that the net amount received by Lessor after payment of all related Taxes equals the amount which Lessor would have received if no such Taxes were payable. Lessee shall prepare and timely file, in a manner satisfactory to Lessor, any reports or returns which may be required with respect to a Unit, including, without limitation, personal property tax returns. For purposes of this section, in computing Lessor's Taxes attributable to a reimbursement, it shall be assumed that the Lessor is in the highest marginal tax rate applicable to corporations at the time the reimbursement is made, and that the term "Lessor" shall include any affiliated group, within the meaning of Section 1504 of the Internal Revenue Code of 1988, of which Lessor is a member for any year in which a consolidated or combined income tax return is filed for the affiliated group. 7. LOSS OR DAMAGE: Lessee shall bear the risk, of any Casualty Occurrence (the Unit is worn out, lost, stolen, destroyed, taken by government action or, in Lessor's opinion, irreparably damaged) or other damage from the time is it purchased by Lessor until it is returned to Lessor. Lessee shall give Lessor prompt notice of a Casualty Occurrence or other damage. If, in Lessor's opinion, the damage is not a Casualty Occurrence, Lessee shall, at its expense, promptly restore the Unit to the condition required by Section 5. If a Casualty Occurrence, Lessee shall pay to Lessor on the first rent payment date following the Casualty Occurrence (thirty (30) days after the Casualty Occurrence if there is no rent payment date remaining) the lessor of (a) the sum of (i) all amounts then due under this Lease with respect to the Unit, (ii) the present value of all unpaid rent for the Unit, and (iii) the present value of the Purchase Price of the Unit as stated on the front hereof; and (b) the maximum amount permitted by law. Present values will be determined by discounting at the implicit interest rate of this Lease. Upon making this payment, the lease term with respect to the Unit shall terminate and Lessee shall be entitled to possession of the Unit and to any recovery in respect to it (subject to the rights of any insurer). 8. WAIVER AND INDEMNITY: LESSEE AGREES TO DEFEND, INDEMNIFY AND HOLD LESSOR, ITS EMPLOYEES, DIRECTORS AND OFFICERS HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS OF LESSEE AND/OR THIRD PARTIES (INCLUDING, BUT NOT LIMITED TO, CLAIMS RELATING TO PATIENT INFRINGEMENT, BASED UPON STRICT LIABILITY IN TORT AND FOR CONSEQUENTIAL DAMAGES), LOSSES, LIABILITIES, DEMANDS, SUITS, JUDGMENTS AND CAUSES OF ACTION, AND ANY COSTS OR EXPENSES IN CONNECTION THEREWITH, INCLUDING REASONABLE ATTORNEYS' FEES AND EXPENSES, WHICH MAY RESULT FROM OR ARISE IN ANY MANNER OUT OF THE DELIVERY (INCLUDING ANY DELAY IN, OR FAILURE OF, DELIVERY), SELECTION, PURCHASE, ACCEPTANCE OR REJECTION, OWNERSHIP, POSSESSION, CONDITION, USE, OPERATION, MAINTENANCE OR REPAIR OF A UNIT FROM THE TIME IT IS PURCHASED BY LESSOR UNTIL IT IS RETURNED TO LESSOR, OR WHICH MAY BE ATTRIBUTABLE TO A DEFECT IN THE UNIT, THE MATERIAL USED THEREIN OR THE DESIGN, MANUFACTURE OR TESTING THEREOF, REGARDLESS OF WHEN THE DEFECT IS DISCOVERED, WHETHER OR NOT THE UNIT IS IN THE POSSESSION OF LESSEE AND WHERE IT IS LOCATED. 9. INSURANCE: Lessee, at its expense, shall keep each Unit insured for the benefit of Lessor against all risks for not less than the amount described in Section 7 and shall maintain comprehensive public liability insurance (including product and broad form contractual liability) covering the Unit for not less than $1,000,000 combined coverage for bodily injury and property damage. All insurance shall be in a form and with companies as Lessor shall approve, shall specify Lessor and Lessee as name insured, shall be primary, without the right of contribution from any other insurance carried by Lessor, and shall provide that the insurance may not be canceled or altered so as to affect the interest of Lessor without at Least to (10) days' prior written notice to Lessor. All insurance covering loss or damage to a Unit shall name Lessor as loss payee. Lessee shall not make adjustments with insurers except with Lessor's prior written consent and hereby irrevocably appoints Lessor as Lessee's attorney-in-fact to receive payment of and to endorse all checks, drafts and other documents and to take any other actions necessary to pursue insurance claims and recover payments if Lessee fails to do so. Lessee shall promptly notify Lessor of any occurrence which may become the basis of a claim and shall provide Lessor with all requested pertinent data. Lessee shall promptly deliver to Lessor evidence of such insurance coverage. 10. EVENTS OF DEFAULT: Each of the following constitutes an event of default ("Event of Default"): (a) Lessee fails to make any payment when due; (b) any representation or warranty to Lessor which is incorrect or misleading; (c) Lessee fails to observe or perform any covenant, agreement or warranty made by Lessee and the failure continues for ten (10) days after written notice to Lessee; (d) any default occurs under any other agreement between Lessee and Lessor or any affiliate of Lessor; (e) Lessee or any guarantor of this Lease ceases to do business, becomes insolvent, makes an assignment for the benefit of creditors or files any petition or action under any bankruptcy, reorganization, insolvency or moratorium law, or any other law or laws for the relief of, or relating to, debtors; (f) filing of any involuntary petition under any bankruptcy statute against Lessee or any guarantor of this Lease, or appointment of a receiver, trustee, custodian or similar official to take possession of the properties of Lessee or any guarantor of this Lease, unless the petition or appointment ceases to be in effect within thirty (30) days after filing or appointment; and (g) breach or repudiation of a guaranty obtained by Lessor in connection with the Lease. 11. REMEDIES: If an Event of Default occurs, Lessor may (a) proceed by court action to enforce performance by Lessee of the covenants of this Lease or to recover damages for their breach or (b) by notice in writing to Lessee terminate this Lease, in which event Lessee shall remain liable as provided herein and Lessor may do any one or more of the following: (i) declare the balance due (or the maximum amount permitted by law if recovery of the entire balance due is prohibited) with respect to each Unit immediately due and payable and recover any additional damages and expenses sustained by Lessor due to breach of any covenant, representation or warranty in this Lease other than for the payment of rent; (ii) enforce the security interest granted herein; (iii) require Lessee to return each Unit pursuant to Section 12; and (iv) enter the premises where any Unit may be and take possession of it without notice, liability or legal process. Lessee agrees to pay all charges, costs, expenses and reasonable attorney's fees incurred by Lessor in enforcing this Lease. Lessor has all rights given to a secured party by law. Lessor may undertake commercially reasonable efforts to sell or release a Unit, and the proceeds of any sale or re-lease shall be applied in the following order: (i) to reimburse Lessor for all expenses of retaking, holding, preparing for sale or re-lease and selling or re-leasing the Unit, including any taxes, charges, costs, expenses and reasonable attorney's fees incurred by Lessor; (ii) to pay Lessor all amounts which under the terms of this Lease are due or have accrued as of the date of Lessor's receipt of the proceeds; and (iii) to pay Lessor the balance due (or the maximum amount permitted by law if recovery of the entire balance due is prohibited) with respect to the Unit. Any surplus shall be paid to the person entitled to it. Lessee shall promptly pay any deficiency to Lessor. Lessee acknowledges that sales for cash or credit to a wholesaler, retailer or user of a Unit are all commercially reasonable. The remedies provided to Lessor shall be cumulative and shall be in addition to all other remedies existing at law or in equity. If Lessee fails to perform any of its obligations under this Lease, Lessor may perform the obligations, and the expenses incurred by Lessor as a result shall be payable by Lessee upon demand. 12. RETURN OF UNIT: If Lessor shall rightfully demand possession of a Unit, Lessee, at its expense, shall promptly deliver possession of the Unit to Lessor, properly protected and in the condition required by Section 5, at the option of Lessor, (a) to the premises of the nearest Caterpillar dealer selling equipment of the same type as the Unit, or (b) on board a carrier named by Lessor an shipping it, freight collect, to the destination designated by Lessor. If the Unit is not in the condition required by Section 5, Lessee shall pay to Lessor, on demand, all costs and expenses incurred by Lessor to bring the Unit into the required condition. 13. MANDATORY FINAL PAYMENT: If the Mandatory Final Payment box is checked, at the end of lease term with respect to a Unit, provided this Lease has not been terminated with respect to it, Lessee shall pay the Final Payment stated on the front hereof. Upon receipt of the Final Payment, and all other amounts due under this Lease, plus an amount equal to any taxes due in connection with the transfer of the Unit or the delivery of the bill of sale, Lessor shall deliver to Lessee, upon request, a bill of sale without warranties except that the Unit is free of all encumbrances of any person claiming through Lessor. Lessee shall purchase the Unit "AS IS, WHERE IS, WITH ALL FAULTS." 14. OPTIONAL FINAL PAYMENT: If the Optional Final Payment box is checked and if no Event of Default shall have occurred and be continuing, Lessee may, by notice delivered to Lessor not less than sixty (60) days prior to the end of the lease term with respect to a Unit, elect to pay the Final Payment stated on the front. Payment of the Final Payment shall be due at the end of the lease term. Upon payment of the Final Payment and all other amounts due under this Lease, plus an amount equal to any taxes due in connection with the transfer of the Unit or the delivery of the bill of sale, Lessor shall deliver to Lessee, upon request, a bill of sale without warranties except that the Unit is free of all encumbrances of any person claiming through Lessor. Lessee shall purchase the Unit "AS IS, WHERE IS, WITH ALL FAULTS". If Lessee does not elect to pay the Final Payment, Lessee, upon expiration of the lease term, shall return the Unit to Lessor as provided in Section 12 and furnish Lessor with documentation, as Lessor may reasonably request, conveying to Lessor all of Lessee's right, title and interest in the Unit, free and clear of all liens, claims, security interests and encumbrances other than those of Lessor. 15. SECURITY INTEREST; LESSEE REPRESENTATIONS: Unless applicable law provides otherwise, title to a Unit shall remain in Lessor as security for the obligations of Lessee hereunder until Lessee has fulfilled all of its obligations. Lessee hereby grants to Lessor a continuing security interest in the Unit, including all attachments, accessories and optional features therefor (whether or not installed thereon) and all substitutions, replacements, additions, and accessions thereto, and proceeds of all of the foregoing, to secure the payment of all sums due hereunder. Lessee will, at its expense, do any act and execute, acknowledge, deliver, file, register and record any documents which Lessor may reasonably request to protect Lessor's security interest in the Unit and Lessor's rights and benefits under this Lease. Lessee represents and warrants to Lessor that (a) Lessee has the power to make, deliver and perform under this Lease; (b) the person executing and delivering this Lease is authorized to do so on behalf of Lessee, and (c) this Lease constitutes a valid obligation of Lessee, legally binding upon it and enforceable in accordance with its terms. Lessee shall, display labels supplied by Lessor stating that the Unit is leased from Lessor in a prominent place on the Unit during the lease term. 16. ASSIGNMENT; COUNTERPARTS: The rights of Lessor under this Lease and title to the Unit may be assigned by Lessor at any time. If notified by Lessor, Lessee shall make all payments due under this Lease to the party designated in the notice, without offset or deduction. No assignment of this Lease or any right or obligation under it may be made by Lessee without the prior written consent of Lessor. This Lease shall be binding upon and benefit Lessor and Lessee and their respective successors and assigns. If this Lease is assigned by Lessor to a partnership or trust, the term "Lessor" shall thenceforth means and include the partnership or trust and shall also include, for purposes of Sections 4, 5, 6, 7, 8 and 9, each partner in or beneficiary of the partnership or trust. Although multiple counterparts of this document may be signed, only the counterpart accepted, acknowledged and certified by Caterpillar Financial Services Corporation on the signature page thereof as the original will constitute original chattel paper. 17. EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF LEASE; NOTICE: A delay or omission by Lessor to exercise any right or remedy shall not impair any right or remedy and shall not be construed as a waiver of any breach or default. Any waiver or consent by Lessor must be in writing. This Lease completely states the rights of Lessor and Lessee and supersedes all prior agreements with respect to the Unit. No variation or modification of this Lease shall be valid unless in writing. All notices shall be in writing, addressed to the other party at the address stated on the front or at such other address as may hereafter be furnished in writing. 18. SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Lease shall be invalid under any law, it shall be deemed omitted but the remaining provisions hereof shall be given effect. All obligations of Lessee under this Lease shall survive the expiration or termination of this Lease to the extent required for their full observance and performance. EX-10.83 8 BID PROPOSAL NO. 4106-97 EXHIBIT 10.83 CLARK COUNTY, NEVADA BID PROPOSAL BID NO.4106-97 SOUTHERN SEGMENT, LAS VEGAS BELTWAY, SECTION 4, GREEN VALLEY PARKWAY TO U.S. 95 REVISED PER ADDENDUM NO.6 ------------------------- MEADOW VALLEY CONTRACTORS, INC. - ------------------------------------------------------------------------------- (NAME) P.O. BOX 549, MOAPA, NEVADA 89025 - ------------------------------------------------------------------------------- (ADDRESS) THE UNDERSIGNED PROPOSES AND AGREES: 1. To complete all work for which a contract may be awarded to the Bidder and to furnish any and all labor, equipment, materials, transportation, and other facilities required for the services as set forth in the Proposal and Contract Documents. 2. That the Bidder has examined the Contract Documents and the site(s) for the proposed work and satisfied themselves as to the character, quality of work to be performed, materials to be furnished and as to the requirements of the specifications. 3. That the Bidder has completed all information in the blanks provided and has submitted the following within this bid proposal: A. Each subcontractor which will be paid an amount exceeding five percent (5%) of the total bid amount. B. Has represented their qualification for Preferential Bidder Status. C. Has submitted a bid security (in the form of, at Bidder's option, A Cashiers Check, Certified Check, Money Order, or Bid Bond in favor of the Owner(s) in the amount of Five Percent (5%) of the bid amount. 4. If the Bidder is one of the three (3) apparent low bidders at the bid opening, they must submit Bid Attachment 2 within two hours after completion of the bid opening. Faxing is not allowed. This Attachment must ---- be time stamped by the Department of General Services. Submission after the ----------------------------------------------------- two (2) hour time limit will be rejected and/or returned unopened and the bid may be deemed non-responsive. A. Projects EXCEEDING Five Million Dollars ($5,000,000) --------- 1. The Bidders shall list subcontractors which will provide labor/improvements exceeding one percent (1%) of the prime contractor's total bid amount, or $50.000.00, whichever is greater. 5. Upon faxed receipt of a letter of intent to Award the contract, the bidder will provide the following submittals within seven (7) days from receipt of the Notice. A. Performance Bond, Labor and Material Payment Bond and a Guaranty Bond, for One Hundred Percent (100%) of the contract price as required B. Certificates of insurance for Commercial General Liability in the amount of $1,000,000, Automobile Liability in the amount of $1,000,000. Explosion, Collapse and Underground in the amount of $1,000,000 Installation Floater and a SIIS certificate as required by law. 6. That if the Bidder does not provide the above submittals on or before the seventh (7th) calendar day, or does not keep the bonds or insurance policies in effect or allows them to lapse, the Bidder will pay over to the Owner the amount of six thousand five hundred dollar; ($6,500.00) per day as liquidated damages. 7. That this Proposal is genuine and is not sham or collusive, or made in the interest of, or on behalf of any person not herein named, nor the Bidder in any mariner sought to secure for themselves an advantage over any other bidder. BID PROPOSAL Bid No. 4106-97 REVISED PER ADDENDUM NO. 6 Southern Segment, Las Vegas Beltway 14. CLAIM OF PREFERENTIAL BIDDER STATUS ----------------------------------- Bidder hereby claims that their firm has paid the sale and use tax and/or the motor privilege vehicle tax for each consecutive 12-month period for sixty (60) months immediately preceding the submission of this bid in the amounts necessary to qualify for the preferential bidder status pursuant to NRS 338.147. IF BIDDER DOES NOT QUALIFY FOR PREFERENTIAL BIDDER STATUS, CHECK HERE |__|. 15. FOR INFORMATIONAL PURPOSES ONLY: ------------------------------- The General Contractor submitting this bid is a [_] MBE [_] WBE [_] PBE [_] SBE [_] NBE [_] LBE as defined in the instructions to Bidders. 16. /s/ Alan Terril MEADOW VALLEY CONTRACTORS, INC. ---------------------------- -------------------------------------- SIGNATURE OF BIDDER LEGAL NAME OF FIRM AS IT WOULD APPEAR IN CONTRACT ALAN TERRIL 702-864-2575 702-864-2580 ---------------------------- --------------- ------------------ NAME OF BIDDER (PRINT OR TYPE) TELEPHONE NUMBER FAX NUMBER P.O. BOX 549 # 0019258 ---------------------------- -------------------------------------- ADDRESS OF FIRM NEVADA STATE CONTRACTOR'S LICENSE NO. MOAPA, NV 89025 A UNLIMITED ---------------------------- --------------- ------------------ CITY, STATE, ZIP CODE CLASSIFICATION MONETARY LIMITATIONS, IF ANY 2/26/98 BUSINESS LICENSE: ---------------------------- [X] CLARK COUNTY - NO. 041648-240-8 ------------- TODAY'S DATE [X] CITY OF LAS VEGAS - NO. 59416 ------------- Bid Proposal Bid No. 4106-97 Revised per Addendum No.6 Southern Segment, Las Vegas Beltway
- ------------------------------------------------------------------------------------------------------------------------------------ APPROX. ITEM NUMBER ITEM DESCRIPTION QUANTITY UNIT UNIT BID PRICE TOTAL - ------------------------------------------------------------------------------------------------------------------------------------ 630 0009 STEPHANIE STREET SANITARY SEWER IMPROVEMENTS 1 L.S. $ 39,405.00 $ 39,405.00 - ------------------------------------------------------------------------------------------------------------------------------------ 633 0000 NON-REFLECTIVE PAVEMENT MARKERS 3,857 EA. $ 1.60 $ 6,171,20 - ------------------------------------------------------------------------------------------------------------------------------------ 633 0004 REFLECTIVE PAVEMENT MARKERS 1,780 EA. $ 2.66 $ 4,734.80 - ------------------------------------------------------------------------------------------------------------------------------------ 633 0653 EPOXY PAINT STRIPING (4-INCH SOLID WHITE) 2.04 MILE $ 2,130.00 $ 4,345.20 - ------------------------------------------------------------------------------------------------------------------------------------ 633 0655 EPOXY PAINT STRIPING (8-INCH BROKEN WHITE) 6.35 MILE $ 532.50 $ 3,381.38 - ------------------------------------------------------------------------------------------------------------------------------------ 633 0656 EPOXY PAINT STRIPING (8-INCH SOLID WHITE) 7.63 MILE $ 3,727.50 $ 28,440.83 - ------------------------------------------------------------------------------------------------------------------------------------ 633 0660 EPOXY PAINT STRIPING (8-INCH SOLID YELLOW) 7.61 MILE $ 3,727.50 $ 28,366.28 - ------------------------------------------------------------------------------------------------------------------------------------ 633 0661 EPOXY PAINT STRIPING (8-INCH DOTTED WHITE) 100 L.F. $ 2.13 $ 213.00 - ------------------------------------------------------------------------------------------------------------------------------------ 633 0662 EPOXY PAINT STRIPING (12-INCH SOLID WHITE) 2.63 MILE $ 6,469.88 $ 17,015.78 - ------------------------------------------------------------------------------------------------------------------------------------ 641 0600 IMPACT ATTENUATOR (QUADGUARD QS 2406G WITH 1 EA. $ 26,625.00 $ 26,625.00 CONCRETE BACKUP. QG) - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL $29,392,720.68 - ------------------------------------------------------------------------------------------------------------------------------------
twenty nine million three hundred ninety two thousand seven hundred twenty dollars and sixty eight cents. - -------------------------------------------------------------------------------- (TOTAL IN WORDS) EX-10.84 9 CONTRACT AGREEMENT DATED MARCH 25, 1998 EXHIBIT 10.84 CONTRACT AGREEMENT THIS AGREEMENT, made and entered into this 25TH day of MARCH, 1998 by and between the STATE OF ARIZONA, acting by and through its State Engineer duly authorized by the Director, Arizona Department of Transportation to enter into such agreement, party of the first part, and MEADOW VALLEY CONTRACTORS, INC. hereinafter called the Contractor, party of the second part. WITNESSETH: That the said Contractor, for in consideration of the sum to be paid him by said State Arizona in the manner and at the time hereinafter provided, and of the other covenants and agreements herein contained, hereby agrees, for himself, heirs, administrators, successors and assigns as follows: ARTICLE I - SCOPE OF WORK: The Contractor shall perform in a workmanlike and substantial manner and to the satisfaction of the State Engineer, all the work specified under TRACS/Project No. 101L MA 052 H473201C RAM 600-I-547 PIMA FREEWAY (SR 101L) (PHOENIX URBAN AREA) (Pima-Red Mountain Traffic Interchange Phase IV) 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 if further agreed that the Proposal, Plans, Standard Specifications, Special Provisions, Contract Bond(s) and any and all Supplementary Agreements, and any and all requirements necessary to complete the work in a substantial and acceptable manner, and any and all equipment and progress statements required, are hereby referred to and made a part of this contract, and shall have the same force and effect as though all of the same were fully inserted herein. ARTICLE III - WARRANTY: The Contractor expressly warrants that he is free from obligation of any other person or persons for services rendered, or supposed to have rendered, in the procurement of this contract. He further agrees that any breach of the Warranty shall constitute adequate cause for the annulment of the Contract by the State of Arizona and that the State of Arizona may retain to its own use from any sums of money due or become due thereunder, an amount thereof equal to any brokerage, commission or percentage so paid, or agreed to be paid. ARTICLE IV - TIME OF COMPLETION: The Contractor further covenants and agrees that all of the said materials shall be furnished and delivered and all of the said labor shall be done and performed in every respect to the satisfaction and approval of the State Engineer and that the said work shall be turned over to the State Engineer, complete and ready for use, on or before the specified time herein. The work shall be free and discharged of all claims and demands whatsoever for, or on account of any and all labor and materials used or furnished to be used in said work. It is expressly understood and agreed that in case of failure on the part of the Contractor, for any reason, except with the written consent of the State Engineer, to complete the entire work to the satisfaction of the State Engineer, and within the aforesaid time limit, the party of the first part shall deduct from any money due, or which may become due the Contractor, as liquidated damages, an amount in accordance with Subsection 108.09 of the Contract Specifications. If no money shall be due the Contractor, the State shall have a cause of action to recover against the Contractor in a court of competent jurisdiction, liquidated damages, in accordance with Subsection 108.09 of the Contract Specifications, said deduction to be made, or said sum to be recovered, not as a penalty, but as liquidated damages: provided, however, that upon receipt of written notice from the Contractor, of the existence of causes, as herein provided, over which said Contractor has no control and which must delay the completion of said work or any delay occasioned by the Arizona Department of Transportation, the State Engineer may extend the period hereinbefore specified for the completion of said work in accordance with the Specifications and in such case, the Contractor shall become liable for said liquidated damages for delays commencing from date said extension period shall expire. After the date as set up in Contract plus any extension granted, no further payments shall be made the Contractor until all work is completed and accepted by the State engineer. It is also agreed that the date of completion shall be that upon which the work is accepted by the State Engineer. ARTICLE V - CLAIMS FOR EXTRA WORK: It is distinctly understood and agreed that no claim for extra work or materials, not specifically herein provided, done or furnished by the Contractor, will be allowed by the State Engineer, nor shall the Contractor do any work or furnish any materials not covered by these Specifications and Contract, unless such work is ordered in writing by the State Engineer. In no event shall the Contractor incur any liability by reason of any oral direction or instruction that he may be given by the State Engineer, or his authorized representatives. It is the intent and meaning of this Article that all orders, directions, instructions, not contained in the Plans, Specifications, and Special Provisions, pertaining to the work shall be in writing, and the Contractor hereby waives any claims for compensation for work done, or materials furnished in violation thereof. ARTICLE VI - MISUNDERSTANDING OR DECEPTION: The party of the second part agrees that he has investigated the site of the work and all parts and appurtenances thereto and hereby waives any right to plead misunderstanding or deception as to location, character of work or materials, estimates of quantities or other conditions surrounding or being a part of the work and understands that the quantities given in the Bidding Schedule are approximate only, and hereby agrees to accept the quantities as actually placed and finally determined upon the completion of the work, in accordance with the Contract Documents. ARTICLE VII - PAYMENTS: For and in consideration of the faithful performance of the work herein embraced, as set forth in the Contract Agreement, Specifications, Special Provisions, Bidding Schedule and all general and detailed Specifications and Plans, which are a part hereof, and in accordance with the directions of the State Engineer and to his satisfaction or his authorized agents, the said State of Arizona agrees to pay to said Contractor the amount earned, computed from the actual quantities of work performed as shown by the estimates of the State Engineer, and the unit forces 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. 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 is 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 the 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. 101L MA 052 H473201C RAM 600-1-547 PIMA FREEWAY (SR 101L) (PHOENIX URBAN AREA) (Pima-Red Mountain Traffic Interchange Phase IV) Witness or hands and seals this 25th day of March 1998 STATE OF ARIZONA By: /s/ SIGNATURE ------------------------------------ Department of Transportation EVIDENCE OF AUTHORITY TO SIGN THE CONTRACT MUST BE ON FILE WITH THE DEPARTMENT, OTHERWISE IT MUST BE FURNISHED WITH THE PROPOSAL. PARTY OF THE FIRST PART Meadow Valley Contractors, Inc. --------------------------------------- By: /s/ Bradley E. Larson ------------------------------------ Contractor BRADLEY E. LARSON PRESIDENT Attest: /s/ Robert W. Bottcher PARTY OF THE SECOND PART --------------------------- Seal Page 19 of 19
BID SCHEDULE 101L MA 052 H473201C - --------------------------------------------------------------------------------------------------------------------------------- ITEM NO ITEM DESCRIPTION UNIT QUANTITY UNIT PRICE EXTENDED AMOUNT - --------------------------------------------------------------------------------------------------------------------------------- BRIDGE 2379 - RAMP W - S OVER RED MOUNTAIN FREEWAY (APPROACH AND ANCHOR SLABS) - --------------------------------------------------------------------------------------------------------------------------------- 2030506 1 STRUCTURE BACKFILL CU.YD. 140 28.00 3,920.00 - --------------------------------------------------------------------------------------------------------------------------------- 6011105 1 BRIDGE CONCRETE BARRIER, TYPE B L.FT. 156 32.00 4,992.00 - --------------------------------------------------------------------------------------------------------------------------------- 6011352 1 DECK JOINT ASSEMBLY (B-24.20 3X3 COMPRESSION SEAL) L.FT. 56 90.00 5,040.00 - --------------------------------------------------------------------------------------------------------------------------------- 6011365 1 APPROACH SLAB (B-19.11) SQ.FT. 840 9.00 7,560.00 - --------------------------------------------------------------------------------------------------------------------------------- 6011366 1 APPROACH SLAB (B-19.12) SQ.FT. 2,166 10.00 21,660.00 - --------------------------------------------------------------------------------------------------------------------------------- 9210007 1 SLOPE PAVING (EXPOSED AGGREGATE) SQ.YD. 985 30.00 29,550.00 - --------------------------------------------------------------------------------------------------------------------------------- BID TOTAL: 10,995,812.95
EX-10.85 10 NEW MEXICO STATE HIGHWAY PROPOSAL NO. SP-4916(200) EXHIBIT 10.85 New Mexico State Highway and Transportation Department PROPOSAL OF NAME MEADOW VALLEY CONTRACTORS, INC. TELEPHONE NO. (602) 437-5400 ADDRESS P.O. BOX 60726 PHOENIX, AZ 85082-0726 *CONTRACTOR'S LICENSE NO. 057280 *LICENSE CLASSIFICATION GA98, GF01, GF02 *RESIDENT BIDDER CERTIFICATE NO.___________________________________________ *Not Required for Bidding on Federal-Aid Projects TO THE STATE HIGHWAY AND TRANSPORTATION DEPARTMENT: The undersigned proposes to construct this project in accordance with the State Highway and Transportation Department's current Standard Specifications for Road and Bridge Construction, the plans, the Special Provisions, the Specifications and all other contract documents and certificates to furnish and deliver all the material and to do all work and labor required for the construction of New Mexico Project No. SP-4916(200) in Otero County, New Mexico on Road No. Alamogoroo Relief Route CN 1970 being about 0.503 miles in length, at the prices stated in the Proposal Schedule. The undersigned also certifies that he has examined the site of the proposed work, the material pits, the haul roads, the proposal, the plans, the specifications, the Special Provisions and all other contract documents before submitting the bid and is satisfied as to the requirements therein. As further consideration for the award of this contract, the undersigned agrees to the following terms, conditions and acknowledgements: 1. To execute the standard form contract and to furnish a contract bond in the amount of One Hundred Percent (100%) of the total bid price of this proposal within fifteen (15) days after receiving notification of the acceptance of this proposal, and failing to do so, to forfeit the accompanying check or proposal bond to the State as liquidated damages, and the Secretary of Highways and Transportation may proceed to award the contract to others. 2. To commence work within 15 days, or such additional time as may be allowed in writing by the Secretary of Highways and Transportation, after notification of award of contract, and to complete the contract as awarded in (335) working days. 3. To furnish a performance and payment bond in the penalty of full amount of contract as surety conditioned for the full, complete and faithful performance of this contract. 4. The undersigned declares that he is the only person or party interested in the proposal as principal and that its officers, employees, subsidiaries or parent corporations (check box a., b., or c. as appropriate): (x) a. have not in any way participated in any activities in restraint of trade, or been debarred with relation to public contracts either in the State of New Mexico or any other State of the United States or on any federally-assisted contract during the five year period immediately preceding this proposal or either directly entered into any agreement, participated in any collusion or otherwise take any action in restraint of free competitive bidding in connection with this contract. ( ) b. have participated in activities in restraint of trade with relation to public contracts either in the State of New Mexico or any other State of the United States or on any federally assisted contracts during the five-year period immediately preceding this proposal or entered into collusion, or restraint of free competitive bidding on this contract, and are of the opinion that they are a responsible bidder entitled to the award of a contract involving public moneys and attach hereto an explanation of their activities in restraint of free trade, restraint of free competitive bidding, or collusion. ( ) c. The contractor has the option to submit an unsworn non collusion declaration, under penalty of perjury under the laws of the United States. See Form No. A-870 - Declaration of Non Collusion for Award of Contract. Activities in restraint of trade include those set forth in New Mexico Statutes Armotated, Section 57-1-1 (1978 Edition as amended, and following). The undersigned declares that this section has been read and is fully understood. 5. In accordance with the contract, plans and specifications; repair, maintain and guarantee all work performed thereunder until accepted by the Secretary of Highways and Transportation. 6. To indemnify and save harmless the State Highway and Transportation Department from any damage or loss for which the Department may become liable by the default of said Contractor, or by reason of any neglect or carelessness on the part of said Contractor, his agents or employees, or by on account of any act of omission of said Contractor, his servants, agents or employees, in the performance of this contract. 7. The established DB goal for this project is 0%. In accordance with 49 CFR Part 23, the Department's Disadvantaged Business Assistance Program, the applicable Special Provisions, modification to the Special Provisions, the undersigned (Check a., b., c. as appropriate): (X) a. Assures to meet or exceed the established DB goal. ( ) b. Cannot meet the established DB goal and assures to meet or exceed a DB goal of ______%. All documentation indicating the good faith efforts to meet the established DB goal will be submitted within five (5) working days following the bid opening. ( ) c. Is a Department certified Disadvantaged Business. 8. The undersigned, as the apparent low bidder, further assures that he will submit Form A-585, DBA-1 (for federally funded projects) within five (5) working days following the bid opening to the Department's Disadvantaged Business Assistance Section. Failure to submit this form within the specified time shall render the bid non-responsive. If 8.c is checked above, the contractors is not required to submit Form A-585, DBA-1. 9. The bidder, hereby certifies that he has (X) has not ( ), participated in a previous contract or subcontract subject to the equal opportunity clause, as required by Executive Orders 11246, 10925 and 11114 as amended, and that he has (X), has not ( ), filed with the Office of Federal Contract Compliance Program all reports due under the applicable filing requirements. 10. We acknowledge the receipt of the following Addenda: NO. DATE NO. DATE 2 4/9/98 ______________________________________________________________________________ ______________________________________________________________________________ 11. The undersigned agrees that any and all claims that the undersigned may have for overcharges resulting from antitrust violations as to goods, services and materials purchased in connection with this bid are hereby assigned to the State of New Mexico, but only to the extent that such overcharges are passed on to the State. The undersigned further agrees to require its Subcontractors to assign any and all such claims for overcharges to the State, but only to the extent such overcharges are passed on to the State, by executing an assignment on a form obtainable from the Engineer prior to the commencement of work by a Subcontractor. The undersigned retains all rights to any such antitrust claims to the extent of any overcharges not passed on to the State. 12. The undersigned tenders herewith, as a proposal guarantee for which receipt has been given, a certified check, bid bond, cashier's check, postal money order or bank money order in the amount of at least 5% of the amount bid drawn to the order of the New Mexico State Transportation Department. MEADOW VALLEY CONTRACTORS, INC. - ------------------------------- Organization By: /s/ Robert W. Bottcher ---------------------------- Title: AREA MANAGER ------------------------- SUBSCRIBED AND SWORN TO ME ON THIS: 9 DAY OF APRIL, 1998 MY COMMISSION EXPIRES: [OFFICIAL SEAL APPEARS HERE] NEW MEXICO STATE HIGHWAY AND DATE: 03/16/98 TRANSPORTATION DEPARTMENT TIME: 13:44 PAGE: 16
PROJECT(S) : SP-4916(200) - -------------------------------------------------------------------------------- LINE ITEM APPROX. UNIT PRICE BID AMOUNT ------------ ------------- NO DESCRIPTION QUANTITY AND UNITS DOLLARS CTS DOLLARS CTS - -------------------------------------------------------------------------------- 562110 POLYMER BRIDGE 1480 JOINT SEALS, TYPE B 256.000 L.F. 180.00 46080.00 - -------------------------------------------------------------------------------- 601000 REMOVAL OF 1490 STRUCTURES AND LUMP LUMP OBSTRUCTIONS 49999.95 - -------------------------------------------------------------------------------- 607077 PEDESTRIAN 1500 SCREENING FENCE, TYPE 2 422.000 L.F. 150.00 63300.00 - -------------------------------------------------------------------------------- 709020 RIGID ELECTRICAL 1510 CONDUIT 2" (DIA.) 660.000 L.F. 3.00 1980.00 - -------------------------------------------------------------------------------- SECTION 0002 TOTAL 1,602,715.35 - -------------------------------------------------------------------------------- TOTAL BID 6,854,760.00 - --------------------------------------------------------------------------------
EX-10.86 11 NEW MEXICO ST. HIGHWAY NO. TPA-(TPO)-0048(10) EXHIBIT 10.86 New Mexico State Highway and Transportation Department PROPOSAL OF NAME MEADOW VALLEY CONTRACTORS, INC. TELEPHONE NO. (602) 437-5400 ADDRESS P.O. BOX 60726 PHOENIX, AZ 85082-0726 *CONTRACTOR'S LICENSE NO. 057280 *LICENSE CLASSIFICATION GA98, GF01 & GF02 *RESIDENT BIDDER CERTIFICATE NO.____________________________________________ *Not Required for Bidding on Federal-Aid Projects TO THE STATE HIGHWAY AND TRANSPORTATION DEPARTMENT: The undersigned proposes to construct this project in accordance with the State Highway and Transportation Department's current Standard Specifications for Road and Bridge Construction, the plans, the Special Provisions, the Specifications and all other contract documents and certifies to furnish and deliver all the material and to do all work and labor required for the construction of New Mexico Project No. TPA-(TPO)-0048(10) in LINCOLN County, New Mexico on Road No. NM 48 CN 0999R being about 2.616 miles in length, at the prices stated in the Proposal Schedule. The undersigned also certifies that he has examined the site of the proposed work, the material pits, the haul roads, the proposal, the plans, the specifications, the Special Provisions and all other contract documents before submitting the bid and is satisfied as to the requirements therein. As further consideration for the award of this contract, the undersigned agrees to the following terms, conditions and acknowledgements: 1. To execute the standard form contract and to furnish a contract bond in the amount of One Hundred Percent (100%) of the total bid price of this proposal within fifteen (15) days after receiving notification of the acceptance of this proposal, and failing to do so, to forfeit the accompanying check or proposal bond to the State as liquidated damages, and the Secretary of Highways and Transportation may proceed to award the contract to others. 2. To commence work within 15 days, or such additional time as may be allowed in writing by the Secretary of Highways and Transportation, after notification of award of contract, and to complete the contract as awarded in (295) working days. 3. To furnish a performance and payment bond in the penalty of full amount of contract as surety conditioned for the full, complete and faithful performance of this contract. 4. The undersigned declares that he is the only person or party interested in the proposal as principal and that its officers, employees, subsidiaries or parent corporations (check box a., b., or c. as appropriate): (x) a. have not in any way participated in any activities in restraint of trade, or been debarred with relation to public contracts either in the State of New Mexico or any other State of the United States or on any federally-assisted contract during the five year period immediately preceding this proposal or either directly entered into any agreement, participated in any collusion or otherwise take any action in restraint of free competitive bidding in connection with this contract. ( ) b. have participated in activities in restraint of trade with relation to public contracts either in the State of New Mexico or any other State of the United States or on any federally assisted contracts during the five-year period immediately preceding this proposal or entered into collusion, or restraint of free competitive bidding on this contract, and are of the opinion that they are a responsible bidder entitled to the award of a contract involving, public moneys and attach hereto an explanation of their activities in restraint of free trade, restraint of free competitive bidding, or collusion. ( ) c. The contractor has the option to submit an unsworn non collusion declaration, under penalty of perjury under the laws of the United States. See Form No. A-870 - Declaration of Non Collusion for Award of Contract. Activities in restraint of trade include those set forth in New Mexico Statutes Armotated, Section 57-1-1 (1978 Edition as amended, and following). The undersigned declares that this section has been read and is fully understood. 5. In accordance with the contract, plans and specifications, repair, maintain and guarantee all work performed thereunder until accepted by the Secretary of Highways and Transportation. SEE NOTICE TO CONTRACTORS (MARCH 14, 1990) ON LOBBYING ACTIVITIES 6. To indemnify and save harmless the State Highway and Transportation Department from any damage or loss for which the Department may become liable by the default of said Contractor, or by reason of any neglect or carelessness on the part of said Contractor, his agents or employees, or by on account of any act of omission of said Contractor, his servants, agents or employees, in the performance of this contract. 7. The established DB goal for this project is 13%. In accordance with 49 CFR Part 23, the Department's Disadvantaged Business Assistance Program, the applicable Special Provisions, modification to the Special Provisions, the undersigned (Check a., b., c. as appropriate): (X) a. Assures to meet or exceed the established DB goal. ( ) b. Cannot meet the established DB goal and assures to meet or exceed a DB goal of _____________%. All documentation indicating the good faith efforts to meet the established DB goal will be submitted within five (5) working days following the bid opening. ( ) c. Is a Department certified Disadvantaged Business. 8. The undersigned, as the apparent low bidder, further assures that he will submit Form A-585, DBA-1 (for federally funded projects) within five (5) working days following the bid opening to the Department's Disadvantage Business Assistance Section. Failure to submit this form within the specified time shall render the bid non-responsive. If 8.c is checked above, the contractors is not required to submit Form A-585, DBA-1. 9. The bidder, hereby certifies that he has (X) has not ( ), participated in a previous contract or subcontract subject to the equal opportunity clause as required by Executive Orders 11246, 10925 and 11114 as amended, and that he has (X), has not ( ), filed with the Office of Federal Contract Compliance Program all reports due under the applicable filing requirements. 10. We acknowledge the receipt of the following Addenda: NO. DATE NO. DATE ________________________________________________________________________________ ________________________________________________________________________________ 11. The undersigned agrees that any and all claims that the undersigned may have for overcharges resulting from antitrust violations as to goods, services and materials purchased in connection with this bid are hereby assigned to the State of New Mexico, but only to the extent that such overcharges are passed on the State. The undersigned further agrees to require its Subcontractors to assign any and all such claim for overcharges to the State, but only to the extent such overcharges are passed on to the State, by executing an assignment on a form obtainable from the Engineer prior to the commencement of work by a Subcontractor. The undersigned retains all rights to any such antitrust claims to the extent of any overcharges not passed on to the State. 12. The undersigned tenders herewith, as a proposal guarantee for which receipt has been given, a certified check, bid, bond, cashier's check, postal money order or bank money order in the amount of at least 5% of the amount bid drawn to the order of the New Mexico State Transportation Department. MEADOW VALLEY CONTRACTORS, INC. - -------------------------------------- Organization By: Robert W. Bottcher ----------------------------------- Title: AREA MANAGER -------------------------------- SUBSCRIBED AND SWORN TO ME ON THIS: 8 DAY OF MAY, 1998 My Commission Expires: June 17, 2001 [SEAL] NEW MEXICO STATE HIGHWAY AND DATE: 04/07/98 TRANSPORTATION DEPARTMENT TIME: 14:37 PAGE: 10
PROJECT(S) : TPA- (TPO)-0048(10) - -------------------------------------------------------------------------------- LINE ITEM APPROX. UNIT PRICE BID AMOUNT ------------ ------------- NO DESCRIPTION QUANTITY AND UNITS DOLLARS CTS DOLLARS CTS - -------------------------------------------------------------------------------- 721000 REMOVAL OF 0900 PAVEMENT STRIPE 13,630.000 L.F. 0.85 11585.50 - -------------------------------------------------------------------------------- 801000 CONSTRUCTION 0910 STAKING BY THE CONTRACTOR LUMP 85,000.65 - -------------------------------------------------------------------------------- SECTION 0001 TOTAL 7,568,420.00 - -------------------------------------------------------------------------------- TOTAL BID 7,568,420.00 - --------------------------------------------------------------------------------
EX-10.87 12 CONTRACT NO. E03445 EXHIBIT 10.87 FORM NO. A-555 CONTRACT NO. E03445 REV. 9-87 New Mexico State Highway and Transportation Department CONTRACT THIS CONTRACT, made this 7th day of July 1998, between the NEW MEXICO STATE HIGHWAY AND TRANSPORTATION DEPARTMENT AND MEADOW VALLEY CONTRACTORS, INC. - -------------------------------------------------------------------------------- (State whether individual, partnership, corporation or joint venture, if incorporated, give State of incorporation) of PHOENIX, AZ ------------------------------------------------------------------------------ his or its successors and assign, hereinafter call the Contractor. Inconsideration of the payment or payments herein specified and agreed to by the State, the contractor agrees to furnish and deliver all the labor, materials and equipment, necessary to do and perform all the work require in the construction of Project No. TPA-NH-070-4(31)260 Control No. 2091 located in Lincoln County, State of New Mexico at the unit prices bid by the contractor in his original proposal, which proposal and prices stated, together with the plans, specifications, supplemental specifications and acknowledged addenda of the State Highway and Transportation Department are made a part of this contract and are in corporated herein by reference. The performance and payment bond given by the contractor in the sum of $7,634,841.00 to secure the proper compliance with the terms, conditions and provisions of this contract is attached hereto and made a part of this contract. The Contractor certifies that he has obtained and will maintain in force all insurance in the designated amount as set forth in the specifications in a form and amount satisfactory to the New Mexico State Highway and Transportation Department. CONTRACTOR NEW MEXICO STATE HIGHWAY & TRANSPORTATION DEPT. BY /s/ Bradley E. Larson ----------------------------- _________________________________ TITLE President BY /s/ [SIGNATURE -------------------------- --------------------------------- Secretary of State Highway & Transportation Dept. CORPORATE ACKNOWLEDGMENT STATE OF NEW MEXICO ) COUNTY OF ______________ )ss. The foregoing instrument was acknowledged before me this ______________ day of _________________________, 19____ by_________________________________________ (Name of Officer) ______________________________ of Meadow Valley Contractors, Inc. ---------------------------------------------- (Title of Officer) (Name of Corporation) an Phoenix AZ ------------------------------------------------------------------------------ (State whether individual, partnership, corporation or joint venture, if incorporated, give State of incorporation) corporation, on behalf of said corporation. My Commission expires: _______________________________ Notary Public ___________________________ Form A-585 Page 5 of 5 DB A-1 Rev. 4/88 NEW MEXICO STATE HIGHWAY AND TRANSPORTATION DEPARTMENT CONTRACT GOAL FOR DISADVANTAGED BUSINESS IN HIGHWAY CONSTRUCTION For the purpose of this contract, a goal of 15.5 percent has been established for Disadvantaged Business (DB's) Participation. Type or print legibly
- -------------------------------------------------------------------------------- Item No.(s) of Name of Proposed Subcontract Work Description Subcontractor/Supplier Amount - -------------------------------------------------------------------------------- 704320 * San Bar Construction Corp. 1,200.00 - -------------------------------------------------------------------------------- 704330 * San Bar Construction Corp. 8,100.00 - -------------------------------------------------------------------------------- 704400 * San Bar Construction Corp. 2,400.00 - -------------------------------------------------------------------------------- 632000 * Baca's Trees, Inc. 6,964.00 - -------------------------------------------------------------------------------- 632100 * Baca's Trees, Inc. 62,952.00 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
1. Project No. TPA-NH-070-4(31)260 CN 2091 ------------------------------------------------- 2. Contractor's DB Liaison Officer Norm Watkins ----------------------------- 3. Total Amount Bid $ 7,634,841.00 ------------------------------------------ 4. Contractors DB Participation Dollar Estimate and Participation: $ 1,193,723.82 or 15.63% of line 3. *Must equal or exceed established goal indicated above or bid may be rendered non-responsive. ________________________________________________________________________________ I will abide by the Disadvantage Business (DB) goal set forth for this project and hereby submit the names of the DB firms that will participate in the project. Substitution(s) will not be allowed without prior submission of written justification to the Project Manager for approval. I understand that failure to meet the goal may result in Liquidated Damages for the difference between the DB goal and the actual DB participation achieved. This statement is my assurance that Meadow Valley Contractors, Inc. agrees to comply with the requirements of 49 CFR Part 23, and the New Mexico State Highway and Transportation Department's Disadvantaged Business Assistance Program, and all the requirements contained therein. May 19, 1998 /s/ Bradley E. Larson - ----------------------------- ------------------------------------- Date Signature of Company Official EX-10.88 13 JOINT VENTURE AGREEMENT EXHIBIT 10.88 THIS JOINT VENTURE AGREEMENT, made and entered into this 16th day of July, 1998, 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 "MVCI") W I T N E S S E T H WHEREAS, the Arizona Department of Transportation, hereinafter called the owner, advertised for bids for construction of Project No. ACSTP-053-1(31)P, Tracs No. 087 MA 218 H230602C, Mesa-Payson Highway(SR 87), Sunflower-MP 226, Segment F in the counties of Maricopa and Gila (hereinafter referred to as the Construction Contract), which bids were received on July 2, 1998. 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, if awarded to the parties hereto, 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" 1 CLARIFICATION OF DUTIES: The joint venturers 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, Project Engineer, and Clerk/Receptionist. Items to be furnished by MVCI: a. Project Manager b. Clerk/Receptionist c. Management and control of Traffic Control operations d. Two office trailers for MVCI use e. Concrete lining of SPP and CMP as called for on the plans. f. Project survey budget and subcontractor have been agreed to between the joint venture parties. The budgeted cost is $575,000.00 and the subcontractor is Rosendahl and Associates. rosendahl's quote is for $502,000.00. Any cost savings or cost overrun between original budget ($575,000.00) and final cost to complete the surveying will be split 50/50. g. Painting of Rock Sculptured Shotcrete. Items to be furnished by R. E. Monks: a. All water to be used on the project. b. An approximate five(5) acre yard site in Sunflower for use as crusher site, hot plant site, concrete batch plant site, QC trailer site, engineer's office trailer site, R. E. Monks and MVCI trailer site, and materials storage site. c. A double wide trailer for R. E. Monks use. d. Shot rock, for AC MA, 24" minus delivered to a crusher site in Sunflower, material permitting. e. Access to all structures suitable for appropriate cranes and structure equipment. R. E. Monks has included $260,000.00 in their bid for this work. Monks will perform this work at mutually agreeable hourly rates. Equipment haul roads through Sycamore Creek, Upper Kitty Joe Creek, and Lower Kitty Joe Creek are excluded from these costs since R. E. Monks will need access through these areas regardless. Any gain or loss will be split equally between the joint venture partners. f. A fully operated and maintained generator with capacity to furnish adequate power to MVCI offices, the Engineer's office, the QC trailer, and R. E. Monks office on a 24 hour basis. 2 g. Semi belly dump trucks fully operated and maintained at $52.00 per hour. h. MA hauls from Tonto Basin delivered to the hot plant site for the unit price of $3.00 per ton. i. Project Engineer/Coordinator. Although R.E. Monks is furnishing the Project Engineer/Coordinator, MVCI will reimburse R.E. Monks $8,500.00/ month for each month that that position is filled by an employee of R.E. Monks. If partial months are used the amount will be prorated. The monthly reimbursement rate includes all costs associated with that position including but not limited to a pickup, computer, fringe benefits, payroll taxes, insurance, etc. It is anticipated that that position will be filled by a R.E. Monks employee for approximately 18-20 months. Items to be shared by both MVCI and R.E. Monks: a. Fencing around the Joint Venture yard site in Sunflower. b. Security, if needed and agreed to by the both Parties, at the job site. 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 Mesa-Payson Highway (SR 87) Sunflower-MP 226, Segment F, 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 3 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. 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 Minority and Woman-Owned Business Enterprise requirements, Equal Employment Opportunity Affirmative Action Programs, On the Job Training 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. In the event one partner has difficulty meeting its obligation hereunder, the Joint Venture partner shall cooperate in the best way possible to achieve the contract goals. 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 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 4 iii. Liability which such party may incur as a result of the operations, acts or omissions of its 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 0.127% of the contract revenue plus a lump sum fee of $9,828.00. 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 equally between the parties. 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 the following manner: The partner responsible for the changed bid item will receive 80% of the savings realized from those items. The other partner will receive 20% of the savings. In the event a value engineering proposal affects items assigned to both parties, the total V.E. savings will first be split on a prorated basis equal to the values of the venturers respective items. Each of the split amounts will then be divided 80/20 with the responsible partner receiving 5 80% of their split amount and 20% of the other partners split amount. 10. Should any dispute arise between the parties hereto as to 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: 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 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. 6 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 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, and Clerk/Receptionist shall be employed by MVCI but will be mutually agreed upon by both parties. The Project Engineer/Coordinator shall be employed by R. E. Monks but will be mutually agreed upon by both parties. These employees 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 arbitration as previously 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 7 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 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. Such disabled party, or its legal representative, shall have no further voice in the performance of the Construction Contract or in the management of this Joint Venture. 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 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, 8 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. 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. ATTEST R. E. Monks Construction, LLC /s/ [SIGNATURE /s/ Richard D. Monks - -------------------------- ------------------------------ (seal) Richard D. Monks Vice President ATTEST Meadow Valley Contractors, Inc. /s/ Robert W. Bottcher /s/ Bradley E. Larson - -------------------------- ------------------------------ (seal) Bradley E. Larson President 9 MEADOW VALLEY CONTRACTORS, INC./R.E. MONKS, A JV MVCI PROJECT NO. 9811 ADOT PROJECT NO. ACSTP-053-1 (31) P PAY ESTIMATE NO.: MESA-PAYSON HWY (SR 87) PERIOD ENDING DATE: (SUNFLOWER-MP 226, SEGMENT F)
----------------------------------------------------------------------------------------------------------------------------- ITEM UNIT UNIT TOTAL NO DESCRIPTION UN QUANT PRICE BID PRICE ------------------------------------------------------------------------------------------------------------------------------ MV 2010001 CLEARING AND GRUBBING LSUM 1 500,000.00 500,000.00 MV 2020072 REMOVE AND SALVAGE GUARD RAIL LF 3750 1.50 5,625.00 MV 2020076 REMOVE & SALVAGE BRKWY CABLE TERMINAL EACH 13 175.00 2,275.00 MV 2020101 REMOVE FENCE LF 4850 1.00 4,850.00 MV 2060001 FURNISH WATER SUPPLY LSUM 1 150,000.00 150,000.00 MV 4040111 BITUMINOUS TACK COAT TON 155 140.00 21,700.00 MV 4040116 APPLY BITUMINOUS TACK COAT HOUR 320 115.00 36,800.00 MV 4040125 FOG COAT TON 65 165.00 10,725.00 MV 4040163 BLOTTER MATERIAL TON 191 17.00 3,247.00 MV 4040230 ASPHALT BINDER (PG76-16) (FOR 1in SHRP MIX) TON 4955 195.00 966,225.00 MV 4090003 ASPHTC CONC (MISCELLANEOUS STRUCTURAL) TON 9000 40.00 360,000.00 MV 4140040 AR-ACFC TON 5300 22.00 116,600.00 MV 4140042 ASPHALT RUBBER MATERIAL (FOR AR-ACFC) TON 504 250.00 126,000.00 MV 4140044 MINERAL ADMIXTURE (FOR AR-ACFC) TON 48 90.00 4,320.00 MV 4160002 ASPHALTIC CONC (1in SHRP MIX) (END PRODUCT) TON 99090 16.00 1,585,440.00 MV 4160031 MINERAL ADMIXTURE TON 933 90.00 83,970.00 MV 5010107 PIPE, CORRUGATED METAL, SLOTTED, 18in LF 580 65.00 37,700.00 MV 5030039 CONC CATCH BSN (C-15.20) ONE 17 'WING,H*=8' EACH 1 3,300.00 3,300.00 MV 5030070 CONC CATCH BASIN (C-15.30) SINGLE, H*=8' EACH 35 1,300.00 45,500.00 MV 5030099 CONC CATCH BSN (C-15.40) SINGLE, H*=8' EACH 1 3,500.00 3,500.00 MV 5030142 CONC CTCH BSN (SAFETY INLET) (C15.90 MOD) EACH 3 2,300.00 6,900.00 MV 5030143 CONC CTCH BSN (MEDIAN) (C-15.81) (MODIFIE EACH 1 1,700.00 1,700.00 MV 6016088 HEADWALL (24in) (SINGLE) (B-11.11) EACH 11 1,400.00 15,400.00 MV 6016089 HEADWALL (48in) (SINGLE) (B-11.12) EACH 5 2,500.00 12,500.00 MV 6016090 HEADWALL (48in) (DOUBLE) (B-11.14) EACH 1 4,500.00 4,500.00 MV 6016091 HEADWALL (72in) (SINGLE) (B-11.12) EACH 4 5,500.00 22,000.00 MV 6016092 HEADWALL (72in) (SINGLE) (B-11.12) (DROPINLET EACH 1 8,300.00 8,300.00 MV 6016093 HEADWALL (90in) (SINGLE) (B-12.10 OR B-12.50 EACH 2 8,000.00 16,000.00 MV 6016094 HEADWALL (120in) (SGL) (B-12.10 OR B-12.50) EACH 2 15,000.00 30,000.00 MV 6016095 HEADWALL (144in) (SGL) (B-12.10 OR B-12.50) EACH 2 29,000.00 58,000.00 MV 6070002 BREAKAWAY SIGN POST S4x7.7 LF 48 17.00 816.00 MV 6070022 FOUNDATION FOR BRKWY SIGN POST S4x7.7 EACH 4 300.00 1,200.00 MV 6070040 SLIP BASE SIGN POST (P-2) EACH 55 300.00 16,500.00 MV 6070041 SIGN POST (P-1) (PERFORATED) (SINGLE) LF 1000 12.00 12,000.00 MV 6070042 SIGN POST (P-2) (PERFORATED) (TELESCOPING) LF 800 18.00 14,400.00 MV 6070046 FOUNDTN FOR SIGN POST (P-1) (PERFORATED) EACH 81 165.00 13,365.00 MV 6070047 FOUNDTN FOR SIGN POST (P-2) (PERFORATED) EACH 60 165.00 9,900.00 MV 6080011 WARNING SIGN PANELS SQFT 600 13.00 7,800.00 MV 6080016 EXTRD ALU W/STD REFLECT SHTG&DEMNT CHRAT SQFT 202 33.00 6,666.00 MV 6080021 NARKER SIGN PANELS SQFT 50 13.00 650.00 MV 6080031 REGULATORY SIGN PANELS SQFT 550 13.00 7,150.00 MV 6080032 FLT SHT ALUM PNL W/DEMNT CHAR & TYP 2 SH SQFT 294 27.00 7,938.00 MV 6080081 FLT SHT ALU W/DIR APL OR SILK-SCRN CHRAT SQFT 65 24.00 1,560.00 MV 6080101 MISC WORK (SIGNS) (REMOVE & SALVAGE) LSUM 1 10,000.00 10,000.00 MV 7010251 OBLITERATE PAVEMENT MARKING LF 3500 0.40 1,400.00 MV 7015010 TEMPORARY CONC BARR (INSTLN & REMOVAL) LF 2200 6.00 13,200.00 MV 7015020 TEMP IMP ATTENUATORS (INSTLN & REMOVAL) EACH 5 475.00 2,375.00 MV 7015042 TEMPORARY PAINTED MARKING (STRIPE) LF 17400 0.10 1,740.00 MV 7015052 OBLITERATE PAVEMENT MARKING (STRIPE) LF 9775 0.40 3,910.00 MV 7015090 SPECIALTY SIGNS (W/TYPE II SHEETING) SQFT 800 10.00 8,000.00 MV 7016020 TEMPORARY CONCRETE BARRIER (IN USE) LFDY 70500 0.07 4,935.00 MV 7016030 BARR (TYPE II, VERT. PANEL, TUBULAR MARKER) DAY 15258 0.30 4,577.00 MV 7016031 BARR (TYPE III, HIGH LEVEL FLAG TREES) DAY 585 1.00 585.00
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------------------------------------------------------------------------------------------------------------------------ ITEM UNIT UNIT TOTAL NO DESCRIPTION UN QUANT PRICE BID PRICE ------------------------------------------------------------------------------------------------------------------------ MV 7016032 PORTABLE SIGN STANDS (RIGID) DAY 1185 0.40 474.00 MV 7016033 PORTABLE SIGN STANDS (SPRING TYPE DAY 3852 1.00 3,852.00 MV 7016035 WARNING LIGHTS (TYPE A) DAY 16750 0.20 3,350.00 MV 7016037 WARNING LIGHTS (TYPE C) DAY 16675 0.40 6,670.00 MV 7016038 TRAFFIC CONE (28 INCHES) DAY 2404 0.25 601.00 MV 7016039 EMBEDDED SIGN POST DAY 16984 0.10 1,698.40 MV 7016040 TEMPORARY SIGN (HIGH INTENS. * 10 SF) DAY 143 0.50 71.50 MV 7016041 TEMPORARY SIGN (HIGH INTENS. ** 10 SF) DAY 7400 0.60 4,440.00 MV 7016042 TEMPORARY SIGN (STANDARD INTENS. * 10 SF) DAY 1459 0.40 583.60 MV 7016043 TEMPORARY SIGN (STANDARD INTENS. ** 10 SF) DAY 1606 0.50 803.00 MV 7016050 TRUCK MOUNTED ATTENDATOR DAY 5 300.00 1,500.00 MV 7016061 FLASHING ARROW PANEL DAY 374 38.00 14,212.00 MV 7016066 CHANGEABLE MESSAGE SIGN DAY 133 75.00 9,975.00 MV 7016075 FLAGGING SERVICES HOUR 638 25.00 15,950.00 MV 7030008 DELINEATOR (FLEXIBLE) EACH 270 21.00 5,670.00 MV 7030036 MILEPOST MARKER (4-S-4.19.1) EACH 12 100.00 1,200.00 MV 7042051 REMVL OF CURING COMPND FROM PCCP STRIP' LF 20000 0.10 2,000.00 MV 7050022 PVMNT MARKING, PREFMD, TYPE I, WHITE STRIPE LF 600 1.74 1,044.00 MV 7050023 PVMNT MARKING, PREFMD, TYPE I, SINGLE ARROW EACH 12 150.00 1,800.00 MV 7050026 PVMNT MARKING, PREFMD, TYPE I, LEGEND (ONLY) EACH 6 160.00 960.00 MV 7060100 PAVEMENT MARKER, RECESSED, TYPE C EACH 130 9.00 1,170.00 MV 7060111 PAVEMENT MARKER, RECESSED, TYPE G EACH 850 9.00 7,650.00 MV 7080001 PERMANENT PVMNT MARKING (PAINTED) (WHITE) LF 107000 0.06 6,420.00 MV 7080011 PERMANENT PVMNT MARKING (PAINTED) (YELLOW) LF 95000 0.06 5,700.00 MV 7090001 DUAL COMPONENT PVMT MRKGS (WHITE EPOXY) LF 107000 0.25 26,750,00 MV 7090002 DUAL COMPONENT PVMT MRKGS (YELLOW EPOXY) LF 95000 0.25 23,750.00 MV 8061002 TREE (FIVE GALLON) EACH 340 90.00 30,600.00 MV 8070001 LANDSCAPING ESTABLISHMENT LSUM 1 45,000.00 45,000.00 MV 8080006 WATER DISTRIBUTION SYSTEM LSUM 1 90,000.00 90,000.00 MV 9010001 MOBILIZATION LSUM 1 3,367,000.00 3,367,000.00 MV 9021001 TEMPORARY FENCE LF 600 15.00 9,000.00 MV 9022001 MEDIAN GLARE SCREEN LF 27792 7.00 194,544.00 MV 9030013 BARBED WIRE GAME FENCE LF 85300 3.00 255,900.00 MV 9030100 FENCE GATE, TYPE 1, SINGLE EACH 9 700.00 6,300.00 MV 9030102 FENCE GATE, TYPE 1, DOUBLE EACH 2 1,100.00 2,200.00 MV 9030105 FENCE GATE, TYPE 2 LF 100 40.00 4,000.00 MV 9030113 FLOOD GATE (FOR ITEM 9030013) LF 160 13.00 2,080.00 MV 9050001 GUARD RAIL, W-BEAM, SINGLE FACE LF 27688 12.00 332,256.00 MV 9050016 GRD RAIL EXTRDER TERM (ET-2000-LET OR BST EACH 30 2,500.00 75,000.00 MV 9050202 GUARD RAIL (NESTED STEEL W BEAM) LF 150 30.00 4,500.00 MV 9050206 GUARD RAIL ANCHORAGE, BOLTED EACH 6 350.00 2,100.00 MV 9050301 GUARD RAIL RUB RAIL EACH 12 450.00 5,400.00 MV 9050400 GRDRL TRANS, W-BEAM TO CNC BAR, C10.30, .31 EACH 12 1,600.00 19,200.00 MV 9050401 GRDRL TRANS, W-BEAM TO CONC BARR, C10.32 EACH 5 1,300.00 6,500.00 MV 9060021 CATTLE GUARD (2 UNIT) EACH 2 4,000.00 8,000.00 MV 9060031 CATTLE GUARD (3 UNIT) EACH 1 6,000.00 6,000.00 MV 9060041 CATTLE GUARD (4 UNIT) EACH 1 8,000.00 8,000.00 MV 9060051 CATTLE GUARD (5 UNIT) EACH 2 10,000.00 20,000.00 MV 9060301 RECONSTRUCT CATTLE GUARD EACH 1 2,500.00 2,500.00 MV 9090001 SURVEY MONUMENT (C-21.10) EACH 2 200.00 400.00 MV 9100079 CONCRETE BARRIER (MEDIAN,B21.18, TYP C, DEP LF 60 120.00 7,200.00 MV 9100201 CONCRETE MEDIAN BARRIER LF 24643 24.00 591,432.00 MV 9110001 RIGHT-OF-WAY MARKER EACH 109 175.00 19,075.00
* LESS THAN ** MORE THAN Page 2 MEADOW VALLEY CONTRACTORS, INC./R.E. MONKS, A JV MVCI PROJECT NO. 9811 ADOT PROJECT NO. ACSTP-053-1(31)P PAY ESTIMATE NO.: MESA-PAYSON HWY (SR 87) PERIOD ENDING DATE: (SUNFLOWER-MP 226, SEGMENT F)
--------------------------------------------------------------------------------------------------------- ITEM UNIT UNIT TOTAL NO DESCRIPTION UN QUANT PRICE BID PRICE --------------------------------------------------------------------------------------------------------- MV 9140121 RETAINING WALL (REINF CONC) (B-18.40) SQFT 380 50.00 19,000.00 MV 9160001 EMBANKMENT CURB LF 1206 7.00 8,442.00 MV 9170001 EMBANKMENT SPILLWAY (C-4.10) LF 204 55.00 11,220.00 MV 9170021 INLET (C-4.10) (SINGLE) EACH 6 1,100.00 6,600.00 MV 9170041 OUTLET (C-4.10) EACH 6 650.00 3,900.00 MV 9230001 PROVIDE ON-THE-JOB TRAINING HOUR 1100 0.80 880.00 MV 9240058 MISC WORK (ATTACH BAT HABITATS) LSUM 1 20,000.00 20,000.00 MV 9240088 MISC WORK (PRTBLE CELULAR VRIBLE MSG SGN LSUM 1 80,000.00 80,000.00 MV 9240114 MISC WORK (OPER. ADOT PRVDED RADAR SPEED HOUR 100 35.00 3,500.00 MV 9240130 MISC WORK (PORTABLE LIGHT) DAY 102 125.00 12,750.00 MV 9240170 CONTRACTOR QUALITY CONTROL LSUM 1 750,000.00 750,000.00 MV 9250001 CONSTRUCTION SURVEYING AND LAYOUT LSUM 1 700,000.00 700,000.00 MV 9260004 ENGINEER'S FIELD OFFICE LSUM 1 35,000.00 35,000.00 MV 9280001 FORMED RUMBLE STRIP LF 66000 0.20 13,200.00 MV 9280031 CUT GROOVE RUMBLE STRIP LF 6400 0.50 3,200.00 MV 9990110 STRUCTURAL CONCRETE (CLASS S) (F'C=3,000) CUYD 504 270.00 136,080.00 MV 9990115 STRUCTURAL CONCRETE (CLASS S) (F'C=3,500) CUYD 1030 270.00 278,100.00 MV 9990120 STRUCTURAL CONCRETE (CLASS S) (F'C=4,500) CUYD 2132 220.00 469,040.00 MV 9990125 BRIDGE CONCRETE BARRIER, TYPE A LF 2905 32.00 92,960.00 MV 9990130 BRIDGE CONCRETE BARRIER TRANSITION EACH 8 2,000.00 16,000.00 MV 9990135 DECK JOINT ASSEMBLY (STRIP SEAL JOINT) LF 280 75.00 21,000.00 MV 9990140 APPROACH SLAB (B-19.11) SQFT 2520 11.00 27,720.00 MV 9990145 PRECAST, P/S MEMBER (AASHTO TYPE 6 GIRDER LF 7140 115.00 821,100.00 MV 9990150 VERTICAL RESTRAINER, EARTHQUAKE (FIXED) EACH 64 75.00 4,800.00 MV 9990155 VERT RESTRAINER, EARTHQUAKE (EXPANSION) EACH 64 100.00 6,400.00 MV 9990160 REINFORCING STEEL LB 922320 0.35 322,812.00 MV 9990170 DRLD SHAFT FOUND (60in) SYC CRK BR NB&SB LF 666 540.00 359,640.00 MV 9990175 DRLD SHAFT FOUND (69in) SYC CRK BR NB&SB LF 506 1,100.00 556,600.00 MV 9990210 STRUCTURAL CONC (CLASS S) (F'C-3,000 PSI) CUYD 132 400.00 52,800.00 MV 9990215 STRUCTURAL CONC (CLASS S) (F'C-3,500 PSI) CUYD 1902 220.00 418,440.00 MV 9990220 STRUCTURAL CONC (CLASS S) (F'C-4,500 PSI) CUYD 2470 220.00 543,400.00 MV 9990225 BRIDGE CONCRETE BARRIER, TYPE A LF 1730 32.00 55,360.00 MV 9990230 BRIDGE CONCRETE BARRIER, TYPE B LF 1730 32.00 55,360.00 MV 9990235 BRIDGE CONCRETE BARRIER, TYPE C LF 30 70.00 2,100.00 MV 9990240 BRIDGE CONCRETE BARRIER TRANSITION EACH 4 2,000.00 8,000.00 MV 9990245 DECK JOINT ASSEMBLY (STRIP SEALS) LF 240 75.00 18,000.00 MV 9990250 APPROACH SLSAB (B-19.11) SQFT 2393 11.00 26,323.00 MV 9990255 PRECAST, P/S MBR (AASHTO TYPE 6 GIRDER) LF 8575 115.00 986,125.00 MV 9990260 RESTRAINERS, VERTICAL EARTHQUAKE (FIXED) EACH 80 75.00 6,000.00 MV 9990265 RESTRAINERS, VERT EARTHQUAKE (EXPANSION) EACH 68 100.00 6,800.00 MV 9990270 REINFORCING STEEL LB 1067740 0.35 373,709.00 MV 9990275 DRLD SHFT FOUND (60in) LWR KTY JOE CR NB&SB LF 830 360.00 298,800.00 MV 9990280 DRLD SHFT FOUND (96in) LWR KTY JOE CR NB&SB LF 1114 610.00 679,540.00 MV 9990310 STRUCTURAL CONCRETE (CLASS S) (F'C=3,000) CUYD 415 170.00 70,550.00 MV 9990315 STRUCTURAL CONCRETE (CLASS S) (F'C=3,500) CUYD 1028 310.00 318,680.00 MV 9990320 STRUCTURAL CONCRETE (CLASS S) (F'C=5,000) CUYD 8160 450.00 3,672,000.00 MV 9990325 BRIDGE CONCRETE BARRIER, TYPE A LF 2292 32.00 73,344.00 MV 9990330 BRIDGE CONCRETE BARRIER, TYPE B LF 2248 32.00 71,936.00 MV 9990335 BRIDGE CONCRETE BARRIER TRANSITION EACH 4 2,000.00 8,000.00 MV 9990340 DECK JOINT ASSEMBLY (MODULAR) LF 172 550.00 94,600.00 MV 9990345 APPROACH SLAB (B-19.11) SQFT 2484 11.00 27,324.00 MV 9990350 BEARING (NON-GUIDED EXPANSION) EACH 16 1,500.00 24,000.00 MV 9990355 PRESTRESS CAST-IN-PLACE CONC (LONGITUDINA LSUM 1 500,000.00 500,000.00
Page 3 MEADOW VALLEY CONTRACTORS, INC. /R.E. MONKS, A JV MVCI PROJECT NO. 9811 ADOT PROJECT NO. ACSTP-053-1 (31)P PAY ESTIMATE NO.: MESA-PAYSON HWY (SR 87) PERIOD ENDING DATE: (SUNFLOWER-MP 226, SEGMENT F)
------------------------------------------------------------------------------------------------------------------------------ ITEM UNIT UNIT TOTAL NO DESCRIPTION UN QUANT PRICE BID PRICE ------------------------------------------------------------------------------------------------------------------------------ MV 9990360 REINFORCING STEEL LB 2148820 0.35 752,087.00 MV 9990365 DRLD SHFT FOUND (60in) WHSKY SPRGS BR NB & SB LF 400 310.00 124,000.00 MV 9990370 DRLD SHFT FOUND (120in) WHSKY SPRGS BR NB & S LF 622 970.00 603,340.00 MV 9990410 STRUCTURAL CONCRETE (CLASS S) (F'C=3, 500) CUYD 1266 260.00 329,160.00 MV 9990415 STRUCTURAL CONCRETE (CLASS S) (F'C=5, 000) CUYD 4257 470.00 2,000,790.00 MV 9990420 BRIDGE CONCRETE BARRIER, TYPE A LF 1226 32.00 39,232.00 MV 9990425 BRIDGE CONCRETE BARRIER, TYPE B LF 1226 32.00 39,232.00 MV 9990430 DECK JOINT ASSEMBLY (STRIP SEAL JOINT) LF 170 75.00 12,750.00 MV 9990435 APPROACH SLAB (B-19.11) SQFT 2400 11.00 26,400.00 MV 9990440 BEARING (NON-GUIDED EXPANSION) EACH 32 1,200.00 38,400.00 MV 9990445 PRESTRESS CAST-IN-PLACE CONC (STA 2663+) LSUM 1 300,000.00 300,000.00 MV 9990450 REINFORCING STEEL LB 979662 0.40 391,864.80 MV 9990455 CONCRETE BRIDGE BARRIER TRANSITION EACH 4 2,000.00 8,000.00 MV 9990460 DRLD SHFT FOUND (60in) UPR KITTY JOE BR NB&S LF 640 400.00 256,000.00 MV 9990465 DRLD SHFT FOUND (72in) UPR KITTY JOE BR NB&S LF 602 440.00 264,880.00 MV 9990470 DRLD SHFT FND (120in) UPR KITTY JOE BR NB&S LF 590 1,300.00 767,000.00 MV 9990510 STRUCTURAL CONCRETE (CLASS S) (F'C=3,000) CUYD 375 270.00 101,250.00 MV 9990515 STRUCTURAL CONCRETE (CLASS S) (F'C-3,500) CUYD 1100 240.00 264,000.00 MV 9990520 STRUCTURAL CONCRETE (CLASS S) (F'C-4,500) CUYD 1225 240.00 294,000.00 MV 9990525 BRIDGE CONCRETE BARRIER, TYPE A LF 900 32.00 28,800.00 MV 9990530 BRIDGE CONCRETE BARRIER, TYPE B LF 900 32.00 28,800.00 MV 9990535 BRIDGE CONCRETE BARRIER TRANSITION EACH 8 2,000.00 16,000.00 MV 9990540 DECK JNT ASSBLY (B-24.20 3X3 COMPR SEAL) LF 172 90.00 15,480.00 MV 9990545 APPROACH SLAB (B-19.11) SQFT 2400 11.00 26,400.00 MV 9990550 PRECAST, P/S MBR (AASHTO TYPE 4 GIRDER) LF 5295 110.00 582,450.00 MV 9990555 VERTICAL RESTRAINER, EARTHQUAKE (FIXED) EACH 80 75.00 6,000.00 MV 9990560 VERTICAL RESTRAINER, EARTHQUAKE (EXPANS) EACH 40 100.00 4,000.00 MV 9990565 REINFORCING STEEL LB 643460 0.35 225,211.00 MV 9990570 DRLD SHFT FOUND (48in) COTTONWOOD BR NB&SB LF 720 210.00 151,200.00 MV 9990575 DRLD SHFT FOUND (96in) COTTONWOOD BR NB&SB LF 520 610.00 317,200.00 MV 9990610 STRUCTURAL CONCRETE (CLASS S) (F'C-4,000) CUYD 2174 170.00 369,580.00 MV 9990615 REINFORCING STEEL LB 229300 0.35 80,255.00 MV 9990705 STRUCTURAL CONCRETE (CLASS S) (F'C=3,000) CUYD 525 200.00 105,000.00 MV 9990710 REINFORCING STEEL LB 82395 0.35 28,838.25 MV 9990805 STRUCTURAL CONCRETE (CLASS S) (F'C=3,000) CUYD 543 200.00 108,600.00 MV 9990810 REINFORCING STEEL LB 81415 0.35 28,495.25 MV 9990910 STRUCTURAL CONCRETE (CLASS S) (F'C-3,000) CUYD 123 250.00 30,750.00 MV 9990915 REINFORCING STEEL LB 14055 0.35 4,919.25 MV 9991010 STRUCTURAL CONCRETE (CLASS S) (F'C=3,000) CUYD 111 260.00 28,860.00 MV 9991015 REINFORCING STEEL LB 12225 0.35 4,278.75 ----------------------------------------------------------------------------------------------------------------------------- 31,630,864.20
Page 4 MEADOW VALLEY CONTRACTORS, INC./R.E. MONKS, A JV MVCI PROJECT NO. 9811 ADOT PROJECT NO. ACSTP-053-1 (31)P PAY ESTIMATE NO.: MESA-PAYSON HWY (SR 87) PERIOD ENDING DATE: (SUNFLOWER-MP 226, SEGMENT F)
----------------------------------------------------------------------------------------------------------------------- ITEM UNIT UNIT TOTAL NO DESCRIPTION UN QUANT PRICE BID PRICE ----------------------------------------------------------------------------------------------------------------------- REM 2010001 CLEARING AND GRUBBING LSUM 1 500,000.00 500,000.00 REM 2020036 REMOVAL OF ASPHALTIC CONCRETE PAVEMENT SQYD 76323 0.50 38,161.50 REM 2020042 REMOVAL OF PIPE (OLD SR 87) LF 923 60.00 55,380.00 REM 2020181 ROADWAY OBLITERATION AND RESTORATION LSUM 1 100,000.00 100,000.00 REM 2030120 GRADER ROAD LF 2640 3.00 7,920.00 REM 2030301 ROADWAY EXCAVATION CUYD 4115263 2.40 9,876,631.20 REM 2030401 DRAINAGE EXCAVATION CUYD 2591 5.00 12,955.00 REM 2030812 DYKE (TYPE B) (MEDIAN OR DITCH) CUYD 120 12.00 1,440.00 REM 2060001 FURNISH WATER SUPPLY LSUM 1 1,400,000.00 1,400,000.00 REM 2070001 DUST PALLIATIVE MGAL 35000 11.00 385,000.00 REM 3030022 AGGREGATE BASE, CLASS 2 CUYD 48870 14.50 708,615.00 REM 5010011 PIPE, CORRUGATED METAL, 24in LF 3856 35.00 134,960.00 REM 5010017 PIPE, CORRUGATED METAL, 30in LF 644 60.00 39,640.00 REM 5010025 PIPE, CORRUGATED METAL, 36in LF 2122 82.00 174,004.00 REM 5010030 PIPE, CORRUGATED METAL, 42in LF 1072 110.00 117,920.00 REM 5010035 PIPE, CORRUGATED METAL, 48in LF 1228 110.00 135,080.00 REM 5010055 PIPE, CORRUGATED METAL, 72in LF 586 200.00 117,200.00 REM 5010069 PIPE, CORRUGATED METAL, 90in LF 420 260.00 109,200.00 REM 5010205 PIPE, CORRUGATED METAL, 35in x 24in LF 116 40.00 4,640.00 REM 5014024 FLARED END SECTION, 24in (C-13.25) EACH 26 250.00 6,500.00 REM 5014030 FLARED END SECTION, 30in (C-13.25) EACH 1 350.00 350.00 REM 5014036 FLARED END SECTION, 36in (C-13.25) EACH 11 400.00 4,400.00 REM 5014042 FLARED END SECTION, 42in (C-13.25) EACH 4 450.00 1,800.00 REM 5014235 FLARED END SECTION, 35in x 24in (C-13.25) EACH 2 250.00 500.00 REM 5020072 STRUCTURAL PLATE PIPE, 72in LF 420 350.00 147,000.00 REM 5020120 STRUCTURAL PLATE PIPE, 120in LF 260 500.00 130,000.00 REM 5020144 STRUCTURAL PLATE PIPE, 144in LF 576 650.00 374,400.00 REM 8050023 SEEDING (CLASS II) (MIX H1) ACRE 60 1,400.00 84,000.00 REM 8050024 SEEDING (CLASS II) (MIX H2) ACRE 144 1,600.00 230,400.00 REM 8080285 PIPE (PVC) (6in) (SCHEDULE 40) LF 1484 20.00 29,680.00 REM 8101011 EROSION CONTROL (STRAW BALES) EACH 479 12.00 5,748.00 REM 8101012 EROSION CONTROL (SILT FENCE) LF 43807 1.50 65,710.50 REM 8101016 EROSION CONTROL (ROCK MULCH) (GRADATION C CUYD 198 25.00 4,950.00 REM 9010001 MOBILIZATION LSUM 1 2,288,000.00 2,288,000.00 REM 9120002 SHOTCRETE (CARVED TO REPLICATE NATRL APRN SQYD 14860 75.00 1,114,500.00 REM 9120004 SHOTCRETE (4in) SQYD 14860 25.00 371,500.00 REM 9130001 RIPRAP (DUMPED) (D50=6in) CUYD 8485 45.00 381,825.00 REM 9130002 RIPRAP (WIRE-TIED) (D50=6in) CUYD 10 125.00 1,250.00 REM 9130008 RIPRAP (DUMPED) (D50=9in) CUYD 9000 45.00 405,500.00 REM 9130037 RIPRAP (WIRE-TIED) (D50=9in) SQYD 825 140.00 115,500.00 REM 9130038 RIPRAP (WIRE-TIED) (D50=12in) SQYD 135 165.00 22,275.00 REM 9130051 RIPRAP (DUMPED) (D50=12in) CUYD 2385 75.00 178,875.00 REM 9130052 RIPRAP (DUMPED) (D50=18in) CUYD 770 75.00 57,750.00 REM 9130053 RIPRAP (DUMPED) (D50=24in) CUYD 3060 45.00 137,700.00 REM 9130054 RIPRAP (DUMPED) (D50=30in) CUYD 6130 45.00 275,850.00 REM 9140153 RETAINING WALL (MSE WALL) SQFT 75380 23.00 1,733,740.00 REM 9230001 PROVIDE ON-THE-JOB TRAINING HOUR 1100 0.80 880.00 REM 9240056 MISC WORK (RESHP & GRD EXSTNG PIONEER RD) LSUM 1 25,000.00 25,000.00 REM 9240111 MISC WORK (INSTALL SOIL NAILS) LF 106420 13.00 1,383,460.00
Page 1 MEADOW VALLEY CONTRACTORS, INC./R.E. MONKS, A JV MVCI PROJECT NO. 9811 ADOT PROJECT NO. ACSTP-053-1(31)P PAY ESTIMATE NO.: MESA-PAYSON HWY (SR 87) PERIOD ENDING DATE: (SUNFLOWER-MP 226, SEGMENT F)
------------------------------------------------------------------------------------------------------------------------------ ITEM UNIT UNIT TOTAL NO DESCRIPTION UN QUANT PRICE BID PRICE ------------------------------------------------------------------------------------------------------------------------------ REM 9240121 MISC WORK (VERIFICATION TEST NAILS) EACH 45 1,500.00 67,500.00 REM 9990100 STR EXC - SYCAMORE CR BR NB&SB CUYD 520 3.50 1,820.00 REM 9990105 STRUCTURE BACKFILL CUYD 1220 10.00 12,200.00 REM 9990165 RIP RAP (WIRED-TIED) CUYD 1500 85.00 127,500.00 REM 9990200 STR EXC - LWR KITTY JOE CRK BR NB&SB CUYD 20 8.00 160.00 REM 9990205 STRUCTURE BACKFILL CUYD 340 10.00 3,400.00 REM 9990300 STR EXC - WHISKEY SPRINGS BRIDGE NB&SB CUYD 60 8.00 480.00 REM 9990305 STRUCTURE BACKFILL CUYD 488 24.00 11,712.00 REM 9990400 STR EXC - UPPER KITTY JOE BRIDGE NB&SB CUYD 925 8.00 7,400.00 REM 9990405 STRUCTURE BACKFILL CUYD 2300 10.00 23,000.00 REM 9990500 STR EXC - COTTONWOOD BRIDGE NB&SB CUYD 200 8.00 1,600.00 REM 9990505 STRUCTURE BACKFILL CUYD 1280 10.00 12,800.00 REM 9990600 STR EXC - BOX CULV STA 2584+80-BR #7041 CUYD 250 8.00 2,000.00 REM 9990605 STRUCTURE BACKFILL CUYD 5640 12.00 67,680.00 REM 9990700 STR BACKFILL - BOX CULV STA 2590+50 CUYD 3651 12.00 43,812.00 REM 9990800 STR BACKFILL - BOX CULV STA 2750+50 CUYD 4071 12.00 48,852.00 REM 9990900 STR EXC - BOX CULV SYCAMORE CR STA 26+00 CUYD 30 15.00 450.00 REM 9990905 STRUCTURE BACKFILL CUYD 550 16.00 8,800.00 REM 9991000 STR EXC - BOX CULV SYCAMORE CR STA 56+00 CUYD 21 15.00 315.00 REM 9991005 STRUCTURE BACKFILL CUYD 480 16.00 7,680.00 ------------------------------------------------------------------------------------------------------------------------------ 23,945,451.20
Page 2 EX-10.89 14 CONTRACT AGREEMENT DATED JULY 21, 1998 EXHIBIT 10.89 CONTRACT AGREEMENT THIS AGREEMENT, made and entered into this 21ST day of JULY, 1998, 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. (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. 087 MA 218 H230602C ACSTP-053-1(31)P MESA - PAYSON HIGHWAY (SR 87) (Sunflower - MP 226, Segment F) 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, and amount in accordance with Subsection 108.09 of the Contract Specifications. If no money shall be due the Contractor, the State shall have a cause of action to recover against the Contractor in a court of competent jurisdiction, liquidated damages, in accordance with Subsection 108.09 of the Contract Specifications, said deduction to be made, or said sum to be recovered, not as a penalty, but as liquidated damages: provided, however, that upon receipt of written notice from the Contractor, of the existence of causes, as herein provided, over which said Contractor has no control and which must delay the completion of said work or any delay occasioned by the Arizona Department of Transportation, the State Engineer may extend the period hereinbefore specified for the completion of said work in accordance with the Specifications and in such case, the Contractor shall become liable for said liquidated damages for delays commencing from date said extension period shall expire. After the date as set up in Contract plus any extension granted, no further payments shall be made the Contractor until all work is completed and accepted by the State engineer. It is also agreed that the date of completion shall be that upon which the work is accepted by the State Engineer. ARTICLE V - CLAIMS FOR EXTRA WORK: It is distinctly understood and agreed that no claim for extra work or materials, not specifically herein provided, done or furnished by the Contractor, will be allowed by the State Engineer, nor shall the Contractor do any work or furnish any materials not covered by these Specifications and Contract, unless such work is ordered in writing by the State Engineer. In no event shall the Contractor incur any liability by reason of any oral direction or instruction that he may be given by the State Engineer, or his authorized representatives. It is the intent and meaning of this Article that all orders, directions, instructions, not contained in the Plans, Specifications, and Special Provisions, pertaining to the work shall be in writing, and the Contractor hereby waives any claims for compensation for work done, or materials furnished in violation thereof. ARTICLE VI - MISUNDERSTANDING OR DECEPTION: The party of the second part agrees that he has investigated the site of the work and all parts and appurtenances thereto and hereby waives any right to plead misunderstanding or deception as to location, character of work or materials, estimates of quantities or other conditions surrounding or being a part of the work and understands that the quantities given in the Bidding Schedule are approximate only, and hereby agrees to accept the quantities as actually placed and finally determined upon the completion of the work, in accordance with the Contract Documents . ARTICLE VII - PAYMENTS: For and in consideration of the faithful performance of the work herein embraced, as set forth in the Contract Agreement, Specifications, Special Provisions, Bidding Schedule and all general and detailed Specifications and Plans, which are a part hereof, and 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. 087 MA 218 H230602C STP-053-(31)P MESA-PAYSON HIGHWAY (SR 87) (Sunflower - MP 226 Segment F) Witness our hands and seals this 21ST day of JULY 1998 STATE OF ARIZONA By: /s/ [SIGNATURE ------------------------------------ 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. (JV) ---------------------------------------- By: /s/ Bradley E. Larson ------------------------------------- Contractor BRADLEY E. LARSON, PRESIDENT Of Meadow Valley Contractors, Inc. Authorized To Sign For The Joint Venture Attest: /s/ Robert W. Bottcher PARTY OF THE SECOND PART --------------------------- Seal BIDDING SCHEDULE TRACS NUMBER FEDERAL NUMBER 087 MA 218 H230602C ACSTP-053-1(31)P
- ----------------------------------------------------------------------------------------------------------------------------- ITEM NO ITEM DESCRIPTION UNIT QUANTITY UNIT PRICE AMOUNT - ----------------------------------------------------------------------------------------------------------------------------- BOX CULVERT SYCAMORE CREEK ROAD STA. 26+00 RIKRIK RIKRIK - ----------------------------------------------------------------------------------------------------------------------------- 2030501N STRUCTURAL EXCAVATION CU.YD. 30 15.00 450.00 - ----------------------------------------------------------------------------------------------------------------------------- 2030506N STRUCTURE BACKFILL CU.YD. 550 16.00 8,800.00 - ----------------------------------------------------------------------------------------------------------------------------- 6010002N STRUCTURAL CONCRETE (CLASS S) (F'c = 3,000) CU.YD. 123 250.00 30,750.00 - ----------------------------------------------------------------------------------------------------------------------------- 6050002N REINFORCING STEEL LB. 14,055 0.35 4,919.25 - ----------------------------------------------------------------------------------------------------------------------------- BOX CULVERT SYCAMORE CREEK ROAD STA. 56+00 RIKRIK RIKRIK - ----------------------------------------------------------------------------------------------------------------------------- 2030501O STRUCTURAL EXCAVATION CU.YD. 21 15.00 315.00 - ----------------------------------------------------------------------------------------------------------------------------- 2030506O STRUCTURE BACKFILL CU.YD. 480 16.00 7,680.00 - ----------------------------------------------------------------------------------------------------------------------------- 6010002O STRUCTURAL CONCRETE (CLASS S) (F'c = 3,000) CU.YD. 111 260.00 28,860.00 - ----------------------------------------------------------------------------------------------------------------------------- 6050002O REINFORCING STEEL LB. 12,225 0.35 4,278.75 - ----------------------------------------------------------------------------------------------------------------------------- CONTRACT TOTAL: 55,594,609.40 - -----------------------------------------------------------------------------------------------------------------------------
EX-10.90 15 CONTRACT DATED SEPTEMBER 23, 1998 EXHIBIT 10.90 THIS AGREEMENT made and executed in FOUR (4) original counterparts this 23RD day of September A.D. 1998 between the Utah Department of Transportation, hereinafter called "Department," first party, and MEADOW VALLEY CONTRACTORS, INC. hereinafter called "Contractor," second party. WITNESSETH, That for and in consideration of payments, hereinafter mentioned, to be made by the Department, the Contractor agrees to furnish all labor and equipment; to furnish and deliver all materials not specifically mentioned as being furnished by the Department and to do and perform all work in the construction of GRASSY MOUNTAIN EASTBOUND & WESTBOUND REST AREA IN TOOELE COUNTY, State of Utah, the same being identified as *INH-80-2(47)55 for the approximate sum of THREE MILLION FOUR HUNDRED TWENTY EIGHT THOUSAND EIGHTY THREE AND 75/100 Dollars ($3,428,583.75). The Contractor further covenants and agrees that all of said work and labor shall be done and performed in the best and most workmanlike manner and in strict conformity with the plans, and specifications. The said plans and specifications and the notice to contractors, instruction to bidders, the proposal, special provisions and contract bond are hereby made a part of this agreement as fully and to the same effect as if the same had been at length herein. In consideration of the foregoing premises, the Department agrees to pay to Contractor in the manner and in the amount provided in the said specification and proposal. IN WITNESS WHEREOF, the parties hereto have subscribed their names through their proper officers thereunto duly authorized as of the day and year first above written. Attest: UTAH DEPARTMENT OF TRANSPORTATION /s/ [SIGNATURE ILLEGIBLE] /s/ [SIGNATURE ILLEGIBLE] - ---------------------------- ------------------------------ Secretary Director of Transportation - First Party Witnesses: ____________________________ Meadow Valley Contractors, Inc. ------------------------------ Second Party /s/ Tortina M. Bunton - ---------------------------- Approved as to form: by /s/ Kenneth D. Nelson ----------------------------- By /s/ [SIGNATURE ILLEGIBLE] Vice President - ------------------------------- ----------------------------- Assistant Attorney General Title 94-279836-5501 APPROVED ______________________ ------------------------------ Director of Finance Utah Contractor License Number FUNDS AVAILABLE _______________ /s/ [SIGNATURE 10/01/98 --------------------------------------- Budget Officer Date EX-10.91 16 BID PROPOSAL NO. 4182-98 EXHIBIT 10.91 CLARK COUNTY, NEVADA BID PROPOSAL BID NO. 4182-98 LAS VEGAS BELTWAY - WESTERN SECTIONS 7, 8 AND 9 REVISED PER ADDENDUM NO. 2 -------------------------- MEADOW VALLEY CONTRACTORS, INC. - -------------------------------------------------------------------------------- (NAME) P.O. BOX 549, MOAPA, NEVADA 89025 - -------------------------------------------------------------------------------- (ADDRESS) THE UNDERSIGNED PROPOSES AND AGREES: 1. To complete all work for which a contract may be awarded to the Bidder and to furnish any and all labor, equipment, materials, transportation, and other facilities required for the services as set forth in the Proposal and Contract Documents. 2. That the Bidder has examined the Contract Documents and the site(s) for the proposed work and satisfied themselves as to the character, quality of work to be performed, materials to be furnished and as to the requirements of the specifications. 3. That the Bidder has completed all information in the blanks provided and has submitted the following within this bid proposal: a. Each subcontractor which will be paid an amount exceeding five percent (5%) of the total bid amount. b. Has represented their qualification for Preferential Bidder Status. c. Has submitted a bid security (in the form of, at Bidder's option. A Cashiers Check, Certified Check, Money Order, or Bid Bond in favor of the Owner(s) in the amount of Five Percent (5%) of the bid amount. 4. If the Bidder is one of the three (3) apparent low bidders at the bid opening, they must submit Bid Attachment 2 within two hours after completion of the bid opening. Faxing is not allowed. This Attachment must ---- be time stamped by the Department of General Services. Submission after the ----------------------------------------------------- two (2) hour time limit will be rejected and/or returned unopened and the bid may be deemed non-responsive. a. Projects EXCEEDING Five Million Dollars ($5,000,000). --------- 1) The Bidders shall list subcontractors which will provide labor/improvements exceeding one percent (1%) of the prime contractor's total bid amount, or $50,000.00, whichever is greater. 5. Upon faxed receipt of a letter of Intent to Award the contract, the bidder will provide the following submittals within seven (7) days from receipt of the Notice. a. Performance Bond, Labor and Material Payment Bond and a Guaranty Bond, for One Hundred Percent (100%) of the contract price as required. b. Certificates of insurance for Commercial General Liability in the amount of $1,000,000, Automobile Liability in the amount of $1,000,000, Explosion, Collapse and Underground in the amount of $1,000,000 Installation Floater and a SIIS certificate as required by law. c. Certificate of insurance for Commercial General Liability in the amount of $5,000,000 with Kern River Gas Transmission Company named as sole beneficiary of proceeds. 6. That if the Bidder does not provide the above submittals on or before the seventh (7th) calendar day, or does not keep the bonds or insurance policies in effect or allows them to lapse, the Bidder will pay over to the Owner the amount of sixteen thousand five hundred dollars ($16,500.) per day as liquidated damages. 7. That this Proposal is genuine and is not sham or collusive, or made in the interest of, or on behalf of any person not herein named, nor the Bidder in any manner sought to secure for themselves an advantage over any other bidder. 8. The Bidder further proposes and agrees that if his bid is accepted they will commence to perform the work called for by the plans and Contract Documents within seven (7) calendar days after Notice to Proceed is issued and will complete all work within the calendar days specified in the instruction to Bidders. Bid Proposal Bid No. 4182-98 Revised per ADDENDUM NO.2 Las Vegas Beltway 14. CLAIM OF PREFERENTIAL BIDDER STATUS ----------------------------------- Bidder hereby claims that their firm has paid the sale and use tax and/or the motor privilege vehicle tax for each consecutive 12-month period for sixty (60) months immediately preceding the submission of this bid in the amounts necessary to qualify for the preferential bidder status pursuant to NRS 338.147. IF BIDDER DOES NOT QUALIFY FOR PREFERENTIAL BIDDER STATUS, CHECK HERE [_]. 15. FOR INFORMATIONAL PURPOSES ONLY: ------------------------------- The General Contractor submitting this bid is a [_] MBE [_] WBE [_] PBE [_] SBE [_] NBE [_] LBE as defined in the instructions to Bidders. 16. /s/ Alan Terril MEADOW VALLEY CONTRACTORS, INC. ------------------------------ ------------------------------- SIGNATURE OF BIDDER LEGAL NAME OF FIRM AS IT WOULD APPEAR IN CONTRACT ALAN TERRIL 702-864-2575 702-864-2580 ------------------------------ ---------------- ------------- NAME OF BIDDER (PRINT OR TYPE) TELEPHONE NUMBER FAX NUMBER P.O. BOX 549 # 0019258 ------------------------------ -------------------------------------- ADDRESS OF FIRM NEVADA STATE CONTRACTOR'S LICENSE NO. MOAPA, NV 89025 A UNLIMITED ------------------------------ ---------------- -------------------- CITY, STATE, ZIP CODE CLASSIFICATION MONETARY LIMITATIONS, IF ANY 8-28-98 BUSINESS LICENSE: ------------------------------ [X] CLARK COUNTY - NO. 041648-240-8 TODAY'S DATE ------------- [X] CITY OF LAS VEGAS - NO. 59416 ------------- Bid Proposal Bid No. 4182-98 Revised per Addendum No. 2 Las Vegas Beltway
======================================================================================================== ITEM NO. DESCRIPTION APRROX. UNIT UNIT BID TOTAL QUANTITY PRICE - -------------------------------------------------------------------------------------------------------- 634.04 PERMANENT PAVEMENT MARKING FILM, TYPE 1 475 LF $15.34 $ 7,286.50 (24-INCH SOLID WHITE) - -------------------------------------------------------------------------------------------------------- 634.05 PERMANENT PAVEMENT MARKING FILM, TYPE 1 1,230 LF $11.88 $ 14,612.40 (24-INCH SOLID YELLOW) - -------------------------------------------------------------------------------------------------------- 634.06 PERMANENT PAVEMENT MARKING FILM, TYPE 1 257 SF $ 7.67 $ 1,971.19 (STOP BARS) - -------------------------------------------------------------------------------------------------------- 634.07 PERMANENT PAVEMENT MARKING FILM, TYPE 1 791 SF $13.50 $ 10,678.50 (LEGENDS) - -------------------------------------------------------------------------------------------------------- 634.08 PERMANENT PAINTED STRIPING (4-INCH SOLID 41,285 LF $ 0.09 $ 3,715.65 WHITE) - -------------------------------------------------------------------------------------------------------- 634.09 PERMANENT PAINTED STRIPING (4-INCH SOLID 26,115 LF $ 0.09 $ 2,350.35 YELLOW) - -------------------------------------------------------------------------------------------------------- 634.10 PERMANENT PAINTED STRIPING (8"SOLID 19,600 LF $ 0.17 $ 3,332.00 WHITE) - -------------------------------------------------------------------------------------------------------- 634.11 PERMANENT PAINTED STRIPING (8" SOLID 1,940 LF $ 0.17 $ 329.80 YELLOW) - -------------------------------------------------------------------------------------------------------- 634.12 PERMANENT PAINTED STRIPING (4" DOUBLE 1,320 LF $ 0.17 $ 224.40 SOLID YELLOW) - -------------------------------------------------------------------------------------------------------- 634.13 MEDIAN PAINT 100 SF $ 1.62 $ 162.00 - -------------------------------------------------------------------------------------------------------- 635.01 TEMPORARY STRIPING TAPE (8-INCH WHITE 5,580 LF $ 1.46 $ 8,146.80 EDGE LINE) - -------------------------------------------------------------------------------------------------------- 635.02 TEMPORARY STRIPING TAPE (8-INCH WHITE 33,110 LF $ 1.46 $ 48,340.60 EDGE LINE) - -------------------------------------------------------------------------------------------------------- 635.03 TEMPORARY STRIPING TAPE (24-INCH SOLID 1,620 SF $ 4.43 $ 7,176.60 YELLOW) - -------------------------------------------------------------------------------------------------------- 635.04 TEMPORARY STRIPING TAPE (24-INCH SOLID 120 LF $ 8.86 $ 1,063.20 WHITE) - -------------------------------------------------------------------------------------------------------- 642.01 SOIL NAIL RETAINING WALL 12,565 SF $51.30 $ 644,584.50 - -------------------------------------------------------------------------------------------------------- TOTAL AMOUNT IN $55,394,771.96 ========================================================================================================
Fifty Five million, three hundred ninety four thousand seven hundred seventy one dollars ninety six cents. - -------------------------------------------------------------------------------- TOTAL AMOUNT IN WORDS Revised 5-11 EX-10.92 17 GEN. AGMT. OF INDEMNITY EXHIBIT 10.92 [LOGO OF LIBERTY BOND SERVICES APPEARS HERE] GENERAL AGREEMENT OF INDEMNITY This General Agreement of Indemnity ("Agreement") is made and entered into by the following individuals, partnerships and/or corporations, MEADOW VALLEY CORPORATION AND ANY OF ITS PRESENT OR FUTURE, DIRECTLY OR INDIRECTLY MAJORITY- OWNED OR CONTROLLED SUBSIDIARIES OR AFFILIATES, WHETHER ALONE OR IN JOINT VENTURE WITH OTHERS NOT NAMED HEREIN; AND ANY CORPORATION, PARTNERSHIP OR PERSON UPON THE WRITTEN REQUEST OF ANY OF THE UNDERSIGNED individually and collectively hereinafter called ("Principals"), who intend to assume the obligations of Principals, as noted in this Agreement, with respect to any surety bond, undertaking, recognizance, instrument of guarantee or other surety obligation (hereinafter called "Bonds") requested and/or issued, before or after the date of this Agreement by Liberty Mutual Insurance Company, a Massachusetts corporation, on behalf of itself and LM Insurance Corporation, an Iowa corporation; The First Liberty Insurance Corporation, and Iowa corporation; Liberty Mutual Fire Insurance Company, a Massachusetts corporation; Liberty Insurance Corporation, a Vermont corporation; and any other company that is part of or added to the Liberty Mutual Group for which surety business is underwritten by Liberty Bond Services (hereinafter called the "Surety") on behalf of such Principals and all of the above listed Principals (individually and collectively hereinafter called "Indemnitors" in this secondary capacity), jointly and severally, also intend to assume the obligations of Indemnitors, as noted in this Agreement, with respect to any and all Bonds heretofore, presently or hereafter requested and/or issued by the Surety on behalf of any or all Principals. WITNESSETH WHEREAS, the Principals, in the performance of contracts and the fulfillment of obligations generally, whether in their own names solely or as co-adventurers with others, may desire, request, or be required to give or procure certain Bonds, and/or to renew, continue, extend or substitute, from time to time, the same or new Bonds with the same or different penalties, and/or conditions, as may be desired, requested or required, in the renewal, continuation, extension and/or substitution thereof; or the Principals or Indemnitors may request the Surety to refrain from canceling the Bonds; and WHEREAS, at the request of the Principals and the Indemnitors and with the express understanding that this Agreement be given, the Surety has heretofore or has presently been requested to and/or has executed or has procured to be executed, and, from time to time hereafter, may be requested to and/or may execute or may procure to be executed, the Bonds on behalf of the Principals; and WHEREAS, the Indemnitors have a substantial, material and beneficial interest in the obtaining of the Bonds or in the Surety's refraining from canceling the Bonds. NOW, THEREFORE, in consideration of the premises, and intending to be legally bound hereby, the Principals and Indemnitors for themselves, their heirs, executors, administrators, successors and assigns, jointly and severally, hereby covenant and agree with the Surety, its successors and assigns, as follows: FIRST: PREMIUMS - The Principals and Indemnitors will pay to the Surety, promptly upon demand, all premiums, costs and charges of the Surety for Bonds requested and/or issued by the Surety in accordance with its rate filings, its manual of rates, or as otherwise agreed upon, and where such premium, costs and charges are annual, continue to pay the same until the Principals of Indemnitors shall deliver evidence satisfactory to the Surety of its discharge or release from the Bonds and all liability by reason thereof. SECOND: INDEMNITY - The Principals and Indemnitors shall exonerate, indemnify, and keep indemnified the Surety from and against any and all liability for losses, fees, costs and expenses of whatsoever kind or nature (including, but not limited to interest, court costs and counsel (fees) and from and against any and all such losses, fees, costs and expenses which the Surety may sustain or incur: (1) by reason of being requested to execute or procure the execution of any Bonds; or (2) by having executed or procured the execution of any Bonds; or (3) by reason of the failure of the Principals or Indemnitors to perform or comply with any of the covenants and conditions of this Agreement; or (4) in enforcing any of the covenants and conditions of this Agreement. Payment by reason of the aforesaid causes shall be made to the Surety by the Principals and Indemnitors promptly, upon demand by the Surety, whether or not the Surety shall have made any payment therefor. In the event of any payment by the Surety, the Principals and Indemnitors further agree that in any accounting between the Surety and the Principals, or between the Surety and the Indemnitors, or either or both of them, the Surety shall be entitled to charge for any and all disbursements made by it in good faith in and about the matters herein contemplated by this Agreement under the belief that is , or was, or might be liable for the sums and amounts so disbursed or that is was necessary or expedient to make such disbursements, whether or not such liability, necessity or expediency existed; and that the vouchers or other evidence or any such payments made by the Surety shall be prima facie evidence of the fact and amount of liability to the Surety. If for any reason the Surety shall deem it necessary to set up or to increase a reserve to cover any possible liability for losses and/or fees, costs and expenses for which the Principals and the Indemnitors will be obliged to indemnify the Surety under the terms of this Agreement, the Principals and the Indemnitors will deposit with the Surety, promptly upon demand, a sum of money equal to such reserve (including any fees, costs and expenses) and any increase thereof as collateral security to the Surety for such liabilities. The Surety shall have the right to use the deposit, or any part thereof, in payment or settlement of any such liabilities for which the Principals and the Indemnitors would be obliged to indemnify the Surety under the terms of this Agreement. THIRD ASSIGNMENT - The Principals and the Indemnitors hereby consenting, will assign, transfer, pledge and convey to the Surety, and do hereby assign, transfer, pledge and convey to the Surety, as collateral security for the full performance of the covenants and agreements herein contained and for the payment of any other indebtedness or liability of the Principals and/or Indemnitors to the Surety, whether heretofore or hereafter incurred, the assignment in the case of each contract shall become effective as of the date of the Bond covering such contract, but only in the event of: (1) any abandonment, forfeiture or breach of any contract referred to in the Bonds or of any breach of any Bond; or (2) a default in discharging any other indebtedness or liabilities incurred in connection therewith, when due; or (3) any breach of the covenants and conditions of this Agreement; or (4) any assignment by the Principals for the benefit of creditors, or of the appointment, or of any application for the appointment, of a receiver or trustee for the Principals whether insolvent or not; or (5) any proceeding which deprives the Principals of the use of any of the machinery, supplies, equipment, plant, tools or material referred to in section (b) of this paragraph; or (6) the Principal's dying, absconding, disappearing, incompetency, insolvency, being convicted of a felony, or imprisoned, if the Principal by an individual: (a) all the right, title and interest of the Principals and the Indemnitors in, and growing in any manner out of, all contracts referred to in the Bonds, or in, or growing in any manner out of the Bonds; (b) all the right, title and interest of the Principals and the Indemnitors in and to all machinery, supplies, equipment, plant, tools and materials which are now, or may hereafter be, about or upon the site or sites of any and all contractual work referred to in the Bonds or elsewhere, including materials purchased for or chargeable to any and all contracts referred to in the Bonds, materials which may be in the process of construction, in storage at the site or elsewhere, or in transportation to any and all sites; (c) all the right, title and interest of the Principals and the Indemnitors in and to all subcontracts let or to be let in connection with any and all contracts 1 LIBERTY BOND SERVICES, GENERAL AGREEMENT OF INDEMNITY Indemnitors: Meadow Valley Corporation and any of its present or future, directly or indirectly majority-owned or controlled subsidiaries or affiliates, whether alone or in joint venture with others not named herein; and any corporation, partnership or person upon the written request of any of the undersigned - ------------------------------------------------------------------------------ referred to in the Bonds, and in and to all surety bonds supporting such subcontracts; (d) all actions, causes of actions, claims and demands whatsoever which the Principals and the Indemnitors may have or acquire against any subcontractor, laborer or materialman, or any person furnishing or agreeing to furnish or supply labor, material, supplies, machinery, tools, other equipment in connection with or on account of any and all contracts referred to in the Bonds; and against any surety or sureties of any subcontractor, laborer or materialman; and (e) any and all percentages retained and any and all sums that may be due or hereafter become due on account of any and all contracts referred to in the Bonds and all other contracts whether bonded or not in which the Principals or the Indemnitors have an interest. FOURTH: UNIFORM COMMERCIAL CODE - This Agreement shall constitute a Security Agreement to the Surety and also a Financing Statement, both in accordance with the provisions of the Uniform Commercial Code of every jurisdiction wherein such Code is in effect and may be so used by the Surety without in any way abrogating, restricting or limiting the rights of the Surety under this Agreement or under law, or in equity. A carbon, photographic or other reproduction of this Agreement may be filed as a Financing Statement. FIFTH: TAKEOVER - In the event of any breach or default asserted by the obligee in any Bond, or the Principals have abandoned the work on or forfeited any contract or contracts covered by any Bond, or have failed to pay obligations incurred in connection therewith, or in the event of the Principal's dying, absconding, disappearing, incompetency, insolvency, being convicted of a felony, or imprisoned, if the Principal be an individual, bankruptcy of the Principals, or the appointment of a receiver or trustee for the Principals or the property of the Principals, or in the event of an assignment for the benefit of creditors of the Principals, or if any action is taken by or against the Principals under or by virtue of the Federal Bankruptcy Code, or should reorganization or arrangement proceedings be filed by or against the Principals under said Code, or if any action is taken by or against the Principals under the Insolvency laws of any state, possession or territory of the United States, the Surety shall have the right, at its option and in its sole discretion and is hereby authorized, with or without exercising any other right or option conferred upon it by law or under the terms of this Agreement, to take possession of any part or all of the work under any contract or contracts covered by any Bond, and at the expense of the Principals and Indemnitors to complete or arrange for the completion of the same, and the Principals and Indemnitors shall promptly, upon demand, pay to the Surety all losses, fees, costs and expenses so incurred. SIXTH: CHANGES - The Surety is authorized and empowered, without notice to or knowledge of the Indemnitors, to assent to any change whatsoever in the Bonds, and/or any contracts referred to in the Bonds, and/or in the general conditions, plans and/or specifications accompanying said contracts, including, but not limited to, any change in the time for the completion of said contracts and to payments or advances thereunder before the same may be due, and to assent to or take any assignment or assignments, to execute or consent to the execution of any continuations, extensions or renewals of the Bonds and to execute any substitute or substitutes therefor, with the same or different conditions, provisions and obligees and with the same or larger or smaller penalties, it being expressly understood and agreed that the Indemnitors shall remain bound under the terms of this Agreement even though any such assent by the Surety does or might substantially increase the liability of said Indemnitors. SEVENTH: ADVANCES - The Surety is authorized and empowered, in its sole discretion and without any obligation to do so, to guarantee loans, to advance or lend to the Principals any money, which the Surety may see fit, for the purpose of any contracts referred to in, or guaranteed by the Bonds, and all money expended in connection with the investigation and/or in the completion of any such contracts by the Surety, or lent or advanced from time to time to the Principals, or guaranteed by the Surety for the purposes of any such contracts, and any and all other costs and expenses incurred by the Surety in relation thereto, unless repaid with legal interest by the Principals to the Surety when due, shall be presumed to be a loss by the Surety for which the Principals and the Indemnitors shall be responsible notwithstanding that said money or any part thereof should not be so used by the Principals. EIGHTH: BOOKS AND RECORDS - At any time, and until such time as the liability of the Surety under any and all Bonds is terminated, the Surety shall have the right of reasonable access to the books, records and/or accounts of the Principals and Indemnitors; and any bank depository, materialman, supply house or other person, firm or corporation when requested by the Surety is hereby authorized to furnish the Surety any information requested including, but not limited to, the status of the work under contracts being performed by the Principals, the condition of the performance of such contracts and payments of accounts. NINTH: DECLINE EXECUTION - Unless otherwise specifically agreed in writing, the Surety may decline to execute any Bond and the Principals and Indemnitors agree to make no claim to the contrary in consideration of the Surety's receiving this Agreement, and if the Surety shall execute a Bid or Proposal Bond, it shall have the right to decline to execute any other Bonds that may be required in connection with any award that may be made under the proposal for which the Bid or Proposal Bond is given, and such declination shall not diminish or alter the liability that may arise by reason of having executed the Bid or Proposal Bond. The Principals and the Indemnitors acknowledge that the Surety makes no representation as to the validity or acceptability of any of its Bonds to any person, firm or entity of whatever sort or kind under any contract. The Principals and the Indemnitors agree that they shall have no claim against the Surety arising out of or in any manner relating to the failure or refusal of any person, firm or entity of whatever sort or kind to award any contract to the Principals, or to accept any Bond executed and delivered by the Surety, or that the Surety has been requested to execute and delivery. TENTH: NOTICE OF EXECUTION - The Indemnitors hereby waive notice of the execution of the Bonds and of the acceptance of this Agreement, and the Principals and the Indemnitors hereby waive all notice of any default, or any other act or acts giving rise to any claim under the Bonds, as well as notice of any and all liability of the Surety under the Bonds, and any and all liability on their part hereunder, to the end and effect that, the Principals and the Indemnitors shall be and continue to be liable hereunder, notwithstanding any notice of any kind to which they might have been or be entitled, and notwithstanding any defenses they might have been entitled to make. ELEVENTH: TRUST FUND - If any of the Bonds are executed in connection with a contract which by its terms or by law prohibits the assignment of the contract price, or any part thereof, the Principals and Indemnitors covenant and agree that all payments for or on account of said contract shall be held as a trust fund in which the Surety has an interest, for the payment of obligations incurred in the performance of the contract and for labor, materials, and services furnished in the prosecution of the work provided in said contract or any authorized extension or modification thereof; and, further, it is expressly understood and declared that all monies due and to become due under any contract or contracts covered by the Bonds are trust funds, whether in the possession of the Principals or Indemnitors or otherwise, for the benefit of and for payment of all such obligations in connection with any such contract or contracts for which the Surety would be liable under any Bonds; said trust also inures to the benefit of the Surety for any liability or loss it may have or sustain under any of the said Bonds, and this Agreement and declaration shall also constitute notice of such trust. 2 LIBERTY BOND SERVICES, GENERAL AGREEMENT OF INDEMNITY INDEMNITORS: MEADOW VALLEY CORPORATION AND ANY OF ITS PRESENT OR FUTURE, DIRECTLY OR INDIRECTLY MAJORITY-OWNED OR CONTROLLED SUBSIDIARIES OR AFFILIATES, WHETHER ALONE OR IN JOINT VENTURE WITH OTHERS NOT NAMED HEREIN; AND ANY CORPORATION, PARTNERSHIP OR PERSON UPON THE WRITTEN REQUEST OF ANY OF THE UNDERSIGNED - -------------------------------------------------------------------------------- TWELFTH: HOMESTEAD - The Principals and the Indemnitors hereby waive, so far as their respective obligations under this Agreement are concerned, all rights to claim any of their property including their respective homesteads, as exempt from levy, execution, sale or other legal process under the laws of any state, territory or possession. THIRTEENTH: SETTLEMENTS - The Surety shall have the right, at its option and sole discretion, to adjust, settle or compromise any claim, demand, suit or judgment upon the Bonds, unless the Principals and the Indemnitors shall request the Surety to litigate such claim or demand, or to defend such suit, or to appeal from such judgment, and shall deposit with the Surety, at the time of such request, cash or collateral satisfactory to the Surety in kind and amount to be used in paying any judgment or judgments rendered or that may be rendered, with interest, costs, expenses and attorneys' fees, including those of the Surety. FOURTEENTH: SURETIES - In the event the Surety procures the execution of the Bonds by other sureties, or executes the Bonds with co-sureties, or reinsures any portion of the Bonds with reinsuring sureties, than all the terms and conditions of this Agreement shall inure to the benefit of such other sureties co-sureties and reinsuring sureties, as their interests may appear. FIFTEENTH: SUITS - Separate suits may be brought hereunder as causes of action accrue, and the bringing of suit or the recovery of judgment upon any cause of action shall not prejudice or bar the bringing of other suits upon other causes of action, whether theretofore or thereafter arising. SIXTEENTH: OTHER INDEMNITY - The Principals and the Indemnitors shall continue to remain bound under the terms of this Agreement even though the Surety may have from time to time heretofore or hereafter, with or without notice to or knowledge of the Principals and the Indemnitors, accepted or released other agreements of Indemnity or collateral in connection with the execution or procurement of the Bonds, from the Principals or Indemnitors and/or others, it being expressly understood and agreed by the Principals and the Indemnitors that any and all other rights which the Surety may have or acquire against the Principals and the Indemnitors and/or others under any such other or additional agreements of indemnity or collateral shall be in addition to, and not in lieu of, the rights afforded the Surety under this Agreement. SEVENTEENTH: INVALIDITY - In case any of the parties mentioned in this Agreement fail to execute the same, or in case the execution hereof by any of the parties be defective or invalid for any reason, such failure, defect or invalidity shall not in any manner affect the validity of this Agreement or the liability hereunder of any of the parties executing the same, but each and every party so executing shall be and remain fully bound and liable hereunder to the same extent as if such failure, defect or invalidity had not existed. It is understood and agreed by the Principals and Indemnitors that the rights, powers, and remedies given the Surety under this Agreement shall be and are in addition to, and not in lieu of, any and all other rights, powers, and remedies which the Surety may have or acquire against the Principals and Indemnitors or others whether by the terms of any other agreement or by operation of law or otherwise. EIGHTEENTH: ATTORNEY IN FACT - The Principals and Indemnitors hereby irrevocably nominate, constitute, appoint and designate the Surety as their attorney-in-fact with the full right and authority, but not the obligation, to exercise all the rights of the Principals and Indemnitors assigned, transferred and set over to the Surety In this Agreement, with full power and authority to execute on behalf of and sign the names of the Principals and Indemnitors to any voucher, financing statement, release, satisfaction, check, bill of sale of all or any property by this Agreement assigned to the Surety, or other documents or papers deemed necessary and proper by the Surety in order to give full effect not only to the Intent and meaning of the within assignments, but also to the full protection intended to be herein given to the Surety under all other provisions of this Agreement. The Principals and Indemnitors hereby ratify and confirm all acts and actions taken and done by the Surety as such attorney-in-fact. NINETEENTH: TERMINATION - This Agreement may be terminated by the Principals or Indemnitors upon twenty days' written notice sent by registered mail to the Surety at its home office at 600 W, Germantown Pike, #300, Plymouth Meeting, Pennsylvania 19462, but any such notice of termination shall not operate to modify, bar, or discharge the Principals or the Indemnitors as to the Bonds that may have been theretofore executed. TWENTIETH: AMENDMENTS - This Agreement may not be changed or modified orally. No change or modification shall be effective unless made by written endorsement executed to form a part hereof. TWENTY-FIRST: JURISDICTION - As to any legal action or proceeding related to this Agreement, the Principals and Indemnitors consent to the general jurisdiction of any local, state or federal court of competent subject matter jurisdiction and waive any claim or defense in any such action or proceeding based on any alleged lack of personal jurisdiction; improper venue, forum non conveniens or any similar basis. Principals and Indemnitors further waive personal service or any end all process. TWENTY-SECOND: ENTIRE AGREEMENT - THE PRINCIPALS AND THE INDEMNITORS REPRESENT TO THE SURETY THAT THEY HAVE CAREFULLY READ THIS ENTIRE AGREEMENT AND THAT THERE ARE NO OTHER AGREEMENTS OR UNDERSTANDINGS, WHETHER ORAL OR WRITTEN, THAT IN ANY WAY MODIFY, CHANGE OR VITIATE THE OBLIGATIONS OF THIS AGREEMENT EXCEPT AS EXPRESSLY SET FORTH BELOW. TWENTY-THIRD: NONE ---- DATED as of this 1st day of September, 1998. 3 LIBERTY BOND SERVICES, GENERAL AGREEMENT OF INDEMNITY INDEMNITORS: MEADOW VALLEY CORPORATION AND ANY OF ITS PRESENT OR FUTURE, DIRECTLY OR INDIRECTLY MAJORITY-OWNED OR CONTROLLED SUBSIDIARIES OR AFFILIATES, WHETHER ALONE OR IN JOINT VENTURE WITH OTHERS NOT NAMED HEREIN; AND ANY CORPORATION, PARTNERSHIP OR PERSON UPON THE WRITTEN REQUEST OF ANY OF THE UNDERSIGNED - ------------------------------------------------------------------------------- WITNESS/ATTEST: MEADOW VALLEY CORPORATION -------------------------------------------- (Full Name & Address of Principal) 4411 S. 40/th/ ST., STE. D-11 PHOENIX, AZ 85040 --------------------------------------------- By: Julie L. Bergo By: Bradley E. Larson - ----------------------------- -----------------------------(Seal) Julie L. Bergo, Secretary Bradley E. Larson, President ================================================================================ TO BE SIGNED BY H.O. COMPANY OFFICER ONLY _______________________________(Surety) By:_____________________________ By:____________________________(Seal) ================================================================================ 4 LIBERTY BOND SERVICES, GENERAL AGREEMENT OF INDEMNITY INDEMNITORS: MEADOW VALLEY CORPORATION AND ANY OF ITS PRESENT OR FUTURE, DIRECTLY OR INDIRECTLY MAJORITY-OWNED OR CONTROLLED SUBSIDIARIES OR AFFILIATES, WHETHER ALONE OR IN JOINT VENTURE WITH OTHERS NOT NAMED HEREIN; AND ANY CORPORATION, PARTNERSHIP OR PERSON UPON THE WRITTEN REQUEST OF ANY OF THE UNDERSIGNED - -------------------------------------------------------------------------------- FOR NOTARIAL ACKNOWLEDGMENT OF PRINCIPAL/INDEMNITOR'S SIGNATURE CORPORATE ACKNOWLEDGMENT State of Arizona -------------------) )SS County of Maricopa ------------------) On this 1/st/ day of Sept, in the year 1998, before me personally comes BRADLEY E. LARSON to me known, who being by me duly sworn, deposes and says that (s)he resides in the City of PHOENIX that (s)he is the PRESIDENT of MEADOW VALLEY CORPORATION, the corporation described in and which executed the foregoing instrument; that (s)he knows the seal of the said corporation: that the seal affixed to the said Instrument is such corporate seal; that it was so affixed by the order of the Board of Directors of said corporation, and that (s)he signed (his)(her) name thereto by like order. /s/ Tortina M. Bunton --------------------------------- (Signature of Notary Public) My commission expires May 31, 2000 5 CORPORATE RESOLUTIONS At a Special meeting of the Board of Directors of the Meadow Valley Corporation "Corporation"), duly called and held on the day of, September 1, 1998, a quorum being present, the following Preamble and Resolutions were adopted: "WHEREAS, the Corporation has a substantial, material and beneficial interest in transactions in which MEADOW VALLEY CORPORATION AND ANY OF ITS PRESENT OR FUTURE, DIRECTLY OR INDIRECTLY MAJORITY-OWNED OR CONTROLLED SUBSIDIARIES OR AFFILIATES, WHETHER ALONE OR IN JOINT VENTURE WITH OTHERS NOT NAMED HEREIN; AND ANY CORPORATION, PARTNERSHIP OR PERSON UPON THE WRITTEN REQUEST OF ANY OF THE UNDERSIGNED (Hereinafter called the (individually and collectively hereinafter called "Principal") has applied or will apply to Liberty Mutual Insurance Company, LM Insurance Corporation, The First Liberty Insurance Corporation, Liberty Mutual Fire Insurance Company, Liberty Insurance Corporation, and their subsidiaries and affiliates, as the case may be (hereinafter called the "Surety"), for certain bonds or undertakings of whatever kind or nature: WHEREAS, the Surety has executed or is willing to consider the execution of such bonds or undertakings, as surety, upon being furnished with the written indemnity of the Corporation; RESOLVED, that the officers authorized to execute documents on behalf of the Corporation, be and they are hereby authorized and empowered to execute any indemnity agreement or agreements required by the Surety as consideration for the execution by it of bonds or undertakings of whatever kind or nature on behalf of the Principal described in the agreement of indemnity required by the Surety; and RESOLVED FURTHER, that the said officers be and they are hereby authorized and empowered, at any time prior or subsequent to the execution by the Surety of any such bonds or undertakings, to execute any and all amendments to said indemnity agreement or agreements; and to execute any other or further agreements relating to any such bonds or undertakings or to any collateral that may have been deposited with the Surety in connection therewith; and to take any and all other actions that may be requested or required by the Surety, in connection with any such bonds or undertakings; and RESOLVED FURTHER, that the said officers be and they are hereby authorized and empowered to affix the corporate seal to such indemnity agreement or agreements and to any and all amendments to said indemnity agreement or agreements and to any other or further agreements." I, Julie L. Bergo, Secretary of the Corporation, have compared the foregoing Preamble and Resolutions with the original thereof as recorded in the Minute Book of the Corporation; and do certify that the same are correct and true transcripts therefrom, and constitute the whole of said original Preamble and Resolutions. The officers authorized to execute documents on behalf of this Corporation are: Bradley E. Larson Kenneth D. Nelson Gary W. Burnell Given under my hand and the seal of the Corporation, in the City of Phoenix State of Arizona this 1 day of September, 1998. /s/ Julie L. Bergo ------------------------------- Secretary 1 EX-10.93 18 EMPLOYMENT AGREEMENT EXHIBIT 10.93 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT is entered into as of the day of January 1998, by and between Meadow Valley Corporation, a Nevada corporation (the "Employer"), and Bradley E. Larson (the "Employee"). The Employer hereby employs the Employee on a full-time basis, and the Employee hereby accepts such full-time employment on the terms and conditions hereinafter set forth. 1. EMPLOYMENT. Employee is employed as the President and Chief Executive ---------- Officer for the Employer. Employee shall perform all duties as outlined herein and as may be assigned by the Employer and shall devote full time, attention and loyalty to the affairs of the Employer. The duties of the Employee shall specifically be: A) To serve as a member of the Board of Directors, report directly to the Board, communicate with the board regarding current operational and financial status of Employer and strategic plans. B) To present to the board, for board approval, annual operating plans, capital improvement programs, budgets and annual updates of strategic plans. C) To assist the Chief Operating Officer in organizing operations personnel to maximize productivity and synergy between various area managers. Delegate responsibilities and oversee activities in the areas of finance/accounting, operations, estimating/marketing, safety and human resources. D) To active represent the Employer in industry organizations where the membership is deemed to be beneficial to the Employer; and serve as board member and/or officer in said organizations when elected to do so. E) To seek out, and present to the board, any opportunities for acquisition and/or investment for growth of the Employer, and to negotiate or assist in the negotiations of acquisitions or investment expenditures. F) To represent the Employer in contract negotiations with owners of work, subcontractors and suppliers. G) To establish, foster and maintain relationships with important vendors and suppliers of strategic resources. H) Any other area specifically assigned by the Board of Directors. 2. TERM. Subject to the provisions of termination provided in paragraph ---- 12, the initial term of this Agreement shall commence on day and year first written above and terminate on December 31, 1999. This Agreement may be extended by the mutual written agreement of the Employee and the Employer. 3. COMPENSATION. Employee shall receive a base salary of One Hundred ------------ Twenty Thousand Dollars ($120,000.00) per year, payable in accordance with the regular payroll practices of Employer, and subject to applicable deductions of withholding taxes and other customary employment taxes. The Board Compensation Committee of Employer shall review Employee's salary at a minimum annually and may adjust Employee's salary upward to recognize improvement, achievement or expansion of Employee's responsibilities. Employee shall participate as a member of senior management in cash incentive plans as currently existing or as amended or adopted in the future by the Compensation Committee of Employer's Board of Directors. Cash bonus plans are subject to annual review and/or change as recommended by the Compensation Committee and approved by the Board of Directors. 4. OPTIONS TO ACQUIRE COMMON STOCK. Employee is eligible to participate ------------------------------- in the Meadow Valley Corporation 1994 Stock Option Plan. Future grants of stock options shall be subject to the discretion of Meadow Valley Corporation's board of directors. 5. EMPLOYEE BENEFITS. Employer shall provide to Employee, and to the ----------------- Employee's dependents, a comprehensive major medical, health, and dental insurance program comparable to the programs normally provided by other employers in the same industry and marketplace, and the Employer shall pay the cost of the Employee's portion of the premium. Should, at any time, the Employee opt to maintain a personal major medical and health insurance policy for himself and for his dependents and not participate in the Employer's group plan, then Employer shall reimburse Employee the lesser of the amount Employee pays for said personal policy, as evidenced by adequate documentation, or what Employer group plan. Should the Employee opt to maintain his own coverage, neither he nor his dependents shall be precluded from later participating in the Employer's group plan so long as they otherwise qualify for enrollment. At Employer's cost, Employer will maintain a life insurance policy covering Employee, with at least $250,000 of death benefits being payable, in a manner that is free of income tax, to Employee's estate or other beneficiaries designated by Employee. Employer agrees to provide Employee with an automobile for business-related use. In addition to the cost of the vehicle itself, Employer shall pay, directly or by reimbursement to Employee, for all maintenance, fuel, repairs, insurance, operating and other costs incidental thereto. Employer shall pay for, or reimburse Employee for, dues for his membership in industry related associations perceived as beneficial to Employer and as approved by the Employer's Executive Committee. So long as it is within the guidelines of the respective plan, Employee shall be given the opportunity to participate in Employer's 401(k) and any other plans made available to other members of executive management. Employee shall be entitled to receive all other employee benefits for senior management personnel upon the terms and conditions then in effect. 6. MOVING EXPENSE AND SUBSISTENCE. In the event the Employer requires the ------------------------------ Employee to relocate, the Employer shall pay for all moving costs of reasonable and normal household effects, including up to six months storage of such household effects while Employee obtains a permanent residence in the relocation area. 2 Employee shall obtain a minimum of two moving and storage quotes from reputable movers and Employer shall pay the most competitive rate. Employer shall provide Employee a subsistence allowance of Two Thousand Dollars ($2,000.00) per month for the lesser of nine months from the date of reassignment in a new location or until such time as the relocation of Employee and his/her spouse to the relocation area is complete. In addition, costs for one round-trip airline ticket per week between the Employee's previous location and the relocation area will be reimbursed by Employer to Employee during the same nine-month period, or less if relocation is completed earlier. Such tickets may be used either by Employee or by his/her spouse. 7. HOLIDAYS AND VACATION. --------------------- A) Employee shall be paid for the following seven (7) holidays: New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and the day after Thanksgiving, and Christmas Day and all other holidays for Employees of the Company as approved by the Chief Executive Officer or Board of Directors. B) Employee is entitled to four weeks vacation during the first year of employment and for each year thereafter. Unused vacation in any given year shall accrue to following years up to a maximum of eight weeks in any one year. 8. RESPONSIBILITIES OF EMPLOYEE. The Employee shall devote such ---------------------------- reasonable time as is necessary or is deemed reasonably necessary by the Employer to carry out all required duties and will devote full time to the Employer during normal business hours. The Employee shall at all times faithfully, with diligence and to the Employee's best good faith ability, experience and talents, perform all the duties that may be required pursuant to the express terms hereof to the reasonable satisfaction of the Employer, in accordance with customary professional standards. 9. WORKING FACILITIES. The Employee shall be furnished with all ------------------ facilities and services suitable to Employee's position and adequate for the performance of Employee's duties. 10. EXPENSES. The Employee is authorized to incur reasonable expenses for -------- promoting business of the Employer, including expenses for entertainment, travel and similar items. The Employer shall reimburse the Employee for all such expenses on the presentation by the Employee of itemized and adequately documented accounts of such expenditures. 11. DISABILITY. If unable to perform duties under the terms of this ---------- Agreement by reason of illness or incapacity for a period of four weeks, Employee shall, commencing at the end of such four week period, be entitled to receive Employee's compensation hereunder for a period of up to and including a maximum of one year or until he is no longer disabled, whichever occurs first. After one year of disability at full salary, the Employee, or his designated beneficiary, shall be provided with a disability insurance policy, if available, at no cost to Employee. The disability income policy would provide 3 for monthly income benefits at the rate of sixty percent (60%) of the Employee's base salary at the time the disability occurred. The Company will attempt to procure a disability income policy that would provide monthly benefits until the Employee reaches 65 years of age or is no longer disabled whichever occurs first. If such a policy is unavailable, the Company will attempt to provide the best policy available. If no policy is available, no other disability income benefits will be provided. 12. TERMINATION. This Employment Agreement may be terminated under the ----------- following circumstances: A) WITHOUT CAUSE. Employer may terminate this Agreement at any time ------------- upon thirty (30) days written notice to Employee, but Employer shall be obligated to pay to Employee compensation in a lump sum for the balance of the term of this Agreement within 30 days of termination, unless Employee agrees to other payment terms. B) VOLUNTARY TERMINATION BY EMPLOYEE WITHOUT CAUSE. Employee may ----------------------------------------------- terminate this Agreement at any time upon thirty (30) days written notice to Employer and Employer shall be obligated, in that event, to pay Employee compensation up to the date of the termination only. All accrued but unpaid compensation and Employee benefits shall be paid in cash within 30 days of termination, unless Employee agrees to other payment terms. C) TERMINATION BY EMPLOYER FOR REASONABLE CAUSE. The Employer may -------------------------------------------- terminate this Agreement for reasonable cause upon the unanimous vote of the Board of Directors and by thirty (30) days written notice to the Employee and Employer shall be obligated, in that event, to pay Employee compensation up to the date of termination only. For purposes hereof, "cause" shall be defined as meaning (i) such conduct by the Employee which constitutes material breach of this Agreement which is not cured within ninety (90) days of written notice to the Employee of said alleged breach or (ii) a material failure to competently perform Employee's duties as stated in paragraph 1 in accordance with applicable professional standards as stated in paragraphs 1 and 8 hereof provided that Employer has previously given Employee written notice and a reasonable opportunity to remedy such failure and such failure has a materially adverse effect on the business or financial condition of Employer or (iii) material breach of Employee's fiduciary duty and such breach has a material adverse effect on the business or financial condition of Employer or (iv) egregiously improper or illegal conduct of the Employee which, based upon a unanimous good faith determination of the Board of Directors of the Employer, has a material adverse affect on Employer. D) TERMINATION BY EMPLOYEE FOR REASONABLE CAUSE. Employee may -------------------------------------------- terminate this Agreement for cause. In such event, Employer shall be obligated to pay Employee compensation in lump sum for the balance of the term of this Agreement within 30 days of termination or as Employee shall agree, plus damages suffered and expenses incurred by reason thereof. For this purpose "cause" shall mean (i) a material breach of this 4 Agreement by Employer or (ii) failure of Employer to pay any amount owed Employee hereunder at the time and in the amount due or (iii) failure of Employer to follow applicable law, especially with respect to SEC filings and compliance over the objection of Employee or contrary to the reasonable advice of Employee or (iv) egregiously improper conduct with respect to dealing with Employee or in a manner which brings discredit to Employee. 13. CONFIDENTIALITY. Employee agrees not to disclose any confidential, --------------- proprietary competitively sensitive information to persons who are not employees, directors, lenders, bonding agents, insurance companies or advisors of the Employer, except as required by law, without prior consent of the Employer; provided however, any disclosure involving this paragraph shall not result in a breach of this Agreement unless the disclosure has a materially adverse effect on the Employer. 14. INDEMNIFICATION. Employer and Meadow Valley Contractors, Inc. shall --------------- provide Employee with an Officer Indemnification Agreement in the form attached hereto. 15. NOTICES. All notices, demands, and communications given under this ------- Agreement ("Notice") shall be in writing and delivered personally or sent by registered or certified mail, return receipt requested, in the United States mail, postage prepaid, addressed as follows: If to Employer: Meadow Valley Corporation P.O. Box 60726 Phoenix, AZ 85082-0726 If to Employee: Bradley E. Larson 671 E. Encinas Ave. Gilbert, AZ 85234 or at such other address as a party may from time to time designate by Notice hereunder. Notice shall be effective upon delivery in person, or if mailed, at midnight on the third business day after the date of mailing. 16. ASSIGNMENT OF AGREEMENT. Neither party may assign or otherwise ----------------------- transfer this Agreement or any of its rights or obligations hereunder without the prior written consent to such assignment or transfer by the other party hereto; and all the provisions of this Agreement shall be binding upon the respective employees, successors, heirs and assigns of the parties; provided, however, the benefits payable to Employee hereunder in the event of disability or death or incapacity are payable to Employee's spouse or personal representative. 5 17. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. This Agreement ------------------------------------------------------ and the representations, warranties, covenants and other agreements (however characterized or described) by both parties and contained herein or made pursuant to the provisions hereof shall survive the execution and delivery of this Agreement. 18. FURTHER INSTRUMENTS. The parties shall execute and deliver any and all ------------------- such other instruments in reasonable mutually acceptable form and substance and shall take any and all such other actions as may be reasonably necessary to carry the intent of the Agreement into full force and effect. 19. SEVERABILITY. If any provision of this Agreement shall be held, ------------ declared or pronounced void, voidable, invalid, unenforceable or inoperative for any reason by any court of competent jurisdiction, governmental authority or otherwise, such holding, declaration or pronouncement shall not affect adversely any other provision of this Agreement, which shall otherwise remain in full force and effect and be enforced in accordance with its terms, and the effect of such holding, declaration or pronouncement shall be limited to the territory of jurisdiction in which made. 20. WAIVER. All the rights and remedies of either party under this ------ Agreement are cumulative and not exclusive of any other rights and remedies provided by law. No delay or failure on the part of either party in the exercise of any right or remedy arising from a breach of this Agreement shall operate as a waiver of any subsequent right or remedy arising from a subsequent breach of this Agreement. The consent of any party where required hereunder to any act or occurrence shall not be deemed to be a consent to any other act or occurrence. 21. GENERAL PROVISIONS. This Agreement shall be construed and enforced in ------------------ accordance with, and governed by, the laws of the state of Arizona. Except as otherwise expressly stated herein, time is of the essence in performing under this Agreement. This Agreement embodies the entire agreement and understanding between the parties and supersedes all prior agreements and understandings relating to the subject matter of this Agreement as it relates to the parties' duties and obligations from and after April 1, 1997, and this Agreement may not be modified or amended or any term or provision hereof waived or discharged except in writing signed by the party against whom such amendment, modification, waiver or discharge is sought to be enforced. The headings of this Agreement are for convenience in reference only and shall not limit or otherwise affect the meaning thereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. 22. SPECIAL RIGHT OF EMPLOYEE UNDER CERTAIN CIRCUMSTANCES. During the term ----------------------------------------------------- of this Agreement, if(i) Employer is involved in a merger, consolidation or other business combination in which Employer is not the surviving and controlling entity; or (ii) all or substantially all the assets of Employer or its 6 principal subsidiary are sold; or (iii) in the event Employee is required to relocate outside the Phoenix, Arizona area in a manner not mutually acceptable to Employee and Employer, then Employee shall have the following rights: A) To terminate this Agreement with 30 days prior notice, in which event Employer shall pay Employee as if there were a termination without cause by the Employer; and B) All options granted shall, to the extent not specifically prohibited by the stock option plan then in effect, vest immediately and be exercisable within one year of the occurring of one of the events set forth in (i), (ii) or (iii) above. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. Meadow Valley Corporation /s/ Bradley E. Larson By: /s/ Scott Miller - --------------------- -------------------------- Employee Chairman - Compensation Committee 7 EX-10.94 19 LEASE AND AGREEMENT EXHIBIT 10.94 LEASE AND AGREEMENT THIS AGREEMENT, made and entered into this 1st day of January, 1998, by and between, Ken Nosker, HC6X Box 32, San Patricio, New Mexico 88348, (Lessor), and Meadow Valley Contractors, Inc. (Lessee), 4411 S. 40th St. Phoenix, AZ 85040. WHEREAS, Lessor has a valid ownership on certain lands hereinafter more particularly described and identified: and, WHEREAS, Lessee desires to obtain the right and privilege to enter into and upon said lands for the purpose of quarrying and mining such rock materials as may be found thereon, and crushing or otherwise processing said rock materials as aggregate for commercial purposes. NOW, THEREFORE, for and in consideration of sum of One and no/100 dollars ($1.00) and other good and valuable consideration of the agreements hereinafter set forth, Lessor has demised, leased and let all of those certain lands and property situated in Lincoln County, New Mexico, SE 1/4 of SW 1/4 & W 1/2 of SE 1/4 & SE 1/4 of SE 1/4, Sec 16 TWP 10S Range 15E, NMPM approximately 160 acres, and including any and all right, title and interest of Lessor in and to any and all rock materials and deposits thereof contained in said property, and all rights-of-ways easements, together with the right to remove the same from the said premises whether by Lessee or it's agents. Water will be made available at existing wells by owner for $1.50 per MG. Meadow Valley Contractors, Inc. will assume all power and pumping costs. A $5,000.00 deposit for minimum royalty will be paid to the lessor by the lessee at the beginning of each year as a minimum royalty payment. No additional payments will be made until the extraction of materials exceed the $5,000.00 amount in royalty calculations based on materials weighed across certified scales. The Lessor retains the right to graze livestock, utilize pastures and existing corrals within the property boundaries while not interfering with lessees active operations. Lessee will not be liable for livestock under any circumstances. TO HAVE AND TO HOLD unto said Lessee and to it's successors and assignees for a term of 5(five) year with the option to renew for 5 (five) years. And in consideration of such demise and of the considerations and royalty hereinafter set forth and the covenants and agreements to be kept and performed, it is hereby covenanted and agreed by the parties hereto, to wit: 1. That Lessee shall have and is hereby granted the sole right, license and privilege to enter into and upon said property for the purpose of mining, quarrying, crushing, blasting, processing, mixing aggregate and asphalt cement in a hot plant, ready mix plant, and/or any other sand & gravel plant, stockpiling and removing any other activities or processes pertaining or incidental to these purposes for the period of 5 (five) years with an option to renew for 5 (five) years. 1a. A mining plan will be established and agreed upon in writing before actual mining commences. This does not include exploratory work necessary to develop the plan. The plan shall be prepared to construction industry standards including planned mining sequence, location of crushing and processing plants, stockpiling areas and planned waste and stripping areas. The mining plan may be changed at any time when agreed upon by both parties. 2. That Lessee is given the right of selling said materials, at such price and in such manner as Lessee shall deem best, and transporting or causing said materials to be transported from said lands. 3. In consideration, lessee agrees to pay lessor $1.00, for sole right to the said property for a period of 5 (five) years, with the option to renew for another 5 (five) years. 4. That Lessee agrees, during continuance of this Lease, to indemnify and save harmless the Lessor from each and every loss, cost, damage and expense arising out of any accident or other occurrence causing injury or death of persons or damage to property caused by the activities of Lessee on the leased premises. Lessee agrees to provide, pay for and maintain public liability insurance in amounts of not less than One Million and no/100 dollars ($1,000,000.00) with respect to such bodily injury or death, and not less than Fifty Thousand and no/100 Dollars ($50,000.00) with respect to damage to the property of others, for the protection of Lessor and Lessee against any liabilities or obligations and heretofore set forth. 5. Lessor warrants a valid ownership on the aforesaid lands and rock materials hereby leased. 6. Lessee covenants and agrees to pay to Lessor at his address royalty payments on all rock or other material removed from the premises, said royalties to be as follows; Royalty payments on aggregates removed @ $0.55 first 100,000/tn, $0.60 next 200,000/tn, $0.65 next 300,000/tn, $0.70 next 400,000/tn, $0.75 thereafter. Deductions will be made for admixtures, eg. oil, cement, etc. All materials will be weighted across certified scales. 6a. In the event recycled materials are brought to the premises and/or aggregates are utilized, these will be paid for at 25% of the royalty rate at the time or removal or at a method agreed upon by both parties. 6b. Lessee shall be responsible for any and all permits, applicable gross taxes, processing taxes, and severance taxes applicable to its operations. 6c. Imported construction wastes will be for recycling and not for permanent storage. No hazardous wastes will be left on leased premises. 6d. Opportunities to utilize pit run, or processed materials by the immediate family of lessor will be provided for in the form of a +/- 10% discount off of retail prices established. This will be a single pass through with bid jobs by lessee being excluded. 7. It is further understood that the cash royalties payable on materials removed from the premises shall be due and payable within fifteen (15) days after the end of the month for any and all materials used during the previous month as paid for by the owner. 8. If Lessee shall fail, refuse, or neglect to carry out any of the terms or provisions of this Lease and Agreement, and if the same be not corrected within fifteen (15) days of mailing or written notice thereof, then Lessor may terminate this Lease immediately and be entitled to the rights of Lessor. 9. Lessee agrees to remove or properly dispose of all trash, unused items or discarded materials and to return the property to Lessor in a neat and clean condition. Any and all processed materials remaining on the premises one year after the termination of this agreement shall become the exclusive property of Lessor. 9a. Lessee shall provide an environmental assessment, archaeological assessment, and a "quarry" reasonable reclamation plan for a quarry operation. Efforts will be made to delineate and preserve historical landmarks, e.g. corrals, buildings, foundations, wellsites, etc. Any change to fences, corrals, water works or wellsites shall be repaired or subject to compensation. Damage to underground wells from blasting will not be a consideration unless negligence can be proven. In the event an environmental, archaeological, zoning, or other unforseen restraint prevents the site from being utilized as a quarry, the lease agreement shall be considered null and void and both the lesee and lessor shall be held harmless. 9b. Oversize boulders generated from blasting may be used to delineate preservation areas or grouped together in a waste area. 9c. Lessee retains the right to remove produced materials for a period of one year after the termination of the lease. Royalties must be paid on these materials as they are removed. 10. The effective date of this agreement shall be , and the terms shall start as of that date. 11. This Lease may not be sublet or assigned in whole or in part without the written consent of the Lessor having been obtained. 12. Notices or other communications address to the Lessor shall be at HC6X Box 32, San Patricio, New Mexico 88348. 13. Notices or other communications addressed to the Lessee shall be at P.O. Box 60726, Phoenix, AZ.85082. 14. Lessee would have no objections to any gas or oil exploration which would not interfere with the lessee's operations of the quarry or the lessee's business. Assayable minerals will be retained by the lessor. IN WITNESS WHEREOF, of the parties hereto have executed this Lease and Agreement this day of LESSEE: MEADOW VALLEY CONTRACTORS By: /s/ Samuel J. Grasmick -------------------------- STATE OF Arizona ) )ss. COUNTY OF Maricopa ) The foregoing instrument was acknowledge before me this 5 day of January by: Samuel J. Grasmick. ------------------ Notary Public /s/ Arminda Palacio --------------------------- My Commission expires: 6-17-2001 ------------------ IN WITNESS WHEREOF, of the parties hereto have executed this Lease Agreement this day of LESSOR: KEN NOSKER By: /s/ Ken Nosker --------------------- STATE OF New Mexico ) )ss. COUNTY OF Lincoln ) The foregoing instrument was acknowledged before me this 30 day of December by Ken Nosker. ---------- Notary Public /s/ [SIGNATURE --------------------------- My commission expires 11-20-99 ------------------- EX-27 20 FINANCIAL DATA SCHEDULE
5 12-MOS 12-MOS DEC-31-1998 DEC-31-1997 JAN-01-1998 JAN-01-1997 DEC-31-1998 DEC-31-1997 14,671,710 4,534,932 0 0 19,344,288 28,348,849 59,178 35,441 0 0 35,817,390 33,741,708 12,753,268 10,211,898 1,757,422 1,185,147 49,297,063 47,896,411 30,056,976 28,747,802 7,801,826 7,571,709 3,601 3,601 0 0 0 0 12,469,116 12,884,783 49,297,063 47,896,411 187,036,077 146,273,286 187,036,077 146,273,286 177,591,846 138,411,314 177,591,846 138,411,314 0 0 0 0 435,358 624,048 3,592,019 3,235,458 1,422,440 1,162,891 2,169,579 2,072,567 (2,585,246) (860,952) 0 0 0 0 (415,667) 1,211,615 (.12) .34 (.11) .33
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