10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003
Commission File No 0-25428

MEADOW VALLEY CORPORATION

(Exact name of registrant as specified in its charter)

Nevada
(State or other Jurisdiction of
incorporation or organization) 88-0328443
(I.R.S. Employer Identification Number)

4411 South 40^th Street, Suite D-11
Phoenix, Arizona 85040
(602) 437-5400

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 and 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 filings requirements for the past 90 days. Yes [X]    No [  ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [  ]    No [X]

Number of shares outstanding of each of the registrant’s classes of common stock as of May 9, 2003:

Common Stock, $.001 par value
3,601,250 shares

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
	Item 1. Financial Statements
		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		CONDENSED CONSOLIDATED BALANCE SHEETS
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosure About Market Risk
	Item 4. Controls and Procedures
PART II – OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
INDEX TO EXHIBITS
EX-10.231
EX-10.232
EX-10.233
EX-10.234
EX-10.235
EX-10.236
EX-10.237
EX-10.238
EX-99.15
EX-99.16

MEADOW VALLEY CORPORATION
INDEX
REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2003

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
Condensed Consolidated Statements of Operations (Unaudited) - Three Months Ended March 31, 2003 and 2002		3
Condensed Consolidated Balance Sheets - As of March 31, 2003 (Unaudited) and December 31, 2002		4
Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2003 and 2002		5
Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	19
Item 4.	Controls and Procedures	19
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	20
Item 6.	Exhibits and Reports on Form 8-K	22

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		Three Months Ended
		March 31,
		2003			2002
Revenue		$	32,194,111		$	35,005,133
Cost of revenue			30,487,943			33,362,759
Gross profit			1,706,168			1,642,374
General and administrative expenses			1,579,666			1,528,277
Income from operations			126,502			114,097
Other income (expense):
	Interest income		17,751			25,652
	Interest expense		(107,852	)		(101,338	)
	Other expense		(4,955	)		(5,920	)
			(95,056	)		(81,606	)
Income before income taxes			31,446			32,491
Income tax expense			(11,792	)		(12,184	)
Net income		$	19,654		$	20,307
Basic net income per common share		$	0.01		$	0.01
Diluted net income per common share		$	0.01		$	0.01
Basic weighted average common shares outstanding			3,568,659			3,559,938
Diluted weighted average common shares outstanding			3,568,659			3,559,938

3

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

			March 31,			December 31,
			2003			2002
			(Unaudited)
Assets:
Current Assets:
	Cash and cash equivalents		$	4,194,696		$	3,289,535
	Restricted cash			1,008,070			1,681,361
	Accounts receivable, net			21,671,947			21,203,373
	Claims receivable			—			387,878
	Prepaid expenses and other			1,183,430			1,573,614
	Inventory, net			2,204,020			2,103,100
	Land held for sale			711,531			711,531
	Costs and estimated earnings in excess of billings on uncompleted contracts			1,390,678			1,543,061
		Total Current Assets		32,364,372			32,493,453
Property and equipment, net				13,996,095			14,555,646
Refundable deposits				67,854			50,604
Mineral rights and pit development, net				430,796			445,063
Claims receivable, less current portion				7,496,118			7,961,107
Other assets				—			32,223
		Total Assets	$	54,355,235		$	55,538,096
Liabilities and Stockholders’ Equity:
Current Liabilities:
	Accounts payable		$	18,078,765		$	19,912,516
	Accrued liabilities			4,162,260			3,697,111
	Notes payable			3,391,826			3,424,209
	Obligations under capital leases			880,725			921,306
	Billings in excess of costs and estimated earnings on uncompleted contracts			4,940,206			3,733,152
		Total Current Liabilities		31,453,782			31,688,294
Deferred tax liability				1,276,837			1,265,045
Notes payable, less current portion				8,493,156			9,256,598
Obligations under capital leases, less current portion				1,659,359			1,875,712
		Total Liabilities		42,883,134			44,085,649
Commitments and contingencies
Stockholders’ Equity:
	Preferred stock-$.001 par value; 1,000,000 shares authorized, none issued and outstanding			—			—
	Common stock-$.001 par value; 15,000,000 shares authorized, 3,601,250 and 3,559,938 issued and outstanding			3,601			3,601
	Additional paid-in capital			10,943,569			10,943,569
	Capital adjustments			(799,147	)		(799,147	)
	Retained earnings			1,324,078			1,304,424
		Total Stockholders’ Equity		11,472,101			11,452,447
		Total Liabilities and Stockholders’ Equity	$	54,355,235		$	55,538,096

4

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

			Three Months Ended
			March 31,
			2003			2002
Increase (Decrease) in Cash and Cash Equivalents:
Cash flows from operating activities:
	Cash received from customers		$	33,906,983		$	35,051,290
	Cash paid to suppliers and employees			(32,417,336	)		(36,446,783	)
	Interest received			17,751			25,652
	Interest paid			(107,852	)		(101,338	)
		Net cash provided by (used in) operating activities		1,399,546			(1,471,179	)
Cash flows from investing activities:
	Decrease in restricted cash			673,291			300,089
	Proceeds from sale of property and equipment			2,000			89,424
	Purchase of property and equipment			(13,166	)		(33,442	)
		Net cash provided by investing activities		662,125			356,071
Cash flows from financing activities:
	Repayment of notes payable			(899,576	)		(506,110	)
	Repayment of capital lease obligations			(256,934	)		(285,815	)
		Net cash used in financing activities		(1,156,510	)		(791,925	)
Net increase (decrease) in cash and cash equivalents				905,161			(1,907,033	)
Cash and cash equivalents at beginning of period				3,289,535			2,228,506
Cash and cash equivalents at end of period			$	4,194,696		$	321,473

5

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)

		Three Months Ended
		March 31,
		2003			2002
Increase (Decrease) in Cash and Cash Equivalents (Continued):
Reconciliation of Net Income to Net Cash Provided by (Used in) Operating Activities:
	Net Income	$	19,654		$	20,307
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
	Depreciation and amortization		690,735			685,651
	Gain on sale of property and equipment		(2,000	)		(57,484	)
	Deferred taxes, net		11,792			—
	Allowance for doubtful accounts		30,858			30,973
Changes in Operating Assets and Liabilities:
	Accounts receivable		(499,432	)		(1,576,503	)
	Prepaid expenses and other		390,184			128,170
	Inventory		(100,920	)		(194,535	)
	Costs and estimated earnings in excess of billings on uncompleted contracts		152,383			(766,992	)
	Refundable deposits		(17,250	)		—
	Claims receivable		852,867			—
	Other assets		32,223			—
	Accounts payable		(1,833,751	)		(2,645,879	)
	Accrued liabilities		465,149			528,330
	Income tax payable		—			12,184
	Billings in excess of costs and estimated earnings on uncompleted contracts		1,207,054			2,364,599
Net cash provided by (used in) operating activities		$	1,399,546		$	(1,471,179	)

6

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.      Description of Business:

     Nature of Corporation:

          Meadow Valley Corporation (the “Company”) was organized under the laws of the State of Nevada on September 15, 1994. The principal business purpose of the Company is to operate as the holding company of Meadow Valley Contractors, Inc. (“MVCI”) and Ready Mix, Inc. (“RMI”). MVCI is a general contractor, primarily engaged in the construction of structural concrete highway bridges and overpasses, and the paving of highways and airport runways in the states of Nevada, Arizona and Utah. RMI manufactures and distributes ready mix concrete in the Las Vegas, NV and Phoenix, AZ metropolitan areas. Formed by the Company, RMI commenced operations in 1997.

     Liquidity:

          The Company had income from operations for the three months ended March 31, 2003 and 2002 of $19,654 and $20,307 and has provided (used) cash in operating activities of $1,399,546 and ($1,471,179) for the three months ended March 31, 2003 and 2002. In order to improve working capital, the Company executed a definitive agreement on March 22, 2002 to sell certain pit assets to United Metro Materials Inc. (“United Metro”). The transaction closed on May 9, 2002. If sales from the certain pit assets sold to United Metro during the twenty-four month period beginning May 2002, as measured in tons of materials sold, meet or exceed a stipulated minimum amount, United Metro will pay an additional $250,000 as specified in the purchase agreement. During 2003, the Company may also consider the disposal of other assets as a means to increase working capital. Should the Company not be able to sell other assets, or raise additional capital to generate sufficient cash flows from operations, management of the Company will need to develop alternative strategies that may ultimately impact the operations and financial condition of the Company.

2.      Presentation of Interim Information:

          The amounts included in this report are unaudited; however, in the opinion of management, all adjustments necessary for a fair statement of results for the periods presented in the accompanying financial statements have been included. These adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by SEC rules and regulations. It is suggested that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 as filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934. The results of operations for the three months ended March 31, 2003 are not necessarily indicative of operating results for the entire year.

3.      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 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 revision become known.

          Claims for additional contract revenue are recognized only to the extent that contract costs relating to the claim have been incurred and evidence provides a legal basis for the claim. As of March 31, 2003, the total amount of contract claims filed by the Company with various public entities was $46,601,386. Of that sum, the Company’s portion was $29,953,191 and the balance of $16,648,195 pertains to a prime contractor or subcontractors’ claims.

7

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.       Revenue and Cost Recognition (Continued):

          Total claim amounts reported by the Company in its filings are approximate and are subject to revision as final documentation, resolution of issues, settlements progress and/or payments are made. Relative to the aforementioned claims, the Company has recorded $7,496,118 in cumulative claim revenue to offset a portion of the costs incurred to-date on the claims. Claims receivable are segregated between current and long-term assets based on the resolution of specific claims, or portion of claims, and as collection of funds is determined. In the accompanying balance sheets, the current and the long-term portion of the claims receivable were in the amounts of $0 and $7,496,118 as of March 31, 2003 and $387,878 and $7,961,107 as of December 31, 2002.

          As of March 31, 2003 and December 31, 2002, the Company has also recorded $126,860 in its costs and estimated earnings in excess of billings on uncompleted contracts (“Underbillings”) for unpaid quantities, unpaid change orders, and pending change orders in advance of receipt in connection with contracts on which claims have been filed. Although the Company believes these amounts represent a reasonably conservative posture, any claims proceeds and payments for previously unpaid quantities, unpaid change orders and pending change orders ultimately paid to the Company less than the aggregate amount recorded on the balance sheet of $7,622,978, net of professional fees, will result in a charge to earnings. Conversely, a payment for those same items in excess of $7,622,978, net of professional fees, will result in an increase in income.

          A common and customary practice in construction contracts is the owner’s withholding of a portion of the contract in the form of retention. Retention practices vary from contract to contract, but in general, retention (usually somewhere between 5% to 10% of the contract) is withheld from each progress payment by the owner and then paid upon satisfactory completion of the contract. Contract proceeds comprising retention are included in the Company’s balance sheet in accounts receivable. The portion of accounts receivable pertaining to retention withheld on the contracts for which claims have been filed amount to $2,008,399. The degree to which the Company is successful in recouping its costs from the claims may also impact the amount of retention paid by the owner.

          The Company believes that all retention amounts currently being held by the owners on the contracts with outstanding claims will be paid in full in accordance with the contract terms. Therefore, no allowance has been made to reduce the receivables due from the retention on the disputed contracts.

4.      Recent Accounting Pronouncements:

          In June 2001, Financial Accounting Standards Board (FASB) issued Statement No. 143 (SFAS No. 143), “Accounting for Asset Retirement Obligations,” effective for fiscal years beginning after June 15, 2002. The Statement requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The adoption of SFAS No. 143 did not have a material effect on the Company’s financial position or results of operations.

          In June 2002, FASB issued Statement No. 146 (SFAS No. 146), “Accounting for Costs Associated with Exit or Disposal Activities,” effective for activities that are initiated after December 31, 2002, with early application encouraged. This Statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” The adoption of SFAS No. 146 did not have a material effect on the Company’s financial position or results of operations.

          In December 2002, FASB issued Statement No. 148 (SFAS No. 148), “Accounting for Stock-Based Compensation — Transition and Disclosure — An Amendment of FASB Statement No. 123.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition

8

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4.      Recent Accounting Pronouncements (Continued):

for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company is required to follow the prescribed format and provide the additional disclosures required by SFAS No. 148 in its annual financial statements for the year ended December 31, 2002 and must also provide the disclosures in its quarterly reports containing condensed financial statements for interim periods beginning with the quarterly period ended March 31, 2003. The adoption of SFAS No. 148 did not have a material effect on the Company’s financial position or results of operations.

          In January 2003, FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (FIN 46) which requires the consolidation of variable interest entities, as defined. FIN 46 is applicable to financial statements to be issued by the Company after 2002; however, disclosures are required currently if the Company expects to consolidate any variable interest entities. The Company does not currently believe that any material entities will be consolidated with the Company as a result of FIN 46.

5.     Notes Payable:

          Summary of first quarter additions to notes payable and its balance at March 31, 2003:

Note payable, interest rate at 6.75%, with monthly payments of $2,416, due January 31, 2006, collateralized by equipment	$	74,591
Note payable, interest rate at 6.75%, with monthly payments of $775, due February 1, 2006, collateralized by equipment		23,929
	$	98,520
Less: current portion		(32,648	)
	$	65,872

          Following are maturities of the above long-term debt for each of the next three years:

2004	$	32,648
2005		34,921
2006		30,951
	$	98,520

6.      Line of Credit:

          Effective April 1, 2003, the Company amended the line of credit agreement. Under the amended agreement, the interest rate was adjusted to Chase Manhattan Bank’s prime rate, plus 1.25% through January 1, 2004 at which time the line of credit converts to a term agreement requiring monthly principal and interest payments through December 31, 2007. The line of credit is collateralized by all of the Company’s assets. Under the terms of the line of credit, the Company is required to maintain a certain level of tangible net worth as well as maintain a ratio of total debt to tangible net worth. As of March 31, 2003, the Company was in compliance with the covenants. As of March 31, 2003 and December 31, 2002, Meadow Valley Corporation had drawn down the entire $7,000,000, from the line of credit.

9

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7.      Commitments:

          During the quarter ended March 31, 2003, the Company leased various pieces of equipment, with a combined monthly payment of $49,817. Minimum future rental payments under the non-cancelable operating leases as of March 31, 2003 and for each of the next five years are:

2004	$	597,807
2005		597,807
2006		597,807
2007		447,820
2008		339,759
	$	2,581,000

          During the quarter ended March 31, 2003, the Company executed employment agreements with some of its key officers that provide for an annual salary and various other benefits and incentives. As of March 31, 2003 the total commitments, excluding benefits and incentives, amount to $1,169,250.

          In November 2002 the Financial Accounting Standards Board issued FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees Including Indirect Guarantees of Indebtness of Others” (“FIN 45”). FIN 45 requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. In addition, FIN 45 requires additional disclosures about the guarantees that an entity has issued. The initial recognition and measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002 and the disclosure requirements of FIN 45 are effective for financial statements of interim or annual periods ending after December 15, 2002. The recognition and measurement provisions of FIN 45 are not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

          The Company has agreed to indemnify its officers and directors for certain events or occurrences arising as a result of the officer or director’s serving in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. However, the Company has a directors and officer liability insurance policy that enables it to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal and has no liabilities recorded for these agreements as of March 31, 2003.

          The Company enters into indemnification provisions under its agreements with other companies in its ordinary course of business, typically with surety companies, business partners, contractors, customers, landlords, lenders and lessors. Under these provisions the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities or, in some cases, as a result of the indemnified party’s activities under the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of March 31, 2003.

10

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8.      Statement of Cash Flows:

     Non-Cash Operating Activities:

          The Company recognized operating activities that affected assets and liabilities, but did not result in cash receipts or payments. This non-cash activity is as follows:

          During the three months ended March 31, 2003 and 2002, the Company had a net increase in the allowance for doubtful accounts receivable of $30,858 and $30,973, respectively.

     Non-Cash Investing and Financing Activities:

          The Company recognized investing and financing activities that affected assets and liabilities, but did not result in cash receipts or payments. These non-cash activities are as follows:

          During the three months ended March 31, 2003 and 2002, the Company financed the purchase of equipment in the amounts of $103,751 and $1,257,345, respectively.

9.      Litigation and Claim Matters:

          The Company is a party to legal proceedings in the ordinary course of its business. With the exception of those matters detailed below, the Company believes that the nature of these proceedings (which generally relate to disputes between the Company and its subcontractors, material suppliers or customers regarding payment for work performed or materials supplied) are typical for a construction firm of its size and scope, and no other pending proceedings are material to its financial condition.

          The following proceedings represent matters that may become material and have already been or may soon be referred to legal counsel for further action:

Requests for Equitable Adjustment to Construction Contracts. The Company has made claims as described below on the following contracts:

(1)

Five contracts with the New Mexico State Highway and Transportation Department – The approximate total value of claims on these projects is $27,465,989 of which approximately $23,703,059 is on behalf of the Company and the balance of $3,762,930 is on behalf of the prime contractor or subcontractors. The primary issues are changed conditions, plan errors and omissions, contract modifications and associated delay costs. In addition, the projects were not completed within the adjusted contract time because of events giving rise to the claims. The prosecution of the claims will include the appropriate extensions of contract time to offset any potential liquidated damages.

(2)

Clark County, Nevada – The approximate total value of claims on this project is $19,135,397 of which approximately $12,885,265 is on behalf of subcontractors. The primary issues are changed conditions, constructive changes, plan errors and omissions, contract modifications and associated delay costs.

          The above claims combined total approximately $46,601,386. Of that sum, the Company’s portion of the claims total approximately $29,953,191 and the balance of approximately $16,648,195 pertains to prime contractor or subcontractors’ claims. Total claim amounts reported by the Company are approximate and are subject to revision as final documentation progresses and as issues are resolved and/or payments made. Relative to the aforementioned claims, the Company has recorded approximately $7,496,118 in cumulative claim revenue to offset a portion of costs incurred to date on the claims. In addition, the Company has also recorded approximately $126,860 in its Underbillings for unpaid quantities, unpaid change orders, and pending change orders in advance of receipt. Although the Company believes these amounts represent a reasonably conservative posture, any claims proceeds and payments for previously unpaid quantities, unpaid change orders and pending change orders ultimately paid to the Company less than $7,622,978, net of professional fees, will reduce income. Conversely, a payment for those same items in excess of $7,622,978, net of professional fees, will increase income.

11

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.      Litigation and Claim Matters (Continued):

          The portion of accounts receivable pertaining to retention withheld on the contracts for which claims have been filed amounts to $2,008,399. The degree to which the Company is successful in recovering its costs from the claims may also impact the amount of retention paid by the owner. The Company believes that all retention amounts currently being held by the owners on the contracts with outstanding claims will be paid in full in accordance with the contract terms. Therefore, no allowance has been made to reduce the receivables due from the retention on the disputed contracts.

Lawsuits Filed Against Meadow Valley Contractors, Inc.

(1)	Innovative Construction Systems, Inc. (“ICS”), District Court, Clark County, NV – ICS was a subcontractor to MVCI on several projects. ICS failed to make payments of payroll, pension fund contributions and other taxes for which the Internal Revenue Service garnished any future payments due ICS on MVCI’s projects. As a result, ICS failed to supply labor to perform its work and defaulted on its subcontracts. MVCI terminated the ICS subcontracts and performed the work with MVCI’s personnel. ICS alleges it was wrongfully terminated and is asserting numerous claims for damages. ICS claims against MVCI total approximately $15,000,000. The Company does not believe ICS’ claims have merit and intends to vigorously defend against these claims and MVCI has filed counter-claims for approximately $3,200,000 seeking to recover the damages ICS has caused MVCI through its failure to perform.
(2)	Progressive Contracting Inc. (“PCI”), District Court, Clark County, NV – PCI was a subcontractor to MVCI on a project where there is a dispute with the owner regarding delays to the project. PCI claims they were damaged by these delays in an amount in excess of $300,000. The Company believes that under the terms of the contract with PCI they are only entitled to compensation for the delays if MVCI is compensated by the owner. MVCI has submitted PCI’s claims to the owner and they are included in the total claim amount MVCI has submitted.
(3)	Johnson & Danley Construction Co., Inc. (“JDCC”), J.D. Materials, Inc. (“JDM”) and Joel T. Danley (“Danley”) (collectively “J&D”), Twelfth Judicial District, District of New Mexico – JDCC was the prime contractor and MVCI was a subcontractor to JDCC on two of the five contracts involved in MVCI’s disputes with the state of New Mexico. JDCC was also a subcontractor to MVCI on other contracts in New Mexico. JDM is the owner of an aggregate pit in Alamogordo, NM and leases the pit to MVCI under a mineral lease agreement. Danley is believed to be an officer and owner of JDCC and JDM. JDCC filed for Chapter 11 bankruptcy protection, which in accordance with the contract, resulted in the termination of its contracts with the New Mexico State Highway and Transportation Department (“NMSHTD”). The payment and performance bonds supplied by JDCC in connection with the two contracts for which JDCC was the prime contractor had been furnished by MVCI’s surety companies. MVCI indemnified the surety companies against losses and claims on the two contracts. Upon JDCC’s termination, the NMSHTD entered into a takeover agreement with the surety companies who subsequently entered into an agreement with MVCI to complete the work. MVCI has successfully completed the projects. In its complaint, J&D alleged, among other things, that MVCI was partially responsible for the cause of its bankruptcy and sought damages in an undetermined amount. On February 10, 2003, for mutual consideration, J&D and MVCI entered into a settlement agreement whereby the two parties dismissed their claims and counterclaims in their entirety. The parties have agreed to jointly prosecute their respective claims against the NMSHTD.
(4)	MVCI is defending against a claimed preference, in the Third Judicial Court of Salt Lake County, in connection with a payment made to it by an insurance company, Southern America Insurance Company, in the approximate amount of $100,000. MVCI believes that the payment is not a preference, and is vigorously defending the action.

12

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.      Litigation and Claim Matters (Continued):

(5) The Company and all of its Directors were served with a civil Complaint by Silver State Materials Corp. and Cyrus Spurlino (collectively “Plaintiffs”) in case no. CV-S-01-1436-KJD-LRL (USDC-NV). The Complaint primarily alleges that the Company’s October 1995 Registration Statement on Form S-1 was misleading in stating that the Company’s Directors were elected on a staggered basis because the Company’s Bylaws, providing for such staggered terms, were not so amended until April 1997, and that such amendment was not filed with the Securities and Exchange Commission. The Plaintiffs filed a notice of dismissal without prejudice on April 22, 2003

10.      Stock Option Plan:

          In November 1994, the Company adopted a Stock Option Plan providing for the granting of both qualified incentive stock options and non-qualified stock options. The Company has reserved 1,200,000 shares of its common stock for issuance under the Plan. Granting of the options is at the discretion of the Board of Directors and may be awarded to employees and consultants. Consultants may receive only non-qualified stock options. The maximum term of the stock options are 10 years and may be exercised as follows: 33.3% after one year of continuous service, 66.6% after two years of continuous service and 100% after three years of continuous service. The exercise price of each option is equal to the market price of the Company’s common stock on the date of grant.

          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 three months ended March 31, 2003 and 2002. 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 (loss) and earnings per share for the three months ended March 31, 2003 and 2002 would have been reduced to the pro forma amounts presented below:

		Three Months Ended			Three Months Ended
		March 31, 2003			March 31, 2002
Net income, as reported		$	19,654		$	20,307
Add: Stock-based Employee compensation expense included in reported income, net of related tax effects			—			—
Deduct: Total stock-based Employee compensation expense determined under fair value based methods for all awards, net of related tax effects			(58,604	)		(26,457	)
Pro forma net loss		$	(38,950	)	$	(6,150	)
Basic net income (loss) per common share
	As Reported	$	0.01		$	0.01
	Pro forma		(0.01	)		0.00
Diluted net income (loss) per common share
	As Reported	$	0.01		$	0.01
	Pro forma		(0.01	)		0.00

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MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10.      Stock Option Plan (Continued):

          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 2001: expected life of options of 5 years, expected volatility of 60.85%, risk-free interest rates of 8%, and a 0% dividend yield. The weighted average fair value at date of grant for options granted during 2001 was approximated $.97.

11.      NASDAQ Stock Market Notifications:

          The NASDAQ Stock Market notified the Company in writing on March 11, 2003 that the price of the Company’s stock closing bid price has been at $1.00 per share or greater for at least 10 consecutive trading days, therefore regaining compliance with the Marketplace Rule 4310(c)(4).

12.      Segment Information:

          The Company manages and operates two segments, construction services and construction materials. The construction services segment provides construction services to a broad range of public and some private customers primarily in the western states of Arizona, Nevada and Utah. Through this segment, the Company performs heavy civil construction such as the construction of bridges and overpasses, channels, roadways, highways and airport runways. The construction materials segment manufactures and distributes ready mix concrete and sand and gravel products in the Las Vegas, NV and Phoenix, AZ markets. Material customers include concrete subcontractors, prime contractors, homebuilders, commercial and industrial property developers, pool builders and homeowners. The construction materials segment operates out of two locations in the Las Vegas, NV vicinity, one location in the Moapa, NV vicinity and two locations in the Phoenix, AZ vicinity.

	Three Months Ended March 31,
	2003						2002
	Construction						Construction
(dollars in thousands)	Services			Materials			Services			Materials
Gross revenue	$	22,363		$	9,949		$	26,629		$	9,259
Intercompany revenue		—			118			—			883
Cost of revenue		21,514			9,092			25,803			8,443
Interest income		16			2			22			4
Interest expense		62			46			63			38
Depreciation and amortization		381			310			424			261
Income (loss) before taxes		(249	)		280			(283	)		315
Income tax benefit (expense)		94			(105	)		106			(118	)
Net income (loss)		(155	)		175			(177	)		197
Total assets		38,553			15,802			48,128			14,766

          There are no differences in accounting principals between the segments. All centrally incurred costs are allocated to the construction services segment. Intercompany revenue is eliminated at cost to arrive at consolidated revenue and cost of revenue.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

          The following is management’s discussion and analysis of certain significant factors affecting the Company’s financial position and operating results during the periods included in the accompanying condensed consolidated financial statements.

          Except for the historical information contained herein, the matters set forth in this report are 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. The Company disclaims any intent or obligation to update these forward-looking statements.

          The Company’s backlog (anticipated revenue from the uncompleted portions of awarded projects) was approximately $73.4 million at March 31, 2003, compared to approximately $63.5 million at March 31, 2002. At March 31, 2003, the Company’s backlog included approximately $58.0 million of work that is scheduled for completion during 2003.

          Revenue on uncompleted fixed price contracts is recorded under the percentage-of-completion method of accounting. The Company begins to recognize revenue on its contracts when it first accrues direct costs. Contracts often involve work periods in excess of one year and revisions in cost and profit estimates during construction are reflected in the accounting period in which the facts that require the revisions become known. Losses on contracts, if any, are provided in total when determined, regardless of the percent complete. Claims for additional contract revenue are recognized only to the extent that contract costs relating to the claim have been incurred and evidence provides a legal basis for the claim. As of March 31, 2003, the total amount of contract claims filed by the Company with various public entities was $46,601,386. Of that sum, the Company’s portion was $29,953,191 and the balance of $16,648,195 pertains to a prime contractor and subcontractors’ claims. Total claim amounts reported by the Company in its filings are approximate and are subject to revision as final documentation, resolution of issues, settlements progress and/or payments are made. Relative to the aforementioned claims, the Company has recorded $7,496,118 in cumulative claim revenue to offset a portion of the costs incurred to-date on the claims. The Company segregates its claims receivable between current and long-term assets based on the resolution of specific claims, or portion of claims, and as collection of funds is determined. In the accompanying balance sheets, the current and the long-term portion of the claims receivable were in the amounts of $0 and $7,496,118 as of March 31, 2003 and $387,878 and $7,961,107 as of December 31, 2002. As of March 31, 2003 and December 31, 2002, the Company has also recorded $126,860, in its Underbillings for unpaid quantities, unpaid change orders, and pending change orders in advance of receipt in connection with contracts on which claims have been filed. Although the Company believes these amounts represent a reasonably conservative posture, any claims proceeds and payments for previously unpaid quantities, unpaid change orders and pending change orders ultimately paid to the Company less than the aggregate amount recorded on the balance sheet of $7,622,978, net of professional fees, will result in a charge to earnings. Conversely, a payment for those same items in excess of $7,622,978, net of professional fees, will result in an increase in income.

          The portion of accounts receivable pertaining to retention withheld on the contracts for which claims have been filed amount to $2,008,399. The degree to which the Company is successful in recouping its costs from the claims may also impact the amount of retention paid by the owner. The Company believes that all retention amounts currently being held by the owners on the contracts with outstanding claims will be paid in full in accordance with the contract terms. Therefore, no allowance has been made to reduce the receivables due from the retention on the disputed contracts.

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Critical Accounting Policies

          Significant accounting policies are described in the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. We believe our most critical accounting policies are the revenue recognition and cost estimation on certain contracts for which we use a percentage of completion accounting method, our allowance for doubtful accounts and the allowance for obsolete inventory. The revenue recognition and cost estimation accounting method is applied by our Construction Services Operations to heavy construction projects executed under multi-year contracts with various customers.

          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.

          The complexity of the estimation process and all issues related to the assumptions, risks and uncertainties inherent with the application of the percentage of completion method of accounting affects the amounts reported in our financial statements. A number of internal and external factors affect our percentage of completion estimates, including labor rate and efficiency variances, estimated future material prices and customer specification changes. If our business conditions were different, or if we used different assumptions in the application of this accounting policy, it is likely that materially different amounts would be reported in our financial statements.

          We are also required to estimate the collectibility of our account receivables. A considerable amount of judgment is required in assessing the realization of these receivables, including the current creditworthiness of each customer and the related aging of the past due balances. Our provision for bad debts at March 31, 2003 and December 31, 2002 amounted to $318,191 and $287,333, respectively. We determine our reserve by using percentages applied to certain aged receivable categories and percentages of certain types of revenue generated.

          In addition, we are required to state our inventories at the lower of cost or market. In assessing the ultimate realization of inventories, we are required to make judgments as to the future demand requirements and compare these with the current inventory levels. Our reserve requirements generally increase as our projected demand requirements decrease due to market conditions and longer than expected usage periods. At March 31, 2003 and December 31, 2002, inventories of $2,204,020 and $2,103,100 respectively, are net of reserves of $1,000,000. It is possible that significant changes in required inventory reserves may continue to occur in the future if there is a further decline in market conditions.

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Results of Operations

          The following table sets forth, for the three months ended March 31, 2003 and 2002, certain items derived from the Company’s Condensed Consolidated Statements of Operations expressed as a percentage of revenue.

	Three Months Ended
	March 31,
	2003			2002
Revenue		100.0	%		100.0	%
Gross Profit		5.3	%		4.7	%
General and administrative expenses		4.9	%		4.4	%
Interest income		0.0	%		0.1	%
Interest expense		-0.3	%		-0.3	%
Other income		0.0	%		0.0	%
Income before income taxes		0.1	%		0.1	%
Income tax expense		0.0	%		0.0	%
Net income		0.1	%		0.1	%

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

          Revenue and Backlog. Revenue for the three months ended March 31, 2003 (“interim 2003”) was $32.2 million compared to $35.0 million for the three months ended March 31, 2002 (“interim 2002”). The decrease in revenue was the result of a $4.3 million decrease in construction services, offset by a $1.5 million increase in revenue generated from construction materials sales to non-affiliates. Revenue may be impacted in any one period by the backlog at the beginning of the period. Backlog at the beginning of this fiscal year was $68.7 million compared to $76.0 million a year ago, therefore revenue was impacted by the amount of the period’s beginning backlog. Backlog increased to $73.4 million at March 31, 2003 from $63.5 million at March 31, 2002. Because so much of the Company’s business stems from competitively bid public works, backlog will fluctuate depending upon the amount and type of contracts that the Company bids on and wins. Bid bonds provided by the Company’s surety company are required on most of the contracts that the Company bids, therefore, any restrictions or limitations in the extension of surety credit can impact the amount and type of contracts available to be bid by the Company. Limitations to the Company’s surety credit continue to inhibit the Company’s ability to materially increase contract backlog. Surety credit limits may be improved as the Company’s financial performance improves, but there can be no assurance that surety credit will improve as there also exist insurance industry and individual insurance company dynamics that are unrelated to the Company’s performance.

          Gross Profit. Consolidated gross profit increased to $1.7 million for interim 2003 from $1.6 million for interim 2002 and consolidated gross margin, as a percent of revenue, increased to 5.3% in interim 2003 from 4.7% in interim 2002. Gross profit from construction services remained flat at $.8 million in interim 2003 compared to $.8 million in interim 2002 and the gross profit margin increased to 3.8% from 3.1% in the respective periods. 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. Gross profit from construction materials increased to $.9 million in interim 2003 from $.8 million in interim 2002 and the gross profit margin decreased to 8.7% from 9.7% in the respective periods. The decrease in gross profit margin results from an increase in the cost of production, and due to competition, the inability to effectively raise product prices.

          General and Administrative Expenses. General and administrative expenses remained relatively flat with a slight increase to $1.6 million for interim 2003 from $1.5 million for interim 2002.

          Interest Income and Expense. Interest income for interim 2003 decreased to $.02 million from $.03 million for interim 2002 resulting primarily from a decrease in invested cash reserves. Interest expense for interim 2003 remained flat at $.1 million compared to $.1 million for interim 2002, due primarily to a consistent variable interest rate on the LOC in interim 2003 compared to the variable interest rate in interim 2002.

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          Net Income. Net income was $.02 million in interim 2003 as compared to a net income of $.02 million for interim 2002

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 construction materials business. Historically, the Company’s primary source of cash has been from operations.

          The following table sets forth for the three months ended March 31, 2003 and 2002, certain items from the condensed consolidated statements of cash flows.

	Three Months Ended
	March 31,
	2003			2002
Cash Flows Provided by (Used in) Operating Activities	$	1,399,546		$	(1,471,179	)
Cash Flows Provided by Investing Activities		662,125			356,071
Cash Flows Used in Financing Activities		(1,156,510	)		(791,925	)

          Cash provided by operating activities during interim 2003 amounted to $1.4 million, primarily the result of a decrease in costs in excess of billings of $.2 million, a decrease in claims receivable of $.9 million, a decrease in prepaid expenses and other of $.4 million, an increase in billings in excess of costs of $1.2 million, an increase in accrued liabilities of $.5 million and depreciation and amortization of $.7 million, offset, in part, by an increase in accounts receivable of $.5 million, an increase in inventory of $.1 million and a decrease in accounts payable of $1.8 million.

          Cash used in operating activities during interim 2002 amounted to $1.5 million, primarily the result of an increase in accounts receivable of $1.6 million and a decrease in accounts payable of $2.7 million, offset, in part, by an increase in net billings in excess of costs of $1.6 million, depreciation and amortization of $.7 million and an increase in accrued liabilities of $.5 million.

          Cash provided by investing activities during interim 2003 amounted to $.7 million related primarily to a decrease in restricted cash of $.7 million.

          Cash provided by investing activities during interim 2002 amounted to $.4 million related primarily to a decrease in restricted cash of $.3 million and proceeds from the sale of property and equipment in the amount of $.1 million.

          Cash used in financing activities during interim 2003 amounted to $1.2 million related to the repayment of notes payable and capital lease obligations of $1.2 million.

          Cash used in financing activities during interim 2002 amounted to $.8 million related primarily to the repayment of notes payable and capital lease obligations of $.8 million.

Recent Accounting Pronouncements

          In June 2001, Financial Accounting Standards Board (FASB) issued Statement No. 143 (SFAS No. 143), “Accounting for Asset Retirement Obligations,” effective for fiscal years beginning after June 15, 2002. The Statement requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The adoption of SFAS No. 143 did not have a material effect on the Company’s financial position or results of operations.

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          In June 2002, FASB issued Statement No. 146 (SFAS No. 146), “Accounting for Costs Associated with Exit or Disposal Activities,” effective for activities that are initiated after December 31, 2002, with early application encouraged. This Statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” The adoption of SFAS No. 146 did not have a material effect on the Company’s financial position or results of operations.

          In December 2002, FASB issued Statement No. 148 (SFAS No. 148), “Accounting for Stock-Based Compensation — Transition and Disclosure — An Amendment of FASB Statement No. 123.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company is required to follow the prescribed format and provide the additional disclosures required by SFAS No. 148 in its annual financial statements for the year ended December 31, 2002 and must also provide the disclosures in its quarterly reports containing condensed financial statements for interim periods beginning with the quarterly period ended March 31, 2003. The adoption of SFAS No. 148 did not have a material effect on the Company’s financial position or results of operations.

          In January 2003, FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (FIN 46) which requires the consolidation of variable interest entities, as defined. FIN 46 is applicable to financial statements to be issued by the Company after 2002; however, disclosures are required currently if the Company expects to consolidate any variable interest entities. The Company does not currently believe that any material entities will be consolidated with the Company as a result of FIN 46.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

          Market risk generally represents the risk that losses may occur in the values of financial instruments as a result of movements in interest rates, foreign currency exchange rates and commodity prices. The Company does not have foreign currency exchange rate or commodity price market risk.

          Interest Rate Risk — From time to time the Company temporarily invests its cash and restricted cash in interest-bearing securities issued by high-quality issuers. The Company’s management monitors risk exposure to monies invested in securities of any one financial institution. Due to the short time the investments are outstanding and their general liquidity, these instruments are classified as cash equivalent in the consolidated balance sheet and do not represent a material interest rate risk to the Company. The Company’s primary market risk to exposure for changes in interest rates relates to the Company’s long-term debt obligations. The Company manages its exposure to changing interest rates principally through the use of a combination of fixed and floating rate debt.

Item 4. Controls and Procedures

          The Company’s Chief Executive Officer and its Principal Accounting Officer, after evaluating the effectiveness of the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c) as of a date within 90 days of the filing date of this quarterly report on Form 10-Q (the “Evaluation Date”)), have concluded that as of the Evaluation Date, the Company’s disclosure controls and procedures were adequate and effective to ensure that material information relating to the Company and its consolidated subsidiaries would be made known to them by others within those entities, particularly during the period in which this quarterly report on Form 10-Q was being prepared.

          There were no significant changes in the Company’s internal controls or in other factors that could significantly affect the Company’s disclosure controls and procedures subsequent to the Evaluation Date, nor any significant deficiencies or material weaknesses in such disclosure controls and procedures requiring corrective actions. As a result, no corrective actions were taken.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

          The Company is a party to legal proceedings in the ordinary course of its business. With the exception of those matters detailed below, the Company believes that the nature of these proceedings (which generally relate to disputes between the Company and its subcontractors, material suppliers or customers regarding payment for work performed or materials supplied) are typical for a construction firm of its size and scope, and no other pending proceedings are material to its financial condition.

          The following proceedings represent matters that may become material and have already been or may soon be referred to legal counsel for further action:

Requests for Equitable Adjustment to Construction Contracts. The Company has made claims as described below on the following contracts:

(1)

Five contracts with the New Mexico State Highway and Transportation Department – The approximate total value of claims on these projects is $27,465,989 of which approximately $23,703,059 is on behalf of the Company and the balance of $3,762,930 is on behalf of the prime contractor or subcontractors. The primary issues are changed conditions, plan errors and omissions, contract modifications and associated delay costs. In addition, the projects were not completed within the adjusted contract time because of events giving rise to the claims. The prosecution of the claims will include the appropriate extensions of contract time to offset any potential liquidated damages.

(2)

Clark County, Nevada – The approximate total value of claims on this project is $19,135,397 of which approximately $12,885,265 is on behalf of subcontractors. The primary issues are changed conditions, constructive changes, plan errors and omissions, contract modifications and associated delay costs.

          The above claims combined total approximately $46,601,386. Of that sum, the Company’s portion of the claims total approximately $29,953,191 and the balance of approximately $16,648,195 pertains to prime contractor or subcontractors’ claims. Total claim amounts reported by the Company are approximate and are subject to revision as final documentation progresses and as issues are resolved and/or payments made. Relative to the aforementioned claims, the Company has recorded approximately $7,496,118 in cumulative claim revenue to offset a portion of costs incurred to date on the claims. In addition, the Company has also recorded approximately $126,860 in its Underbillings for unpaid quantities, unpaid change orders, and pending change orders in advance of receipt. Although the Company believes these amounts represent a reasonably conservative posture, any claims proceeds and payments for previously unpaid quantities, unpaid change orders and pending change orders ultimately paid to the Company less than $7,622,978, net of professional fees, will reduce income. Conversely, a payment for those same items in excess of $7,622,978, net of professional fees, will increase income.

          The portion of accounts receivable pertaining to retention withheld on the contracts for which claims have been filed amounts to $2,008,399. The degree to which the Company is successful in recovering its costs from the claims may also impact the amount of retention paid by the owner. The Company believes that all retention amounts currently being held by the owners on the contracts with outstanding claims will be paid in full in accordance with the contract terms. Therefore, no allowance has been made to reduce the receivables due from the retention on the disputed contracts.

Lawsuits Filed Against Meadow Valley Contractors, Inc.

(1) Innovative Construction Systems, Inc. (“ICS”), District Court, Clark County, NV – ICS was a subcontractor to MVCI on several projects. ICS failed to make payments of payroll, pension fund contributions and other taxes for which the Internal Revenue Service garnished any future payments due ICS on MVCI’s projects. As a result, ICS failed to supply labor to perform its work and defaulted on its subcontracts. MVCI terminated the ICS subcontracts and performed the work with MVCI’s personnel. ICS alleges it was wrongfully terminated and is asserting numerous claims for damages. ICS claims against MVCI total approximately $15,000,000. The Company does not believe ICS’ claims have merit and intends to vigorously defend against these claims and MVCI has filed counter-

20

	claims for approximately $3,200,000 seeking to recover the damages ICS has caused MVCI through its failure to perform.
(2)	Progressive Contracting Inc. (“PCI”), District Court, Clark County, NV – PCI was a subcontractor to MVCI on a project where there is a dispute with the owner regarding delays to the project. PCI claims they were damaged by these delays in an amount in excess of $300,000. The Company believes that under the terms of the contract with PCI they are only entitled to compensation for the delays if MVCI is compensated by the owner. MVCI has submitted PCI’s claims to the owner and they are included in the total claim amount MVCI has submitted.
(3)	Johnson & Danley Construction Co., Inc. (“JDCC”), J.D. Materials, Inc. (“JDM”) and Joel T. Danley (“Danley”) (collectively “J&D”), Twelfth Judicial District, District of New Mexico – JDCC was the prime contractor and MVCI was a subcontractor to JDCC on two of the five contracts involved in MVCI’s disputes with the state of New Mexico. JDCC was also a subcontractor to MVCI on other contracts in New Mexico. JDM is the owner of an aggregate pit in Alamogordo, NM and leases the pit to MVCI under a mineral lease agreement. Danley is believed to be an officer and owner of JDCC and JDM. JDCC filed for Chapter 11 bankruptcy protection, which in accordance with the contract, resulted in the termination of its contracts with the New Mexico State Highway and Transportation Department (“NMSHTD”). The payment and performance bonds supplied by JDCC in connection with the two contracts for which JDCC was the prime contractor had been furnished by MVCI’s surety companies. MVCI indemnified the surety companies against losses and claims on the two contracts. Upon JDCC’s termination, the NMSHTD entered into a takeover agreement with the surety companies who subsequently entered into an agreement with MVCI to complete the work. MVCI has successfully completed the projects. In its complaint, J&D alleged, among other things, that MVCI was partially responsible for the cause of its bankruptcy and sought damages in an undetermined amount. On February 10, 2003 for mutual consideration, J&D and MVCI entered into a settlement agreement whereby the two parties dismiss their claims and counterclaims in their entirety. The parties have agreed to jointly prosecute their respective claims against the NMSHTD.
(4)	MVCI is defending a claimed preference, in the Third Judicial Court of Salt Lake County, in connection with a payment made to it by an insurance company, Southern America Insurance Company, in the approximate amount of $100,000. MVCI believes that the payment is not a preference, and is vigorously defending the action.
(5)	The Company and all of its Directors were served with a civil Complaint by Silver State Materials Corp. and Cyrus Spurlino (collectively “Plaintiffs”) in case no. CV-S-01-1436-KJD-LRL (USDC-NV). The Complaint primarily alleges that the Company’s October 1995 Registration Statement on Form S-1 was misleading in stating that the Company’s Directors were elected on a staggered basis because the Company’s Bylaws, providing for such staggered terms, were not so amended until April 1997, and that such amendment was not filed with the Securities and Exchange Commission. The Plaintiffs filed a notice of dismissal without prejudice on April 22, 2003

21

Item 6. Exhibits and Reports on Form 8-K

a. Exhibits:

10.231	Amendment of Amended and Restated Revolving Loan Agreement with The CIT Group/Equipment Financing, Inc.
10.232	Amendment of Revolving Loan Agreement with The CIT Group/Equipment Financing, Inc.
10.233	Indemnification Agreement with Clint Tryon
10.234	Master Lease Agreement with The CIT Group/Equipment Financing, Inc.
10.235	Lease Agreement with The CIT Group/Equipment Financing, Inc.
10.236	Lease Agreement with The CIT Group/Equipment Financing, Inc.
10.237	Lease Agreement with Caterpillar Financial Services Corporation
10.238	Lease Agreement with Caterpillar Financial Services Corporation
99.15	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Bradley E. Larson
99.16	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Clint Tryon

b.	Reports on Form 8-K:
	The Company did not file a Form 8-K during the three months ended March 31, 2003.

22

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act as of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MEADOW VALLEY CORPORATION (Registrant)
By	/s/ Bradley E. Larson
	Bradley E. Larson
	President and Chief Executive Officer
By	/s/ Clint Tryon
	Clint Tryon
	Principal Accounting Officer

23

Certification

     I, Bradley E. Larson, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Meadow Valley Corporation;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 15, 2003	/s/ Bradley E. Larson
	Bradley E. Larson
	President and Chief Executive Officer

24

Certification

I, Clint Tryon, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Meadow Valley Corporation;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 15, 2003	/s/ Clint Tryon
	Clint Tryon
	Principal Accounting Officer

25

INDEX TO EXHIBITS

Exhibits:
10.231	Amendment of Amended and Restated Revolving Loan Agreement with The CIT Group/Equipment Financing, Inc.
10.232	Amendment of Revolving Loan Agreement with The CIT Group/Equipment Financing, Inc.
10.233	Indemnification Agreement with Clint Tryon
10.234	Master Lease Agreement with The CIT Group/Equipment Financing, Inc.
10.235	Lease Agreement with The CIT Group/Equipment Financing, Inc.
10.236	Lease Agreement with The CIT Group/Equipment Financing, Inc.
10.237	Lease Agreement with Caterpillar Financial Services Corporation
10.238	Lease Agreement with Caterpillar Financial Services Corporation
99.15	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Bradley E. Larson
99.16	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Clint Tryon

EX-10.231 3 p67796exv10w231.txt EX-10.231 Exhibit - 10.231 CIT Tel: 800 553-8778 Equipment Rental and Finance - US P.O. Box 27248 1540 W. Fountainhead Parkway Tempe, AZ 85285-7248 Tempe, AZ 85282 www.cit.com [CIT LOGO] Meadow Valley Contractors, Inc. 4411 South 44th Street #D-11 Phoenix, AZ 85040 RE: AMENDMENT OF AMENDED AND RESTATED REVOLVING LOAN AGREEMENT, ACCOUNT #90045210 Gentlemen: Reference is made to the Amended and Restated Revolving Loan Agreement, dated July 27, 2001, as amended (the "Loan Agreement"), between Meadow Valley Contractors, Inc., (the "Company") and The CIT Group/Equipment Financing, Inc. ("CIT"). The Loan Agreement shall be amended as follows: 1. Section 5 of the Loan Agreement: "governing rate" plus 1.50%, is amended to read: "governing rate" plus 1.25%. Except as modified herein, the Loan Agreement and all documents executed in connection therewith shall continue in full force and effect. Dated: April 1, 2003 Sincerely, THE CIT GROUP/EQUIPMENT FINANCING, INC. By: Title ------------------- ------------ ACKNOWLEDGED AND AGREED TO: MEADOW VALLEY CONTRACTORS, INC. By: Bradley E. Larson Title President ---------------------- ----------- GUARANTOR ACKNOWLEDGEMENT: MEADOW VALLEY CORPORATION By: Kenneth D. Nelson Title V.P. ---------------------- ----------- READY MIX, INC. By: Clint Tryon Title Sec/Treas ---------------------- ----------- EX-10.232 4 p67796exv10w232.txt EX-10.232 Exhibit 10.232 CIT Tel: 800 553-8778 Equipment Rental and Finance--US P.O. Box 27248 1540 W. Fountainhead Parkway Tempe, AZ 85285-7248 Tempe, AZ 85282 www.cit.com [CIT LOGO] Ready Mix, Inc. 3430 E. Flamingo Rd. #100 Las Vegas, NV 89121-5018 RE: AMENDMENT OF REVOLVING LOAN AGREEMENT Gentlemen: Reference is made to the Revolving Loan Agreement, dated July 27, 2001, as amended (the "Loan Agreement"), between Ready Mix, Inc., (the "Company") and The CIT Group/Equipment Financing, Inc. ("CIT"). The Loan Agreement shall be amended as follows: 1. Section 1 of the Loan Agreement: "governing rate" plus 1.50%, is amended to ----- read: "governing rate" plus 1.25%. ----- Except as modified herein, the Loan Agreement and all documents executed in connection therewith shall continue in full force and effect. Sincerely, The CIT Group/Equipment Financing, Inc. By Title: ------------------ ---------- ACKNOWLEDGED AND AGREED TO: GUARANTOR ACKNOWLEDGEMENT: Ready Mix, Inc. Meadow Valley Corporation By:/s/ Clint Tryon Title: Sec/Treas. By:/s/ Kenneth D. Nelson Title: V.P. ----------------- ---------- --------------------- --------- April 1, 2003 Meadow Valley Contractors, Inc. By:/s/ Bradley E. Larson Title: President --------------------- ---------- EX-10.233 5 p67796exv10w233.txt EX-10.233 Exhibit - 10.233 READY MIX, INC. OFFICER/DIRECTOR INDEMNIFICATION AGREEMENT ------------------------------------------ THIS AGREEMENT ("Agreement") is entered into and effective this 16th day of April, 2003, by and between Ready Mix, Inc., a Nevada corporation ("Corporation"), and Clint Tryon ("Indemnified Party"). WHEREAS, the Board of Directors of the Corporation have determined that it is in the best interest of each respective Corporation and its shareholders to agree to indemnify Indemnified Party (who is a Director and/or Officer of the Corporation) from and against certain liabilities for actions taken by him/her during the performance of his/her tasks for the Corporation. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. INDEMNIFICATION. The Corporation hereby agrees to indemnify and hold harmless Indemnified Party to the maximum extent possible under all applicable laws against any and all claims, demands, debts, duties, liabilities, judgments, fines and amounts paid in settlement and expenses (including attorneys' fees and expenses) actually and reasonably incurred by Indemnified Party in connection with the investigation, defense, negotiation and settlement of any such claim or any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action by or in the right of any of the Corporation) to which Indemnified Party is or becomes a party, or is threatened to be made a party, by reason of the fact that Indemnified Party is an officer or a director of the Corporation or any of its subsidiaries. 2. LIMITATIONS ON INDEMNITY. No indemnity pursuant to this Agreement shall be made by the Corporation: (a) For the amount of such losses for which the Indemnified Party is indemnified pursuant to any insurance purchased and maintained by the Corporation; or (b) In respect to remuneration paid to Indemnified Party if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law; or (c) On account of any suit in which judgment is rendered against Indemnified Party for an accounting of profits made (i) for an improper personal profit without full and fair disclosure to the Corporation of all material conflicts of interest and not approved thereof by a majority of the disinterested members of the Board of Directors of the Corporation; or (ii) from the purchase or sale by Indemnified Party of securities of the Corporation pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local law; or (d) On account of Indemnified Party's conduct which is finally determined to have been knowingly fraudulent, deliberately dishonest or willfully in violation of applicable law for which the corporation suffered actual financial damages; or (e) If a final decision by a court having jurisdiction in the matter shall determine that such indemnification is not lawful. 3. CONTINUATION OF INDEMNITY. All agreements and obligations of the Corporation contained herein shall continue during the period Indemnified Party is an officer or director of the Corporation or a subsidiary and thereafter so long as Indemnified Party shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal or investigative, by reason of the fact that Indemnified Party was an officer or a director of the Corporation or any subsidiary. 4. NOTIFICATION OF DEFENSE OF CLAIM. Within 30 days after receipt by Indemnified Party of notice of any claim or any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, in which Indemnified Party has a right to Indemnification hereunder, Indemnified Party will notify the Corporation of the commencement thereof. With respect to any such action, suit or proceeding as to which Indemnified Party notifies the Corporation of the commencement thereof: (a) The Corporation will be entitled to participate therein at its own expense; and (b) Except as otherwise provided below, to the extent that it may wish, the Corporation jointly with any other indemnifying party will be entitled to assume the defense thereof, with counsel satisfactory to Indemnified Party. After notice from the Corporation to Indemnified Party of its election to assume the defense thereof, the Corporation will not be liable to Indemnified Party under this Agreement for any legal or other expenses subsequently incurred by Indemnified Party in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. Indemnified Party shall have the right to employ counsel in such action, suit or proceeding, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Indemnified Party, unless (i) the employment of counsel by Indemnified Party has been authorized by the Corporation, (ii) Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Corporation and Indemnified Party in the conduct of the defense of such action, (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel shall be at the expense of the Corporation, or (iv) unless the Indemnified 2 Party reasonably and in good faith asserts defenses and theories of defense not asserted by the Corporation. The Corporation shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Corporation or as to which Indemnified Party shall have made the conclusion provided for in (ii) or (iv) above. (c) The Corporation shall not be liable to indemnify Indemnified Party under this Agreement for any amounts paid in settlement of any action or claim effected without the Corporation's written consent. The Corporation shall not settle any action or claim in any manner which would impose any penalty or limitation on Indemnified Party without Indemnified Party's written consent. Neither the Corporation or Indemnified Party will unreasonably withhold their consent to any proposed settlement. 5. REPAYMENT OF EXPENSES. Indemnified Party agrees that Indemnified Party will reimburse the Corporation for all reasonable expenses paid by the Corporation in defending any civil or criminal action, suit or proceeding against Indemnified Party in the event and only to the extent that Indemnified Party is finally determined that Indemnified Party is not entitled to be indemnified by the Corporation for such expenses under the Corporation's charter or bylaws, this Agreement or under applicable law. 6. ENFORCEMENT. (a) The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on the Corporation hereby in order to induce Indemnified Party to serve as an officer and/or director of the Corporation or any subsidiary thereof, and acknowledges that Indemnified Party is relying upon this Agreement as part of the consideration for so acting. (b) In the event Indemnified Party is required to bring any action to enforce rights or to collect moneys due under this Agreement and is successful in such action, the Corporation shall reimburse Indemnified Party for all of Indemnified Party's reasonable attorneys' and other fees and expenses in bringing and pursuing such action. 7. SEVERABILITY. Each of the provisions of this Agreement is a separate and distinct agreement and independent of the others, so that if any provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions hereof. 8. GOVERNING LAW; BINDING EFFECT; AMENDMENT AND TERMINATION. (a) This Agreement shall be interpreted and enforced in accordance with the laws of the State of Arizona. (b) This Agreement shall be binding upon Indemnified Party and upon the Corporation, its successors and assigns, and shall inure to the benefit of 3 Indemnified Party, his heirs, personal representatives and assigns and to the benefit of the Corporation, its successors and assigns. (c) No amendment, modification, termination or change of this Agreement shall be effective unless it is signed by both parties hereto. 9. ADDITIONAL RIGHTS. This Agreement is in addition to, and not in lieu of, any other right to indemnification under the Corporation's corporate charter, bylaws, insurance contracts or otherwise at law or in equity. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written. READY MIX, INC. By: /s/ Kenneth D. Nelson --------------------------------- Kenneth D. Nelson, Vice President Indemnified Party: /s/ Clint Tryon --------------------------------- Clint Tryon 4 EX-10.234 6 p67796exv10w234.txt EX-10.234 EXHIBIT-10.234 MASTER LEASE AGREEMENT MASTER LEASE AGREEMENT ("Master Lease") dated as of 3-31-03 between The CIT Group/Equipment Financing, Inc. (Lessor), having a place of business at P. O. Box 27248 Tempe AZ 85285-7248, -------------------------------------------------- Address City State Zip Code and Meadow Valley Contractors, Inc. ("Lessee"), ----------------------------------------------------------------- having a place of business at 4411 S. 40th Street Phoenix AZ 85040 . -------------------------------------------------- Address City State Zip Code This Master Lease Agreement provides a set of terms and conditions that the parties hereto intend to be applicable to various transactions for the lease of personal property. Each lease contract shall be evidenced by an equipment schedule ("Schedule") executed by Lessor and Lessee that explicitly incorporates the provisions of this Master Lease Agreement and that sets forth specific terms of that particular lease contract. Where the provisions of a Schedule conflict with the terms hereof, the provisions of the Schedule shall prevail. Each Schedule shall constitute a complete and separate lease agreement, independent of all other Schedules, and without any requirement of being accompanied by an originally executed copy of this Master Lease Agreement. The term "Lease" when used herein shall refer to an individual Schedule. One originally executed copy of the Schedule shall be denominated "Originally Executed Copy No. 1 of 1 originally executed copies" and such copy shall be retained by Lessor. If more than one copy of the Schedule is executed by Lessor and Lessee, all such other copies shall be numbered consecutively with numbers greater than 1. Only transfer of possession by Lessor of the originally executed copy denominated "Originally Executed Copy No. 1" shall be effective for purposes of perfecting an interest in such Schedule by possession. 1. EQUIPMENT LEASED AND TERM. This Lease shall cover such personal property as is described in any Schedule executed by or pursuant to the authority of Lessee, accepted by Lessor in writing and identified as a part of this Lease (which personal property with all replacement parts, additions, repairs, accessions and accessories incorporated therein and/or affixed thereto is hereinafter called the "Equipment"). Lessor hereby leases to Lessee and Lessee hereby hires and takes from Lessor, upon and subject to the covenants and conditions hereinafter contained, the Equipment described in any Schedule. NOTWITHSTANDING THE COMMENCEMENT DATE OF THE TERM OF THIS LEASE WITH RESPECT TO ANY ITEM OF EQUIPMENT, LESSEE AGREES THAT ALL RISK OF LOSS OF THE EQUIPMENT SHALL BE ON LESSEE FROM AND AFTER SHIPMENT OF THE EQUIPMENT TO LESSEE BY THE SELLER THEREOF, F.O.B. seller's point of shipment, the date of such shipment being hereinafter called "date of shipment." The term of this Lease with respect to any item of Equipment shall be for the period as set forth in the Schedule. Lessee hereby gives Lessor authority to insert the actual commencement date and date of first monthly rental for any item of Equipment in any Schedule as well as such items as serial numbers if such are not already inserted when such Schedule is executed by Lessee. "Seller" as used in this Lease means the supplier from which Lessor acquires any item of Equipment. 2. RENT. The aggregate rent payable with respect to each item of Equipment shall be in the amount shown with respect to such item on the Schedule. Lessee shall pay to Lessor the aggregate rental for each item of Equipment for the full period and term for which the Equipment is leased, such rental to be payable at such times and in such amounts for each item of Equipment as shown in the applicable Schedule. All rent shall be paid at Lessor's place of business shown above, or such other place as Lessor may designate by written notice to the Lessee. ALL RENTS SHALL BE PAID WITHOUT NOTICE OR DEMAND AND WITHOUT ABATEMENT, DEDUCTION OR SET OFF OF ANY AMOUNT WHATSOEVER. The operation and use of the Equipment shall be at the risk of Lessee and not of Lessor and the obligation of Lessee to pay rent hereunder shall be unconditional. 795 (2/02) Master Lease Agreement-CIT as Lessor Page 1 of 7 3. DESTRUCTION OF EQUIPMENT. If any Equipment is lost, totally destroyed, damaged beyond repair or taken by governmental action, the liability of the Lessee to pay rent therefor may be discharged by paying to Lessor all the rent due thereon, plus all the rent to become due thereon less the net amount of the recovery, if any, actually received by Lessor from insurance or otherwise for such loss or damage. In the event of partial destruction of any Equipment, the rent due and to become due thereon shall not abate and Lessee shall, at its own expense, cause such Equipment to be restored to usable condition, but Lessor shall, upon receiving satisfactory evidence of such restoration, promptly pay Lessee the proceeds of any insurance or compensation received by reason of such damage. If the estimated cost of restoring such Equipment exceeds 50% of the unmatured rent therefor, such Equipment shall, on notice by Lessee, be deemed, for all purposes hereof, to be totally destroyed and the liability of the Lessee to pay rent therefor shall be discharged if Lessee pays the rent described in the preceding paragraph of this Section. Lessor shall not be obligated to undertake by litigation or otherwise the collection of any claim against any person for loss or damage to the Equipment. Except as expressly provided above, the total or partial destruction of any Equipment or the total or partial loss of use or possession thereof to Lessee shall not release or relieve Lessee from the duty to pay the rent herein provided. 4. NO WARRANTIES BY LESSOR; MAINTENANCE AND COMPLIANCE WITH LAWS. Lessor, not being the manufacturer of the Equipment, nor manufacturer's agent, MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE FITNESS, QUALITY, DESIGN, CONDITION, CAPACITY, SUITABILITY, MERCHANTABILITY OR PERFORMANCE OF THE EQUIPMENT OR OF THE MATERIAL OR WORKMANSHIP THEREOF, IT BEING AGREED THAT THE EQUIPMENT IS LEASED "AS IS" AND THAT ALL SUCH RISKS, AS BETWEEN LESSOR AND LESSEE, ARE TO BE BORNE BY LESSEE AT ITS SOLE RISK AND EXPENSE, Lessee accordingly agrees not to assert any claim whatsoever against Lessor based thereon. Lessee further agrees, regardless of cause, not to assert any claim whatsoever against Lessor for loss of anticipatory profits or consequential damages. Lessor shall have no obligation to install, erect, test, adjust or service the Equipment. Lessee shall look to the manufacturer and/or Seller for any claims related to the Equipment. Lessor hereby acknowledges that any manufacturer's and/or Seller's warranties are for the benefit of both Lessor and Lessee. No oral agreement, guaranty, promise, condition, representation or warranty shall be binding; all prior conversations, agreements or representations related hereto and/or to the Equipment are integrated herein. Lessee agrees, at its own cost and expense: (a) to pay all shipping charges and other expenses incurred in connection with the shipment of the Equipment by the Seller to Lessee; (b) to pay all charges and expenses in connection with the operation of each item of Equipment; (c) to comply with all governmental laws, ordinances, regulations, requirements and rules with respect to the use, maintenance and operation of the Equipment; and (d) to make all repairs and replacements required to be made to maintain the Equipment in good condition, reasonable wear and tear excepted. 5. INSURANCE. Lessee shall maintain at all times on the Equipment, at its expense, all-risk physical damage insurance and comprehensive general and/or automobile (as appropriate) liability insurance (covering bodily injury and property damage exposures including, but not limited to, contractual liability and products liability) in such amounts, against such risks, in such form and with such insurers as shall be satisfactory to Lessor; provided, that the amount of all-risk physical damage insurance shall not on any date be less than the greater of the full replacement value or a sum equal to all the rent due thereon, plus all rent to become due. Each physical damage insurance policy will name Lessor as loss payee. Each liability insurance policy will name Lessor as additional insured. Each insurance policy will also require that the insurer give Lessor at least thirty (30) days prior written notice of any alteration in or cancellation of the terms of such policy and require that Lessor's interests be continued insured regardless of any breach or violation by Lessee or others of any warranties, declarations or conditions contained in such insurance policy. In no event shall Lessor be responsible for premiums, warranties or representations to any insurer or any agent thereof. Lessee shall furnish to Lessor a certificate or other evidence satisfactory to Lessor that such insurance coverage is in effect, but Lessor shall be under no duty to ascertain the existence or adequacy of such insurance. The insurance maintained by Lessee shall be primary without any right of contribution from insurance which may be maintained by Lessor. Lessee shall be liable for all deductible portions of all required insurance. Lessor may, at its own expense, for its own benefit, purchase insurance in excess of that required under this Lease Agreement. Physical damage insurance proceeds shall be applied as set forth in Section 6. 795 (2/02) Master Lease Agreement - CIT as Lessor Page 2 of 7 6. LOSS AND DAMAGE. Lessee agrees to assume and bear the entire risk of any partial or complete loss with respect to the Equipment from any and every cause whatsoever including theft, loss, damage, destruction or governmental taking, whether or not such loss is covered by insurance or caused by any default or neglect of Lessee. Lessee agrees to give Lessor prompt notice of any damage to or loss of any Equipment. All physical damage insurance proceeds shall be payable directly to Lessor. Following payment of such loss, and if no Event of Default as defined in Section 11 has occurred and remains continuing, Lessor will then: (a) transfer to Lessee Lessor's rights to such Equipment "as-is, where-is and with all defects," without recourse and without representation or warranty, express or implied, other than a warranty that the Equipment is free and clear of any liens created by Lessor; and (b) remit to Lessee any physical damage insurance proceeds arising out of such loss in excess of the sum due the Lessor. Lessee shall determine in the exercise of its reasonable judgment whether the Equipment is damaged beyond repair, subject to Lessor's approval. In the event of damage or loss which does not result in damage beyond repair or a total loss of the Equipment or any item thereof, Lessee shall cause the affected Equipment to be restored to the condition required by the terms of this Lease. Upon completion of such repair and after supplying Lessor with satisfactory evidence thereof (and providing no Event of Default has occurred and remains continuing), Lessee shall be entitled to receive any insurance proceeds or other recovery to which Lessor would otherwise be entitled in connection with such loss up to the amount expended by Lessee in making the repair. Lessor shall not be obligated to undertake by litigation or otherwise the collection of any claim against any person for loss of, damage to, or governmental taking of the Equipment, but Lessor will cooperate with Lessee at Lessee's expense to pursue such claims. Except as expressly provided above, the total or partial destruction of any Equipment or Lessee's total or partial loss of use or possession thereof shall not release or relieve Lessee from its obligations under this Master Lease or any Schedule including the duty to pay the rent(s) herein provided. 7. TAXES. Lessee agrees that, during the term of this Lease, in addition to the rent and all other amounts provided herein to be paid, it will promptly pay all taxes, assessments and other governmental charges (including penalties and interest, if any, and fees for titling or registration, if required) levied or assessed: (a) upon the interest of Lessee in the Equipment or upon the use or operation thereof or on the earnings arising therefrom, and (b) against Lessor on account of its acquisition or ownership of the Equipment or any part thereof, or the use or operation thereof or the leasing hereof to Lessee, or the rent herein provided for, or the earnings arising therefrom, exclusive, however, of any taxes based on net income of Lessor. Lessee agrees to file, in behalf of Lessor, all required tax returns and reports concerning the Equipment with all appropriate governmental agencies, and within not more than 45 days after the due date of such filing to send Lessor confirmation, in form satisfactory to Lessor, of such filing. 8. LESSOR'S TITLE, RIGHT OF INSPECTION AND IDENTIFICATION OF EQUIPMENT. TITLE TO THE EQUIPMENT SHALL AT ALL TIMES REMAIN IN LESSOR, except as provided in the next sentence. With respect to any software financed hereunder as to which Lessor is not the licensee or licensor, Lessee hereby grants Lessor a security interest in such software to secure the payment and performance of Lessee's obligations under this Lease. Lessee will at all times protect and defend, at its own cost and expense, the title of Lessor from and against all claims, liens and legal processes of creditors of Lessee and keep all the Equipment free and clear from all such claims, liens and processes. The Equipment is and shall remain personal property. Upon the expiration or termination of this Lease with respect to any item of Equipment: (a) Lessee at Lessee's sole expense shall return such Equipment unencumbered to Lessor at the place where the rent is payable or to such other place as Lessor and Lessee agree upon, and in the same condition as when received by Lessee, reasonable wear and tear resulting from use thereof alone excepted; or (b) in lieu of returning such Equipment to Lessor, Lessee agrees that Lessee will, upon request of Lessor, store such Equipment on Lessee's premises, at an inside location protected from the weather and elements, without charge to Lessor for a period of 180 days following the date of expiration or termination of this Lease. During such storage period Lessee shall not use the Equipment for any purpose. Upon expiration of such storage period Lessee will return such Equipment to Lessor in accordance with the provisions of (a) above. 795 (2/02) Master Lease Agreement - CIT as Lessor Page 3 of 7 Lessor shall have the right from time to time during reasonable business hours to enter upon Lessee's premises or elsewhere for the purpose of confirming the existence, condition and proper maintenance of the Equipment and during any period of storage Lessor shall also have the right to demonstrate and show the Equipment to others. The foregoing rights of entry are subject to any applicable governmental laws, regulations and rules concerning industrial security. Lessee shall, upon the request of Lessor, and at its own expense firmly affix to the Equipment, in a conspicuous place, such a decalcomania or metal plate as shall be supplied by Lessor showing the Lessor as the owner and lessor of such Equipment. 9. POSSESSION, USE AND CHANGES IN LOCATION OF EQUIPMENT. So long as Lessee shall not be in default under the Lease it shall be entitled to the possession and use of the Equipment in accordance with the terms of this Lease. The Equipment shall be used in the conduct of the lawful business of Lessee, and no item of Equipment shall be removed from its location shown on the Schedule, without the prior written consent of Lessor. Lessee shall not, without Lessor's prior written consent, part with possession or control of the Equipment or attempt or purport to sell, pledge, mortgage or otherwise encumber any of the Equipment or otherwise dispose of or encumber any interest under this Lease. 10. PERFORMANCE OF OBLIGATIONS OF LESSEE BY LESSOR. In the event that the Lessee shall fail duly and promptly to perform any of its obligations under the provisions of Sections 4, 5, 6, 7, and 8 of this Lease, Lessor may, at its option, perform the same for the account of Lessee without thereby waiving such default, and any amount paid or expense (including reasonable attorneys' fees), penalty or other liability incurred by Lessor in such performance, together with interest at the rate of 1 1/2% per month thereon (but in no event greater than the highest rate permitted by relevant law) until paid by Lessee to Lessor, shall be payable by Lessee upon demand as additional rent for the Equipment. Lessee shall be responsible for and pay to Lessor a returned check fee, not to exceed the maximum permitted by law, which fee will be equal to the sum of (i) the actual bank charges incurred by Lessor plus (ii) all other actual costs and expenses incurred by Lessor. The returned check fee is payable upon demand as additional rent under this Lease. 11. DEFAULT. An Event of Default shall occur if: (a) Lessee fails to pay when due any installment of rent and such failure continues for a period of 10 days; (b) Lessee shall fail to perform or observe any covenant, condition or agreement to be performed or observed by it hereunder and such failure continues uncured for 15 days after written notice thereof to Lessee by Lessor; (c) Lessee ceases doing business as a going concern, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts as they become due, files a voluntary petition in bankruptcy, is adjudicated a bankrupt or an insolvent, files a petition seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar arrangement under any present or future statute, law or regulation or files an answer admitting the material allegations of a petition filed against it in any such proceeding, consents to or acquiesces in the appointment of a trustee, receiver, or liquidator of it or of all or any substantial part of its assets or properties, or if it or its shareholders shall take any action looking to its dissolution or liquidation; (d) within 60 days after the commencement of any proceedings against Lessee seeking reorganization, arrangement, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceedings shall not have been dismissed, or if within 60 days after the appointment without Lessee's consent or acquiescence of any trustee, receiver or liquidator of it or of all or any substantial part of its assets and properties, such appointment shall not be vacated; (e) Lessee attempts to remove, sell, transfer, encumber, part with possession or sublet the Equipment or any item thereof; or (f) a third party takes any action to foreclose on, obtain possession or control of, collect, sell or otherwise dispose of or exercise any rights with respect to any of the Equipment without the express written consent of Lessor. Upon the occurrence of an Event of Default, Lessor shall have all the rights and remedies provided by applicable law and by this Lease. Notwithstanding that this Agreement is a lease and title to the Equipment is at all times in Lessor, Lessor may nevertheless at its option choose those rights and remedies of a secured party under the Uniform Commercial Code. In addition, Lessor, at its option, may: (a) declare all sums due and to become due hereunder immediately due and payable, but in no event shall the Lessee, upon demand by Lessor for payment of the unpaid rent, upon acceleration of the maturity thereof or otherwise, be obligated to pay any amount in excess of that permitted by law; 795 (2/02) Master Lease Agreement - CIT as Lessor Page 4 of 7 (b) proceed by appropriate court action or actions or other proceedings either at law or equity to enforce performance by the Lessee of any and all covenants of this Lease and to recover damages for the breach thereof; (c) demand that Lessee deliver the Equipment forthwith to Lessor at Lessee's expense at such place as Lessor may designate; and (d) Lessor and/or its agents may without notice or liability or legal process, enter into any premises of or under control or jurisdiction of Lessee or any agent of Lessee where the Equipment may be or by Lessor is believed to be, and repossess all or any item thereof, disconnecting and separating all thereof from any other property and using all force necessary or permitted by applicable law so to do, Lessee hereby expressly waiving all further rights to possession of the Equipment and all claims for injuries suffered through or loss caused by such repossession; Lessor may sell or lease the Equipment at a time and location of its choosing provided that the Lessor acts in good faith and in a commercially reasonable manner, but the Lessor shall nevertheless, be entitled to recover immediately as liquidated damages for loss of the bargain and not as a penalty any unpaid rent that accrued on or before the occurrence of the event of default plus an amount equal to the difference between the aggregate rent reserved hereunder for the unexpired term of this Lease and the then aggregate rental value of all Equipment for such unexpired term, provided, however, that if any statute governing the proceeding in which such damages are to be proved specifies the amount of such claim, Lessor shall be entitled to prove as and for damages for the breach an amount equal to that allowed under such statute. The provisions of this paragraph shall be without prejudice to any rights given to the Lessor by such statute to prove for any amounts allowed thereby. Should any proceedings be instituted by or against Lessor for monies due to Lessor hereunder and/or for possession of any or all of the Equipment or for any other relief, Lessee shall pay a reasonable sum as attorneys' fees. No remedy of Lessor hereunder shall be exclusive of any remedy herein or by law provided, but each shall be cumulative and in addition to every other remedy. 12. INDEMNITY. Lessee agrees that Lessor shall not be liable to Lessee for, and Lessee shall indemnify and save Lessor harmless from and against any and all liability, loss, damage, expense, causes of action, suits, claims or judgments arising from or caused directly or indirectly by: (a) Lessee's failure to promptly perform any of its obligations under the provisions of Sections 4, 5, 6, 7 and 8 of this Lease; or (b) injury to persons or damage to property resulting from or based upon actual or alleged use, operation, delivery or transportation of any or all of the Equipment or its location or condition; or (c) inadequacy of the Equipment, or any part thereof, for any purpose or any deficiency or defect therein or the use or maintenance thereof or any repairs, servicing or adjustments thereto or any delay in providing or failure to provide any thereof or any interruption or loss of service or use thereof or any loss of business; and shall, at its own cost and expense, defend any and all suits which may be brought against Lessor, either alone or in conjunction with others upon any such liability or claim or claims and shall satisfy, pay and discharge any and all judgments and fines that may be recovered against Lessor in any such action or actions, provided, however, that Lessor shall give Lessee written notice of any such claim or demand. Lessee agrees that its obligations under this Section 12 shall survive the expiration or termination of this Lease. 13. ASSIGNMENT, NOTICES AND WAIVERS. This Lease and all rights of Lessor hereunder shall be assignable by Lessor without Lessee's consent, but Lessee shall not be obligated to any assignee of Lessor except after written notice of such assignment from Lessor. Following such assignment, solely for the purpose of determining assignee's rights hereunder, the term "Lessor" shall be deemed to include or refer to Lessor's assignee. WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, LESSEE SHALL NOT ASSIGN THIS LEASE OR ITS INTERESTS HEREUNDER OR ENTER INTO ANY SUB-LEASE WITH RESPECT TO THE EQUIPMENT COVERED HEREBY, IT BEING AGREED LESSOR WILL NOT UNREASONABLY WITHHOLD ITS CONSENT TO A SUB-LEASE OF THE EQUIPMENT. All notices to Lessor shall be delivered in person to an officer of the Lessor, or shall be sent certified mail return receipt requested to Lessor at its address shown herein or at any later address last known to the sender. All notices to Lessee shall be in writing and shall be delivered by mail at its address shown herein or at any later address last known to the sender. A waiver of a default shall not be a waiver of any other or a subsequent default. 14. FURTHER ASSURANCES. Lessee shall execute and deliver to Lessor, upon Lessor's request such instruments and assurances as Lessor deems necessary or advisable for the confirmation or perfection of this Lease and Lessor's rights hereunder. Lessee may not terminate any Schedule without the written consent of Lessor. If Lessor in good faith believes itself insecure or performance impaired, it may declare a default hereunder or, instead of declaring a default, Lessor may demand, and Lessee hereby agrees to give, additional Equipment or other collateral as security for the obligations hereunder. If any of the Equipment consists of software, Lessee agrees, at Lessor's request, to inform Lessor of the name of the licensor of such software and to provide Lessor with a copy of the license agreement. 15. LEASE IRREVOCABILITY. 795 (2/02) Master Lease Agreement-CIT as Lessor Page 5 of 7 This Lease is irrevocable for the full terms thereof as set forth in any Schedule and for the aggregate rentals therein reserved and the rent shall not abate by reason of termination of Lessee's right of possession and/or the taking of possession by the Lessor or for any other reason. Any payment not made when due shall, at the option of Lessor, bear late charges thereon calculated at the rate of 1 1/2% per month, but in no event greater than the highest rate permitted by relevant law. 16. PURCHASE OPTION. If any Schedule has a purchase option price set forth therein with respect to the items of Equipment listed on such Schedule, then at the expiration of the original lease term in such Schedule with respect to such items of Equipment, if Lessee has paid in full all rentals owing under such Schedule, and be not then in default under this Lease (including all obligations under any Schedule), Lessee shall have the option to purchase ALL, BUT NOT LESS THAN ALL, THE ITEMS OF EQUIPMENT IN THE APPLICABLE SCHEDULE upon giving written notice not less than 30 DAYS prior to expiration of the original term thereof. The purchase price shall be as set forth in the applicable Schedule and shall be payable upon expiration of the original Lease term. If any Schedule does not contain a purchase option price, then Lessee shall not have an option to purchase any Equipment on such Schedule. Any purchase option price stated as "fair market value" ("FMV") for any item of Equipment on a Schedule shall be determined on the basis of, and shall be equal in amount to, the value which would obtain in an arm's length transaction between an informed and willing buyer-user (other than a Lessee currently in possession and a used Equipment dealer) and an informed and willing seller under no compulsion to sell and, in such determination, costs of removal of the items of Equipment from their location of current use shall not be a deduction from such value. 17. RENEWAL. Any renewal privilege shown on any Schedule with respect to any item of Equipment shall be exercised by Lessee giving Lessor a notice in writing and paying Lessor the amount of the renewal rental plus applicable taxes, at least 45 DAYS prior to the commencement of the renewal term of the Lease with respect to such item of Equipment. Upon such notification and payment, this Lease shall be renewed for the stated renewal period at the stated renewal rental with the other provisions and conditions of the lease continuing unchanged. 18. MISCELLANEOUS If any provision of this Lease is contrary to, prohibited by or deemed invalid under applicable laws or regulations of any jurisdiction, such provision shall be inapplicable and deemed omitted but shall not invalidate the remaining provisions hereof. IN THE EVENT THIS LEASE OR ANY PART HEREOF IS DEEMED TO CREATE A SECURITY INTEREST, LESSEE GRANTS LESSOR A SECURITY INTEREST IN EACH ITEM OF EQUIPMENT AS SECURITY FOR ALL OF LESSEE'S INDEBTEDNESS AND OBLIGATIONS OWING UNDER THIS LEASE AND UNDER EACH SCHEDULE AS WELL AS ALL OTHER PRESENT AND FUTURE INDEBTEDNESS AND OBLIGATIONS OF LESSEE TO LESSOR OF EVERY KIND AND NATURE WHATSOEVER. Lessee authorizes Lessor to file a financing statement with respect to the Equipment and ratifies the filing by Lessor of any such financing statement previously filed. If Lessee is an organization, Lessee (a) is the type of organization, (b) is organized under the laws of the jurisdiction, (c) has its chief executive office, and (d) if it is a "registered organization" as defined in Article 9 of the Uniform Commercial Code (i.e., organized solely under the laws of a single state and as to which the state must maintain a public record showing the organization to have been organized), has the organizational identification number (or, if none, has been assigned no such number by the state of organization), all as set forth under Lessee's name (which is its exact and complete legal name) at the signature line of this Lease. If Lessee is an individual, Lessee's exact and complete legal name and principal residence are as set forth at and under Lessee's name at the signature line of this Lease. Lessee agrees to notify Lessor in writing immediately in the event of a change in any of the foregoing facts and information. This lease contains the entire agreement between the parties with respect to the Equipment and may not be altered, modified, terminated or discharged except by a writing signed by the party against whom such alteration, modification, termination or discharge is sought. LESSEE'S INITIALS CT -- 19. SPECIAL PROVISIONS. 795 (2/02) Master Lease Agreement - CIT as Lessor Page 6 of 7 If Lessee is a corporation, this Lease is executed by authority of its Board of Directors. If Lessee is a partnership or joint venture, this Lease is executed by authority of all its partners or co-venturers. Dated: 3-31-03 ----------------------------- LESSEE: Meadow Valley Contractors, Inc. - -------------------------------------------------------------------------------- Name of individual, corporation or partnership By /s/ Clint Tryon Title Sec/Treas. --------------------------------- ----------------------------------- If corporation, have signed by President, Vice President or If owner or partner, state which. Treasurer, and give official title. If an organization, If an individual, Type of organization: Corporation Principal residence: --------------------- Jurisdiction of organization: Nevada --------------------- --------------------- Organizational identification number (or "None"): C1649-1980 --------------------- Location of chief executive office: Nevada --------------------- LESSOR: THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ Janae Tam Title Agent --------------------------------- ----------------------------------- - -------------------------------------------------------------------------------- If Lessee is a partnership, enter: Partners' names Home addresses - --------------- -------------- 795 (2/02) Master Lease Agreement -- CIT as Lessor Page 7 of 7 EX-10.235 7 p67796exv10w235.txt EX-10.235 EXHIBIT-10.235 EQUIPMENT SCHEDULE NO. 1, dated 3/31/03, to Master Lease Agreement, dated 3/31/03, between THE CIT GROUP/EQUIPMENT FINANCING, INC. ("Lessor") and Meadow Valley Contractors, Inc. ("Lessee"). This Equipment Schedule incorporates the terms and conditions of the above-referenced Master Lease Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Lessor of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. The Equipment listed on this Schedule will be located at 4411 S. 40th Street Phoenix AZ 85040 _______________________________________________________________________________ Address City County State Zip Code LEASE TERM: The term of this Lease for the items described in this Schedule shall be 42 months. RENTALS: For said term or any portion thereof, Lessee shall pay to Lessor the stated aggregate rentals, of which $0.00 is herewith paid in advance and the balance of the rentals is payable in 42 equal, successive, monthly payments as stated, of which the first is due on the first monthly rental date set forth below, and the others on a like date of each month thereafter, until fully paid.

- ----------------------------------------------------------------------------------------------------------- Item Description of Equipment Aggregate Monthly No. (Include make, kind of unit, year, model and serial number) Rental Rental - ----------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- One One (1) Volvo Model A35C Articulated Hauler, S/N A35CV60610 155,400.00 3,700.00 And all additions, substitutions, attachments, replacements and accessions thereof, plus the proceeds of all the forgoing. - -----------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------- Date Date of Renewals Purchase Item Lease Term First Monthly (No. of Years and Option No. Commences Rental Amount per Year) Price - ----------------------------------------------------------------------------------------------------------- 3/31/03 June 1, 2003 None 63,565.03 - ----------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------

796 (8/00) Equipment Schedule for Master Lease Agreement Page 1 of 2 The Lease term commences on 3/31/03. The first Monthly Rental is due on June 1, 2003. The Lease term may be renewed for N/A months with the Monthly Rental for such renewal term of None. The Lessee has the option to purchase the Equipment as of the last day of the initial Lease term for $63,565.03. Special Provisions Instructions SO AS LONG AS THERE ARE ANY OBLIGATIONS OUTSTANDING BY DEBTOR TO SECURED PARTY UNDER REVOLVING LOAN AGREEMENT DATED JULY 17, 2000 THE EQUIPMENT UNDER THE REVOLVING LOAN AGREEMENT SHALL ALSO SECURE ALL OBLIGATIONS OF THE LESSEE UNDER EQUIPMENT SCHEDULE NO 1 TO MASTER LEASE AGREEMENT. ACCEPTED: LESSEE: Meadow Valley Contractors, Inc. - ------------------------------------------ By Clint Tryon Title: Sec/Treas. ------------- ------------- LESSOR: The CIT Group/Equipment Financing, Inc. - ------------------------------------------ By Janae Tam Title: Agent ------------- ------------- 796 (8/00) Equipment Schedule for Master Lease Agreement Page 2 of 2 EX-10.236 8 p67796exv10w236.txt EX-10.236 EXHIBIT-10.236 EQUIPMENT SCHEDULE NO. 2, dated 3/31/03, to Master Lease Agreement, dated 3/31/03, between THE CIT GROUP/EQUIPMENT FINANCING, INC. ("Lessor") and Meadow Valley Contractors, Inc. ("Lessee"). This Equipment Schedule incorporates the terms and conditions of the above-referenced Master Lease Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Lessor of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. The Equipment listed on this Schedule will be located at 4411 S. 40th Street Phoenix AZ 85040 - -------------------------------------------------------------------------------- Address City County State Zip Code LEASE TERM: The term of this Lease for the items described in this Schedule shall be 42 months. RENTALS: For said term or any portion thereof, Lessee shall pay to Lessor the stated aggregate rentals, of which $0.00 is herewith paid in advance and the balance of the rentals is payable in 42 equal, successive, monthly payments as stated, of which the first is due on the first monthly rental date set forth below, and the others on a like date of each month thereafter, until fully paid.

- ------------------------------------------------------------------------------------------------------------ Item Description of Equipment Aggregate Monthly No. (Include make, kind of unit, year, model and serial number.) Rental Rental - ------------------------------------------------------------------------------------------------------------ One One (1) Volvo Model A35C Articulated Hauler, S/N A35CV60336 125,370.00 2,985.00 - ------------------------------------------------------------------------------------------------------------ And all additions, substitutions, attachments, replacements - ------------------------------------------------------------------------------------------------------------ and accessions thereof, plus the proceeds of all the - ------------------------------------------------------------------------------------------------------------ foregoing. - ------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------ Date Date of Renewals Purchase Item Lease Term First Monthly (No. of Years and Option No. Commences Rental Amount per Year) Price - ------------------------------------------------------------------------------------------------------------ 3/31/03 June 1, 2003 None 51,369.96 - ------------------------------------------------------------------------------------------------------------

796 (8/00) Equipment Schedule for Master Lease Agreement Page 1 of 2 The Lease Term commences on 3/31/03. The first Monthly Rental is due on June 1, 2003. The Lease term may be renewed for N/A months with the Monthly Rental for such renewal term of None. The Lessee has the option to purchase the Equipment as of the last day of the initial Lease term for $51,369.96. Special Provisions Instructions SO AS LONG AS THERE ARE ANY OBLIGATIONS OUTSTANDING BY DEBTOR TO SECURED PARTY UNDER THE REVOLVING LOAN AGREEMENT DATED JULY 17, 2000 THE EQUIPMENT UNDER THE REVOLVING LOAN AGREEMENT SHALL ALSO SECURE ALL OBLIGATIONS OF THE LESSEE UNDER EQUIPMENT SCHEDULE NO. 2 TO MASTER LEASE AGREEMENT. ACCEPTED: LESSEE: Meadow Valley Contractors, Inc. - ------------------------------------------------------------------- By /s/ Clint Tryon Title Sec/Treas. -------------------------- ------------------------------- LESSOR: The CIT Group/Equipment Financing, Inc. - ------------------------------------------------------------------- By /s/ Janae Tam Title Agent -------------------------- ------------------------------- 796 (8/00) Equipment Schedule for Master Lease Agreement Page 2 of 2 EX-10.237 9 p67796exv10w237.txt EX-10.237 EXHIBIT-10.237 CATERPILLAR FINANCIAL SERVICES CORPORATION FINANCE LEASE Dated as of ------------------------------ LESSEE: MEADOW VALLEY CONTRACTORS, INC. LESSOR: CATERPILLAR FINANCIAL SERVICES CORPORATION ADDRESS: 4411 S. 40TH ST. ADDRESS: 2120 West End Avenue PHOENIX, AZ 85040 Nashville, TN 37203 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) AP-1055B Caterpillar Asphalt Paver ABB00185 $4,423.53 $26,160.00 (1) BG-650 Caterpillar Paver 9EK00341 $1,782.12 $13,516.80

RENT TO BE PAID: in arrears (starts one month after Delivery Date) and every month thereafter. Lease term: 36 Months Utilization Date: May 25, 2003 The [_____] Mandatory Final Payment (Section 13) [X] Optional Final Payment (Section 14) is applicable to this Lease (check one) Location of Unit(s): 4411 SO. 40TH ST. PHOENIX, AZ 85040, MARICOPA ADDITIONAL PROVISIONS: RIDERS: 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 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 PO Box 100647 Pasadena, CA 91189-0647 or such other location Lessor designates in writing, rent for each Unit as stated above starting (a) on its Delivery Date if the rent is to be paid in advance, or (b) one month (or other period as stated above) after its Delivery Date if the rent is to be paid in arrears. An amount equal to the first rent payment for each Unit must accompany this document when it is submitted to Lessor. If Lessor executes this document, the amount shall be the first rent payment. If Lessor does not execute this document, the amount shall be returned to Lessee. If Lessor does not receive a rent payment on the date it is due, Lessee shall pay to Lessor, on demand, a late payment charge equal to five percent (5%) of the rent payment not paid when due or the highest charge allowed by law, whichever is less. 3. NO ABATEMENT: Lessee shall not be entitled to abatement or reduction of rent or setoff against rent for any reason whatsoever. Except as otherwise provided, this Lease shall not terminate because of, nor shall the obligations of Lessor or Lessee be affected by damage to, any defect in, destruction of, or loss of possession or use of a Unit; the attachment of any lien, security interest or other claim to a Unit; any interference with Lessee's use of a Unit; Lessee's insolvency or the commencement of any bankruptcy or similar proceeding by or against Lessee, or any other cause whatsoever. 4. DISCLAIMER OF WARRANTIES: Lessee acknowledges and agrees that Lessor is not the manufacturer of the Unit(s) and that Lessee has selected each Unit based on Lessee's own judgment without any reliance whatsoever on any statements or representations made by Lessor. AS BETWEEN LESSOR AND LESSEE, THE UNIT(S) ARE PROVIDED "AS IS" WITHOUT ANY WARRANTIES OF ANY KIND. LESSOR HEREBY EXPRESSLY DISCLAIMS a) ALL WARRANTIES OF MERCHANTABILITY, b) ALL WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, AND c) ALL WARRANTIES AGAINST INFRINGEMENT OR THE LIKE. Lessor assigns to Lessee its interest in any of the manufacturer's warranties on the Unit(s). 5. POSSESSION, USE AND MAINTENANCE: Lessee shall not (a) use, operate, maintain or store a Unit improperly, carelessly, unsafely or in violation of any applicable law or regulation or for any purpose other than in the conduct of Lessee's business; (b) abandon a Unit; (c) sublease a Unit, permit the use of a Unit by anyone other than Lessee, change the use of unit from that specified in the Application Survey/Usage Rider attached hereto, or change the location of a Unit from that specified above, without the prior written consent of Lessor; or (d) create or allow to exist any lien, claim, security interest or encumbrance on any of its rights hereunder or a Unit. A Unit is and shall remain personal property regardless of its use or manner of attachment to realty. Lessor and its agent shall have the right (but not the obligation) to inspect a Unit and maintenance records relating to it and observe its use. Lessee, at its expense, shall maintain each Unit in good operating order, repair and condition and shall perform maintenance at least as frequently as stated in any applicable operator's guide, service manual, or lubrication and maintenance guide. Lessee shall not alter any Unit or affix any accessory or equipment to it if doing so will impair its originally intended function or use or reduce its value. Any alteration or addition to a Unit shall be the responsibility of and at the sole risk of Lessee. All parts, accessories and equipment affixed to a Unit shall be subject to the security interest of Lessor. SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS Lessee: MEADOW VALLEY CONTRACTORS, INC. Lessor: CATERPILLAR FINANCIAL SERVICES CORPORATION By Kenneth D. Nelson By --------------------------------------------------- ---------------------------------------------------- Name (PRINT) Kenneth D. Nelson Name (PRINT) ----------------------------------------- ----------------------------------------- Title Vice President Title ------------------------------------------------ ----------------------------------------------- Date Date ------------------------------------------------- ------------------------------------------------ 6. TAXES: Lessee shall promptly pay or reimburse Lessor for all fees, charges and taxes of any nature, including, without limitation, personal property taxes, together with any penalties, fines or additions to tax and interest thereon (collectively, "Taxes") levied on or assessed against Lessor in connection with the ownership, leasing, rental, sale, possession, purchase, or use of a Unit; excluding however, all charges or taxes on or measured by Lessor's net income, or charges or taxes levied on or assessed against Lessor in connection with a Unit after the Unit is returned to Lessor in accordance with the terms of this Lease. If the reimbursement to Lessor of Taxes constitutes income for federal, state or local tax purposes and if the Lessor is not entitled to a deduction for the full amount of the reimbursement, the Lessee shall pay the Lessor an additional amount such that the net amount received by Lessor after payment of all related Taxes equals the amount which Lessor would have received if no such Taxes were payable. Lessee shall prepare and timely file, in a manner satisfactory to Lessor, any reports or returns which may be required with respect to a Unit, including, without limitation, personal property tax returns. For purposes of this section, in computing Lessor's Taxes attributable to a reimbursement, it shall be assumed that the Lessor is in the highest marginal tax rate applicable to corporations at the time the reimbursement is made, and that the term "Lessor" shall include any affiliated group, within the meaning of Section 1504 of the Internal Revenue Code of 1986, of which Lessor is a member for any year in which a consolidated or combined income tax return is filed for the affiliated group. 7. LOSS OR DAMAGE. Lessee shall bear the risk, of any Casualty Occurrence (the Unit is worn out, lost, stolen, destroyed, taken by government action or, in Lessor's opinion, irreparably damaged) or other damage from the time it is purchased by Lessor until it is returned to Lessor. Lessee shall give Lessor prompt notice of a Casualty Occurrence or other damage. If, in Lessor'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 lesser of (a) the sum of (i) all amounts then due under this Lease with respect to the Unit, (ii) the present value of all unpaid rent for the Unit, and (iii) the present value of the Purchase Price of the Unit as stated on the front hereof; or (b) the maximum amount permitted by law. Present values will be determined by discounting at the implicit interest rate of this Lease. Upon making this payment, the lease term with respect to the Unit shall terminate and Lessee shall be entitled to possession of the Unit and to any recovery in respect to it (subject to the rights of any insurer). 8. WAIVER AND INDEMNITY: LESSEE HEREBY AGREES TO RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS LESSOR, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS FROM AND AGAINST ANY CLAIMS OF LESSEE OR THIRD PARTIES, INCLUDING CLAIMS BASED UPON BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL INJURY, PROPERTY DAMAGE, STRICT LIABILITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR INJURY CAUSED BY OR RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY, CONDITION, OPERATION, USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY UNIT. FURTHER, LESSEE AGREES TO BE RESPONSIBLE FOR ALL COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEYS' FEES, INCURRED BY LESSOR OR ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS IN DEFENDING SUCH CLAIMS OR IN ENFORCING THIS PROVISION. UNDER NO CONDITION OR CAUSE OF ACTION SHALL LESSOR BE LIABLE FOR ANY LOSS OF ACTUAL OR ANTICIPATED BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES. 9. INSURANCE: Lessee, at its expense, shall keep each Unit insured for the benefit of Lessor against all risks for not less than the amount described in Section 7 and shall maintain comprehensive public liability insurance (including product and broad form contractual liability) covering the Unit for not less than $1,000,000 combined coverage for bodily injury and property damage. All insurance shall be in a form and with companies as Lessor shall approve, shall specify Lessor and Lessee as name insured, shall be primary, without the right of contribution from any other insurance carried by Lessor, and shall provide that the insurance may not be canceled or altered so as to affect the interest of Lessor without at least ten (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 this Lease. 11. REMEDIES: If an Event of Default occurs, Lessor may (a) proceed by court action to enforce performance by Lessee of the covenants of this Lease or to recover damages for their breach or (b) by notice in writing to Lessee terminate this Lease, in which event Lessee shall remain liable as provided herein and Lessor may do any one or more of the following: (i) declare the balance due (or the maximum amount permitted by law if recovery of the entire balance due is prohibited) with respect to each Unit immediately due and payable and recover any additional damages and expenses sustained by Lessor due to breach of any covenant, representation or warranty in this Lease other than for the payment of rent; (ii) enforce the security interest granted herein; (iii) require Lessee to return each Unit and additional security pursuant to Section 12; and (iv) enter the premises where any Unit or additional security may be and take possession of it without notice, liability or legal process. Lessee agrees to pay all charges, costs, expenses and reasonable attorney's fees incurred by Lessor in enforcing this Lease. Lessor has all rights given to a secured party by law. Lessor may undertake commercially reasonable efforts to sell or release a Unit and additional security, and the proceeds of any sale or 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 and additional security, including any taxes, charges, costs, expenses and reasonable attorney's fees incurred by Lessor: (ii) to pay Lessor all amounts which under the terms of this Lease are due or have accrued as of the date of Lessor's receipt of the proceeds: and (iii) to pay Lessor the balance due (or the maximum amount permitted by law if recovery of the entire balance due is prohibited) with respect to the Unit and additional security. Any surplus shall be paid to the person entitled to it. Lessee shall promptly pay any deficiency to Lessor. Lessee acknowledges that sales of cash or credit to a wholesaler, retailer or user of a Unit or additional security are all commercially reasonable. The remedies provided to Lessor shall be cumulative and shall be in addition to all other remedies existing at law or in equity. If Lessee fails to perform any of its obligations under this Lease, Lessor may perform the obligations, and the expenses incurred by Lessor as a result shall be payable by Lessee upon demand. 12. RETURN OF UNIT: If Lessor shall rightfully demand possession of a Unit, Lessee, at its expense, shall promptly deliver possession of the Unit to Lessor, properly protected and in the condition required by Section 5, at the option of Lessor, (a) to the premises of the nearest Caterpillar dealer selling equipment of the same type as the Unit, or (b) on board a carrier named by Lessor and shipping it, freight collect, to the destination designated by Lessor. If the Unit is not in the condition required by Section 5, Lessee shall pay to Lessor, on demand, all 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, including, but not limited to, proceeds in the form of chattel paper to secure the payment of all sums due hereunder. Lessee will, at its expense, do any act and execute, acknowledge, deliver, file, register and record any documents which Lessor deems desirable in its discretion to protect Lessor's security interest in the Unit and Lessor's rights and benefits under this Lease. Lessee hereby irrevocably appoints Lessor as Lessee's Attorney-in-Fact for the signing and filing of such documents and authorizes Lessor to delegate these limited powers. Lessee represents and warrants to Lessor that (a) Lessee has the power to make, 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, during the lease term, display in a prominent place on the Unit labels supplied by Lessor stating that the Unit is leased from Lessor. Lessee further represents and warrants to Lessor that Lessee is and shall remain a Corporation registered in the state of NV ("Business Location"); and Lessee will not change its form of business organization or Business Location without prior written notice to Lessor. 16. ASSIGNMENT; COUNTERPARTS: The rights of Lessor under this Lease and title to the Unit may be assigned by Lessor at any time. If notified by Lessor, Lessee shall make all payments due under this Lease to the party designated in the notice, without offset or deduction. No assignment of this Lease or any right or obligation under it may be made by Lessee without the prior written consent of Lessor. This Lease shall be binding upon and benefit Lessor and Lessee and their respective successors and assigns. If this Lease is assigned by Lessor to a partnership or trust, the term "Lessor" shall thenceforth mean and include the partnership or trust and shall also include, for purposes of Sections 4, 5, 6, 7, 8 and 9, each partner in or beneficiary of the partnership or trust. Although multiple counterparts of this document may be signed, only the counterpart accepted, acknowledged and certified by Caterpillar Financial Services Corporation on the signature page thereof as the original will constitute original chattel paper. 17. EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF LEASE; NOTICES: A delay or omission by Lessor to exercise any right or remedy shall not impair any right or remedy and shall not be construed as 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. APPLICABLE LAW, JURISDICTION AND JURY TRIAL WAIVER PROVISIONS: This Agreement shall be governed by and construed under the laws of the State of Tennessee, without giving effect to the conflict-of-laws principles thereof, and Lessee hereby consents to the jurisdiction of any state or federal court located within the State of Tennessee. THE PARTIES HERETO HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OBLIGATIONS OR THE COLLATERAL. 19. SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Lease shall be invalid under any law, it shall be deemed omitted but the remaining provisions hereof shall be given effect. All obligations of Lessee under this Lease shall survive the expiration or termination of this Lease to the extent required for their full observance and performance. EX-10.238 10 p67796exv10w238.txt EX-10.238 Exhibit - 10.238 CATERPILLAR FINANCIAL SERVICES CORPORATION FINANCE LEASE Dated as of ------------------------ LESSEE: MEADOW VALLEY CONTRACTORS, INC. ADDRESS: 4411 S. 40TH ST. PHOENIX, AZ 85040 LESSOR: CATERPILLAR FINANCIAL SERVICES CORPORATION ADDRESS: 2120 West End Avenue Nashville, TN 37203 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) USED 140H Caterpillar Motor Grader 2ZK02772 $2,950.77 $28,000.00 [ILLEGIBLE]

RENT TO BE PAID: in arrears (starts one month after Delivery Date) and every month thereafter. Lease Term: 36 Months Utilization Date: May 25, 2003 The [ ] Mandatory Final Payment (Section 13) [ X ] Optional Final Payment (Section 14) is applicable to this Lease (check one) Location of Unit(s): 4411 SO. 40TH ST. PHOENIX, AZ 85040, MARICOPA ADDITIONAL PROVISIONS: RIDERS: 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 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 PO Box 100647 Pasadena, CA 91189-0647 or such other location Lessor designates in writing, rent for each Unit as stated above starting (a) on its Delivery Date if the rent is to be paid in advance, or (b) one month (or other period as stated above) after its Delivery Date if the rent is to be paid in arrears. An amount equal to the first rent payment for each Unit must accompany this document when it is submitted to Lessor. If Lessor executes this document, the amount shall be the first rent payment. If Lessor does not execute this document, the amount shall be returned to Lessee. If Lessor does not receive a rent payment on the date it is due, Lessee shall pay to Lessor, on demand, a late payment charge equal to five percent (5%) of the rent payment not paid when due or the highest charge allowed by law, whichever is less. 3. NO ABATEMENT: Lessee shall not be entitled to abatement or reduction of rent or setoff against rent for any reason whatsoever. Except as otherwise provided, this Lease shall not terminate because of, nor shall the obligations of Lessor or Lessee be affected by damage to, any defect in, destruction of, or loss of possession or use of a Unit, the attachment of any lien, security interest or other claim to a Unit; any interference with Lessee's use of a Unit; Lessee's insolvency or the commencement of any bankruptcy or similar proceeding by or against Lessee, or any other cause whatsoever. 4. DISCLAIMER OF WARRANTIES: Lessee acknowledges and agrees that Lessor is not the manufacturer of the Unit(s) and that Lessee has selected each Unit based on Lessee's own judgment without any reliance whatsoever on any statements or representations made by Lessor. AS BETWEEN LESSOR AND LESSEE, THE UNIT(S) ARE PROVIDED "AS IS" WITHOUT ANY WARRANTIES OF ANY KIND. LESSOR HEREBY EXPRESSLY DISCLAIMS a) ALL WARRANTIES OF MERCHANTABILITY, b) ALL WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, AND c) ALL WARRANTIES AGAINST INFRINGEMENT OR THE LIKE. Lessor assigns to Lessee its interest in any of the manufacturer's warranties on the Unit(s). 5. POSSESSION, USE AND MAINTENANCE: Lessee shall not (a) use, operate, maintain or store a Unit improperly, carelessly, unsafely or in violation of any applicable law or regulation or for any purpose other than in the conduct of Lessee's business; (b) abandon a Unit; (c) sublease a Unit, permit the use of a Unit by anyone other than Lessee, change the use of unit from that specified in the Application Survey/Usage Rider attached hereto, or change the location of a Unit from that specified above, without the prior written consent of Lessor; or (d) create or allow to exist any lien, claim, security interest or encumbrance on any of its rights hereunder or a Unit. A Unit is and shall remain personal property regardless of its use or manner of attachment to realty. Lessor and its agent shall have the right (but not the obligation) to inspect a Unit and maintenance records relating to it and observe its use. Lessee, at its expense, shall maintain each Unit in good operating order, repair and condition and shall perform maintenance at least as frequently as stated in any applicable operator's guide, service manual, or lubrication and maintenance guide. Lessee shall not alter any Unit or affix any accessory or equipment to it if doing so will impair its originally intended function or use or reduce its value. Any alteration or addition to a Unit shall be the responsibility of and at the sole risk of Lessee. All parts, accessories and equipment affixed to a Unit shall be subject to the security interest of Lessor. SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS Lessee: MEADOW VALLEY CONTRACTORS, INC. By /s/ Kenneth D. Nelson ---------------------------------------------- Name (PRINT) /s/ Kenneth D. Nelson ------------------------------------ Title Vice President ------------------------------------------- Date 3- -------------------------------------------- Lessor: CATERPILLAR FINANCIAL SERVICES CORPORATION By ---------------------------------------------- Name (PRINT) ------------------------------------- Title -------------------------------------------- Date --------------------------------------------- 6. TAXES: Lessee shall promptly pay or reimburse Lessor for all fees, charges and taxes of any nature, including, without limitation, personal property taxes, together with any penalties, fines or additions to tax and interest thereon (collectively, "Taxes") levied on or assessed against Lessor in connection with the ownership, leasing, rental, sale, possession, purchase, or use of a Unit; excluding, however, all charges or taxes on or measured by Lessor's net income, or charges or taxes levied on or assessed against Lessor in connection with a Unit after the Unit is returned to Lessor in accordance with the terms of this Lease. If the reimbursement to Lessor of Taxes constitutes income for federal, state or local tax purposes and if the Lessor is not entitled to a deduction for the full amount of the reimbursement, the Lessee shall pay the Lessor an additional amount such that the net amount received by Lessor after payment of all related Taxes equals the amount which Lessor would have received if no such Taxes were payable. Lessee shall prepare and timely file, in a manner satisfactory to Lessor, any reports or returns which may be required with respect to a Unit, including, without limitation, personal property tax returns. For purposes of this section, in computing Lessor's Taxes attributable to a reimbursement, it shall be assumed that the Lessor is in the highest marginal tax rate applicable to corporations at the time the reimbursement is made, and that the term "Lessor" shall include any affiliated group, within the meaning of Section 1504 of the Internal Revenue Code of 1986, of which Lessor is a member for any year in which a consolidated or combined income tax return is filed for the affiliated group. 7. LOSS OR DAMAGE: Lessee shall bear the risk, of any Casualty Occurrence (the Unit is worn out, lost, stolen, destroyed, taken by government action or, in Lessor's opinion, irreparably damaged) or other damage from the time it is purchased by Lessor until it is returned to Lessor. Lessee shall give Lessor prompt notice of a Casualty Occurrence or other damage. If, in Lessor'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 lesser of (a) the sum of (i) all amounts then due under this Lease with respect to the Unit, (ii) the present value of all unpaid rent for the Unit, and (iii) the present value of the Purchase Price of the Unit as stated on the front hereof; or (b) the maximum amount permitted by law. Present values will be determined by discounting at the implicit interest rate of this Lease. Upon making this payment, the lease term with respect to the Unit shall terminate and Lessee shall be entitled to possession of the Unit and to any recovery in respect to it (subject to the rights of any insurer). 8. WAIVER AND INDEMNITY: LESSEE HEREBY AGREES TO RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS LESSOR, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS FROM AND AGAINST ANY CLAIMS OF LESSEE OR THIRD PARTIES, INCLUDING CLAIMS BASED UPON BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL INJURY, PROPERTY DAMAGE, STRICT LIABILITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR INJURY CAUSED BY OR RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY, CONDITION, OPERATION, USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY UNIT. FURTHER, LESSEE AGREES TO BE RESPONSIBLE FOR ALL COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEYS' FEES, INCURRED BY LESSOR OR ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS IN DEFENDING SUCH CLAIMS OR IN ENFORCING THIS PROVISION. UNDER NO CONDITION OR CAUSE OF ACTION SHALL LESSOR BE LIABLE FOR ANY LOSS OF ACTUAL OR ANTICIPATED BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES. 9. INSURANCE: Lessee, at its expense, shall keep each Unit insured for the benefit of Lessor against all risks for not less than the amount described in Section 7 and shall maintain comprehensive public liability insurance (including product and broad form contractual liability) covering the Unit for not less than $1,000,000 combined coverage for bodily injury and property damage. All insurance shall be in a form and with companies as Lessor shall approve, shall specify Lessor and Lessee as name insured, shall be primary, without the right of contribution from any other insurance carried by Lessor, and shall provide that the insurance may not be canceled or altered so as to affect the interest of Lessor without at least to (10) days' prior written notice to Lessor. All insurance covering loss or damage to a Unit shall name Lessor as loss payee. Lessee shall not make adjustments with insurers except with Lessor's prior written consent 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 this Lease. 11. REMEDIES: If an Event of Default occurs, Lessor may (a) proceed by court action to enforce performance by Lessee of the covenants of this Lease or to recover damages for their breach or (b) by notice in writing to Lessee terminate this Lease, in which event Lessee shall remain liable as provided herein and Lessor may do any one or more of the following: (i) declare the balance due (or the maximum amount permitted by law if recovery of the entire balance due is prohibited) with respect to each Unit immediately due and payable and recover any additional damages and expenses sustained by Lessor due to breach of any covenant, representation or warranty in this Lease other than for the payment of rent; (ii) enforce the security interest granted herein; (iii) require Lessee to return each Unit and additional security pursuant to Section 12; and (iv) enter the premises where any Unit or additional security may be and take possession of it without notice, liability or legal process. Lessee agrees to pay all charges, costs, expenses and reasonable attorney's fees incurred by Lessor in enforcing this Lease. Lessor has all rights given to a secured party by law. Lessor may undertake commercially reasonable efforts to sell or release a Unit and additional security, and the proceeds of any sale or 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 and additional security, including any taxes, charges, costs, expenses and reasonable attorney's fees incurred by Lessor; (ii) to pay Lessor all amounts which under the terms of this Lease are due or have accrued as of the date of Lessor's receipt of the proceeds; and (iii) to pay Lessor the balance due (or the maximum amount permitted by law if recovery of the entire balance due is prohibited) with respect to the Unit and additional security. Any surplus shall be paid to the person entitled to it. Lessee shall promptly pay any deficiency to Lessor. Lessee acknowledges that sales for cash or credit to a wholesaler, retailer or user of a Unit or additional security are all commercially reasonable. The remedies provided to Lessor shall be cumulative and shall be in addition to all other remedies existing at law or in equity. If Lessee fails to perform any of its obligations under this Lease, Lessor may perform the obligations, and the expenses incurred by Lessor as a result shall be payable by Lessee upon demand. 12. RETURN OF UNIT: If Lessor shall rightfully demand possession of a Unit, Lessee, at its expense, shall promptly deliver possession of the Unit to Lessor, properly protected and in the condition required by Section 5, at the option of Lessor, (a) to the premises of the nearest Caterpillar dealer selling equipment of the same type as the Unit, or (b) on board a carrier named by Lessor and shipping it, freight collect, to the destination designated by Lessor. If the Unit is not in the condition required by Section 5, Lessee shall pay to Lessor, on demand, all 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, including, but not limited to, proceeds in the form of chattel paper to secure the payment of all sums due hereunder. Lessee will, at its expense, do any act and execute, acknowledge, deliver, file, register and record any documents which Lessor deems desirable in its discretion to protect Lessor's security interest in the Unit and Lessor's rights and benefits under this Lease. Lessee hereby irrevocably appoints Lessor as Lessee's Attorney-in-Fact for the signing and filing of such documents and authorizes Lessor to delegate these limited powers. Lessee represents and warrants to Lessor that (a) Lessee has the power to make, 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, during the lease term, display in a prominent place on the Unit labels supplied by Lessor stating that the Unit is leased from Lessor. Lessee further represents and warrants to Lessor that Lessee is and shall remain a Corporation registered in the state of NV ("Business Location"); and Lessee will not change its form of business organization or Business Location without prior written notice to Lessor. 16. ASSIGNMENT; COUNTERPARTS: The rights of Lessor under this Lease and title to the Unit may be assigned by Lessor at any time. If notified by Lessor, Lessee shall make all payments due under this Lease to the party designated in the notice, without offset or deduction. No assignment of this Lease or any right or obligation under it may be made by Lessee without the prior written consent of Lessor. This Lease shall be binding upon and benefit Lessor and Lessee and their respective successors and assigns. If this Lease is assigned by Lessor to a partnership or trust, the term "Lessor" shall thenceforth mean and include the partnership or trust and shall also include, for purposes of Sections 4, 5, 6, 7, 8 and 9, each partner in or beneficiary of the partnership or trust. Although multiple counterparts of this document may be signed, only the counterpart accepted, acknowledged and certified by Caterpillar Financial Services Corporation on the signature page thereof as the original will constitute original chattel paper. 17. EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF LEASE; NOTICES: A delay or omission by Lessor to exercise any right or remedy shall not impair any right or remedy and shall not be construed as 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. APPLICABLE LAW, JURISDICTION AND JURY TRIAL WAIVER PROVISIONS: This Agreement shall be governed by and construed under the laws of the State of Tennessee, without giving effect to the conflict-of-laws principles thereof, and Lessee hereby consents to the jurisdiction of any state or federal court located within the State of Tennessee. THE PARTIES HERETO HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OBLIGATIONS OR THE COLLATERAL. 19. SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Lease shall be invalid under any law, it shall be deemed omitted but the remaining provisions hereof shall be given effect. All obligations of Lessee under this Lease shall survive the expiration or termination of this Lease to the extent required for their full observance and performance. EX-99.15 11 p67796exv99w15.txt EX-99.15 Exhibit-99.15 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Meadow Valley Corporation (the "Company") on Form 10-Q for the period ending March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bradley E. Larson, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Bradley E. Larson - ----------------------------------- Bradley E. Larson President and Chief Executive Officer May 15, 2003 EX-99.16 12 p67796exv99w16.txt EX-99.16 Exhibit-99.16 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Meadow Valley Corporation (the "Company") on Form 10-Q for the period ended March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Clint Tryon, Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Clint Tryon - ----------------------------------- Clint Tryon Principal Accounting Officer May 15, 2003 -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.231

                                                                Exhibit - 10.231

          CIT                                          Tel:  800 553-8778
          Equipment Rental and Finance - US            P.O. Box 27248
          1540 W. Fountainhead Parkway                 Tempe, AZ  85285-7248
          Tempe, AZ  85282                             www.cit.com


[CIT LOGO]

Meadow Valley Contractors, Inc.
4411 South 44th Street #D-11
Phoenix, AZ  85040

     RE:  AMENDMENT OF AMENDED AND RESTATED REVOLVING LOAN AGREEMENT,
          ACCOUNT #90045210

Gentlemen:

     Reference is made to the Amended and Restated Revolving Loan Agreement,
dated July 27, 2001, as amended (the "Loan Agreement"), between Meadow Valley
Contractors, Inc., (the "Company") and The CIT Group/Equipment Financing, Inc.
("CIT").

     The Loan Agreement shall be amended as follows:

          1.  Section 5 of the Loan Agreement: "governing rate" plus 1.50%, is
              amended to read: "governing rate" plus 1.25%.

     Except as modified herein, the Loan Agreement and all documents executed in
connection therewith shall continue in full force and effect.



Dated:  April 1, 2003

                                       Sincerely,
                                       THE CIT GROUP/EQUIPMENT FINANCING, INC.


                                       By:                     Title
                                         -------------------        ------------


ACKNOWLEDGED AND AGREED TO:
MEADOW VALLEY CONTRACTORS, INC.


By: Bradley E. Larson      Title President
  ----------------------        -----------


GUARANTOR ACKNOWLEDGEMENT:
MEADOW VALLEY CORPORATION



By: Kenneth D. Nelson      Title V.P.
  ----------------------        -----------



READY MIX, INC.



By: Clint Tryon             Title Sec/Treas
  ----------------------        -----------

EX-10.232

                                                                  Exhibit 10.232

CIT                                    Tel: 800 553-8778
Equipment Rental and Finance--US       P.O. Box 27248
1540 W. Fountainhead Parkway           Tempe, AZ 85285-7248
Tempe, AZ 85282                        www.cit.com

[CIT LOGO]

Ready Mix, Inc.
3430 E. Flamingo Rd. #100
Las Vegas, NV 89121-5018

                   RE: AMENDMENT OF REVOLVING LOAN AGREEMENT

Gentlemen:

Reference is made to the Revolving Loan Agreement, dated July 27, 2001, as
amended (the "Loan Agreement"), between Ready Mix, Inc., (the "Company") and
The CIT Group/Equipment Financing, Inc. ("CIT").

The Loan Agreement shall be amended as follows:

1.  Section 1 of the Loan Agreement: "governing rate" plus 1.50%, is amended to
                                                           -----
    read: "governing rate" plus 1.25%.
                                -----

Except as modified herein, the Loan Agreement and all documents executed in
connection therewith shall continue in full force and effect.

Sincerely,
The CIT Group/Equipment Financing, Inc.


By                   Title:
  ------------------       ----------


ACKNOWLEDGED AND AGREED TO:            GUARANTOR ACKNOWLEDGEMENT:

Ready Mix, Inc.                        Meadow Valley Corporation


By:/s/ Clint Tryon  Title: Sec/Treas.  By:/s/ Kenneth D. Nelson Title: V.P.
   -----------------       ----------     ---------------------       ---------

   April 1, 2003                       Meadow Valley Contractors, Inc.

                                       By:/s/ Bradley E. Larson Title: President
                                          ---------------------       ----------

EX-10.233

                                                                Exhibit - 10.233

                                READY MIX, INC.
                   OFFICER/DIRECTOR INDEMNIFICATION AGREEMENT
                   ------------------------------------------

     THIS AGREEMENT ("Agreement") is entered into and effective this 16th day
of April, 2003, by and between Ready Mix, Inc., a Nevada corporation
("Corporation"), and Clint Tryon ("Indemnified Party").

     WHEREAS, the Board of Directors of the Corporation have determined that it
is in the best interest of each respective Corporation and its shareholders to
agree to indemnify Indemnified Party (who is a Director and/or Officer of the
Corporation) from and against certain liabilities for actions taken by him/her
during the performance of his/her tasks for the Corporation.

     NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt, adequacy and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

     1.   INDEMNIFICATION. The Corporation hereby agrees to indemnify and hold
harmless Indemnified Party to the maximum extent possible under all applicable
laws against any and all claims, demands, debts, duties, liabilities,
judgments, fines and amounts paid in settlement and expenses (including
attorneys' fees and expenses) actually and reasonably incurred by Indemnified
Party in connection with the investigation, defense, negotiation and settlement
of any such claim or any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
any action by or in the right of any of the Corporation) to which Indemnified
Party is or becomes a party, or is threatened to be made a party, by reason of
the fact that Indemnified Party is an officer or a director of the Corporation
or any of its subsidiaries.

     2.   LIMITATIONS ON INDEMNITY. No indemnity pursuant to this Agreement
shall be made by the Corporation:

     (a)  For the amount of such losses for which the Indemnified Party is
          indemnified pursuant to any insurance purchased and maintained by the
          Corporation; or

     (b)  In respect to remuneration paid to Indemnified Party if it shall be
          determined by a final judgment or other final adjudication that such
          remuneration was in violation of law; or

     (c)  On account of any suit in which judgment is rendered against
          Indemnified Party for an accounting of profits made (i) for an
          improper personal profit without full and fair disclosure to the
          Corporation of all material conflicts of interest and not approved
          thereof by a majority of the disinterested members of the Board of
          Directors of the Corporation; or (ii) from the purchase or sale by
          Indemnified Party of securities of the Corporation pursuant to the
          provisions of Section 16(b) of the Securities Exchange Act


          of 1934 and amendments thereto or similar provisions of any federal,
          state or local law; or

     (d)  On account of Indemnified Party's conduct which is finally determined
          to have been knowingly fraudulent, deliberately dishonest or willfully
          in violation of applicable law for which the corporation suffered
          actual financial damages; or

     (e)  If a final decision by a court having jurisdiction in the matter shall
          determine that such indemnification is not lawful.

     3. CONTINUATION OF INDEMNITY. All agreements and obligations of the
Corporation contained herein shall continue during the period Indemnified Party
is an officer or director of the Corporation or a subsidiary and thereafter so
long as Indemnified Party shall be subject to any possible claim or threatened,
pending or completed action, suit or proceeding, whether civil, criminal or
investigative, by reason of the fact that Indemnified Party was an officer or a
director of the Corporation or any subsidiary.

     4. NOTIFICATION OF DEFENSE OF CLAIM. Within 30 days after receipt by
Indemnified Party of notice of any claim or any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, in which Indemnified Party has a right to Indemnification
hereunder, Indemnified Party will notify the Corporation of the commencement
thereof. With respect to any such action, suit or proceeding as to which
Indemnified Party notifies the Corporation of the commencement thereof:

     (a)  The Corporation will be entitled to participate therein at its own
          expense; and

     (b)  Except as otherwise provided below, to the extent that it may wish,
          the Corporation jointly with any other indemnifying party will be
          entitled to assume the defense thereof, with counsel satisfactory to
          Indemnified Party. After notice from the Corporation to Indemnified
          Party of its election to assume the defense thereof, the Corporation
          will not be liable to Indemnified Party under this Agreement for any
          legal or other expenses subsequently incurred by Indemnified Party in
          connection with the defense thereof other than reasonable costs of
          investigation or as otherwise provided below. Indemnified Party shall
          have the right to employ counsel in such action, suit or proceeding,
          but the fees and expenses of such counsel incurred after notice from
          the Corporation of its assumption of the defense thereof shall be at
          the expense of Indemnified Party, unless (i) the employment of counsel
          by Indemnified Party has been authorized by the Corporation, (ii)
          Indemnified Party shall have reasonably concluded that there may be a
          conflict of interest between the Corporation and Indemnified Party in
          the conduct of the defense of such action, (iii) the Corporation shall
          not in fact have employed counsel to assume the defense of such
          action, in each of which cases the fees and expenses of counsel shall
          be at the expense of the Corporation, or (iv) unless the Indemnified

                                       2

         Party reasonably and in good faith asserts defenses and theories of
         defense not asserted by the Corporation. The Corporation shall not be
         entitled to assume the defense of any action, suit or proceeding
         brought by or on behalf of the Corporation or as to which Indemnified
         Party shall have made the conclusion provided for in (ii) or (iv)
         above.

    (c)  The Corporation shall not be liable to indemnify Indemnified Party
         under this Agreement for any amounts paid in settlement of any action
         or claim effected without the Corporation's written consent. The
         Corporation shall not settle any action or claim in any manner which
         would impose any penalty or limitation on Indemnified Party without
         Indemnified Party's written consent. Neither the Corporation or
         Indemnified Party will unreasonably withhold their consent to any
         proposed settlement.

    5.   REPAYMENT OF EXPENSES. Indemnified Party agrees that Indemnified Party
will reimburse the Corporation for all reasonable expenses paid by the
Corporation in defending any civil or criminal action, suit or proceeding
against Indemnified Party in the event and only to the extent that Indemnified
Party is finally determined that Indemnified Party is not entitled to be
indemnified by the Corporation for such expenses under the Corporation's charter
or bylaws, this Agreement or under applicable law.

    6.   ENFORCEMENT.

    (a)  The Corporation expressly confirms and agrees that it has entered into
         this Agreement and assumed the obligations imposed on the Corporation
         hereby in order to induce Indemnified Party to serve as an officer
         and/or director of the Corporation or any subsidiary thereof, and
         acknowledges that Indemnified Party is relying upon this Agreement as
         part of the consideration for so acting.

    (b)  In the event Indemnified Party is required to bring any action to
         enforce rights or to collect moneys due under this Agreement and is
         successful in such action, the Corporation shall reimburse Indemnified
         Party for all of Indemnified Party's reasonable attorneys' and other
         fees and expenses in bringing and pursuing such action.

    7.   SEVERABILITY. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.

    8.   GOVERNING LAW; BINDING EFFECT; AMENDMENT AND TERMINATION.

    (a)  This Agreement shall be interpreted and enforced in accordance with the
         laws of the State of Arizona.

    (b)  This Agreement shall be binding upon Indemnified Party and upon the
         Corporation, its successors and assigns, and shall inure to the benefit
         of

                                       3

          Indemnified Party, his heirs, personal representatives and assigns and
          to the benefit of the Corporation, its successors and assigns.
     (c)  No amendment, modification, termination or change of this Agreement
          shall be effective unless it is signed by both parties hereto.

     9.   ADDITIONAL RIGHTS. This Agreement is in addition to, and not in lieu
of, any other right to indemnification under the Corporation's corporate
charter, bylaws, insurance contracts or otherwise at law or in equity.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.

                                        READY MIX, INC.



                                        By: /s/ Kenneth D. Nelson
                                            ---------------------------------
                                            Kenneth D. Nelson, Vice President

                                            Indemnified Party:

                                            /s/ Clint Tryon
                                            ---------------------------------
                                            Clint Tryon


                                       4

EX-10.234

                                                                  EXHIBIT-10.234


                             MASTER LEASE AGREEMENT


MASTER LEASE AGREEMENT ("Master Lease") dated as of 3-31-03 between The CIT
Group/Equipment Financing, Inc. (Lessor),

having a place of business at P. O. Box 27248       Tempe     AZ     85285-7248,
                              --------------------------------------------------
                              Address               City      State  Zip Code

and Meadow Valley Contractors, Inc.                                  ("Lessee"),
    -----------------------------------------------------------------

having a place of business at 4411 S. 40th Street   Phoenix    AZ    85040     .
                              --------------------------------------------------
                              Address               City      State  Zip Code

This Master Lease Agreement provides a set of terms and conditions that the
parties hereto intend to be applicable to various transactions for the lease of
personal property. Each lease contract shall be evidenced by an equipment
schedule ("Schedule") executed by Lessor and Lessee that explicitly incorporates
the provisions of this Master Lease Agreement and that sets forth specific terms
of that particular lease contract. Where the provisions of a Schedule conflict
with the terms hereof, the provisions of the Schedule shall prevail. Each
Schedule shall constitute a complete and separate lease agreement, independent
of all other Schedules, and without any requirement of being accompanied by
an originally executed copy of this Master Lease Agreement. The term "Lease"
when used herein shall refer to an individual Schedule.

One originally executed copy of the Schedule shall be denominated "Originally
Executed Copy No. 1 of 1 originally executed copies" and such copy shall be
retained by Lessor. If more than one copy of the Schedule is executed by
Lessor and Lessee, all such other copies shall be numbered consecutively with
numbers greater than 1. Only transfer of possession by Lessor of the originally
executed copy denominated "Originally Executed Copy No. 1" shall be effective
for purposes of perfecting an interest in such Schedule by possession.

1.  EQUIPMENT LEASED AND TERM.

This Lease shall cover such personal property as is described in any Schedule
executed by or pursuant to the authority of Lessee, accepted by Lessor in
writing and identified as a part of this Lease (which personal property with
all replacement parts, additions, repairs, accessions and accessories
incorporated therein and/or affixed thereto is hereinafter called the
"Equipment"). Lessor hereby leases to Lessee and Lessee hereby hires and takes
from Lessor, upon and subject to the covenants and conditions hereinafter
contained, the Equipment described in any Schedule. NOTWITHSTANDING THE
COMMENCEMENT DATE OF THE TERM OF THIS LEASE WITH RESPECT TO ANY ITEM OF
EQUIPMENT, LESSEE AGREES THAT ALL RISK OF LOSS OF THE EQUIPMENT SHALL BE ON
LESSEE FROM AND AFTER SHIPMENT OF THE EQUIPMENT TO LESSEE BY THE SELLER THEREOF,
F.O.B. seller's point of shipment, the date of such shipment being hereinafter
called "date of shipment." The term of this Lease with respect to any item of
Equipment shall be for the period as set forth in the Schedule. Lessee
hereby gives Lessor authority to insert the actual commencement date and
date of first monthly rental for any item of Equipment in any Schedule as
well as such items as serial numbers if such are not already inserted when
such Schedule is executed by Lessee.  "Seller" as used in this Lease means
the supplier from which Lessor acquires any item of Equipment.

2.  RENT.

The aggregate rent payable with respect to each item of Equipment shall be in
the amount shown with respect to such item on the Schedule. Lessee shall pay to
Lessor the aggregate rental for each item of Equipment for the full period and
term for which the Equipment is leased, such rental to be  payable at such times
and in such amounts for each item of Equipment as shown in the applicable
Schedule.

All rent shall be paid at Lessor's place of business shown above, or such
other place as Lessor may designate by written notice to the Lessee. ALL
RENTS SHALL BE PAID WITHOUT NOTICE OR DEMAND AND WITHOUT ABATEMENT,
DEDUCTION OR SET OFF OF ANY AMOUNT WHATSOEVER. The operation and use of
the Equipment shall be at the risk of Lessee and not of Lessor and the
obligation of Lessee to pay rent hereunder shall be unconditional.


795 (2/02) Master Lease Agreement-CIT as Lessor                      Page 1 of 7

3.   DESTRUCTION OF EQUIPMENT.

If any Equipment is lost, totally destroyed, damaged beyond repair or taken by
governmental action, the liability of the Lessee to pay rent therefor may be
discharged by paying to Lessor all the rent due thereon, plus all the rent to
become due thereon less the net amount of the recovery, if any, actually
received by Lessor from insurance or otherwise for such loss or damage.

In the event of partial destruction of any Equipment, the rent due and to become
due thereon shall not abate and Lessee shall, at its own expense, cause such
Equipment to be restored to usable condition, but Lessor shall, upon receiving
satisfactory evidence of such restoration, promptly pay Lessee the proceeds of
any insurance or compensation received by reason of such damage. If the
estimated cost of restoring such Equipment exceeds 50% of the unmatured rent
therefor, such Equipment shall, on notice by Lessee, be deemed, for all purposes
hereof, to be totally destroyed and the liability of the Lessee to pay rent
therefor shall be discharged if Lessee pays the rent described in the preceding
paragraph of this Section.

Lessor shall not be obligated to undertake by litigation or otherwise the
collection of any claim against any person for loss or damage to the Equipment.

Except as expressly provided above, the total or partial destruction of any
Equipment or the total or partial loss of use or possession thereof to Lessee
shall not release or relieve Lessee from the duty to pay the rent herein
provided.

4.   NO WARRANTIES BY LESSOR; MAINTENANCE AND COMPLIANCE WITH LAWS.

Lessor, not being the manufacturer of the Equipment, nor manufacturer's agent,
MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE
FITNESS, QUALITY, DESIGN, CONDITION, CAPACITY, SUITABILITY, MERCHANTABILITY OR
PERFORMANCE OF THE EQUIPMENT OR OF THE MATERIAL OR WORKMANSHIP THEREOF, IT
BEING AGREED THAT THE EQUIPMENT IS LEASED "AS IS" AND THAT ALL SUCH RISKS, AS
BETWEEN LESSOR AND LESSEE, ARE TO BE BORNE BY LESSEE AT ITS SOLE RISK AND
EXPENSE, Lessee accordingly agrees not to assert any claim whatsoever against
Lessor based thereon. Lessee further agrees, regardless of cause, not to assert
any claim whatsoever against Lessor for loss of anticipatory profits or
consequential damages. Lessor shall have no obligation to install, erect, test,
adjust or service the Equipment. Lessee shall look to the manufacturer and/or
Seller for any claims related to the Equipment. Lessor hereby acknowledges that
any manufacturer's and/or Seller's warranties are for the benefit of both
Lessor and Lessee.

No oral agreement, guaranty, promise, condition, representation or warranty
shall be binding; all prior conversations, agreements or representations
related hereto and/or to the Equipment are integrated herein.

Lessee agrees, at its own cost and expense:

(a)  to pay all shipping charges and other expenses incurred in connection with
     the shipment of the Equipment by the Seller to Lessee;

(b)  to pay all charges and expenses in connection with the operation of each
     item of Equipment;

(c)  to comply with all governmental laws, ordinances, regulations,
     requirements and rules with respect to the use, maintenance and operation
     of the Equipment; and

(d)  to make all repairs and replacements required to be made to maintain the
     Equipment in good condition, reasonable wear and tear excepted.

5.   INSURANCE.

Lessee shall maintain at all times on the Equipment, at its expense, all-risk
physical damage insurance and comprehensive general and/or automobile (as
appropriate) liability insurance (covering bodily injury and property damage
exposures including, but not limited to, contractual liability and products
liability) in such amounts, against such risks, in such form and with such
insurers as shall be satisfactory to Lessor; provided, that the amount of
all-risk physical damage insurance shall not on any date be less than the
greater of the full replacement value or a sum equal to all the rent due
thereon, plus all rent to become due. Each physical damage insurance policy will
name Lessor as loss payee. Each liability insurance policy will name Lessor as
additional insured. Each insurance policy will also require that the insurer
give Lessor at least thirty (30) days prior written notice of any alteration in
or cancellation of the terms of such policy and require that Lessor's interests
be continued insured regardless of any breach or violation by Lessee or others
of any warranties, declarations or conditions contained in such insurance
policy. In no event shall Lessor be responsible for premiums, warranties or
representations to any insurer or any agent thereof. Lessee shall furnish to
Lessor a certificate or other evidence satisfactory to Lessor that such
insurance coverage is in effect, but Lessor shall be under no duty to ascertain
the existence or adequacy of such insurance. The insurance maintained by Lessee
shall be primary without any right of contribution from insurance which may be
maintained by Lessor. Lessee shall be liable for all deductible portions of all
required insurance. Lessor may, at its own expense, for its own benefit,
purchase insurance in excess of that required under this Lease Agreement.
Physical damage insurance proceeds shall be applied as set forth in Section 6.

795 (2/02) Master Lease Agreement - CIT as Lessor                    Page 2 of 7

6.   LOSS AND DAMAGE.

Lessee agrees to assume and bear the entire risk of any partial or complete loss
with respect to the Equipment from any and every cause whatsoever including
theft, loss, damage, destruction or governmental taking, whether or not such
loss is covered by insurance or caused by any default or neglect of Lessee.
Lessee agrees to give Lessor prompt notice of any damage to or loss of any
Equipment. All physical damage insurance proceeds shall be payable directly to
Lessor. Following payment of such loss, and if no Event of Default as defined in
Section 11 has occurred and remains continuing, Lessor will then:

(a)  transfer to Lessee Lessor's rights to such Equipment "as-is, where-is and
     with all defects," without recourse and without representation or warranty,
     express or implied, other than a warranty that the Equipment is free and
     clear of any liens created by Lessor; and

(b)  remit to Lessee any physical damage insurance proceeds arising out of such
     loss in excess of the sum due the Lessor.

Lessee shall determine in the exercise of its reasonable judgment whether the
Equipment is damaged beyond repair, subject to Lessor's approval. In the event
of damage or loss which does not result in damage beyond repair or a total loss
of the Equipment or any item thereof, Lessee shall cause the affected Equipment
to be restored to the condition required by the terms of this Lease. Upon
completion of such repair and after supplying Lessor with satisfactory evidence
thereof (and providing no Event of Default has occurred and remains continuing),
Lessee shall be entitled to receive any insurance proceeds or other recovery to
which Lessor would otherwise be entitled in connection with such loss up to the
amount expended by Lessee in making the repair.

Lessor shall not be obligated to undertake by litigation or otherwise the
collection of any claim against any person for loss of, damage to, or
governmental taking of the Equipment, but Lessor will cooperate with Lessee at
Lessee's expense to pursue such claims.

Except as expressly provided above, the total or partial destruction of any
Equipment or Lessee's total or partial loss of use or possession thereof shall
not release or relieve Lessee from its obligations under this Master Lease or
any Schedule including the duty to pay the rent(s) herein provided.

7.   TAXES.

Lessee agrees that, during the term of this Lease, in addition to the rent and
all other amounts provided herein to be paid, it will promptly pay all taxes,
assessments and other governmental charges (including penalties and interest, if
any, and fees for titling or registration, if required) levied or assessed:

(a)  upon the interest of Lessee in the Equipment or upon the use or operation
     thereof or on the earnings arising therefrom, and

(b)  against Lessor on account of its acquisition or ownership of the Equipment
     or any part thereof, or the use or operation thereof or the leasing hereof
     to Lessee, or the rent herein provided for, or the earnings arising
     therefrom, exclusive, however, of any taxes based on net income of Lessor.

Lessee agrees to file, in behalf of Lessor, all required tax returns and reports
concerning the Equipment with all appropriate governmental agencies, and within
not more than 45 days after the due date of such filing to send Lessor
confirmation, in form satisfactory to Lessor, of such filing.

8.   LESSOR'S TITLE, RIGHT OF INSPECTION AND IDENTIFICATION OF EQUIPMENT.

TITLE TO THE EQUIPMENT SHALL AT ALL TIMES REMAIN IN LESSOR, except as provided
in the next sentence. With respect to any software financed hereunder as to
which Lessor is not the licensee or licensor, Lessee hereby grants Lessor a
security interest in such software to secure the payment and performance of
Lessee's obligations under this Lease. Lessee will at all times protect and
defend, at its own cost and expense, the title of Lessor from and against all
claims, liens and legal processes of creditors of Lessee and keep all the
Equipment free and clear from all such claims, liens and processes. The
Equipment is and shall remain personal property. Upon the expiration or
termination of this Lease with respect to any item of Equipment:

(a)  Lessee at Lessee's sole expense shall return such Equipment unencumbered to
     Lessor at the place where the rent is payable or to such other place as
     Lessor and Lessee agree upon, and in the same condition as when received by
     Lessee, reasonable wear and tear resulting from use thereof alone excepted;
     or

(b)  in lieu of returning such Equipment to Lessor, Lessee agrees that Lessee
     will, upon request of Lessor, store such Equipment on Lessee's premises, at
     an inside location protected from the weather and elements, without charge
     to Lessor for a period of 180 days following the date of expiration or
     termination of this Lease. During such storage period Lessee shall not use
     the Equipment for any purpose. Upon expiration of such storage period
     Lessee will return such Equipment to Lessor in accordance with the
     provisions of (a) above.

795 (2/02) Master Lease Agreement - CIT as Lessor                    Page 3 of 7


Lessor shall have the right from time to time during reasonable business hours
to enter upon Lessee's premises or elsewhere for the purpose of confirming the
existence, condition and proper maintenance of the Equipment and during any
period of storage Lessor shall also have the right to demonstrate and show the
Equipment to others. The foregoing rights of entry are subject to any
applicable governmental laws, regulations and rules concerning industrial
security. Lessee shall, upon the request of Lessor, and at its own expense
firmly affix to the Equipment, in a conspicuous place, such a decalcomania or
metal plate as shall be supplied by Lessor showing the Lessor as the owner and
lessor of such Equipment.

9.   POSSESSION, USE AND CHANGES IN LOCATION OF EQUIPMENT.

So long as Lessee shall not be in default under the Lease it shall be entitled
to the possession and use of the Equipment in accordance with the terms of this
Lease. The Equipment shall be used in the conduct of the lawful business of
Lessee, and no item of Equipment shall be removed from its location shown on the
Schedule, without the prior written consent of Lessor. Lessee shall not, without
Lessor's prior written consent, part with possession or control of the Equipment
or attempt or purport to sell, pledge, mortgage or otherwise encumber any of the
Equipment or otherwise dispose of or encumber any interest under this Lease.

10.  PERFORMANCE OF OBLIGATIONS OF LESSEE BY LESSOR.

In the event that the Lessee shall fail duly and promptly to perform any of its
obligations under the provisions of Sections 4, 5, 6, 7, and 8 of this Lease,
Lessor may, at its option, perform the same for the account of Lessee without
thereby waiving such default, and any amount paid or expense (including
reasonable attorneys' fees), penalty or other liability incurred by Lessor in
such performance, together with interest at the rate of 1 1/2% per month
thereon (but in no event greater than the highest rate permitted by relevant
law) until paid by Lessee to Lessor, shall be payable by Lessee upon demand as
additional rent for the Equipment. Lessee shall be responsible for and pay to
Lessor a returned check fee, not to exceed the maximum permitted by law, which
fee will be equal to the sum of (i) the actual bank charges incurred by Lessor
plus (ii) all other actual costs and expenses incurred by Lessor. The returned
check fee is payable upon demand as additional rent under this Lease.

11.  DEFAULT.

An Event of Default shall occur if:

(a)  Lessee fails to pay when due any installment of rent and such failure
     continues for a period of 10 days;

(b)  Lessee shall fail to perform or observe any covenant, condition or
     agreement to be performed or observed by it hereunder and such failure
     continues uncured for 15 days after written notice thereof to Lessee by
     Lessor;

(c)  Lessee ceases doing business as a going concern, makes an assignment for
     the benefit of creditors, admits in writing its inability to pay its debts
     as they become due, files a voluntary petition in bankruptcy, is
     adjudicated a bankrupt or an insolvent, files a petition seeking for itself
     any reorganization, arrangement, composition, readjustment, liquidation,
     dissolution or similar arrangement under any present or future statute, law
     or regulation or files an answer admitting the material allegations of a
     petition filed against it in any such proceeding, consents to or acquiesces
     in the appointment of a trustee, receiver, or liquidator of it or of all or
     any substantial part of its assets or properties, or if it or its
     shareholders shall take any action looking to its dissolution or
     liquidation;

(d)  within 60 days after the commencement of any proceedings against Lessee
     seeking reorganization, arrangement, readjustment, liquidation, dissolution
     or similar relief under any present or future statute, law or regulation,
     such proceedings shall not have been dismissed, or if within 60 days after
     the appointment without Lessee's consent or acquiescence of any trustee,
     receiver or liquidator of it or of all or any substantial part of its
     assets and properties, such appointment shall not be vacated;

(e)  Lessee attempts to remove, sell, transfer, encumber, part with possession
     or sublet the Equipment or any item thereof; or

(f)  a third party takes any action to foreclose on, obtain possession or
     control of, collect, sell or otherwise dispose of or exercise any rights
     with respect to any of the Equipment without the express written consent of
     Lessor.

Upon the occurrence of an Event of Default, Lessor shall have all the rights
and remedies provided by applicable law and by this Lease. Notwithstanding that
this Agreement is a lease and title to the Equipment is at all times in Lessor,
Lessor may nevertheless at its option choose those rights and remedies of a
secured party under the Uniform Commercial Code. In addition, Lessor, at its
option, may:

(a)  declare all sums due and to become due hereunder immediately due and
     payable, but in no event shall the Lessee, upon demand by Lessor for
     payment of the unpaid rent, upon acceleration of the maturity thereof or
     otherwise, be obligated to pay any amount in excess of that permitted by
     law;

795 (2/02) Master Lease Agreement - CIT as Lessor                    Page 4 of 7


(b)  proceed by appropriate court action or actions or other proceedings either
     at law or equity to enforce performance by the Lessee of any and all
     covenants of this Lease and to recover damages for the breach thereof;

(c)  demand that Lessee deliver the Equipment forthwith to Lessor at Lessee's
     expense at such place as Lessor may designate; and

(d)  Lessor and/or its agents may without notice or liability or legal process,
     enter into any premises of or under control or jurisdiction of Lessee or
     any agent of Lessee where the Equipment may be or by Lessor is believed to
     be, and repossess all or any item thereof, disconnecting and separating all
     thereof from any other property and using all force necessary or permitted
     by applicable law so to do, Lessee hereby expressly waiving all further
     rights to possession of the Equipment and all claims for injuries suffered
     through or loss caused by such repossession; Lessor may sell or lease the
     Equipment at a time and location of its choosing provided that the Lessor
     acts in good faith and in a commercially reasonable manner, but the Lessor
     shall nevertheless, be entitled to recover immediately as liquidated
     damages for loss of the bargain and not as a penalty any unpaid rent that
     accrued on or before the occurrence of the event of default plus an amount
     equal to the difference between the aggregate rent reserved hereunder for
     the unexpired term of this Lease and the then aggregate rental value of all
     Equipment for such unexpired term, provided, however, that if any statute
     governing the proceeding in which such damages are to be proved specifies
     the amount of such claim, Lessor shall be entitled to prove as and for
     damages for the breach an amount equal to that allowed under such statute.
     The provisions of this paragraph shall be without prejudice to any rights
     given to the Lessor by such statute to prove for any amounts allowed
     thereby. Should any proceedings be instituted by or against Lessor for
     monies due to Lessor hereunder and/or for possession of any or all of the
     Equipment or for any other relief, Lessee shall pay a reasonable sum as
     attorneys' fees.

No remedy of Lessor hereunder shall be exclusive of any remedy herein or by law
provided, but each shall be cumulative and in addition to every other remedy.

12.  INDEMNITY.

Lessee agrees that Lessor shall not be liable to Lessee for, and Lessee shall
indemnify and save Lessor harmless from and against any and all liability,
loss, damage, expense, causes of action, suits, claims or judgments arising
from or caused directly or indirectly by:

(a)  Lessee's failure to promptly perform any of its obligations under the
     provisions of Sections 4, 5, 6, 7 and 8 of this Lease; or

(b)  injury to persons or damage to property resulting from or based upon actual
     or alleged use, operation, delivery or transportation of any or all of the
     Equipment or its location or condition; or

(c)  inadequacy of the Equipment, or any part thereof, for any purpose or any
     deficiency or defect therein or the use or maintenance thereof or any
     repairs, servicing or adjustments thereto or any delay in providing or
     failure to provide any thereof or any interruption or loss of service or
     use thereof or any loss of business; and shall, at its own cost and
     expense, defend any and all suits which may be brought against Lessor,
     either alone or in conjunction with others upon any such liability or claim
     or claims and shall satisfy, pay and discharge any and all judgments and
     fines that may be recovered against Lessor in any such action or actions,
     provided, however, that Lessor shall give Lessee written notice of any such
     claim or demand. Lessee agrees that its obligations under this Section 12
     shall survive the expiration or termination of this Lease.

13.  ASSIGNMENT, NOTICES AND WAIVERS.

This Lease and all rights of Lessor hereunder shall be assignable by Lessor
without Lessee's consent, but Lessee shall not be obligated to any assignee of
Lessor except after written notice of such assignment from Lessor.  Following
such assignment, solely for the purpose of determining assignee's rights
hereunder, the term "Lessor" shall be deemed to include or refer to Lessor's
assignee. WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, LESSEE SHALL NOT ASSIGN
THIS LEASE OR ITS INTERESTS HEREUNDER OR ENTER INTO ANY SUB-LEASE WITH RESPECT
TO THE EQUIPMENT COVERED HEREBY, IT BEING AGREED LESSOR WILL NOT UNREASONABLY
WITHHOLD ITS CONSENT TO A SUB-LEASE OF THE EQUIPMENT.  All notices to Lessor
shall be delivered in person to an officer of the Lessor, or shall be sent
certified mail return receipt requested to Lessor at its address shown herein
or at any later address last known to the sender. All notices to Lessee shall
be in writing and shall be delivered by mail at its address shown herein or at
any later address last known to the sender. A waiver of a default shall not be
a waiver of any other or a subsequent default.

14.  FURTHER ASSURANCES.

Lessee shall execute and deliver to Lessor, upon Lessor's request such
instruments and assurances as Lessor deems necessary or advisable for the
confirmation or perfection of this Lease and Lessor's rights hereunder. Lessee
may not terminate any Schedule without the written consent of Lessor. If Lessor
in good faith believes itself insecure or performance impaired, it may declare
a default hereunder or, instead of declaring a default, Lessor may demand, and
Lessee hereby agrees to give, additional Equipment or other collateral as
security for the obligations hereunder. If any of the Equipment consists of
software, Lessee agrees, at Lessor's request, to inform Lessor of the name of
the licensor of such software and to provide Lessor with a copy of the license
agreement.

15.  LEASE IRREVOCABILITY.

795 (2/02) Master Lease Agreement-CIT as Lessor                      Page 5 of 7


This Lease is irrevocable for the full terms thereof as set forth in any
Schedule and for the aggregate rentals therein reserved and the rent shall not
abate by reason of termination of Lessee's right of possession and/or the taking
of possession by the Lessor or for any other reason. Any payment not made when
due shall, at the option of Lessor, bear late charges thereon calculated at the
rate of 1 1/2% per month, but in no event greater than the highest rate
permitted by relevant law.

16.  PURCHASE OPTION.

If any Schedule has a purchase option price set forth therein with respect to
the items of Equipment listed on such Schedule, then at the expiration of the
original lease term in such Schedule with respect to such items of Equipment, if
Lessee has paid in full all rentals owing under such Schedule, and be not then
in default under this Lease (including all obligations under any Schedule),
Lessee shall have the option to purchase ALL, BUT NOT LESS THAN ALL, THE ITEMS
OF EQUIPMENT IN THE APPLICABLE SCHEDULE upon giving written notice not less than
30 DAYS prior to expiration of the original term thereof. The purchase price
shall be as set forth in the applicable Schedule and shall be payable upon
expiration of the original Lease term. If any Schedule does not contain a
purchase option price, then Lessee shall not have an option to purchase any
Equipment on such Schedule.

Any purchase option price stated as "fair market value" ("FMV") for any item of
Equipment on a Schedule shall be determined on the basis of, and shall be equal
in amount to, the value which would obtain in an arm's length transaction
between an informed and willing buyer-user (other than a Lessee currently in
possession and a used Equipment dealer) and an informed and willing seller under
no compulsion to sell and, in such determination, costs of removal of the items
of Equipment from their location of current use shall not be a deduction from
such value.

17.  RENEWAL.

Any renewal privilege shown on any Schedule with respect to any item of
Equipment shall be exercised by Lessee giving Lessor a notice in writing and
paying Lessor the amount of the renewal rental plus applicable taxes, at least
45 DAYS prior to the commencement of the renewal term of the Lease with respect
to such item of Equipment. Upon such notification and payment, this Lease shall
be renewed for the stated renewal period at the stated renewal rental with the
other provisions and conditions of the lease continuing unchanged.

18.  MISCELLANEOUS

If any provision of this Lease is contrary to, prohibited by or deemed invalid
under applicable laws or regulations of any jurisdiction, such provision shall
be inapplicable and deemed omitted but shall not invalidate the remaining
provisions hereof.

IN THE EVENT THIS LEASE OR ANY PART HEREOF IS DEEMED TO CREATE A SECURITY
INTEREST, LESSEE GRANTS LESSOR A SECURITY INTEREST IN EACH ITEM OF EQUIPMENT AS
SECURITY FOR ALL OF LESSEE'S INDEBTEDNESS AND OBLIGATIONS OWING UNDER THIS LEASE
AND UNDER EACH SCHEDULE AS WELL AS ALL OTHER PRESENT AND FUTURE INDEBTEDNESS AND
OBLIGATIONS OF LESSEE TO LESSOR OF EVERY KIND AND NATURE WHATSOEVER. Lessee
authorizes Lessor to file a financing statement with respect to the Equipment
and ratifies the filing by Lessor of any such financing statement previously
filed.

If Lessee is an organization, Lessee (a) is the type of organization, (b) is
organized under the laws of the jurisdiction, (c) has its chief executive
office, and (d) if it is a "registered organization" as defined in Article 9 of
the Uniform Commercial Code (i.e., organized solely under the laws of a single
state and as to which the state must maintain a public record showing the
organization to have been organized), has the organizational identification
number (or, if none, has been assigned no such number by the state of
organization), all as set forth under Lessee's name (which is its exact and
complete legal name) at the signature line of this Lease. If Lessee is an
individual, Lessee's exact and complete legal name and principal residence are
as set forth at and under Lessee's name at the signature line of this Lease.
Lessee agrees to notify Lessor in writing immediately in the event of a change
in any of the foregoing facts and information.

This lease contains the entire agreement between the parties with respect to the
Equipment and may not be altered, modified, terminated or discharged except by a
writing signed by the party against whom such alteration, modification,
termination or discharge is sought. LESSEE'S INITIALS  CT
                                                       --
19.  SPECIAL PROVISIONS.

795 (2/02) Master Lease Agreement - CIT as Lessor                    Page 6 of 7

If Lessee is a corporation, this Lease is executed by authority of its Board of
Directors. If Lessee is a partnership or joint venture, this Lease is executed
by authority of all its partners or co-venturers.

Dated: 3-31-03
       -----------------------------

LESSEE:


Meadow Valley Contractors, Inc.
- --------------------------------------------------------------------------------
Name of individual, corporation or partnership

By /s/ Clint Tryon                     Title Sec/Treas.
   ---------------------------------         -----------------------------------
   If corporation, have signed by            President, Vice President or
   If owner or partner, state which.         Treasurer, and give official title.



If an organization,           If an individual,

Type of organization: Corporation            Principal residence:
                      ---------------------

Jurisdiction of organization: Nevada
                              ---------------------    ---------------------

Organizational identification

number (or "None"): C1649-1980
                    ---------------------

Location of chief executive office: Nevada
                                    ---------------------


LESSOR:

THE CIT GROUP/EQUIPMENT FINANCING, INC.


By /s/ Janae Tam                       Title Agent
   ---------------------------------         -----------------------------------


- --------------------------------------------------------------------------------
If Lessee is a partnership, enter:
Partners' names                         Home addresses
- ---------------                         --------------










795 (2/02) Master Lease Agreement -- CIT as Lessor                   Page 7 of 7

EX-10.235

                                                                 EXHIBIT-10.235

EQUIPMENT SCHEDULE NO. 1, dated 3/31/03, to Master Lease Agreement, dated
3/31/03, between THE CIT GROUP/EQUIPMENT FINANCING, INC. ("Lessor") and
Meadow Valley Contractors, Inc. ("Lessee").

This Equipment Schedule incorporates the terms and conditions of the
above-referenced Master Lease Agreement.

This is Originally Executed Copy No. 1 of 1 originally executed copies. Only
transfer of possession by Lessor of Originally Executed Copy No. 1 shall be
effective for purposes of perfecting an interest in this Schedule by possession.

The Equipment listed on this Schedule will be located at

4411 S. 40th Street       Phoenix                              AZ      85040
_______________________________________________________________________________
Address                   City               County            State   Zip Code

LEASE TERM: The term of this Lease for the items described in this Schedule
shall be 42 months.

RENTALS: For said term or any portion thereof, Lessee shall pay to Lessor the
stated aggregate rentals, of which

$0.00 is herewith paid in advance and the balance of the rentals is payable in
42 equal, successive, monthly payments as stated, of which the first is due on
the first monthly rental date set forth below, and the others on a like date of
each month thereafter, until fully paid.



- -----------------------------------------------------------------------------------------------------------
Item                    Description of Equipment                                     Aggregate    Monthly
No.   (Include make, kind of unit, year, model and serial number)                      Rental      Rental
- -----------------------------------------------------------------------------------------------------------
                                                                                         
- -----------------------------------------------------------------------------------------------------------
One   One (1) Volvo Model A35C Articulated Hauler, S/N A35CV60610                    155,400.00   3,700.00
      And all additions, substitutions, attachments, replacements
      and accessions thereof, plus the proceeds of all the
      forgoing.
- -----------------------------------------------------------------------------------------------------------




- -----------------------------------------------------------------------------------------------------------
             Date                     Date of                    Renewals                 Purchase
Item      Lease Term               First Monthly            (No. of Years and              Option
 No.      Commences                   Rental                 Amount per Year)              Price
- -----------------------------------------------------------------------------------------------------------
                                                                              
          3/31/03                  June 1, 2003             None                          63,565.03
- -----------------------------------------------------------------------------------------------------------

- -----------------------------------------------------------------------------------------------------------

- -----------------------------------------------------------------------------------------------------------

- -----------------------------------------------------------------------------------------------------------

- -----------------------------------------------------------------------------------------------------------


796 (8/00) Equipment Schedule for Master Lease Agreement             Page 1 of 2


The Lease term commences on 3/31/03.

The first Monthly Rental is due on June 1, 2003.

The Lease term may be renewed for N/A months with the Monthly Rental for such
renewal term of None.


The Lessee has the option to purchase the Equipment as of the last day of the
initial Lease term for $63,565.03.

Special Provisions Instructions

SO AS LONG AS THERE ARE ANY OBLIGATIONS OUTSTANDING BY DEBTOR TO SECURED PARTY
UNDER REVOLVING LOAN AGREEMENT DATED JULY 17, 2000 THE EQUIPMENT UNDER THE
REVOLVING LOAN AGREEMENT SHALL ALSO SECURE ALL OBLIGATIONS OF THE LESSEE UNDER
EQUIPMENT SCHEDULE NO 1 TO MASTER LEASE AGREEMENT.



ACCEPTED:

LESSEE:

Meadow Valley Contractors, Inc.
- ------------------------------------------

By   Clint Tryon      Title: Sec/Treas.
   -------------             -------------


LESSOR:

The CIT Group/Equipment Financing, Inc.
- ------------------------------------------

By  Janae Tam         Title: Agent
   -------------             -------------




796 (8/00) Equipment Schedule for Master Lease Agreement             Page 2 of 2

EX-10.236

                                                                 EXHIBIT-10.236

EQUIPMENT SCHEDULE NO. 2, dated 3/31/03, to Master Lease Agreement, dated
3/31/03, between THE CIT GROUP/EQUIPMENT FINANCING, INC. ("Lessor") and Meadow
Valley Contractors, Inc. ("Lessee").

This Equipment Schedule incorporates the terms and conditions of the
above-referenced Master Lease Agreement.

This is Originally Executed Copy No. 1 of 1 originally executed copies. Only
transfer of possession by Lessor of Originally Executed Copy No. 1 shall be
effective for purposes of perfecting an interest in this Schedule by possession.

The Equipment listed on this Schedule will be located at
4411 S. 40th Street           Phoenix                       AZ        85040
- --------------------------------------------------------------------------------
Address                       City           County         State     Zip Code

LEASE TERM: The term of this Lease for the items described in this Schedule
shall be 42 months.

RENTALS: For said term or any portion thereof, Lessee shall pay to Lessor the
stated aggregate rentals, of which $0.00 is herewith paid in advance and the
balance of the rentals is payable in 42 equal, successive, monthly payments as
stated, of which the first is due on the first monthly rental date set forth
below, and the others on a like date of each month thereafter, until fully paid.



- ------------------------------------------------------------------------------------------------------------
Item                          Description of Equipment                           Aggregate          Monthly
 No.        (Include make, kind of unit, year, model and serial number.)           Rental            Rental
- ------------------------------------------------------------------------------------------------------------
                                                                                           
One       One (1) Volvo Model A35C Articulated Hauler, S/N A35CV60336           125,370.00          2,985.00
- ------------------------------------------------------------------------------------------------------------
          And all additions, substitutions, attachments, replacements
- ------------------------------------------------------------------------------------------------------------
          and accessions thereof, plus the proceeds of all the
- ------------------------------------------------------------------------------------------------------------
          foregoing.
- ------------------------------------------------------------------------------------------------------------




- ------------------------------------------------------------------------------------------------------------
                    Date                    Date of                   Renewals                 Purchase
Item             Lease Term              First Monthly           (No. of Years and              Option
 No.              Commences                  Rental                Amount per Year)              Price
- ------------------------------------------------------------------------------------------------------------
                                                                                  
                  3/31/03                  June 1, 2003                  None                 51,369.96
- ------------------------------------------------------------------------------------------------------------




796 (8/00) Equipment Schedule for Master Lease Agreement             Page 1 of 2

The Lease Term commences on 3/31/03.

The first Monthly Rental is due on June 1, 2003.

The Lease term may be renewed for N/A months with the Monthly Rental for such
renewal term of None.

The Lessee has the option to purchase the Equipment as of the last day of the
initial Lease term for $51,369.96.

Special Provisions Instructions

SO AS LONG AS THERE ARE ANY OBLIGATIONS OUTSTANDING BY DEBTOR TO SECURED PARTY
UNDER THE REVOLVING LOAN AGREEMENT DATED JULY 17, 2000 THE EQUIPMENT UNDER THE
REVOLVING LOAN AGREEMENT SHALL ALSO SECURE ALL OBLIGATIONS OF THE LESSEE UNDER
EQUIPMENT SCHEDULE NO. 2 TO MASTER LEASE AGREEMENT.

ACCEPTED:

LESSEE:

Meadow Valley Contractors, Inc.
- -------------------------------------------------------------------
By /s/ Clint Tryon            Title Sec/Treas.
  --------------------------        -------------------------------

LESSOR:

The CIT Group/Equipment Financing, Inc.
- -------------------------------------------------------------------
By /s/ Janae Tam              Title Agent
  --------------------------        -------------------------------



796 (8/00) Equipment Schedule for Master Lease Agreement             Page 2 of 2

EX-10.237

                                                                  EXHIBIT-10.237

CATERPILLAR FINANCIAL SERVICES CORPORATION                         FINANCE LEASE
                                      Dated as of
                                                  ------------------------------
                                                             
LESSEE:   MEADOW VALLEY CONTRACTORS, INC.                        LESSOR:   CATERPILLAR FINANCIAL SERVICES CORPORATION

ADDRESS: 4411 S. 40TH ST.                                        ADDRESS:  2120 West End Avenue
         PHOENIX, AZ 85040                                                 Nashville, TN 37203



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) AP-1055B           Caterpillar Asphalt Paver       ABB00185            $4,423.53               $26,160.00

(1) BG-650             Caterpillar Paver               9EK00341            $1,782.12               $13,516.80


RENT TO BE PAID: in arrears (starts one month after Delivery Date) and every
month thereafter.

Lease term: 36 Months                   Utilization Date: May 25, 2003

The [_____] Mandatory Final Payment (Section 13) [X] Optional Final Payment
(Section 14) is applicable to this Lease (check one)

Location of Unit(s): 4411 SO. 40TH ST.
                     PHOENIX, AZ 85040, MARICOPA
ADDITIONAL PROVISIONS:                                           RIDERS:

                              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 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 PO Box 100647 Pasadena, CA 91189-0647
or such other location Lessor designates in writing, rent for each Unit as
stated above starting (a) on its Delivery Date if the rent is to be paid in
advance, or (b) one month (or other period as stated above) after its Delivery
Date if the rent is to be paid in arrears. An amount equal to the first rent
payment for each Unit must accompany this document when it is submitted to
Lessor. If Lessor executes this document, the amount shall be the first rent
payment. If Lessor does not execute this document, the amount shall be returned
to Lessee. If Lessor does not receive a rent payment on the date it is due,
Lessee shall pay to Lessor, on demand, a late payment charge equal to five
percent (5%) of the rent payment not paid when due or the highest charge allowed
by law, whichever is less.

3.   NO ABATEMENT: Lessee shall not be entitled to abatement or reduction of
rent or setoff against rent for any reason whatsoever. Except as otherwise
provided, this Lease shall not terminate because of, nor shall the obligations
of Lessor or Lessee be affected by damage to, any defect in, destruction of, or
loss of possession or use of a Unit; the attachment of any lien, security
interest or other claim to a Unit; any interference with Lessee's use of a Unit;
Lessee's insolvency or the commencement of any bankruptcy or similar proceeding
by or against Lessee, or any other cause whatsoever.

4.   DISCLAIMER OF WARRANTIES: Lessee acknowledges and agrees that Lessor is not
the manufacturer of the Unit(s) and that Lessee has selected each Unit based on
Lessee's own judgment without any reliance whatsoever on any statements or
representations made by Lessor. AS BETWEEN LESSOR AND LESSEE, THE UNIT(S) ARE
PROVIDED "AS IS" WITHOUT ANY WARRANTIES OF ANY KIND. LESSOR HEREBY EXPRESSLY
DISCLAIMS a) ALL WARRANTIES OF MERCHANTABILITY, b) ALL WARRANTIES OF FITNESS FOR
A PARTICULAR PURPOSE, AND  c) ALL WARRANTIES AGAINST INFRINGEMENT OR THE LIKE.
Lessor assigns to Lessee its interest in any of the manufacturer's warranties on
the Unit(s).

5.   POSSESSION, USE AND MAINTENANCE: Lessee shall not (a) use, operate,
maintain or store a Unit improperly, carelessly, unsafely or in violation of any
applicable law or regulation or for any purpose other than in the conduct of
Lessee's business; (b) abandon a Unit; (c) sublease a Unit, permit the use of a
Unit by anyone other than Lessee, change the use of unit from that specified in
the Application Survey/Usage Rider attached hereto, or change the location of a
Unit from that specified above, without the prior written consent of Lessor; or
(d) create or allow to exist any lien, claim, security interest or encumbrance
on any of its rights hereunder or a Unit. A Unit is and shall remain personal
property regardless of its use or manner of attachment to realty. Lessor and its
agent shall have the right (but not the obligation) to inspect a Unit and
maintenance records relating to it and observe its use. Lessee, at its expense,
shall maintain each Unit in good operating order, repair and condition and shall
perform maintenance at least as frequently as stated in any applicable
operator's guide, service manual, or lubrication and maintenance guide. Lessee
shall not alter any Unit or affix any accessory or equipment to it if doing so
will impair its originally intended function or use or reduce its value. Any
alteration or addition to a Unit shall be the responsibility of and at the sole
risk of Lessee. All parts, accessories and equipment affixed to a Unit shall be
subject to the security interest of Lessor.

              SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS

                                                             
Lessee:   MEADOW VALLEY CONTRACTORS, INC.                        Lessor:   CATERPILLAR FINANCIAL SERVICES CORPORATION

By Kenneth D. Nelson                                             By
   ---------------------------------------------------             ----------------------------------------------------

Name (PRINT) Kenneth D. Nelson                                   Name (PRINT)
             -----------------------------------------                        -----------------------------------------

Title Vice President                                             Title
      ------------------------------------------------                  -----------------------------------------------

Date                                                             Date
     -------------------------------------------------                 ------------------------------------------------




     6. TAXES: Lessee shall promptly pay or reimburse Lessor for all fees,
charges and taxes of any nature, including, without limitation, personal
property taxes, together with any penalties, fines or additions to tax and
interest thereon (collectively, "Taxes") levied on or assessed against Lessor in
connection with the ownership, leasing, rental, sale, possession, purchase, or
use of a Unit; excluding however, all charges or taxes on or measured by
Lessor's net income, or charges or taxes levied on or assessed against Lessor in
connection with a Unit after the Unit is returned to Lessor in accordance with
the terms of this Lease. If the reimbursement to Lessor of Taxes constitutes
income for federal, state or local tax purposes and if the Lessor is not
entitled to a deduction for the full amount of the reimbursement, the Lessee
shall pay the Lessor an additional amount such that the net amount received by
Lessor after payment of all related Taxes equals the amount which Lessor would
have received if no such Taxes were payable. Lessee shall prepare and timely
file, in a manner satisfactory to Lessor, any reports or returns which may be
required with respect to a Unit, including, without limitation, personal
property tax returns. For purposes of this section, in computing Lessor's Taxes
attributable to a reimbursement, it shall be assumed that the Lessor is in the
highest marginal tax rate applicable to corporations at the time the
reimbursement is made, and that the term "Lessor" shall include any affiliated
group, within the meaning of Section 1504 of the Internal Revenue Code of 1986,
of which Lessor is a member for any year in which a consolidated or combined
income tax return is filed for the affiliated group.

     7. LOSS OR DAMAGE. Lessee shall bear the risk, of any Casualty Occurrence
(the Unit is worn out, lost, stolen, destroyed, taken by government action or,
in Lessor's opinion, irreparably damaged) or other damage from the time it is
purchased by Lessor until it is returned to Lessor. Lessee shall give Lessor
prompt notice of a Casualty Occurrence or other damage. If, in Lessor'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 lesser of (a) the sum of (i) all amounts
then due under this Lease with respect to the Unit, (ii) the present value of
all unpaid rent for the Unit, and (iii) the present value of the Purchase Price
of the Unit as stated on the front hereof; or (b) the maximum amount permitted
by law. Present values will be determined by discounting at the implicit
interest rate of this Lease. Upon making this payment, the lease term with
respect to the Unit shall terminate and Lessee shall be entitled to possession
of the Unit and to any recovery in respect to it (subject to the rights of any
insurer).

     8. WAIVER AND INDEMNITY: LESSEE HEREBY AGREES TO RELEASE, DEFEND, INDEMNIFY
AND HOLD HARMLESS LESSOR, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS
FROM AND AGAINST ANY CLAIMS OF LESSEE OR THIRD PARTIES, INCLUDING CLAIMS BASED
UPON BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL INJURY, PROPERTY DAMAGE,
STRICT LIABILITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR INJURY CAUSED BY OR
RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY, CONDITION, OPERATION,
USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY UNIT. FURTHER, LESSEE AGREES TO BE
RESPONSIBLE FOR ALL COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEYS' FEES,
INCURRED BY LESSOR OR ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS IN
DEFENDING SUCH CLAIMS OR IN ENFORCING THIS PROVISION. UNDER NO CONDITION OR
CAUSE OF ACTION SHALL LESSOR BE LIABLE FOR ANY LOSS OF ACTUAL OR ANTICIPATED
BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.

     9. INSURANCE: Lessee, at its expense, shall keep each Unit insured for the
benefit of Lessor against all risks for not less than the amount described in
Section 7 and shall maintain comprehensive public liability insurance (including
product and broad form contractual liability) covering the Unit for not less
than $1,000,000 combined coverage for bodily injury and property damage. All
insurance shall be in a form and with companies as Lessor shall approve, shall
specify Lessor and Lessee as name insured, shall be primary, without the right
of contribution from any other insurance carried by Lessor, and shall provide
that the insurance may not be canceled or altered so as to affect the interest
of Lessor without at least ten (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 this Lease.

     11. REMEDIES: If an Event of Default occurs, Lessor may (a) proceed by
court action to enforce performance by Lessee of the covenants of this Lease or
to recover damages for their breach or (b) by notice in writing to Lessee
terminate this Lease, in which event Lessee shall remain liable as provided
herein and Lessor may do any one or more of the following: (i) declare the
balance due (or the maximum amount permitted by law if recovery of the entire
balance due is prohibited) with respect to each Unit immediately due and payable
and recover any additional damages and expenses sustained by Lessor due to
breach of any covenant, representation or warranty in this Lease other than for
the payment of rent; (ii) enforce the security interest granted herein; (iii)
require Lessee to return each Unit and additional security pursuant to Section
12; and (iv) enter the premises where any Unit or additional security may be and
take possession of it without notice, liability or legal process. Lessee agrees
to pay all charges, costs, expenses and reasonable attorney's fees incurred by
Lessor in enforcing this Lease. Lessor has all rights given to a secured party
by law. Lessor may undertake commercially reasonable efforts to sell or release
a Unit and additional security, and the proceeds of any sale or 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 and additional security, including any taxes, charges, costs, expenses and
reasonable attorney's fees incurred by Lessor: (ii) to pay Lessor all amounts
which under the terms of this Lease are due or have accrued as of the date of
Lessor's receipt of the proceeds: and (iii) to pay Lessor the balance due (or
the maximum amount permitted by law if recovery of the entire balance due is
prohibited) with respect to the Unit and additional security. Any surplus shall
be paid to the person entitled to it. Lessee shall promptly pay any deficiency
to Lessor. Lessee acknowledges that sales of cash or credit to a wholesaler,
retailer or user of a Unit or additional security are all commercially
reasonable. The remedies provided to Lessor shall be cumulative and shall be in
addition to all other remedies existing at law or in equity. If Lessee fails to
perform any of its obligations under this Lease, Lessor may perform the
obligations, and the expenses incurred by Lessor as a result shall be payable by
Lessee upon demand.

     12. RETURN OF UNIT: If Lessor shall rightfully demand possession of a Unit,
Lessee, at its expense, shall promptly deliver possession of the Unit to Lessor,
properly protected and in the condition required by Section 5, at the option of
Lessor, (a) to the premises of the nearest Caterpillar dealer selling equipment
of the same type as the Unit, or (b) on board a carrier named by Lessor and
shipping it, freight collect, to the destination designated by Lessor. If the
Unit is not in the condition required by Section 5, Lessee shall pay to Lessor,
on demand, all 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,
including, but not limited to, proceeds in the form of chattel paper to secure
the payment of all sums due hereunder. Lessee will, at its expense, do any act
and execute, acknowledge, deliver, file, register and record any documents which
Lessor deems desirable in its discretion to protect Lessor's security interest
in the Unit and Lessor's rights and benefits under this Lease. Lessee hereby
irrevocably appoints Lessor as Lessee's Attorney-in-Fact for the signing and
filing of such documents and authorizes Lessor to delegate these limited powers.
Lessee represents and warrants to Lessor that (a) Lessee has the power to make,
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, during the lease term,
display in a prominent place on the Unit labels supplied by Lessor stating that
the Unit is leased from Lessor. Lessee further represents and warrants to Lessor
that Lessee is and shall remain a Corporation registered in the state of NV
("Business Location"); and Lessee will not change its form of business
organization or Business Location without prior written notice to Lessor.

     16. ASSIGNMENT; COUNTERPARTS: The rights of Lessor under this Lease and
title to the Unit may be assigned by Lessor at any time. If notified by Lessor,
Lessee shall make all payments due under this Lease to the party designated in
the notice, without offset or deduction. No assignment of this Lease or any
right or obligation under it may be made by Lessee without the prior written
consent of Lessor. This Lease shall be binding upon and benefit Lessor and
Lessee and their respective successors and assigns. If this Lease is assigned by
Lessor to a partnership or trust, the term "Lessor" shall thenceforth mean and
include the partnership or trust and shall also include, for purposes of
Sections 4, 5, 6, 7, 8 and 9, each partner in or beneficiary of the partnership
or trust. Although multiple counterparts of this document may be signed, only
the counterpart accepted, acknowledged and certified by Caterpillar Financial
Services Corporation on the signature page thereof as the original will
constitute original chattel paper.

     17. EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF LEASE; NOTICES: A
delay or omission by Lessor to exercise any right or remedy shall not impair any
right or remedy and shall not be construed as 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. APPLICABLE LAW, JURISDICTION AND JURY TRIAL WAIVER PROVISIONS: This
Agreement shall be governed by and construed under the laws of the State of
Tennessee, without giving effect to the conflict-of-laws principles thereof, and
Lessee hereby consents to the jurisdiction of any state or federal court located
within the State of Tennessee. THE PARTIES HERETO HEREBY WAIVE THE RIGHT TO
TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OBLIGATIONS OR THE COLLATERAL.

     19. SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Lease
shall be invalid under any law, it shall be deemed omitted but the remaining
provisions hereof shall be given effect. All obligations of Lessee under this
Lease shall survive the expiration or termination of this Lease to the extent
required for their full observance and performance.

EX-10.238

                                                                Exhibit - 10.238

CATERPILLAR FINANCIAL SERVICES CORPORATION                         FINANCE LEASE

                                             Dated as of
                                                        ------------------------

LESSEE:  MEADOW VALLEY CONTRACTORS, INC.

ADDRESS: 4411 S. 40TH ST.
         PHOENIX, AZ 85040

LESSOR:  CATERPILLAR FINANCIAL SERVICES CORPORATION

ADDRESS: 2120 West End Avenue
         Nashville, TN 37203

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) USED  140H         Caterpillar Motor Grader         2ZK02772    $2,950.77    $28,000.00
                                                                   [ILLEGIBLE]


RENT TO BE PAID: in arrears (starts one month after Delivery Date) and every
month thereafter.

Lease Term:  36 Months        Utilization Date: May 25, 2003

The [   ] Mandatory Final Payment (Section 13) [ X ] Optional Final Payment
(Section 14) is applicable to this Lease (check one)

Location of Unit(s): 4411 SO. 40TH ST.
                     PHOENIX, AZ 85040, MARICOPA

ADDITIONAL PROVISIONS:                               RIDERS:

                              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 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 PO Box 100647 Pasadena, CA 91189-0647
or such other location Lessor designates in writing, rent for each Unit as
stated above starting (a) on its Delivery Date if the rent is to be paid in
advance, or (b) one month (or other period as stated above) after its Delivery
Date if the rent is to be paid in arrears. An amount equal to the first rent
payment for each Unit must accompany this document when it is submitted to
Lessor. If Lessor executes this document, the amount shall be the first rent
payment. If Lessor does not execute this document, the amount shall be returned
to Lessee. If Lessor does not receive a rent payment on the date it is due,
Lessee shall pay to Lessor, on demand, a late payment charge equal to five
percent (5%) of the rent payment not paid when due or the highest charge allowed
by law, whichever is less.

  3. NO ABATEMENT: Lessee shall not be entitled to abatement or reduction of
rent or setoff against rent for any reason whatsoever. Except as otherwise
provided, this Lease shall not terminate because of, nor shall the obligations
of Lessor or Lessee be affected by damage to, any defect in, destruction of, or
loss of possession or use of a Unit, the attachment of any lien, security
interest or other claim to a Unit; any interference with Lessee's use of a Unit;
Lessee's insolvency or the commencement of any bankruptcy or similar proceeding
by or against Lessee, or any other cause whatsoever.

  4. DISCLAIMER OF WARRANTIES: Lessee acknowledges and agrees that Lessor is not
the manufacturer of the Unit(s) and that Lessee has selected each Unit based on
Lessee's own judgment without any reliance whatsoever on any statements or
representations made by Lessor. AS BETWEEN LESSOR AND LESSEE, THE UNIT(S) ARE
PROVIDED "AS IS" WITHOUT ANY WARRANTIES OF ANY KIND. LESSOR HEREBY EXPRESSLY
DISCLAIMS a) ALL WARRANTIES OF MERCHANTABILITY, b) ALL WARRANTIES OF FITNESS FOR
A PARTICULAR PURPOSE, AND c) ALL WARRANTIES AGAINST INFRINGEMENT OR THE LIKE.
Lessor assigns to Lessee its interest in any of the manufacturer's warranties on
the Unit(s).

  5. POSSESSION, USE AND MAINTENANCE: Lessee shall not (a) use, operate,
maintain or store a Unit improperly, carelessly, unsafely or in violation of any
applicable law or regulation or for any purpose other than in the conduct of
Lessee's business; (b) abandon a Unit; (c) sublease a Unit, permit the use of a
Unit by anyone other than Lessee, change the use of unit from that specified in
the Application Survey/Usage Rider attached hereto, or change the location of a
Unit from that specified above, without the prior written consent of Lessor; or
(d) create or allow to exist any lien, claim, security interest or encumbrance
on any of its rights hereunder or a Unit. A Unit is and shall remain personal
property regardless of its use or manner of attachment to realty. Lessor and its
agent shall have the right (but not the obligation) to inspect a Unit and
maintenance records relating to it and observe its use. Lessee, at its expense,
shall maintain each Unit in good operating order, repair and condition and shall
perform maintenance at least as frequently as stated in any applicable
operator's guide, service manual, or lubrication and maintenance guide. Lessee
shall not alter any Unit or affix any accessory or equipment to it if doing so
will impair its originally intended function or use or reduce its value. Any
alteration or addition to a Unit shall be the responsibility of and at the sole
risk of Lessee. All parts, accessories and equipment affixed to a Unit shall be
subject to the security interest of Lessor.

              SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS

Lessee: MEADOW VALLEY CONTRACTORS, INC.

By /s/ Kenneth D. Nelson
   ----------------------------------------------

Name (PRINT) /s/ Kenneth D. Nelson
             ------------------------------------

Title Vice President
      -------------------------------------------

Date  3-
     --------------------------------------------

Lessor: CATERPILLAR FINANCIAL SERVICES CORPORATION

By
   ----------------------------------------------

Name (PRINT)
            -------------------------------------

Title
     --------------------------------------------

Date
    ---------------------------------------------

  6.  TAXES: Lessee shall promptly pay or reimburse Lessor for all fees, charges
and taxes of any nature, including, without limitation, personal property taxes,
together with any penalties, fines or additions to tax and interest thereon
(collectively, "Taxes") levied on or assessed against Lessor in connection with
the ownership, leasing, rental, sale, possession, purchase, or use of a Unit;
excluding, however, all charges or taxes on or measured by Lessor's net income,
or charges or taxes levied on or assessed against Lessor in connection with a
Unit after the Unit is returned to Lessor in accordance with the terms of this
Lease. If the reimbursement to Lessor of Taxes constitutes income for federal,
state or local tax purposes and if the Lessor is not entitled to a deduction for
the full amount of the reimbursement, the Lessee shall pay the Lessor an
additional amount such that the net amount received by Lessor after payment of
all related Taxes equals the amount which Lessor would have received if no such
Taxes were payable. Lessee shall prepare and timely file, in a manner
satisfactory to Lessor, any reports or returns which may be required with
respect to a Unit, including, without limitation, personal property tax returns.
For purposes of this section, in computing Lessor's Taxes attributable to a
reimbursement, it shall be assumed that the Lessor is in the highest marginal
tax rate applicable to corporations at the time the reimbursement is made, and
that the term "Lessor" shall include any affiliated group, within the meaning of
Section 1504 of the Internal Revenue Code of 1986, of which Lessor is a member
for any year in which a consolidated or combined income tax return is filed for
the affiliated group.

  7.  LOSS OR DAMAGE: Lessee shall bear the risk, of any Casualty Occurrence
(the Unit is worn out, lost, stolen, destroyed, taken by government action or,
in Lessor's opinion, irreparably damaged) or other damage from the time it is
purchased by Lessor until it is returned to Lessor. Lessee shall give Lessor
prompt notice of a Casualty Occurrence or other damage. If, in Lessor'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 lesser of (a) the sum of (i) all amounts
then due under this Lease with respect to the Unit, (ii) the present value of
all unpaid rent for the Unit, and (iii) the present value of the Purchase Price
of the Unit as stated on the front hereof; or (b) the maximum amount permitted
by law. Present values will be determined by discounting at the implicit
interest rate of this Lease. Upon making this payment, the lease term with
respect to the Unit shall terminate and Lessee shall be entitled to possession
of the Unit and to any recovery in respect to it (subject to the rights of any
insurer).

  8.  WAIVER AND INDEMNITY: LESSEE HEREBY AGREES TO RELEASE, DEFEND, INDEMNIFY
AND HOLD HARMLESS LESSOR, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS
FROM AND AGAINST ANY CLAIMS OF LESSEE OR THIRD PARTIES, INCLUDING CLAIMS BASED
UPON BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL INJURY, PROPERTY DAMAGE,
STRICT LIABILITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR INJURY CAUSED BY OR
RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY, CONDITION, OPERATION,
USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY UNIT. FURTHER, LESSEE AGREES TO BE
RESPONSIBLE FOR ALL COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEYS' FEES,
INCURRED BY LESSOR OR ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS IN
DEFENDING SUCH CLAIMS OR IN ENFORCING THIS PROVISION. UNDER NO CONDITION OR
CAUSE OF ACTION SHALL LESSOR BE LIABLE FOR ANY LOSS OF ACTUAL OR ANTICIPATED
BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.

  9.  INSURANCE: Lessee, at its expense, shall keep each Unit insured for the
benefit of Lessor against all risks for not less than the amount described in
Section 7 and shall maintain comprehensive public liability insurance (including
product and broad form contractual liability) covering the Unit for not less
than $1,000,000 combined coverage for bodily injury and property damage. All
insurance shall be in a form and with companies as Lessor shall approve, shall
specify Lessor and Lessee as name insured, shall be primary, without the right
of contribution from any other insurance carried by Lessor, and shall provide
that the insurance may not be canceled or altered so as to affect the interest
of Lessor without at least to (10) days' prior written notice to Lessor. All
insurance covering loss or damage to a Unit shall name Lessor as loss payee.
Lessee shall not make adjustments with insurers except with Lessor's prior
written consent 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 this Lease.

  11.  REMEDIES: If an Event of Default occurs, Lessor may (a) proceed by court
action to enforce performance by Lessee of the covenants of this Lease or to
recover damages for their breach or (b) by notice in writing to Lessee terminate
this Lease, in which event Lessee shall remain liable as provided herein and
Lessor may do any one or more of the following: (i) declare the balance due (or
the maximum amount permitted by law if recovery of the entire balance due is
prohibited) with respect to each Unit immediately due and payable and recover
any additional damages and expenses sustained by Lessor due to breach of any
covenant, representation or warranty in this Lease other than for the payment of
rent; (ii) enforce the security interest granted herein; (iii) require Lessee to
return each Unit and additional security pursuant to Section 12; and (iv) enter
the premises where any Unit or additional security may be and take possession of
it without notice, liability or legal process. Lessee agrees to pay all charges,
costs, expenses and reasonable attorney's fees incurred by Lessor in enforcing
this Lease. Lessor has all rights given to a secured party by law. Lessor may
undertake commercially reasonable efforts to sell or release a Unit and
additional security, and the proceeds of any sale or 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 and
additional security, including any taxes, charges, costs, expenses and
reasonable attorney's fees incurred by Lessor; (ii) to pay Lessor all amounts
which under the terms of this Lease are due or have accrued as of the date of
Lessor's receipt of the proceeds; and (iii) to pay Lessor the balance due (or
the maximum amount permitted by law if recovery of the entire balance due is
prohibited) with respect to the Unit and additional security. Any surplus shall
be paid to the person entitled to it. Lessee shall promptly pay any deficiency
to Lessor. Lessee acknowledges that sales for cash or credit to a wholesaler,
retailer or user of a Unit or additional security are all commercially
reasonable. The remedies provided to Lessor shall be cumulative and shall be in
addition to all other remedies existing at law or in equity. If Lessee fails to
perform any of its obligations under this Lease, Lessor may perform the
obligations, and the expenses incurred by Lessor as a result shall be payable by
Lessee upon demand.

  12. RETURN OF UNIT: If Lessor shall rightfully demand possession of a Unit,
Lessee, at its expense, shall promptly deliver possession of the Unit to Lessor,
properly protected and in the condition required by Section 5, at the option of
Lessor, (a) to the premises of the nearest Caterpillar dealer selling equipment
of the same type as the Unit, or (b) on board a carrier named by Lessor and
shipping it, freight collect, to the destination designated by Lessor. If the
Unit is not in the condition required by Section 5, Lessee shall pay to Lessor,
on demand, all 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,
including, but not limited to, proceeds in the form of chattel paper to secure
the payment of all sums due hereunder. Lessee will, at its expense, do any act
and execute, acknowledge, deliver, file, register and record any documents which
Lessor deems desirable in its discretion to protect Lessor's security interest
in the Unit and Lessor's rights and benefits under this Lease. Lessee hereby
irrevocably appoints Lessor as Lessee's Attorney-in-Fact for the signing and
filing of such documents and authorizes Lessor to delegate these limited powers.
Lessee represents and warrants to Lessor that (a) Lessee has the power to make,
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, during the lease term,
display in a prominent place on the Unit labels supplied by Lessor stating that
the Unit is leased from Lessor. Lessee further represents and warrants to Lessor
that Lessee is and shall remain a Corporation registered in the state of NV
("Business Location"); and Lessee will not change its form of business
organization or Business Location without prior written notice to Lessor.

  16.  ASSIGNMENT; COUNTERPARTS: The rights of Lessor under this Lease and title
to the Unit may be assigned by Lessor at any time. If notified by Lessor, Lessee
shall make all payments due under this Lease to the party designated in the
notice, without offset or deduction. No assignment of this Lease or any right or
obligation under it may be made by Lessee without the prior written consent of
Lessor. This Lease shall be binding upon and benefit Lessor and Lessee and their
respective successors and assigns. If this Lease is assigned by Lessor to a
partnership or trust, the term "Lessor" shall thenceforth mean and include the
partnership or trust and shall also include, for purposes of Sections 4, 5, 6,
7, 8 and 9, each partner in or beneficiary of the partnership or trust. Although
multiple counterparts of this document may be signed, only the counterpart
accepted, acknowledged and certified by Caterpillar Financial Services
Corporation on the signature page thereof as the original will constitute
original chattel paper.

  17.  EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF LEASE; NOTICES: A
delay or omission by Lessor to exercise any right or remedy shall not impair any
right or remedy and shall not be construed as 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.  APPLICABLE LAW, JURISDICTION AND JURY TRIAL WAIVER PROVISIONS: This
Agreement shall be governed by and construed under the laws of the State of
Tennessee, without giving effect to the conflict-of-laws principles thereof, and
Lessee hereby consents to the jurisdiction of any state or federal court located
within the State of Tennessee. THE PARTIES HERETO HEREBY WAIVE THE RIGHT TO
TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OBLIGATIONS OR THE COLLATERAL.

  19.  SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Lease shall
be invalid under any law, it shall be deemed omitted but the remaining
provisions hereof shall be given effect. All obligations of Lessee under this
Lease shall survive the expiration or termination of this Lease to the extent
required for their full observance and performance.

EX-99.15

                                                                   Exhibit-99.15


                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Meadow Valley Corporation (the
"Company") on Form 10-Q for the period ending March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Bradley
E. Larson, President and Chief Executive Officer of the Company, certify
pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or
         15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Company.

/s/ Bradley E. Larson
- -----------------------------------
Bradley E. Larson
President and Chief Executive Officer
May 15, 2003

EX-99.16

                                                                   Exhibit-99.16


                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Meadow Valley Corporation (the
"Company") on Form 10-Q for the period ended March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Clint
Tryon, Principal Accounting Officer of the Company, certify, pursuant to 18
U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or
         15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Company.

/s/ Clint Tryon
- -----------------------------------
Clint Tryon
Principal Accounting Officer
May 15, 2003