-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OjxV5/xRgeCHrIIVulrUDA6ul4Se+06+oRI1fSZp1kLQGP6DDNV32eXU07L38vjc QY503FQ6HPGNyR+gX27a5A== 0000899243-02-000912.txt : 20020415 0000899243-02-000912.hdr.sgml : 20020415 ACCESSION NUMBER: 0000899243-02-000912 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 29 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020401 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEADOW VALLEY CORP CENTRAL INDEX KEY: 0000934749 STANDARD INDUSTRIAL CLASSIFICATION: WATER, SEWER, PIPELINE, COMM AND POWER LINE CONSTRUCTION [1623] IRS NUMBER: 880328443 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 000-25428 FILM NUMBER: 02596754 BUSINESS ADDRESS: STREET 1: 4411 S 40TH ST STREET 2: STE D-11 CITY: PHOENIX STATE: AZ ZIP: 85040 BUSINESS PHONE: 6024375400 MAIL ADDRESS: STREET 1: 4411 S 40TH ST STREET 2: STE D-11 CITY: PHOENIX STATE: AZ ZIP: 85040 10-K405 1 d10k405.txt FORM 10-K405 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number 0-25428 MEADOW VALLEY CORPORATION (Exact name of registrant as specified in its charter) Nevada 88-0328443 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 4411 SOUTH 40TH STREET, SUITE D-11, PHOENIX, AZ 85040 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (602) 437-5400 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Title of each class: Name of exchange on which registered: ------------------- ------------------------------------ Common stock, $.001 par value Nasdaq SmallCap Market Common stock purchase warrants Nasdaq SmallCap Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------ ------ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] On March 6, 2002, the aggregate market value of the registrant's voting stock held by non-affiliates was $5,636,863 On March 6, 2002, there were 3,559,938 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE The registrant incorporates by reference into Part III of this Report, information contained in its definitive proxy statement to be disseminated in connection with its Annual Meeting of Shareholders for the year ended December 31, 2001. 1 MEADOW VALLEY CORPORATION ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2001 TABLE OF CONTENTS PART I PAGE Item 1. Business 3 Item 2. Properties 10 Item 3. Legal Proceedings 11 Item 4. Submission of Matters to a Vote of Security Holders 12 PART II Item 5. Market for the Registrant's Common Stock and Related Stockholders Matters 12 Item 6. Selected Financial Data 13 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 14 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 21 Item 8. Financial Statements and Supplementary Data 22 Item 9. Change in and Disagreements with Accountants on Accounting and Financial Disclosure 22 PART III Item 10. Directors and Executive Officers of the Registrant 22 Item 11. Executive Compensation 22 Item 12. Security Ownership of Certain Beneficial Owners and Management 22 Item 13. Certain Relationships and Related Transactions 22 PART IV Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K 23 2 PART I ITEM 1. BUSINESS RECENT DEVELOPMENTS Two consecutive years of operating losses, due primarily to losses on projects in New Mexico and one project in Clark County, Nevada and start-up costs related to the expansion of the ready mix business have greatly impaired working capital and caused cash shortages. As a result, payment of payables is slower than normal and the Company has borrowed the full amount available under its line of credit. The Company has filed, or will file, claims to recoup costs incurred on projects where the Company believes it is due compensation under the terms of the respective contract. Prosecution of these claims through the obligatory administrative levels and then, if necessary, through mediation, arbitration or litigation is a time-consuming process and, therefore, the Company's working capital will likely remain at decreased levels until final resolution of the claims. The resultant decline in working capital has also reduced the Company's bonding capacity that determines the size and number of projects the Company can bid on and obtain. Given these circumstances, the Company has acted to improve working capital by, among other things, considering the sale of certain assets. Accordingly, on March 22, 2002, the Company executed a definitive agreement to sell certain pit assets that include the quarry near Prescott Valley, Arizona and the gravel pit near Chino Valley, Arizona. The Company previously announced entering into a non-binding letter of intent with RMI Enterprises, LLC for the stock sale of Ready Mix, Inc., the Company's ready mix concrete subsidiary, but that letter of intent was terminated on March 26, 2002. The termination stemmed from the conclusion that the purchase price offer significantly undervalued Ready Mix, Inc.; that the Company could not obtain a clean opinion of legal counsel acceptable to the Board of Directors certifying that the transaction, as proposed, would fully conform to Nevada laws; and the Board's determination that, at this time, the sale of pit assets was preferable to the sale of Ready Mix, Inc. The transaction proposed by the definitive agreement will, depending upon final inventory stockpile measurement, yield approximately $4.1 to $4.4 million in cash and eliminate approximately $.2 million in debt and $1.7 million in future operating lease payments. HISTORY The following is a summary of certain information contained in this Report and is qualified in its entirety by the detailed information and financial statements that appear elsewhere herein. Except for the historical information contained herein, the matters set forth in this Report include forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties are detailed throughout this Report and will be further discussed from time to time in the Company's periodic reports filed with the Commission. The forward-looking statements included in this Report speak only as of the date hereof. Meadow Valley Corporation (the "Company") was incorporated in Nevada on September 15, 1994. In October and November 1995, the Company sold 1,926,250 Units of its securities to the public at $6.00 per Unit (the "Public Offering"). Each Unit consisted of one share of $.001 par value common stock and one common stock purchase warrant exercisable to purchase one additional share of common stock at $7.20 per share until October 16, 2000. In September 2000, the exercise price of the warrants was reduced to $5.00 per share and the exercise period was extended until June 30, 2002. The Company currently has two wholly owned subsidiaries, Meadow Valley Contractors, Inc. and Ready Mix, Inc. On October 1, 1994, the Company purchased all of the outstanding Common Stock of Meadow Valley Contractors, Inc. ("MVCI") for $11.5 million comprised of a $10 million promissory note and $1.5 million paid by the issuance of 500,000 restricted shares of the Company's Common Stock valued at $3.00 per share. On January 4, 1999, the $10 million promissory note was paid in full. MVCI was founded in 1980 as a heavy construction contractor and has been engaged in that activity since inception. References to the Company's history include the history of MVCI. Through MVCI, the Company primarily operates as a heavy construction contractor. MVCI specializes in public infrastructure projects including the construction of bridges and overpasses, channels, roadways, highways and airport runways. MVCI generally serves as the prime contractor for public sector customers (such as federal, state and local governmental authorities) in the states of Nevada, Arizona, and Utah. MVCI primarily seeks public sector customers 3 because public sector projects are less cyclical than private sector projects, payment is more reliable, work required by the project is generally standardized and little marketing expense is incurred in obtaining projects. In 1996, the Company expanded into the materials segment of the construction industry with the formation of Ready Mix, Inc. ("RMI"). RMI manufactures and distributes ready mix concrete and owns and operates four ready mix concrete batch plants - two in the Las Vegas, NV area and two in the Phoenix, AZ area and 95 ready mix trucks. RMI also produces the majority of its own rock and sand for its Nevada plants from a crushing and screening plant in Moapa, NV. RMI primarily targets prospective customers such as concrete subcontractors, prime contractors, homebuilders, commercial and industrial property developers, pool builders and homeowners. RMI began its ready mix concrete operation from its first location in North Las Vegas in March 1997, began processing rock and sand from its Moapa pit in November 1999 and expanded into the Phoenix market with two plants in 2000. Consistent with the Company's dual interests in construction services and construction materials, the Company owns and leases two portable hot mix asphalt plants, a rubberized asphalt plant, and related asphalt paving equipment. The portability of these asphalt paving capabilities provides the Company with an opportunity to expand its existing geographic market, enhance its construction operations in its existing market, improve its competitiveness and generate increased revenues on projects that call for large quantities of asphaltic concrete, recycled asphalt, or rubberized asphalt. These capabilities also afford the Company the opportunity to provide construction materials or to subcontract its services to other construction companies. The Company's backlog (anticipated revenue from the uncompleted portions of awarded projects) was approximately $76 million at December 31, 2001, compared to $75 million at December 31, 2000, and consists of various projects in Nevada, Arizona and Utah. Approximately $65 million of the Company's backlog is scheduled for completion during 2002. The Company has acted as the prime contractor on projects funded by a number of governmental authorities, including the Federal Highway Administration, the Arizona Department of Transportation, the Nevada Department of Transportation, the Utah Department of Transportation, the Clark County (Nevada) Department of Public Works, the Salt Lake City (Utah) Airport Authority, the New Mexico State Highway and Transportation Department and the City of Phoenix. In 1996, the Company formed Prestressed Products Incorporated ("PPI") as a wholly owned subsidiary to design, manufacture and erect precast prestressed concrete building components for use on commercial, institutional and public construction projects throughout the Southwest. Product lines included architectural and structural building components and prestressed bridge girders for highway construction. During 1997, PPI began operations with a precast yard and concrete batch plant located on leased property adjacent to the Company's office in Moapa, Nevada. As a result of continuing operating losses, in June 1998, the Company adopted a formal plan (the "Plan") to discontinue the operations of PPI. The Plan included the completion of approximately $2.8 million of uncompleted contracts and the disposition of approximately $1.2 million of equipment. The Company recorded an estimated loss of $1,950,000 (net of income tax benefit of $1,300,000), related to the disposal of assets of PPI, which included a provision of $1,350,000 for estimated losses during the phase- out period of July 1, 1998 through June 30, 1999. During the twelve months ended December 31, 1999 the Company incurred $598,172 of the expected losses (net of income tax benefit of $398,743). BUSINESS STRATEGY The Company seeks to grow revenue and improve profitability by pursuing the following business strategy: (i) Continue to actively bid in the construction markets in Arizona, Nevada and Utah and improve construction project profitability. The Company will continue to actively bid on transportation infrastructure and other related heavy civil projects in its core geographic market of Arizona, Nevada and Utah. The difficulties experienced in getting paid by the New Mexico State Highway and Transportation Department has caused the Company to cease operations in the New Mexico market with the exception of the ongoing prosecution of claims which is performed from the Phoenix, AZ office. The Company will strive to increase margins on new work bidding. (ii) Due to the need for additional working capital, the Company may seek to sell the mineral leases in New Mexico, or alternatively, to form a strategic alliance to operate the pits as commercial sources for aggregate sales to third parties. In addition, the Company entered into a definitive agreement, due to the attractiveness of the offer, to sell certain pit 4 assets near Chino Valley and Prescott Valley, Arizona. The Company may also consider the disposal of other assets as a means to increase working capital. (iii) Diligently pursue the successful resolution of the Company's construction claims. The Company has incurred substantial cost in completing certain projects in New Mexico and Clark County, Nevada and strongly believes that the costs are compensable due to changed conditions, owners' plan errors and omissions, conflicting utilities, other causes for delays and misadministration by third party construction managers employed by the owners. The total amount of claims that have been submitted or soon-to-be submitted is approximately $54.4 million. This amount includes costs that are attributable to subcontractors and to a prime contractor. The Company's portion of the claims is approximately $29.4 million. To date, the Company has recorded approximately $7.8 million in claim revenue to offset costs incurred on the claims. In addition, the Company has also recorded approximately $1.8 million for unpaid quantities, unpaid change orders and pending change orders in advance of receipt. On the average, the Company has recorded approximately 26.4% of the total claim amount into revenue. Management acknowledges that successful resolution to claims constitutes the most important strategic course of action to restoring financial health and increased surety credit. See "Insurance and Bonding". (iv) Maintain operating costs and SG&A costs at competitive levels. The Company has adjusted to its recent decline in contract backlog by reducing personnel, consolidating functions at the area and corporate office levels and disposing of under-utilized equipment. Costs are continually monitored to identify trends that may require timely management action. MARKET OVERVIEW In spite of the current recession, the total construction market for 2002 is expected to decline only slightly from the robust levels experienced over most of the past decade. While this decline in the total construction market will likely have some affect on the Company, it is believed that it will be minimal due to the fact that public works represent the primary source of the Company's revenue. The Transportation Equity Act for the 21st Century ("TEA 21"), enacted in 1998, and the annual appropriation levels authorized under this legislation give some assurance of continued federal funding through 2003 for transportation infrastructure. The actual flow of funds from TEA 21, approximately 40% more than previous funding levels from 1993 to 1997, has improved in recent years after a slow start. However, 2003 TEA-21 authorization levels are expected to decline due to decreased tax revenues. In spite of this, the anticipated flow in 2002 of federal funds from TEA-21 combined with the existing high volume of infrastructure work in the healthy construction economy of the Company's three-state market leads the Company to concur with most construction forecasts that infrastructure construction (primarily highways, bridges, overpasses, tunnels, airport runways and taxiways and other transportation and heavy civil projects) in the western United States will increase slightly, by about 4%, over 2001 levels. (Source: Fails Management Institute - Construction Forecast 2002) The Nevada Department of Transportation has announced that 2002 and 2003 will significantly surpass previous years' spending levels while Arizona Department of Transportation is expecting about a 20% decline in highway contract lettings for 2002 compared to 2001 and Utah Department of Transportation looks unchanged for the same period. For the decade from 1990 to 2000, Maricopa County, Arizona (Phoenix metropolitan area) and Clark County, Nevada (Las Vegas metropolitan area) ranked number 1 and number 3 respectively in the nation for the number of new residents. For the same period, Nevada led all states in population growth percentage at 66.3% with Arizona second at 40% and Utah's 29.6% growth rate was fourth behind Colorado. Population growth is a key indicator for the construction industry as it drives increases in housing and commercial and industrial construction, not to mention transportation facilities. Freeway construction programs, funded by sales tax measures, continue to create opportunities for the Company in Phoenix and Las Vegas. The Company's construction materials operations are impacted to a greater degree by the conditions of the residential and commercial sectors of the construction economy. Residential construction activity in 2001 in Phoenix, Arizona was the highest in recent years. Consequently, if interest rate levels remain low, there appears to be sufficient momentum in the housing markets to carry 2002 to a successful year for RMI sales in both Phoenix and Las Vegas. OPERATIONS In addition to the construction of highways, bridges, overpasses and airport runways, the Company constructs other heavy civil projects. From its Phoenix, Arizona corporate office and area offices in Phoenix, Arizona, Las Vegas, Nevada, 5 North Las Vegas, Nevada and Springville, Utah, the Company markets (primarily by responding to solicitations for competitive bids) and manages all of its projects. Project management is also located on-site to provide direct supervision for operations. In addition to profitability, the Company considers a number of factors when determining whether to bid on a project, including the location of the project, likely competitors and the Company's current and projected workloads. The Company uses a computer-based project estimating system which reflects its bidding and construction experience and performs detailed quantity take-offs from bidding documents, which the Company believes helps identify a project's risks and opportunities. The Company develops comprehensive estimates with each project divided into phases and line items for which separate labor, equipment, material, subcontractor and overhead cost estimates are compiled. Once a project begins, the estimate provides the Company with a budget against which ongoing project costs are measured. There can be no assurance that every project will attain its budgeted costs. A number of factors can affect a project's profitability including weather, availability of a quality workforce and actual productivity rates. Each month the project manager updates the project's projected performance at completion by using actual costs-to-date and re-forecasted costs-to-complete for the balance of the work remaining. Regular review of these estimated costs-at-completion reports allow project, area and corporate management to be as responsive as possible to cost overruns or other problems that may affect profitability. The Company owns most of the equipment used in its business lines, including cranes, backhoes, graders, loaders, trucks, trailers, pavers, rollers, construction material processing plants, batch plants and related equipment. The net book value of the Company's equipment at December 31, 2001 was approximately $15.3 million. The Company leases a significant portion of its equipment and attempts to keep the equipment as fully utilized as possible. Equipment owned by the Company may be rented on a short-term basis to third parties. The Company's corporate management oversees operational and strategic issues and, through the corporate accounting staff, provides administrative support services to subsidiary managers, area managers and individual project management at the project site. The latter are responsible for planning, scheduling and budgeting operations, equipment maintenance and utilization and customer satisfaction. Subsidiary managers, area managers and project managers monitor project costs on a daily and weekly basis while corporate management monitors such costs monthly. Raw materials (primarily concrete, aggregate and steel) used in the Company's operations are available from a number of sources. There are a sufficient number of materials suppliers within the Company's market area to assure the Company of adequate competitive bids for supplying such raw materials. Generally, the Company will obtain several bids from competing concrete, asphalt or aggregate suppliers whose reserves of such materials will normally extend beyond the expected completion date of the project. Costs for raw materials vary depending upon project duration, construction season, and other factors; but, generally, prices quoted to the Company for raw materials are fixed for the project's duration. The Company initiated its commercial construction materials operations in the first quarter 1997 with the start-up of RMI. RMI currently operates four ready mix concrete batch plants - two in the Las Vegas, NV area and two in the Phoenix, AZ area and a total of 95 ready mix trucks. Most of RMI's internal sand and gravel requirements in the Las Vegas market are manufactured from its rock quarry in Moapa, Nevada. Production capacity at the Moapa quarry was increased substantially during 1999 with further refinements added in 2000. A fulltime sales staff promotes sales of ready mix concrete, rock and sand products and landscape rock. Through mineral leases, the Company also controls pits or quarries in or near Nephi, UT, Ruidoso, NM, Alamogordo, NM, Oro Grande, NM, Albuquerque, NM, El Paso, TX, Yuma, AZ, Chino Valley, AZ and Prescott Valley, AZ. These locations operate under the Meadow Valley Contractors, Inc. subsidiary since most of the products are used on MVCI projects. From these locations, MVCI manufactures and sells rock and sand products, and from time to time asphalt or concrete from portable plants, to its own projects or to third parties. In January 2002, the Company entered into an agreement that terminates all legal issues at the Prescott quarry and also provides access to the Town of Prescott Valley's reliable water supply. Due to the need for additional working capital and the exit from the New Mexico market, the Company may seek to sell the mineral leases in New Mexico, or alternatively, to form a strategic alliance to operate the pits as commercial sources for aggregate sales to third parties. In addition, the Company entered into a definitive agreement, due to the attractiveness of the offer, to sell certain pits assets near Chino Valley and Prescott Valley, Arizona. 6 PROJECTS AND CUSTOMERS The Company specializes in public sector construction projects and its principal customers are the state departments of transportation in Nevada, Arizona and Utah and bureaus and departments of municipal and county governments in those states. Since completing the final contracts in New Mexico, the Company has ceased operations in New Mexico. For the year ended December 31, 2001, revenue generated from five projects in Nevada, Arizona and Utah represented approximately 30% of the Company's revenue. The discontinuance of any projects, a general economic downturn or a reduction in the number of projects let out for bid in any of the states in which the Company operates, could have an adverse effect on its future results of operations. For the years ended December 31, 2001, 2000 and 1999, the Company recognized a significant portion of its consolidated revenue from four customers (shown as an approximate percentage of consolidated revenue): For the Years Ended December 31, -------------------------------- 2001 2000 1999 --------- -------- -------- Arizona Department of Transportation 21.9% 17.5% 26.2% Clark County General Services 12.5% 16.3% 28.7% Nevada Department of Transportation 9.6% 23.0% 17.2% Utah Department of Transportation 14.7% 6.1% 5.8% BACKLOG The Company's backlog (anticipated revenue from the uncompleted portions of awarded projects) was approximately $76 million at December 31, 2001, compared to approximately $75 million at December 31, 2000. At December 31, 2001, the Company's backlog included approximately $65 million of work that is scheduled for completion during 2002. Accordingly, revenue in the future will be significantly reduced if the Company is unable to obtain substantial new projects in 2002. The Company includes a construction project in its backlog at such time as a contract is awarded or a firm letter of commitment is obtained. The Company believes that its backlog figures are firm, subject to provisions contained in its contracts, which allow customers to modify or cancel the contracts at any time upon payment of a relatively small cancellation fee. The Company has not been materially adversely affected by contract cancellations or modifications in the past. Revenue is impacted in any one period by the backlog at the beginning of the period. The Company's backlog depends upon the Company's success in the competitive bid process. Bidding strategies and priorities may be influenced and changed from time to time by the level of the Company's backlog and other internal and external factors. A portion of the Company's anticipated revenue in any year is not reflected in its backlog at the start of the year because some projects are initiated and completed in the same year. COMPETITION The Company believes that the primary competitive factors as a prime contractor in the heavy construction industry are price, reputation for quality work, financial strength, knowledge of local market conditions and estimating abilities. The Company believes that it competes favorably with respect to each of the foregoing factors on projects that it is able to bid. Most of the Company's projects involve public sector work for which contractors are first pre-qualified to bid and then are chosen by a competitive bidding process, primarily on the basis of price. The Company competes with a large number of small owner/operator contractors that tend to dominate smaller (under $4 million) projects. When bidding on larger infrastructure projects, the Company also competes with larger, well capitalized regional and national contractors (including Granite Construction Incorporated, Peter Kiewit Sons', Inc., Sundt Corp., among others), many of whom have larger net worth, higher bonding capacity and more construction personnel than the Company. In the event of a decrease of work available in the private construction market, it is foreseeable that contractors may exit the private market and enter the public market segment resulting in increased competition. Operating losses over the last two years and reduced liquidity due to the Company's collections problems with New Mexico and Clark County, Nevada have resulted in a change of the Company's surety credit. Currently the Company is limited to a single project bond approval of up to $10 million and an aggregate program bond capacity of approximately $100 million. The Company believes its bonding capacity is sufficient to sustain operations, but will limit growth. Larger competitors typically have unlimited bonding capacity and, therefore, are able to bid on more work than the Company. Except for bonding capacity and liquidity, the Company does not believe it is at a competitive disadvantage in relation to its 7 larger competitors. With respect to its smaller competitors, the Company believes that its current bonding capacity and long relationships with subcontractors and suppliers may be competitive advantages. Often, the Company faces the same competitors for sales of construction materials as it does for its contracting work. It is common for prime contractors in the heavy highway construction industry to develop some degree of vertical integration into construction materials. Companies such as Granite Construction, Kiewit, Oldcastle and LaFarge, among others, provide contracting services and produce construction materials. The quality of the product and the customer service are often just as important, if not more so, than price in successfully marketing construction materials. Vertical integration into construction materials may occasionally allow the Company to be more competitive in its bidding for construction contracts. However, the Company's marketing strategy is to make third party sales a top priority. To accomplish this, the Company recognizes it must provide quality products and service to its construction materials customers. THE CONTRACT PROCESS The Company's projects are obtained primarily through competitive bidding and negotiations in response to advertisements by federal, state and local government agencies and solicitations by private parties. The Company submits bids after a detailed review of the project specifications, an internal review of the Company's capabilities and equipment availability and an assessment of whether the project is likely to attain targeted profit margins. The Company owns, leases, or is readily able to rent, most equipment necessary to complete the projects upon which it bids. After computing estimated costs of the project to be bid, the Company adds its desired profit margin before submitting its bid. The Company believes that success in the competitive bidding process involves (i) being selective on projects bid upon in order to conserve resources, (ii) identifying projects which require the Company's specific expertise, (iii) becoming familiar with all aspects of the project to avoid costly bidding errors and (iv) analyzing the local market to determine the availability and cost of labor and the degree of competition. Since 1995, the Company has been awarded contracts for approximately 19.29% of the projects upon which it has bid. A substantial portion of the Company's revenue is derived from projects that involve "fixed unit price" contracts under which the Company is committed to provide materials or services at fixed unit prices (such as dollars per cubic yard of earth or concrete, or linear feet of pipe). The unit price is determined by a number of factors including haul distance between the construction site and the warehouses or supply facilities of local material suppliers and to or from disposal sites, site characteristics and the type of equipment to be used. While the fixed unit price contract generally shifts the risk of estimating the quantity of units for a particular project to the customer, any increase in the Company's unit cost over its unit bid price, whether due to inefficiency, faulty estimates, weather, inflation or other factors, must be borne by the Company. Most public sector contracts provide for termination of the contract at the election of the customer. In such event the Company is generally entitled to receive a small cancellation fee in addition to reimbursement for all costs it incurred on the project. Many of the Company's contracts are subject to completion requirements with liquidated damages assessed against the Company if schedules are not met. These provisions in the past have not materially adversely affected the Company. The contractor is also obligated to perform work as directed to do so by the owner. If the contractor believes the directives to be outside the scope of the original bid documents, or if the physical conditions as found on the project are different than provided in the bid documents, or for any variety of reasons the contractor believes the directive to perform the work creates costs that could not reasonably be ascertained from the bid documents, the contract permits the contractor to make a claim for equitable adjustment to the contract price. Such equitable adjustment requests are often called contract claims. The process for resolving claims may vary from one contract to another, but in general there is a process to attempt resolution at the project supervisory level or with higher levels of management within the organizations of the contractor and the owner. Depending upon the terms of the contract, claim resolution may employ a variety of resolution methods including mediation, arbitration, binding arbitration, litigation or other methods. Regardless of the process, it is typical that when a potential claim arises on a project, the contractor fulfills the obligation to perform the work and must incur the costs in doing so. The contractor does not recoup the costs until the claim is resolved. It is not uncommon for the claim resolution process to take months, or, if it entails litigation, years to resolve. Contracts often involve work periods in excess of one year. Revenue on uncompleted fixed price contracts is recorded under the percentage of completion method of accounting. The Company begins to recognize revenue on its contracts when it first incurs direct costs. Pursuant to common construction industry practice, the customer may retain a 8 portion of billings, generally not exceeding 10%, until the project is completed satisfactorily and all obligations of the contractor are paid. The Company acts as prime contractor on most of its construction projects and subcontracts certain activities such as electrical, mechanical, guardrail and fencing, signing and signals, foundation drilling, steel erection and other specialty work to others. As prime contractor, the Company bills the customer for work performed and pays the subcontractors from funds received from the customer. Occasionally the Company provides its services as a subcontractor to another prime contractor. As a subcontractor, the Company will generally receive the same or similar profit margin as it would as a prime contractor, although revenue to the Company will be smaller because the Company only contracts a part of the project. As prime contractor, the Company is responsible for the performance of the entire contract, including work assigned to subcontractors. Accordingly, the Company is subject to liability associated with the failure of subcontractors to perform as required under the contract. The Company occasionally requires its subcontractors to furnish bonds guaranteeing their performance, although affirmative action regulations require the Company to use its best efforts to hire minority subcontractors for a portion of the project and some of these subcontractors may not be able to obtain surety bonds. On average, the Company has required performance bonds for less than 10% of the dollar amount of its subcontracted work, but will likely increase the percentage of bonded subcontractors in the future. The Company is generally aware of the skill levels and financial condition of its subcontractors through its direct inquiry of the subcontractors and contract partners of the subcontractors, as well as its review of financial information provided by the subcontractors and third party reporting services including credit reporting agencies and bonding companies. In connection with public sector contracts, the Company is required to provide various types of surety bonds guaranteeing its own performance. The Company's ability to obtain surety bonds depends upon its net worth, working capital, past performance, management expertise and other factors. Surety companies consider such factors in light of the amount of the Company's surety bonds then outstanding and the surety companies' current underwriting standards, which may change from time to time. See "Insurance and Bonding". INSURANCE AND BONDING The Company maintains general liability and excess liability insurance covering its owned and leased construction equipment and workers' compensation insurance in amounts it believes are consistent with its risks of loss and in compliance with specific insurance coverage required by its customers as a part of the bidding process. The Company carries liability insurance of $11 million per occurrence, which management believes is adequate for its current operations and consistent with the requirements of projects currently under construction by the Company. The Company carries builders risk insurance on a limited number of projects and depends upon management's assessment of individual project risk versus the cost of insurance. The Company is required to provide a surety bond on most of its projects. The Company's ability to obtain bonding, and the amount of bonding required, is primarily determined by the Company's management experience, net worth, liquid working capital (consisting of cash and accounts receivable in excess of accounts payable and accrued liabilities), the Company's performance history, the number and size of projects under construction and other factors. Surety companies consider such factors in light of the amount of the Company's surety bonds then outstanding and the surety companies' current underwriting standards, which may change from time to time. The larger the project and/or the more projects, in which the Company is engaged, the greater the Company's bonding, net worth and liquid working capital requirements. Bonding requirements vary depending upon the nature of the project to be performed. The Company generally pays a fee to bonding companies based upon the amount of the contract to be performed. Because these fees are generally payable at the beginning of a project, the Company must maintain sufficient working capital to satisfy the fee prior to receiving revenue from the project. Operating losses for the past two years and reduced liquidity due to the Company's collections problems with New Mexico and Clark County, Nevada have resulted in a change in the Company's surety credit. Currently the Company has surety credit up to $10 million on a single project and an aggregate program bond capacity of approximately $100 million. The Company believes its bonding capacity is sufficient to sustain existing levels of workload but will limit growth. If working capital can be increased by the sale of assets or additional financing, if structured favorably, the Company may be able to obtain additional surety credit that may permit bidding on more numerous and larger projects and improve the likelihood of increasing revenue and profit. 9 MARKETING The Company obtains its projects primarily through the process of competitive bidding. Accordingly, the Company's marketing efforts are limited to subscribing to bid reporting services and monitoring trade journals and other industry sources for bid solicitations by various government authorities. In response to a bid request, the Company submits a proposal detailing its qualifications, the services to be provided and the cost of the services to the soliciting entity which then, based on its evaluation of the proposals submitted, awards the contract to the successful bidder. Generally, the contract for a project is awarded to the lowest bidder, although other factors may be taken into consideration such as the bidder's track record for compliance with bid specifications and procedures and its construction experience. A more focused marketing effort and greater emphasis on customer care and service are important tools in promoting sales of construction materials. Membership and participation in selected industry associations help increase the Company's exposure to potential clients and are two means by which the Company stays informed on industry developments and future prospects within the marketplace. Building and maintaining customer relations and reputation for quality work are essential elements to the marketing efforts of RMI. GOVERNMENT REGULATION The Company's operations are subject to compliance with regulatory requirements of federal, state and municipal authorities, including regulations covering labor relations, safety standards, affirmative action and the protection of the environment including requirements in connection with water discharge, air emissions and hazardous and toxic substance discharge. Under the Federal Clean Air Act and Clean Water Act, the Company must apply water or chemicals to reduce dust on road construction projects and to contain water contaminants in run-off water at construction sites. The Company may also be required to hire subcontractors to dispose of hazardous wastes encountered on a project. The Company believes that it is in substantial compliance with all applicable laws and regulations. However, future amendments to current laws or regulations imposing more stringent requirements could have a material adverse effect on the Company. EMPLOYEES On December 31, 2001, the Company employed approximately 87 salaried employees (including its management personnel and executive officers) and approximately 454 hourly employees. The number of hourly employees varies depending upon the amount of construction in progress. For the year ended December 31, 2001, the number of hourly employees ranged from approximately 472 to approximately 759 and averaged approximately 616. At December 31, 2001, the Company was party to six project agreements in Arizona with the Arizona State District Council of Carpenters, AFL-CIO that covers approximately 7% of the Company's hourly workforce. At December 31, 2001, the Company believed its relations with its employees are satisfactory. ITEM 2. PROPERTIES The Company leased the following properties at December 31, 2001: (1) 8,315 square feet of executive office space at 4411 South 40th Street, Suites D-8, D-10 and D-11, Phoenix, Arizona, 85040, pursuant to a lease that expires in December 2003, at a monthly rental rate of $8,280 through December 2001, $8,694 from January 2002 through December 2002 and $9,108 from January 2002 through December 2003. (2) 2,000 square feet of office space for the Company's ready mix operations, at 3430 E. Flamingo, Suite 100, Las Vegas, Nevada, 89118, pursuant to a lease that expires in April 2002, at a monthly rental rate of $3,400. (3) 2,260 square feet of office space for the Company's ready mix operations, at 2601 E. Thomas Road, Suite 235, Phoenix, Arizona, 89121, pursuant to a lease that expires August 2003, at a average monthly rental rate of $3,074. (4) 4,000 square feet of office space at 2250 West Center St. Bldg. 1, Suite A, Springville, Utah, 84663, pursuant to a lease that expires April 2003, at a monthly rental rate of $3,400 per month with a 5% increase each year. (5) 4,320 square feet of office space at 4635 Andrews Street, North Las Vegas, Nevada, 89031, pursuant to a lease that expires November 2006, at a monthly rental rate of $2,998 with a 3% increase each year. 10 The Company owns approximately five acres of land at 109 W. Delhi, North Las Vegas, Nevada 89030, which is used for the manufacturing of ready mix concrete. The Company owns approximately 24.5 acres of land in Moapa, Nevada. The Company has determined that the above properties are sufficient to meet the Company's current needs. ITEM 3. LEGAL PROCEEDINGS The Company is a party to legal proceedings in the ordinary course of its business. With the exception of those matters detailed below, the Company believes that the nature of these proceedings (which generally relate to disputes between the Company and its subcontractors, material suppliers or customers regarding payment for work performed or materials supplied) are typical for a construction firm of its size and scope, and no other pending proceedings are material to its financial condition. The following proceedings represent matters that may become material and have already been or may soon be referred to legal counsel for further action: Requests for Equitable Adjustment to Construction Contracts. The Company has or will make claims as described below on the following contracts: (1) Five contracts with the New Mexico State Highway and Transportation Department - The approximate total value of claims on these projects is $35,271,841 of which approximately $23,146,407 is on behalf of MVCI and the balance of $12,125,434 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, plan errors and omissions, contract modifications and associated delay costs. The above claims combined total approximately $54,407,238. Of that sum, the Company's portion of the claims total approximately $29,396,539 and the balance of approximately $25,010,699 pertains to prime contractor or subcontractors' claims. Relative to the aforementioned claims, the Company has recorded approximately $7,754,448 in claim revenue to offset costs incurred to- date on the claims. In addition, the Company has also recorded approximately $1,817,831 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 $9,572,279 will reduce net income. Conversely, a payment for those same items in excess of $9,572,279 will increase net income. Lawsuits Filed Against Meadow Valley Contractors, Inc. or Meadow Valley Corporation (1) Innovative Construction Systems, Inc. ("ICS"), District Court, Clark County, NV - ICS was a subcontractor to MVCI on several projects. ICS failed to make payments of payroll, pension fund contributions and other taxes for which the Internal Revenue Service garnished any future payments due ICS on MVCI projects. As a result, ICS failed to supply labor to perform its work and defaulted on its subcontracts. MVCI terminated the ICS subcontracts and performed the work with MVCI personnel. ICS alleges it was wrongfully terminated and is asserting numerous claims for damages. ICS claims against MVCI total approximately $15,000,000. The Company does not believe ICS' claims have merit and intends to vigorously defend against these claims and will eventually seek to recover the damages ICS has caused the Company through its failure to perform. (2) AnA Enterprises, LLC ("AnA"), District Court, Clark County, NV - AnA supplied equipment to MVCI on a project under terms of a variety of agreements. AnA is suing MVCI for non-payment. MVCI has 11 counter-sued for cost overruns deemed to be the responsibility of AnA. AnA's suit against MVCI is for approximately $3,000,000. MVCI's countersuit against AnA is for approximately $2,000,000. AnA has also filed a complaint on two other projects completed in 1997 where they were a subcontractor to MVCI in the same jurisdiction in the amount of approximately $715,000 for changed conditions. The Company does not believe AnA's claims have merit and intends to vigorously defend against these claims. (3) 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. (4) The Company is defending a claimed preference in connection with a payment made to it by an insurance company in the approximate amount of $100,000. The Company believes that the payment is not a preference, and is vigorously defending the action. (5) The Company and all of its directors were served with a civil complaint by Silver State Materials Corp. and Cyrus Spurlino. 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 term, were not so amended until April 1997, and that such amendment was not filed with the Securities and Exchange Commission. The complaint seeks (i) to terminate all of the Company's directors for cause, (ii) to elect a new Board of Directors, (iii) to cause the Company to enact amended and restated bylaws, (iv) for monetary damages in an undisclosed amount, (v) for interest, fees and costs, and (vi) for such other relief as the District Court may deem appropriate. The Company believes that the complaint is without merit and intends to vigorously defend it. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the year ended December 31, 2001. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Company's Common Stock was listed on the Nasdaq National Market from October 1995 to August 2001. In August 2001, the Company's securities were transferred to the Nasdaq SmallCap Market and are traded under the symbol "MVCO". The following table represents the high and low closing prices for the Company's Common Stock on the Nasdaq SmallCap Market and the Nasdaq National Market. 2001 2000 ----------------- ----------------- High Low High Low ---- --- ---- --- First Quarter 3.36 2.31 4.00 3.50 Second Quarter 2.81 1.81 4.02 3.13 Third Quarter 2.54 1.95 3.44 2.13 Fourth Quarter 2.17 1.93 3.13 2.39 HOLDER OF RECORD As of March 6, 2002, there were 462 record and beneficial owners of the Company's Common Stock. 12 ITEM 6. SELECTED FINANCIAL DATA
Years Ended December 31, -------------------------------------------------------------------------------- 2001 2000 1999 1998 1997 ------------ ------------ ----------- ----------- ------------- STATEMENT OF OPERATIONS DATA: Revenue $174,063,148 $163,573,258 $210,002,272 $187,036,077 $146,273,286 Gross profit 4,658,361 4,638,155 9,931,446 9,444,231 7,861,972 Income (loss) from operations (3,404,262) (2,139,685) 3,260,411 3,084,983 3,172,430 Interest Expense 485,937 250,996 209,872 435,358 624,048 Income (loss) from continuing operations before income taxes (3,192,562) (1,859,447) 3,930,586 3,592,019 3,235,458 Net income (loss) from continuing operations (2,523,931) (1,574,586) 2,340,106 2,169,579 2,072,567 Discontinued Operations: Loss from discontinued operations (1) - - - (635,246) (860,952) Estimated loss on disposal of net assets of discontinued operations (2) - - - (1,950,000) - Net income (loss) (2,523,931) (1,574,586) 2,340,106 (415,667) 1,211,615 Basic net income (loss) per common share: Income (loss) from continuing operations $ (0.71) $ (0.44) $ 0.67 $ 0.60 $ 0.58 Loss from discontinued operations - - - (0.18) (0.24) Estimated loss on disposal of net assets of discontinued operations - - - (0.54) - Basic net income (loss) per common share $ (0.71) $ (0.44) $ 0.67 $ (0.12) $ 0.34 Diluted net income (loss) per common share: Income (loss) from continuing operations $ (0.71) $ (0.44) $ 0.66 $ 0.60 $ 0.57 Loss from discontinued operations - - - (0.17) (0.24) Estimated loss on disposal of net assets of discontinued operations - - - (0.54) - Diluted net income (loss) per common share $ (0.71) $ (0.44) $ 0.66 $ (0.11) $ 0.33 Basic weighted average common shares outstanding 3,559,938 3,549,458 3,518,510 3,601,250 3,601,250 Diluted weighted average common shares outstanding 3,559,938 3,549,458 3,529,705 3,644,651 3,651,360 FINANCIAL POSITION DATA: Working capital $ (1,194,786) $ 4,946,174 $ 5,780,599 $ 5,760,414 $ 5,152,550 Total assets 62,149,042 55,386,030 58,554,822 49,297,063 47,737,762 Long-term debt 12,448,674 11,278,148 7,121,634 5,977,643 5,847,659 Stockholders' equity 10,714,306 13,238,237 14,812,823 12,472,717 12,888,384
(1) Includes the net income tax benefit of $423,497 and $443,520 for the years ended December 31, 1998 and 1997 for the discontinued operations of Prestressed Products Incorporated. (2) Estimated loss on disposal of net assets of Prestressed Products Incorporated (net of income tax benefit of $1,300,000), including $1,350,000 for operating losses during the phase-out period. 13 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION The following is a summary of certain information contained in this Report and is qualified in its entirety by the detailed information and financial statements that appear elsewhere herein. Except for the historical information contained herein, the matters set forth in this Report include forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties are detailed throughout the Report and will be further discussed from time to time in the Company's periodic reports filed with the Commission. The forward-looking statements included in the Report speak only as of the date hereof. Fiscal year 2001 began with disappointing results in the first quarter. Improving results in the second and third quarter gave rise to optimism for profitably completing the year, but significant declines and adjustments during the fourth quarter resulted in a loss for the year. The first quarter results of operations were impacted by the continuing losses on projects in New Mexico, lingering effects of a subcontractor default on several projects in Nevada, continuing losses from the expanding ready mix business and normal seasonal losses from Utah. For the quarter, the construction segment reported gross profit of $.15 million on contract revenue of $29 million. The materials segment expansion helped produce a 64% increase in sales over the same period of the previous year, but gross profit declined from about $.5 million in first quarter of FY 2000 to $.04 million in first quarter of FY 2001. During the second and third quarter, the ready mix business began to benefit from the expansion that began in mid-2000. Materials sales, for the two quarters combined, increased almost 74% over sales volumes for the same period in 2000; sales increased to approximately $16.0 million in the combined second quarter and third quarter of 2001 from approximately $9.2 million in the combined second quarter and third quarter of 2000. First and second quarter construction results also improved in spite of continuing losses in New Mexico. Contract revenue improved from the first quarter's $29 million to $37.4 million and $44.7 million in the second and third quarter, respectively, while gross profit also improved to approximately $1.6 million and $1.8 million for the same periods. Collectively, these improvements inspired optimism that the fourth quarter would follow the trend established in the year's middle two quarters. During the fourth quarter, however, costs from various sources combined to create a loss from operations of approximately $3.0 million. The loss from operations resulted primarily from the impairment of goodwill, underutilization of equipment and health insurance costs. The carrying value of goodwill is periodically reviewed by the Company and impairments, if any, are recognized when expected future operating cash flows derived from goodwill is less than its carrying value. Based on this analysis, the Company determined that the fair value of goodwill as of December 31, 2001 was zero. Accordingly, a goodwill impairment loss of approximately $1.4 million was recorded in the fourth quarter of 2001 in accordance with the Statement of Financial Accounting Standard No. 121. The Company recorded approximately $0.6 million of expenses from the underutilization of equipment which costs are particularly sensitive to usage of portable asphalt plants and paving equipment due to high monthly fixed costs and repair costs. The Company recorded approximately $0.6 million of expenses from health insurance costs. Action has been taken in 2002 to reduce the health insurance costs by decreasing the level of plan coverage and increasing the amount paid by the employee for elective dependent coverage. Besides the aforementioned adjustments, the fourth quarter was also impacted by a decrease in construction services gross profit offset by an increase in construction materials segment gross profit. The quarter's construction services gross profit was not materially affected by the impact of the bankruptcy filing of the prime contractor on a project in New Mexico as mentioned in Note 8 to the condensed consolidated financial statements as filed in the Company's 10-Q for the quarter ending September 30, 2001. The Company continues to press forward with the prosecution of its construction claims. Progress is slow on claims with the New Mexico State Highway and Transportation Department ("NMSHTD"). The Company plans to employ increasingly aggressive methods to overcome the delay and stall tactics used by the NMSHTD. The Clark County, NV claim also progresses slowly through the final administrative review level. 14 Non-payment of claim costs is the primary cause for the Company's decreased working capital and weakened financial condition, which in turn, has decreased the Company's bonding capacity. While the Company's backlog at December 31, 2001 of $76 million remained nearly unchanged from the preceding year's $75 million, decreased bonding capacity has already limited the Company's ability to bid on contracts for which the Company would historically compete. These circumstances create a very real challenge to maintain, let alone increase, backlog. Necessarily, the Company is working on all reasonable and available options to improve cash balances and working capital, including the sale or disposition of assets, cost cutting and containment, personnel reductions, financing alternatives or attracting capital. To the degree that the Company succeeds in that effort, bonding capacity may improve. RESULTS OF OPERATIONS The following table sets forth statement of operations data expressed as a percentage of revenues for the periods indicated: Years Ended December 31, --------------------------- 2001 2000 1999 ------- ------- ------- Revenue 100.00% 100.00% 100.00% Cost of revenue 97.32 97.16 95.27 Gross profit 2.68 2.84 4.73 General and administrative expenses 4.63 4.14 3.18 Income (loss) from operations (1.96) (1.30) 1.55 Interest income 0.18 0.40 0.32 Interest expense (.28) (.15) (.10) Other income (expense) 0.22 (.07) 0.10 Net income (loss) (1.45) (.96) 1.11 YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000 Revenue and Backlog. Revenue increased 6.4% to $174.1 million for the year ended December 31, 2001 (2001) from $163.6 million for the year ended December 31, 2000 (2000). The increase was the result of a $12.0 million increase in revenue generated from construction materials production and manufacturing sold to non-affiliates offset by a $1.5 million decrease in contract revenue. Backlog increased to $76.0 million at December 31, 2001 compared to $75.0 million at December 31, 2000. Revenue is impacted in any one period by the backlog at the beginning of the period. Gross Profit. As a percentage of revenue, consolidated gross profit margin decreased from 2.84% for 2000 to 2.68% for 2001. The decrease in the construction services gross profit margin was the result of costs related to claims and costs overruns on certain projects offset, in part, by increased profit recognition related to several projects nearing completion at December 31, 2001. 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. The decrease in the construction services gross profit margin was offset by an increase in the construction materials gross profit margin. General and Administrative Expenses. General and administrative expenses increased to $8.06 million for 2001 from $6.78 million for 2000. The increase resulted primarily from the Company recording an impairment loss of goodwill in the amount of $1.4 million, a $.1 million increase in various employee incentive plans, offset by a $.3 million decrease in bad debt expense. Interest Income and Expense. Interest income for 2001 decreased to $.3 million from $.6 million for 2000 resulting primarily from a decrease in invested cash reserves. Interest expense increased for 2001 to $.5 million from $.3 million for 2000, due primarily to the Company borrowing on the line of credit. Net Income (loss). Net loss was $(2.5) million for 2001 as compared to $(1.6) million for 2000. The increase in net loss resulted primarily from the Company recording a goodwill impairment loss of $(1.4) million, offset by a $.4 million increase in other income (expense). 15 YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999 Revenue and Backlog. Revenue decreased 22.1% to $163.6 million for the year ended December 31, 2000 (2000) from $210.0 million for the year ended December 31, 1999 (1999). The decrease was the result of a $51.0 million decrease in contract revenue offset by a $4.6 million increase in revenue generated from construction materials production and manufacturing sold to non- affiliates. Backlog decreased to $75.0 million at December 31, 2000 compared to $104.0 million at December 31, 1999. Revenue is impacted in any one period by the backlog at the beginning of the period. Gross Profit. As a percentage of revenue, consolidated gross profit margin decreased from 4.73% for 1999 to 2.84% for 2000. The decrease in gross profit margin was the result of costs related to claims and cost overruns on certain projects, offset, in part, by increased profit recognition related to several projects nearing completion at December 31, 2000. Gross profit margins are affected by a variety of factors including construction delays and difficulties due to weather conditions, availability of materials, the timing of work performed by other subcontractors and the physical and geological condition of the construction site. General and Administrative Expenses. General and administrative expenses increased to $6.78 million for 2000 from $6.67 million for 1999. The increase resulted primarily from a $1 million increase in general and administrative expenses attributable to expanding construction material operations offset, in part, by a $.9 million reduction of general and administrative expenses related to heavy construction and home office of which various employee incentive plans amounted to approximately $.8 million. Interest Income and Expense. Interest income for 2000 decreased to $.6 million from $.7 million for 1999 resulting primarily from a decrease in invested cash reserves. Interest expense increased for 2000 to $.3 million from $.2 million for 1999, due primarily to the Company borrowing on the line of credit. Net Income (loss) from Continuing Operations After Income Taxes. Net income (loss) from continuing operations after income taxes was $(1.6) million for 2000 as compared to $2.3 million for 1999. The decrease resulted from lower revenues along with decreased gross profit margins. Discontinued Operations. In June 1998, due to continuing operating losses, the Company decided to dispose of its wholly owned subsidiary Prestressed Products Incorporated. Accordingly, the Company has reclassified the operations of Prestressed Products Incorporated as discontinued operations in the accompanying financial statements. In June 1998, the Company accrued a $1.95 million charge (net of income tax benefit of $1.3 million), related to the disposal of assets for the Prestressed Products business, which included a provision of $1.35 million for estimated operating losses during the phase-out period. During the year ended December 31, 1999, $.6 million of the expected losses was incurred (net of income tax benefit of $.4 million). Net Income (loss). Net income (loss), after discontinued operations, for 1999 was $2.3 million as compared to $(1.6) million for 2000. 16 LIQUIDITY AND CAPITAL RESOURCES The Company's primary need for capital has been to finance growth in its core business as a heavy construction contractor and its expansion into the other construction and construction related businesses previously discussed. Historically, the Company's primary source of cash has been from operations. The following table sets forth, for the periods presented, certain items from the Statements of Cash Flows of the Company.
For the Years Ended December 31, ------------------------------------------ 2001 2000 1999 ------------ ------------ ----------- Cash Provided By (Used in) Operating Activities $ 94,449 $(3,031,916) $(1,774,214) Cash Provided By (Used in) Investing Activities 1,124,921 (1,662,667) 207,362 Cash Provided By (Used in) Financing activities (813,462) 339,692 (3,248,684)
More recently, however, cash has been consumed by the costs incurred on contracts for which claim compensation is being sought and the start-up costs of the construction materials expansion. Accordingly, during the year ended December 31, 2000, the Company entered into a revolving loan agreement ("line of credit"). Under the terms of the agreement, the Company may borrow up to $7,000,000 at Chase Manhattan Bank's prime, plus 0.25% through December 31, 2001 at which time the line of credit was to convert to a term agreement requiring monthly principal and interest payments through December 31, 2005. The line of credit is collateralized by all of the Company's assets. Under the terms of the line of credit, the Company is required to maintain a certain level of tangible net worth. In addition, the Company is also required to maintain a ratio of total debt to tangible net worth. As of December 31, 2001, the Company was not in compliance with the tangible net worth covenant. Effective March 2002, the Company amended the line of credit agreement. Under the terms of the amended agreement, the interest rate increased to Chase Manhattan Bank's prime, plus 1.5% through January 1, 2003 at which time the line of credit converts to a term agreement requiring monthly principal and interest payments through December 31, 2006. In connection with the amendment, the Company obtained a waiver from non-compliance with the tangible net worth covenant as of December 31, 2001. As of December 31, 2001, the Company had withdrawn the entire $7,000,000 from the line of credit. Cash provided by operating activities during 2001 amounted to $.09 million, primarily the result of an increase in accounts payable of $9.4 million, a decrease in costs in excess of billings of $4.5 million, a decrease in income tax receivable of $.8 million and the impairment of goodwill of $1.4 million and depreciation and amortization of $2.8 million, offset by, an increase in accounts receivable of $7.2 million, a decrease in billings in excess of costs of $1.4 million, an increase in claims receivable of $6.0 million, an increase in inventory of $1.2 million, an increase in net deferred taxes of $.6 million and a net loss of $2.5 million. Cash used in operating activities during 2000 amounted to $3.0 million, primarily the result of a decrease in billings in excess of costs of $2.4 million, a decrease in accounts payable of $3.2 million, an increase in inventory of $1.1 million, a decrease in accrued liabilities of $1.1 million, an increase in costs in excess of billings of $1.0 million, an increase in income tax receivable of $.8 million, a net loss of $1.6 million, offset in part by a decrease in accounts receivable of $4.7 million, a decrease in prepaid expenses and other of $.6 million and depreciation and amortization of $2.7 million. Cash used in operating activities during 1999 amounted to $1.8 million, primarily the result of an increase in billings in excess of costs of $2.9 million, an increase in inventory of $3.2 million, a decrease in costs in excess of billings of $5.0 million, an increase in accounts receivable of $3.9 million, offset in part by an increase in accounts payable of $7.0 million, an increase in accrued liabilities of $.3 million, a decrease in prepaid expense and other of $.6 million, an increase in net deferred taxes of $.6 million, depreciation and amortization of $2.1 million and a net income of $2.3 million. Cash provided by investing activities during 2001 amounted to $1.1 million related primarily to the proceeds from the sale of property and equipment in the amount of $2.4 million, offset by the increase in restricted cash of $.6 million, the purchase of property and equipment of $.5 million and the increase in pit development of $.1 million. Cash used by investing activities during 2000 amounted to $1.7 million related primarily to the purchase of property and equipment of $1.6 million, an increase in pit development of $.7 million, offset by proceeds from the sale of property and equipment in the amount of $.3 million and a decrease in restricted cash of $.3 million. 17 Cash provided by investing activities during 1999 amounted to $.2 million related primarily to a decrease in restricted cash of $1.5 million, the collection of a note receivable of $.2 million, proceeds from the sale of property and equipment of $.4 million and a decrease in net assets of discontinued operations of $.2 million, offset by the purchase of property and equipment of $1.4 million and the purchase of mineral rights and pit development of $.7 million. Cash used in financing activities during 2001 amounted to $.8 million related primarily to repayment of notes payable and capital lease obligations in the amount of $5.0 million, offset by the proceeds received from a note payable of $4.2 million. Cash provided by financing activities during 2000 amounted to $.3 million related primarily to the proceeds received from a note payable of $6.0 million, offset by the repayment of notes payable and lease obligations in the amount of $5.7 million. Cash used in financing activities during 1999 amounted to $3.2 million including the $1.0 million prepayment of a loan from a related party and the repayments of notes payable and capital lease obligations in the amount of $2.2 million. The aforementioned note payable related party was due to a principal shareholder of the Company, the Richard C. Lewis Family Revocable Trust I. IMPACT OF INFLATION The Company believes that inflation has not had a material impact on its operations. However, substantial increases in labor costs, worker compensation rates and employee benefits, equipment costs, material or subcontractor costs could adversely affect the operations of the Company for future periods. SIGNIFICANT ACCOUNTING POLICIES Our significant accounting policies are described in Note 1 to the consolidated financial statements included in Item 8 of this Form 10-K. We believe our most critical accounting policy is the revenue recognition and cost estimation on certain contracts for which we use a percentage of completion accounting method. This accounting method is applied by our Construction Services Operations to heavy construction projects executed under multi-year contracts with various customers. Approximately 82%, 88% and 93% of total net revenue was recognized under the percentage of completion method of accounting during 2001, 2000 and 1999, respectively. 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. 18 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. SUMMARY OF CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS Contractual obligations at December 31, 2001, and the effects such obligations are expected to have on liquidity and cash flow in future periods, are summarized as follows:
Payments Due by Period -------------------------------------------------------------------- Less than 1 - 3 4 - 5 After Total 1 Year Years Years 5 Years ------------ ------------ ------------- ------------ ---------- CONTRACTUAL OBLIGATIONS Long-term debt $ 4,170,113 $1,685,634 $ 2,379,629 $ 104,850 $ - Capital Lease Obligations 4,754,952 1,400,875 2,939,360 414,717 - Operating Leases 24,299,009 5,594,036 13,286,551 2,994,399 2,424,023 ----------- ---------- ----------- ---------- ---------- Total Contractual Obligations $33,224,074 $8,680,545 $18,605,540 $3,513,966 $2,424,023 =========== ========== =========== ========== ==========
Amount of Commitment Expiration Per Period Total Amounts Less than 1 - 3 4 - 5 Over Committed 1 Year Years Years 5 Years ------------- ----------- ---------- --------- --------- OTHER COMMERICAL COMMITMENTS Line of Credit $7,000,000 $ - $5,116,928 $1,883,072 $ - =========== ========== =========== ========== ========
19 RECENT ACCOUNTING PRONOUNCEMENTS In June 2001, the Financial Accounting Standard Board finalized FASB Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and Other Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. SFAS 141 also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired intangible assets meet certain criteria. SFAS 141 applies to all business combinations initiated after June 30, 2001 and for purchase business combinations completed on or after July 1, 2001. It also requires, upon adoption of SFAS 142, the Company reclassify the carrying amounts of intangible assets and goodwill based on the criteria in SFAS 141. SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. In addition, SFAS 142 requires that the Company identify reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized intangible assets, and cease amortization of intangible assets with an indefinite useful life. An intangible asset with an indefinite useful life should be tested for impairment in accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in fiscal years beginning after December 15, 2001 to all goodwill and to the intangible assets recognized at that date, regardless of when those assets were initially recognized. SFAS 142 requires the Company to complete a transitional goodwill impairment test six months from the date of adoption. The Company is also required to reassess the useful lives of other intangible assets within the first interim quarter after adoption of SFAS 142. The Company's previous business combinations were accounted for using the purchase method. As of December 31, 2000, the carrying amount of the goodwill was $1,500,733. Amortization expense during the year ended December 31, 2001 was $80,029. The carrying value of goodwill is periodically reviewed by the Company and impairments, if any, are recognized when expected future operating cash flows derived from goodwill is less than its carrying value. Based on this analysis, the Company determined that the fair value of goodwill as of December 31, 2001 was zero. Accordingly, a goodwill impairment loss of $1,420,704 was recorded in the fourth quarter of 2001 in accordance with the Statement of Financial Accounting Standard No. 121 and is included in the loss from continuing operations. We anticipate the adoption of SFAS 141 and SFAS 142 to not have a material impact on the financial statements of the Company. SFAS 143, Accounting for Asset Retirement Obligations, was issued in June 2001 and is effective for fiscal years beginning after June 15, 2002. SFAS 143 requires that any legal obligation related to the retirement of long-lived assets be quantified and recorded as a liability with the associated asset retirement cost capitalized on the balance sheet in the period it is incurred when a reasonable estimate of the fair value of the liability can be made. SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, was issued in August 2001 and is effective for fiscal years beginning after December 15, 2001. SFAS 144 provides a single, comprehensive accounting model for impairment and disposal of long-lived assets and discontinued operations. SFAS 143 and SFAS 144 will be adopted on their effective dates, and adoption is not expected to result in any material effects on the Company's financial statements. KNOWN AND ANTICIPATED FUTURE TRENDS AND CONTINGENCIES Subject to the Company's success in improving profitability and efforts to increase working capital, it is anticipated that its bonding limits will increase proportionately, thereby allowing the Company to bid on and perform more and larger projects. The Company believes that government at all levels will continue to be the primary source of funding for infrastructure work. The national transportation legislation, TEA-21, establishes a total budget authority of $215 billion over the six-year period 1998-2003. TEA-21 ensures that tax revenue deposited into the Highway Trust Fund will be spent on transportation improvements by guaranteeing $165 billion for highways and $35 billion for transit and by further stipulating that appropriators can spend trust fund dollars only on transportation. Annual spending authorizations under TEA-21 have been consistent with anticipated levels, however, a component of the TEA-21 legislation called Revenue Aligned Budget Authority ("RABA"), may increase or decrease funding proportionate to tax proceeds increases or decreases. Declines in tax 20 revenues, due to the recession, may create a downward adjustment in funding from the RABA component of TEA-21. The flow of TEA-21 has begun to normalize, and with the exception of RABA adjustments, will likely be steady throughout the remainder of its funding horizon of 2003. See "Market Overview". The competitive bidding process will continue to be the dominant method for determining contract award. However, other innovative bidding methods will be tried and may gain favor, namely "A Plus B" contracts, where the bidders' proposals are selected on both price and scheduling criteria. Design-build projects are becoming more common and are likely to increase in frequency. Design-build projects also tend to be of more worth to the owner when the contract size is substantial, usually $50 million or more. In light of the rising needs for infrastructure work throughout the nation and the tendency of the current needs to out-pace the supply of funds, it is anticipated that alternative funding sources will continue to be sought. Funding for infrastructure development in the United States is coming from a growing variety of innovative sources. An increase of funding measures is being undertaken by various levels of government to help solve traffic congestion and related air quality problems. Sales taxes, fuel taxes, user fees in a variety of forms, vehicle license taxes, private toll roads and quasi-public toll roads are examples of how transportation funding is evolving. Transportation norms are being challenged by federally mandated air quality standards. Improving traffic movement, eliminating congestion, increasing public transit, adding or designating high occupancy vehicle (HOV) lanes to encourage car pooling and other solutions are being considered in order to help meet EPA-imposed air quality standards. There is also a trend toward local and state legislation regulating growth and urban sprawl. The passage of such legislation and the degree of growth limits imposed by it could dramatically affect the nature of the Company's markets. SEASONALITY The construction industry is seasonal, generally due to inclement weather occurring in the winter months. Accordingly, the Company may experience a seasonal pattern in its operating results with lower revenue in the first and fourth quarters of each calendar year than other quarters. Quarterly results may also be affected by the timing of bid solicitations by governmental authorities, the stage of completion of major projects and revenue recognition policies. Results for any one quarter, therefore, may not be indicative of results for other quarters or for the year. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk generally represents the risk that losses may occur in the values of financial instruments as a result of movements in interest rates, foreign currency exchange rates and commodity prices. The Company does not have foreign currency exchange rate and commodity price market risk. Interest Rate Risk - From time to time the Company temporarily invests its excess cash and restricted cash in interest-bearing securities issued by high- quality issuers. The Company's management monitors risk exposure to monies invested in securities of any one financial institution. Due to the short time the investments are outstanding and their general liquidity, these instruments are classified as cash equivalents in the consolidated balance sheet and do not represent a material interest rate risk to the Company. The Company's primary market risk exposure for changes in interest rates relates to the Company's long-term debt obligations. The Company manages its exposure to changing interest rates principally through the use of a combination of fixed and floating rate debt. The Company evaluated the potential effect that near term changes in interest rates would have had on the fair value of its interest rate risk sensitive financial instruments at December 31, 2001. Assuming a 100 basis point increase in the prime interest rate at December 31, 2001 the potential increase in the fair value of the Company's debt obligations would have been approximately $77,971 at December 31, 2001. See notes 8 and 9 in the accompanying consolidated financial statement. 21 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Company's Consolidated Financial Statements are indexed on page F-1. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not Applicable PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information on directors and executive officers of the Company will be included under the caption "Directors and Executive Officers" of the Company's definitive Proxy Statement relating to the Annual Meeting of Shareholders for the year ended December 31, 2001, which is hereby incorporated by reference. ITEM 11. EXECUTIVE COMPENSATION Information on executive compensation will be included under the caption "Compensation of Executive Officers" of the Company's definitive Proxy Statement relating to the Annual Meeting of Shareholders for the year ended December 31, 2001, which is hereby incorporated by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information on beneficial ownership of the Company's voting securities by each director and all officers and directors as a group, and by any person known to beneficially own more than 5% of any class of voting security of the Company will be included under the caption "Beneficial Ownership of the Company's Securities" of the Company's definitive Proxy Statement relating to the Annual Meeting of the Shareholders for the year ended December 31, 2001, which is hereby incorporated by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information on certain relationships and related transactions including information with respect to management indebtedness will be included under the caption "Certain Relationships and Related Transactions" and "Information Regarding Indebtedness of Management to the Company" of the Company's definitive Proxy Statement relating to the Annual Meeting of Shareholders for the year ended December 31, 2001, which is hereby incorporated by reference. 22 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a)(1) Financial Statements See Item 8 of Part II hereof. (a)(2) Financial Statement Schedules The schedules specified under Regulation S-X are either not applicable or immaterial to the Company's consolidated financial statements for the years ended December 31, 2001, 2000 and 1999. (b) Reports on Form 8-K The Company filed a Form 8-K during the fourth quarter ended December 31, 2001. (c) Exhibits EXHIBIT NO. TITLE - ------- ----- 1.01 Form of Underwriting Agreement with Spelman & Co., Inc (1) 1.02 Form of Selected Dealer Agreement (1) 1.03 Form of Representatives' Warrant (1) 1.04 Consulting Agreement with the Representative (1) 1.05 Form of Amended Underwriting Agreement (Spelman & Co., Inc.) (1) 1.06 Form of Amended Representatives' Warrant (Spelman & Co., Inc.) (1) 1.07 Form of Underwriting Agreement (H D Brous & Co., Inc.) (1) 1.08 Form of Selected Dealer Agreement (H D Brous & Co., Inc.) (1) 1.09 Form of Representatives' Unit Warrant ( H D Brous & Co., Inc.) (1) 1.10 Warrant Agreement (1) 1.11 Agreement Among Underwriters (1) 1.12 Form of Underwriting Agreement (H D Brous & Co., Inc. and Neidiger/Tucker/Bruner, Inc.) (1) 1.13 Form of Agreement Among Underwriters (H D Brous & Co., Inc. and Neidiger/Tucker/Bruner, Inc.) (1) 1.14 Form of Selected Dealer Agreement (H D Brous & Co., Inc. and Neidiger/Tucker/Bruner, Inc.) (1) 1.15 Form of Representatives' Warrant Agreement, including Form of Representatives' Warrant (H D Brous & Co., Inc. and Neidiger/Tucker/Bruner, Inc.) (1) 3.01 Articles of Incorporation and Amendments thereto of the Registrant (1) 3.02 Bylaws of the Registrant (1) 3.03 Bylaws of the Registrant Effective October 20, 1995 (1) 3.04 Bylaws of the Registrant Effective April 28, 1997 5.01 Opinion of Gary A. Agron, regarding legality of the Common Stock (includes Consent) (1) 5.02 Opinion of Gary A. Agron, regarding legality of the Units, Common Stock and Warrants (1) 10.01 Incentive Stock Option Plan (1) 10.02 Office lease of the Registrant (1) 10.03 Office lease of the Registrant (1) 10.04 Contract between the State of Arizona and the Registrant dated October 22, 1993 (1) 10.05 Surety Bond between the Registrant and St. Paul Fire & Marine Insurance Company (1) 10.06 Surety Bond between the Registrant and United States Fidelity and Guaranty Company (1) 10.07 Contract between Clark County, Nevada and the Registrant dated October 6, 1992 (1) 10.08 Surety Bond between the Registrant and St. Paul Fire and Marine Insurance Company (1) 10.09 Agreement between Salt Lake City Corporation and the Registrant dated May 5, 1993 (1) 23 EXHIBIT NO. TITLE - ------- ----- 10.10 Contract between Clark County, Nevada and the Registrant dated July 21, 1993 (1) 10.11 Contract between Clark County, Nevada and the Registrant dated August 17, 1993 (1) 10.12 Promissory Note executed by Robert C. Lewis and Richard C. Lewis (1) 10.13 Promissory Note executed by Moapa Developers, Inc. (1) 10.14 Promissory Note executed by Paul R. Lewis (1) 10.15 Contract between Clark County, Nevada and the Registrant dated September 7, 1993 (1) 10.16 Agreement between Salt Lake City Corporation and the Registrant dated February 11, 1994 (1) 10.17 Contract between Northwest/Cheyenne Joint Venture and the Registrant dated March 16, 1994 (1) 10.18 Contract between Clark County, Nevada and the Registrant dated April 5, 1994 (1) 10.19 Statutory Payment Bond dated September 8, 1994 (1) 10.20 Employment Agreement with Mr. Lewis (1) 10.21 Employment Agreement with Mr. Black (1) 10.22 Employment Agreement with Mr. Terril (1) 10.23 Employment Agreement with Mr. Nelson (1) 10.24 Employment Agreement with Ms. Danley (1) 10.25 Employment Agreement with Mr. Jessop (1) 10.26 Employment Agreement with Mr. Larson (1) 10.27 Stock Purchase Agreement (1) 10.28 Form of Lockup Letter (1) 10.29 Revolving Credit Loan Agreement (1) 10.30 Contract Award Notification - Arizona Department of Transportation (1) 10.31 Contract Award Notification - McCarran International Airport (1) 10.32 Contract Award Notification - City of Henderson (1) 10.33 Contract between Registrant and Arizona Department of Transportation (1) 10.34 Contract between Registrant and Arizona Department of Transportation (1) 10.35 Office Lease of the Registrant (1) 10.36 Contract between Registrant and Arizona Department of Transportation (2) 10.37 Contract Award Notification - Clark County (2) 10.38 Joint Venture Agreement (2) 10.39 Employment Agreement with Mr. Grasmick (2) 10.40 Contract between Registrant and Clark County, Nevada (2) 10.41 Contract between Registrant and Clark County, Nevada (2) 10.42 Contract between Registrant and Utah Department of Transportation (2) 10.43 Contract between Registrant and Arizona Department of Transportion (2) 10.44 Promissory Note executed by Nevada State Bank (2) 10.45 Escrow Settlement Documents and related Promissory Note (2) 10.46 Conveyor Sales Contract and Security Agreement (2) 10.47 CAT Financial Installment Sale Contract (2) 10.48 Second and Third Amendments to Office Lease of Registrant (2) 10.49 Lease Agreement with US Bancorp (2) 10.50 Lease Agreement with CIT Group (2) 10.51 CAT Financial Installment Sale Contract (3) 10.52 CAT Financial Installment Sale Contract (3) 10.53 CAT Financial Installment Sale Contract (3) 10.54 CAT Financial Installment Sale Contract (3) 10.55 CAT Financial Installment Sale Contract (3) 24 EXHIBIT NO. TITLE - ------- ----- 10.56 Escrow Settlement Documents (3) 10.57 Promissory Note executed by General Electric Capital Corporation (3) 10.58 Promissory Note executed by General Electric Capital Corporation (3) 10.59 Promissory Note executed by General Electric Capital Corporation (3) 10.60 Promissory Note executed by General Electric Capital Corporation (3) 10.61 Promissory Note executed by Neveda State Bank (3) 10.62 KDC Sales Contract (3) 10.63 Lease Agreement with CIT (3) 10.64 Lease Agreement with CIT (3) 10.65 Contract between Registrant and Utah Department of Transportation (3) 10.66 Contract between Registrant and Clark County, Nevada (3) 10.67 Contract between Registrant and New Mexico State Highway and Transportation Department (3) 10.68 Contract between Registrant and Salt Lake City Corporation (3) 10.69 Contract between Registrant and Utah Department of Transportation (3) 10.70 Contract between Registrant and Arizona Department of Transportation (3) 10.71 Contract between Registrant and Nevada Department of Transportation (3) 10.72 Employment and Indemnification Agreements with Mr. Nelson (3) 10.73 Employment and Indemnification Agreements with Mr. Terril (3) 10.74 Employment and Indemnification Agreements with Mr. Lewis (3) 10.75 Employment and Indemnification Agreements with Mr. Larson (3) 10.76 Employment and Indemnification Agreements with Mr. Burnell (3) 10.77 Lease Agreement with Banc One Leasing Corp. (4) 10.78 Lease Agreement with Banc One Leasing Corp. (4) 10.79 Lease Agreement with Banc One Leasing Corp. (4) 10.80 Lease Agreement with US Bancorp (4) 10.81 Security Agreement with Associates Commercial Corporation (4) 10.82 Lease Agreement with Caterpillar Financial Services (4) 10.83 Contract between Registrant and Clark County, Nevada (4) 10.84 Contract between Registrant and Arizona Department of Transportation (4) 10.85 Contract between Registrant and New Mexico State Highway and Transportation Department (4) 10.86 Contract between Registrant and New Mexico State Highway and Transportation Department (4) 10.87 Contract between Registrant and New Mexico State Highway and Transportation Department (4) 10.88 Joint Venture Agreement between Registrant and R. E. Monks Construction Co. (4) 10.89 Contract between Meadow Valley Contractors, Inc./R. E. Monks Construction Co. (JV) and the Arizona Department of Transportation (4) 10.90 Contract between the Registrant and Utah Department of Transportation (4) 10.91 Contract between the Registrant and Clark County, Nevada (4) 10.92 General Agreement of Indemnity between the Registrant and Liberty Mutual Insurance Company (4) 10.93 Employment Agreement with Mr. Larson (4) 10.94 Lease Agreement between the Registrant and Ken Nosker (4) 10.95 Promissory Note executed by General Electric Capital Corporation (5) 10.96 Promissory Note executed by General Electric Capital Corporation (5) 10.97 Promissory Note executed by John Deere Construction Equipment Company (5) 10.98 Promissory Note executed by John Deere Construction Equipment Company (5) 10.99 Transfer and Assumption Agreement executed by Associates Leasing, Inc. (5) 10.100 Lease Agreement with Banc One Leasing Corp. (5) 10.101 Lease Agreement with Caterpillar Financial Services (5) 25 EXHIBIT NO. TITLE - ------- ----- 10.102 Lease Agreement with Trinity Capital Corporation (5) 10.103 Lease Agreement with Banc One Leasing Corp. (5) 10.104 Wheeler Machinery Co. Installment Sale Contract (5) 10.105 Wheeler Machinery Co. Installment Sale Contract (5) 10.106 Bank One, Arizona Restated Revolving Line of Credit Note (5) 10.107 Promissory Note executed by General Electric Capital Corporation (5) 10.108 Employment Agreement with Mr. Larson (5) 10.109 Lease Agreement with Banc One Leasing Corp. (5) 10.110 Master Lease Agreement with Banc One Leasing Corp. (5) 10.111 Contract between Registrant and Arizona Department of Transportation (5) 10.112 Contract between Registrant and Arizona Department of Transportation (5) 10.113 Contract between Registrant and Utah Department of Transportation (5) 10.114 Contract between Registrant and Flood Control District of Maricopa County (5) 10.115 Contract between Registrant and Johnson and Danley Construction Co., Inc. (5) 10.116 Master Lease Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.117 Lease Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.118 Lease Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.119 Lease Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.120 Master Lease Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.121 Lease Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.122 Master Security Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.123 Security Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.124 Security Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.125 Security Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.126 Security Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.127 Security Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.128 Master Security Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.129 Security Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.130 Office lease of the Registrant (6) 10.131 Transfer and Assumption Agreement with Caterpillar Financial Services Corporation (6) 10.132 Installment Sale Contract with Caterpillar Financial Services Corporation (6) 10.133 Property Lease and Aggregate Supply Agreement with Sun State Rock & Materials Corp. (6) 10.134 Property Lease and Aggregate Supply Agreement with Clay R. Oliver d.b.a. Oliver Mining Company (6) 10.135 Security Agreement with John Deere Construction Equipment Company (6) 10.136 Master Lease Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.137 Lease Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.138 Lease Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.139 Security Agreement with Associates Leasing, Inc. (6) 10.140 Revolving Loan Agreement with The CIT Group/Equipment Financing, Inc. (6) 10.141 Lease Agreement with Banc One Leasing Corporation (6) 10.142 Office lease of the Registrant (6) 10.143 Security Agreement with John Deere Construction Equipment Company (6) 10.144 Contract between Registrant and Nevada Department of Transportation (6) 10.145 Contract between Registrant and Arizona Department of Transportation (6) 10.146 Joint Venture Agreement between Registrant and R.E. Monks Construction Co., LLC (6) 10.147 Contract between Registrant and Nevada Department of Transportation (6) 26 EXHIBIT NO. TITLE - ------- ----- 10.148 Installment Sale Contract with Caterpillar Financial Services Corporation (7) 10.149 Lease Agreement with Associates Leasing, Inc. (8) 10.150 Lease Agreement with M&I First National Leasing Corp. (8) 10.151 Lease Agreement with Trinity Capital Corporation (8) 10.152 Security Agreement with FCC Equipment Financing, Inc. (9) 10.153 Lease Agreement with CitiCapital (9) 10.154 Amended and Restated Revolving Loan Agreement with The CIT Group/Equipment Financing, Inc. (9) 10.155 Revolving Loan Agreement with The CIT Group/Equipment Financing, Inc. (9) 10.156 Lease Agreement with Thomas Mining, LLC (9) 10.157 Employment Agreement with Mr. Kiesel (9) 10.158 Security Agreement with Volvo Commercial Finance LLC The Americas (9) 10.159 Letter of Intent with RMI Enterprises, LLC (12) 10.160 Lease Agreement with The CIT Group/Equipment Financing, Inc. 10.161 Lease Agreement with Associates Leasing, Inc. 10.162 Office Lease Agreement 10.163 Lease Agreement with Caterpillar Financial Services Corporation 10.164 Security Agreement with John Deere Construction Equipment & Forestry Company 10.165 Lease Extension with U.S. Bancorp Leasing & Financial 10.166 Security Agreement with The CIT Group/Equipment Financing, Inc. 10.167 Security Agreement with The CIT Group/Equipment Financing, Inc. 10.168 Amendment No. 1 to Restated and Amended Revolving Loan Agreement with The CIT Group/Equipment Financing, Inc. 10.169 Security Agreement with The CIT Group/Equipment Financing, Inc. 10.170 Indemnification Agreement with Robert R. Morris 10.171 Indemnification Agreement with Nicole R. Smith 10.172 Indemnification Agreement with Alan A. Terril 10.173 Indemnification Agreement with Bradley E. Larson 10.174 Indemnification Agreement with Kenneth D. Nelson 10.175 Installment Sale Contract with Caterpillar Financial Services Corporation 10.176 Contract between Registrant and Clark County, Nevada 10.177 Contract between Registrant and U.S. Army Corp of Engineers 10.178 Contract between Registrant and Utah Department of Transportation 10.179 Contract between Registrant and Clark County, Nevada 10.180 Contract between Registrant and Utah Department of Transportation 10.181 Contract between Registrant and Clark County, Nevada 10.182 Lease Extension with The CIT Group/Equipment Financing, Inc. 10.183 Asset Purchase Agreement between United Metro Materials Inc. and the Registrant 10.184 Engagement Letter with AMG Financing Capital, Inc. 10.185 Amendment No. 2 to Restated and Amended Revolving Loan Agreement with The CIT Group/Equipment Financing, Inc. 10.186 Notice of Termination of Non-Binding Letter of Intent with RMI Enterprises, LLC 27 EXHIBIT NO. TITLE - ------- ----- 16.01 Letter re: Change in Certifying Accountant (1) 21.01 Subsidiaries of the Registrant (1) 23.01 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1) 23.02 Consent of Semple & Cooper (Meadow Valley Corporation) (1) 23.03 Consent of Gary A. Agron, Esq. (See 5.01, above) (1) 23.04 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1) 23.05 Consent of BDO Seidman, LLP (Meadow Valley Corporation) (1) 23.06 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1) 23.07 Consent of BDO Seidman, LLP (Meadow Valley Corporation) (1) 23.08 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1) 23.09 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.) (1) 23.10 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1) 23.11 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.) (1) 23.12 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1) 23.13 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.) (1) 23.14 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1) 23.15 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow Valley Contractors, Inc.) (1) 99.1 Civil complaint by Silver State Materials Corp., et. al. vs. Meadow Valley Corporation, et. al. (10) 99.2 Exhibits to civil complaint by Silver State Materials Corp., et. al. vs. Meadow Valley Corporation, et. al. (11) 99.3 Press release by Meadow Valley Corporation to sell its Ready Mix Subsidiary (12) (1) Incorporation by reference to the Company's Registration Statement on Form S-1, File Number 33-87750 declared effective on October 16, 1995 (2) Incorporated by reference to the Company's December 31, 1996 Annual Report on Form 10-K (3) Incorporated by reference to the Company's December 31, 1997 Annual Report on Form 10-K (4) Incorporated by reference to the Company's December 31, 1998 Annual Report on Form 10-K (5) Incorporated by reference to the Company's December 31, 1999 Annual Report on Form 10-K (6) Incorporated by reference to the Company's December 31, 2000 Annual Report on Form 10-K (7) Incorporated by reference to the Company's March 31, 2001 Form 10-Q (8) Incorporated by reference to the Company's June 30, 2001 Form 10-Q (9) Incorporated by reference to the Company's September 30, 2001 Form 10-Q (10) Incorporated by reference to the Company's November 20, 2001 Form 8-K (11) Incorporated by reference to the Company's November 20, 2001 Form 8-K/A (12) Incorporated by reference to the Company's February 14, 2002 Form 8-K 28 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MEADOW VALLEY CORPORATION /s/ Bradley E. Larson ------------------------------------- Bradley E. Larson President and Chief Executive Officer Date: April 1, 2002 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ Bradley E. Larson /s/ Earle C. May - --------------------------------- ---------------------------------- Bradley E. Larson Earle C. May Director, President and Chief Director Executive Officer Date: April 1, 2002 Date: April 1, 2002 /s/ Kenneth D. Nelson /s/ Alan A. Terril - --------------------------------- ----------------------------------- Kenneth D. Nelson Alan A. Terril Director, Chief Administrative Director, Vice President Officer and Vice President and Chief Operating Officer Date: April 1, 2002 Date: April 1, 2002 /s/ Charles E. Cowan /s/ Gary A. Agron - --------------------------------- ----------------------------------- Charles E. Cowan Gary A. Agron Director Director Date: April 1, 2002 Date: April 1, 2002 /s/ Charles R. Norton /s/ Nicole R. Smith - --------------------------------- ----------------------------------- Charles R. Norton Nicole R. Smith Director Treasurer, Secretary and Principal Date: April 1, 2002 Accounting Officer Date: April 1, 2002 29 INDEX TO FINANCIAL STATEMENTS MEADOW VALLEY CORPORATION AND SUBSIDIARIES Report of Independent Certified Public Accountants F-2 Consolidated Balance Sheets at December 31, 2001 and 2000 F-3 Consolidated Statements of Operations for the years ended December 31, 2001, 2000 and 1999 F-4 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2001, 2000 and 1999 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999 F-6 Notes to Consolidated Financial Statements F-8 F-1 [LETTERHEAD OF BDO SEIDMAN, LLP] REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors Meadow Valley Corporation Phoenix, Arizona We have audited the accompanying consolidated balance sheets of Meadow Valley Corporation and Subsidiaries as of December 31, 2001 and 2000 and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Meadow Valley Corporation and Subsidiaries at December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. /s/ BDO Seidman, LLP Los Angeles, CA March 26, 2002 F-2 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
December 31, December 31, 2001 2000 ------------ ------------- Assets (Note 9): Current Assets: Cash and cash equivalents (Notes 1 and 2) $ 2,228,506 $ 1,822,598 Restricted cash (Notes 1, 2 and 16) 2,401,548 1,783,005 Accounts receivable, net (Notes 1, 3, 10 and 16) 21,377,904 14,297,564 Prepaid expenses and other 404,780 749,708 Inventory (Note 1) 3,365,750 4,288,235 Income tax receivable (Notes 1 and 11) - 774,000 Costs and estimated earnings in excess of billings on uncompleted contracts (Notes 1 and 4) 5,294,054 9,828,009 ----------- ----------- Total Current Assets 35,072,542 33,543,119 Property and equipment, net (Notes 1, 5, 8, and 12) 15,267,791 18,111,506 Assets held for sale (Note 1) 3,213,484 - Deferred tax asset (Notes 1 and 11) 1,957,923 873,441 Refundable deposits 55,110 176,565 Goodwill, net (Note 1) - 1,500,733 Mineral rights and pit development, net 533,608 1,180,666 Claims receivable (Notes 1, 4 and 14) 5,968,026 - Other assets 80,558 - ----------- ----------- Total Assets $62,149,042 $55,386,030 =========== =========== Liabilities and Stockholders' Equity: Current Liabilities: Accounts payable (Notes 6 and 10) $27,025,984 $17,606,113 Accrued liabilities (Notes 7 and 10) 1,811,998 2,289,698 Notes payable (Note 8) 1,685,634 1,604,399 Obligations under capital leases (Note 12) 1,118,055 1,041,921 Billings in excess of costs and estimated earnings on uncompleted contracts (Notes 1 and 4) 4,625,657 6,054,814 ----------- ----------- Total Current Liabilities 36,267,328 28,596,945 Deferred tax liability (Notes 1 and 11) 2,718,734 2,272,700 Notes payable, less current portion (Notes 8 and 9) 9,484,479 7,674,608 Obligations under capital leases, less current portion (Note 12) 2,964,195 3,603,540 ----------- ----------- Total Liabilities 51,434,736 42,147,793 ----------- ----------- Commitments and contingencies (Notes 9, 10, 12 and 14) Stockholders' Equity: Preferred stock - $.001 par value; 1,000,000 shares authorized, none issued and outstanding (Note 13) - - Common stock - $.001 par value; 15,000,000 shares authorized, 3,559,938 issued and outstanding (Notes 13 and 17) 3,601 3,601 Additional paid-in capital 10,943,569 10,943,569 Capital adjustments (799,147) (799,147) Retained earnings 566,283 3,090,214 ----------- ----------- Total Stockholders' Equity 10,714,306 13,238,237 ----------- ----------- Total Liabilities and Stockholders' Equity $62,149,042 $55,386,030 =========== ===========
The Accompanying Notes are an Integral Part of the Financial Statements F-3 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, ---------------------------------------------- 2001 2000 1999 ------------ ----------- ------------ Revenue (Notes 10 and 16) $174,063,148 $163,573,258 $210,002,272 Cost of revenue (Note 10) 169,404,787 158,935,103 200,070,826 ------------ ------------ ------------ Gross profit 4,658,361 4,638,155 9,931,446 General and administrative expenses (Notes 1 and 10) 8,062,623 6,777,840 6,671,035 ------------ ------------ ------------ Income (loss) from operations (3,404,262) (2,139,685) 3,260,411 ------------ ------------ ------------ Other income (expense): Interest income 319,797 646,480 668,928 Interest expense (485,937) (250,996) (209,872) Other income (expense) 377,840 (115,246) 211,119 ------------ ------------ ------------ 211,700 280,238 670,175 ------------ ------------ ------------ Income (loss) before income taxes (3,192,562) (1,859,447) 3,930,586 Income tax benefit (expense) 668,631 284,861 (1,590,480) ------------ ------------ ------------ Net income (loss) (Note 17) $ (2,523,931) $ (1,574,586) $ 2,340,106 ============ ============ ============ Basic net income (loss) per common share $(0.71) $(0.44) $0.67 ============ ============ ============ Diluted net income (loss) per common share $(0.71) $(0.44) $0.66 ============ ============ ============ Basic weighted average common shares outstanding (Note 18) 3,559,938 3,549,458 3,518,510 ============ ============ ============ Diluted weighted average common shares outstanding (Note 18) 3,559,938 3,549,458 3,529,705 ============ ============ ============
The Accompanying Notes are an Integral Part of the Financial Statements F-4 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
Common Stock --------------------- Number of Shares Paid-in Capital Retained Outstanding Amount Capital Adjustment Earnings ----------- ------ ----------- ----------- ---------- Balance at January 1, 1999 3,601,250 $3,601 $10,943,569 $(799,147) $2,324,694 Treasury stock held for funding employer retirement plan contributions (100,000) Net income 2,340,106 --------- ------ ----------- ----------- ---------- Balance at December 31, 1999 3,501,250 3,601 10,943,569 (799,147) 4,664,800 Treasury stock used in funding employer retirement plan contributions 58,688 Net loss (1,574,586) --------- ------ ----------- ----------- ---------- Balance at December 31, 2000 3,559,938 3,601 10,943,569 (799,147) 3,090,214 Net loss (2,523,931) --------- ------ ----------- ----------- ---------- Balance at December 31, 2001 3,559,938 $3,601 $10,943,569 $(799,147) $ 566,283 ========= ====== =========== =========== ==========
The Accompanying Notes are an Integral Part of the Financial Statements F-5 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, ---------------------------------------------- 2001 2000 1999 ------------- ------------- ------------ Increase (Decrease) in Cash and Cash Equivalents: Cash flows from operating activities: Cash received from customers $ 164,497,420 $ 164,943,635 $ 198,476,899 Cash paid to suppliers and employees (165,041,014) (167,857,330) (199,775,477) Interest received 319,797 646,480 695,759 Interest paid (485,937) (250,996) (235,899) Income taxes refunded (paid) 804,183 (513,705) (935,496) ------------- ------------- ------------- Net cash provided by (used in) operating activities 94,449 (3,031,916) (1,774,214) ------------- ------------- ------------- Cash flows from investing activities: Decrease (increase) in restricted cash (618,543) 360,502 1,535,178 Collection of note receivable - other - - 208,807 Proceeds from sale of property and equipment 2,366,242 320,039 361,138 Purchase of property and equipment (510,516) (1,625,734) (1,399,815) Purchase of mineral rights and pit development (112,262) (717,474) (729,289) Decrease in net assets of discontinued operations - - 231,343 ------------- ------------- ------------- Net cash provided by (used in) investing activities 1,124,921 (1,662,667) 207,362 ------------- ------------- ------------- Cash flows from financing activities: Repayment of capital lease obligations (1,105,301) (1,183,847) (882,677) Proceeds received from notes payable - other 4,182,533 6,055,556 - Repayment of notes payable - other (3,890,694) (4,532,017) (1,366,007) Repayment of notes payable - related party - - (1,000,000) ------------- ------------- ------------- Net cash provided by (used in) financing activities (813,462) 339,692 (3,248,684) ------------- ------------- ------------- Net increase (decrease) in cash and cash equivalents 405,908 (4,354,891) (4,815,536) Cash and cash equivalents at beginning of year 1,822,598 6,177,489 10,993,025 ------------- ------------- ------------- Cash and cash equivalents at end of year $ 2,228,506 $ 1,822,598 $ 6,177,489 ============= ============= =============
The Accompanying Notes are an Integral Part of the Financial Statements F-6 MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, ---------------------------------------------- 2001 2000 1999 ------------- ------------- ------------ Increase (Decrease) in Cash and Cash Equivalents (Continued): Reconciliation of Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities: Net Income (Loss) $(2,523,931) $(1,574,586) $ 2,340,106 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 2,811,042 2,681,037 2,100,151 (Gain) loss on sale of property and equipment 64,872 (106,280) 11,886 Deferred taxes, net (638,448) (24,566) 634,098 Allowance for doubtful accounts 163,193 301,895 38,146 Impairment of goodwill 1,420,704 - - Changes in Operating Assets and Liabilities: Accounts receivable (7,243,533) 4,657,423 (3,860,537) Prepaid expenses and other 344,928 638,042 643,386 Inventory (1,198,218) (1,071,280) (3,216,955) Income tax receivable 774,000 (774,000) 20,886 Costs and estimated earnings in excess of billings on uncompleted contracts 4,533,955 (969,076) (5,008,314) Refundable deposits 121,455 (92,885) 107,461 Claims receivable (5,968,026) - - Other assets (80,558) - - Accounts payable 9,419,871 (3,201,679) 7,010,356 Accrued liabilities (477,700) (1,097,622) 321,985 Interest payable - - (26,027) Billings in excess of costs and estimated earnings on uncompleted contracts (1,429,157) (2,398,339) (2,890,842) ----------- ----------- ----------- Net cash provided by (used in) operating activities $ 94,449 $(3,031,916) $(1,774,214) =========== =========== ===========
The Accompanying Notes are an Integral Part of the Financial Statements F-7 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES: Nature of the Corporation: Meadow Valley Corporation (the "Company") was organized under the laws of the State of Nevada on September 15, 1994. The principal business purpose of the Company is to operate as the holding company of Meadow Valley Contractors, Inc. ("MVCI") and Ready Mix, Inc. ("RMI"). MVCI is a general contractor, primarily engaged in the construction of structural concrete highway bridges and overpasses, and the paving of highways and airport runways in the states of Nevada, Arizona, and Utah. RMI manufactures and distributes ready mix concrete in the Las Vegas and Phoenix metropolitan areas. Formed by the Company, RMI commenced operations in 1997. Liquidity: The Company incurred income (loss) from operations for the years ended December 31, 2001, 2000 and 1999 of $(3,404,262), $(2,139,685) and $3,260,411 and has provided (used) cash in operating activities of $94,449, $(3,031,916) and $(1,774,214) for the years ended December 31, 2001, 2000 and 1999. In order to improve working capital, the Company executed a definite agreement on March 22, 2002 to sell certain pit assets to United Metro Materials Inc. ("United Metro"). The purchase price consists of approximately $3.0 million in cash plus the value of rock and sand inventories, which are expected to be between $1.1 and $1.4 million, also paid in cash, and the assumption by United Metro of certain obligations and other liabilities. The final purchase price will depend upon the measurement of rock and sand inventories at closing, which is expected in April 2002. Accordingly, $3,213,484 of assets consisting primarily of inventory and equipment, have been classified as assets held for sale on the accompanying 2001 balance sheet. During 2002, the Company may also consider the disposal of other assets as a means to increase working capital. In addition, the Company has engaged the services of AMG Financing Capital, Inc. to find potential sources of financing to meet future financial obligations. Should the Company not be able to execute the definite agreement with United Metro, sell other assets, or raise additional financing 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. Principles of Consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries MVCI and RMI. Intercompany transactions and balances have been eliminated in consolidation. Reclassifications: Certain balances as of December 31, 2000 and 1999 and the years then ended have been reclassified in the accompanying consolidated financial statements to conform with the current year presentation. These classifications had no effect on previously reported net income or stockholders' equity. Accounting Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Significant estimates are used when accounting for the percentage of completion and the estimated gross profit on projects in progress, allowance for doubtful accounts, depreciation and amortization, accruals, taxes, contingencies and goodwill, which are discussed in the respective notes to the consolidated financial statements. Revenue and Cost Recognition: Revenues and costs from fixed-price and modified fixed-price construction contracts are recognized for each contract on the percentage-of-completion method, measured by the percentage of costs incurred to date to the estimated total of direct costs. Direct costs include, among other things, direct labor, field labor, equipment rent, subcontracting, direct materials, and direct overhead. General and administrative expenses are accounted for as period costs and are, therefore, not included in the calculation of the estimates to complete construction contracts in progress. Project losses are provided in the period in which such losses are determined, without reference to the percentage-of- completion. As contracts can extend over one or more accounting periods, revisions in costs and earnings estimated during the course of the work are reflected during the accounting period in which the facts that required such revisions become known. Claims for additional contract revenue are recognized only to the extent that contract costs relating to the claim have been incurred and evidence provides a legal basis for the claim. As of December 31, 2001 and 2000, the total amount of claims that have been submitted or soon-to-be submitted was approximately $54,407,238 and $37,909,196, respectively. Of those sums, the Company's portion of the claims total was $29,396,539 and $20,536,637 and the balance of $25,010,699 and $17,372,559 pertains to prime contractor or subcontractors' claims. Relative to the aforementioned claims, the Company has recorded approximately $7,754,448 and $5,820,904, respectively, in claim revenue to offset costs incurred to-date on the claims. In the accompanying December 31, 2001 balance sheet, claims receivable in the amount of $5,968,026 has been recorded in connection with claims filed. In addition, the Company has also recorded approximately $1,817,831 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 $9,572,279 will reduce net income. Conversely, a payment for those same items in excess of $9,572,279 will increase net income. 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. F-8 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES (CONTINUED): Restricted Cash: At December 31, 2001 and 2000, funds in the amount of $2,401,548 and $1,783,005, respectively, were held in trust, in lieu of retention, on certain of the Company's construction contracts and will be released to the Company after the contracts are completed. Inventory: Inventories, which consist primarily of raw materials, are stated at the lower of cost, determined by the first-in, first-out method, or market. Inventory quantities are determined by physical measurements. Accounts Receivable, net: Included in accounts receivable are trade receivables that represent amounts billed but uncollected on completed construction contracts and construction contracts in progress as well as other trade and non-trade receivables. The Company follows the allowance method of recognizing uncollectible accounts receivable. The allowance method recognizes bad debt expense based on a review of the individual accounts outstanding, and the Company's prior history of uncollectible accounts receivable. At December 31, 2001 and 2000, the Company had established an allowance for potentially uncollectible accounts receivable in the amounts of $562,412 and $399,219, respectively. During the years ended December 31, 2001, 2000 and 1999 the Company incurred bad debt expense in the amounts of $171,037, $489,379 and $79,681, respectively. Property and Equipment: Property and equipment are recorded at cost. Depreciation charged to operations during the years ended December 31, 2001, 2000 and 1999 was $2,529,281, $2,422,470 and $1,932,272, respectively. Depreciation is provided for on the straight-line method, over the following estimated useful lives. Leasehold improvements are recorded at cost and are amortized over their estimated useful lives or the lease term, whichever is shorter. Plants 6-15 years Computer Equipment 5-7 years Equipment 5-10 years Vehicles 5 years Office furniture and equipment 7 years Improvements 2-10 years At December 31, 2001 and 2000, property and equipment with a net book value of $15,802,984 and $18,111,506, respectively, were pledged as collateral for notes payable and capital lease obligations. Goodwill: Goodwill represents the excess of the costs of acquiring Meadow Valley Contractors, Inc. over the fair value of its net assets and was being amortized on the straight-line method over twenty-five (25) years. Amortization expense charged to operations for each of the years ended December 31, 2001, 2000 and 1999 was $80,029. The carrying value of goodwill is periodically reviewed by the Company and impairments, if any, are recognized when expected future operating cash flows derived from goodwill is less than its carrying value. Based on this analysis, the Company determined that the fair value of goodwill as of December 31, 2001 was zero. Accordingly, a goodwill impairment loss of $1,420,704 was recorded in the fourth quarter of 2001 in accordance with the Statement of Financial Accounting Standard No. 121 and is included in the loss from continuing operations. F-9 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES (CONTINUED): Income Taxes: The Company accounts for income taxes in accordance with the Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires the Company to recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in a Company's financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company files consolidated tax returns with MVCI and RMI for federal and state tax reporting purposes. Cash Flow Recognition: For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an initial maturity of three (3) months or less to be cash equivalents. Fair Value of Financial Instruments: The carrying amounts of financial instruments including cash, restricted cash, costs and estimated earnings in excess of billings on uncompleted contracts, certain current maturities of long-term debt, billings in excess of costs and estimated earnings on uncompleted contracts, accrued liabilities and long-term debt approximate fair value based on borrowing rates currently available to the Company for loans with similar terms and maturities. Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed of: Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of" ("SFAS 121") establishes guidelines regarding when impairment losses on long-lived assets, which include plant and equipment, and certain identifiable intangible assets, should be recognized and how impairment losses should be measured. The carrying value of goodwill is periodically reviewed by the Company and impairments, if any, are recognized when expected future operating cash flows derived from goodwill is less than its carrying value. Based on this analysis, the Company determined that the fair value of goodwill as of December 31, 2001 was zero. Accordingly, a goodwill impairment loss of $1,420,704 was recorded in the fourth quarter of 2001 in accordance with the Statement of Financial Accounting Standard No. 121 and is included in the loss from continuing operations. The Company executed a definite agreement on March 22, 2002 to sell certain pit assets of MVCI to United Metro Materials Inc. ("United Metro"). The purchase price consists of approximately $3.0 million in cash plus the value of rock and sand inventories, which are expected to be between $1.1 and $1.4 million, also paid in cash. In addition, United Metro will assume certain obligations and other liabilities. The final purchase price will depend upon the measurement of rock and sand inventories at closing, which is expected in April 2002. Accordingly, $3,213,484 of assets consisting primarily of inventory and equipment, have been classified as assets held for sale on the accompanying 2001 balance sheet. Stock-Based Compensation: Statements of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123") establishes a fair value method of accounting for stock-based compensation plans and for transactions in which an entity acquires goods or services from nonemployees in exchange for equity instruments. SFAS 123 also encourages, but does not require companies to record compensation cost for stock-based employee compensation. The Company has chosen to continue to account for stock-based compensation utilizing the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees". Accordingly, compensation cost for stock options is measured as the excess, if any, of the fair market price of the Company's stock at the date of grant over the amount an employee must pay to acquire the stock. Earnings per Share: Statement of Financial Accounting Standards No. 128, "Earnings per Share," ("SFAS 128") provides for the calculation of Basic and Diluted earnings per share. Basic earnings per share includes no dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity, similar to fully diluted earnings per share. F-10 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES (CONTINUED): Business Combinations and Goodwill and Other Intangible Assets: In June 2001, the Financial Accounting Standard Board finalized FASB Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and Other Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. SFAS 141 also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired intangible assets meet certain criteria. SFAS 141 applies to all business combinations initiated after June 30, 2001 and for purchase business combinations completed on or after July 1, 2001. It also requires, upon adoption of SFAS 142, the Company reclassify the carrying amounts of intangible assets and goodwill based on the criteria in SFAS 141. SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. In addition, SFAS 142 requires that the Company identify reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized intangible assets, and cease amortization of intangible assets with an indefinite useful life. An intangible asset with an indefinite useful life should be tested for impairment in accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in fiscal years beginning after December 15, 2001 to all goodwill and to the intangible assets recognized at that date, regardless of when those assets were initially recognized. SFAS 142 requires the Company to complete a transitional goodwill impairment test six months from the date of adoption. The Company is also required to reassess the useful lives of other intangible assets within the first interim quarter after adoption of SFAS 142. The Company's previous business combinations were accounted for using the purchase method. As of December 31, 2000, the net carrying amount of goodwill was $1,500,733. Amortization expense during the year ended December 31, 2001 was $80,029. The carrying value of goodwill is periodically reviewed by the Company and impairments, if any, are recognized when expected future operating cash flows derived from goodwill is less than its carrying value. Based on this analysis, the Company determined that the fair value of goodwill as of December 31, 2001 was zero. Accordingly, a goodwill impairment loss of $1,420,704 was recorded in the fourth quarter of 2001 in accordance with the Statement of Financial Accounting Standard No. 121 and is included in the loss from continuing operations. We anticipate the adoption of SFAS 141 and SFAS 142 to not have a material impact on the financial statements of the Company. Accounting for Asset Retirement Obligations and Accounting for the Impairment or Disposal of Long-Lived Assets: SFAS 143, Accounting for Asset Retirement Obligations, was issued in June 2001 and is effective for fiscal years beginning after June 15, 2002. SFAS 143 requires that any legal obligation related to the retirement of long-lived assets be quantified and recorded as a liability with the associated asset retirement cost capitalized on the balance sheet in the period it is incurred when a reasonable estimate of the fair value of the liability can be made. SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, was issued in August 2001 and is effective for fiscal years beginning after December 15, 2001. SFAS 144 provides a single, comprehensive accounting model for impairment and disposal of long-lived assets and discontinued operations. SFAS 143 and SFAS 144 will be adopted on their effective dates, and adoption is not expected to result in any material effects on the Company's financial statements. 2. CONCENTRATION OF CREDIT RISK: The Company maintains cash balances at various financial institutions. Deposits not to exceed $100,000 for each institution are insured by the Federal Deposit Insurance Corporation. At December 31, 2001 and 2000, the Company has uninsured cash, cash equivalents, and restricted cash in the amounts of $6,603,140 and $5,322,475, respectively. F-11 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 3. ACCOUNTS RECEIVABLE: Accounts receivable consists of the following: December 31, December 31, 2001 2000 ------------ ------------ Contracts in progress $ 9,114,437 $ 6,382,925 Contracts in progress - retention 6,740,547 4,041,781 Completed contracts 8,775 - Completed contracts - retention 83,500 121,376 Other trade receivables 5,894,753 4,000,003 Other receivables 98,304 150,698 ----------- ----------- 21,940,316 14,696,783 Less: Allowance for doubtful accounts (562,412) (399,219) ----------- ----------- $21,377,904 $14,297,564 =========== =========== 4. CONTRACTS IN PROGRESS: Costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings on uncompleted contracts consist of the following: December 31, December 31, 2001 2000 ------------- ------------- Costs incurred on uncompleted contracts $ 443,326,113 $ 425,863,961 Estimated earnings to date 14,792,091 18,838,396 ------------- ------------- 458,118,204 444,702,357 Less: billings to date (451,481,781) (440,929,162) ------------- ------------- 6,636,423 3,773,195 Less: claims receivable (5,968,026) - ------------- ------------- $ 668,397 $ 3,773,195 ============= ============= Included in the accompanying balance sheets under the following captions: December 31, December 31, 2001 2000 ------------ ------------ Costs and estimated earnings in excess of billings on uncompleted contracts $ 5,294,054 $ 9,828,009 Billings in excess of costs and estimated earnings on uncompleted contracts (4,625,657) (6,054,814) ----------- ----------- $ 668,397 $ 3,773,195 =========== =========== F-12 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 5. PROPERTY AND EQUIPMENT: Property and equipment consists of the following: December 31, December 31, 2001 2000 ------------ ------------ Land $ 827,639 $ 827,639 Plants 7,283,099 9,395,274 Computer equipment 382,962 341,783 Equipment 12,262,847 12,089,702 Vehicles 2,431,937 2,068,654 Office furniture and fixtures 61,995 62,420 Improvements 442,814 364,766 ----------- ----------- 23,693,293 25,150,238 Accumulated depreciation (8,425,502) (7,038,732) ----------- ----------- $15,267,791 $18,111,506 =========== =========== 6. ACCOUNTS PAYABLE: Accounts payable consists of the following: December 31, December 31, 2001 2000 ------------ ------------ Trade $22,897,786 $14,069,299 Retentions 4,128,198 3,536,814 ----------- ----------- $27,025,984 $17,606,113 =========== =========== 7. ACCRUED LIABILITIES: Accrued liabilities consists of the following: December 31, December 31, 2001 2000 ------------ ------------ Compensation $ 715,552 $ 765,497 Taxes 517,853 641,464 Insurance 144,616 77,208 Other 433,977 805,529 ----------- ----------- $ 1,811,998 $ 2,289,698 =========== =========== F-13 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 8. NOTES PAYABLE: Notes payable consists of the following:
December 31, December 31, 2001 2000 ------------ ------------ Notes payable, interest rates ranging from 3.9% to 9% with monthly payments of $87,916, due dates ranging from April 1, 2002 to June 4, 2004, collateralized by equipment $ 1,377,503 $ 2,397,756 Notes payable, interest rates ranging from 9.0% to 9.33% with monthly payments of $9,958, due dates ranging from August 15, 2003 to December 31, 2004, collateralized by land 218,862 313,067 Notes payable, interest rates ranging from 0% to 8.11% with monthly payments of $18,680, due dates ranging from July 5, 2002 to November 1, 2004, collateralized by equipment 285,890 484,677 Notes payable, variable interest rate currently at 4.75%, interest rate is based on Chase Manhattan Bank's prime, with monthly principal payments of $15,536, due dates ranging from July 14, 2005 to May 13, 2006, collateralized by equipment 797,102 3,045,659 Non-interest bearing note payable, with monthly payments of $5,012, due September 28, 2004, collateralized by equipment 165,394 - Notes payable, interest rates ranging from 4.5% to 8.84%, with monthly payments of $33,099, due dates ranging from December 20, 2004 to February 27, 2006, collateralized by equipment 1,325,362 - Note payable, variable interest rate currently at 5.0%, interest rate is based on Chase Manhattan Bank's prime plus .25%. Effective March 2002, the line of credit was amended to bear interest at Chase Manhattan Bank's prime plus 1.5%, with interest only payments until January 1, 2003, due December 31, 2006, collateralized by all assets of the Company (See Note 9) 7,000,000 3,037,848 ------------ ----------- 11,170,113 9,279,007 Less: current portion (1,685,634) (1,604,399) ------------ ----------- $ 9,484,479 $ 7,674,608 ============ ===========
Following are maturities of long-term debt for each of the next 5 years: 2002 $ 1,685,634 2003 2,817,172 2004 2,418,334 2005 2,261,051 2006 1,987,922 ----------- $11,170,113 =========== F-14 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 9. LINE OF CREDIT: In July 2000, the Company entered into a revolving loan agreement ("line of credit"). Under the terms of the agreement, the Company may borrow up to $7,000,000 at Chase Manhattan Bank's prime, plus .25% through December 31, 2001 at which time the line of credit was to convert to a term agreement requiring monthly principal and interest payments through December 31, 2005. The line of credit is collateralized by all of the Company's assets. Under the terms of the line of credit, the Company is required to maintain a certain level of tangible net worth. In addition, the Company is also required to maintain a ratio of total debt to tangible net worth. As of December 31, 2001, the Company was not in compliance with the tangible net worth covenant. Effective March 2002, the Company amended the line of credit agreement. Under the terms of the amended agreement, the interest rate increased to Chase Manhattan Bank's prime, plus 1.5% through January 1, 2003 at which time the line of credit converts to a term agreement requiring monthly principal and interest payments through December 31, 2006. In connection with the amendment, the Company obtained a waiver from non- compliance with the tangible net worth convenant as of December 31, 2001. As of December 31, 2001, the Company had withdrawn the entire $7,000,000 from the line of credit. 10. RELATED PARTY TRANSACTIONS: Management believes that the fair value of the following transactions reflect current amounts that the Company could have consummated transactions with other third parties. Revenue: During the years ended December 31, 2001 and 2000, the Company provided construction materials to various related parties in the amounts of $108,112 and $26,556, respectively. Included in accounts receivable at December 31, 2001 and 2000 are amounts due from related parties, in the amounts of $27,337 and $15,132, respectively. Professional Services: During the years ended December 31, 2001, 2000 and 1999, a related party rendered professional services to the Company in the amounts of $14,573, $23,342 and $7,944, respectively. During the years ended December 31, 2001, 2000 and 1999, the Company paid $30,000, $30,000 and $5,000, respectively, to outside members of the board of directors. Subcontractor/Supplier: Various related parties provided materials and equipment used in the Company's construction business during the years ended December 31, 2001, 2000 and 1999, in the amounts of $4,114,319, $535,694, and $65,441, respectively. Included in accounts payable at December 31, 2001 and 2000 are amounts due to related parties, in the amounts of $1,046,908 and $154,861, respectively, related to supplies. Royalties: During the years ended December 31, 2001, 2000 and 1999, the Company paid a related party mining royalties in the amounts of $390,144, $328,310, and $182,061, respectively. Included in accrued liabilities December 31, 2001 and 2000 are amounts due to related parties, in the amounts of $30,464 and $49,983, respectively, related to royalties. Commitments: The Company leased office space in Moapa, Nevada on a month-to-month basis, at a rental rate of $840 per month, from a related party of the Company. The lease terms also required the Company to pay common area maintenance, taxes, insurance and other costs. Rent expense under the lease for the years ended December 31, 2001, 2000 and 1999 amount to $9,240, $10,080 and $10,080, respectively. F-15 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 11. INCOME TAXES: The provisions for income taxes benefit (expense) from continuing operations consist of the following: For the Years Ended December 31, ------------------------------------ 2001 2000 1999 -------- -------- ------------ Current: Federal $ 30,183 $231,663 $ (851,180) State - 28,632 (105,202) -------- -------- ----------- 30,183 260,295 (956,382) Deferred 638,448 24,566 (634,098) -------- -------- ----------- $668,631 $284,861 $(1,590,480) ======== ======== =========== The Company's deferred tax asset (liability) consists of the following: December 31, December 31, 2001 2000 ------------ ------------ Deferred tax asset: Other $ 613,705 $ 269,137 NOL carryforward 1,344,218 604,304 ----------- ----------- 1,957,923 873,441 Deferred tax liability: Depreciation (2,718,734) (2,272,700) ----------- ----------- Net deferred tax liability $ (760,811) $(1,399,259) =========== =========== For the years ended December 31, 2001, 2000 and 1999, the effective tax rate differs from the federal statutory rate primarily due to state income taxes and permanent differences, as follows: For the Years Ended December 31, ------------------------------------ 2001 2000 1999 ----------- ----------- --------- Statutory rate applied to income (loss) before income taxes $(1,085,471) $ (632,212) $1,334,160 State taxes, net of federal benefit (35,902) (61,362) 131,949 Increase (decrease) in income taxes resulting from: Non-Deductible items 525,015 50,557 - Other (72,273) 358,156 124,731 ----------- ---------- ---------- $ (668,631) $ (284,861) $1,590,840 =========== ========== ========== F-16 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 12. COMMITMENTS: The Company is currently leasing office space in Phoenix, Arizona under a non-cancelable operating lease agreement expiring in December 2003. During December 1998, the Company amended the original lease. The amended lease agreement provides for monthly payments of $8,280 through December 31, 2001, $8,694 from January 1, 2002 through December 31, 2002 and $9,108 from January 1, 2003 through December 31, 2003. The lease also requires the Company to pay common area maintenance, taxes, insurance and other costs. Rent under the aforementioned operating lease was $115,059, $96,765 and $89,152 for the years ended December 31, 2001, 2000 and 1999, respectively. The Company leases office space, batch plants, equipment, mixer trucks, property and aggregate supply under leases expiring in various years through 2010. Rent under the aforementioned operating leases were $8,307,423, $4,369,138 and $2,374,109 for the years ended December 31, 2001, 2000 and 1999, respectively. Minimum future rental payments under non-cancelable operating leases having remaining terms in excess of one year as of December 31, 2001 for each of the next five years and in aggregate are: 2002 $ 5,594,036 2003 5,258,727 2004 4,834,046 2005 3,193,778 2006 1,747,355 Subsequent to 2006 3,671,067 ----------- $24,299,009 =========== The Company has entered into employment contracts with some of its executive officers that provide for an annual salary, issuance of the Company's common stock and various other benefits and incentives. As of the end of December 31, 2001, 2000 and 1999, the total commitments, excluding benefits and incentives, amount to $498,875, $870,188 and $1,530,438, respectively. The Company is the lessee of batch plants, equipment and vehicles under capital leases expiring in various years through 2006. The assets and liabilities under a capital lease are initially recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. Each asset is depreciated over the lower of the expected useful life or the lease term. Depreciation on the assets under capital leases charged to expense in 2001, 2000 and 1999 was $621,147, $762,548 and $559,348, respectively. At December 31, 2001 and 2000, property and equipment included $5,017,796 and $6,895,120, respectively, of vehicles and equipment under capital leases. Minimum future lease payments under capital leases as of December 31, 2001 for each of the next five years and in aggregate are: 2002 $ 1,400,875 2003 1,197,078 2004 1,046,391 2005 695,891 2006 414,717 ----------- Total minimum payments 4,754,952 Less: executory costs (186) ----------- Net minimum lease payments 4,754,766 Less: amount representing interest (672,516) ----------- Present value of net minimum lease payment 4,082,250 Less: current portion (1,118,055) ----------- $ 2,964,195 =========== F-17 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 13. STOCKHOLDERS' EQUITY: Preferred Stock: The Company has authorized 1,000,000 shares of $.001 par value preferred stock to be issued, with such rights, preferences, privileges, and restrictions as determined by the Board of Directors. Initial Public Offering: During October 1995, the Company completed an initial public offering ("Offering") of Units of the Company's securities. Each unit consisted of one share of $.001 par value common stock and one redeemable common stock purchase warrant ("Warrant"). Each Warrant is exercisable to purchase one share of common stock at $7.20 per share for a period of 5 years from the date of the Offering. The Offering included the sale of 1,926,250 Units at $6.00 per Unit. Net proceeds of the Offering, after deducting underwriting commissions and offering expenses of $2,122,080, amounted to $9,435,420. In connection with the Offering, the Company granted the underwriters warrants to purchase 167,500 shares of common stock at $7.20 per share for a period of twelve months from the date of the offering and for a period of four years thereafter. In September 2000, the exercise price of the warrants was reduced to $5.00 per share and the exercise period was extended until June 30, 2002. 14. LITIGATION AND CLAIM MATTERS: The Company is a party to legal proceedings in the ordinary course of its business. With the exception of those matters detailed below, the Company believes that the nature of these proceedings (which generally relate to disputes between the Company and its subcontractors, material suppliers or customers regarding payment for work performed or materials supplied) are typical for a construction firm of its size and scope, and no other pending proceedings are material to its financial condition. The following proceedings represent matters that may become material and have already been or may soon be referred to legal counsel for further action: Requests for Equitable Adjustment to Construction Contracts. The Company has or will make claims as described below on the following contracts: (1) Five contracts with the New Mexico State Highway and Transportation Department - The approximate total value of claims on these projects is $35,271,841 of which approximately $23,146,407 is on behalf of MVCI and the balance of $12,125,434 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, plan errors and omissions, contract modifications and associated delay costs. The above claims combined total approximately $54,407,238. Of that sum, the Company's portion of the claims total approximately $29,396,539 and the balance of approximately $25,010,699 pertains to prime contractor or subcontractors' claims. Relative to the aforementioned claims, the Company has recorded approximately $7,754,448 in claim revenue to offset costs incurred to- date on the claims. In addition, the Company has also recorded approximately $1,817,831 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 $9,572,279 will reduce net income. Conversely, a payment for those same items in excess of $9,572,279 will increase net income. F-18 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 14. LITIGATION AND CLAIM MATTERS (CONTINUED): Lawsuits Filed Against Meadow Valley Contractors, Inc. or Meadow Valley Corporation (1) Innovative Construction Systems, Inc. ("ICS"), District Court, Clark County, NV - ICS was a subcontractor to MVCI on several projects. ICS failed to make payments of payroll, pension funds contributions and other taxes for which the Internal Revenue Service garnished any future payments due ICS on MVCI projects. As a result, ICS failed to supply labor to perform its work and defaulted on its subcontracts. MVCI terminated the ICS subcontracts and performed the work with MVCI personnel. ICS alleges it was wrongfully terminated and is asserting numerous claims for damages. ICS claims against MVCI total approximately $15,000,000. The Company does not believe ICS' claims have merit and intends to vigorously defend against these claims and will eventually seek to recover the damages ICS has caused the Company through its failure to perform. (2) AnA Enterprises, LLC ("AnA"), District Court, Clark County, NV - AnA supplied equipment to MVCI on a project under terms of a variety of agreements. AnA is suing MVCI for non-payment. MVCI has counter-sued for cost overruns deemed to be the responsibility of AnA. AnA's suit against MVCI is for approximately $3,000,000. MVCI's countersuit against AnA is for approximately $2,000,000. AnA has also filed a complaint on two other projects completed in 1997 where they were a subcontractor to MVCI in the same jurisdiction in the amount of approximately $715,000 for changed conditions. The Company does not believe AnA's claims have merit and intends to vigorously defend against these claims. (3) 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. (4) The Company is defending a claimed preference in connection with a payment made to it by an insurance company in the approximate amount of $100,000. The Company believes that the payment is not a preference, and is vigorously defending the action. (5) The Company and all of its directors were served with a civil complaint by Silver State Materials Corp. and Cyrus Spurlino. 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 term, were not so amended until April 1997, and that such amendment was not filed with the Securities and Exchange Commission. The complaint seeks (i) to terminate all of the Company's directors for cause, (ii) to elect a new Board of Directors, (iii) to cause the Company to enact amended and restated bylaws, (iv) for monetary damages in an undisclosed amount, (v) for interest, fees and costs, and (vi) for such other relief as the District Court may deem appropriate. The Company believes that the complaint is without merit and intends to vigorously defend it. 15. STATEMENT OF CASH FLOWS: Non-Cash Investing and Financing Activities: The Company recognized investing and financing activities that affected assets, liabilities, and equity, but did not result in cash receipts or payments. These non-cash activities are as follows: During the years ended December 31, 2001, 2000 and 1999, the Company financed the purchase of property, plant and equipment in the amounts of $2,141,357, $4,044,329 and $4,987,308, respectively. During the year ended December 31, 1999, the Company received $135,000 trade in value on equipment. During the year ended December 31, 2000, the Company sold a piece of equipment for a total purchase price of $80,000. The Company received a cash payment in the amount of $20,000; a piece of equipment valued at $20,000 and accepted the remaining $40,000 to be paid in two equal installments of $20,000. Included in accounts receivable, net at December 31, 2000, is $40,000 related to the aforementioned sale. During the first quarter of 2001, the Company had collected the entire accounts receivable amount. F-19 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 16. SIGNIFICANT CUSTOMERS: For the years ended December 31, 2001, 2000 and 1999, the Company recognized a significant portion of its revenue from four Customers (shown as an approximate percentage of total revenue): For the Years Ended December 31, -------------------------------- 2001 2000 1999 ---- ---- ---- A 21.9% 17.5% 26.2% B 12.5% 16.3% 28.7% C 9.6% 23.0% 17.2% D 14.7% 6.1% 5.8% At December 31, 2001 and 2000, amounts due from the aforementioned Customers included in restricted cash and accounts receivables, are as follows: For the Years Ended December 31, -------------------------------- 2001 2000 ---- ---- A $3,809,567 $2,968,786 B 6,255,403 1,855,666 C 350,962 1,124,196 D 2,218,976 762,181 17. STOCK OPTION PLAN: In November 1994, the Company adopted a Stock Option Plan providing for the granting of both qualified incentive stock options and non-qualified stock options. The Company has reserved 1,200,000 shares of its common stock for issuance under the Plan. Granting of the options is at the discretion of the Board of Directors and may be awarded to employees and consultants. Consultants may receive only non-qualified stock options. The maximum term of the stock options are 10 years and may be exercised as follows: 33.3% after one year of continuous service, 66.6% after two years of continuous service and 100% after three years of continuous service. The exercise price of each option is equal to the market price of the Company's common stock on the date of grant. The following summarized the stock option transactions: Weighted Average Shares Price per Share ---------- ---------------- Outstanding January 1, 1999 622,075 $5.43 Granted 165,500 5.43 Forfeited (14,700) 5.43 -------- Outstanding December 31, 1999 772,875 5.12 Forfeited (101,525) 5.23 -------- Outstanding December 31, 2000 671,350 5.11 Granted 201,300 2.44 Forfeited (101,000) 4.80 -------- Outstanding December 31, 2001 771,650 4.45 ======== F-20 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 17. STOCK OPTION PLAN (CONTINUED): Information relating to stock options at December 31, 2001 summarized by exercise price is as follows:
Outstanding Exercisable --------------------------------------------- --------------------------- Weighted Average Weighted Average --------------------------------- ---------------- Remaining Exercise Price Per Share Shares Life ( In Years) Exercise Price Shares Exercise Price - ------------------------ -------- ---------------- -------------- ------ -------------- $6.25 139,700 4 $ 6.25 139,700 $ 6.25 $5.41 2,500 5 5.41 2,500 5.41 $4.375 144,050 5 4.375 144,050 4.375 $5.31 80,000 6 5.31 80,000 5.31 $5.875 91,000 7 5.875 91,000 5.875 $4.563 20,000 8 4.563 13,334 4.563 $4.00 20,000 8 4.00 13,333 4.00 $3.875 83,600 8 3.875 55,734 3.875 $2.438 190,800 10 2.438 - 2.438 - --------------- ------- -------- ------- ------ $2.438 to $6.25 771,650 $ 4.45 539,651 $ 4.45 =============== ======= ======== ======= ======
All stock options issued to employees have an exercise price not less than the fair market value of the Company's Common Stock on the date of grant. In accordance with accounting for such options utilizing the intrinsic value method, there is no related compensation expense recorded in the Company's financial statements for the years ended December 31, 2001, 2000 and 1999. Had compensation cost for stock-based compensation been determined based on the fair value of the options at the grant dates consistent with the method of SFAS 123, the Company's net income (loss) and earnings per share for the years ended December 31, 2001, 2000 and 1999 would have been reduced to the proforma amounts presented below:
2001 2000 1999 ----------- ----------- ---------- Net income (loss) As Reported $(2,523,931) $(1,574,586) $2,340,106 Proforma (2,625,728) (1,721,988) 1,784,024 Basic net income (loss) per common share As Reported $ (0.71) $ (0.44) $ 0.67 Proforma (0.74) (0.49) 0.51 Diluted net income (loss) per common share As Reported $ (0.71) $ (0.44) $ 0.66 Proforma (0.74) (0.49) 0.51
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 and 1999: expected life of options of 5 years, expected volatility of 54.87%, risk-free interest rates of 8.0%, and a 0% dividend yield. The weighted average fair value at date of grant for options granted during 2001 and 1999 approximated $.97 and $1.13, respectively. F-21 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 18. BASIC EARNINGS (LOSS) PER SHARE: The Company's basic net income (loss) per share at December 31, 2001, 2000 and 1999 were computed by dividing net income for the period by 3,559,938, 3,549,458 and 3,518,510, respectively, the basic weighted average number of common shares outstanding during the period. The Company's diluted net loss per common share at December 31, 2001 is computed based on the weighted average number of shares of common stock outstanding during the period. Options to purchase 771,650 at a range of $2.438 to $6.25 per share were outstanding during 2001, but were not included in the computation of diluted net loss per common shares because the options' exercise price was greater than the average market price of the common share. The Company's diluted net income per common share at December 31, 2000 is computed based on the weighted average number of shares of common stock outstanding during the period. Options to purchase 671,350 at a range of $3.875 to $6.25 per share were outstanding during 2000, but were not included in the computation of diluted net income per common share because the options' exercise price was greater than the average market price of the common share. The Company's diluted net income per common share at December 31, 1999 includes 11,195 common shares that would be issued upon exercise of outstanding stock options. Options to purchase 429,705 at a range of $5.31 to $6.25 per share were outstanding during 1999, but were not included in the computation of diluted net income per common share because the options' exercise price was greater than the average market price of the common share. 19. Discontinued Operations: In June 1998, the Company adopted a formal plan (the "Plan") to discontinue the operations of Prestressed Products Incorporated ("PPI"). The Plan included the completion of approximately $2.8 million of uncompleted contracts and the disposition of approximately $1.2 million of equipment. Accordingly, the Company has reclassified the operations of PPI as discontinued operations in the accompanying statements of operations. The Company recorded an estimated loss of $1,950,000 (net of income tax benefit of $1,300,000), related to the disposal of assets for PPI, which included a provision of $1,350,000 for estimated operating losses during the phase-out period. During the year ended December 31, 1999, $598,172 of the expected losses was incurred (net of income tax benefit of $398,743). The revenue of PPI for the year ended December 31, 1999 was $1,460,381. These amounts are not included in revenue in the accompanying statements of operations. The accompanying consolidated balance sheet as of December 31, 1999 reflects the net liabilities and the estimated loss as a single amount as follows: December 31, 1999 ----------- Current assets $ 653,668 Non-current assets - Liabilities (242,113) ----------- Net assets 411,555 Estimated loss on disposition (217,717) ----------- Net asset of discontinued operations $ 193,838 =========== F-22 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 20. SUBSEQUENT EVENTS: In January 2002, the Company amended the line of credit agreement. Under the terms of the amended agreement, the interest rate increased to Chase Manhattan Bank's prime, plus .5% through January 1, 2003 at which time the line of credit converts to a term agreement requiring monthly principal and interest payments through December 31, 2006. In January 2002, the Company refinanced 22 mixer trucks for $830,625. The mixer trucks were previously recorded under a operating lease agreement. The note payable obligation has an interest rate of 6.65%, with monthly payments of $25,515, and is due January 2005. In February 2002, the Company entered into a non-binding letter of intent to sell Ready Mix, Inc. to RMI Enterprises, LLC. In February 2002, the Company financed the purchase of equipment in the amount of $16,129. The note payable is non-interest bearing, with monthly payments of $1,344, and is due February 2003. In March 2002, the Company financed the purchase of equipment in the amount of $77,891. The note payable obligation has an interest rate of 7.9%, with monthly payments of $3,496, and is due February 2004. In March 2002, the Company refinanced 10 mixer trucks for $332,700. The mixer trucks were previously recorded under an operating lease agreement. The capital lease agreement has an interest rate of 6.9%, with monthly payments of $10,238, and is due April 2005. In March 2002, the Company is in negotiations to refinance 8 mixer trucks, which were previously recorded under operating lease agreements. In March 2002, the Company executed a definitive agreement to sell mineral leases and related equipment and other assets pertaining to the sand and gravel operation near Prescott, Arizona. In March 2002, the Company amended the line of credit agreement. Under the terms of the amended agreement, the interest rate increased to Chase Manhattan Bank's prime, plus 1.5% through January 1, 2003 at which time the line of credit converts to a term agreement requiring monthly principal and interest payments through December 31, 2006. In March 2002, the Company terminated the non-binding letter of intent to sell Ready Mix, Inc. to RMI Enterprises, LLC. 21. OTHER INFORMATIVE DISCLOSURES: The construction materials operation manufactures and distributes ready mix concrete and sand and gravel products in the Las Vegas, NV and Phoenix, AZ markets. Prospective customers include concrete subcontractors, prime contractors, homebuilders, commercial and industrial property developers, pool builders and homeowners. Construction materials sales first began from a single location in March 1997 and, by the end of 2000, expanded to two locations in the Las Vegas, NV vicinity, one location in the Moapa, NV vicinity and two locations in the Phoenix, AZ vicinity. The construction services operation of the Company generates revenue by providing construction services, usually under terms of a contract with an owner or a subcontract with another contractor. F-23 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 21. OTHER INFORMATIVE DISCLOSURES (CONTINUED): The following is a summary of certain financial items of the Company's two main areas of operations for 2001, 2000 and 1999:
Construction Construction Services Materials ------------ ------------ For the twelve months ended December 31, 2001 Gross revenue $ 143,129,246 $ 32,625,131 Intercompany revenue - 1,691,229 Cost of revenue 140,058,139 31,037,877 Interest income 299,887 19,910 Interest expense (302,489) (183,448) Depreciation and amortization 1,999,626 811,416 Income (loss) before taxes (2,698,403) (494,159) Income tax benefit (expense) 756,333 (87,702) Net income (loss) (1,942,070) (581,861) Total assets 47,963,143 14,185,899 For the twelve months ended December 31, 2000 Gross revenue $ 144,608,886 $ 20,330,715 Intercompany revenue - 1,366,343 Cost of revenue 140,684,222 19,617,224 Interest income 614,118 32,362 Interest expense (177,850) (73,146) Depreciation and amortization 2,018,501 662,536 Income (loss) before taxes (532,354) (1,327,093) Income tax benefit (expense) (210,145) 495,006 Net income (loss) (742,499) (832,087) Total assets 42,043,028 13,343,002 For the twelve months ended December 31, 1999 Gross revenue $ 195,589,962 $ 15,664,030 Intercompany revenue - 1,251,720 Cost of revenue 187,258,844 14,063,702 Interest income 648,922 20,006 Interest expense (132,637) (77,235) Depreciation and amortization 1,820,981 279,170 Income (loss) before taxes 3,493,888 436,698 Income tax benefit (expense) (1,427,294) (163,186) Net income (loss) 2,066,594 273,512 Total assets 48,664,190 9,890,632
There are no differences in accounting principles between the operations. All centrally incurred costs are allocated to the construction services operation. Intercompany revenue is eliminated at cost to arrive at consolidated revenue and cost of revenue. F-24 MEADOW VALLEY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 22. QUARTERLY FINANCIAL DATA (UNAUDITED):
March 31, June 30, September 30, December 31, ------------- ------------- ------------- ------------- 2001 Revenue $ 35,353,537 $ 45,476,667 $ 52,619,530 $ 40,613,414 Gross Profit 190,604 2,150,370 2,205,774 111,613 Income (loss) from operations (1,548,077) 417,024 704,325 (2,977,534) Net income (loss) (1,017,359) 537,702 325,453 (2,369,727) Basic net income (loss) per common share (0.29) 0.15 0.09 (0.66) Diluted net income (loss) per common share (0.29) 0.15 0.09 (0.66) Basic weighted average common shares outstanding 3,559,938 3,559,938 3,559,938 3,559,938 Diluted weighted average common shares outstanding 3,559,938 3,559,938 3,559,938 3,559,938 2002 Revenue $ 38,589,472 $ 45,378,857 $ 44,434,571 $ 35,170,358 Gross Profit 1,784,830 1,413,572 1,742,034 (302,281) Income (loss) from operations 210,286 (61,337) (50,655) (2,237,979) Net income (loss) 227,164 15,366 17,515 (1,834,631) Basic net income (loss) per common share 0.06 0.01 - (0.51) Diluted net income (loss) per common share 0.06 0.01 - (0.51) Basic weighted average common shares outstanding 3,518,018 3,559,938 3,559,938 3,559,938 Diluted weighted average common shares outstanding 3,518,018 3,559,938 3,559,938 3,559,938
F-25 EX-3.04 3 dex304.txt BYLAWS OF MEADOW VALLEY Exhibit 3.04 BYLAWS OF MEADOW VALLEY CORPORATION Table of Contents
ARTICLE I - Offices.................................................................... 2 ARTICLE II - Shareholders.............................................................. 2 ARTICLE III - Board of Directors....................................................... 9 ARTICLE IV - Officers and Agents....................................................... 13 ARTICLE V - Stock...................................................................... 15 ARTICLE VI - Indemnification of Certain Persons........................................ 17 ARTICLE VII - Provision of Insurance................................................... 20 ARTICLE VIII - Miscellaneous........................................................... 20
Effective: April 28, 1997 -1- BYLAWS OF MEADOW VALLEY CORPORATION ARTICLE I Offices The principal office of the corporation shall be designated from time to time by the corporation and may be within or outside of Nevada. The corporation may have such other offices, either within or outside Nevada, as the board of directors may designate or as the business of the corporation may require from time to time. The registered office of the corporation required under Nevada law to be maintained in Nevada may be, but need not be, identical with the principal office, and the address of the registered office may be changed from time to time by the board of directors. ARTICLE II Shareholders Section 1. Annual Meeting. The annual meeting of the shareholders shall be held within 180 days of the Corporation's fiscal year end on a date and at a time fixed by the board of directors of the corporation (or by the president in the absence of action by the board of directors), beginning with the year 1996, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the election of directors is not held on the day fixed as provided herein for any annual meeting of the shareholders, or any adjournment thereof, the board of directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as it may conveniently be held. A shareholder may apply to the district court in the county in Nevada where the corporation's principal office is located or, if the corporation has no principal office in Nevada, to the district court of the county in which the corporation's registered office is located to seek an order that a shareholder meeting be held (i) if an annual meeting was not held within six months after the close of the corporation's most recently ended fiscal year or fifteen months after its last annual meeting, whichever is earlier, or (ii) if the shareholder participated in a proper call of or proper demand for a special meeting and notice of the special meeting was not given within thirty days after the date of the call or the date the last of the demands necessary to require calling of the meeting was received by the corporation pursuant to Nevada law, or the special meeting was not held in accordance with the notice. Section 2. Special Meetings. Unless otherwise prescribed by statute, special meetings of the shareholders may be called for any purpose by the president or by the board of directors. The president shall call a special meeting of the shareholders if the corporation receives one or more written demands for the meeting, stating the purpose or purposes for which it is to be held, -2- signed and dated by holders of shares representing at least ten percent of all the votes entitled to be cast on any issue proposed to be considered at the meeting. Section 3. Place of Meeting. The board of directors may designate any place, either within or outside Nevada, as the place for any annual meeting or any special meeting called by the board of directors. A waiver of notice signed by all shareholders entitled to vote at a meeting may designate any place, either within or outside Nevada, as the place for such meeting. If no designation is made, or if a special meeting is called other than by the board, the place of meeting shall be the principal office of the corporation. Section 4. Notice of Meeting. Written notice stating the place, date, and hour of the meeting shall be given not less than ten nor more than sixty days before the date of the meeting, except that (i) if the number of authorized shares is to be increased, at least thirty days' notice shall be given, or (ii) any other longer notice period is required under Nevada law. The secretary shall be required to give such notice only to shareholders entitled to vote at the meeting except as otherwise required under Nevada law. Notice of a special meeting shall include a description of the purpose or purposes of the meeting. Notice of an annual meeting need not include a description of the purpose or purposes of the meeting except the purpose or purposes shall be stated with respect to (i) an amendment to the articles of incorporation of the corporation, (ii) a merger or share exchange in which the corporation is a party and, with respect to a share exchange, in which the corporation's shares will be acquired, (iii) a sale, lease, exchange or other disposition, other than in the usual and regular course of business, of all or substantially all of the property of the corporation or of another entity which this corporation controls, in each case with or without the goodwill, (iv) a dissolution of the corporation, (v) restatement of the articles of incorporation, or (vi) any other purpose for which a statement of purpose is required under Nevada law. Notice shall be given personally or by mail, private carrier, telegraph, teletype, electronically transmitted facsimile or other form of wire or wireless communication by or at the direction of the president, the secretary, or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed and if in a comprehensible form, such notice shall be deemed to be given and effective when deposited in the United States mail, properly addressed to the shareholder at his address as it appears in the corporation's current record of shareholders, with first class postage prepaid. If notice is given other than by mail, and provided that such notice is in a comprehensible form, the notice is given and effective on the date actually received by the shareholder. If requested by the person or persons lawfully calling such meeting, the secretary shall give notice thereof at corporate expense. No notice need be sent to any shareholder if three successive notices mailed to the last known address of such shareholder have been returned as undeliverable until such time as another address for such shareholder is made known to the corporation by such shareholder. In order to be entitled to receive notice of any meeting, a shareholder shall advise the corporation in writing of any change in such shareholder's mailing address as shown on the corporation's books and records When a meeting is adjourned to another date, time or place, notice need not be given of -3- the new date, time or place if the new date, time or place of such meeting is announced before adjournment at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which may have been transacted at the original meeting. If the adjournment is for more than 120 days, or if a new record date is fixed for the adjourned meeting, a new notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting as of the new record date. A shareholder may waive notice of a meeting before or after the time and date of the meeting by a writing signed by such shareholder. Such waiver shall be delivered to the corporation for filing with the corporate records, but this delivery and filing shall not be conditions to the effectiveness of the waiver. Further, by attending a meeting either in person or by proxy, a shareholder waives objection to lack of notice or defective notice of the meeting unless the shareholder objects at the beginning of the meeting to the holding of the meeting or the transaction of business at the meeting because of lack of notice or defective notice. By attending the meeting, the shareholder also waives any objection to consideration at the meeting of a particular matter not within the purpose or purposes described in the meeting notice unless the shareholder objects to considering the matter when it is presented. Section 5. Fixing of Record Date. For the purpose of determining shareholders entitled to (i) notice of or vote at any meeting of shareholders or any adjournment thereof, (ii) receive distributions or share dividends, (iii) demand a special meeting, or (iv) make a determination of shareholders for any other proper purpose, the board of directors may fix a future date as the record date for any such determination of shareholders, such date in any case to be not more than seventy days, and, in case of a meeting of shareholders, not less than ten days, prior to the date on which the particular action requiring such determination of shareholders is to be taken. If no record date is fixed by the directors, the record date shall be the day before the notice of the meeting is given to shareholders, or the date on which the resolution of the board of directors providing for a distribution is adopted, as the case may be. When a determination of shareholders entitled to vote at any meeting of shareholders is made as provided in this section, such determination shall apply to any adjournment thereof unless the board of directors fixes a new record date, which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting. Unless otherwise specified when the record date is fixed, the time of day for such determination shall be as of the corporation's close of business on the record date. Notwithstanding the above, the record date for determining the shareholders entitled to take action without a meeting or entitled to be given notice of action so taken shall be the date a writing upon which the action is taken is first received by the corporation. The record date for determining shareholders entitled to demand a special meeting shall be the date of the earliest of any of the demands pursuant to which the meeting is called. Section 6. Voting Lists. After a record date is fixed for a shareholders' meeting, the secretary shall make, at the earlier of ten days before such meeting or two business days after notice of the meeting has been given, a complete list of the shareholders entitled to be given notice of such meeting or any adjournment thereof. The list shall be arranged by voting groups and within each voting group by class or series of shares, shall be in alphabetical order within -4- each class or series, and shall show the address of and the number of shares of each class or series held by each shareholder. For the period beginning the earlier of ten days prior to the meeting or two business days after notice of the meeting is given and continuing through the meeting and any adjournment thereof, this list shall be kept on file at the principal office of the corporation, or at a place (which shall be identified in the notice) in the city where the meeting will be held. Such list shall be available for inspection on written demand by any shareholder (including for the purpose of this Section 6 any holder of voting trust certificates) or his agent or attorney during regular business hours and during the period available for inspection. The original stock transfer books shall be prima facie evidence as to who are the shareholders entitled to examine such list or transfer books or to vote at any meeting of shareholders. Any shareholder, his agent or attorney may copy the list during regular business hours and during the period it is available for inspection, provided (i) the shareholder has been a shareholder for at least three months immediately preceding the demand or holds at least five percent of all outstanding shares of any class of shares as of the date of the demand, (ii) the demand is made in good faith and for a purpose reasonably related to the demanding shareholder's interest as a shareholder, (iii) the shareholder describes with reasonable particularity the purpose and the records the shareholder desires to inspect, (iv) the records are directly connoted with the described purpose, and (v) the shareholder pays a reasonable charge covering the costs of labor and material for such copies, not to exceed the estimated cost of production and reproduction. Section 7. Recognition Procedure for Beneficial Owners. The board of directors may adopt by resolution a procedure whereby a shareholder of the corporation may certify in writing to the corporation that all or a portion of the shares registered in the name of such shareholder are held for the account of a specified person or persons. The resolution may set forth (i) the types of nominees to which it applies, (ii) the rights or privileges that the corporation will recognize in a beneficial owner, which may include rights and privileges other than voting, (iii) the form of certification and the information to be contained therein, (iv) if the certification is with respect to a record date, the time within which the certification must be received by the corporation, (v) the period for which the nominee's use of the procedure is effective, and (vi) such other provisions with respect to the procedure as the board deems necessary or desirable. Upon receipt by the corporation of a certificate complying with the procedure established by the board of directors, the persons specified in the certification shall be deemed, for the purpose or purposes set forth in the certification, to be the registered holders of the number of shares specified in place of the shareholder making the certification. Section 8. Quorum and Manner of Acting. One-third of the votes entitled to be cast on a matter by a voting group represented in person or by proxy, shall constitute a quorum of that voting group for action on the matter. If less than one-third of such votes are represented at a meeting, a majority of the votes so represented may adjourn the meeting from time to time without further notice, for a period not to exceed 120 days for any one adjournment. If a quorum is present at such adjourned meeting, any business may be transacted which might have been transacted at the meeting as originally noticed. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, unless the meeting is adjourned and a new -5- record date is set for the adjourned meeting. If a quorum exists, action on a matter other than the election of directors by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast within the voting group opposing the action, unless the vote of a greater number or voting by classes is required by law or the articles of incorporation. Section 9. Proxies. At all meetings of shareholders, a shareholder may vote by proxy by signing an appointment form or similar writing, either personally or by his duly authorized attorney-in-fact. A shareholder may also appoint a proxy by transmitting or authorizing the transmission of a telegram, teletype, or other electronic transmission providing a written statement of the appointment to the proxy, a proxy solicitor, proxy support service organization, or other person duly authorized by the proxy to receive appointments as agent for the proxy, or to the corporation. The transmitted appointment shall set forth or be transmitted with written evidence from which it can be determined that the shareholder transmitted or authorized the transmission of the appointment. The proxy appointment form or similar writing shall be filed with the secretary of the corporation before or at the time of the meeting. The appointment of a proxy is effective when received by the corporation and is valid for eleven months unless a different period is expressly provided in the appointment form or similar writing. Any complete copy, including an electronically transmitted facsimile, of an appointment of a proxy may be substituted for or used in lieu of the original appointment for any purpose for which the original appointment could be used. Revocation of a proxy does not affect the right of the corporation to accept the proxy's authority unless (i) the corporation had notice that the appointment was coupled with an interest and notice that such interest is extinguished is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises his authority under the appointment, or (ii) other notice of the revocation of the appointment is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises his authority under the appointment. Other notice of revocation may, in the discretion of the corporation, be deemed to include the appearance at a shareholders' meeting of the shareholder who granted the proxy and his voting in person on any matter subject to a vote at such meeting. The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises his authority under the appointment. The corporation shall not be required to recognize an appointment made irrevocable if it has received a writing revoking the appointment signed by the shareholder (including a shareholder who is a successor to the shareholder who granted the proxy) either personally or by his attorney-in-fact, notwithstanding that the revocation may be a breach of an obligation of the shareholder to another person not to revoke the appointment. Subject to Section 11 and any express limitation on the proxy's authority appearing on the -6- appointment form, the corporation is entitled to accept the proxy's vote or other action as that of the shareholder making the appointment. Section 10. Voting of Shares. Each outstanding share, regardless of class, shall be entitled to one vote, except in the election of directors, and each fractional share shall be entitled to a corresponding fractional vote on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class or classes are limited or denied by the articles of incorporation as permitted under Nevada law. Cumulative voting shall not be permitted in the election of directors or for any other purpose. Each record holder of stock shall be entitled to vote in the election of directors and shall have as many votes for each of the shares owned by him as there are directors to be elected and for whose election he has the right to vote. At each election of directors, that number of candidates equaling the number of directors to be elected, having the highest number of votes cast in favor of their election, shall be elected to the board of directors. Except as otherwise ordered by a court of competent jurisdiction upon a finding that the purpose of this Section would not be violated in the circumstances presented to the court, the shares of the corporation are not entitled to be voted if they are owned, directly or indirectly, by a second corporation, domestic or foreign, and the first corporation owns, directly or indirectly, a majority of the shares entitled to vote for directors of the second corporation except to the extent the second corporation holds the shares in a fiduciary capacity. Redeemable shares are not entitled to be voted after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares. Section 11. Corporation's Acceptance of Votes. If the name signed on a vote, consent, waiver, proxy appointment, or proxy appointment revocation corresponds to the name of a shareholder, the corporation, if acting in good faith, is entitled to accept the vote, consent, waiver, proxy appointment or proxy appointment revocation and give it effect as the act of the shareholder. If the name signed on a vote, consent, waiver, proxy appointment or proxy appointment revocation does not correspond to the name of a shareholder, the corporation, if acting in good faith, is nevertheless entitled to accept the vote, consent, waiver, proxy appointment or proxy appointment revocation and to give it effect as the act of the shareholder if: (i) the shareholder is an entity and the name signed purports to be that of an officer or agent of the entity; (ii) the name signed purports to be that of an administrator, executor, guardian or conservator representing the shareholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation; -7- (iii) the name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation; (iv) the name signed purports to be that of a pledgee, beneficial owner or attorney-in-fact of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation; (v) two or more persons are the shareholder as co-tenants or fiduciaries and the name signed purports to be the name of at least one of the co-tenants or fiduciaries, and the person signing appears to be acting on behalf of all the co-tenants or fiduciaries; or (vi) the acceptance of the vote, consent, waiver, proxy appointment or proxy appointment revocation is otherwise proper under rules established by the corporation that are not inconsistent with this Section 11. The corporation is entitled to reject a vote, consent, waiver, proxy appointment or proxy appointment revocation if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the shareholder. Neither the corporation nor its officers nor any agent who accepts or rejects a vote, consent, waiver, proxy appointment or proxy appointment revocation in good faith and in accordance with tile standards of this Section is liable in damages for the consequences of the acceptance or rejection. Section 12. Informal Action by Shareholders. Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if a written consent (or counterparts thereof) that sets forth the action so taken is signed by all of the shareholders entitled to vote with respect to the subject matter thereof and received by the corporation. Such consent shall have the same force and effect as a unanimous vote of the shareholders and may be stated as such in any document. Action taken under this Section 12 is effective as of the date the last writing necessary to effect the action is received by the corporation, unless all of the writings specify a different effective date, in which case such specified date shall be the effective date for such action. If any shareholder revokes his consent as provided for herein prior to what would otherwise be the effective date, the action proposed in the consent shall be invalid. The record date for determining shareholders entitled to take action without a meeting is the date the corporation first receives a writing upon which the action is taken. Any shareholder who has signed a writing describing and consenting to action taken pursuant to this Section 12 may revoke such consent by a writing signed by the shareholder describing the action and stating that the shareholder's prior consent thereto is revoked, if such -8- writing is received by the corporation before the effectiveness of the action. Section 13. Meetings by Telecommunication. Any or all of the shareholders may participate in an annual or special shareholders' meeting by, or the meeting may be conducted through the use of, any means of communication by which all persons participating in the meeting may hear each other during the meeting. A shareholder participating in a meeting by this means is deemed to be present in person at the meeting. ARTICLE III Board of Directors Section 1. General Powers. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, except as otherwise provided under Nevada law or the articles of incorporation. Section 2. Number, Qualifications and Tenure. The number of directors of the corporation shall be fixed from time to time by the board of directors, within a range of no less than three or more than nine, but no decrease in the number of directors shall have the effect of shortening the term of any incumbent director. A director shall be a natural person who is eighteen years of age or older. A director need not be a resident of Nevada or a shareholder of the corporation. There shall be three classes of directors. "Class A" directors shall be initially elected for a term of three years, "Class B" directors shall be initially elected for a term of two years and "Class C" directors shall be initially elected for a term of one year. Thereafter, all directors shall be re-elected to three-year terms. Directors whose terms have expired shall be elected at each annual meeting of shareholders. Directors shall be removed in the manner provided under Nevada law. Any director may be removed by the shareholders with or without cause at a meeting called for that purpose. The notice of the meeting shall state that the purpose or one of the purposes of the meeting is removal of the director. A director may be removed only if the number of votes cast in favor of removal exceeds the number of votes against removal. Section 3. Vacancies. Any director may resign at any time by giving written notice to the secretary. Such resignation shall take effect at the time the notice is received by the secretary unless the notice specifies a later effective date. Unless otherwise specified in the notice of resignation, the corporation's acceptance of such resignation shall not be necessary to make it effective. Any vacancy on the board of directors may be filled by the affirmative vote of a majority of the shareholders at a special meeting called for that purpose or by the board of directors. If the directors remaining in office constitute fewer than a quorum of the board, the directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. If elected by the directors, the director shall hold office until the next annual shareholders' meeting at which directors are elected. If elected by the shareholders, the director shall hold office for the unexpired term of his predecessor in office; except that, if the director's predecessor was elected by the directors to fill a vacancy, the director elected by the shareholders shall hold office for the unexpired term of the last predecessor elected by the shareholders. -9- Section 4. Regular Meetings. A regular meeting of the board of directors shall be held without notice immediately after and at the same place as the annual meeting of shareholders. The board of directors may provide by resolution the time and place, either within or outside Nevada, for the holding of additional regular meetings without other notice. Section 5. Special Meetings. Special meetings of the board of directors may be called by or at the request of the president or any two directors. The person or persons authorized to call special meetings of the board of directors may fix any place, either within or outside Nevada, as the place for holding any special meeting of the board of directors called by them, provided that no meeting shall be called outside the State of Nevada unless a majority of the board of directors has so authorized. Section 6. Notice. Notice of the date, time and place of any special meeting shall be given to each director at least two days prior to the meeting by written notice either personally delivered or mailed to each director at his business address, or by notice transmitted by private courier, telegraph, telex, electronically transmitted facsimile or other form of wire or wireless communication. If mailed, such notice shall be deemed to be given and to be effective on the earlier of (i) five days after such notice is deposited in the United States mail, properly addressed, with first class postage prepaid, or (ii) the date shown on the return receipt, if mailed by registered or certified mail return receipt requested, provided that the return receipt is signed by the director to whom the notice is addressed. If notice is given by telex, electronically transmitted facsimile or other similar form of wire or wireless communication, such notice shall be deemed to be given and to be effective when sent, and with respect to a telegram, such notice shall be deemed to be given and to be effective when the telegram is delivered to the telegraph company. If a director has designated in writing one or more reasonable addresses or facsimile numbers for delivery of notice to him, notice sent by mail, telegraph, telex, electronically transmitted facsimile or other form of wire or wireless communication shall not be deemed to have been given or to be effective unless sent to such addresses or facsimile numbers, as the case may be. A director may waive notice of a meeting before or after the time and date of the meeting by a writing signed by such director. Such waiver shall be delivered to the secretary for filing with the corporate records, but such delivery and filing shall not be conditions to the effectiveness of the waiver. Further, a director's attendance at or participation in a meeting waives any required notice to him of the meeting unless at the beginning of the meeting, or promptly upon his later arrival, the director objects to holding the meeting or transacting business at the meeting because of lack of notice or defective notice and does not thereafter vote for or assent to action taken at the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting. Section 7. Quorum. A majority of the number of directors fixed by the board of directors pursuant to Article III, Section 2 or, if no number is fixed, a majority of the number in office immediately before the meeting begins, shall constitute a quorum for the transaction of business at any meeting of the board of directors. -10- Section 8. Manner of Acting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors. Section 9. Compensation. By resolution of the board of directors, any director may be paid any one or more of the following: his expenses, if any, of attendance at meetings, a fixed sum for attendance at each meeting, a stated salary as director, or such other compensation as the corporation and the director may reasonably agree upon. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Section 10. Presumption of Assent. A director of the corporation who is present at a meeting of the board of directors or committee of the board at which action on any corporate matter is taken shall be presumed to have assented to all action taken at the meeting unless (i) the director objects at the beginning of the meeting, or promptly upon his arrival, to the holding of the meeting or the transaction of business at the meeting and does not thereafter vote for or assent to any action taken at the meeting, (ii) the director contemporaneously requests that his dissent or abstention as to any specific action taken be entered in the minutes of the meeting, or (iii) the director causes written notice of his dissent or abstention as to any specific action to be received by the presiding officer of the meeting before its adjournment or by the secretary promptly after the adjournment of the meeting. A director may dissent to a specific action at a meeting, while assenting to others. The right to dissent to a specific action taken at a meeting of the board of directors or a committee of the board shall not be available to a director who voted in favor of such action. Section 11. Committees. By resolution adopted by a majority of all the directors in office when the action is taken, the board of directors may designate from among its members an executive committee and one or more other committees, and appoint one or more members of the board of directors to serve on them. To the extent provided in the resolution, each committee shall have all the authority of the board of directors, except that no such committee shall have the authority to (i) authorize distributions, (ii) approve or propose to shareholders actions or proposals required under Nevada law to be approved by shareholders, (iii) fill vacancies on the board of directors or any committee thereof, (iv) amend articles of incorporation, (v) adopt, amend or repeal the bylaws, (vi) approve a plan of merger not requiring shareholder approval, (vii) authorize or approve the reacquisition of shares unless pursuant to a formula or method prescribed by the board of directors, or (viii) authorize or approve the issuance or sale of shares, or contract for the sale of shares or determine the designations and relative rights, preferences and limitations of a class or series of shares, except that the board of directors may authorize a committee or officer to do so within limits specifically prescribed by the board of directors. The committee shall then have full power within the limits set by the board of directors to adopt any final resolution setting forth all preferences, limitations and relative rights of such class or series and to authorize an amendment of the articles of incorporation stating the preferences, limitations and relative rights of a class or series for filing with the Secretary of State under Nevada law. Sections 4, 5, 6, 7, 8 or 12 of Article III, which govern meetings, notice, waiver of notice, quorum, voting requirements and action without a meeting of the board of directors, shall apply to committees and their members appointed under this Section 11. -11- Neither, the designation of any such committee, the delegation of authority to such committee, nor any action by such committee pursuant to its authority shall alone constitute compliance by any member of the board of directors or a member of the committee in question with his responsibility to conform to the standard of care set forth in Article lII, Section 14 of these bylaws. Section 12. Informal Action by Directors. Any action required or permitted to be taken at a meeting of the directors or any Committee designated by the board of directors may be taken without a meeting if a written consent (or counterparts thereof) that sets forth the action so taken is signed by all of the directors entitled to vote with respect to the action taken. Such consent shall have the same force and effect as a unanimous vote of the directors or committee members and may be stated as such in any document. Unless the consent specifies a different effective time or date, action taken under this Section 12 is effective at the time or date the last director signs a writing describing the action taken, unless, before such time, any director has revoked his consent by a writing signed by the director and received by the president or the secretary of the corporation. Section 13. Telephonic Meetings. The board of directors may permit any director (or any member of a committee designated by the board) to participate in a regular or special meeting of the board of directors or a committee thereof through the use of any means of communication by which all directors participating in the meeting can hear each other during the meeting. A director participating in a meeting in this manner is deemed to be present in person at the meeting. Section 14. Standard of Care. A director shall perform his duties as a director, including without limitation his duties as a member of any committee of the board, in good faith, in a manner he reasonably believes to be in the best interests of the corporation, and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. In performing his duties, a director shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared or presented by the persons herein designated. However, he shall not be considered to be acting in good faith if he has knowledge concerning the matter in question that would cause such reliance to be unwarranted. A director shall not be liable to the corporation or its shareholders for any action he takes or omits to take as a director if, in connection with such action or omission, he performs his duties in compliance with this Section 14. The designated persons on whom a director is entitled to rely are (i) one or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented, (ii) legal counsel, public accountant, or other person as to matters which the director reasonably believes to be within such person's professional or expert competence, or (iii) a committee of the board of directors on which the director does not serve if the director reasonably believes the committee merits confidence. -12- ARTICLE IV Officers and Agents Section 1. General. The officers of the corporation shall be a president, one or more vice presidents, a secretary and a treasurer, each of whom shall be appointed by the board of directors and shall be a natural person eighteen years of age or older. One person may hold more than one office. The board of directors or an officer or officers so authorized by the board may appoint such other officers, assistant officers, committees and agents, including a chairman of the board, assistant secretaries and assistant treasurers, as they may consider necessary. Except as expressly prescribed by these bylaws, the board of directors or the officer or officers authorized by the board shall from time to time determine the procedure for the appointment of officers, their authority and duties and their compensation, provided that the board of directors may change the authority, duties and compensation of any officer who is not appointed by the board. Section 2. Appointment and Term of Office. The officers of the corporation to be appointed by the board of directors shall be appointed at each annual meeting of the board held after each annual meeting of the shareholders. If the appointment of officers is not made at such meeting or if an officer or officers are to be appointed by another officer or officers of the corporation, such appointments shall be made as determined by the board of directors or the appointing person or persons. Each officer shall hold office until the first of the following occurs: his successor shall have been duly appointed and qualified, his death, his resignation, or his removal in the manner provided in Section 3. Section 3. Resignation and Removal. An officer may resign at any time by giving written notice of resignation to the president, secretary or other person who appoints such officer. The resignation is effective when the notice is received by the corporation unless the notice specifies a later effective date. Any officer or agent may be removed at any time with or without cause by the board of directors or an officer or officers authorized by the board. Such removal does not affect the contract rights; if any, of the corporation or of the person so removed. The appointment of an officer or agent shall not in itself create contract rights. Section 4. Vacancies. A vacancy in any office, however occurring, may be filled by the board of directors, or by the officer or officers authorized by the board, for the unexpired portion of the Officer's term. If an officer resigns and his resignation is made effective at a later date, the board of directors, or officer or officers authorized by the board, may permit the officer to remain in office until the effective date and may fill the pending vacancy before the effective date if the board of directors or officer or officers authorized by the board provide that the successor shall not take office until the effective date. In the alternative, the board of directors, or officer or officers authorized by the board of directors, may remove the officer at any time before the effective date and may fill the resulting vacancy. Section 5. President. The president shall preside at all meetings of shareholders and all meetings of the board of directors unless the board of directors has appointed a chairman, vice chairman, or other officer of the board and has authorized such person to preside at meetings of -13- the board of directors. Subject to the direction and supervision of the board of directors, the president shall be the chief executive officer of the corporation, and shall have general and active control of its affairs and business and general supervision of its officers, agents and employees. Unless otherwise directed by the board of directors, the president shall attend in person or by substitute appointed by him, or shall execute on behalf of the corporation written instruments appointing a proxy or proxies to represent the corporation, at all meetings of the stockholders of any other corporation in which the corporation holds any stock. On behalf of the corporation, the president may in person or by substitute or by proxy execute written waivers of notice and consents with respect to any such meetings. At all such meetings and otherwise, the president, in person or by substitute or proxy, may vote the stock held by the corporation, execute written consents and other instruments with respect to such stock, and exercise any and all rights and powers incident to the ownership of said stock, subject to the instructions, if any, of the board of directors. The president shall have custody of the treasurer's bond, if any. The president shall have such additional authority and duties as are appropriate and customary for the office of president and chief executive officer, except as the same may be expanded or limited by the board of directors from time to time. Section 6. Vice Presidents. The vice presidents shall assist the president and shall perform such duties as may be assigned to them by the president or by the board of directors. In the absence of the president, the vice president, if any (or, if more than one, the vice presidents in the order designated by the board of directors, or if the board makes no such designation, then the vice president designated by the president, or if neither the board nor the president makes any such designation, the senior vice president as determined by first election to that office), shall have the powers and perform the duties of the president. Section 7. Secretary. The secretary shall (i) prepare and maintain as permanent records the minutes of the proceedings of the shareholders and the board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation, and a record of all waivers of notice of meetings of shareholders and of the board of directors or any committee thereof, (ii) see that all notices are duly given in accordance with the provisions of these bylaws and as required by law, (iii) serve as custodian of the corporate records and of the seal of the corporation and affix the seal to all documents when authorized by the board of directors, (iv) keep at the corporation's registered office or principal place of business a record containing the names and addresses of all shareholders in a form that permits preparation of a list of shareholders arranged by voting group and by class or series of shares within each voting group, that is alphabetical within each class or series and that shows the address of, and the number of shares of each class or series held by, each shareholder, unless such a record shall be kept at the office of the corporation's transfer agent or registrar, (v) maintain at the corporation's principal office the originals or copies of the corporation's articles of incorporation, bylaws, minutes of all shareholders' meetings and records of all action taken by shareholders without a meeting for the past three years, all written communications within the past three years to shareholders as a group or to the holders of any class or series of shares as a group, a list of the names and business addresses of the current directors and officers, a copy of the corporation's most recent corporate report filed with the Secretary of State, and financial statements showing in reasonable detail the corporation's assets and liabilities and results of -14- operations for the last three years, (vi) have general charge of the stock transfer books of the corporation, unless the corporation has a transfer agent, (vii) authenticate records of the corporation, and (viii) in general, perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the president or by the board of directors. Assistant secretaries, if any, shall have the same duties and powers, subject to supervision by the secretary. The directors and/or shareholders may however respectively designate a person other than the secretary or assistant secretary to keep the minutes of their respective meetings. Any books, records, or minutes of the corporation may be in written form or in any form capable of being converted into written form within a reasonable time. Section 8. Treasurer. The treasurer shall be the principal financial officer of the corporation, shall have the care and custody of all funds, securities, evidences of indebtedness and other personal property of the corporation and shall deposit the same in accordance with the instructions of the board of directors. Subject to the limits imposed by the board of directors, he shall receive and give receipts and acquittances for money paid in on account of the corporation, and shall pay out of the corporation's funds on hand all bills, payrolls and other just debts of the corporation of whatever nature upon maturity. He shall perform all other duties incident to the office of the treasurer and, upon request of the board, shall make such reports to it as may be required at any time. He shall, if required by the board, give the corporation a bond in such sums and with such sureties as shall be satisfactory to the board, conditioned upon the faithful performance of his duties and for the restoration to the corporation of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation. He shall have such other powers and perform such other duties as may from time to time be prescribed by the board of directors or the president. The assistant treasurers, if any, shall have the same powers and duties, subject to the supervision of the treasurer. The treasurer shall also be the principal accounting officer of the corporation. He shall prescribe and maintain the methods and systems of accounting to be followed, keep complete books and records of account as required under Nevada law, prepare and file all local, state and federal tax returns, prescribe and maintain an adequate system of internal audit and prepare and furnish to the president and the board of directors statements of account showing the financial position of the corporation and the results of its operations. ARTICLE V Stock Section 1. Certificates. The board of directors shall be authorized to issue any of its classes of shares with or without certificates. The fact that the shares are not represented by certificates shall have no effect on the rights and obligations of shareholders. If the shares are represented by certificates, such shares shall be represented by consecutively numbered certificates signed, either manually or by facsimile, in the name of the corporation by the president and the secretary. In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is -15- issued, such certificate may nonetheless be issued by the corporation with the same effect as if he were such officer at the date of its issue. All certificates shall be consecutively numbered, and the names of the owners, the number of shares, and the date of issue shall be entered on the books of the corporation. Each certificate representing shares shall state upon its face: (i) That the corporation is organized under the laws of Nevada; (ii) The name of the person to whom issued; (iii) The number and class of the shares and the designation of the series, if any, that the certificate represents; (iv) The par value, if any, of each share represented by the certificate; (v) Any restrictions imposed by the corporation upon the transfer of the shares represented by the certificate. If shares are not represented by certificates, within a reasonable time following the issue or transfer of such shares, the corporation shall send the shareholder a complete written statement of all of the information required to be provided to holders of uncertificated shares under Nevada law. Section 2. Consideration for Shares. Certificated or uncertificated shares shall not be issued until the shares represented thereby are fully paid. The board of directors may authorize the issuance of shares for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed or other securities of the corporation. Future services shall not constitute payment or partial payment for shares of the corporation. The promissory note of a subscriber or an affiliate of a subscriber shall not constitute payment or partial payment for shares of the corporation unless the note is negotiable and is secured by collateral, other than the shares being purchased, having a fair market value at least equal to the principal amount of the note. For purposes of this Section 2, "promissory note" means a negotiable instrument on which there is an obligation to pay independent of collateral and does not include a non-recourse note. Section 3. Lost Certificates. In case of the alleged loss, destruction or mutilation of a certificate of stock, the board of directors may direct the issuance of a new certificate in lieu thereof upon such terms and conditions in conformity with law as the board may prescribe. The board of directors may in its discretion require an affidavit of lost certificate and/or a bond in such form and amount and with such surety as it may determine before issuing a new certificate. Section 4. Transfer of Shares. Upon surrender to the corporation or to a transfer agent of the corporation of a certificate of stock duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, and receipt of such documentary stamps as may be required by law and evidence of compliance with all applicable securities laws and other restrictions, the corporation shall issue a new certificate to the person entitled thereto, and cancel the old certificate. Every such transfer of stock shall be entered on the stock books of the -16- corporation which shall be kept at its principal office or by the person and at the place designated by the board of directors. Except as otherwise expressly provided in Article II, Sections 7 and 11, and except for the assertion of dissenters' rights to the extent provided under Nevada law, the corporation shall be entitled to treat the registered holder of any shares of the corporation as the owner thereof for all purposes, and the corporation shall not be bound to recognize any equitable or other claim to, or interest in, such shares or rights deriving from such shares on the part of any person other than the registered holder, including without limitation any purchaser, assignee or transferee of such shares or rights deriving from such shares, unless and until such other person becomes the registered holder of such shares, whether or not the corporation shall have either actual or constructive notice of the claimed interest of such other person. Section 5. Transfer Agent, Registrars and Paying Agents. The board may at its discretion appoint one or more transfer agents, registrars and agents for making payment upon any class of stock, bond, debenture or other security of the corporation. Such agents and registrars may be located either within or outside Nevada. They shall have such rights and duties and shall be entitled to such compensation as may be agreed. ARTICLE VI Indemnification of Certain Persons Section 1. Indemnification. For purposes of Article VI, a "Proper Person" means any person (including the estate or personal representative of a director) who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, by reason of the fact that he is or was a director, officer, employee, fiduciary or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, fiduciary or agent of any foreign or domestic profit or nonprofit corporation or of any partnership, joint venture, trust, profit or nonprofit unincorporated association, limited liability company, or other enterprise or employee benefit plan. The corporation shall indemnify any Proper Person against reasonably incurred expenses (including attorneys' fees), judgments, penalties, fines (including any excise tax assessed with respect to an employee benefit plan) and amounts paid in settlement reasonably incurred by him in connection with such action, suit or proceeding if it is determined by the groups set forth in Section 4 of this Article that he conducted himself in good faith and that he reasonably believed (i) in the case of conduct in his official capacity with the corporation, that his conduct was in the corporation's best interests, or (ii) in all other cases (except criminal cases), that his conduct was at least not opposed to the corporation's best interests, or (iii) in the case of any criminal proceeding, that he had no reasonable cause to believe his conduct was unlawful. Official capacity means, when used with respect to a director, the office of director and, when used with respect to any other Proper Person, the office in a corporation held by the officer or the employment, fiduciary or agency relationship undertaken by the employee, fiduciary, or agent on behalf of the corporation. Official capacity does not include service for any other domestic or foreign corporation or other person or employee benefit plan. -17- A director's conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in or beneficiaries of the plan is conduct that satisfies the requirement in (ii) of this Section 1. A director's conduct with respect to an employee benefit plan for a purpose that the director did not reasonably believe to be in the interests of the participants in or beneficiaries of the plan shall be deemed not to satisfy the requirement of this section that he conduct himself in good faith. No indemnification shall be made under this Article VI to a Proper Person with respect to any claim, issue or matter in connection with a proceeding by or in the right of a corporation in which the Proper Person was adjudged liable to the corporation or in connection with any proceeding charging that the Proper Person derived an improper personal benefit, whether or not involving action in an official capacity, in which he was adjudged liable on the basis that he derived an improper personal benefit. Further, indemnification under this section in connection with a proceeding brought by or in the right of the corporation shall be limited to reasonable expenses, including attorneys' fees, incurred in connection with the proceeding. Section 2. Right to Indemnification. The corporation shall indemnify any Proper Person who was wholly successful, on the merits or otherwise, in defense of any action, suit, or proceeding as to which he was entitled to indemnification under Section I of this Article VI against expenses (including attorneys' fees) reasonably incurred by him in connection with the proceeding without the necessity of any action by the corporation other than the determination in good faith that the defense has been wholly successful. Section 3. Effect of Termination of Action. The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the person seeking indemnification did not meet the standards of conduct described in Section 1 of this Article VI. Entry of a judgment by consent as part of a settlement shall not be deemed an adjudication of liability, as described in Section 2 of this Article VI. Section 4. Groups Authorized to Make Indemnification Determination. Except where there is a right to indemnification as set forth in Sections 1 or 2 of this Article or where indemnification is ordered by a court in Section 5, any indemnification shall be made by the corporation only as determined in the specific case by a proper group that indemnification of the Proper Person is permissible under the circumstances because he has met the applicable standards of conduct set forth in Section I of this Article. This determination shall be made by the board of directors by a majority vote of those present at a meeting at which a quorum is present, which quorum shall consist of directors not parties to the proceeding ("Quorum"). If a Quorum cannot be obtained, the determination shall be made by a majority vote of a committee of the board of directors designated by the board, which committee shall consist of two or more directors not parties to the proceeding, except that directors who are parties to the proceeding may participate in the designation of directors for the committee. If a Quorum of the board of directors cannot be obtained and the committee cannot be established, or even if a Quorum is obtained or the committee is designated and a majority of the directors constituting such Quorum or committee so directs, the determination shall be made by (i) independent legal counsel selected by a vote of the board of directors or the committee in the manner specified in this -18- Section 4 or, if a Quorum of the full board of directors cannot be obtained and a committee cannot be established, by independent legal counsel selected by a majority vote of the full board (including directors who are parties to the action) or (ii) a vote of the shareholders. Authorization of indemnification and advance of expenses shall be made in the same manner as the determination that indemnification or advance of expenses is permissible except that, if the determination that indemnification or advance of expenses is permissible is made by independent legal counsel, authorization of indemnification and advance of expenses shall be made by the body that selected such counsel. Section 5. Court-Ordered Indemnification. Any Proper Person may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction for mandatory indemnification under Section 2 of this Article, including indemnification for reasonable expenses incurred to obtain court-ordered indemnification. If a court determines that the Proper Person is entitled to indemnification under Section 2 of this Article, the court shall order indemnification, including the Proper Person's reasonable expenses incurred to obtain court-ordered indemnification. If the court determines that such Proper Person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the standards of conduct set forth in Section 1 of this Article or was adjudged liable in the proceeding, the court may order such indemnification as the court deems proper except that if the Proper Person has been adjudged liable, indemnification shall be limited to reasonable expenses incurred in connection with the proceeding and reasonable expenses incurred to obtain court-ordered indemnification. Section 6. Advance of Expenses. Reasonable expenses (including attorneys' fees) incurred in defending an action, suit or proceeding as described in Section I may be paid by the corporation to any Proper Person in advance of the final disposition of such action, suit or proceeding upon receipt of (i) a written affirmation of such Proper Person's good faith belief that he has met the standards of conduct prescribed by Section I of this Article VI, (ii) a written undertaking, executed personally or on the Proper Person's behalf, to repay such advances if it is ultimately determined that he did not meet the prescribed standards of conduct (the undertaking shall be an unlimited general obligation of the Proper Person but need not be secured and may be accepted without reference to financial ability to make repayment), and (iii) a determination is made by the proper group (as described in Section 4 of this Article VI) that the facts as then known to the group would not preclude indemnification. Determination and authorization of payments shall be made in the same manner specified in Section 4 of this Article VI. Section 7. Additional Indemnification to Certain Persons Other Than Directors. In addition to the indemnification provided to officers, employees, fiduciaries or agents because of their status as Proper Persons under this Article, the corporation may also indemnify and advance expenses to them if they are not directors of the corporation to a greater extent than is provided in these bylaws, if not inconsistent with public policy, and if provided for by general or specific action of its board of directors or shareholders or by contract. Section 8. Witness Expenses. The sections of this Article VI do not limit the corporation's authority to pay or reimburse expenses incurred by a director in connection with an -19- appearance as a witness in a proceeding at a time when he has not been made or named as a defendant or respondent in the proceeding. Section 9. Report to Shareholders. Any indemnification of or advance of expenses to a director in accordance with this Article VI, if arising out of a proceeding by or on behalf of the corporation, shall be reported in writing to the shareholders with or before the notice of the next shareholders' meeting. If the next shareholder action is taken without a meeting at the instigation of the board of directors, such notice shall be given to the shareholders at or before the time the first shareholder signs a writing consenting to such action. ARTICLE VII Section 1. Provision of Insurance. By action of the board of directors, notwithstanding any :interest of the directors in the action, the corporation may purchase and maintain insurance, in such scope and amounts as the board of directors deems appropriate, on behalf of any person who is or was a director, officer, employee, fiduciary or agent of the corporation, or who, while a director, officer, employee, fiduciary or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, fiduciary or agent of any other foreign or domestic profit or nonprofit corporation or of any partnership, joint venture, trust, profit or nonprofit unincorporated association, limited liability company, other enterprise or employee benefit plan, against any liability asserted against, or incurred by, him in that capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of Article VI or applicable law. Any such insurance may be procured from any insurance company designated by the board of directors of the corporation, whether such insurance company is formed under the laws of Nevada or any other jurisdiction of the United States or elsewhere, including any insurance company in which the corporation has an equity interest or any other interest, through stock ownership or otherwise. ARTICLE VIII Miscellaneous Section 1. Seal. The board of directors may adopt a corporate seal, which shall be circular in form and shall contain the name of the corporation and the words, "Seal, Nevada." Section 2. Fiscal Year. The fiscal year of the corporation shall be as established by the board of directors. Section 3. Amendments. The board of directors shall have power, to the maximum extent permitted under Nevada law, to make, amend and repeal the bylaws of the corporation at any regular or special meeting of the board unless the shareholders, in making, amending or repealing a particular bylaw, expressly provide that the directors may not amend or repeal such bylaw. The shareholders also shall have the power to make, amend or repeal the bylaws of the corporation at any annual meeting or at any special meeting called for that purpose. Section 4. Receipt of Notices by the Corporation. Notices, shareholder writings consenting to -20- action, and other documents or writings shall be deemed to have been received by the corporation when they are actually received: (i) at the registered office of the corporation in Nevada; (ii) at the principal office of the corporation (as that office is designated in the most recent document filed by the corporation with the secretary of state for Nevada designating a principal office) addressed to the attention of the secretary of the corporation; (iii) by the secretary of the corporation wherever the secretary may be found; or (iv) by any other person authorized frown time to time by the board of directors or the president to receive such writings, wherever such person is found. Section 5. Gender. The masculine gender is used in these bylaws as a matter of convenience only and shall be interpreted to include the feminine and neuter genders as the circumstances indicate. Section 6. Conflicts. In the event of any irreconcilable conflict between these bylaws and either the corporation's articles of incorporation or applicable law, the latter shall control. Section 7. Definitions. Except as otherwise specifically provided in these bylaws, all terms used in these bylaws shall have the same definition as under Nevada law. __________________________ Julie L. Bergo, Secretary -21- CERTIFIED COPY OF RESOLUTION ADOPTED BY THE BOARD OF DIRECTORS OF MEADOW VALLEY CORPORATION RESOLVED, that the Amendment to the Corporate By-Laws is hereby accepted. The By-Laws were amended as follows: Article III Board of Directors Section 2. Number, Qualifications and Tenure. Paragraph 2 is amended to read (italics represent added language): There shall be three classes of directors. "Class A" directors shall be initially elected for a term of three years. "Class B" directors shall be initially elected for a term of two years and "Class C" directors shall be initially elected for a term of one year. Thereafter, all directors shall be re- elected to three year terms. Directors whose terms have expired shall be elected at the annual meeting of shareholders. Directors shall be removed in the manner provided under Nevada law. Any directors may be removed by the shareholders with or without cause at a meeting called for that purpose. The notice of the meeting shall state that the purpose or one of the purposes of the meeting is removal of the director. A director may be removed only if the number of votes cast in favor of removal exceeds the number of votes cast against removal. CERTIFICATE We hereby certify that we are duly elected, qualified, officers and directors of Meadow Valley Corporation, a Nevada Corporation, and that the above is a true and correct copy of a Resolution adopted by unanimous consent of the Directors of said Corporation on April 28, 1997, and that said Resolution is in full force and effect and has not been repealed, amended, or canceled. DATE: 3/29/02 /s/ Bradley E. Larson ------- ---------------------------------------- Bradley E. Larson, President, Chief Executive Officer and Director /s/ Kenneth D. Nelson ---------------------------------------- Kenneth D. Nelson, Vice President, Chief Administrative Officer and Director EX-10.160 4 dex10160.txt LEASE AGREEMENT WITH CIT GROUP Exhibit 10.160 Equipment Schedule No. 2 Dated as of 9/20/00 To Master Lease Agreement dated June 20, 2000 Acceptance Date 9-21-00 Commencement Date 10-21-00 Equipment Schedule to MASTER LEASE AGREEMENT dated as of June 20, 2000 between THE CIT GROUP/EQUIPMENT FINANCING, INC., as Lessor and Ready Mix, Inc. as Lessee This Equipment Schedule Incorporates the terms and conditions of the above-referenced Master Lease Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Lessor of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. 1. EQUIPMENT DESCRIPTION:
Quantity Manufacturer Model/Feature Serial Number Description Cost Per Unit - -------- ------------ ------------- ------------- ----------- ------------- 1 Haltec M-12 4022-33063 12 Yard Mobile 543,313.00 Batch with Surge Hopper
And all attachments, replacements, substitutions, additions, and all the proceeds thereof. 2. LESSOR'S AGGREGATE COST OF EQUIPMENT. $543,313.00 3. EQUIPMENT LOCATION. 39353 N. Schnepf Rd., Queen Creek, AZ 85242 4. ACCEPTANCE: Lessee confirms that (a) the Equipment described herein has been delivered to it in good working order and condition, and has been inspected and accepted by Lessee as of the Acceptance Date set forth above, (b) no Event of Default exists, (c) No Event of Default will be caused by the execution of this Schedule, (d) all Lessee's representations and warranties are true and correct, and (e) the terms and provisions of the Master Lease are hereby incorporated by reference and reaffirmed. 5. LEASE TERM. a. Interim Lease Term. The Interim term of the lease of the Equipment shall commence on the Acceptance Date and shall continue until the commencement of the Primary Lease Term defined below. b. Primary Lease Term. The primary term of the lease of Equipment shall commence on the Commencement Date and shall continue for a term of 72 months from such Commencement Date. 6. RENT PAYMENTS. 2290 (8/00) Equipment Schedule - Tax Page 1 of 2 a. Interim Rent. The rent for each item of Equipment during the Interim Lease Term shall be an amount equal to 1/30th of the Primary Rent (defined below) multiplied by the number of days from and including the Acceptance Date to the Commencement Date which amount shall be payable on the Commencement Date. b. Primary Rent. The rent for each item of Equipment during the Primary Lease Term shall consist of 72 payments of $8,797.78, payable monthly commencing on the Commencement Date and a like sum on the same day of each month thereafter. 7. STIPULATED LOSS VALUES. The Stipulated Loss Values, expressed as a percentage of Lessor's cost of the Equipment, are set forth in Exhibit A attached hereto. The Stipulated Loss Value with respect to any item of Equipment as of any rent payment date shall be an amount determined by multiplying Lessor's cost of the item by the applicable percentage set forth on Exhibit A. Any Stipulated Loss Value determined as of a date after the final rent payment date will be determined by using the percentage for the final rent payment date. 8. RETURN, OPERATION, MAINTENANCE, ADDITIONS. The return, operation, maintenance and additions provisions applicable to the Equipment are set forth in Rider A attached hereto. 9. DEPRECIATION TAX ASSUMPTIONS. Equipment has a recovery period of 5 years. 10. NONREFUNDABLE PROCESSING/ORIGINATION FEE payable to The CIT Group/Equipment Financing, Inc. $0 11. ADDITIONAL PROVISIONS: See Rider "B" consisting of one page attached hereto and made a part hereof. IN WITNESS WHEREOF, this Equipment Schedule has been signed as of the date set forth above. Lessee: Ready Mix, Inc. - ------------------------------------ By /s/ KENNETH D. NELSON Title Vice President -------------------------------- -------------------------------- KENNETH D. NELSON - ------------------------------------------------------------------------------ Print or Type Name Lessor: THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ HEATHER MEHEUT Title Agent -------------------------------- -------------------------------- HEATHER MEHEUT - ----------------------------------------------------------------------------- Print or Type Name 2290 (8/00) Equipment Schedule - Tax Page 2 of 2 EX-10.161 5 dex10161.txt LEASE AGREEMENT WITH ASSOCIATES LEASING Exhibit 10.161 [LOGO] THE ASSOCIATES LEASE AGREEMENT Name and Address of Lessee ("Lessee") Name and Address of Lessor ("Lessor") Meadow Valley Contractors, Inc. Associates Leasing, Inc. 4411 S. 40th St., #D-11 PO Box 2340 Phoenix AZ 85040 Newport Beach CA 92658 ================================================================================ DESCRIBE EQUIPMENT FULLY LESSOR'S COST Equipment Total Cost $296,550.00 ----------- One (1) Blaw Knox model PF 5510 paver Shipping & Handling Cost $ 0.00 with Omni VII Screed SN 551029-77 ----------- Installation Cost $ 0.00 ----------- Other (Specify) 0.00 ----------- TOTAL COST $296,550.00 ----------- ================================================================================ LOCATION OF EQUIPMENT: 4411 S. 40th St., #D-11 Maricopa Phoenix AZ 85040 ================================================================================ A. TERM: 60 Months following the first day of the month after delivery. B. ADVANCE RENTAL PAYMENTS: FIRST RENTAL AND LAST 0 RENTAL(S) PLUS APPLICABLE TAXES. C. INTERIM RENTAL: Per day rental for the period from delivery to the first of the following month calculated as Monthly Rental divided by 30 times the number of days from the Delivery Date through the end of the month in which the Equipment is delivered plus applicable taxes. D. RENTAL PAYMENT: 60 Payments of $5,045.00 PLUS APPLICABLE TAXES E. SECURITY DEPOSIT: $0.00 Any termination Value Table attached to this Lease is a part of and incorporated into the terms of this Lease. F. PAYMENT SCHEDULE: THE ADVANCE RENTAL PAYMENT IS PAYABLE UPON DELIVERY OF THE LEASE APPLICATION TO LESSOR. INTERIM RENTAL IS PAYABLE UPON DELIVERY OF THE EQUIPMENT. THE REMAINING RENTAL PAYMENTS ARE PAYABLE AS FOLLOWS: MONTHLY ON THE FIRST DAY OF EACH MONTH BEGINNING ON THE FIRST DAY OF May 2001 (MO/YR). G. PURCHASE OPTION PRICE AT END OF TERM: $60,792.75 Plus Applicable Taxes H. TAX LEASE STATUS: (check one and initial) [X] Tax Lease: If checked, this Lease is a Tax Oriented Lease and the provisions of Paragraph 13 of this Lease apply. [ ] Non-Tax Lease: If checked, this Lease is not a Tax Oriented Lease and the provisions of Paragraph 13 of this Lease do not apply. I. 5 MACRS Class Life of Equipment. - -------------------------------------------------------------------------------- TERMS AND PROVISIONS OF LEASE 1. EFFECTIVE DATE: The terms and provisions of this Lease Agreement ("this Lease") and the obligations and liabilities of Lessee under this Lease are effective on the date of Lessor's acceptance of this Lease ("Effective Date"), even though the Term and Lessee's obligation to pay the remaining Rental Payments may begin on a later date. 2. LEASE: Lessor hereby leases to Lessee, and Lessee hereby hires and takes from Lessor, under and subject to the terms and provisions hereof until the end of the Term specified above ("Term"), the personal property described above and on any supplemental schedule(s) identified as constituting a part of this lease (herein, with all present and future attachments, accessories, replacement parts, repairs, and additions, and all proceeds thereof, referred to as "Equipment"). This Lease is for the Term commencing on the date the Equipment is delivered to Lessee. For the Term or any portion thereof, Lessee agrees to pay to Lessor aggregate rentals equal to the sum of all Rental Payments (including advance and interim rentals) in accordance with the Payment Schedule. 3. PLACE OF PAYMENT AND OBLIGATION TO PAY: All Rental Payments are payable without notice or demand. All amounts payable under this Lease to Lessor are payable at Lessor's address set forth herein or at such other address as Lessor may specify from time to time in writing. Except as otherwise specifically provided herein, Lessee's obligations to pay the Rental Payments and all other amounts due or to become due under this Lease shall be absolute and unconditional under all circumstances, regardless of any set-off, counterclaim, recoupment, defense or other claim whatsoever. Any Security Deposit is held as security for Lessor's obligations and will be refunded in full, without interest, upon payment in full of these obligations. 4. DELINQUENCY CHARGES: For each such Rental Payment or other sum due under this Lease which is not paid when due, Lessee agrees to pay Lessor a delinquency charge calculated thereon at the rate of 1 1/2% per month for the period of delinquency or, at Lessor's option, 5% of such Rental Payment or other sum due under this Lease, provided that such a delinquency charge is not prohibited by law, otherwise a the highest rate Lessee can legally obligate itself to pay and/or Lessor can legally collect. Lessee agrees to reimburse Lessor immediately upon demand for any amount charged to Lessor by any depositary institution because a check, draft or other order made or drawn by or for the benefit of Lessee is returned unpaid for any reason and, if allowed by law, to pay lessor an additional handling charge in the amount of $25.00 or in the event applicable law limits or restricts the amount of such reimbursement and/or handling charge, the amounts chargeable under this provision will be limited and/or restricted in accordance with applicable law. Page 1 of 4 of Lease Agreement dated 03/02/01 between Meadow Valley Contractors, Inc. (Lessee) and Associates Leasing, Inc. (Lessor) which includes, without limitation, an item of Equipment with the following serial number: 551029-77 702004 Rev 6/00 Lessee's Initials se02004.wpd Standard/FMV Tax Lease ----------------- 1 09 Original KDN ----------------- 5. NO WARRANTIES BY LESSOR, MAINTENANCE, AND COMPLIANCE WITH LAWS: Lessor makes no representations or warranties as to the character of this transaction for tax or other purposes. Lessee acknowledges and agrees that: the Equipment is of a size, design, capacity and manufacture selected by Lessee; Lessor is not the manufacturer of the Equipment or the manufacturer's agent: LESSEE LEASES THE EQUIPMENT "AS IS" AND LESSOR HAS NOT MADE, AND DOES NOT MAKE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, QUALITY, MATERIAL, WORKMANSHIP, DESIGN, CAPACITY, MERCHANTABILITY, DURABILITY, FITNESS OR SUITABILITY OF THE EQUIPMENT FOR ANY USE OR PURPOSE, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED. Lessee will not assert any claim whatsoever, regardless of cause, against Lessor. Lessee will not bring any suit or claim against or make any settlement with the manufacturer or seller to Lessor of the Equipment (both herein called "Seller") without Lessor's prior written consent; and the selection, servicing and maintaining of the Equipment shall be entirely at Lessee's risk and expense. Lessee agrees, at its own cost and expense: (a) to cause the Equipment to be operated with care and only by qualified personnel in the regular course of Lessee's business; (b) to comply with all applicable laws, rules and regulations relating to the Equipment, with any published instructions or specifications of the Seller and with all of the terms of any insurance policy covering the Equipment; (c) to obtain, or sign any documents Lessor deems necessary and any certificates of title required or permitted by law with respect to the Equipment; (d) to maintain the Equipment in good operating condition, repair and appearance; and (e) to furnish Lessor promptly with such financial statements and other information as Lessor may reasonably request from time to time. 6. TERMINATION VALUE: "Termination Value" of the Equipment is the value of the Equipment for purposes of insurance and casualty loss. If Lessor and Lessee have executed a Termination Value Table with respect to this Lease, the Termination Value as of any date will be the amount indicated on that table plus any accrued and unpaid Rentals or other amounts payable under this Lease as of that date. If Lessor and Lessee have not executed a Termination Value Table with respect to this Lease, the Termination Value as of any date shall mean an amount equal to the total of all accrued and unpaid Rental Payments and all other amounts then due and remaining unpaid plus the greater of: (a) the then Fair Market Value (as determined in accordance with Paragraph 12 of this Lease) of the Equipment as of that date in the same condition as when received by Lessee, reasonable wear and tear from the normal use thereof alone excepted, as well as in the condition required upon its return determined in accordance with Paragraph 21 of this Lease, and (b) an amount equal to all accrued and unpaid Rental Payments and all other amounts then due and remaining unpaid plus the then present worth of all unaccrued Rental Payments plus either (i) the Purchase Option Price, or (ii) if no purchase option is offered, the Fair Market Value (as determined in accordance with Paragraph 12 of this Lease) of the Equipment in the same condition as when received by Lessee, reasonable wear and tear from the normal use thereof alone excepted, as well as in the condition required upon its return determined in accordance with Paragraph 21 of this Lease. Present worth shall be determined by discounting such unaccrued Rental Payments from their respective due dates at the Rate of 5.50%. 7. INSURANCE: Lessee shall bear all risk of loss of, damage to, or destruction of the Equipment from the date of its delivery until its return. If, for any reason, any of the Equipment is lost, stolen, destroyed or damaged beyond repair, Lessee shall (a) immediately and fully inform Lessor with regard thereto, and (b) promptly pay to Lessor the Stipulated Loss Value calculated as of the date of payment thereof. Any amounts actually received by Lessor from insurance or otherwise on Lessee's behalf for such loss or damage shall be applied to reduce Lessee's obligation under this paragraph. Except as expressly provided herein, the total or partial destruction of the Equipment or the total or partial loss of use or possession thereof to Lessee, shall not release or relieve Lessee from its obligations and liabilities under this Lease. Lessee agrees to procure and maintain at all times on and after the Effective Date such liability, physical damage and other insurance as Lessor may require from time to time. Lessee agrees that all such insurance shall be in form and amount and with insurers satisfactory to Lessor, and that Lessee will deliver promptly to Lessor certificates or, upon request, policies satisfactory to Lessor evidencing such insurance. All liability policies shall name Lessor as an additional insured, and all physical damage policies shall provide that payment thereof shall be made to Lessor and Lessee as their interests may appear. Each policy shall provide that Lessor's interest therein shall not be invalidated by any acts, omissions or neglect of anyone other than Lessor, and shall contain the insurer's agreement to give Lessor at least 30 days prior written notice before cancellation or any material change in the policy shall be effective as to Lessor, whether such cancellation or change is at the direction of Lessee or the insurer. 8. TAXES: Lessee shall be liable for all taxes, levies, duties, assessments, and other governmental charges (including any penalties and interest, and any fees for titles or registration) levied or assessed against Lessee, Lessor or the Equipment, upon or with respect to the lease or the purchase, use, operation, leasing, ownership, value, return or other disposition of the Equipment, or the rent, earnings or receipts arising therefrom, exclusive, however, of any taxes based on Lessor's net income. Unless Lessor notifies Lessee in writing otherwise, Lessor will file all returns and remit all personal property taxes applicable to the Equipment. Lessee agrees to reimburse Lessor for all such personal property taxes immediately upon receipt of Lessor's invoice including without limitation such taxes assessed or arising during the term of this Lease but remitted by Lessor after the termination of this Lease. At Lessor's option, Lessee agrees to remit, along with Lessee's rental payments under this Lease, an amount equal to a percentage of Lessor's reasonable estimate of the personal property taxes that will be assessable against the Equipment during the succeeding tax year. Any such amounts remitted to Lessor will be credited by Lessor against Lessee's obligations under this paragraph. Lessee will remain obligated in the event that such amounts are insufficient to fully reimburse Lessor for the actual amount of such taxes and any surplus will be either credited to Lessee's other obligations to Lessor or returned to Lessee. If requested, Lessee agrees to file promptly on behalf of Lessor all requested tax returns and reports concerning the Equipment in form satisfactory to Lessor, with all appropriate governmental agencies and to mail a copy thereof to Lessor concurrently with the filing thereof. Lessee further agrees to keep or cause to be kept and made available to Lessor any and all necessary records relevant to the use of the Equipment and pertaining to the aforesaid taxes, assessments and other governmental charges. The obligations arising under this paragraph shall survive payment of all other obligations under this Lease and the termination of this Lease. 9. LESSOR'S TITLE, STORAGE AND IDENTIFICATION OF EQUIPMENT: Title to the Equipment will at all times remain in Lessor and Lessee will at all times, at its own cost and expense, protect and defend the title of Lessor from and against all claims, liens and legal processes of creditors of Lessee and keep the Equipment free and clear from all such claims, liens and processes. Lessee agrees not to alter or modify the Equipment without first obtaining in each instance the prior written approval of Lessor. Upon the expiration or termination of this Lease, Lessee, at Lessee's sole expense, shall return the Equipment unencumbered to Lessor at a place to be designated by Lessor, and in the same condition as when received by Lessee, reasonable wear and tear resulting from normal use thereof alone excepted. Lessee shall, upon Lessor's request, and at Lessee's own expense firmly affix to the Equipment, in a conspicuous place, such label, sign or other device as Lessor may supply to identify Lessor as the owner and lessor of the Equipment. If Lessee fails to perform duly and promptly any of its obligations under this Lease (including, without limitation, insuring the Equipment), Lessor may perform the same, but shall not be obligated to do so, for the account of Lessee to protect the interest of Lessor or Lessee or both, at Lessor's option. Any amount paid or expense (including reasonable attorney's fees), penalty or other liability incurred by Lessor in such performance shall be payable by Lessee upon demand as additional rent for the Equipment. 10. POSSESSION, LOCATION OF EQUIPMENT, RIGHT OF INSPECTION AND ASSIGNMENT: The Equipment will be kept by Lessee at the location indicated herein, and will not be removed from said location without the prior written consent of Lessor. Lessor shall have the right to inspect the Equipment at all reasonable times and from time to time as Lessor may require. Lessee will not sell, assign, transfer, pledge, encumber, secrete, sublet or otherwise dispose of any of the Equipment or any interest of Lessee in or under this Lease without Lessor's prior written consent. This Lease and all rights of Lessor under this Lease will be assignable by Lessor without Lessee's consent. LESSEE HEREBY WAIVES, RELINQUISHES AND DISCLAIMS AS TO ANY ASSIGNEE OF LESSOR ALL CLAIMS, RIGHTS OF SET-OFF AND DEFENSES LESSEE MAY HAVE AGAINST LESSOR, INCLUDING THE RIGHT TO WITHHOLD PAYMENT OF ANY MONIES WHICH MAY BECOME DUE UNDER THIS LEASE. After receiving notice of any assignment by Lessor, Lessee agrees that it will not, without the prior written consent of the assignee, purchaser or secured party, (i) prepay any amounts owing under this Lease; (ii) modify or amend this Lease; or (iii) exercise any rights which are exercisable only with the consent of the Lessor. 11. OPTIONS AVAILABLE TO LESSEE: PURCHASE OPTION: If the amount set forth as the Purchase Option Price is $-0- or is left blank, Lessee shall have no option whatsoever to purchase any of the Equipment. If "FMV" or a dollar amount other than $-0- is indicated as the Purchase Option Price, Lessee is not then in default and Lessee has paid all other amounts payable under the terms of this Lease, Lessee shall have the option to purchase all but not less than all of the Equipment subject to this Lease at the end of the Term of this Lease at the Purchase Option Price indicated. If "FMV" is designated as the Purchase Option Price, the purchase price shall be the Fair Market Value of the Equipment in the return condition required at the end of the Term Page 2 of 4 of Lease Agreement dated 03/02/01 between Meadow Valley Contractors, Inc. (Lessee) and Associates Leasing, Inc. (Lessor) which includes, without limitation, an item of Equipment with the following serial number: 551029-77 702004 Rev 6/00 Lessee's Initials se02004.wpd Standard/FMV Tax Lease ----------------- 1 09 Original KDN ----------------- Any sales or other applicable taxes and any personal property or other taxes (whether or not then payable) assessable against the Equipment shall be the responsibility of Lessee and will be payable to Lessor along with the Purchase Option Price. Lessee must notify Lessor in writing at least ninety (90) days prior to the expiration of the Term of Lessee's intention to return the Equipment or to exercise any option to purchase. Failure to give such notice will render Lessee's option to purchase null and void. Lessor is authorized and directed to apply the amount of any security deposit to the Purchase Option Price and the balance, if any, of the Purchase Option Price must be received by Lessor no later than ten (10) days after the last day of the Lease Term. Upon receipt of the total Purchase Option Price and all other amounts payable under this Lease, Lessor shall convey the Equipment to Lessee AS IS, WHERE IS, WITHOUT ANY WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABIITY OR FITNESS FOR ANY PARTICULAR PURPOSE. 12. FAIR MARKET VALUE: The term "Fair Market Value" as used herein shall be determined on the basis of, and shall be equal in amount to, the value which the Equipment would obtain in an arms length sale transaction between an informed and willing buyer-user (other than a buyer currently in possession) and an informed and willing seller under no compulsion to sell and assuming that the Equipment is then in the condition required under the terms of the Lease. If on or before 60 days prior to the expiration of the Term of the Lease, Lessor and Lessee are unable to agree upon a determination of the Fair Market Value of such Equipment, such value shall be determined in accordance with the foregoing definition by a qualified independent appraiser selected by Lessor. The appraiser shall be instructed to make such determination within a period of 45 days following appointment, but in no event later than 10 days prior to the expiration of the Term of the Lease, and shall promptly communicate such determination in writing to Lessor and Lessee. The appraiser's determination of such Fair Market Value shall be conclusively binding upon both Lessor and Lessee. The expenses and fees of the appraiser shall be borne by Lessee. 13. TAX INDEMNITY: Lessee and Lessor agree that Lessor shall be entitled to modified accelerated cost recovery (or depreciation) deductions with respect to the Equipment, and should, under any circumstances whatsoever, except as specifically set forth below, either the United States government or any state tax authority disallow, eliminate, reduce, recapture, or disqualify, in whole or in part, any benefits consisting of accelerated cost recovery (or depreciation) deductions with respect to any Equipment, Lessee shall then indemnify Lessor by payment to Lessor, upon demand, of a sum which shall be equal to the amount necessary to permit Lessor to receive (on an after-tax basis over the full term of this Lease) the same after-tax cash flow and after-tax yield assumed by lessor in evaluating the transactions contemplated by this Lease (referred to hereafter as "Economic Return") that Lessor would have realized had there not been a loss or disallowance of such benefits, together with, on an after-tax basis, any interest or penalties which may be assessed by the governmental authority with respect to such loss or disallowance. In addition, if Lessee shall make any addition or improvement to any Equipment, and as a result thereof, Lessor is required to include an additional amount in its taxable income, Lessee shall also pay to Lessor, upon demand, an amount which shall be equal to the amount necessary to permit Lessor to receive (on an after-tax basis over the full term of this Lease) the same Economic Return that Lessor would have realized had such addition or improvement not been made. Lessor and Lessee agree that the Class Life of the Equipment for federal income tax purposes is as indicated on the front side of this Equipment Schedule. Lessee shall not be obligated to pay any sums required by this section with respect to any Equipment in the event the cause of the loss of the deductions results solely from one or more of the following events: (1) a failure of Lessor to timely modified accelerated cost recovery (or depreciation) deductions for the Equipment in Lessor's tax return, other than a failure resulting from the Lessor's determination, based upon opinion of counsel or otherwise, that no reasonable basis exists for claiming accelerated cost recovery (or depreciation) deductions, or (2) a failure of Lessor to have sufficient gross income to benefit from accelerated cost recovery (or depreciation) deductions. Lessor agrees to promptly notify Lessee of any claim made by any federal or state tax authority against the Lessor with respect to the disallowance of cost recovery (or depreciation) deductions. All amounts payable by Lessee pursuant to this section shall be payable directly to Lessor. All the indemnities contained in this section shall continue in full force and effect notwithstanding the expiration or other termination of the Lease in whole or in part and are expressly made for the benefit of, and shall be enforceable by, Lessor. Lessee's obligations under this section shall be that of primary obligor irrespective of whether Lessor shall also be indemnified with respect to the same matter under some other agreement by another party. The obligations of Lessee under this section are expressly made for the benefit of, and shall be enforceable by, Lessor without necessity of declaring the Lease in default and Lessor may initially proceed directly against Lessee under this section without first resorting to any other rights of indemnification it may have. 14. DEFAULT BY LESSEE: If Lessee at any time defaults in any of its obligations to Lessor, such default shall be considered an abandonment of all options herein and all options herein shall immediately expire and become null and void. 15. OPTIONS NOT ASSIGNABLE. It is agreed that Lessee's rights under this Lease are not assignable and that no modification of the provisions hereof shall be binding unless in writing and signed by an officer of the party to be charged. 16. DEFAULT AND REMEDIES: An event of default shall occur if: (a) any rental Payment or any other amount owed by Lessee to Lessor hereunder is not paid promptly when due; (b) Lessee breaches any warranty or provision hereof, (c) Lessee ceases to do business as a going concern, becomes insolvent, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts as they become due, or takes advantage of any law for the relief of debtors; (d) any property of Lessee is attached; (e) a petition in bankruptcy or for an arrangement, reorganization, composition, liquidation, dissolution or similar relief is filed by or against Lessee under any present or future statute, law or regulation; (f) Lessee or its shareholders take any action looking to its dissolution or liquidation; (g) a trustee or receiver is appointed for Lessee or for any substantial part of its property; (h) if there shall occur an (i) appropriation, (ii) confiscation, (iii) retention, or (iv) seizure of control, custody or possession of the Equipment by any governmental authority including, without limitation, any municipal, state, federal or other governmental entity or any governmental agency or instrumentality (all such entities, agencies and instrumentalities shall hereinafter be collectively referred to as "Governmental Authority"); or (i) if anyone in the control, custody or possession of the Equipment or the Lessee is accused or alleged or charged (whether or not subsequently arraigned, indicted or convicted) by any Governmental Authority to have used the Equipment in connection with the commission of any crime (other than a misdemeanor moving violation). Upon the occurrence of an event of default Lessee shall be in default hereunder and Lessor may, at its option, with or without notice to Lessee (a) declare all sums due and to become due hereunder and all other sums then owing by Lessee to Lessor to be immediately due and payable; (b) proceed by appropriate court action or actions or other proceedings either at law or in equity to enforce performance by Lessee of any and all provisions of this Lease and to recover the damages for the breach thereof; (c) require Lessee to assemble the Equipment and deliver same forthwith to Lessor at Lessee's expense at such place as Lessor may designate which is reasonably convenient to both parties; (d) exercise one or more of the rights and remedies available to a secured party under the Uniform Commercial Code, whether or not this transaction is subject thereto; (e) enter, or its agents may enter, without notice or liability or legal process, into any premises where the Equipment may be, or is believed by lessor to be, and repossess all or any part thereof, disconnecting and separating the same from any other property and using all force necessary and permitted by applicable law, Lessee hereby expressly waiving all further rights to possession of the Equipment after default and all claims for injuries suffered through or loss caused by such repossession; and/or (f) apply any security deposit or other amounts held by Lessor to any indebtedness of Lessee to Lessor. In addition, Lessee agrees to pay, to Lessor, as liquidated damages for loss of the bargain and not as a penalty, (1) the Stipulated Loss Value plus (2) all expenses of retaking, holding, preparing for sale, selling and the like, including reasonable attorneys' fees and other legal expenses, less (3) any amount actually received by lessor from the re-lease, sale or other disposition of the Equipment. Lessee hereby waives any right to trial by jury in any proceeding arising out of this Lease. Nothing herein contained will require Lessor to re-lease, sell or otherwise dispose of the Equipment. No remedy of Lessor hereunder shall be exclusive of any other remedy herein or provide by law, but each shall be cumulative and in addition to every other remedy. A waiver of a default shall not be a waiver of any other or a subsequent default. If allowed by law, "the reasonable fees for attorneys" retained by Lessor shall include the amount of any flat fee, retainer, contingent fee or the hourly charges of any attorney retained by lessor in enforcing any of Lessor's rights hereunder or in the prosecution or defense of any litigation related to this Agreement or the transactions contemplated by this Agreement. All notices to Lessee relating hereto will be considered received when delivered in person or mailed to Lessee at the address set forth in this Agreement, or at any later address designated in writing by Lessee. 17. INDEMNITY: Lessor (which term as used herein includes Lessor's successors, assigns, agents, and servants) shall have no responsibility or liability to Lessee, its successors or assigns or any other person with respect to any Liabilities (as "Liabilities" is herein defined), and Lessee hereby assumes liability for, and hereby agrees, at its sole cost and expense, to indemnify, defend, protect and save Lessor and keep it harmless from and against, any and all Liabilities. The term "Liabilities" as used herein shall include any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements of whatsoever kind and nature, including legal fees and expenses, (whether or not any transaction contemplated hereby is consummated) imposed on, incurred by or asserted against Lessor or the Equipment (whether by way of strict or absolute liability or otherwise) and in any way relating to arising out of this Lease or the selection, manufacture, purchase, acceptance, ownership, delivery, non-delivery, lease, possession, use, operation, condition, servicing, maintenance, repair, improvement, alteration, replacement, storage, return or other disposition of the Equipment (including without limitation, (i) claims as a result of latent or patent defects, whether or not discoverable by Lessor or Lessee, (ii) claims for trademark, patent or copyright infringement, and (iii) tort claims of any kind (whether based on Lessor's alleged negligence or otherwise), including claims for injury or damage to property, or injury of death to any person (including Lessee's employees) or, for any claim or liability hereby indemnified against. The indemnities arising under this paragraph shall survive payment of all other obligations under this Lease and the termination of this Lease. Page 3 of 4 of Lease Agreement dated 03/02/01 Between Meadow Valley Contractors, Inc. (Lessee) and Associates Leasing, Inc. (Lessor) which includes, without limitation, an item of Equipment with the following serial number: 551029-77 702004 Rev 6/00 Lessee's Initials se02004.wpd Standard/FMV Tax Lease ----------------- 1 09 Original KDN ----------------- 18. POWER ATTORNEY. LESSEE HEREBY APPOINTS LESSOR OR ANY OFFICER, EMPLOYEE OR DESIGNEE OF LESSOR OR OF ANY ASSIGNEE OF LESSOR AS LESSEE'S OR SUCH ASSIGNEE'S ATTORNEY-IN-FACT TO, IN LESSEE'S, ASSIGNEE'S OR LESSOR'S NAME, TO: (a) PREPARE, EXECUTE AND SUBMIT ANY NOTICE OR PROOF OF LOSS IN ORDER TO REALIZE THE BENEFITS OF ANY INSURANCE POLICY INSURING THE EQUIPMENT; (b) PREPARE, EXECUTE AND FILE ANY INSTRUMENT WHICH, IN LESSOR'S OPINION, IS NECESSARY TO PERFECT AND/OR GIVE PUBLIC NOTICE OF THE INTERESTS OF LESSOR IN THE EQUIPMENT; AND (c) ENDORSE LESSEE'S NAME ON ANY REMITTANCE REPRESENTING PROCEEDS OF ANY INSURANCE RELATING TO THE EQUIPMENT OR THE PROCEEDS OF THE SALE, LEASE OR OTHER DISPOSITION OF THE EQUIPMENT (WHETHER OR NOT THE SAME IS A DEFAULT HEREUNDER). 19. PRIVACY WAIVER: Lessor may receive from and disclose to any individual, corporation, business trust, association, company, partnership, joint venture, or other entity (herein collectively, the "Entity"), including, without limiting the generality of the foregoing, Lessor's parent or any affiliate or any subsidiary of Lessor and any credit reporting agency or other entity whether or not related to Lessor for any purpose, information about Lessee's accounts, credit application and credit experience with Lessor and Lessee authorizes any Entity to release to Lessor any information regarding the Lessee. This shall be continuing authorization for all present and future disclosures of Lessee's account information, credit application and credit experience on Lessee made by Lessor, or any Entity requested to release such information to Lessor. 20. DEBIT TRANSACTIONS. Lessor may but shall not be required to offer Lessee the option of paying any of Lessee's obligations to Lessor through printed checks ("Debit Transactions") drawn pursuant to this authorization upon Lessee's checking account, using Lessee's checking account number, bank routing code and other information which Lessee provides to Lessor prior to the first Debit Transaction. Lessee authorizes Lessor to initiate Debit Transactions from Lessee's checking account in the amount necessary to pay the rental payments, delinquency charges, or such other amounts as may now or hereafter be due hereunder or under any other present or future agreement with or which is held by Lessor, plus a fee of ten dollars ($10.00) for each Debit Transaction initiated by Lessor. In the event applicable law prohibits or restricts the amount of such fee, the fee chargeable under this provision shall be limited and/or restricted in accordance with applicable law. Lessor may from time to time increase or decrease the Debit Transaction fee upon prior written notice addressed to Lessee's last known address as shown on the records of Lessor and such increase or decrease shall be effective as stated in the written notice. Unless prohibited by applicable law, Lessee's continued use of Debt Transactions after the effective date specified in such notice shall conclusively establish Lessee's agreement to pay the new Debt Transaction fee stated therein. Lessee authorizes Lessor or any officer, employee or designee of Lessor to endorse Lessee's name as drawer on any printed check drawn in accordance with this authorization. Until cancelled by Lessee, this authorization shall be valid for all Debit Transactions Lessor initiates in payment of Lessee's obligations hereunder or under any other present or future agreement with or which is held by Lessor. This authorization may be canceled at any time by Lessee giving at least three (3) business days prior written notice to Lessee's bank and Lessor. Payment by Debit Transactions is not required by Lessor not is its use a factor in the approval of credit. 21. GENERAL PROVISIONS: To the extent that any court of law at any time deems Debtor's to have an interest in any of the Equipment during the Term or any Renewal Term and following the purchase by Debtor of any item of the Equipment (whether pursuant to a purchase option or otherwise), it is the intention of the parties that Lessor have a security interest ("PMSI") in the portion of the Equipment (such portion, together with any proceeds thereof, is referred to as the "Collateral") that was acquired by Lessee with funds advanced by Lessor for the Collateral (the "PMSI Debt"). The Collateral shall secure only the unpaid balance of monies advanced by Lessor for the acquisition of the Collateral. The PMSI Debt shall be secured only by the Collateral and no other property of Debtor. All payments made by Lessee to Lessor with reference to this Lease shall be applied first to late charges, then to any other fees or other amounts payable hereunder other than the PMSI Debt, until all such indebtedness is paid in full, and then to the PMSI Debt, and all proceeds of the Collateral shall be applied only to the payment of the PMSI Debt. Upon payment in full of the PMSI Debt, all security interests of Lessor in the Collateral shall be terminated. This provision controls over any conflicting provision or language in this Agreement or in any other agreement between Lessor and Lessee unless the parties mutually agree in writing in a subsequent agreement to override this provision. Any provisions hereof contrary to, prohibited by or invalid under applicable laws or regulations shall be inapplicable and deemed omitted herefrom, but shall not invalidate the remaining provisions hereof. This Lease and any addenda referred to herein constitute the entire agreement of the parties hereto. 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 superseded hereby, and no modification hereof shall be binding unless in writing and signed by an officer of the party to be bound. The only copy of this Lease that will be constitute "chattel paper" for purposes of the Uniform Commercial Code is the original of this Lease marked "Original For Associates". 22. RENEWAL. Unless Lessee notifies Lessor in writing at least ninety (90) days prior to the expiration of the Term of Lessee's intention to return the Equipment or to exercise any option to purchase, or Lessor notifies Lessee in writing at least ninety (90) days prior to the expiration of the Term of Lessor's intention to terminate this Lease, this Lease will automatically renew and continue on a month to month basis following the initial Term ("Renewal Term") until such time as either Lessor or Lessee provides the other party with at least ninety (90) days prior written notice of that party's intention to terminate this Lease. Rental Payments will continue to be due and owing until expiration of such notice period. All of the terms and provisions of this Lease shall govern during any Renewal Term, except that any option on the part of Lessee to purchase the Equipment shall automatically expire on the expiration of the Term and shall be inapplicable to any Renewal Term. 23. RETURN OF EQUIPMENT: If Lessee does not exercise, or is precluded from exercising, the option to purchase the Equipment at the expiration of the Term or any Renewal Term of this Lease. Lessee shall, at Lessee's sole cost and expense, return all, but not less than all, of the Equipment to Lessor immediately upon the expiration of the Term or any Renewal Term of this Lease pursuant to the terms and conditions contained in Lessor's Standard Return Conditions for equipment similar to the Equipment subject to this Lease (a copy of which has been delivered to Lessee in conjunction with this Lease). If Lessee does not surrender the Equipment to Lessor as herein provided, Lessee will be in default of this Lease as to such Equipment, and Lessee shall pay Lessor, as liquidated damages and not as penalty, an amount equal to one hundred ten percent (110%) of the Monthly Rental Payment applicable to such Equipment. Such payment shall commence with the month immediately following the end of the Term or any Renewal Term and shall continue thereafter monthly until the Equipment is returned to Lessor. Lessee agrees that such liquidated damages are a reasonable estimate and fair compensation for the costs, expenses, residual value exposure and other losses, which are incapable of an exact determination, incurred by Lessor as a result of Lessees retaining possession of the Equipment beyond the end of the Term or any Renewal Term. Notwithstanding the foregoing, Lessor shall have the right to obtain immediate possession of the Equipment at any time after the end of the Term or any Renewal Term for such Equipment. - -------------------------------------------------------------------------------- DELIVERY AND ACCEPTANCE OF EQUIPMENT (Check Appropriate Box) Lessee's obligations and liabilities under this Lease are absolute and unconditional under all circumstances and regardless of any failure of operation or loss of possession of any item of Equipment or the cessation or interruption of Lessee's business for any reason whatsoever. [_] On ____________, the Equipment leased under this Lease was delivered to Lessee with all installation necessary for the proper use of the Equipment completed at a location agreed to by Lessee and the Equipment was inspected by Lessee and found to be in satisfactory condition in all respects and delivery thereof was unconditionally accepted by Lessee. [_] The Equipment leased under this Lease has not yet been delivered to or accepted by Lessee and, upon delivery, Lessee agrees to execute such delivery and acceptance certificate as Lessor or Lessor's assignee requires. ================================================================================ THE UNDERSIGNED HEREBY AGREE TO ALL THE TERMS AND PROVISIONS SET FORTH ON ALL FOUR PAGES OF THIS LEASE AND ALL RIDERS EXECUTED IN CONNECTION HEREWITH. LESSEE ACKNOWLEDGES RECEIPT OF A COMPLETE COPY OF THIS LEASE TOGETHER WITH ALL RIDERS AND OF LESSOR'S STANDARD RETURN CONDITIONS. LESSEE: LESSOR: Meadow Valley Contractors, Inc. Associates Leasing, Inc. By /s/ Kenneth D. Nelson By /s/ ILLEGIBLE ------------------------------ ------------------------------ Title VICE PRESIDENT Title Credit Analyst -------------------------- --------------------------- Date: 03/02/01 Federal Tax ID #:____ Date: 03/02/01 Federal Tax ID #:____ -------- -------- Page 4 of 4 of Lease Agreement dated 03/02/01 between Meadow Valley Contractors, Inc. (Lessee) and Associates Leasing, Inc. (Lessor) which includes, without limitation, an item of Equipment with the following serial number: 551029-77 702004 Rev 6/00 se02004.wpd Standard/FMV Tax Lease 1 09 Original [LOGO] AMENDMENT TO LEASE AGREEMENT (PURCHASE AND RENEWAL OPTIONS) This Amendment To Lease Agreement (this "Amendment") is attached to and incorporated into the terms of that certain Lease Agreement (the "Lease") bet as Lessor, and Meadow Valley Contractors, Inc., as Lessee, dated 03/02/01. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Lessor and Lessee hereby agree to amend the Lease as follows: 1. Paragraph 11 of the Lease is hereby deleted and the following inserted in lieu thereof: 11. OPTIONS AVAILABLE TO LESSEE: A. Option To Purchase During Term. Lessor hereby grants to Lessee the option to purchase all, but not less than all, of the Equipment described in the Lease on 03/15/05 (the "Option Date") upon the following terms and conditions: (1) Lessee gives Lessor written notice of Lessee's intent to exercise this option to purchase at least 60 but not more than 90 days prior to the Option Date and (2) Lessee has paid all Rental Payments accruing prior to the Option Date on or before the Option Date. Failure to give such notice or to pay the Term Option Price on or before the Option Date will render the Lessee's option to purchase null and void. The purchase price for the Equipment on the Option Date will be the then Fair Market Value of the Equipment which, for purposes of the Option Date only, Lessor and Lessee agree will be $122,250.00 plus an amount equal to any applicable taxes on the above sum (the "Term Option Price"). Lessor and Lessee agree that the Term Option Price is a reasonable prediction of the then Fair Market Value of the Equipment. The Term Option Price will be payable on the Option Date in cash or, at Lessee's option, as provided in Paragraph B. of this Amendment. Upon such payment, Lessor will execute a bill of sale conveying title to the Equipment to Lessee on an "AS IS, WHERE IS" BASIS, WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND. B. Conversion Option During Term. In the event Lessee exercised Lessee's option to purchase the Equipment on the Option Date as provided in paragraph A above, Lessee may elect to pay the Term Option Price to Lessor upon the following terms and conditions: (1) Lessee agrees to pay the Term Option Price in 12 equal consecutive monthly installments of $10,187.50 each with the first such installment payable on the Option Date and each succeeding installment payable on a like date of each month thereafter until fully paid and provided that the final installment will be in the amount of the then remaining unpaid balance. In addition to the payment provided above, Lessee promises and agrees to pay interest at the rate of 10% per annum payable monthly on the unpaid principal balance; (2) Lessee agrees to give Lessor written notice of Lessee's election pursuant to this Paragraph at least 60 but not more than 90 days prior to the Option Date (failure to give such notice on or before the Option Date will render the Lessee's "Conversion Option" null and void); (3) Lessee grants to Lessor, its successors and assigns, a security interest in the Equipment complete with all present and future attachments, accessories, replacement parts, repairs, additions, and all proceeds thereof, all herein referred to collectively as "Collateral" to secure payment and performance of the foregoing obligations and all absolute and all contingent obligations and liabilities of Lessee to Lessor, or to any assignee of Lessor; (4) Lessee will be a "debtor" and Lessor a "secured party" as those terms are used under the Uniform Commercial Code; (5) Lessee agrees, at its own cost and expense, to do everything necessary or expedient to perfect and preserve the security interest of Lessor granted hereunder; and (6) All of the terms and provisions of the Lease will be and remain in full force and effect except as indicated in this paragraph. C. Option to Purchase Upon Expiration of Term: Lessor hereby grants to Lessee the option to purchase all, but not less than all, of the Equipment described in the Lease at the expiration of the Term provided that Lessee is not then in default under the terms of the Lease and that Lessee gives Lessor written notice of Lessee's intent to exercise this option to purchase at least 90 but not more than 120 days prior to the expiration of the Term of the Lease. Failure to give such notice on or before the expiration of the Term of the Lease, will render the Lessee's option to purchase null and void. The purchase price will be payable on the expiration date of the Lease. The purchase price to be paid to Lessor for the Equipment will be the then Fair Market Value of the Equipment which Lessor and Lessee agree will be $60,792.75, plus an amount equal to the Rental Payments then unpaid under the terms of 1 the Lease, plus applicable taxes, if any, on the above sum, all payable in cash. Lessor and Lessee agree that the foregoing purchase price is a reasonable prediction of the Fair Market Value of the Equipment at the expiration of the Term. Upon such payment, Lessor will execute a bill of sale conveying title to the Equipment to Lessee on an "AS IS, WHERE IS" BASIS, WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND. D. Renewal of Lease: In the event that Lessee does not exercise or is precluded from exercising Lessee's option specified in Paragraph C, the Lease will renew and continue with respect to all, but not less than all, of the Equipment described in the Lease, following the expiration of the Term of the Lease, for a period of 12 months (the "Renewal Term"), upon the following terms and conditions: (1) Lessee must pay to Lessor for the Renewal Term 12 Rental Payments in the amount of $5,344.65 each for each month of the Renewal Term, which will be due and payable on the first day of each month during the Renewal Term and (2) all of the terms and conditions of the Lease will continue to remain in full force and effect during the Renewal Term and, if this option to renew becomes effective, the word "Term" wherever the same appears in the Lease will include the Renewal Term. E. Option To Purchase On Expiration Of Renewal Term: Lessor hereby grants to Lessee the option to purchase all, but not less than all, of the Equipment described in the Lease at the expiration of the Renewal Term provided that Lessee is not then in default under the terms of the Lease and that Lessee gives Lessor written notice of Lessee's intent to exercise this option to purchase at least 90 but not more than 120 days prior to the expiration of the Renewal Term. Failure to give such notice on or before the expiration of the Renewal Term of the Lease, will render the Lessee's option to purchase null and void. The purchase price will be payable on the expiration of the Renewal Term. The purchase price to be paid to Lessor for the Equipment will be the then Fair Market Value (as defined in the Lease) of the Equipment plus an amount equal to the Rental Payments then unpaid under the terms of the Lease, plus applicable taxes, if any, payable in cash. Upon such payment, Lessor will execute a bill of sale conveying title to the Equipment to Lessee on an "AS IS, WHERE IS" BASIS, WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND. 2. Paragraph 21 of the Lease is hereby deleted and the following inserted in lieu thereof: RETURN OF EQUIPMENT: If Lessee does not exercise, or is precluded from exercising, the option to purchase the Equipment at the expiration of the Renewal Term of this Lease, Lessee shall, at Lessee's sole cost and expense, return all, but not less than all, of the Equipment to Lessor immediately upon the expiration of the Renewal Term of this Lease pursuant to the terms and conditions contained in Lessor's Standard Return Conditions for equipment similar to the Equipment subject to this Lease (a copy of which has been delivered to Lessee in conjunction with this Lease). If Lessee does not surrender the Equipment to Lessor as herein provided, Lessee will be in default of this Lease as to such Equipment, and Lessee shall pay Lessor, as additional liquidated damages and not as penalty, an amount equal to one hundred ten percent (110%) of the Monthly Rental Payment applicable to such Equipment. Such payment shall commence with the month immediately following the end of the Renewal Term and shall continue thereafter monthly until the Equipment is returned to Lessor. Lessee agrees that such liquidated damages are a reasonable estimate and fair compensation for the costs, expenses, residual value exposure and other losses, which are incapable of an exact determination, incurred by Lessor as a result of Lessees retaining possession of the Equipment beyond the end of the Renewal Term. Notwithstanding the foregoing, Lessor shall have the right to obtain immediate possession of the Equipment at any time after the end of the Renewal Term for such Equipment. 3. DEFINED TERMS: The terms "Equipment", "Fair Market Value", "Rental Payments", and "Term" as used herein have the same meaning as defined in the Lease (and as modified in this Agreement). 4. DEFAULT BY LESSEE: If Lessee at any time defaults in any of its obligations to Lessor, such default will be considered an abandonment of the options contained in this Agreement and the options herein will immediately expire and become null and void. 5. OPTIONS NOT ASSIGNABLE: It is agreed that Lessee's rights under this Amendment are not assignable and that no modification of the provisions hereof will be binding unless in writing and signed by an officer of the party to be charged. 6. Except as expressly modified hereby, the Lease is and shall remain in full force and effect. Lessor Associates Leasing, Inc. Lessee Meadow Valley Contractors, Inc. ------------------------------ --------------------------------- By /s/ [ILLEGIBLE] By /s/ Kenneth D. Nelson ----------------------------------- ------------------------------------- Title Credit Analyst Title Vice President -------------------------------- ---------------------------------- 2 EX-10.162 6 dex10162.txt OFFICE LEASE AGREEMENT Exhibit 10.162 ASSIGNMENT AND ASSUMPTION OF LEASES This Assignment and Assumption of Leases (the "Assignment") is made and entered into as of the 19th day of December, 2001, by and between HB PROPERTIES, a Texas general partnership ("Assignor"), and JPET II COMPANY, LIMITED PARTNERSHIP, a Utah limited partnership ("JPET"), and FAE HOLDINGS 0112009, L.L.C., a Utah limited liability company ("FAE"). JPET and FAE are collectively referred to herein as "Assignees". FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged: Assignor hereby grants, conveys, transfers and assigns to JPET an undivided 70.7% interest and FAE an undivided 29.3% interest, in all of Assignor's right, title and interest in, to and under the leases (the "Leases") described in Exhibit B attached hereto and incorporated herein by this reference, relating to that certain real property located in Clark County, Nevada, and more particularly described in Exhibit A attached hereto (the "Real Property"), together with any and all right, title, estate and interest of Assignor as lessor under the Leases, whether now owned or hereafter acquired, in and to all improvements and fixtures located thereon and any rights, privileges, easements, rights of way or appurtenances appertaining thereto (including, without limitation, any and all rents, issues, profits, royalties, income and other benefits derived from the Real Property hereafter accruing, and any and all claims, causes of action, rights of proceeds or awards related to the Real Property hereafter accruing), together with all right, title, estate and interest of Assignor in and to such security and other deposits and prepaid rents, if any, as have been paid to Assignor pursuant to such Leases, together with all right, title, estate and interest of Assignor in and to any subleases relating to the Real Property. Assignees hereby accept the foregoing assignment and agree to assume, pay, perform and discharge, as and when due, all of the agreements and obligations of Assignor under the Leases arising on or after the date hereof and agree to be bound by all of the terms and conditions of the Leases arising on or after the date hereof. The provisions of this Assignment shall be binding upon, and inure to the benefit of, the successors and assigns of Assignor and Assignees, respectively. This Assignment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument. ASSIGNOR: HB PROPERTIES, a Texas General Partnership By /s/ Mark Hallgren --------------------------------------- Mark Hallgren, General Partner ASSIGNEES: ASSIGNEES: JPET II COMPANY, LIMITED PARTNERSHIP By /s/ JOHN PRICE --------------------------------------- John Price, General Partner FAE HOLDINGS 0112009, L.L.C. By: FIRST AMERICAN EXCHANGE CORPORATION, its Manager By /s/ MICHAEL ANDERSON --------------------------------------- Michael Anderson, Vice President STATE OF __________ ) :ss. COUNTY OF _________ ) The foregoing instrument was acknowledged before me this day of December, 2001, by MARK HALLGREN, as General Partner of HB PROPERTIES. --------------------------------------- Notary Public Residing in____________________________ My Commission Expires: - ---------------------- STATE OF UTAH ) :ss. COUNTY OF SALT LAKE ) The foregoing instrument was acknowledged before me this 19th day of December, 2001, by JOHN PRICE, as the General Partner of JPET II COMPANY, LIMITED PARTNERSHIP. /s/ LESLIE M. WADE --------------------------------------- Notary Public Residing in____________________________ My Commission Expires: - ---------------------- 2 ---------------------------------------- NOTARY PUBLIC LEZLIE M. WADE [GRAPHIC 35 Century Parkway OMITTED] Salt Lake City, Utah 84115 My Commission Expires May 1, 2003 STATE OF UTAH ---------------------------------------- JPET II COMPANY, LIMITED PARTNERSHIP By -------------------------------------- John Price, General Partner FAE HOLDINGS 0112009, L.L.C. By: FIRST AMERICAN EXCHANGE CORPORATION, its Manager By -------------------------------------- Michael Anderson, Vice President STATE OF Texas ) :ss. COUNTY OF Lubbock ) The foregoing instrument was acknowledged before me this 19th day of December, 2001, by MARK HALLGREN, as General Partner of HB PROPERTIES. /s/ BECKY KIMMEL ----------------------------------------- Notary Public Residing in Lubbock TX My Commission Expires: ------------------------------- 1-21-2005 BECKY KIMMEL - ---------------------- [GRAPHIC NOTARY PUBLIC OMITTED] State of Texas STATE OF UTAH ) Comm. Exp. 01-21-2005 :ss. ------------------------------- COUNTY OF SALT LAKE ) The foregoing instrument was acknowledged before me this __ day of December, 2001, by JOHN PRICE, as the General Partner of JPET II COMPANY, LIMITED PARTNERSHIP. ----------------------------------------- Notary Public Residing in______________________________ My Commission Expires: - ---------------------- STATE OF UTAH ) 2 LEASE AGREEMENT THIS LEASE AGREEMENT, made and entered into this July 9, 2001, by and between HB PROPERTIES, as Landlord, and MEADOW VALLEY CORPORATION, INC., AN ARIZONA CORPORATION, as Tenant. ARTICLE 1. FUNDAMENTAL LEASE PROVISIONS. Each reference in this Lease to the "Fundamental Lease Provisions" shall mean and refer to the following terms: 1.1 Landlord's Address" 5909 63rd Street, Lubbock, Texas 79424. 1.2 Tenant's Notice Address: 4411 South 40th Street, D-11, Phoenix, AZ 85040 1.3 Tenant's Trade Name: Meadow Valley Contractors, Inc. 1.4 Estimated Possession Date: October 1, 2001. 1.5 Rent Commencement Date: October 1, 2001. 1.6 Lease Term Five (5) years. 1.7 Initial Basic Rent: Two Thousand Nine Hundred Ninety-Eight and NO/100's Dollars ($2,998.00). 1.8 Tenant's Proportionate Share of Common Area Operating Costs: 12.5%. 1.9 Tenant's Proportionate Share of Taxes: 12.5%. 1.10 Tenant's Proportionate Share of Insurance: 12.5%. 1.11 Use: General office and warehouse uses for a general contracting business specializing in infrastructure projects. 1.12 Security Deposit: $2,998.00 1.13 Guarantors: None ARTICLE 2. PREMISES. 2.1 The Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord certain premises in the building located at 4635 Andrews Street, Suite "F", North Las Vegas, Clark County, Nevada 89030 (hereinafter the "Building"), depicted on the site plan of the Building attached hereto as Exhibit "A" (hereinafter referred to as the "Premises"), containing a total of approximately 4,320 square feet of floor space. 2.2 Tenant's Rights to Use in Common. Tenant shall have the nonexclusive right to use in common, subject to reasonable rules of general applicability to tenants of the Building from time to time made by Landlord and of which Tenant is given notice, all areas, space, equipment and signs provided for the common or joint use or benefit of the tenants of the Building, including but not limited to driveways, access roads, landscaped and vacant areas, truck serviceways, lobbies, corridors, stairs, ramps, elevators, escalators, entrances, exits, stairways, sidewalks, pavement, lighting facilities, utility systems, HVAC systems, exterior and interior walls, and public facilities, are collectively referred to herein as the "Common Areas". Tenant hereby agrees that Landlord shall have the right, for the purposes of accommodating the other tenants of the Building, to increase or decrease the configuration and dimensions or to otherwise alter the Common Areas so long as Tenant's access to the Premises is not unreasonably restricted thereby. Page -1- 2.4 No Warranty. Tenant agrees that neither Landlord nor any agent of Landlord has made any representations or warranty as to the suitability of the Premises for the conduct of Tenant's business, nor has Landlord agreed to undertake any modification, alteration or improvement to the Premises or the Building except as provided in this Lease. Tenant acknowledges and agrees that neither Landlord nor any agent of Landlord has made any representation or warranty whatsoever or at all concerning (a) the safety of the Premises, the Building or of any part thereof, whether for the use of Tenant or any other persons, including Tenant's employees, agents, invitees, or customers, or (b) the existence or adequacy of any security system(s) which may be installed or used by Landlord. All understandings and agreements heretofore made between the parties hereto are merged in this Lease. ARTICLE 3. PURPOSE. 3.1 Permitted Use. The Premises are to be used only for the use described in the Fundamental Lease Provisions and for no other purpose without the prior written consent of Landlord, which consent shall not be unreasonably withheld. 3.2 Restrictions. The parties agree that this Lease is subject to the effect of any covenants, conditions, restrictions, easements, mortgages or deeds of trust, ground leases, rights of way and any other matters or documents of record; the effects of any zoning laws of the city, county and state where the Building is situated, and general and special taxes not delinquent. Tenant agrees that as to Tenant's leasehold estate Tenant and all persons in possession or holding under Tenant, will conform to and will not violate the terms of any covenants, conditions or restrictions of record which may now or hereafter encumber the Building (the "Restrictions"); and this Lease is subordinate to the Restrictions and any amendments or modifications thereto. ARTICLE 4. TERM. The term of this Lease (herein referred to as the "term of this Lease" or "the term hereof"), shall begin as of the date hereof, and, unless sooner terminated as provided in this Lease, shall continue until Five (5) years from the Rent Commencement Date, as defined in the Fundamental Lease Provisions. The estimated possession date is set forth in the Fundamental Lease Provisions (the "Estimated Possession Date"). ARTICLE 5. POSSESSION. Landlord agrees to deliver to the Tenant and Tenant agrees to accept from Landlord, possession of the Premises forthwith upon substantial completion of the Premises. The term "substantial completion of the Premises" is defined as the date Landlord notifies Tenant that the Premises are substantially complete to the extent of Landlord's work as specified in Exhibit "B", to the point that Tenant's contractor may commence the construction of Tenant's Work as specified in Exhibit "B". Certification by Landlord's architect of the substantial completion of the Premises in accordance with Exhibit "B" shall be conclusive and binding upon the parties hereto. If Landlord, for any reason whatsoever, cannot deliver possession of the Premises to Tenant on or prior to the Estimated Possession Date, this Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom. ARTICLE 6. RENT. 6.1 Basic Rent. (a) Tenant shall pay to Landlord, as rent for the Premises beginning on the Rent Commencement Date and continuing throughout the term of this Lease, the Basic Annual Rent (sometimes referred to as "Basic Rent") set forth in the Fundamental Lease Provisions hereof, as such Basic Rent may be adjusted as hereinafter provided. The Basic Rent shall be payable in equal monthly installments in advance on or before the first day of each calendar month during the term hereof. Basic Rent for any partial month shall be prorated on a per diem basis based on a 360-day year. (b) Landlord and Tenant stipulate and agree for all purposes under this Lease that the floor area of the Premises is 4,320 square feet, notwithstanding any different measurement thereof that may be made hereafter by or on behalf of either party. Page -2- 6.2 Basic Rental Adjustment (CPI). On January 1, 2002 and on the first day of each calendar year of the term of this Lease (the "Adjustment Date"), the Basic Rent shall be adjusted upwards by three percent (3%). The adjusted Basic Rent shall become effective as of the applicable Adjustment Date and shall remain in effect for the next succeeding twelve (12) calendar months. 6.3 Net Lease; Additional Rent. It is the intent of both parties that the Basic Rent shall be absolutely net to Landlord throughout the terms of this Lease, that all costs, expenses, and obligations of every kind relating to the Premises which may arise or become due during the term hereof shall be paid by Tenant, except for those which are specifically imposed upon Landlord pursuant to the terms of this Lease. In furtherance thereof, Tenant specifically agrees to pay to Landlord as additional rent, without demand therefore and without offset or deduction, the expenses and charges set forth below: (a) Tenant shall pay to Landlord its Proportionate Share (as defined in Article 1 above) of the Common Area operating costs. The "Common Area operating cost" means the total cost and expense incurred in connection with the ownership, maintenance, repair, replacement and operation of Common Areas, specifically including, without limitation, the costs and expenses for utilities for lighting and cleaning the Common Areas, watering vegetation, and temperature control in interior Common Areas; personal property taxes and assessments on the Common Area personalty and equipment; real property taxes and assessments on the land and improvements comprising the exterior Common Areas (to the extent not included in subparagraph (c) below; premiums for insurance covering exterior Common Areas, including fire and extended coverage, all risk public liability and property damage, rental abatement insurance, earthquake insurance and such other insurance as may otherwise be required by the first mortgagee of the Building or by the Landlord in the exercise of its discretion, maintenance, repair and replacement (including capital charges) of Common Area pavement, sidewalks, walls, roofs, fences, curbs and bumpers, floor and wall coverings in interior Common Areas, and all interior and exterior directional signs; gardening and the maintenance and replacement of landscaping and irrigation systems; striping and line painting; sweeping, sanitary and flood control, removal of snow, ice, trash, rubbish, garbage, and other refuse; cleaning, repair and replacement of lighting fixtures including bulbs and ballasts; depreciation on, or rentals for, machinery and equipment used in such maintenance; management fee (not to exceed five percent (5%); the cost of supplies and personnel (and salaries, uniforms, workmen's compensation insurance, group insurance, fidelity bonds and other fringe benefits) to implement such service, to direct parking, and to police the Common Areas; repair of all utility lines, custodial service for interior Common Areas, all cost required by a governmental entity for energy conservation, life safety or other purposes or made by Landlord to reduce operating expenses; fees required for licenses and permits relating to the operation of parking areas, and fifteen percent (15%) of all the foregoing costs (except for the cost of taxes and insurance) to cover administrative and overhead expenses. Any of the services which may be included in the computation of the Common Area operating costs may be performed by subsidiaries or affiliates of Landlord, provided that the contracts for the performance of such services shall be competitive with similar contracts and transactions with unaffiliated entities for the performance of such services in comparable projects in Salt Lake County. (b) Tenant shall pay to Landlord its Proportionate Share (as defined in Article 1 above) of the cost of Landlord's property damage insurance described in Section 16.2 below. (c) Tenant shall pay to Land lord its Proportionate Share (as defined in Article 1 above) of all Real Estate Taxes (as defined below) levied against the Building (and applicable land on which the Building is located) for any period occurring during the term of this Lease. (d) "Real Estate Taxes" or "Taxes" shall mean and include all general and special taxes, assessments, duties and levies, charged and levied upon or assessed by any governmental authority against the Building including the land, the buildings, the Premises, any other improvements situated on the land other than the buildings, the various estates in the land and the buildings, any leasehold improvements, fixtures, installations additions and equipment whether owned by Landlord or Tenant. Real Estate Taxes shall also include the reasonable cost to Landlord contesting the amount, validity, or the applicability of any Taxes mentioned in this Article. Further included in the definition of Taxes herein shall be general and special assessments, fees of every kind and nature, commercial rental tax, levy, penalty or tax (other than inheritance or estate taxes) Page -3- imposed by any authority having the direct or indirect power to tax, as against any legal or equitable interest of Landlord in the Premises or in the Building or on the act of entering into this Lease or as against Landlord's right to rent or other income therefrom, or as against Landlord's business of leasing the Premises, any tax, fee, or charge with respect to the possession, leasing, transfer of interest, operation, management, maintenance alteration, repair, use or occupancy by Tenant of the Premises or any portion of the Building, or any tax imposed in substitution, partially or totally, for any tax previously included within the definition of Taxes herein, or any additional tax, the nature of which may or may not have been previously included within the definition of Taxes. Further, if at any time during the term of this Lease the method of taxation or assessment of real estate or the income therefrom prevailing at the time of execution hereof shall be, or has been altered so as to cause the whole or any part of the Taxes now or hereafter levied, assessed or imposed on real estate to be levied, assessed or imposed upon Landlord, wholly or partially, as a capital levy, business tax, permit or other charge, or on or measured by the rents received therefrom, then such new or altered Taxes, regardless of their nature, which are attributable to the land, the buildings or to other improvements within the Building, shall be deemed to be included within the term "Real Estate Taxes" for purposes of this Article, whether in substitution for, or in addition to any other Real Estate Taxes, save and except that such shall not be deemed to include any enhancement of said tax attributable to other income of Landlord. With respect to any general or special assessments which may be levied upon or against the Premises, the Buildings, the underlying realty or which may be evidenced by improvement or other bonds, or may be paid in annual or semi-annual installments, only the amount of such installment, pro rated for any partial year, and statutory interest, shall be included within the computation of Taxes for which Tenant is responsible hereunder. When possible, Tenant shall cause its trade fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Landlord. If any of Tenant's said personal property shall be assessed with Landlord's real property, Tenant shall pay to Landlord the Taxes attributable to Tenant within ten (10) days after receipt of a written statement setting forth the Taxes applicable to Tenant's property. (e) All costs and expenses herein described which are incurred on a Building-wide basis, such as exterior Common Area maintenance costs, liability insurance, and taxes and assessments (if separate tax bills are not available), shall be prorated among the various tenants within the Building, based upon the square foot area within the Building. Notwithstanding the preceding provision, Tenant's proportionate share as to certain expenses may be calculated differently to yield a higher percentage share for Tenant as to certain expenses in the event Landlord permits other lessees in the Building to directly incur such expenses rather than have Landlord incur the expenses in common for the Building. In such case Tenant's proportionate share of the applicable expense shall be calculated as having its denominator the gross leasable area of all premises in the Building less the gross leasable area of Tenants who have incurred such expense directly. In any case in which Tenant, with Landlord's consent, incurs such expenses directly, Tenant's proportionate share shall be calculated specially so that expenses of the same character which are incurred by Landlord for the benefit of other Tenants in the Building shall not be pro rated to Tenant. Nothing herein shall imply that Landlord will permit Tenant or any other Tenant of the Building to incur any Common Area costs or operating costs. Any such permission shall be in the sole discretion of the Landlord, which Landlord may grant or withhold in its arbitrary judgment. (f) Tenant's Proportionate Share of the costs and expenses herein described shall be estimated by Landlord for each twelve (12) month period, as Landlord, in good faith, may determine and shall, where possible, be based upon previous costs and expenses increased by an inflation factor and anticipated forthcoming extraordinary expenditures. Tenant shall pay in equal installments in advance on the first day of each calendar month on-twelfth (1/12th) of its estimated Proportionate Share of such costs for such period and any adjustments to be made as a result of any difference between the amount paid by Tenant (as its estimated Proportionate Share) and Tenant's actual Proportionate Share. In the case of a deficiency, Tenant shall promptly remit the amount of such deficiency to Landlord. In the case of a surplus, Landlord shall apply such surplus to payments next falling due from Tenant hereunder. Notwithstanding the foregoing, however, Landlord may elect to prorate certain costs and expenses, such as taxes and assessments, as they are incurred and, with respect to such items, not following the "budget billing" concept described in this subparagraph. Page -4- 6.4 Taxes on Rent. Tenant shall pay and be liable for all rental, sales and use taxes or other similar taxes, if any, levied or imposed on Rent or any part thereof by any city, county, state or other governmental body having authority. 6.5 Payment; Late Charges. Except as otherwise specifically provided herein, any sum, amount, item or charge designated or considered as additional rent in this Lease or any other sum, amount, item or charge payable by Tenant to Landlord pursuant to this Lease (all of which sums together with Basic Rent are sometimes referred to in this Lease as "Rent") shall be paid to Landlord without deduction or offset, in lawful money of the United States of America and shall be paid at the office of Landlord, or to such other place as Landlord may from time to time designate by written notice to Tenant. Any installment of Rent, other sum or any portion of such installment or other sum required under this Lease to be paid by Tenant which has not been paid within five (5) days after the due date thereof shall, whether or not demand therefore is made or notice of default is given, bear interest at the rate of one and one half percent (1-1/2%) per month from the due date thereof or until paid in full. In addition thereto, Landlord may charge a sum equal to five percent (5%) of each unpaid amount as a service fee to compensate Landlord for the additional time and expense necessitated in the handling of delinquent payments. ARTICLE 7. USE OF PREMISES. 7.1 Prohibited Uses. Tenant shall not do or permit anything to be done in or about the Premises, nor bring or keep anything therein which will in any way increase the existing rate or affect any policy of fire or other insurance upon the Premises or any of its contents. Tenant shall not do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other lessees or occupants of the Building, injure or annoy them or use or allow the Premises to be used to any improper, immoral, unlawful or objectionable purposes, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall not overload the floors or damage or deface or otherwise commit or suffer to be committed any waste, abuse, deterioration or destructive use in or upon the Premises. Tenant shall not place any sign or advertisement upon any exterior wall or window without the prior written consent of Landlord, which consent shall not be unreasonably withheld. 7.2 Compliance with Law. Tenant shall not use the Premises or permit anything to be done in or about the Premises which will in any way conflict with any law, statute, ordinance or government rule or regulation now in force or which may hereafter be enacted or promulgated. Tenant shall at its sole cost and expense promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force and with the requirements of any board of fire underwriters or other similar body now or hereafter constituted related to or affecting the condition, use or occupancy of the Premises, excluding structural changes not related to or affected by Tenant's improvements or acts. The judgment of any court of competent jurisdiction or the admission of Tenant in an action against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any such law, statute, ordinance or governmental rule, regulation or requirement, shall be conclusive of that fact as between Landlord and Tenant. Tenant hereby accepts the Premises in the condition existing as of the date of occupancy, subject to all applicable zoning, municipal, county and state laws, ordinances, rules, regulations, orders, restrictions of record, and requirements in effect during the term or any part of the term hereof regulating the Premises. 7.3 Hazardous Materials. (a) For purposes hereof, "Hazardous Materials" shall mean any and all flammable explosives, radioactive material, hazardous waste, toxic substance or related material, including but not limited to, those materials and substances defined as "hazardous substances", "hazardous materials", "hazardous wastes" or "toxic substances" in the Environmental Laws. For purposes hereof, "Environmental Laws" shall mean all local, state and federal laws, statutes, rules and regulations relating to industrial hygiene, environmental protection, or the use analysis, generation, manufacture, storage, disposal, or transportation of any Hazardous Material, including but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq.; the Hazardous Materials Transportation Act, 39 U.S.C. Section 1801, et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Page -5- Act, 42 U.S.C. Section 6901 et seq.; the Federal Clean Water Act 33 U.S.C. Section 1251 et seq.; the Clean Air Act 42 U.S.C. Section 7401 et seq.; the Porter-Cologne Water Quality Act, including all amendments thereto, replacements thereof, and regulations adopted and publications promulgated pursuant thereto. (b) Tenant agrees that during the term of this Lease Tenant shall not be in violation of any federal, state or local law, ordinance or regulation relating to industrial hygiene, soil, water, or environmental conditions on, under or about the Premises or the Building including, but not limited to, the Environmental laws. Tenant further agrees that during the term of this Lease, there shall be no use, presence, disposal, storage, generation, release, or threatened release of Hazardous Materials on, from or under the Premises of the Building. Tenant further covenants that it will immediately notify Landlord of any environmental concern raised by a private party or governmental agency as it relates to the Premises or Tenant's use of the Building; and immediately notify Landlord of any hazardous waste spill. In the event of a violation hereof, Tenant shall immediately proceed, at Tenant's expense, to remedy same. Failure of Tenant to commence clean up activities within five (5) days after receipt of notice to do so shall result in a default under this Lease. Landlord shall, thereafter, have the right, but not the obligation, to remedy any environmental violation upon the Premises or the Building, and Tenant shall promptly reimburse Landlord for all costs relating thereto. Landlord further retains the right, in its sole, but reasonable discretion, to conduct any environmental tests should Landlord suspect a violation to exist. (c) Tenant agrees to indemnify, defend, protect and hold harmless Landlord, its directors, officers, employees, partners, and agents from and against any and all losses, claims, demands, actions, damages (whether direct or consequential), penalties, liabilities, costs and expenses, including all attorney's fees and legal expenses, arising out of any violation or alleged violation of any of the laws or regulations referred to in this Article, or breach of any of the provisions of this Article. Tenant's obligations under this Article shall survive the expiration or earlier termination of the term of this Lease. ARTICLE 8. ALTERATIONS. 8.1 Consent. Tenant shall not make or permit to be made any alterations, additions or improvements to or of the Premises or any part thereof without the written consent of Landlord, which consent shall not be unreasonably withheld, and any alterations, additions or improvements to, or on the Premises, except movable furniture and trade fixtures, shall at once become a part of the realty and belong to Landlord. 8.2 Plans. Tenant shall submit working drawings for any such alterations, additions or improvements to Landlord for Landlord's prior written approval. 8.3 Performance. In the event Landlord consents to the making of any alterations, additions or improvements to the Premises by Tenant, the same shall be made by Tenant at Tenant's sole cost and expense and selection by Tenant of any contractor of person to construct or install the same shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld. Such work shall be performed in a good and workmanlike manner, and Tenant shall diligently prosecute such construction to completion. Tenant shall have the work performed in such a manner so as not to (a) obstruct the access of any other tenant in the Building, (b) interfere with the rights of quiet enjoyment of the premises of the other tenants in the Building, or (c) damage any portion of the Building or Common Areas. 8.4 Liens Not Permitted. Tenant shall keep the Premises and the Building free from any liens arising out of any work performed, materials furnished or obligations incurred by Tenant. In the event a mechanic's or other lien is filed against the Premises or the Building of which the Premises forms a part as a result of a claim arising through Tenant, Landlord may demand that Tenant furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to at least one hundred fifty percent (150%) of the amount of the contested lien, claim or demand, indemnifying Landlord against liability for the same and holding the Premises free from the effect of such lien notice from Landlord. In addition, Landlord may require Tenant to pay Landlord's attorney's fees and costs in participating in any action to foreclose such lien if Landlord shall decide it is to its best interest to do so. Landlord may pay the claim prior to the enforcement thereof, in which event Page -6- Tenant shall reimburse Landlord in full, including attorney's fees, for any such expense, as additional rent, with the next due rental. 8.5 Action Upon Expiration. Tenant shall return the Premises to Landlord at the expiration or earlier termination of this Lease in good and sanitary order, condition and repair, free of rubble and debris, broom clean, reasonable wear and tear excepted. However, Tenant shall ascertain from Landlord at least thirty (30) days prior to the termination of this Lease, whether Landlord desires the Premises, or any part thereof, restored to its condition prior to the making of permitted alterations, installations and improvements, and if Landlord shall so desire, then Tenant shall forthwith restore said Premises or the designated portions thereof as the case may be, to its original conditions, entirely at its own expense, excepting normal wear and tear. Upon, or within ten (10) days prior to termination of this Lease, Tenant will provide, at Tenant's sole cost and expense a certification of the HVAC system by a contractor acceptable to Landlord. In the event said certification indicates any deferred maintenance or other conditions other than normal wear and tear, Tenant shall promptly cause any such conditions to be remedied at Tenant's sole cost and expense, by a contractor acceptable to Landlord. All damage to the Premises caused by the removal of such trade fixtures and other personal property that Tenant is permitted to remove under the terms of this Lease and/or such restoration shall be repaired by Tenant at its sole cost and expense prior to termination. ARTICLE 9. MAINTENANCE AND REPAIRS. 9.1 Tenant's Obligations. (a) Tenant shall, at all times during the term hereof, and at Tenant's sole cost and expense, keep, maintain and repair the Premises in good and sanitary order and condition and repair, including, without limitation, interior surfaces of the ceilings, walls and floors located within the Premises, replacement of all broken or damaged glass, replacement of light globes or tubes, doors, window casements, heating, air conditioning and ventilating systems servicing the Premises exclusively, plumbing, pipes, electrical wiring conduit, interior partitions, fixtures, leasehold improvements and alterations. (c) Tenant agrees to repair any damage to the Premises or the Building caused by or in connection with (i) the use of the Premises or portions of the Building by Tenant or its employees, agents or invitees, (ii) the moving by Tenant or its employees or agents in to the Premises, or (iii) the removal of any articles of personal property, business or trade fixtures, machinery, equipment, cabinet work, furniture, movable partition or permanent improvements or additions, including without limitation thereto, repairing the floor and patching and painting the walls where required by Landlord to Landlord's reasonable satisfaction, all at the Tenant's sole cost and expense. (d) In the event Tenant fails to maintain the Premises in good order, condition and repair, or to repair damage as provided above, Landlord may (but shall not be obligated to) give Tenant notice to do such acts as are reasonably required to so maintain the Premises. In the event that after such notice Tenant shall fail to promptly commence such work and diligently prosecute it to completion, then Landlord shall have the right to do such acts and expend such funds at the expense of Tenant as are reasonably required to perform such work. Any amount so expended by Landlord shall be paid by Tenant promptly after demand with interest from the date of such work. Page -7- 9.2 Landlord's Obligations (a) Landlord shall, at its sole cost and expense, keep and maintain in good repair, the exterior walls and roof of the Building. By entering into the Premises, Tenant shall be deemed to have accepted the Premises in "as-is" condition and as being in good and sanitary order, condition and repair, and Tenant agrees that on the last day of said term or sooner termination of this Lease to surrender the Premises with appurtenance in the same condition as when received, reasonable use and wear thereof and damage by fire, act of God or by the elements is excepted. (b) Landlord shall pay for maintenance and repair as defined herein so long as the need for same does not result from any wrongful or negligent act or omission of Tenant or its employees, invitees or licensees. The cost of any such maintenance, repair, janitorial or other service which becomes necessary as a result of any such act or omission shall be borne by Tenant. Landlord shall not be required to make any repairs unless and until Tenant has notified Landlord in writing of the need for such repairs and Landlord shall have a reasonable period of time thereafter within which to commence and complete said repairs. Landlord shall act within seventy-two (72) hours after receipt of written notice and shall pursue to completion with due diligence; provided however, Landlord shall not be liable for any damages, direct, indirect or consequential, or for damages for personal discomfort, illness or inconvenience of Tenant by reason of failure of such equipment facilities or systems or reasonable delays in the performance of such repairs, replacements and maintenance, unless caused by the deliberate act or omission of Landlord, its servants, agents, or employees or anyone permitted by it to be in the Building, or through it in any way, the cost of the necessary repairs, replacements or alterations shall be borne by Tenant who shall pay the same to Landlord on demand. Tenant waives all rights it may have under law to make repairs at Landlord's expense. ARTICLE 10. RIGHTS RESERVED TO LANDLORD 10.1 Entry. Tenant shall permit Landlord and its agents to enter into and upon the Premises at all reasonable times to inspect the same or to perform any obligation of Tenant hereunder which Tenant has failed to perform satisfactorily, to exhibit the Premises to prospective purchasers or tenants, to place upon the property in which the Premises are located any usual or ordinary signs advertising the availability of the property for sale or lease prior to the expiration of this Lease, to post and maintain notices of non-responsibility, or any other notice, deemed necessary by Landlord for the protection of its interest, to maintain or repair the Premises or to alter, improve, maintain or repair any other portion of the Building, specifically including its mechanical, electrical and telephone systems, all without being deemed guilty of any eviction of Tenant and without abatement of Rent, and may, in order to carry out such purposes, erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed as well as keep and store upon the Premises all tools, materials and equipment necessary for such purposes, provided that the business of Tenant shall not be unreasonably interfered with or disrupted. For each of the aforesaid purposes, Landlord shall at all times have and retain a key with which to unlock all of the doors in, upon and about the Premises, excluding Tenant's vaults and safes, and Landlord shall have the right to use any and all means which Landlord may deem proper to open such doors in an emergency in order to obtain entry to the Premises. 10.2 Relocation. Landlord shall have the right, at any time during the term hereof, upon not less than ninety (90) days prior written notice to Tenant, to substitute for the Premises such other space in the Building as shall be substantially the same size as the Premises (the "Substituted Premises"), provided that Landlord shall pay all expenses of Tenant incidental to Tenant's relocation to the Substituted Premises and that Landlord shall improve the Substituted Premises for Tenant's use and occupancy at least to the same extent as the Premises occupied by Tenant prior to such relocation. 10.3 Transfer of Landlord's Interest. In the event Landlord transfers its interest in the Premises (other than a transfer for security purposes only), Landlord shall be relieved of all obligations accruing hereunder after the effective date of such transfer, including any obligations arising out of any act, occurrence or omission relating to the Premises or this Lease which occur after the consummation of such transfer. Page -8- 10.4 Right to Obtain Estoppel Certificate. Tenant agrees at any time and from time to time upon not less than ten (10) days prior request by Landlord, to (a) execute, acknowledge and deliver to Landlord a statement in writing certifying that (i) this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications), (ii) the dates to which the Rent and other charges have been paid in advance, if any, (it being intended that any such statement delivered pursuant to this subparagraph may be relied upon by a prospective purchaser, mortgagee or assignee of any mortgage of the Premises), and (iii) acknowledging that there are not any uncured defaults on the part of Landlord hereunder, or specifying such defaults if they are claimed, and/or (b) execute any document or provide any statement as required by Landlord's lender provided such document shall not affect the rental or term of this Lease. 10.5 Building Name Change. Landlord reserves to itself and shall at any and all times have the right to change the name or street address of the Premises or the Building. 10.6 Signs. Landlord reserves to itself and shall at any and all times have the right to install and maintain signs on the exterior and interior of the Building, except within the Premises. 10.7 Other Tenancies. Landlord reserves to itself and shall at any and all times have the right to effect such other tenancies in the Building as Landlord in the exercise of its sole business judgment shall determine to best promote the interest of the Building. Tenant does not rely on the fact nor does Landlord represent that any specific tenant or number of tenants shall during the term of this Lease occupy any space in the Building. 10.8 Work in or Near Building. Landlord reserves to itself and shall at any and all times have the right to do or permit to be done any work in or about the exterior of the Building. 10.9 Non-Recourse. The obligations of Landlord under this Lease do not constitute personal obligations of the individual entities which comprise Landlord nor their respective partners, members, directors, officers or shareholders, and Tenant shall look solely to the real estate that is the subject of this Lease and to no other assets of the entities comprising Landlord for satisfaction of any liability in respect of this Lease and will not seek recourse against the individual entities which comprise Landlord nor against their respective partners, members, directors, officers or shareholders nor against any of their personal assets for such satisfaction other than the Building or any interest they may have in or to the Building or any portion thereof. ARTICLE 11. ABANDONMENT. Tenant shall not vacate or abandon the Premises at any time prior to the expiration or earlier termination of the term hereof nor permit the Premises to remain unoccupied for a period longer than ten (10) consecutive days. In the event Tenant shall abandon, vacate or surrender the Premises or be dispossessed by process of law or otherwise, any personal property belonging to tenant and left on the Premises shall be deemed to have been abandoned. ARTICLE 12. LIENS. Should any mechanic's or other liens be filed against the Premises by reason of Tenant's acts or omissions or because of a claim against Tenant or against Tenant's agents or contractors, Tenant shall cause the same to be canceled and discharged of record and shall indemnify, defend and hold Landlord harmless from any such lien and shall deal with any such lien in accordance with the terms of Article 8 above. ARTICLE 13. ASSIGNMENT AND SUBLETTING. 13.1 Landlord's Consent Required. Tenant acknowledges and agrees that it has entered into this Lease in order to acquire the Premises for its own personal use and not for the purpose of obtaining the right to convey the leasehold to others. Tenant shall not assign, license, transfer, mortgage, hypothecate, or otherwise encumber all or any part of this Lease or any interest therein, or sublet the Premises or any part thereof to occupy or use the Premises or any portion thereof without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Landlord's consent shall not be deemed unreasonably withheld if the proposed new tenant is anyone with whom Landlord has negotiated for a direct lease within the preceding twelve (12) months, anyone with whom Landlord is negotiating a direct lease at the time of such proposed Page -9- assignment of sublease, anyone on Landlord's list of prospective new tenants, or any current or prior occupant or tenant of the Building; or if in Landlord's opinion the business operation conducted on the Premises is or may in any way adversely affect the Building or other tenants during the term of the Lease by such proposed assignment, license, transfer, mortgage, encumbrance or subletting; or the financial worth of a proposed new tenant is less than that of Tenant or the financial worth or the guarantor of a proposed new tenant is less than that of Tenant or the financial worth or the guarantor of a proposed new tenant is less than that of the guarantor of Tenant. Acceptance of rent by Landlord of Tenant or Assignee shall not be deemed approval or acceptance of assignment or subletting. Tenant shall remain liable for all terms and conditions of this Lease Agreement at all times even upon Lease assignment or subletting. Any assignment or subletting by Tenant without Landlord's consent shall be a default by Tenant hereunder. 13.2 Tenant's Application. In the event that Tenant desires at any time to assign this Lease or to sublet the Premises or any portion thereof, Tenant shall submit to Landlord at least 60 days prior to the proposed effective date of the assignment of sublease ("Proposed Effective Date"), in writing: (a) a request for permission to assign or sublease, setting forth the Proposed Effective Date, which shall be no less than 60 nor more than 120 days after the sending of such notice; (b) the name of the proposed subtenant or assignee; (c) the nature of the proposed subTenant's or assignee's business to be carried on in the Premises; (d) the name of the guarantor, if any, of the proposed subtenant or assignee; (e) the terms and provisions of the proposed sublease or assignment; (f) current audited financial statements of the proposed subtenant or assignee and the guarantor, if any, and (g) the fee for review pursuant to Section 13.4 below. 13.3 Recapture. If Tenant proposes to assign this Lease, Landlord may, at its option, exercisable upon written notice to Tenant within 30 days after Landlord's receipt of the notice from Tenant, elect to recapture the Premises and terminate this Lease. If Tenant proposes to sublease all or part of the Premises, Landlord may, at its option, exercisable upon written notice to Tenant within 30 days after Landlord's receipt of the notice from Tenant, elect to recapture such portion of the Premises as Tenant proposes to sublease and, upon such election by Landlord, this Lease shall terminate as to the portion of the Premises recaptured. 13.4 Fee for Review. In the event Tenant shall request to assign, transfer, mortgage, pledge, hypothecate or encumber this Lease or any interest therein, or sublet the Premises or any part thereof, Tenant shall pay to Landlord a non-refundable fee of $500.00 for Landlord's time and processing efforts and for expenses incurred by Landlord in reviewing such transaction. In addition to such fee, Tenant shall pay to Landlord in the event Landlord retains the services of an attorney to review the transaction, all reasonable attorneys= fees incurred by the Landlord in connection therewith, Tenant shall pay such attorneys= fees to Landlord within five days after written request therefor and such payment shall be a condition to any approval by Landlord. 13.5 Implied Assignment. If Tenant hereunder is a corporation, an unincorporated association, a limited liability company or a partnership, the transfer, merger, assignment or hypothecation or any stock or interest in such entity in the aggregate in excess of 25% shall be deemed an assignment within the meaning and provisions of this Article; provided however, that a transfer or assignment of any such stock or interest by a shareholder, partner or member to his or her spouse, children or grandchildren is excepted from the foregoing provision. ARTICLE 14. PARKING AND COMMON AREAS. 14.1 Parking. Tenant shall have the non-exclusive right to use parking spaces in the parking area provided by Landlord adjacent to or near the Premises, subject to such reasonable rules and regulations as Landlord may impose from time to time. Nothing contained herein shall be deemed to create any liability or responsibility upon Landlord for any damage to motor vehicles or Tenant, its customers, invitees and employees or for loss of property from within such motor vehicles, unless caused by the gross negligence of Landlord, its agents or employees. 14.2 Rules and Regulations. Landlord shall have the right, through reasonable rules, regulations and/or restrictive covenants promulgated or modified by it from time to time, to control use and operation of the parking and the Common Areas in order that the same may occur in proper and orderly fashion; provided, however, that any such promulgated or modified rules, regulations and/or restrictive covenants shall not discriminate against Tenant in favor of other tenants or portions of the Building. Page -10- 14.3 Changes. Landlord reserves the right to change from time to time the dimensions and location of the Common Areas as shown on Exhibit "A" as well as the dimensions identity and type of the Building (except the Premises of Tenant) shown on Exhibit "A" and to construct additional buildings, modify existing buildings or make other improvements. ARTICLE 15. INDEMNITY AND WAIVER 15.1 Assignment of Risk. This Article 15 is written and agreed to in respect of the intent of the parties to assign the risk of loss whether resulting from negligence of the parties or otherwise, to the party who is obligated hereunder to cover the risk of such loss with insurance. Thus, the indemnity and waiver of claims provisions of this Lease have as their object, so long as such object is not in violation of public policy, the assignment of risk for a particular casualty to the party carrying the insurance for such risk, without respect to the causation thereof. 15.2 Release. Landlord and Tenant release each other, and their respective authorized representatives, from any claims for damage to any person or to the Premises and the Building and other improvements in which the Premises are located, and to the fixtures, personal property, Tenant's improvements and alterations of either Landlord or Tenant, in or on the Premises and the Building and other improvements in which the Premises are located, including loss of income, that are caused by or result from risks insured or required under the terms of this Lease to be insured against under any property insurance policies carried or to be carried by either of the parties. 15.3 Waiver of Subrogation. Each party shall cause each such insurance policy obtained by it to provide that the insurance company waives all rights of recovery by way of subrogation against either party in connection with any damage covered by such policy. Neither party shall be liable to the other for any damage caused by fire or any other risks insured against under any property insurance policy carried under the terms of this Lease. If any such insurance policy cannot be obtained with a waiver of subrogation without payment of an additional premium charge above that charged by the insurance companies issuing such policies without waiver of subrogation, the party receiving the benefit shall elect to either forfeit the benefit or shall pay such additional premium to the insurance carrier requiring such additional premium. It is understood that subrogation waivers may be operative only as long as such waivers are available in the State of Utah. In the event subrogation waivers are allegedly not operative in such State, notice of such fact shall be promptly given by party obtaining the insurance in question to the other party. 15.4 Indemnification. Tenant, as a material part of the consideration to be rendered to Landlord, shall indemnify, defend, protect and hold harmless Landlord against all actions, claims, demands, damages, liabilities, losses, penalties, or expenses of any kind which may be brought or imposed upon Landlord or which Landlord may pay or incur by reason of injury to person or property, from whatever cause, all or in any way connected with the condition or use of the Premises, on the improvements or personal property therein or thereon, including without limitation any liability or injury to the person or property of Tenant, its agents, officers, employees or invitees. Tenant agrees to indemnify, defend and protect Landlord and hold it harmless from any and all liability, loss, cost of obligation on account of, or arising out of, any such injury or loss however occurring, including beach of the provisions of this Lease and the negligence for the parties hereto. Nothing contained herein shall obligate Tenant to indemnify Landlord against its own sole or gross negligence or willful acts, for which Landlord shall indemnify Tenant. In the event any action, suit or proceeding is brought against Landlord by reason of such occurrence, Tenant, upon Landlord's request will at Tenant's expense resist and defend such action, suit or proceeding, or cause the same to be resisted and defended by counsel designated either by Tenant or by the insurer whose policy covers the occurrence and in either case approved by Landlord. The obligations of Tenant under this Article arising by reason of any occurrence taking place during the Lease term shall survive any termination of this Lease. 15.5 Waiver. Tenant, as a material part of the consideration to be rendered to Landlord, hereby waives all claims against Landlord for damages to goods, wares, merchandise and loss of business in, upon or about the Premises and for injury to Tenant, its agents, employees, invitees or third persons in or about the Premises from any cause arising at any time, including breach of the provisions of this Lease and the negligence of the parties hereto. Page - 11 - 15.6 Construction. Wherever in this Article the term Landlord or Tenant is used and such party is to receive the benefit of a provision contained in this Article, such term shall refer not only to that party but also to its officers, directors, employees, partners and agents. ARTICLE 16. INSURANCE 16.1 Tenant's Insurance (a) Tenant agrees to secure and keep in force from and after the date Landlord shall deliver possession of the Premises to Tenant and throughout the term of this Lease, at Tenant's sole cost and expense comprehensive general liability insurance on the Premises under Tenant's care, custody and control, and all areas appurtenant thereto, on an occurrence basis with a minimum limit of liability in an amount of One Million Dollars ($1,000,000.00) per occurrence, Two Million Dollars ($2,000,000.00) aggregate. Evidence of said insurance shall be provided to Landlord within thirty (30) days of occupancy and shall name Landlord as an additional insured. The policy shall contain cross liability endorsements and shall insure performance by Tenant of the indemnity provisions of this Lease; shall cover contractual liability, and products liability; shall be primary, not contributing with, and not in excess of coverage which Landlord may carry; shall state that Landlord is entitled to recovery for the negligence of Tenant even though Landlord and Landlord's lender are named as an additional insured, shall provide for severability of interest; shall provide that an act or omission of one of the insured or additional insured which would void or otherwise reduce coverage shall not void or reduce coverage as to the other insured or additional insured; and shall afford coverage after the term of this Lease (by separate policy or extension if necessary) for all claims based on acts, omissions injury or damage which occurred or arose (or the onset of which occurred or arose) in whole or in part during the term of this Lease. The limits of said insurance shall not limit any liability of Tenant hereunder. Not more frequently than every three (3) years, if, in the reasonable opinion of Landlord, the amount of liability insurance required hereunder is not adequate, Tenant shall promptly increase said insurance coverage as required by Landlord. (b) At all times during the term hereof, Tenant shall keep in force at its sole cost and expense, fire and extended coverage insurance, and against sprinkler leakage or malfunction and water damage and against vandalism and malicious mischief, Tenant's leasehold improvements, trade fixtures, furnishings, equipment and contents upon the Premises in full replacement value thereof. Tenant shall also obtain broad form boiler and machinery insurance on all air-conditioning equipment, boilers and other pressure vessels or systems, whether fired or unfired, which are installed by Tenant or which exclusively serve the Premises. Such boiler and machinery insurance shall cover the replacement value of such items. Tenant shall also obtain plate glass insurance for all plate glass upon the Premises. During the Lease term, the proceeds from any such policy or policies of insurance shall be used for the repair or replacement of the property so insured. Landlord shall have no interest in the insurance upon Tenant's equipment and fixtures. (c) Tenant shall procure pollution liability insurance covering Landlord against any diminution in value of the Premises or Building as a result of Tenant's handling of any Hazardous Material (as defined herein) the cost of any on or off site clean up of any such hazardous material, any toxic waste liability including a complete indemnification of Landlord against any and all claims whatsoever made in any connection whatsoever with Tenant's bringing any Hazardous Material onto the Premises or the Building. 16.2 Landlord's Insurance. Landlord shall procure insurance coverage insuring Landlord against loss of, or damage to, the Building by reason of fire and certain other casualties. Such insurance shall be underwritten by a responsible insurance company qualified to do business in the State where The Building is located and shall be in the face amount equal to the full replacement cost of The Building. Such insurance shall cover loss or damage by fire, and loss or damage arising out of the normal extended coverage perils which are windstorm, hail, acts of god, explosion, riot, attending a strike, civil commotion, aircraft, vehicles, and smoke. 16.3 Violations. No use shall be made or permitted to be made on the Premises, nor acts done, which will increase the existing rate of insurance upon the Building, or cause the cancellation of any insurance policy are located, or cause the cancellation of any insurance policy covering the Building, or any part thereof, nor shall Tenant sell, or permit to be kept, used or sold, in or about the Page -12- Premises, any article which may be prohibited by the standard form of fire insurance policies. Tenant shall at its sole cost and expense, comply with any and all requirements pertaining to the Premises, of any insurance organization or company, necessary for the maintenance of reasonable property damage and public liability insurance, covering the Premises or the Building. Tenant agrees to pay to Landlord, as additional rent, any increase resulting from Landlord's use in premium on policies which may be carried by Landlord on the Premises or the Building, or any blanket policies which include the Building, covering damage thereto and loss of rent caused by fire and other perils above the rates for the least hazardous type of occupancy of office use. Tenant further agrees to pay Landlord, as additional rent, any increases in such premiums resulting from the nature of Tenant's occupancy or any act or omission of Tenant. ARTICLE 17. UTILITIES; JANITORIAL SERVICE. 17.1 Utilities. (a) Tenant shall be solely responsible for, and shall promptly pay before delinquency, all charges for use or consumption of heat, sewer, water, gas, electricity, telephone or any other utility services supplied to Tenant or to the Premises during the term hereof. Should Landlord elect to supply any utility service, Tenant agrees to purchase and pay for the same at the applicable rates then prevailing in the community. Should any utility service be provided on a joint meter to the Premises and to other spaces within the Building, Tenant shall reimburse Landlord for its pro rata share (based upon floor area square footage) of such jointly supplied utility service. Such reimbursement shall be made within ten (10) days following the receipt of Landlord's statement indicating the share owed by Tenant and such shall be considered additional rent hereunder. (b) Landlord shall not be liable in the event of any interruption in the supply of any utility service to the Premises or to the Building. Tenant agrees that it will not install any equipment which will exceed or overload the capacity of any utility facilities and that if any equipment installed by Tenant shall require additional utility facilities, the same shall be installed at Tenant's expense in accordance with plans and specifications first approved in writing by Landlord. (c) In the event any governmental authority promulgates or revises any statute, ordinance or building, fire or other code, or imposes mandatory or voluntary controls or guidelines on Landlord or the Building or any part thereof, relating to the use or conservation of energy, water, gas, light or electricity or the provision of any other utility or service provided with respect to this Lease. Landlord may, in its sole and absolute discretion, take any action necessary to comply with such mandatory or voluntary controls or guidelines, including making alterations to the Building. Such compliance and the making of such alterations shall in no event entitle Tenant to any damages, relieve Tenant of the obligation to pay the full Rent or to perform each of its other covenants hereunder or constitute or be construed as a constructive or other eviction of Tenant. 17.2 Janitorial. Tenant shall provide, at its sole expense, regular janitorial service for the Premises which shall include at least ordinary dusting and cleaning, emptying of waste baskets and vacuuming. In addition, Tenant shall provide an adequate sized dumpster for the storage of refuse in the location acceptable to Landlord. Tenant shall arrange for the removal of such refuse and periodic cleaning of such dumpster and the areas immediately adjacent thereto. ARTICLE 18. PERSONAL PROPERTY TAXES. During the term hereof Tenant shall pay prior to delinquency all taxes assessed against and levied upon fixtures, furnishings, equipment and all other personal property of Tenant as well as any alterations or leasehold improvements contained in the Premises and when possible Tenant shall cause said fixtures, furnishings and equipment to be assessed and billed separately from the real property of Landlord. ARTICLE 19. DEFAULT. 19.1 Action Upon Default. In the event of any failure of Tenant to pay any Rent due hereunder within five (5) days after the same shall be due or any failure to perform any other of the terms, conditions or covenants of this Lease to be observed or performed by Tenant for more than ten (10) days after written notice of such default shall have been given to Tenant or if Tenant or any guarantor of the Lease shall become bankrupt or insolvent or file any debtor proceedings or take or Page -13- have taken against Tenant or any guarantor of this Lease in any court pursuant to any statute either of the United States or any state a petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee of all or a portion of Tenant's or any such guarantor's property or if Tenant or any such guarantor makes an assignment for the benefit of creditors or petitions for or enters into an arrangement or if Tenant shall abandon said Premises or suffer this Lease to be taken under any writ of execution, Landlord, besides other rights or remedies it may have, shall have the immediate right of re-entry and may remove all persons and property from the Premises and such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby. Any two (2) failures by Tenant to observe and perform any provisions of this Lease during any twelve (12) month period of the term, as such may be extended, shall constitute, at the option of Landlord, a separate and non-curable default. 19.2 Landlord Options; Reletting. Should Landlord elect to re-enter, as herein provided, or should it take possession pursuant to legal proceedings or pursuant to any notice provided for by law, it may either terminate this Lease or it may from time to time without terminating this Lease, make such alterations and repairs as may be necessary in order to relet the Premises and relet said Premises or any part thereof for such term or terms (which may be for a term extending beyond the term of this Lease) and at such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion may deem advisable, upon such reletting, all rentals received by Landlord from such reletting shall be applied, first, to the payment of any indebtedness other than rent due hereunder from Tenant to Landlord, second, to the payment of any costs and expenses of such alterations and repairs, third, to the payment of rent due and unpaid hereunder, and the residue, if any, shall be held by Landlord and applied toward payment of future rent as the same may become due and payable hereunder. If such rentals received from such reletting during any month be less than that to be paid during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. No such re-entry or taking possession of said Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. Notwithstanding any such reletting without termination, in addition to any other remedies it may have, it may recover from Tenant all damages it may incur by reason of such breach, including the worth at the time of such termination of the excess, if any, of the amount of rent and charges equivalent to rent reserved in this Lease for the remainder of the stated term over the then reasonable rental value of the Premises for the remainder of the stated term, all of which amounts shall be immediately due and payable from Tenant to Landlord. 19.3 Use of Property. In the event of default, all Tenant's fixtures, furniture, equipment, improvements, additions, alterations and other personal property shall remain on the subject Premises and in that event and continuing during the length of said default, Landlord shall have the right to take the exclusive possession of the same and to use the same, rent or charge free, until all defaults are cured, or, at its option, at an time during the term of this Lease, to require Tenant to forthwith remove the same, and Tenant hereby waives all rights to notice and all common law and statutory claims and causes of actions which it may have against Landlord subsequent to such date as regards to storage, distribution, damage, loss of use and ownership of the personal property affected by the terms of this Article. Tenant acknowledges Landlord's need to relet the Premises upon termination of this Lease for repossession of the Premises and understands that the forfeitures and waivers provided herein are necessary to said reletting and to prevent Landlord incurring a loss for inability to deliver the Premises to a prospective Tenant. 19.4 Landlord's Lien. It is agreed that Landlord shall have a first lien on all of the equipment, fixtures, furnishings and other personal property brought upon the Premises by Tenant for use thereon. In the event of a default in the payment of any sum required to be paid under this Lease by Tenant, Landlord shall have the right, at its option, without service of notice or resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby, to take possession of such personal property and sell the same at a private or public sale and apply the proceeds thereof upon the sums owing to Landlord hereunder. Tenant agrees to execute and deliver to Landlord during the duration of this Lease such further instruments as Landlord may reasonably deem necessary or desirable to accomplish or facilitate the Page -14- arrangement contemplated herein or to perfect or continue the perfection of the interests of Landlord hereunder, including UCC Financing Statements and Continuation Statements. Tenant agrees that for purposes of the Utah Uniform Commercial Code, this Lease shall also constitute a Security Agreement. Tenant hereby designates Landlord as Tenant's attorney-in-fact for purposes of executing such documents as may be necessary to perfect the lien and security interest granted hereunder. 19.5 Remedies Cumulative. The remedies given to Landlord in this section shall be in addition and supplemental to all other rights or remedies which Landlord may have under laws then in force. ARTICLE 20. DESTRUCTION. 20.1 Damage/Restoration. If the Building shall be partially damaged by fire or other casualty insured against under Landlord's property damage insurance policies, Landlord shall, upon receipt of the insurance proceeds, repair the Building to a condition which is substantially similar to the condition in existence prior to such casualty. 20.2 Exceptions to Obligation to Rebuild. Notwithstanding the foregoing, however, if the Building is damaged as a result of flood, earthquake, nuclear radiation or contamination, act of war or other risk which is not covered by Landlord's insurance, or if the Premises or the Building are damaged to the extent of thirty-three and one third percent (33-1/3%) or more of their then replacement value, or if the repair of the Premises, or the Building, would require more than one hundred twenty (120) days, Landlord shall either terminate this Lease upon written notice given to Tenant within forty-five (45) days following such casualty or commence as soon as is reasonably possible the restoration of the Building. 20.3 Extent of Landlord's Obligations to Rebuild. Landlord's obligations to restore shall in no way include any construction originally performed by Tenant or subsequently undertaken by Tenant, but shall include solely that property constructed by Landlord prior to commencement of the term hereof. The cost of any repairs made by Landlord, pursuant to this Article 20 of this Lease, shall be paid by Landlord utilizing available insurance proceeds. Tenant shall reimburse Landlord upon completion of the repairs for any deductible for which no insurance proceeds will be obtained under Landlord's insurance policy, or if other premises are also repaired, a pro rata share based on total costs of the repair equitability apportioned to the Premises. Tenant shall, however, not be responsible to pay any deductible for which no insurance proceeds will be obtained under Landlord's insurance policy, or if other premises are also repaired, a pro rata share based on total costs of the repair equitability apportioned to the Premises. Tenant shall, however, not be responsible to pay any deductible or its share of any deductibles to the extent that Tenant's payment would be in excess of $10,000.00 if Tenant's consent has not been received by Landlord, unless such denial of consent by Tenant is unreasonable. 20.4 Tenant's Obligations. Unless this Lease is terminated, Tenant shall, at its expense, repair the fixtures and improvements installed by it within the Premises and repair or replace any of Tenant's furniture, equipment or other personal property damaged by such casualty. 20.5 Abatement of Rent. In the event this Lease is not terminated and Landlord undertakes to repair any portion of the Premises, until such repair is complete, Basic Rent shall abate proportionately as to the portion of the Premises rendered untenable unless (i) Landlord shall make available to Tenant, during the period of such repair, other space in the Building which is reasonably suitable for the temporary conduct of Tenant's business, or (ii) the damage being repaired was caused by the fault or negligence of Tenant or its employees, agents, licensees or concessionaries. 20.6 Last Year of Term. Notwithstanding anything to the contrary contained in this Article, Landlord shall not have any obligation whatsoever to repair, reconstruct or restore the Building or the Premises when damage resulting from any casualty covered under this Article occurs during the last 18 months of the term of this Lease or any extension hereof. ARTICLE 21. EMINENT DOMAIN. If all or more than 33-1/3% of the Premises or all or a material portion of the Common Areas shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain, or transfer in lieu thereof, either party hereto shall have the right, at its option, to terminate this Lease as of the date title vests in the condemning entity. Landlord shall be entitled to any award, or other payment made in connection with such Page -15- condemnation. Tenant, however, shall have the right to pursue a claim in any condemnation proceeding against the condemning authority (but not against Landlord) for compensation for any resulting damages to Tenant's business, trade fixtures and personal property (but not for any diminution or loss of Tenant's leasehold estate). If a part of the Premises shall be so taken or appropriated and this Lease is not thereafter terminated, the rental thereafter to be paid shall be reduced in the proportion that the area of the Premises so taken bears to the entire Premises. Notwithstanding the foregoing, however, before Tenant may terminate this Lease by reason of a taking or appropriation as described above, such taking or appropriation shall be of such an extent and nature as to substantially handicap, impede or impair Tenant's use of the Premises for a period in excess of ninety (90) days (assuming Landlord shall promptly commence any repairs necessary to restore the remaining Premises to a complete architectural unit). If any material part of the Building other than the Premises shall be so taken or appropriated, Landlord shall have the right, at its option, to terminate this Lease. Landlord shall be entitled to the entire condemnation award or payment attributable to any such taking of the Building or to any taking of any portion of the Common Areas. ARTICLE 22. MORTGAGE REQUIREMENTS. 22.1 Tenant's Right Subordinate. This Lease and all rights of Tenant under this Lease are hereby subordinate hereunder to any lien of any mortgage or mortgages or lien or other security interest resulting from any other method of financing or refinancing, now or hereafter in force against the land and/or buildings hereafter placed upon the land of which the Premises are a part and to all advances made or thereafter to be made upon the security thereof. The provisions of this Article notwithstanding, so long as Tenant is not in default hereunder, this Lease shall remain in full force and effect for the full term hereof and shall not be terminated as a result of any foreclosure or sale or transfer in lieu of such proceedings pursuant to a mortgage or other instrument to which Tenant has subordinated its rights pursuant hereto. 22.2 Attornment. In the event of the sale or assignment of Landlord's interest in the buildings of which the Premises are a part, or in the event of any proceeding, brought for the foreclosure of, or in the event of exercise of the power of sale under any mortgage or other security instrument made by Landlord covering the Premises, Tenant shall attorn to the assignee or purchaser and recognize such purchaser as Landlord under this Lease. 22.3 Notice and Cure. Tenant agrees to give any mortgagees (as defined below), by registered mail, a copy of any notice of default served by Tenant upon Landlord, provided that prior to such notice, Tenant has been notified, in writing (by way of a Notice of Assignment of Rents and Leases or otherwise) of the addresses of any such mortgagees. Tenant further agrees that if Landlord shall have failed to cure such default within the time set forth in this Lease, then any such mortgagees shall have an additional thirty (30) days within which to cure such default or if such default cannot be cured within that time, then such additional time as may be necessary, if within such thirty (30) days, any such mortgagee has commenced and is diligently pursuing the remedies necessary, to cure such default (including but not limited to commencement of foreclosure proceedings, if necessary to effect such cure), in which event this Lease shall not be terminated while such "mortgagee" shall mean the holder of any mortgage, the beneficiary under any deed of trust or the holder of any other security interest which encumbers the Building. ARTICLE 23. RULES, REGULATIONS AND RESTRICTIVE COVENANTS. Tenant shall faithfully observe and comply with the Rules, Regulations and Restrictive Covenants attached hereto as Exhibit "C" and all reasonable modifications of and additions thereto from time to time put into effect by Landlord, provided however, that any such promulgated or modified Rules, Regulations and/or Restrictive Covenants shall not discriminate against Tenant in favor of other lessees of portions of the Building. Landlord shall not be responsible to Tenant for the nonperformance by any other lessee or occupant of the Building of any such Rules, Regulations and Restrictive Covenants, but shall take reasonable steps to secure such other Tenant's compliance. ARTICLE 24. HOLDING OVER. If Tenant holds possession of the Premises after the term of this Lease with Landlord's consent, and Landlord accepts Rent in the amounts hereinafter provided, Tenant shall become a lessee from month-to-month upon terms equal to the then existing terms hereunder, except that the Basic Rent shall be the then existing Basic Rent then payable Page -16- hereunder at the end of the term (on a monthly basis) multiplied by one hundred twenty-five percent (125%). Rent shall be paid in advance on or before the first day of each month and Tenant shall continue in possession until such tenancy shall be terminated by Landlord or until Tenant shall have given to Landlord a written notice at least thirty (30) days prior to the date of termination of such tenancy of its intention to terminate such tenancy. ARTICLE 25. NOTICES. All notices and demands which may or are required to be given by either party to the other hereunder shall be sent by overnight courier or United States certified or registered mail, postage prepaid, addressed to the parties at the addresses set forth in the Fundamental Lease Provisions, or at such other address as may have been specified by a party giving prior written notice to the other party. ARTICLE 26. LANDLORD'S RIGHT TO CURE DEFAULTS. All covenants and agreements to be performed by Tenant under any of the terms of this Lease shall be at its sole cost and expense and, except as otherwise specifically provided herein, without any abatement of Rent. If Tenant shall fail to pay any sum of money, other than Rent, required to be paid by it hereunder or shall fail to perform any other act on its part to be performed hereunder, and such failure shall continue for five (5) days after Tenant has received notice thereof by Landlord, Landlord may, but shall not be obligated to do so, and without waiving any rights of Landlord or releasing Tenant from any obligations of Tenant hereunder, make such payment or perform such other act. All sums to be paid by Landlord and all necessary incidental costs together with interest thereon at the rate of one and one-half percent (1-1/2%) per month from the date of such payment by Landlord in connection with the performance of any such act by Landlord shall be considered additional rent hereunder and, except as otherwise in this Lease expressly provided, shall be payable to Landlord on demand or, at the option of Landlord, in such installments as Landlord may elect and may be added to any rent then due or thereafter becoming due under this Lease. ARTICLE 27. FORCE MAJEURE. Landlord shall not be responsible or liable for any delay in the observance or performance of any term or condition of this Lease to be observed or performed by Landlord to the extent such delay results from action of governmental authorities, civil commotions, strikes, fires, acts of God, whether or not similar or the matters herein specifically enumerated and any such delay shall extend by like time any period of performance by Landlord and shall not be deemed a breach of or failure to perform this Lease or any provision hereof. ARTICLE 28. SECURITY DEPOSIT. Tenant will deposit with Landlord or its agent the sum of $2,998.00, as security (and not as rent) for the full and faithful performance by Tenant of all of Tenant's obligations hereunder. In the event Tenant defaults in the performance of any of the terms hereof or abandons the Premises, Landlord may use, apply or retain the whole or any part of such security for the payment of any Rent or any other payment to be made by Tenant hereunder which is in default or of any other cost, expense or liability which Landlord may incur by reason of Tenant's default. If all or any portion of the security deposit is so used or applied, Tenant shall, no later than five (5) days after written demand is made therefor, deposit cash with the Landlord in an amount sufficient to restore the security deposit to its original amount. In the event of bankruptcy or other debtor-creditor proceedings, either voluntarily or involuntarily instituted by or against Tenant, the security deposit shall be deemed to be applied in the following order: to actual damages, obligations and other charges, including any damages sustained by Landlord, other than unpaid Rent, due to Landlord for all periods prior to the filing of such proceedings; to accrued and unpaid Rent prior to the filing of such proceeding; and thereafter to actual damages, obligations, other charges and damages sustained by Landlord and Rent due the Landlord for all periods subsequent to such filing. If Tenant shall, at the end of the term hereof, including extensions and holdover periods, have fully and faithfully complied with all of the terms and provisions of this Lease (but not otherwise) the security deposit, or any balance thereof shall then be returned to Tenant. Tenant shall not be entitled to interest on any such security deposit, and Landlord shall not be required to maintain the deposit in a segregated account, unless required by applicable law. Tenant shall not assign or encumber the funds deposited by it as security hereunder and neither Landlord nor its successors or assigns shall be bound by any such assignment or encumbrance. In the event of a sale of the Premises or all or a portion of the Building, Landlord shall have the right to transfer the security deposit to the buyer, and Landlord shall thereupon be relieved of all obligations to return the security deposit to Tenant, and tenant agrees to look solely to the buyer for the return of the security deposit. Page -17- ARTICLE 29. QUIET ENJOYMENT. Landlord covenants that so long as Tenant performs all of its obligations hereunder it shall peacefully and quietly have, hold and enjoy the Premises for the term hereof. ARTICLE 30. SIGNS. Tenant shall not place on the Premises or in the Building, any exterior signs or advertisements, nor any interior signs or advertisements that are visible from the exterior of the premises, without Landlord's prior written consent, which Landlord reserves the right to withhold for any aesthetic reason in its sole judgment. All signing by Tenant shall be in accordance with the sign criteria set forth in Exhibit _______ attached hereto. The cost of installation and regular maintenance of any such signs approved by Landlord shall be at the sole expense of Tenant. At the termination of this Lease, or any extensions thereof, Tenant shall remove all its signs, and all damage caused by such removal shall be repaired at Tenant's expense. ARTICLE 31. SURRENDER OF LEASE. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work as a merger, and shall, at the option of Landlord, terminate all or any existing subleases or subtenancies, or may, at the option of Landlord, operate as an assignment to it of any or all such subleases or subtenancies. ARTICLE 32. ESTOPPEL CERTIFICATES AND FINANCING. Within ten (10) days of request therefor by Landlord, Tenant shall execute a written statement acknowledging the commencement and termination dates of this Lease, that it is in full force and effect, has not been modified (or if is has stating such modifications), and providing any other pertinent information as Landlord or its agent might reasonably request. Failure to comply with this Article shall be a material breach of this Lease by Tenant giving Landlord all rights and remedies under Article 19 hereof, as well as a right to damages caused by the loss of a loan or sale which may result from such failure by Tenant. ARTICLE 33. MISCELLANEOUS 33.1 Successors and Assigns. The covenants and conditions herein contained shall, subject to the provisions as to assignment, apply to and bind the heirs successors, executors, administrators and assigns of all of the parties hereto; and all of the parties hereto shall be jointly and severally liable hereunder. 33.2 Arbitration. The parties agree that in the event a dispute arises with respect to this Lease, and the parties, after good faith efforts, have failed to resolve the dispute among themselves, that such dispute will be submitted to arbitration pursuant to the rules then in force of the American Arbitration Association, or a mutually acceptable alternative organization. If reasonably necessary, judgment upon an arbitration award may be entered in any court having jurisdiction. 33.3 Attorneys' Fees. In the event that at any time during the term of this Lease either Landlord or Tenant institutes any action or proceeding against the other relating to the provisions of this Lease or any default hereunder, then the unsuccessful party in such action or proceeding agrees to reimburse the prevailing party therein for the reasonable expense of attorneys' fees and disbursements incurred therein by the prevailing party. In the event that at any time during the term of this Lease, Landlord consults with an attorney with respect to a delinquency or nonperformance of Tenant or serves Tenant with a notice to pay (or perform) or quit and Tenant subsequently cures, or is permitted by Landlord to cure, such delinquency or nonperformance, Tenant shall pay to Landlord all of Landlord's reasonable service of process fees, filing fees and attorneys' fees. 33.4 Time. Time is of the essence of this Lease with respect to each and every Article, Section and Subsection hereof. 33.5 Waiver. The waiver by Landlord of any term, covenant or condition herein contained shall not be deemed to be a waiver of the same or any other term, covenant or condition or any subsequent breach of the same of any other term, covenant or condition herein contained. The subsequent acceptance of rent hereunder by Landlord shall not constitute a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rent. Page -18- 33.6 Applicable Law. This Lease shall be governed by and construed in accordance with Nevada law. 33.7 Separability. The invalidity or enforceability of any provision hereof shall not affect or impair any other provision hereof. 33.8 Entire Agreement. This Lease and the Exhibits, Riders and Addenda, if any attached hereto and the rules and regulations adopted pursuant to Article 23 above constitute the entire agreement between the parties. All Exhibits, Riders or Addenda mentioned in this Lease are incorporated herein by reference. No subsequent amendment to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed. Submission of this Lease for examination does not constitute an option for the Premises and becomes effective as a Lease only upon execution and delivery thereof by Landlord to Tenant. If any provision contained in a River or Addendum is inconsistent with a provision in the body of this Lease, the provision contained in said Rider or Addendum shall control. It is hereby agreed that this Lease contains no restrictive covenants binding on other lessees or exclusive use provisions in favor of Tenant. There are no representations or promises by either party to the other except as are specifically set forth herein. This Lease supersedes and revokes all previous conversations, negotiations, arrangements, letters of intent, writings, brochures, understandings, and information conveyed, whether oral or in writing, between the parties hereto or their respective representatives or any agents of them. The captions and section numbers appearing herein are inserted only as a matter of convenience and are not intended to define, limit, construe or describe the scope or intent of any Section or Article. 33.9 Terminology. The term "Landlord" as used herein shall include the agent or agents of Landlord. The term "Tenant" as used herein shall include the plural as well as the singular and shall include the masculine, feminine and neuter. If there is more than one Tenant, the obligations of Tenant hereunder shall be joint and several. 33.10 No Recording by Tenant. Tenant shall not record this Lease or a Memorandum thereof without the written consent of Landlord. Landlord may file this Lease for record with the Recorder of the County in which the Building is located. 33.11 Authority of Signatories. Each person executing this Lease individually and personally represents and warrants that he is duly authorized to execute and deliver the same on behalf of the entity for which he is signing (whether it be a corporation, general or limited partnership or otherwise) and that this Lease is binding upon said entity in accordance with its terms. 33.12 Accord and Satisfaction. No payment by Tenant or receipt by Landlord of an amount less than is due hereunder shall be deemed to be other than payment towards or on account of the earliest portion of the amount then due, nor shall any endorsement or statement on any check or payment (or any letter accompanying any check or payment) be deemed an "accord and satisfaction" (or payment in full), and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such amount or pursue any other remedy provided herein. Any statement on any check or instrument or any accompanying written communication rendered by Tenant to Landlord, claiming full satisfaction of a claim, shall be sent to the following designated person and address: Mark Hallgren HB Properties 5909 63rd Street Lubbock, TX 79424 ARTICLE 34. LANDLORD'S ACCEPTANCE. Landlord's execution of this Lease is subject to Tenant providing financial statements of the Tenant and/or Guarantor(s) which are acceptable to the Landlord. ARTICLE 35. GUARANTEE. FOR VALUE RECEIVED, the undersigned hereby unconditionally and irrevocably guarantees the prompt and faithful performance by Tenant of all of the obligations of the Tenant as set forth in the aforesaid Lease. Page -19- LANDLORD TENANT HB Properties Meadow Valley Corporation, Inc. /s/ MARK HALGREN /s/ ROBERT TERRIL --------------------------- --------------------------- By: Mark Halgren, Partner By: Robert Terril, Area Manager 75-2616339 88-017-1959 --------------------------- --------------------------- TAX ID #: TAX ID #: 7/12/01 7/15/01 --------------------------- --------------------------- Date Date Address: 5909 63rd Street Address: 4411 South 40th Street, "D-11" Lubbock, TX 79424 Phoenix, AZ 85040 IN WITNESS WHEREOF, Landlord and Tenant executed this Lease as of the date first above written. AFFIX CORPORATE SEAL (HERE) Page -20- ADDENDUM 1 This Addendum 1 to Lease is executed concurrently with and is part of that certain Lease dated July 9, 2001 and hereinafter referred to as "Lease", which is attached hereto, by and between HB Properties ("Landlord") and Meadow Valley Corporation, Inc., an Arizona Corporation ("Tenant") for that Property known as 4635 Andrews Street, Suite "F", North Las Vegas, NV 89030. In the event of any conflict between this Addendum 1 to Lease and the Lease, the provisions of this Addendum 1 to Lease shall prevail. Unless otherwise provided, all capitalized terms shall have the same meaning as set forth in the Lease. 1. TENANT IMPROVEMENTS: Landlord shall provide Tenant with approximately 1,914 square feet of HVAC office space as shown on attached Exhibit "B", per Brimont Construction Work letter and Tenant's specifications attached as Exhibit "B-1". Landlord's cost for said work shall not exceed $97,310.00. In addition, Landlord shall provide Tenant with doors, frames and hardware with a budget not to exceed $1,400.00. Landlord shall contract for all tenant improvement work directly with a licensed and bonded contractor and said work shall comply with current building codes. 2. BASE RENT: The base rent as specified in Section 1.06 of the lease shall be as follows: Month 1-12 $2,998.00 per month, plus CAM Charges Months 13-24 $3,088.00 per month, plus CAM Charges Months 25-36 $3,180.00 per month, plus CAM Charges Months 37-48 $3,276.00 per month, plus CAM Charges Months 49-60 $3,374.00 per month, plus CAM Charges 3. FINANCIAL INFORMATION: Tenant shall furnish to Landlord 1999, 2000 and current year balance sheet and income statements. 4. TIME IS OF THE ESSENCE: In the event this lease is not executed by Tenant on or before July 20, 2001, this lease agreement shall become null and void. 5. HAZARDOUS WASTE: Landlord agrees to disclose to Broker and to prospective tenants any and all information which Landlord has regarding present and future zoning and environmental matters affecting the property and regarding the condition of the property, including, but not limited to structural, mechanical and soils conditions, the presence and location of asbestos, PCB transformers, other toxic, hazardous or contaminated substances, and underground storage tanks in, on, or about the property. Broker is authorized to disclose any such information to prospective tenants. 6. AMERICANS WITH DISABILITIES ACT: Please be advised that an owner or tenant of real property may be subject to the Americans With Disabilities Act (the ADA), a Federal law codified at 42 USC Section 12101 et seq. Among other requirements of the ADA that could apply to your property, Title III of the ADA requires owners and tenants of "public accommodations" to remove barriers to access by disabled persons and provide auxiliary aids and services for hearing, vision or speech impaired persons. The regulations under Title III of the ADA are codified at 28 CFR Part 36. The Industrial Property Group (IPG) recommends that you and your attorney review the ADA and the regulations and, if appropriate, your proposed lease agreement to determine if this law would apply to you, and the nature of the requirements. These are legal issues. You are responsible for conducting your own independent investigation of these issues. The Industrial Property Group cannot give you legal advise on these issues. LANDLORD TENANT HB Properties Meadow Valley Corporation, Inc. /s/ MARK HALGREN /s/ ROBERT TERRIL -------------------------- --------------------------- By: Mark Halgren, Partner By: Robert Terril, Area Manager 75-2616339 88-0171959 -------------------------- --------------------------- TAX ID #: TAX ID #: Address: 5909 63rd Street Address: 4411 South 40th Street, "D-11" Lubbock, TX 79424 Phoenix, AZ 85040 AFFIX CORPORATE SEAL (HERE) CONSTRUCTION OF IMPROVEMENTS BY LANDLORD LEASE RIDER This Rider is attached to and made part of that certain Industrial Real Estate Lease dated July 9, 2001 between HB Properties, as Landlord, and Meadow Valley Corporation, Inc., as Tenant, covering the Property commonly known as 4635 Andrews Street, Suite "F", North Las Vegas, NV 89030. ("Lease"). The terms used in this Rider shall have the same definitions as set forth in the Lease. The provisions of this Rider shall prevail over any inconsistent or conflicting provisions of the Lease. A. Description of Improvements. Landlord shall, at Landlord's expense, construct certain improvements on or about the Property ("Work") in accordance with certain plans and specifications attached hereto as Attachment "A" and incorporated herein by this reference. Attachment "A" shall consist of construction (bidset) drawings and specifications. Any such plans and specifications shall be submitted to Tenant's facilities manager for prior reasonable approval. B. Preliminary Plans/Final Plans. If the plans and specifications attached hereto are agreed upon as final plans and specifications, (a) initial here, Landlord _______________ and Tenant ___________________, (b) such final plans and specifications are hereinafter referred to as the "Final Plans," and (c) the remainder of this Paragraph shall be inoperative. If the plans and specifications attached hereto are preliminary plans, Landlord shall prepare final working drawings and outlined specifications for the Work and submit such plans and specifications to Tenant for its approval. Tenant shall approve or disapprove such drawings and specifications within five (5) business days after receipt from Landlord. Tenant shall have the right to disapprove such drawings and specifications only if they materially differ from the plans and specifications attached hereto. If Tenant disapproves such drawings and specifications, Landlord and Tenant shall promptly meet in an attempt to resolve any dispute regarding such drawings and specifications. If the parties are unable to agree upon the final working drawings and specifications for the Work on or before July 31, 2000, Landlord may, at Landlord's option, either (i) terminate this Lease upon seven (7) days' prior written notice to Tenant, in which case neither Landlord nor Tenant shall have further liability to the other, or (ii) submit the matter to conclusive and binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Final working drawings and specifications prepared in accordance with this Paragraph B and approved by Landlord and Tenant are hereinafter referred to as the "Final Plans". C. Completion of the Work. Landlord shall use its best efforts to complete the Work described in the Final Plans prior to the scheduled Commencement Date set forth in Section 1.05 of the Lease. Notwithstanding the date set forth in Section 1.05, the Commencement Date shall be the date upon which the Work is substantially completed and the Property is delivered to Tenant. For the purposes of this Paragraph B, the Work shall be conclusively deemed to be substantially completed when all Work described in the Final Plans is completed, except for minor items of work (e.g., "pick-up work") which can be completed with only minor interference with Tenant's conduct of business on the Property, and there is a Certificate of Occupancy for the property. D. Changes. Landlord's obligation to prepare the Property for Tenant's occupancy is limited to the completion of the Work set forth in the plan and specifications attached hereto as Attachment A. Landlord shall not be required to furnish, construct or install any items not shown thereon. If Tenant requests any change, addition or alteration ("Changes") in such plans and specifications or in the construction of the Work, Landlord shall promptly give Tenant an estimate of the cost of such Changes and the resulting delay in the delivery of the Property to Tenant. Any request made by Tenant shall be from Tenant's real estate department. Within five (5) business days after receipt of such estimate, Tenant shall give Landlord written notice whether Tenant elects to proceed with such Changes. If Tenant notifies Landlord in writing that Tenant elects to proceed with such Changes and if Landlord approves such Changes, Landlord shall, at Tenant's expense, promptly make such Changes. If Tenant fails to notify Landlord of its election within the five (5) business day period, Landlord may complete the Work without making such Changes. Tenant shall pay or reimburse Landlord for the costs of such Changes within fifteen (15) days after billing. The Work shall be the property of Landlord and shall remain upon and be surrendered with the Property upon the expiration of the Lease Term. E. Tenant's Work. All work not within the scope of the Work, such as the furnishing and installing of furniture, trade fixtures, telephone equipment and office equipment shall be furnished and installed by Tenant at Tenant's sole cost and expense. Tenant shall adopt a schedule which is consistent with the schedule of Landlord's contractors and conduct its work in such a manner as to maintain harmonious labor relations and not interfere with or delay the work of Landlord's contractors. All work and labor to be performed by Tenant shall (a) be carried out in a good and workmanlike manner; (b) comply with all governmental rules, regulations, statutes and directives; (c) not commence until proof of insurance reasonably required by Landlord is provided; and e) not adversely affect the proper functioning of any of the mechanical, electrical, sanitary and other service systems or installations of the Property or the Building of which the Property is a part. F. Building Permit. If for any reason Landlord is not able to obtain a building permit for the Work based solely upon the Final Plans, or upon such modifications thereto as are agreed to by Tenant and Landlord, then this Lease shall be null and void and of no further force and effect. In either event, Landlord shall forthwith return any sums paid to Landlord by Tenant and Landlord and Tenant shall have no further obligations to or claims against the other arising from this Lease. G. Delays. In the event that Landlord is delayed in completing the Work as a result of: (a) delays in the delivery of non-building standard materials, finishes or installations requested by Tenant after plan approval; (b) changes to the Final Plans requested by Tenant after approval thereof; (c) the carrying out of work on the Property by Tenant or its subcontractors; or (d) any other types of delays caused by Tenant, then, in such event, the Work shall be deemed to be substantially completed upon the date Landlord would have completed the Work in the absence of such delays as determined by Landlord's architect or contractor, and, if not already commenced, the Lease Term shall commence. EX-10.163 7 dex10163.txt LEASE AGREEMENT WITH CATERPILLAR Exhibit 10.163 CATERPILLAR FINANCIAL SERVICES CORPORATION FINANCE LEASE Dated as of Oct 18 2001 LESSEE: MEADOW VALLEY LESSOR: CATERPILLAR FINANCIAL SERVICE CONTRACTORS INC. CORPORATION ADDRESS: 4411 S. 40th, SUITE D11 ADDRESS: 2120 West End Avenue PHOENIX, AZ 85040 Nashville, TN 37203-0001 K-179710 Lessor, in reliance on Lessee's selection of the equipment 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) 966G Caterpillar WHEEL LOADER 3SW00499 4,216.92 1.00
Rent to be paid: in arrears (starts one month after Delivery Date) and every month thereafter. Lease Term: 48 Months Utilization Date: JANUARY 31, 2002 The [X] Mandatory Final Payment (Section 13) [ ] Optional Final Payment (Section 14) is applicable to this Lease (check one) Location of Unit(s) 4411 S. 40th, SUITE D11 PHOENIX, AZ 85040 MARICOPA ADDITIONAL PROVISIONS: RIDERS: TERMS AND CONDITIONS 1. LEASE TERM: The lease term of 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 P.O. 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 state 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 the 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 form 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 lest 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 Lessee: CATERPILLAR FINANCIAL SERVICES CONTRACTORS, INC. CORPORATION By /s/ BRADLEY E. LARSON By /s/ MICHAEL M. WARD ------------------------------ ------------------------------ Name (PRINT) BRADLEY E. LARSON Name (PRINT) Michael M. Ward -------------------- -------------------- Title PRESIDENT Title Documentation Manager --------------------------- --------------------------- Date 10/15/2001 Date 10/18/01 ---------------------------- ---------------------------- 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, taxes 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 damage) 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 implied 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 ATTORNEY'S 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 BY 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 payments of and to endorse all checks, drafts and other documents and to take any other action 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 client and shall provide Lessor with all requested printed 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 or 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 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 additions 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. Leases 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) the premises of the nearest Caterpillar dealer selling equipment of the same type as the Unit, or (b) on board of 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 a 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 accessories 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 process 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 will not change its principal place of business or primary residence and, if a business entity, its form of business organization (including any merger, consolidation, reincorporation or such similar restructuring), 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 henceforth 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, addressed to the other party at the address stated on the front or at such other address as may hereafter by 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 shall be given effect. All obligations of Lessee under this Lease shall survive the expiration or termination of this Lease to the extent required for their full observance and performance. GUARANTY OF PAYMENT THIS GUARANTY ("Guaranty") is made and entered into as of October 18, 2001 by MEADOW VALLEY CORPORATION, (thereinafter, referred to as "Guarantor"), in favor of Caterpillar Financial Services Corporation, 2120 West End Avenue, Nashville, Tennessee 37203-0001 (hereinafter referred to as "Caterpillar Financial"), guaranteeing the Indebtedness (as hereinafter defined) of MEADOW VALLEY CONTRACTORS, INC. (hereinafter referred to as "Obligor"). WITNESSETH: FOR VALUE RECEIVED, and/or as an inducement to Caterpillar Financial to now or hereafter enter into, purchase or otherwise acquire the agreements, accounts and/or other obligations evidencing and/or securing Obligor's Indebtedness and in consideration of and for credit and financial accommodations now or hereafter extended to or for the account of the Obligor (which includes Caterpillar Financial's consent to an assignment and/or assumption of the Indebtedness), which is in the best interest of Guarantor and which would not have been extended but for this Guaranty, the Guarantor agrees as follows: SECTION 1. Guaranty of Obligor's Indebtedness. Guarantor hereby absolutely, - ---------------------------------------------- irrevocably and unconditionally agrees to, and by these presents does hereby: (a) guarantee the prompt and punctual payment, performance and satisfaction of all present and future indebtedness and obligations of Obligor to Caterpillar Financial which Obligor now owes Caterpillar Financial or which Obligor shall at any time or form time to time hereafter owe Caterpillar Financial when the same shall become due in connection with or arising out of that certain FINANCE LEASE by and between Obligor and Caterpillar Financial dated 10/18/01, including any and all existing and future additional schedules, amendments and/or related agreements thereto (the "Contract"), whether direct or contingent, due or to become due, joint or several, primary or secondary, liquidated or unliquidated, secured or unsecured, original or renewed or extended, or by open account or otherwise, and whether representing rentals, principal, interest and/or late charges of an original balance, an accelerated balance, a balance reduced by part payment or a deficiency after sale of collateral or otherwise and (b) undertake and guarantee to pay on demand and indemnify Caterpillar Financial against all liabilities, losses, costs, attorney's fees, and expenses which may be suffered by Caterpillar Financial by reason of Obligor's default or default of the Guarantor (with all of Obligor's indebtedness and/or obligations as stated above (including all costs, fees and expenses) being hereinafter individually and collectively referred to under this Guaranty as Obligor's "Indebtedness", which Indebtedness shall be conclusively presumed to have been created in alliance upon this Guaranty). SECTION 2. Joint, Several and Solidary Liability. Guarantor further agrees that - ------------------------------------------------- its obligations and liabilities for the prompt and punctual payment, performance and satisfaction of Obligor's Indebtedness are independent of any agreement or transaction with any third parties and shall be on a "joint and several" and "solidary" basis along with Obligor to the same degree and extent as if Guarantor had been and/or will be a co-borrower, co-principal obligor and/or co-maker of Obligor's Indebtedness. In the event that there is more than one guarantor under this Guaranty, or in the event that there are other guarantors, endorsers, sureties or any other party who may at any time become liable for all or any portion of Obligor's Indebtedness (each, an "Other Obligor"), the provisions hereof shall be read with all grammatical changes thereby rendered necessary and each reference to the Guarantor shall include each and every one of those parties liable for all or any portion of Obligor's Indebtedness and each Guarantor's obligations and liabilities and hereunder shall be on a "joint and several" and "solidary" basis along with such Other Obligors. SECTION 3. Duration; Cancellation of Guaranty. This Guaranty and Guarantor's - ---------------------------------------------- obligations and liabilities hereunder shall remain in full force and effect until such time as Obligor's Indebtedness shall be fully and finally paid, performed and/or satisfied, until such time as the Guaranty may be cancelled by Caterpillar Financial under a written cancellation instrument in favor of Guarantor or otherwise as stated herein. SECTION 4. Default by Obligor. Immediately upon Obligor's default under any of - ------------------------------ its Indebtedness in favor of Caterpillar Financial, Caterpillar Financial may make demand upon Guarantor unconditionally and absolutely agrees to pay the full then unpaid amount of all of Obligor's Indebtedness (whether at stated maturity, by required prepayment, declaration, acceleration or otherwise) and/or perform any covenant or agreement hereunder guaranteed. Such payment or payments shall be made immediately following demand by Caterpillar Financial at Caterpillar Financial's offices as indicated above. SECTION 5. Additional Covenants. Guarantor further agrees that Caterpillar - -------------------------------- Financial may, at its sole potion, at any time, and from time to time, without the consent of or notice to guarantor, or to any other party, and without incurring any responsibility to Guarantor or to any other party, and without affecting, impairing or releasing the obligations of the Guarantor under this Guaranty: (a) discharge or release any party (including, but not limited to, Obligor, secondary obligors of Obligor's Indebtedness or any co-guarantor under this Guaranty) who is or may be liable to Caterpillar Financial for Obligor's Indebtedness; (b) sell at public or private sale, exchange, release, impair, surrender, substitute, realize upon or otherwise deal with, in any manner and in any order and upon such terms and conditions as Caterpillar Financial deems best at its uncontrolled discretion, any leased equipment and/or any collateral listed in the Contract or now or hereafter otherwise directly or indirectly securing repayment of Obligor's Indebtedness (all such leased equipment and/or all such collateral shall hereinafter be referred to as the "Equipment"), including without limitation, the purchase of all or any part of such collateral for Caterpillar Financial's own account; (c) change the manner, place or terms of payment and/or available credit (including without limitation increase or decrease in the amount of such payments, available credit or any interest rate adjustments), or change or extend the time of payment of or renew, as often and for such periods as Caterpillar Financial may determine, or alter Obligor's Indebtedness or grant any other indulgence to Obligor and/or any secondary obligors of Obligor's Indebtedness or any co-guarantor under this Guaranty; (d) settle or compromise Obligor's Indebtedness with Obligor or all of Obligor's Indebtedness; and/or (f) enter into, deliver, modify, amend or waive compliance with, any instrument, agreement or arrangement evidencing, securing or otherwise affecting, all or any part of Obligor's Indebtedness. SECTION 6. No Release of Guarantor. Guarantor's obligations and liabilities - ----------------------------------- under this Guaranty shall not be released, impaired, reduced or otherwise affected by, and shall continue in full force and effect, notwithstanding the occurrence of any event, including without limitation any one or more of the following events: (a) death, insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of authority (whether corporate, partnership or trust) of Obligor (or any person acting on Obligor's behalf) or any Other Obligor or any other defense based on or arising out of the lack of validity or unenforceability of the Indebtedness or any agreement or instrument relating thereto or any provisions thereof and/or Obligor's absence or cessation of liability thereunder for any reason, including without limitation, Caterpillar Financial's failure to preserve any right or remedy against Obligor; (b) any change in Obligor's financial condition; (c) partial payment or payments of any amount due and/or outstanding under Obligor's Indebtedness; (d) any change in Obligor's management, ownership, identity or business or organizational structure; (e) any payment by Obligor or any other party to Caterpillar Financial that is held to constitute a preferential transfer or a fraudulent conveyance under any applicable law, or for any reason, Caterpillar Financial is required to fund such payment or pay such amount to Obligor or to any other person; (f) any sale, lease or transfer, whether or not commercially reasonable, of all or any part of Obligor's assets and/or any assignment, transfer or delegation of Obligor's Indebtedness to any third party (whereby this Guaranty shall continue to extend to all sums due from or for the account of Obligor and/or the new or substituted legal entity); (g) any failure to perfect any lien or security interest securing the Indebtedness or preserve any right, priority or remedy against any Equipment; (h) any interruption, change or cessation of relations between Guarantor and Obligor; (i) any defect in, damage to, destruction of or loss of or interference with possession or use of any Equipment of any reason by Obligor or any other person; (j) any act or omission by Caterpillar Financial which increases the scope of Guarantor's risk, including without limitation, negligent administration of transactions with Obligor; and/or (k) any other occurrence or circumstance whatsoever, whether similar or dissimilar to the foregoing, which might otherwise constitute a legal or equitable discharge, release or defense of a guarantor or surety or which might otherwise limit recourse against Guarantor. SECTION 7. Waivers by Guarantor. Guarantor waives, for the benefit of - -------------------------------- Caterpillar Financial (which waivers shall survive until this Guaranty is released or terminated in writing by Caterpillar Financial): (a) notice of acceptance of this Guaranty; (b) notice of the existence, creation or incurrence of new and/or additional debt owing from Obligor to Caterpillar Financial; (c) presentment, protest and demand, and notice of protest, demand, nonpayment, nonperformance and dishonor or any and all agreements, notes or other obligations signed, accepted, endorsed or assigned to or by Caterpillar Financial or agreed to between Obligor and Caterpillar Financial; (d) notice of adverse change in Obligor's financial condition or any other fact which might materially increase the risk of Guarantor; (e) any and all rights in and notices or demands relating to any Equipment, including without limitation, all rights, notices, advertisements or demands relating, whether directly or indirectly, to the foreclosure, sale or other disposition of any or all such Equipment or the manner of such sale or other disposition; (f) any claim, right or remedy which Guarantor may now have or hereafter acquire against the Obligor that arises hereunder and/or from the performance by any Other Obligor including, without limitation, any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification, or participation in any claim, right or remedy of Caterpillar Financial against the Obligor or any security which caterpillar Financial now has or hereafter acquires with respect to the Obligor, whether or not such claim, right or remedy arises in equity, under contract (express or implied), by statute, under common law or otherwise; (g) notice of any default by Obligor or any other person obligated in any manner for all or any portion of Obligor's Indebtedness and notice of any legal proceedings against such parties; (h) any right of contribution from any Other Obligors; (i) notice and hearing as to any prejudgment remedies; (j) any defense which is premised on an alleged lack of consideration for the obligation undertaken by Guarantor, including without limitation, any defense to the enforcement of this Guaranty based upon the timing of execution of this Guaranty and/or that the Guaranty had been executed after the execution date of any agreements evidencing the Indebtedness; (k) all exemptions and homestead laws; (l) any other demands and notices required by law; (m) all setoffs and counterclaims against Caterpillar Financial and/or Obligor; (n) any defense based on the claim that Guarantor's liabilities and obligations exceed or are more burdensome than those of Obligor; (o) any defense which the Obligor may assert or be able to assert on the underlying Indebtedness or which may be asserted by Guarantor, including but not limited to (i) breach of warranty, (ii) fraud, (iii) statute of frauds, (iv) infancy, (v) statute of limitations, (vi) lender liability (vii) accord and satisfaction, (viii) payment and/or (ix) usury. SECTION 8. Enforcement of Guarantor's Obligations and Liabilities. Guarantor - ------------------------------------------------------------------ agrees that, should Caterpillar Financial deem it necessary to file an appropriate collection action to enforce Guarantor's obligations and liabilities under this Guaranty, Caterpillar Financial may commence such a civil action against Guarantor without the necessity of first (i) attempting to collect Obligor's Indebtedness from Obligor or from any Other Obligor, whether through filing of suit or otherwise, (ii) attempting to exercise any rights Caterpillar Financial may have against any Equipment, whether through re-lease, the filing of an appropriate foreclosure action or otherwise, (iii) including Obligor or any Other Obligor as an additional party defendant in such a collection action against Guarantor, or (iv) pursuing any other [illegible] in Caterpillar Financial's power or to mitigate damages. If there is more than one guarantor under this Guaranty, each Guarantor additionally agrees that Caterpillar Page 1 Financial may file an appropriate collection and/or enforcement action against any or one or more of them, without impairing the rights of Caterpillar Financial against any other guarantor under this Guaranty. SECTION 9. Construction. This writing is intended as a final expression of this - ------------------------ Guaranty agreement and is a complete and exclusive statement of the terms of that agreement, provided however, that the provisions of this Guaranty shall be in addition to and cumulative of, and not in substitution, novation or discharge of, any and all prior or contemporaneous written guaranties or other written agreements by guarantor (or any one or more of them), in favor of Caterpillar Financial or assigned to enforcing any and all such other guaranties or agreements in accordance with their respective terms. SECTION 10. Successors and Assigns Bound. Guarantor's obligations and - ---------------------------------------- liabilities under this Guaranty shall be binding upon Guarantor's successors, heirs, leagalees, devisees, administrators, executors and assigns. Caterpillar Financial may assign this Guaranty and any and all rights and interests included herein in benefit of Caterpillar Fianancial's sole discretion without notice to Guarantor and the rights and remedies granted to Caterpillar Financial under this Guaranty shall also inure to the benefit of Caterpillar Financial's successors and assigns, as well as to any and all subsequent holder or holders of any of Obligor's Indebtedness subject to this Guaranty, without setoff, counterclaim, reduction, recoupment, abatement, deduction or defense based on any claim Guarantor may have against Caterpillar Financial, such successors and assigns or subsequent holders of Obligor's Indebtedness. Guarantor shall not assign this Guaranty without the prior written consent of Caterpillar Financial. SECTION 11. Termination. This Guaranty is irrevocable and may be terminated only - ----------------------- as to indebtedness created sixty (60) days after actual receipt by Caterpillar Financial of written notice of termination hereof, provided however, that all Indebtedness incurred, created or arising pursuant to a commitment of Caterpillar Financial made prior to the effective date of such termination (the "Termination Date") and any extensions, renewals or modifications of such Indebtedness (including without limitation loan and/or other commitments) agreed to or instituted by Caterpillar Financial prior to Termination Date shall not be effected by such termination and shall be deemed to have been incurred prior to termination (irrespective of whether Indebtedness arising thereunder occurs after the Termination Date) and shall be fully covered by Guaranty. Any termination of this Guaranty shall be ineffective unless upon the Termination Date Guarantor deposits with Caterpillar Financial collateral in the form of cash in an amount not less than the amount of the Indebtedness outstanding on the Termination Date. Such cash shall be held by Caterpillar Financial in a separate account and shall be returned to Guarantor upon the full and indefeasible payment of all of the Indebtedness. SECTION 12. Governing Law; Waiver of Jury. This Guaranty shall be construed - ----------------------------------------- liberally in favor of Caterpillar Financial and shall be governed and construed in accordance with the substantive laws of the State of Tennessee without regard to the conflicts of laws principles thereof. ANY ACTION, SUIT OR PROCEEDING RELATING DIRECTLY OR INDIRECTLY TO THIS GUARANTY OR THE RELATIONSHIP BETWEEN GUARANTOR AND CATERPILLAR FINANCIAL WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE WITHOUT A JURY. AS SUCH, GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL IN ANY SUCH ACTION, SUIT OR PROCEEDING. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY THE COURT. SECTION 13. Severability. If any provision of this Guaranty is held to be - ------------------------ illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable, this Guaranty shall be construed and enforceable as if the illegal, invalid or unenforceable provision had never compromised a part of it, and the remaining provisions of this Guaranty shall remain in full force and effect not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. IN WITNESS WHEREOF, Guarantor has executed this Guaranty in favor of Caterpillar Financial on the day, month and year first written above. GUARANTOR HAS READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS GUARANTY. (Complete Address, Phone, SSN if Guarantor is an Individual) Guarantor: MEADOW VALLEY CORPORATION Address: ------------------------------- Signature: /s/ BRADLEY E. LARSON -------------------------- ---------------------------------------- Name (Print): BRADLEY E. LARSON Phone: ----------------------- --------------------------------- Title: PRESIDENT/CEO SSN: ------------------------------ ----------------------------------- Page 2 EX-10.164 8 dex10164.txt SECURITY AGREEMENT WITH JOHN DEERE Exhibit 10.164
LOAN CONTRACT - SECURITY AGREEMENT - ---------------------------------------------------------------------------------------------------------------------------------- GOODS PREVIOUSLY CONSTRUCTION DEALER ACCOUNT DEALER PHONE NO. APPLICATION DATE DATE ACCEPTED BY JOHN DEERE CONTRACT NO SETTLED FOR? ------------ NUMBER CONSTRUCTION & FORESTRY COMPANY YES [X] NO [ ] NEW [X] USED [ ] 17-0908 801-262-7441 07DEC01 OFFICE USE ONLY 17-880171959 - ---------------------------------------------------------------------------------------------------------------------------------- Seller's Name and Address SCOTT MACHINERY COMPANY 4055 SOUTH 500 WEST SALT LAKE CITY, UT 84123 - ---------------------------------------------------------------------------------------------------------------------------------- Borrower's (Debtor's) Name (Last Name First) Borrower's (Debtor's) Name (Last Name First ) and Mailing Address (Including County and Zip) and Mailing Address (Including County and Zip) MEADOW VALLEY CONTRACTORS INC 2250 WEST CENTER STREET SPRINGVILLE, UT 84663 - ---------------------------------------------------------------------------------------------------------------------------------- Borrower's (Debtor's) Borrower (Debtor) Resides Borrower (Debtor) Agrees to Keep Place of Filing (Town & State) Phone No. in (County/State) Goods in 801-491-7433 UTAH UT State UTAH, NV, CO, AZ UT-SOS - ---------------------------------------------------------------------------------------------------------------------------------- Borrower's Social Security Number Type of Business Name and Title of Signing Officer (If (First Signer) or Tax Id Number ----------------------------------------------------- Corporation or LLC) 880171959 Proprietor [ ] Partner [ ] Corporation [X] L.L.C. [ ] BRADLEY E. LARSON PRESIDENT - ---------------------------------------------------------------------------------------------------------------------------------- APPLICATION AND PROMISSORY NOTE: I hereby apply to John Deere Construction & Forestry Company (together with is assigns, the "Lender") for a Loan in the amount of the Principal Balance shown below. The amount of the unpaid balance on line 3 is to be used to finance the Balance Due on the purchase order executed in connection with the purchase from the Seller of the equipment described below (the "Goods"). If this Loan Contract is accepted by Lender, I promise to pay to the order of Lender, the Principal Balance, shown on line 7 below, and finance charges thereon computed on the daily unpaid balance of the Principal Balance and to pay the installments shown below, with such adjustments in the amount or number of installments as may be necessary to reflect actual finance charges earned. If more than one person signs this Agreement as "Borrower"), we will be jointly and severally liable for all amounts due under this Agreement. Except for the Notice to Borrower section, In this Agreement, the words "I", "me" and "my" mean the persons, whether one or more, who sign it as the "Borrower". - ---------------------------------------------------------------------------------------------------------------------------------- Quantity New/Used Manufacturer Model Goods (Equipment) Product Identification No. Delivered Cash Price - ---------------------------------------------------------------------------------------------------------------------------------- 1 N JOHN DEERE 772-CH Motor Grader w/Cab, Ripper, DW772CH578032 $209,888.00 Front Scrafler, Michelin Tires - ---------------------------------------------------------------------------------------------------------------------------------- $0.00 - ---------------------------------------------------------------------------------------------------------------------------------- $0.00 - ---------------------------------------------------------------------------------------------------------------------------------- $0.00 - ---------------------------------------------------------------------------------------------------------------------------------- Quantity Manufacturer Model Description of Trade-In (From Purchase Order) Product Identification No. Amount - ---------------------------------------------------------------------------------------------------------------------------------- $0.00 - ---------------------------------------------------------------------------------------------------------------------------------- $0.00 - ---------------------------------------------------------------------------------------------------------------------------------- $0.00 - ---------------------------------------------------------------------------------------------------------------------------------- CASH DOWN PAYMENT: $16,875.00 TOTAL TRADE-IN $0.00 - ---------------------------------------------------------------------------------------------------------------------------------- MONTHLY INSTALLMENTS - -------------------------------------------- Number of Amount of First Payment Payments Each Payment Due Date ITEMIZATION OF AMOUNT FINANCED - -------------------------------------------- 36 $6,105.30 1/20/02 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Sales Tax Paid to Government Agencies $11,778.42 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Cash Price (Including Tax) 1 $221,666.42 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Total Down Payment, Sum of Trade-In and Cash Down Payment 2 $16,875.00 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Unpaid Balance of Cash Price (Paid to Seller) 3 $204,791.42 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Official Fees (Paid to Public Officials) 4 $50.00 - ---------------------------------------------------------------------------------------------------------------------------------- 0 $0.00 Administrative Fees 5 $400.00 - ---------------------------------------------------------------------------------------------------------------------------------- Insurance - Credit Life and/or Physical Damage 6 $0.00 - ---------------------------------------------------------------------------------------------------------------------------------- Payments are due each successive month on Principal Balance (Lines 3, 4, 5 and 6) the same day of the month as the first The amount of credit provided to Borrower(s) 7 $205,241.42 payment except as follows: - ---------------------------------------------------------------------------------------------------------------------------------- Finance Charge (Based on Line 7) The dollar amount the credit will cost Borrower(s) 8 $14,549.38 - ---------------------------------------------------------------------------------------------------------------------------------- Total (Lines 7 and 8). (Principal Balance plus Finance Charge) 9 $219,790.80 - ---------------------------------------------------------------------------------------------------------------------------------- Annual Interest Rate: DATE FINANCE CHARGE BEGINS: 12/20/01 The cost of the Borrower(s) credit as a yearly rate 4.50% - ---------------------------------------------------------------------------------------------------------------------------------- SECURITY AGREEMENT: To secure the indebtedness evidenced by this contract or any other indebtedness owed to you or youaffiliates, I grant Secured Party a security Interest in the Goods described above (which term includes items, if any, listed as "security" or additional security") and all parts and accessories now or hereafter incorporated in or on such Goods by way ofaddition, accession or replacement. Buyer represents that all trade-in property, if any, is free and clear of all security agreements, liens and encumbrances. I also grant you a Security interest in all proceeds, including insurance proceeds and refund of insurance premiums financed hereunder. I acknowledge that all security granted on any other Contract between you and me shall also secure the obligations described in this Contract. You can inspect the Goods at any time. I REPRESENT THAT THE GOODS ARE BEING PURCHASED FOR A BUSINESS OR COMMERCIAL PURPOSE. EARLY PAYMENT: I may prepay my obligation in full at any time prior to the original or any extended maturity and will be charged only for earned Finance Charges. DELINQUENCY CHARGE; NSF FEES: For each installment not paid when due, I promise to pay Lender a delinquency charge calculated at the rate of 1.5% per month for the period of the delinquency or, at Lender's option, 5% of such installment provided that such a delinquency charge is not prohibited by law, otherwise at the highest rate allowed by applicable law. I agree to repay immediately to Lender in the enforcement or administration of its rights under this Agreement, including, without limitation, any amount paid by Lender to a depository institution because a check, draft or order made or drawn by or for the benefit of me is returned unpaid for any reason. If any payment is made by a check which is dishonored, I agree to pay Lender a fee of $20 or such lesser amount specified by applicable law. STATE LAW APPLYING: THE CONSTRUCTION AND VALIDITY OF THIS AGREEMENT SHALL BE CONTROLLED BY THE LAW OF IOWA, AND THE VALIDITY OF THE SECURITY INTEREST SHALL BE CONTROLLED BY THE LAW OF THE STATE WHERE THE GOODS ARE TO BE KEPT AND USED. - ---------------------------------------------------------------------------------------------------------------------------------- ADDITIONAL PROVISIONS CONCERNING RIGHTS OF THE PARTIES ON REVERSE SIDE ARE A PART OF THIS CONTRACT - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- INSURANCE DISCLOSURES. I may obtain Physical Damage Insurance from anyone I want NO I want Physical Damage that is acceptable to Lender. If I get this insurance through Lender, I will pay MOS PREMIUM Insurance (sign in this box) the Premium shown at right. No insurance will be provided unless I sign at the 0 $0.00 right, the premium is shown and Lender accepts the contract. - ---------------------------------------------------------------------------------------------------------------------------------- Credit Life Insurance is not required to obtain credit and will not be provided NO I want Credit Life Insurance unless I sign at the right, the premium is shown and Lender accepts this MOS PREMIUM (sign in this box) contract. 0 $0.00 Age - ---------------------------------------------------------------------------------------------------------------------------------- NOTICE TO BORROWERS: 1. Do not sign this contract before you read it or if it contains blank spaces. 2. You are entitled to an exact and completely filled in copy of this contract when you sign it. Keep it to protect your rights. 3. Under the law, you may have the right to redeem the property if repossessed for a default within the time provided by law. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN IT. I acknowledge receipt of a true copy hereof. MEADOW VALLEY CONTRACTORS INC. DO NOT WRITE IN SHADED AREA - FOR DEERE CREDIT SERVICES, INC. /s/ BRADLEY E. LARSON PRES 12/11/01 USE ONLY - ----------------------------------------------------------------- -------- ----------------------------------------------- Borrower's (Debtor's) Signature BRADLEY E. LARSON Title Date Accepted by: JOHN DEERE CONSTRUCITON & FORESTRY COMPANY (Lender/Secured Party) - ----------------------------------------------------------------- -------- At: 6400 NW 86th Street PO Box 6600, Borrower's (Debtor's) Signature Title Date Johnston, Iowa 50131-6600 ------------------------------------------- - ----------------------------------------------------------------- -------- By: Borrower's (Debtor's) Signature Title Date ------------------------------------------- (Authorized Signature) Date -----------------------------------------------
ADDITIONAL PROVISIONS CONCERNING RIGHTS OF THE PARTIES APPLICATION OF PAYMENTS AND PROCEEDS: Any money that you get from me as well as any insurance proceeds, proceeds from the disposition of the Goods following repossession and returned insurance premiums may be applied, at your choice to what I owe under this Agreement or to any other debt I owe Secured Party, in spite of any instructions I may send Secured Party. Also, they may be applied to finance charges before the unpaid balance of the amount Financed and to late charges, charges for dishonored checks and past due interest before installments. If any proceeds from the sale of the Goods or insurance are applied to the debt, I remain liable to make each periodic payment described in this contract until it is paid in full. Secured Party can accept payments marked "paid in full" or with any other restrictive endorsements, without losing any of Secured Party's rights under this Agreement. DEFAULT: This contract shall be in default (a) if I fail to pay any installment when due; (b) if I attempt to sell or encumber any interest in the Goods; (c) if I institute or have instituted against me proceedings under any bankruptcy or insolvency law; (d) if I make an assignment for the benefit of creditors; (e) if I fail to pay taxes levied on the Goods; (f) if any attachment, execution, writ, or other process is levied against any of my property; (g) if I fail at any time to keep the Goods properly insured as described below; (h) if I remove the Goods, without prior written notice to Lender, from the location in which I have agreed to keep them; (i) if I fail to maintain the Goods in good condition and repair or permit its value to be impaired; (j) if I permit the Goods to be used in violation of any law, regulation or policy of insurance; (k) if any representation, warranty or statement is made to Lender in connection with this agreement which is false in any material respect when made; (l) if any legal entity such as a partnership, limited liability company or corporation) that has agreed to pay this agreement ceases to do business, dissolves, liquidates its assets or terminates or fails to maintain its legal existence; (m) if I fail to comply with any other provision of this contract; or (n) if for any reason Lender deems the debt or security unsafe. In any such event Lender may take possession of any Goods in which Lender has a Security Interest and exercise any other remedies provided by law. In such event I agree, upon demand, to assemble the Goods at a location within UT, NV, CO, AZ, designated by Lender, and Lender may immediately and without notice declare the entire balance of this contract due and payable. In addition, to the extent permitted by law, Lender may collect all reasonable expenses, including allocated internal costs and attorney's fees, incurred in realizing on the security interest granted hereunder, or otherwise enforcing the terms of this contract. If I reside in Texas, I agree that any remaining amounts due under this contract after any default by me shall be payable to Lender or its order at Dallas County, Texas. If Secured Party takes possession of the Goods after I default, it shall be commercially reasonable for Secured Party to sell the Goods at a private sale (i) at wholesale to a dealer in used goods of like kind, (ii) at retail to a purchaser directly or through a dealer in such used goods; or (iii) to John Deere Construction Dealers through any on-line or in person auction. I acknowledge that you may, instead of selling the security, lease or rent the security and such action shall be commercially reasonable so long as you apply the proceeds of such lease or rental to the indebtedness either as such payments are received, or based upon a present value of the scheduled payment. The enumeration of the methods described in this paragraph area without limitation to Secured Party's right to dispose of the Goods by any other manner or method, whether by sale, lease or otherwise, in a commercially reasonable fashion. You also have the right to take possession of the Goods or to render Goods unusable. You may also cancel any insurance on the Goods, and to the extent allowed by law, apply any premium refunds to any debt I owe you. Waiver of any breach or Default shall not constitute a waiver of any other or subsequent default. RISK OF LOSS AND OTHER AGREEMENTS. I hold the Goods at my risk and expense with no abatement in any obligation on account of loss or damage. I will settle all claims of any kind against the seller of the Goods directly with the seller and I will not use any such claim as a defense, setoff or counterclaim against any effort by Lender to enforce this Contract. I agree that a financing statement which describes either the security contained in this Contract or a financing statement which references all equipment currently or in the future financed by Secured Party or its assigns, may be filed in the appropriate government office without my signature. I agree that I will notify you whenever I change my state of location, as such term is used in Section 9-307 of the Uniform Code, as amended. Each person who signs this Agreement agrees that any carbon signature, facsimile signature or electronic signature shall constitute an original signature within the meaning of applicable law, for all purposes, including the filing of financing statements. Lender may correct patent or clerical errors in the Agreement, or any purchase order or financing statement executed in connection with the transactions contemplated in this Agreement. Any provision of this Agreement prohibited by law shall be ineffective and deemed deleted to the extent of such prohibition and shall not invalidate any other provision hereof. INSURANCE: I agree that (except to the extent of this contract is for service work) I will at all times keep the Goods insured against all risk of loss, damage or destruction, for their full insurable value, with Lender listed as loss payee. I may choose the person through whom I obtain the insurance but the insurance must be acceptable to Lender. Such insurance will provide that it may not be canceled by me without Lender's consent and may not be canceled by the insurance company without at least ten (10) days written notice to Lender. I will provide Lender with evidence of the paid-up insurance on the Goods within fifteen (15) days of the date of this contract and at least thirty (30) days before the renewal date. If I fail to provide evidence of the insurance within the time periods specified in the preceding sentence, then I will reimburse Lender for the cost of any insurance Lender purchased until the date such evidence is provided by me. If I fail to keep the goods properly insured, Lender may, but is under no obligation to, buy insurance to protect the Goods and add the cost to my debt to Lender, and I promise to pay additional cost upon Lender's demand. To the fullest extent permitted by law, I will pay Lender a reasonable administrative fee for obtaining and canceling such insurance. I may meet this insurance requirement by having Lender purchase such insurance. Inclusion of any amount of Physical Damage Insurance in the Insurance Disclosure box on the front of this contract will be election to do this, but such insurance will only be purchased if Lender accepts this Agreement. Such insurance will cover only the fair market value of the Goods at the time of the loss. If the term of such insurance is less than the term of this Agreement, I will, upon termination of such insurance, purchase insurance to fulfill by obligation to insure hereunder. EX-10.165 9 dex10165.txt LEASE EXTENSION WITH US BANCORP Exhibit 10.165 usbancorp illegible ------------------- Equipment Finance LEASE NUMBER 1.12162.1 This Lease Extension is incorporated into and made a part of that certain Lease Agreement dated November 10, 1998 and Lease Schedule Number 01 dated November 10, 1998 (the "Lease") between U.S. Bancorp Leasing & Financial ("Lessor") and Meadow Valley Contractors ("Lessee"). Extension Term: The term of this Lease Extension shall be for a period of eighteen months (18), commencing on November 20, 2001. Payment Schedule: As Extension Rent, Lessee agrees to pay $7,526.02 per month in Arr (plus any applicable sales/use taxes) commencing on November 20, 2001 and continuing on the same day of each succeeding month thereafter (or if no such day, on the last day of the month). Additional Terms and Conditions: TITLE PASSAGE: a. As long as no event of default has occurred and is continuing under the Lease, Lessee shall have the option to purchase all, but not part, of the Property at the end of the Term or any renewal thereof (the "Option") for a purchase price of $1.00 (the "Purchase Price") Payment of the Purchase Price must be received by Lessor on or before the last day of the Term. The Purchase Price shall be deemed to be the "anticipated" or "estimated" residual value of the Property. (as such terms are used in the Lease) b. Upon receipt of payment of the Purchase Price together with any and all applicable sales or other taxes due in conjunction therewith, and any and all remaining sums or other amounts payable under this Schedule, Lessor shall transfer all its right, title and interest in and to the Property to Lessee. The Property shall be transferred "As Is" and "Where Is" without any express or implied representations or warranties. Except as specifically modified by this Lease Extension, Lessee reaffirms all of the terms, conditions and covenants of the Lease. IN WITNESS THEREOF, the undersigned approve and acknowledge this Lease Extension. LESSOR: LESSEE(S): U.S. Bancorp Leasing & Financial Meadow Valley Contractors By /s/ DAVID L. SABIN By /s/ KENNETH D. NELSON - ----------------------------------- ----------------------------------- David L. Sabin Kenneth D. Nelson Vice President Vice President Date: 12/21/01 Date: 12/20/01 ----------------------------- -------------------------------- ADDRESS FOR ALL NOTICES 7659 S.W. Mohawk Street Tualarin, OK 97042 EX-10.166 10 dex10166.txt SECURITY AGREEMENT WITH CIT GROUP Exhibit 10.166 Schedule No. 8 Schedule of Indebtedness and Collateral To Master Security Agreement dated 4/5/00, between the undersigned Secured Party and Debtor. This Schedule of Indebtedness and Collateral incorporates the terms and conditions of the above-referenced Master Security Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Secured Party of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. The equipment listed on this Schedule will be located at: 4411 S. 40th Street Phoenix AZ 85040 - -------------------------------------------------------------------------------- Address City State Zip Code Debtor grants to Secured Party a security interest in the property described below, along with all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy, all hereinafter referred to collectively as "Collateral". Collateral Description (Describe Collateral fully including make, kind of unit, model and serial numbers and any other pertinent information.) One (1) Cedarapids Model MS-2 60" Pikc-Up Machine S/N 50480 Including all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy. 2095A (8/00) Schedule of Indebtedness and Collateral - Page 1 of 2 Precomputed Interest: Fixed Rate Attach to Master Security Agreement 2094 Debtor promises to pay Secured Party the total sum of $81,623.52 which represents principal and interest precomputed over the term hereof, payable in 48 (total number) combined principal and interest payments of $1,700.49 each commencing on 1/18/02 and a like sum on a like date each month thereafter until fully paid, provided however, that the final payment shall be in the amount of the unpaid balance and interest. Payment shall be made at the address of Secured Party shown on the Master Security Agreement or such other place as Secured Party may designate from time to time. Special Provisions. If this Schedule of Indebtednesses No. 8 is prepaid prior to the date provided for repayment in the Schedule of Indebtednesses No. 8 the debtor agrees to pay the following fees: NO PREPAYMENT ALLOWED THE FIRST YEAR: During the Second Year - - 5% of the then unpaid balance; During the Third Year - 4% of the then unpaid balance; During the Fourth Year - 3% of the then unpaid balance. Accepted 12/18/01 ------------------------- Secured Party: THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ ILLEGIBLE Title Agent ------------------------------- ------------------------------ Executed on 12/14/01 ---------------------- Debtor: Meadow Valley Contractors, Inc. - --------------------------------------------------------------------------- Name of individual, corporation or partnership By /s/ KENNETH D. NELSON Title Vice President ------------------------------- ------------------------------ 2095A (8/00) Schedule of Indebtedness and Collateral - Page 2 of 2 Precomputed Interest: Fixed Rate Attach to Master Security Agreement 2094 Delivery and Installation Certificate To: THE CIT GROUP/EQUIPMENT FINANCING, INC. P.O. Box 27248 - -------------------------------------------------------------------------------- Address Tempe AZ 85285-7248 - -------------------------------------------------------------------------------- City State Zip Code Undersigned hereby certifies that all goods, chattels and equipment described in the Schedule of Indebtedness and Collateral No. 8 dated 12/14/01, to Master Security Agreement dated 4/5/00 between The CIT Group/Equipment Financing, Inc. and undersigned ("Security Agreement"), have been furnished to undersigned at the location designated in the security agreement, that delivery and installation of said goods, chattels and equipment have been fully completed as required, and that said goods, chattels and equipment have been inspected and accepted by the undersigned as satisfactory on 11/27/01. Undersigned understands that you are relying on the foregoing certification in making your loan for the purchase of such goods, chattels and equipment, and to induce you to make the loan, undersigned agrees that undersigned will settle all claims, defenses, setoffs and counterclaims it may have directly with Herrmann Equipment, Inc. ("Seller") and will not set up any thereof against you, that its obligation to you is absolute and unconditional, and that you are not the manufacturer, distributor or seller of the equipment and have no knowledge or familiarity with it. One (1) Cedarapids Model MS-2 60" Pikc-Up Machine S/N 50480. Including all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy. Dated: 12/14/01 --------------------------- Meadow Valley Contractors, Inc. - -------------------------------------------------------------------------------- Name of individual, corporation or partnership By /s/ KENNETH D. NELSON Title Vice President ------------------------------- ----------------------------------- If corporation, have signed by President, Vice President or Treasurer, and give official title. If owner or partner, state which. 1552A (11/98) Delivery and Installation Certificate - Purchase Money Loan by CIT Page 1 of 1 Date: 12/14/01 THE CIT GROUP/EQUIPMENT FINANCING, INC. P.O. Box 27248 - ---------------------------------------------------------------- Address Tempe AZ 85285-7248 - ---------------------------------------------------------------- City State Zip Code Gentlemen: You are irrevocably instructed to disburse the proceeds of your loan to us, evidenced by the Schedule of Indebtedness No. 8 dated 12/14/01 To Master Security Agreement dated 9/5/00 as follows: Payee Names and Addresses Amount - ----------------------------------------------- ------------------- Herrmann Equipment, Inc. $ 73,183.70 ------------------ The CIT Group/Equipment Financing, Inc. $ 250.00 ------------------ (NON REFUNDABLE ORIGINATION FEE) $ ------------------ $ ------------------ $ ------------------ $ ------------------ $ ------------------ Total Proceeds $ 73,433.70 ------------------ Very truly yours, Meadow Valley Contractors, Inc. - -------------------------------------------------------------------------------- By /s/ KENNETH D. NELSON Title Vice President ------------------------------- ----------------------------------- 1770 (11/98) Pay Proceeds Letter Page 1 of 1 EX-10.167 11 dex10167.txt SECURITY AGREEMENT WITH CIT GROUP Exhibit 10.167 Schedule No. 3 Schedule of Indebtedness and Collateral To Master Security Agreement dated 4/5/00, between the undersigned Secured Party and Debtor. This Schedule of Indebtedness and Collateral incorporates the terms and conditions of the above-referenced Master Security Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Secured Party of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. The equipment listed on this Schedule will be located at: 3430 East Flamingo Road, Ste. 100 Las Vegas NV 89121 - -------------------------------------------------------------------------------- Address City State Zip Code Debtor grants to Secured Party a security interest in the property described below, along with all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy, all hereinafter referred to collectively as "Collateral". Collateral Description (Describe Collateral fully including make, kind of unit, model and serial numbers and any other pertinent information.) See Schedule "A" consisting of 2 pages attached hereto and made a part hereof. 2095A (8/00) Schedule of Indebtedness and Collateral - Precomputed Interest: Fixed Rate Attach to Master Security Agreement 2094. Page 1 of 2 Debtor promises to pay Secured Party the total sum of $918,524.16 which represents principal and interest precomputed over the term hereof, payable in 36 (total number) combined principal and interest payments of $25,514.56 each commencing on 2/18/02 and a like sum on a like date each month thereafter until fully paid, provided however, that the final payment shall be in the amount of the unpaid balance and interest. Payment shall be made at the address of Secured Party shown on the Master Security Agreement or such other place as Secured Party may designate from time to time. Special Provisions If this Schedule is prepaid prior to the date provided for repayment, the Debtor agrees to pay the following fees: During the first loan year - NO PREPAYMENT ALLOWED; during the second loan year - 5% of the then unpaid balance; during the third loan year - 4% of the then unpaid balance. Accepted 1/16/02 ------------------------- Secured Party: THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ ILLEGIBLE Title ILLEGIBLE ------------------------------- ----------------------------------- Executed on ------------------- Debtor: 1/16/02 Ready Mix, Inc. - -------------------------------------------------------------------------------- Name of individual, corporation or partnership By /s/ KENNETH D. NELSON Title Vice President ------------------------------- ----------------------------------- 2095A (8/00) Schedule of Indebtedness and Collateral - Precomputed Interest: Fixed Rate Attach to Master Security Agreement 2094. Page 2 of 2 SCHEDULE "A" ------------ Attached to and made a part of Schedule of Indebtedness and Collateral No. 3 dated 1-16-02, to Master Security Agreement dated 4-5-00, between Ready Mix, Inc. as Debtor and The CIT Group/Equipment Financing, Inc. as Secured Party. One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT0VC029176, with 11.0 Yard Bridgemaster III Mixer, S/N: 43133-09079 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT6VC029196, with 11.0 Yard Bridgemaster III Mixer, S/N: 43132-09078 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT9VC027118, with 11.0 Yard Bridgemaster III Mixer, S/N: 43147-09086 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT3VC029169, with 11.0 Yard Bridgemaster III Mixer, S/N: 43145-09084 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT1VC029171, with 11.0 Yard Bridgemaster III Mixer, S/N: 43168-09098 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHTXVC029170, with 11.0 Yard Bridgemaster III Mixer, S/N: 43178-09101 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT9VC029175, with 11.0 Yard Bridgemaster III Mixer, S/N: 43165-09095 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT1VC029185, with 11.0 Yard Bridgemaster III Mixer, S/N: 42938-08979 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT3VC029172, with 11.0 Yard Bridgemaster III Mixer, S/N: 42873-08955 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT2VC029177, with 11.0 Yard Bridgemaster III Mixer, S/N: 42940-08981 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT6VC029179, with 11.0 Yard Bridgemaster III Mixer, S/N: 43101-09063 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT4VC029178, with 11.0 Yard Bridgemaster III Mixer, S/N: 42877-08956 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT0VC027010, with 11.0 Yard Bridgemaster III Mixer, S/N: 42868-08952 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT0VC027007, with 11.0 Yard Bridgemaster III Mixer, S/N: 42854-08946 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT7VC027120, with 11.0 Yard Bridgemaster III Mixer, S/N: 43042-09033 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT7VC027117, with 11.0 Yard Bridgemaster III Mixer, S/N: 42928-08975 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT2VC027123, with 11.0 Yard Bridgemaster III Mixer, S/N: 42919-08971 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT5VC017208, with 11.0 Yard Bridgemaster III Mixer, S/N: 43026-09024 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT0VC027122, with 11.0 Yard Bridgemaster III Mixer, S/N: 42920-08972 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT2VC029180, with 11.0 Yard Bridgemaster III Mixer, S/N: 43087-09049 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT9VC027121, with 11.0 Yard Bridgemaster III Mixer, S/N: 43077-09048 One (1) 1997 IHC Truck, F5070 SFA, VIN: 2HTTWAHT4VC027012, with 11.0 Yard Bridgemaster III Mixer, S/N: 42872-08954 And tires, wheels, additions, substitutions, attachments, replacements and accessions thereof, plus the proceeds of all the foregoing. Debtor: Secured Party: READY MIX, INC. THE CIT GROUP/EQUIPMENT - --------------- ----------------------- FINANCING, INC. --------------- By: /s/ KENNETH D. NELSON By: ------------------------------ ------------------------------ Title: Vice President Title: --------------------------- --------------------------- ---------- Date THE CITY GROUP/EQUIPMENT FINANCING, INC. P.O. Box 27248 - -------------------------------------------------------------------------------- Address Tempe AZ 85285-7248 - -------------------------------------------------------------------------------- City State Zip Code Gentlemen: You are irrevocably instructed to disburse the proceeds of your loan to us, evidenced by the Schedule of Indebtedness No. _____ dated 1-16-02, To Master Security Agreement dated 4-5-00 as follows:
Payee Names and Addresses Amount - ------------------------------------------------------------- --------------------- 1st Capital Group $ 452,672.89 -------------------- US Bankcorp. $ 374,451.69 -------------------- The CIT Group/Equipment Financing, Inc (Non Refundable Processing Fee) $ 3,500.00 -------------------- $ -------------------- $ -------------------- $ -------------------- $ -------------------- Total Proceeds $ 830,624.58 --------------------
Very truly yours, Ready Mix, Inc. - -------------------------------------------------------------------------------- By /s/ KENNETH D. NELSON Title Vice President ------------------------------- ----------------------------------- 1770 (11/98) Pay Proceeds Letter Page 1 of 1 EX-10.168 12 dex10168.txt AMENDMENT ONE TO REVOLVING LOAN AGREEMENT Exhibit 10.168 tyco Mark Saylor Tyco Capital fka The CIT - ---------- Phone 480-784-2383 Group/EF Capital Fax 480-858-1438 1540 W. Fountainhead Pkwy E-Mail Tempe, AZ 85282 Mark.saylor@cit.com ------------------- P.O. Box 27248 Tempe, AZ 85285 January 15, 2002 Mr. Brad Larson Meadow Valley Contractors, Inc. 4411 South 40th Street Phoenix, AZ 85040 Re: Amendment No. 1 to Restated and Amended Revolving Loan Agreement (the "Agreement") dated July 27, 2001. Dear Brad: The above Agreement is hereby amended as follows: Section 1. Loans. The "Termination Date" is changed to January 1, 2003. Section 4. Repayment of Loans. The date in Subsection 4.2 is changed to January 31, 2003. Section 5. Interest. The rate in the first sentence is changed to "governing rate" plus .50%. Section 7. Available Line of Credit. Subsection 7.3 is entirely replaced by the following: All other terms and conditions of the Agreement will remain in full force and effect. Sincerely, Mark Saylor CIT Group/Equipment Financing, Inc. Agreed to: Meadow Valley Contractors, Inc. By: /s/ KENNETH D. NELSON ------------------------- Title: Vice President ---------------------- Date: 1-28-02 ----------------------- Guarantor Acknowledgement: Meadow Valley Corporation By: /s/ Bradley E. Larson ------------------------- Title: President ---------------------- Date: 1-28-02 ----------------------- Tyco Capital companies are subsidiaries of Tyco International Ltd. tyco Mark Saylor Tyco Capital fka The CIT - ---------- Phone 480-784-2383 Group/EF Capital Fax 480-858-1438 1540 W. Fountainhead Pkwy E-Mail Tempe, AZ 85282 Mark.saylor@cit.com ------------------- P.O. Box 27248 Tempe, AZ 85285 January 15, 2002 Mr. Brad Larson Ready Mix, Inc. 3430 Flamingo Rd. #100 Las Vegas, NV 89121-5018 Re: Amendment No. 1 to Revolving Loan Agreement (the "Agreement") dated July 27, 2001. Dear Brad: The above Agreement is hereby amended as follows: Section 1. Loans. The "Termination Date" is changed to January 1, 2003. Section 4. Repayment of Loans. The date in Subsection 4.2 is changed to January 31, 2003. Section 5. Interest. The rate in the first sentence is changed to "governing rate" plus .50%. Section 7. Available Line of Credit. Subsection 7.3 is entirely replaced by the following: All other terms and conditions of the Agreement will remain in full force and effect. Sincerely, Mark Saylor CIT Group/Equipment Financing, Inc. Agreed to: Ready Mix, Inc. By: /s/ KENNETH D. NELSON ------------------------- Title: Vice President ---------------------- Date: 1-28-02 ----------------------- Guarantor Acknowledgement: Meadow Valley Corporation By: /s/ Bradley E. Larson ------------------------- Title: President ---------------------- Date: 1-28-02 ----------------------- Tyco Capital companies are subsidiaries of Tyco International Ltd. EX-10.169 13 dex10169.txt SECURITY AGREEMENT WITH CIT GROUP Exhibit 10.169 Schedule No. 4 Schedule of Indebtedness and Collateral To Master Security Agreement dated 4-5-00 between the undersigned Secured Party and Debtor. This Schedule of Indebtedness and Collateral incorporates the terms and conditions of the above-referenced Master Security Agreement. This is Originally Executed Copy No. 1 of 1 originally executed copies. Only transfer of possession by Secured Party of Originally Executed Copy No. 1 shall be effective for purposes of perfecting an interest in this Schedule by possession. The equipment listed on this Schedule will be located at: 3430 E. Flamingo Rd. Suite 100 Las Vegas NV 89121 - -------------------------------------------------------------------------------- Address City State Zip Code Debtor grants to Secured Party a security interest in the property described below, along with all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy, all hereinafter referred to collectively as "Collateral". Collateral Description (Describe Collateral fully including make, kind of unit, model and serial numbers and any other pertinent information.) One (1) Used JCB model 185 Skid Steer Loader S/N SLP185SAXE07468060 Including all present and future attachments and accessories thereto and replacements and proceeds thereof, including amounts payable under any insurance policy. Page 1 of 2 Debtor promises to pay Secured Party the total sum of $16,129.00 which represents principal and interest precomputed over the term hereof, payable in 12 (total number) combined principal and interest payments of $1,344.08 each commencing on 3-7-02 and a like sum on the like date each month thereafter until fully paid, provided however, that the final payment shall be in the amount of the unpaid balance and interest. Payment shall be made at the address of Secured Party shown on the Master Security Agreement or such other place as Secured Party may designate from time to time. Special Provisions: If this Schedule of Indebtedness and Collateral No. 4 is prepaid prior to the date provided for in the Schedule of Indebtedness and Collateral No. 4 the Debotr agrees to pay the following fees: NO PREPAYMENT IS ALLOWED Accepted 2-4-02 ------------------------- Secured Party THE CIT GROUP/EQUIPMENT FINANCING, INC. By /s/ ILLEGIBLE Title ILLEGIBLE ------------------------------- ------------------------------ Executed on 2-4-02 ---------------------- Debtor: Ready Mix, Inc. - --------------------------------------------------------------------------- Name of individual, corporation or partnership By /s/ KENNETH D. NELSON Title Vice President ------------------------------- ------------------------------ Page 2 of 2 EX-10.170 14 dex10170.txt INDEMNIFICATION AGREEMENT WITH ROBERT MORRIS Exhibit 10.170 READY MIX, INC. OFFICER/DIRECTOR INDEMNIFICATION AGREEMENT ------------------------------------------ THIS AGREEMENT ("Agreement") is entered into and effective this 5th Day of March, 2002, by and between Ready Mix, Inc., a Nevada corporation ("Corporation"), and Robert R. Morris ("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 and 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 employee 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/ BRADLEY E. LARSON --------------------------------------- Bradley E. Larson, Executive Vice President Indemnified Party: /s/ ROBERT R. MORRIS ------------------------------------------- Robert R. Morris EX-10.171 15 dex10171.txt INDEMNIFICATION AGREEMENT WITH NICOLE SMITH Exhibit 10.171 MEADOW VALLEY CORPORATION AND MEADOW VALLEY CONTRACTORS, INC. AND READY MIX, INC. OFFICER/DIRECTOR INDEMNIFICATION AGREEMENT ------------------------------------------ THIS AGREEMENT ("Agreement") is entered into and effective this 5th day of March, 2002, by and between Meadow Valley Corporation and Meadow Valley Contractors, Inc., and Ready Mix, Inc., Nevada corporations ("Corporation(s)"), and Nicole R. Smith ("Indemnified Party"). WHEREAS, the Boards of Directors of the Corporations 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 Corporations) 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 and 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 nor 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 2 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 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. 3 (b) This Agreement shall be binding upon Indemnified Party and upon the Corporation, its successors and assigns, and shall inure to the benefit of 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. MEADOW VALLEY CORPORATION AND MEADOW VALLEY CONTRACTORS, INC. By: /s/ BRADLEY E. LARSON ------------------------------------- Bradley E. Larson, President and Chief Executive Officer READY MIX, INC. By: /s/ BRADLEY E. LARSON ------------------------------------- Bradley E. Larson, Executive Vice President Indemnified Party: /s/ NICOLE R. SMITH ----------------------------------------- Nicole R. Smith 4 EX-10.172 16 dex10172.txt INDEMNIFICATION AGREEMENT WITH ALAN TERRIL Exhibit 10.172 READY MIX, INC. OFFICER/DIRECTOR INDEMNIFICATION AGREEMENT ------------------------------------------ THIS AGREEMENT ("Agreement") is entered into and effective this 5th day of March, 2002, by and between Ready Mix, Inc. a Nevada corporation ("Corporation"), and Alan A. Terril ("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 and 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 notified 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 obligation 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 unenforeceability 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/ BRADLEY E. LARSON ------------------------------------- Bradley E. Larson, Executive Vice President Indemnified Party: /s/ ALAN A. TERRIL ----------------------------------------- Alan A. Terril 4 EX-10.173 17 dex10173.txt INDEMNIFICATION AGREEMENT WITH BRADLEY LARSON Exhibit 10.173 READY MIX, INC. OFFICER/DIRECTOR INDEMNIFICATION AGREEMENT ------------------------------------------ THIS AGREEMENT ("Agreement") is entered into and effective this 5th day of March, 2002, by and between Ready Mix, Inc., a Nevada corporation ("Corporation"), and Bradley E. Larson ("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 and 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 such 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 acknowledged 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/ BRADLEY E. LARSON ----------------------------------------- Bradley E. Larson 4 EX-10.174 18 dex10174.txt INDEMNIFICATION AGREEMENT WITH KENNETH NELSON Exhibit 10.174 READY MIX, INC. OFFICER/DIRECTOR INDEMNIFICATION AGREEMENT ------------------------------------------ THIS AGREEMENT ("Agreement") is entered into and effective this 5th day of March, 2002, by and between Ready Mix, Inc., a Nevada corporation ("Corporation"), and Kenneth D. Nelson ("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 and 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 such 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 acknowledged 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. IT 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/ BRADLEY E. LARSON ------------------------------------- Bradley E. Larson, Executive Vice President Indemnified Party: /s/ KENNETH D. NELSON ----------------------------------------- Kenneth D. Nelson 4 EX-10.175 19 dex10175.txt INSTALLMENT SALE CONTRACT WITH CATERPILLAR Exhibit 10.175 INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT) PURCHASER(S): SELLER: MEADOW VALLEY CATERPILLAR FINANCIAL SERVICES CORPORATION CONTRACTORS, INC. 2120 West End Avenue 4411 S. 40TH, SUITE D11 Nashville, TV 37203-0001 PHOENIX, AZ 85040 County: MARICOPA - -------------------------------------------------------------------------------- Subject to the terms and conditions set forth below and on the reverse side hereof, Seller hereby sells the equipment described below (the "Unit" or "Units") to Purchaser, and Purchaser (if more than one, jointly and severally), having been offered both a cash sale price and a time sale price, hereby buys the Units from Seller on a time sale basis. - -------------------------------------------------------------------------------- NEW (IF USED) DELIVERED OR FIRST MODEL DESCRIPTION OF UNIT(S) SERIAL# CASH SALE USED USED PRICE - -------------------------------------------------------------------------------- (1)USED 980F Caterpillar WHEEL LOADER 8JN00570 73,920.00
- ------------------------------------------------------------------------------------------------------ FIRST DESCRIPTION OF ADDITIONAL SECURITY USED (MAKE, MODEL & SERIAL NUMBER) Sub-Total................................. $ 73,920.00 - -------------------------------------------- Sales Tax................................. $ 3,696.00 1. Total Cash Sale Price.................. $ 77,616.00 Cash Down Pay - -------------------------------------------- Net Trade-in Allow 0.00 FIRST DESCRIPTION OF TRADE-IN EQUIPMENT 2. Total Down Payment..................... $ 0.00 USED (MAKE, MODEL & SERIAL NUMBER) 3. Unpaid Balance of Cash Price (1-2)..... $ 77,616.00 - -------------------------------------------- 4. Official Fees (Specify)................ $ 275.00 DOCUMENTATION FEE 275.00 5. Physical Damage Insurance.............. $ - -------------------------------------------- 6. Principal Balance (Amount Financed)(3+4+5)............... $ 77,891.00 Trade-in Value 7. Finance Charge Less Owing to (___n/a____) (Time Price Differential).............. $ 6,018.52 Net Trade-in Allowance 0.00 8. Time Balance (Total of Payments)(6+7)............... $ 83,909.52 Location of Units: 4411 S. 40TH STREET 9. Time Sale Balance PHOENIX, AZ 85040 MARICOPA (Deferred payment Price)(2+8).......... $ 83,909.52 10. Annual Percentage Rate 7.90% [ILLEGIBLE] 11. Date FINANCE CHARGE begins to accrue MARCH 10, 2002
Purchaser hereby sells and conveys to Seller the above described Trade-in Equipment and warrants it to be free and clear of all claims, liens, security interests and encumbrances except to the extent shown above. 1. PAYMENT: Purchaser shall pay to Seller, at P.O. Box 730681, DALLAS TX 75373-0681 or such other location Seller designates in writing, the Time Balance (Item 8 above) as follows [check(a) or (b)]: [X] (a) in 24 equal monthly installments of $3,496.23 each, with the first installment due on MARCH 10, 2002 and the balance of the installments due on the like day of each month thereafter, (except no payments shall be due during the month(s) of (__n/a__)), until the entire indebtedness has been paid; or __ (b) in accordance with the Payment Schedule attached to this Contract. (Provisions of section 1 continued on reverse.) SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS WHICH ARE A PART OF THIS CONTRACT. LIABILITY INSURANCE COVERAGE FOR BODILY INJURY AND PROPERTY DAMAGE CAUSED TO OTHERS IS NOT INCLUDED IN THIS CONTRACT. NOTICE TO PURCHASER: (1) DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT OR IF IT CONTAINS ANY BLANK SPACES: (2) YOU ARE ENTITLED TO AN EXACT COPY OF THE CONTRACT YOU SIGN: (3) UNDER THE LAW YOU MAY HAVE THE RIGHT TO PAY OFF IN ADVANCE THE FULL AMOUNT DUE AND TO OBTAIN A PARTIAL REFUND OF THE FINANCE CHARGE. PURCHASER ACKNOWLEDGES RECEIPT OF A FULLY COMPLETED COPY OF THIS CONTRACT EXECUTED BY PURCHASER. THIS CONTRACT IS NOT BINDING UPON SELLER UNTIL EXECUTED BY AN AUTHORIZED REPRESENTATIVE OF SELLER. Purchaser(s) and Seller have duly executed this contract as of 3-10, 2002. Purchaser(s) Seller: MEADOW VALLEY CATERPILLAR FINANCIAL SERVICES CORPORATION CONTRACTORS, INC. By /s/ BRADLEY E. LARSON By /s/ MAUREEN JOHNSON ------------------------------- ---------------------------------- Name (PRINT) Bradley E. Larson Name (PRINT) Maureen Johnson --------------------- ------------------------ Title PRESIDENT/CEO Title Option Financing Representative ---------------------------- ------------------------------- ADDITIONAL TERMS AND CONDITIONS 1. PAYMENT (continued): Purchaser shall pay to Seller a late payment charge equal to the lesser of (a) the highest charge allowed by law or (b) 5% of the amount of any payment (including any accelerated payment) not made when due under this Contract (or such later date as may be required by applicable law). Upon prepayment in full or acceleration of the total unpaid Time Balance, Purchaser shall receive a rebate of the unearned portion of the Finance Charge computed on an actuarial basis less a processing fee. Except as otherwise expressly provided herein, the obligations of Purchaser hereunder shall not be affected by any defect in, damage to, loss of or interference with possession or use of any Unit, by the attachment of any lien or claim to any Unit or for any to her cause. 2. DISCLAIMER OF WARRANTIES: Purchaser acknowledges and agrees that Seller is not the manufacturer of the Unit(s) and that Purchaser has selected each Unit based on Purchaser's own judgment without any reliance whatsoever on any statement or representations made by Seller. AS BETWEEN SELLER AND PURCHASER, THE UNIT(S) ARE PROVIDED "AS IS" WITHOUT ANY WARRANTIES OF ANY KIND. SELLER HEREBY EXPRESSLY DISCLAIMS a) ALL WARRANTIES OF MERCHANTABILITY, b) ALL WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, AND c) ALL WARRANTIES AGAINST INFRINGEMNET OR THE LIKE. Seller assigns to Purchaser its interest in any of the manufacturer's warranties on the Unit(s). 3. POSSESSION, USE AND MAINTENANCE: Purchaser shall not(a) use any Unit improperly, carelessly, unsafely or in violation of any law or regulation or for personal, family, or household purposes or for any purpose other than in Purchaser's business (including agricultural business); (b) permit the use of any Unit by anyone other than Purchaser or change the permanent location of any Unit from the county and state specified above without the prior written consent of Seller; or (c) sell, lease, assign or transfer, or create or suffer to exist any lien, claim, security interest or encumbrance on any of its rights hereunder or in any Unit. The Units are and shall remain personal property irrespective of their use or manner of attachment to realty. Upon prior notice to Purchaser, Seller or its agent shall have the right (but not the obligation) at all reasonable times to inspect any Unit. Purchaser shall at its expense maintain the Units in good operating order, repair and condition. Purchaser shall not alter any Unit or affix any equipment to any Unit if such alteration or addition would impair the originally intended function or reduce the value of such Unit. Any alteration or addition to any Unit shall be at the sole risk of Purchaser. 4. TAXES: Purchaser shall promptly pay all taxes, assessments, fees and other charges when levied or assessed against any Unit or the ownership or use thereof, or this Contract or any payments made or to be made to Seller. 5. WAIVER AND INDEMNITY: PURCHASER HEREBY AGREES TO RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS FROM AND AGAINST ANY CLAIMS OF PURCHASER OR THIRD PARTIES, INCLUDING CLAIMS BASED UPON BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL INJURY, PROPERTY DAMAGE, STRICT LIAIBLITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR INJURY CAUSED BY OR RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY, CONDITION, OPERATION, USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY UNIT. FURTHER, PURCHASER AGREES TO BE RESPONSIBLE FOR ALL COSTS AND EXPENSES INCLUDING REASONABLE ATTORNEYS FEES, INCURRED BY SELLER OR ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS IN DEFENDING SUCH CLAIMS OR IN ENFORCING THIS PROVISION. UNDER NO CONDITION OR CAUSE OF ACTION SHALL SELLER BE LIABLE FOR ANY LOSS OF ACTUAL OR ANTICIPATED BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES. 6. INSURANCE: Purchaser, at is expense, shall keep each Unit and all equipment listed as Additional Security insured against all risks of their full insurable value and shall maintain comprehensive public liability insurance in an amount reasonably acceptable to Seller. All such insurance shall be in such form and with such companies as Seller shall reasonably approve, shall be primary, without right of contribution from any insurance carried by Seller, and shall provide that such insurance may not be cancelled or altered so as to affect the interest of Seller without at least 30 days' prior written notice to Seller. All insurance covering loss or damage to the Units and Additional Security shall name Seller (or its designee) as loss payee and be payable to Seller as its interest may appear. Purchaser agrees to notify Seller of any occurrence which may become the basis of an insurance claim hereunder and not to make any adjustments with insurers without Seller's prior written consent. Prior to the first delivery of any Unit to Purchaser, Purchaser shall deliver to Seller satisfactory evidence of such insurance coverage. 7. EVENTS OF DEFAULT: Each of the following shall constitute an "Event of Default" hereunder: (a) Purchaser shall fail to make any payment to Seller when due hereunder or fail to observe or perform any other covenant, agreement or warranty made by Purchaser hereunder; (b) any representation or warranty of Purchaser contained herein or in any document furnished to Seller in connection herewith shall be incorrect or misleading when made; (c) any Unit or additional security shall become lost, stolen, destroyed, irreparably damaged or subject to any sale, lien, claim, security interest or encumbrance (other than in favor of Seller or is assignee); (d) any default shall occur under any other agreement between Purchaser and Seller; (e) Purchaser or any guarantor of this Contract shall cease to do business, become insolvent, make an assignment for the benefit of creditors or file any petition under any bankruptcy, reorganization, insolvency or moratorium law, or any other law for the relief of debtors; (f) any involuntary petition shall be filed under any bankruptcy statute against Purchaser or any guarantor of this Contract or any receiver, trustee, or similar official shall be appointed to take possession of the properties of Purchaser or any guarantor of this Contract unless such petition or appointment ceases to be in effect within 30 days of said filing or appointment, (g) Seller shall reasonably deem itself to be insecure; or (h) any breach or repudiation by any guarantor shall occur under any guaranty obtained by Seller in connection with this Contract. 8. REMEDIES: If any Event of Default shall occur, Seller may, at its option, do any one or more of the following: (a) Declare all amounts due or to become due under this Contract, excluding any unearned portion of the Finance Charge, immediately due and payable; (b) recover any additional damages and expenses sustained by Seller by reason of the breach of any covenant, representation or warranty contained in this Contract; (c) enforce the security interest granted hereunder; (d) without notice, liability or legal process, enter upon the premises where any of the Units or additional security may be and take possession thereof, and (e) require Purchaser to assemble the Units and additional security and make them available to Seller at a place designated by Seller which is reasonably convenient to both parties. Time is of the essence of this Contract. Seller shall have all rights given to a secured party by law and may retain all monies theretofore paid by Purchaser hereunder as compensation for the reasonable use of the Units by Purchaser Seller may, at its option, undertake commercially reasonable efforts to sell the Units and additional security, and the proceeds of any such sale shall be applied: First, to reimburse Seller for all reasonable expenses of retaking, holding, preparing for sale, and selling the Units and additional security, including all taxes and reasonable attorneys' fees, and second, to the extent not previously paid by Purchaser, to pay Seller all amounts then due or accrued under this Contract, including any accelerated payments and late payment charges. Any surplus shall be paid to the person entitled thereto. Purchaser shall promptly pay any deficiency to Seller. Purchaser acknowledges that sales for cash or on credit to a wholesaler, retailer or user of the Units or additional security, and with or without the Units or additional security being present at such sale, are all commercially reasonable. Purchaser agrees to pay all reasonable attorneys' fees (to the extent permitted by applicable law) and all costs and expenses incurred by Seller in enforcing this Contract. The remedies provided herein shall be cumulative and in addition to all other remedies at law or in equity. If Purchaser fails to perform any of its obligations under this Contract, Seller may (but need not) at any time thereafter perform such obligation, and the expenses incurred in connection therewith shall be payable by Purchaser upon demand. 9. SECURITY INTEREST; PURCHASER ASSURANCES AND REPRESENTATIONS: To secure payment of Purchaser's indebtedness to Seller hereunder and the performance of all obligations of Purchaser hereunder, Purchaser hereby grants to Seller a continuing security interest in the Units, and in the equipment, if any, described as Additional Security on the front of this Contract, including all attachments, accessories and optional features for such Units and Additional Security (whether or not installed thereon) and all substitutions, replacements, additions and accessions thereto, and proceeds of all the foregoing including, but not limited to, proceeds in the form of chattel paper. Purchaser will, at its expense, do any act and execute, acknowledge, deliver, file, register and record any document which Seller deems desirable in its discretion to protect Seller's security interest and Seller's rights and benefits under this Contract. Purchaser hereby irrevocably appoints Seller as Purchaser's Attorney-in-Fact for the signing and filing of such documents and authorizes Seller to delegate these limited powers. Purchaser represents and warrants to Seller that (a) Purchaser has the power to make, deliver and perform under this Contract; (b) the person executing and delivering this Contract is authorized to do so on behalf of Purchaser; (c) this Contract constitutes a valid obligation of Purchaser, legally binding upon it and enforceable in accordance with its terms; and (d) all credit, financial and other information submitted to Seller in connection with this Contract is and shall be true, correct and complete. Purchaser further represents and warrants to Seller that Purchaser is and shall remain a Corporation registered in the state of Nevada ("Business Location"); and Purchaser will not change its form of business organization or Business Location without prior written notice to Seller. 10. ASSIGNMENT; COUNTERPARTS: The rights and remedies of Seller under this Contract may be assigned by Seller at any time. If this Contract is assigned by Seller, the term "Seller" shall thenceforth mean Seller's assignee, and if assigned to a partnership, shall thenceforth mean such partnership and, for purposes of Sections 2, 4, 5 and 6, each partner in such partnership. If notified by Seller, Purchaser shall make all payments due hereunder directly to the party designated in such notice, without any offset or deduction whatsoever. Purchaser waives, as to Seller's assignee, all claims and defenses Purchaser may have or assert against Seller and agrees that no such claim or defense will be asserted against Seller's assignee. No assignment of this Contract or any right or obligation hereunder may be made by Purchaser without the prior written consent of Seller. This Contract shall be binding upon and inure to the benefit of Seller and Purchaser and their respective successors and assigns. Although multiple counterparts of this document may be signed, only the counterpart accepted, acknowledged and certified by Caterpillar Financial Services Corporation on the signature page thereof as the original will constitute original chattel paper. 11. EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF CONTRACT; NOTICES: No delay or omission to exercise any right or remedy accruing to Seller hereunder shall impair any such right or remedy nor shall it be construed to be a waiver of any breach or default of Purchaser. Any waiver or consent by Seller under this Contract must be in writing specifically set forth. This Contract completely states the rights of Seller and Purchaser with respect to the Units and supersedes all prior agreements with respect thereto. No variation or modification of this Contract shall be valid unless in writing. All notices hereunder shall be in writing, addressed to each party at the address set forth on the front of this Contract or at such other address as may hereafter be furnished in writing. 12. SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Contract shall be invalid under any applicable law, such provision shall be deemed omitted but the remaining provisions hereof shall be given effect. All obligations of Purchaser under this Contract shall survive the expiration or termination of this Contract to the extent required for their full observance and performance. 13. APPLICABLE LAW, JURISIDICTION AND JURY TRIAL WAIVER PROVISIONS: This Agreement shall be governed by and construed under the laws of the State of Tennessee, without giving effect to the conflict-of-laws principles thereof, and Purchaser hereby consents to the jurisdiction of any state of 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. EX-10.176 20 dex10176.txt CONTRACT BETWEEN REGISTRANT AND CLARK COUNTY NV Exhibit 10.176 Department of General Services [GRAPHIC OMITTED] Purchasing & Contracts 500 S Grand Central Pky 4th Fl o PO Box 551732 o Las Vegas NV 89155-1732 (702) 455-2897 o Fax (702) 386-4914 Earl Hawkes, Director o Ted J. Olivas, Purchasing & Contracts Manager ================================================================================ January 24, 2001 Alan Terril MEADOW VALLEY CONTRACTORS, INC P.O. Box 549 Moapa, Nevada 89025 RE: NOTICE OF AWARD, BID NUMBER 4726-00; NORTHERN SEGMENT LAS VEGAS BELTWAY- JONES TO SIMMONS PWP# CL-2001-167 Dear Mr. Terril: Thank you for the prompt return of the requested bonds and insurance. The documents provided appear to be in order. Therefore, this project is hereby awarded to your company in the amount of $12,998,245. Enclosed is your copy of the contract documents, which is comprised of 1 book. The Public Works Department will administer this contract and will be in contact with you in the near future to schedule the pre-construction meeting and issue the Notice to Proceed. Please contact Michael Dunning immediately to schedule your mandatory initial Quality Control (QC) plan meeting at (702) 455-7430. Thank you for you continued interest in doing business with Clark County. Sincerely, /s/ REGINA R. HEILMAN-RYAN - ------------------------------ REGINA R. HEILMAN-RYAN, C.P.M. Purchasing Analyst :kam Enclosure cc: M.J. Manning, Public Works Les Henley, Public Works Bobby Shelton, Public Works Michael Dunning, Public Works BOARD OF COUNTY COMMISSIONERS DARIO HERRERA, Chairman o MYRNA WILLIAMS, Vice-Chair YVONNE ATKINSON GATES o ERIN KENNY o MARY J. KINCAID o CHIP MAXFIELD BRUCE L. WOODBURY o DALE W. ASKEW, Count Manager BOND NUMBER: 24006311/255073 BID NO. 4726-00 CLARK COUNTY, NEVADA PERFORMANCE BOND IMPORTANT: SURETY COMPANIES EXECUTING BONDS MUST BE LICENSED TO ISSUE SURETY BY THE STATE OF NEVADA INSURANCE DIVISION PURSUANT TO NEVADA REVISED STATUTE 683A.090 AND ISSUED BY AN APPOINTED AGENT PURSUANT TO NEVADA REVISED STATUTE 683A.280. INDIVIDUAL SURETY BONDS ARE NOT ACCEPTABLE. KNOW ALL MEN BY THESE PRESENTS That Meadow Valley Contractors, Inc., as Principal Contractor, and Liberty Mutual Insurance Company and The Insurance,* as Surety, are held and firmly bound unto Clark County General Services Department, hereinafter called Owner, in the sum of Twelve Million Nine Hundred Ninety-Eight Thousand** dollars, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents. *Company of the State of Pennsylvania ** two Hundred Forty-Five and no/100 WHEREAS, said Contractor has been recommended for award and shall enter into the contract with said Owner to perform all work required under the Bidding Schedule(s) BID NO. 4726-00 of the Owner's specifications, entitled NORTHERN SEGMENT LAS VEGAS BELTWAY - JONES BOULEVARD TO SIMMONS STREET. NOW THEREFORE, if said Contractor shall perform all the requirements of said contract required to be performed on their part, at the times and in manner specified therein, then this obligation shall be null and void, otherwise it shall remain in full force and effect. PROVIDED, that any change order(s), alterations in the work to be done or the materials to be furnished, which may be made pursuant to the terms of said contract, shall not in any way release said Contractor or said SURETY thereunder, nor shall any extensions of time granted under the provisions of said contract release either said Contractor or said Surety, and notice of such change order(s), alterations or extensions of the contract is hereby waived by said Surety.
SIGNED this 4 day of January, 2001 (SEAL AND NOTORIAL ACKNOWLEDGEMENT OF SURETY) Countersigned resident agent in Nevada. Meadow Valley Contractors, Inc. Pursuant to Nevada Revised Statue 680A.300: --------------------------------------------- (Principal Contractor) ROBERT R. BELL 29469 ALAN TERRIL, Vice-President - --------------------------------------------- --------------------------------------------- (Resident Agent) (Authorized Representative and Title) AON RISK SERVICES INC, INV, 58270 By: ALAN TERRIL - --------------------------------------------- ----------------------------------------- (State of Nevada License Number) (Signature) Liberty Mutual Insurance Company and /s/ ROBERT R. BELL Surety: The Insurance Company of the State of - --------------------------------------------- Pennsylvania (Appointed Agent Name) ------------------------------------- 31689 By: ------------------------------------- ------------------------------------------ (State of Nevada License Number) (Signature) Aon Risk Services, Inc. of Southern AON RISK SERVICES, INC. of NEVADA California Insurance Services Address: 2300 WEST SAHARA, SUITE 560 --------------------------------------------- ------------------------------------ (Appointed Agent Name) LAS VEGAS, NEVADA 89102 ------------------------------------ By: /s/ JERI APODACA ----------------------------------------- Telephone: (702) 227-0300 FAX (702) 227-0021 (Signature) ---------------------------------- Jeri Apodaca, Attorney in Fact Address: 695 Town Center Drive, Suite 500 ------------------------------------ Costa Mesa, CA 92626 ------------------------------------ Telephone No. 714-641-8355 -------------------------------
ISSUING COMPANY MUST HOLD CERTIFICATES OF AUTHORITY AS ACCEPTABLE SURETY ON FEDERAL BONDS AND AS ACCEPTABLE REINSURING COMPANY WITH LISTING IN THE DEPARTMENT OF TREASURY, FISCAL SERVICE, (DEPARTMENT OF CIRCULAR "570," CURRENT REVISIONS). CLARK COUNTY, NEVADA BID PROPOSAL BID NO. 4726-00 NORTHERN SEGMENT LAS VEGAS BELTWAY JONES BOULEVARD TO SIMMONS STREET MEADOW VALLEY CONTRACTORS, INC. - -------------------------------------------------------------------------------- (NAME) P.O. BOX 549, MOAPA, NV 89025 - -------------------------------------------------------------------------------- (ADDRESS) THE UNDERSIGNED PROPOSES AND AGREES: 1. To complete all work for which a contract may be awarded to the Bidder and to furnish any and all labor, equipment, materials, transportation, and other facilities required for the services as set forth in the Proposal and Contract Documents. 2. That the Bidder has examined the Contract Documents and the site(s) for the proposed work and satisfied themselves as to the character, quality of work to be performed, materials to be furnished and as to the requirements for the specifications. 3. That the Bidder has completed all information in the blanks provided and has submitted the following within this bid proposal: a. Each subcontractor which will be paid an amount exceeding 5% of the total base bid amount. b. Has enclosed their Certificate of Eligibility issued by the State Contractors Board, if applicable. c. Has submitted a bid security in the form of, at Bidder's option, A Cashiers Check, Certified Check, Money Order, or Bid Bond in favor of the Owner(s) in the amount of 5% of the base bid amount. 4. If the Bidder is one of the 3 apparent low bidders at the bid opening, and has subcontractor(s) pursuant to NRS 338.141, they must submit Bid Attachment 2 within two hours after completion of the bid opening pursuant to the Instructions to Bidders. Faxing is not allowed. This Attachment must be time stamped by the Department of General Services, Submission after the 2 hour time limit will be rejected and/or returned unopened and the bid may be deemed non-responsive. a. Projects EXCEEDING $5,000,000 1) The Bidders shall list subcontractors which will provide labor/improvements exceeding 1% of the prime contractor's total base bid amount, or $50,000,000, whichever is greater. 5. Upon faxed receipt of the letter of Intent to Award the contract, the bidder will provide the following submittals within 7 days from receipt of the Notice. a. Performance Bond, Labor and Material Payment Bond and Guaranty Bond, for 100% of the contract price as required. b. Certificates of Insurance for Commercial General Liability in the amount of $1,000,000, Automobile Liability in the amount of $1,000,000,Explosion, Collapse and Underground in the amount of $1,000,000, and workers' compensation insurance issued by an insurer qualified to underwrite workers' compensation insurance in the State of Nevada, as required by law. 6. That if the Bidder does not provide the above submittals on or before the 7th calendar day, or does not keep the bonds or insurance policies in effect or allows them to lapse, the Bidder will pay over to the Owner the amount of $3,500 per day as liquidated damages. 7. That this Proposal is genuine and is not sham or collusive, or made in the interest of, or on behalf of any person not herein named, nor the Bidder in any manner sought to secure for themselves an advantage over any other bidder. 8. The Bidder further proposes and agrees that if his bid is accepted they will commence to perform the work called for by the plans and Contract Documents within 7 calendar days after Notice to Proceed is issued and will complete all work within the calendar days specified in the Instruction to Bidders. 9. The Bidder further proposed and agrees that they will accept as full compensation for the work to be performed the price written in the Bid Schedule below. 10. That the Bidder has carefully checked the figures below and that Owner will not be responsible for any error or omissions in the preparation or submission of this Bid. 5-1
Bid Proposal Bid No. 4726-00 Addendum No. 4 Northern Segment Las Vegas Beltway Jones Boulevard to Simmons Street ===================================================================================== ITEM APPROX. NUMBER ITEM DESCRIPTION QUANTITY UNIT TOTAL - ------------------------------------------------------------------------------------- 623.03 No. 7 PULLBOX 4 EA $ 1,192.92 - ------------------------------------------------------------------------------------- 623.04 3" PVC CONDUIT W/PULL STRING 700 LF $ 3,836.00 - ------------------------------------------------------------------------------------- 624.01 TRAFFIC CONTROL 1 LS $ 177,221.33 - ------------------------------------------------------------------------------------- 627.01 PERMANENT SIGN PANEL (GROUND MOUNTED) 800 SF $ 29,184.00 - ------------------------------------------------------------------------------------- 628.01 8" LIQUID PAVEMENT MARKING 30,000 LF $ 72,000.00 - ------------------------------------------------------------------------------------- 628.02 TYPE I FILM (CROSSWALKS, STOP BARS, AND CHEVRON ISLANDS) 6,000 SF $ 25,260.00 - ------------------------------------------------------------------------------------- 628.03 TYPE I FILM ("ARROW") 40 EA $ 7,029.20 - ------------------------------------------------------------------------------------- 628.04 TYPE I FILM ("ONLY") 20 EA $ 3,727.60 - ------------------------------------------------------------------------------------- 629.01 VERTICALLY ADJUST BLOWOFF VALVE 1 EA $ 532.50 - ------------------------------------------------------------------------------------- 629.02 VERTICALLY ADJUST TEST STATION 2 EA $ 2,130.00 - ------------------------------------------------------------------------------------- 629.03 VERTICALLY ADJUST LOW POINT DRAIN 1 EA $ 2,130.00 - ------------------------------------------------------------------------------------- 629.04 24" WATER LINE EXTENSION (BRADLEY) 1 LS $ 234,300.00 - ------------------------------------------------------------------------------------- 630.01 ADJUST SANITARY SEWER MANHOLE 10 EA $ 3,727.50 - ------------------------------------------------------------------------------------- 630.02 26" CASING FOR FUTURE SEWER 350 LF $ 44,730.00 - ------------------------------------------------------------------------------------- 633.01 NON-REFLECTIVE PAVEMENT MARKERS 7,500 EA $ 10,800.00 - ------------------------------------------------------------------------------------- 633.02 REFLECTIVE PAVEMENT MARKERS 3,000 EA $ 9,120.00 - ------------------------------------------------------------------------------------- TOTAL BID $12,988,244.50 =====================================================================================
EX-10.177 21 dex10177.txt CONTRACT BETWEEN REGISTRANT AND CORP OF ENGINEERS Exhibit 10.177
CONTRACT NO.: DACW09-01-C-0003 - ---------------------------------------------------------------------------------------------- OFFER (Must be fully completed by offeror) - ---------------------------------------------------------------------------------------------- 14. NAME AND ADDRESS OF OFFEROR (Include ZIP Code) 15. TELEPHONE NO. (Include ZIP code) Meadow Valley Contractors, Inc. 702-864-2575 P.O. Box 549 ------------------------------------ Moapa, NV 89025 16. REMITTANCE ADDRESS (Include only if different then Item 14) CAGE CODE NO.: 065T2 DUNS NO.: 87-840-3500 - -------------------------------------------------------- CODE FACILITY CODE - ---------------------------------------------------------------------------------------------- 17. The Offeror agrees to perform the work required at the prices specified below in strict accordance with the terms of this solicitation, if this offer is accepted by the Government in writing within _____ calendar days after the date offers are due. (Insert any number equal to or greater than the minimum requirement stated in Item 13D. Failure to insert any number means the offer accepts the minimum in Item 13D. AMOUNTS . SEE SCHEDULE OF PRICES - ---------------------------------------------------------------------------------------------- 18. The offeror agrees to furnish any required performance and payment bonds. - ---------------------------------------------------------------------------------------------- 19. ACKNOWLEDGEMENT OF AMENDMENTS (The offeror acknowledges receipt of amendments to the solicitation - give number and date of each) - ---------------------------------------------------------------------------------------------- AMENDMENT NO. 1. 2. 3. 4. 5. 6. 7. - ---------------------------------------------------------------------------------------------- DATE 8-31-00 10-6-00 10-26-00 11-6-00 11-13-00 11-24-00 11-30-00 - ---------------------------------------------------------------------------------------------- 20A. NAME AND TITLE OF PERSON AUTHORIZED TO SIGN OFFER 20B. SIGNATURE 20C. OFFER DATE (Type or print) Alan Terril - Vice-President /s/ ALAN TERRIL 12-7-00 - ---------------------------------------------------------------------------------------------- 21. ITEMS ACCEPTED: ITEM NO'S 0001-0047 AND AMENDMENT NO'S 1-7, AS PER ATTACHED SCHEDULE OF PAYMENT, IFB NO. DACW09-00-B-0012, DRAWINGS AND CONDITIONS SET FORTH HEREIN, ALL OF WHICH ARE MADE A PART OF THIS CONTRACT. THE SUBCONTRACTING PLAN SUBMITTED BY MEADOW VALLEY CONTRACTORS, ILLEGIBLE IS INCORPORATED AND MADE A MATERIAL PART OF THIS CONTRACT. - ---------------------------------------------------------------------------------------------- 22. AMOUNT 23. ACCOUNTING AND APPROPRIATION DATA $10,608,307.41 THIS IS A CONTINUING CONTRACT, SEE ATTACHMENT NO. 1 - ---------------------------------------------------------------------------------------------- 24. SUBMIT INVOICES TO ADDRESS SHOWN IN . ITEM 25. OTHER THAN FULL AND OPEN COMPETITION (4 Copies unless otherwise specified) 26 PURSUANT TO [ ] 10 U.S.C 2304(c) ( ) [ ] 41 U.S.C 253(c) ( ) - ---------------------------------------------------------------------------------------------- 26. ADMINISTERED BY CODE 27. PAYMENT WILL BE MADE BY ---------------- U.S. ARMY CORPS OF ENGINEERS USACE FINANCE CENTER TROPICANA PROJECT OFFICE ATTN: CEFC-AO-P 4440 SO. DURANGO, BLDG. B, SUITE D 5270 INTEGRITY DRIVE LAS VEGAS, NV 89117 MILLINGTON, TN 38454-5005 - ---------------------------------------------------------------------------------------------- CONTRACTING OFFICER WILL COMPLETE ITEM 28 OR 29 AS APPLICABLE - ---------------------------------------------------------------------------------------------- [ ] 28. NEGOTIATED AGREEMENT Contractor is [X] 29. AWARD (Contractor is not required required to sign this document and return ____ to sign this document.) Your offer on this copies to issuing office.) Contractor agrees to solicitation is herby accepted as to the furnish and deliver all items or perform all items listed. This award consummates the work requirements identified on this form and contract, which consists of (a) the any continuation sheets for the consideration Government solicitation and your offer, and stated in this contract. The rights and (b) the contract award. No further obligations of the arties to this contract shall contractual document is necessary. be governed by (a) this contract award, (b) the solicitation, and (c) the clauses, representations, certifications, and specifications incorporate by reference in or attached to this contract. - ---------------------------------------------------------------------------------------------- 30A. NAME AND TITLE OF CONTRACTOR OR PERSON 31A. NAME OF CONTRACTING OFFICER (Type AUTHORIZED TO SIGN (Type or print) or print) MICHAEL K. WEGLER Major, U.S. Army - ---------------------------------------------------------------------------------------------- 30B. SIGNATURE 30C. DATE 31B. UNITED STATES OF AMERICA 31C. AWARD DATE BY [ILLEGIBLE] 26JAN 01 - ---------------------------------------------------------------------------------------------- DACQW09-00-B-0012 STANDARD FORM 1442 BACK (REV. 4-85) ENCLOSURE NO. 1 TO AMENDMENT NO. 0006 USAPPC v1.00
EX-10.178 22 dex10178.txt CONTRACT BETWEEN REGISTRANT AND UTAH DOT Exhibit 10.178 CONTRACT THIS AGREEMENT, made and executed in Three (3) original counterparts this 25th day of June A.D. 2001 between the Utah Department of Transportation, hereinafter called "Department," first party, and Meadow Valley Contractors hereinafter called "Contractor," Second party. WITNESSETH, That for an in consideration of payments, hereinafter mentioned, to be made by the Department, the Contractor agrees to furnish all labor equipment; to furnish and deliver all materials not specifically mentioned as being furnished by the Department and to do and perform all work in the GRADING, DRAIN., SURFACING, SIGNALS, SIGNING, STRUCTURES, LANDSCAPING, LIGHTING in Salt Lake County, State of Utah, the same being identified as SP-0151(1)0 for the approximate sum of Ten Million Four Hundred Thirty Nine Thousand Ninety Four Dollars and 84/100 ($10,439,094.84). The Contractor further covenants and agrees that all of said work and labor shall be done and performed in the best and most workmanlike manner and in strict conformity with the plans and specifications. The said Plans, and Specifications and the Notice to Contractors, Instruction to Bidders, the Proposal, Special Provisions and Contract Bond are hereby made a part of this agreement as fully and to the same effect as if the same had been set forth at length herein. In consideration of the foregoing premises, the Department agrees to pay to Contractor in the manner and in the amount provided in the said specification and proposal. IN WITNESS WHEREOF, The parties hereto have subscribed their names through their proper officers thereunto duly authorized as of the day and year first above written. Attest: UTAH DEPARTMENT OF TRANSPORTATION /s/ ILLEGIBLE /s/ ILLEGIBLE - ------------------------------ ------------------------------ Secretary for Director of Transportation - First Party /s/ Val Martin Meadow Valley Contractors - ------------------------------ ------------------------------ Witness to: Company Representative Second Party Approved as to form: by /s/ ROBERT TERRIL ------------------------------ by /s/ ILLEGIBLE - ------------------------------ ------------------------------ UDOT Legal Counsel Company Representative APPROVED /s/ CHERISE YOUNG 6/28/01 94-279836-5501 --------------------- ------------------------------ Contract Administrator Utah Contractor License Number FUNDS AVAILABLE -------------- /s/ JANET GLADMAN 6/27/01 --------------------- ------- Budget Officer Date EX-10.179 23 dex10179.txt CONTRACT BETWEEN REGISTRANT AND CLARK COUNTY NV Exhibit 10.179 [GRAPHIC OMITTED] Department of General Services Purchasing and Contracts Division 500 S Grand Central Pky 4th Fl o P O Box 551732 o Las Vegas NV 89155-1732 (702) 455-2897 o Fax (702) 386-4914 Earl Hawkes, Director o Ted J. Olivas, Purchasing & Contracts Manager June 13, 2001 Mr. Alan Terril MEADOW VALLEY CONTRACTORS, INC. P.O. Box 549 Moapa, Nevada 89025 RE: NOTICE OF AWARD, BID NUMBER 4708-00; NORTHERN BELTWAY - PECOS ROAD TO I-15 PWP #CL-2001-279 Dear Mr. Terril: Thank you for the prompt return of the requested insurance. The documents provided appear to be in order. Therefore, this project is hereby awarded to your company in the amount of $21,749,072.82. Enclosed is your copy of the contract documents. The Public Works Department will administer this contract and will be in contact with you in the near future to schedule the pre-construction meeting. Please contact Michael Dunning immediately to schedule your mandatory initial Quality Control (QC) plan meeting at (702) 455-7430. Thank you for your continued interest in doing business with Clark County. Sincerely, /s/ REGINA R. HEILMAN-RYAN REGINA R. HEILMAN-RYAN, C.P.M. Purchasing Analyst :sls Enclosure cc: M. J. Manning, Public Works Les Henley, Public Works Bobby Shelton, Public Works Michael Dunning, Public Works BOARD OF COUNTY COMMISSIONERS DARIO HERRERA, Chairman o MYRNA WILLIAMS, Vice-Chair YVONNE ATKINSON GATES o ERIN KENNY o MARY KINCAID-CHAUNCEY o CHIP MAXFIELD BRUCE L. WOODBURY o DALE W. ASKEW, County Manager BOND NUMBER: 24006341 BID NO. 4708-00 CLARK COUNTY, NEVADA PERFORMANCE BOND IMPORTANT: SURETY COMPANIES EXECUTING BONDS MUST BE LICENSED TO ISSUE SURETY BY THE STATE OF NEVADA INSURANCE DIVISION PURSUANT TO NEVADA REVISED STATUTE 683A.09D AND ISSUED BY AN APPOINTED AGENT PURSUANT TO NEVADA REVISED STATUTE 683A.28D. INDIVIDUAL SURETY BONDS ARE NOT ACCEPTABLE. KNOW ALL MEN BY THESE PRESENTS, That MEADOW VALLEY CONTRACTORS, INC. as Principal Contractor, and LIBERTY MUTUAL INSURANCE COMPANY, as Surety, are held and firmly bound unto CLARK COUNTY, NEVADA, hereinafter called Owner, in the sum of Twenty-One Million Seven Hundred Forty-Nine Thousand Seventy-Two and 82/100's ($21,749,072.82) dollars, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents. WHEREAS, said Contractor has been recommended for award and shall enter into the contract with said Owner to perform all work required under the Bidding Schedule(s) BID NO. 4708-00 of the Owner's specifications, entitled NORTHERN BELTWAY, PECOS ROAD TO I-15. NOW THEREFORE, if said Contractor shall perform all the requirements of said contract required to be performed on their part, at the times and in the manner specified therein, then this obligation shall be null and void, otherwise it shall remain in full force and effect. PROVIDED, that any change order(s), alterations in the work to be done or the materials to be furnished, which may be made pursuant to the terms of said contract, shall not in any way release said Contractor or said Surety thereunder, nor shall any extensions of time granted under the provisions of said contract release either said Contractor or said Surety, and notice of such change order(s), alterations or extensions of the contract is hereby waived by said Surety. SIGNED this 6th day of June, 2001 (SEAL AND NOTARIAL ACKNOWLEDGMENT OF SURETY) MEADOW VALLEY CONTRACTORS, INC. Countersigned resident agent in Nevada ------------------------------------ Pursuant to Nevada Revised Statute (Principal Contractor) 680A.3DD: Alan Terril, Vice-President James A. Mainardi ------------------------------------ - ------------------------------------ (Authorized Representative and Title (Resident Agent) By: /s/ ALAN TERRIL 46745 -------------------------------- - ------------------------------------ (Signature) (State of Nevada, License Number) Surety: LIBERTY MUTUAL INSURANCE AON RISK SERVICES, INC. of NEVADA COMPANY - ------------------------------------ ---------------------------- (Appointed Agent Name) 31689 By: /s/ JAMES A. ILLEGIBLE ------------------------------------ -------------------------------- (State of Nevada, License Number) (Signature) Aon Risk Services, Inc. Address: 2300 WEST SAHARA, SUITE 560 ------------------------------------ --------------------------- (Appointed Agent Name) LAS VEGAS, NEVADA 89102 By: /s/ JERI APODACA --------------------------- -------------------------------- (Signature) Telephone: (702) 227-0300 Jeri Apodaca, Attorney in Fact ------------------------- Address: 695 Town Center Drive, Suite 500 ------------------------------------ Costa Mesa, CA 92626 ------------------------------------ Telephone No. (714) 641-8355 ---------------------- ISSUING COMPANY MUST HOLD CERTIFICATES OF AUTHORITY AS ACCEPTABLE SURETY ON FEDERAL BONDS AND AS ACCEPTABLE REINSURING COMPANY WITH LISTING IN THE DEPARTMENT OF TREASURY, FISCAL SERVICE, (DEPARTMENT OF CIRCULAR "570," CURRENT REVISIONS). 3-6 CLARK COUNTY, NEVADA BID PROPOSAL BID NO. 4708-00 NORTHERN BELTWAY, PECOS ROAD TO I-15 MEADOW VALLEY CONTRACTORS, INC. - -------------------------------------------------------------------------------- (NAME) P.O. BOX 549, MOAPA, NEVADA 89025 - -------------------------------------------------------------------------------- (ADDRESS) THE UNDERSIGNED PROPOSES AND AGREES: 1. To complete all work for which a contract may be awarded to the Bidder and to furnish any and all labor, equipment, materials, transportation, and other facilities required for the services as set forth in the Proposal and Contract Documents. 2. That the Bidder has examined the Contract Documents and the site(s) for the proposed work and satisfied themselves as to the character, quality of work to be performed, materials to be furnished and as to the requirements of the specifications. 3. That the Bidder has completed all information in the blanks provided and has submitted the following within this bid proposal: a. Each subcontractor which will be paid an amount exceeding 5% of the total base bid amount. b. Has enclosed their Certificate of Eligibility issued by the State Contractors Board, if applicable. c. Has submitted a bid security in the form of, at Bidder's option, A Cashiers Check, Certified Check, Money Order, or Bid Bond in favor of the Owner(s) in the amount of 5% of the base bid amount. 4. If the Bidder is one of the 3 apparent low bidders at the bid opening, and has subcontractor(s) pursuant to NRS 338.141, they must submit Bid Attachment 2 within two hours after completion of the bid opening pursuant to the instructions to Bidders. Faxing is not allowed. This Attachment must be time stamped by the Department of General Services. Submission after the 2 hour time limit will be rejected and/or returned unopened and the bid may be deemed non-responsive. a. Projects EXCEEDING $5,000,000 1) The Bidders shall list subcontractors which will provide labor/improvements exceeding 1% of the prime contractor's total base bid amount, or $50,000.00, whichever is greater. 5. Upon faxed receipt of a letter of Intent to Award the contract, the bidder will provide the following submittals within 7 days from receipt of the Notice. a. Performance Bond, Labor and Material Payment Bond and a Guaranty Bond, for 100% of the contract price as required. b. Certificates of Insurance for Commercial General Liability in the amount of $1,000,000, Automobile Liability in the amount of $1,000,00, Explosion, Collapse and Underground in the amount of $1,000,000, Installation Floater, and workers' compensation insurance issued by an insurer qualified to underwrite workers' compensation insurance in the State of Nevada, as required by law. 6. That if the Bidder does not provide the above submittals on or before the 7th calendar day, or does not keep the bonds or insurance policies in effect or allows them to lapse, the Bidder will pay over to the Owner the amount of $2,500 per day as liquidated damages. 7. That this Proposal is genuine and is not sham or collusive, or made in the interest of, or on behalf of any person not herein named, nor the Bidder in any manner sought to secure for themselves an advantage over any other bidder. 8. The Bidder further proposes and agrees that if his bid is accepted they will commence to perform the work called for by the plans and Contract Documents within 7 calendar days after Notice to Proceed is issued and will complete all work within the calendar days specified in the instruction to Bidders. 5-1
Bid Proposal Bid No. 4708-00 Revised per Addendum No. 5 Northern Beltway, Pecos Road to I-15 ============================================================================================== ITEM APPROX. NUMBER ITEM DESCRIPTION QUANTITY UNIT TOTAL ============================================================================================== 625.002 LIQUID PAVEMENT MARKING (8" SOLID WHITE) 55,705 LF $ 85,785.70 - ---------------------------------------------------------------------------------------------- 628.003 LIQUID PAVEMENT MARKING (12" SOLID WHITE) 6,228 LF $ 19,742.76 - ---------------------------------------------------------------------------------------------- 628.004 LIQUID PAVEMENT MARKING (8" SOLID YELLOW) 52,240 LF $ 81,494.40 - ---------------------------------------------------------------------------------------------- 628.005 TYPE I FILM (STOPBARS, DIAGONAL STRIPING) 4,655 SF $ 24,578.40 - ---------------------------------------------------------------------------------------------- 628.006 TYPE I FILM (LEGENDS AND SYMBOLS) 38 EA $ 7,416.84 - ---------------------------------------------------------------------------------------------- 628.007 LIQUID PAVEMENT MARKING (8" BROKEN WHITE) 14,330 LF $ 9,887.70 - ---------------------------------------------------------------------------------------------- 628.008 PARKING LOT STRIPING 1 LS $ 1,318.75 - ---------------------------------------------------------------------------------------------- 630.001 ABANDON EXISTING SEPTIC SYSTEM 1 LS $ 15,825.00 - ---------------------------------------------------------------------------------------------- 630.002 26"-INCH STEEL PIPE CASING 280 LF $ 16,917.60 - ---------------------------------------------------------------------------------------------- 630.003 8"-PVC SEWER PIPE 7,162 LF $ 225,173.28 - ---------------------------------------------------------------------------------------------- 630.004 16"-STEEL PIPE CASING 1,060 LF $ 48,410.20 - ---------------------------------------------------------------------------------------------- 630.005 SANITARY SEWER MANHOLE 18 EA $ 29,225.70 - ---------------------------------------------------------------------------------------------- 633.001 REFLECTIVE PAVEMENT MARKERS 2,238 EA $ 6,736.38 - ---------------------------------------------------------------------------------------------- 633.002 NON-REFLECTIVE PAVEMENT MARKERS 5,614 EA $ 7,971.88 - ---------------------------------------------------------------------------------------------- 637.001 DUST PALLIATIVE 136 AC $ 103,305.60 - ---------------------------------------------------------------------------------------------- 637.002 PRE-EMERGENT HERBICIDE 136 AC $ 43,044.00 - ---------------------------------------------------------------------------------------------- TOTAL BASE BID $21,749,072.82 ==============================================================================================
ADDITIVE/DEDUCTIVE ITEMS THE OWNER MAY EXERCISE ANY OF THE FOLLOWING ITEMS DURING THE COURSE OF CONSTRUCTION. EXPLANATION OF EACH ITEM IS INCLUDED WITH APPLICABLE SECTIONS OF SPECIFICATIONS. THE BIDDER MUST PROVIDE BID PRICES FOR ALL ITEMS TO BE RESPONSIVE AND CONSIDERED FOR AWARD. THE PRICES QUOTED SHALL REMAIN FIRM THROUGHOUT THE CONTRACT PERIOD. =============================================================================== ITEM APPROX. NUMBER ITEM DESCRIPTION UNIT QUANTITY TOTAL =============================================================================== 208.001 TRENCH OVER EXCAVATION & COMPACTED IMPORTED AGGREGATE BEDDING CY 1,000 $25,000 - ------------------------------------------------------------------------------- 208.002 CHANGES IN EARTHWORK QUANTITIES BEFORE INITIAL TRENCHING CY 1,000 $ 5,000 - ------------------------------------------------------------------------------- 208.003 CHANGES IN EARTHWORK QUANTITIES AFTER CY 1,000 $10,000 =============================================================================== Revised 5-8 Bid Proposal Bid No. 4708-00 Northern Beltway, Pecos Road to I-15 14. FOR INFORMATIONAL PURPOSES ONLY: -------------------------------- The General Contractor submitting this bid is a [ ] MBE [ ] WBE [ ] PBE [ ] SBE [ ] NBE [ ] LBE as defined in the instructions to Bidders. 15. /s/ ALAN TERRIL MEADOW VALLEY CONTRACTORS, INC. ------------------------------- ------------------------------------ SIGNATURE OF BIDDER LEGAL NAME OF FIRM AS IT WOULD APPEAR IN CONTRACT ALAN TERRIL 702-864-2575 702-864-2580 ------------------------------- ---------------- --------------------- NAME OF BIDDER (PRINT OR TYPE) TELEPHONE NUMBER FAX NUMBER P.O. BOX 549 0019258 ------------------------------- ---------------------------------------- ADDRESS OF FIRM NEVADA STATE CONTRACTOR'S LICENSE NO. MOAPA, NV 89025 A UNLIMITED ------------------------------- ---------------- --------------------- CITY, STATE, ZIP CODE CLASSIFICATION MONETARY LIMITATIONS, IF ANY MAY 17, 2001 ------------------------------- TODAY'S DATE 5-10 EX-10.180 24 dex10180.txt CONTRACT BETWEEN REGISTRANT AND UTAH DOT Exhibit 10.180 CONTRACT THIS AGREEMENT made and executed in Four (4) original counterparts this 23RD day of July A.D. 2001 between the Utah Department of Transportation, hereinafter called "Department", first party, and Meadow Valley Contractors hereinafter called "Contractor," second party. WITNESSETH, That for and in consideration of payments, hereinafter mentioned, to be made by the Department, the Contractor agrees to furnish all labor and equipment; to furnish and deliver all materials not specifically mentioned as being furnished by the Department and to do and perform all work in the RESURFACING, DRAINAGE, DETENTION BASIN, RECONSTRUCT SR-130 & CONSTRUCT BUSINESS in Iron County, State of Utah, the same being identified as *IM-15-2(38)61 for the approximate sum of Nine Million Forty Seven Thousand Nine Hundred Seven Dollars and 89/100 ($9,047,907.89). The Contractor further covenants and agrees that all of said work and labor shall be done and performed in the best and most workmanlike manner and in strict conformity with the plans and specifications. The said Plans, and Specifications and the Notice to Contractors, Instruction to Bidders, the Proposal, Special Provisions and Contract Bond are hereby made a part of this agreement as fully and to the same effect as if the same had been set forth at length herein. In consideration of the foregoing premises, the Department agrees to pay to Contractor in the manner and in the amount provided in the said specification and proposal. IN WITNESS WHEREOF, The parties hereto have subscribed their names through their proper officers thereunto duly authorized as of the day and year first above written. Attest: UTAH DEPARTMENT OF TRANSPORTATION /s/ Tonya Clawson-MVCI /s/ ILLEGIBLE - ----------------------------------- ----------------------------------- Secretary Director of Transportation - First Party /s/ Val Martin Meadow Valley Contractors - ----------------------------------- ----------------------------------- Witness to: Company Representative Second Party Approved as to form: by /s/ Robert Terril -------------------------------- by /s/ ILLEGIBLE ------------------------------- ----------------------------------- UDOT Legal Counsel Company Representative APPROVED /s/ CHERISE YOUNG 8/7/01 94-279836-5501 -------------------------- ----------------------------------- Contract Administrator Utah Contractor License Number FUNDS AVAILABLE -------------------- /s/ JANET [ILLEGIBLE] 7/27/01 ----------------------------------- Budget Officer Date EX-10.181 25 dex10181.txt CONTRACT BETWEEN REGISTRANT AND CLARK COUNTY NV Exhibit 10.181 [GRAPHIC OMITTED] Department of General Services Purchasing and Contracts Division 500 S Grand Central Pky 4th Fl o P O Box 551732 o Las Vegas NV 89155-1732 (702) 455-2897 o Fax (702-386-4914 Ted J. Olivas, Purchasing & Contracts Manager ================================================================================ November 13, 2001 Mr. Robert Terril MEADOW VALLEY CONTRACTORS, INC. P.O. Box 549 Maopa, Nevada 89025 RE: NOTICE OF AWARD, BID NUMBER 4968-01; FRANK SINATRA AT TROPICANA AVENUE PWP NO. CL-2001-771 Dear Mr. Terril: Thank you for your prompt return of the requested bonds and insurance. The documents provided appear to be in order. Therefore, this project is hereby awarded to your company in the amount of $8,346,355.73. Enclosed is your copy of contract documents. The Public Works Department will administer this contract and will be in contact with you in the near future to schedule the pre-construction meeting and issue the Notice to Proceed. Thank you for your continued interest in doing business with Clark County. Sincerely, /s/ REGINA R. HEILMAN-RYAN REGINA R. HEILMAN-RYAN, C.P.M. Purchasing Analyst :sls Enclosure cc: M.J. Manning, Public Works Leslie R. Henley, Public Works Bobby Shelton, Public Works Board of County Commissioners Dario Herrera, Chairman o Myrna Williams, Vice-Chair Yvonne Atkinson Gates o Erin Kenny o Mary Kincaid-Chauncey o Chip Maxfield Bruce L. Woodbury o Thom Reilly, County Manager CLARK COUNTY, NEVADA BID FORM BID NO. 4968-01 FRANK SINATRA AT TROPICANA AVENUE PWP NUMBER: CL-2001-771 MEADOW VALLEY CONTRACTORS, INC. - -------------------------------------------------------------------------------- (NAME) P.O. BOX 549, MAOPA, NEVADA 89025 - -------------------------------------------------------------------------------- (ADDRESS) I, THE UNDERSIGNED BIDDER: 1. Agree, if awarded this Contract, I will complete all work for which a Contract may be awarded and to furnish any and all labor, equipment, materials, transportation, and other facilities required for the services as set forth in the Bidding and Contract Documents. 2. Have examined the Contract Documents and the site(s) for the proposed work and satisfied themselves as to the character, quality of work to be performed, materials to be furnished and as to the requirements of the specifications. 3. Have completed all information in the blanks provided and have submitted the following within this Bid: a. Have listed the name of each Subcontractor which will be paid an amount exceeding 5% of the Total Base Bid amount. b. Attached a bid security (in the form of, at my option, a Cashiers Check, Certified Check, Money Order, or Bid Bond in favor of the Owner in the amount of 5% of the Total Base Bid Amount. c. Have enclosed my Certificate of Eligibility issued by the Nevada State Contractors Board, if it applies. 4. I acknowledge that if I am one of the 3 apparent low bidders at the bid opening, and if I have listed Subcontractor(s) pursuant to NRS 338.141.1, I must submit Bid Attachment 2 within two hours after completion of the bid opening pursuant to the Instructions to Bidders, and I understand that hand delivery is recommended, and Owner shall not be responsible for lists received after the 2 hour time limit, regardless of the reason. This Attachment will be time stamped by the Department of General Services. I understand that submission after the 2 hour time limit is not allowed and will be returned to me and the bid may be deemed non-responsive. I acknowledge that for: a. Projects EXCEEDING $5,000,000. 1) I need to list only subcontractors which will provide labor/improvements exceeding 1% of the prime contractor's total base bid amount, or $50,000.00 whichever is greater. 5. Upon faxed or mailed receipt of a Notice of Intent to Award the Contract, I will provide the following submittals within 7 days from receipt of the Notice: a. Performance Bond, Labor and Material Payment Bond and a Guaranty Bond, for 100% of the Contract amount as required. b. Certificates of insurance for Commercial General Liability in the amount of $1,000,000. Automobile Liability in the amount of $1,000,000. Explosion, Collapse and Underground in the amount of $1,000,000, and workers' compensation insurance issued by an insurer qualified to underwrite workers' compensation insurance in the State of Nevada, as required by law. 6. I acknowledge that if I do not provide the above submittals on or before the 7th calendar day after receipt of the Notice of Intent to Award, or do not keep the bonds or insurance policies in effect or allows them to lapse during the performance of the Contract, I will pay over to the Owner the amount of $6,500 per day as liquidated damages. 7. I confirm this bid is genuine and is not a sham or collusive, or made in the interest of, or on behalf of any person not herein named, nor the Bidder in any manner sought to secure for themselves an advantage over any other bidder. 8. I further propose and agree that if my bid is accepted, I will commence to perform the work called for by the plans and Contract within 7 calendar days after Notice to Proceed is issued and I will complete all work within the calendar days specified in the Instructions to Bidders. 9. I further propose and agree that I will accept as full compensation for the work to be performed the price written in the Bid Schedule below. 10. I have carefully checked the figures below and will not hold Owner will not be responsible for any error or omissions in the preparation or submission of this Bid. 11. I agree no verbal agreement or conversation with an officer, agent or employee of the owner, either before or after the execution of the contract, shall affect or modify any of the terms or obligations of this Bid. 12. I am responsible to ascertain the number of addenda issued, and I hereby acknowledge receipt of the following addenda: Addendum No. 1 dated 7-27-01 Addendum No. 4 dated 9-26-01 Addendum No. 2 dated 8-20-01 Addendum No. 5 dated 9-27-01 Addendum No. 3 dated 9-14-01 Addendum No. 6 dated 10-3-01 5-1
Bid Form Bid No. 4968-01 Revised Per Addendum No. 3 Frank Sinatra at Tropicana Avenue =============================================================================================== ITEM APPROX. NUMBER ITEM DESCRIPTION UNIT QUANITY TOTAL =============================================================================================== 627 0540 Permanent Signs, Reset S.F. 71 $ 604.92 - ----------------------------------------------------------------------------------------------- 628 0101 Type I Film (Arrow Legend) EA. 52 $ 8,030.36 - ----------------------------------------------------------------------------------------------- 628 0102 Type I Film ("ONLY" Legend) EA 22 $ 4,217.40 - ----------------------------------------------------------------------------------------------- 628 0110 Type I Film (Crosswalks) S.F. 334 $ 1,780.22 - ----------------------------------------------------------------------------------------------- 628 0120 Type I Film (Stop Bar) S.F. 746 $ 3,976.18 - ----------------------------------------------------------------------------------------------- 628 0130 Type I Film (Chevron Island) S.F. 105 $ 559.65 - ----------------------------------------------------------------------------------------------- 630 0001 Adjust Manhole EA 3 $ 1,597.50 - ----------------------------------------------------------------------------------------------- 633 0000 Non-Reflective Pavement Markers EA 4,807 $ 7,691.20 - ----------------------------------------------------------------------------------------------- 633 0004 Reflective Pavement Markers EA 1,718 $ 4,569.88 - ----------------------------------------------------------------------------------------------- 633 0008 Temporary Reflective Pavement Markers EA 440 $ 1,170.40 - ----------------------------------------------------------------------------------------------- 633 0609 Epoxy Paint Striping (4-inch Solid White) L.F. 595 $ 547.40 - ----------------------------------------------------------------------------------------------- 633 0612 Epoxy Paint Striping (8-Inch Solid White) L.F. 12,559 $ 11,554.28 - ----------------------------------------------------------------------------------------------- 633 0616 Epoxy Paint Striping (12-Inch Solid White) L.F. 3,462 $ 5,262.24 - ----------------------------------------------------------------------------------------------- 633 0620 Epoxy Paint Striping (8-Inch Solid Yellow) L.F. 10,815 $ 9,949.80 - ----------------------------------------------------------------------------------------------- 635 0001 Type 1 Temporary Pavement Markings S.F. 43,260 $ 85,654.80 - ----------------------------------------------------------------------------------------------- 637 0100 Dust Control L.S. 1 $ 2,343.00 - ----------------------------------------------------------------------------------------------- 637 0500 Dust Palliative S.Y. 40,000 $ 5,200.00 - ----------------------------------------------------------------------------------------------- 640 0100 Soil Nail Retaining Wall RW-4 S.F. 5,080 $ 208,330.80 - ----------------------------------------------------------------------------------------------- 641 0544 Impact Attenuator (55 mph) EA. 1 $ 21,372.68 - ----------------------------------------------------------------------------------------------- 641 0548 Impact Attenuator (70 mph) EA. 1 $ 33,387.78 - ----------------------------------------------------------------------------------------------- GRAND TOTAL $8,374,776.73 ===============================================================================================
Revised 5-7 Bid Form Bid No. 4968-01 Frank Sinatra at Tropicana Avenue 14. BUSINESS ENTERPRISE INFORMATION: -------------------------------- The Prime Contractor submitting this Bid is a [ ] MBE [ ] PBE [ ] SBE [ ] NBE [ ] LBE as defined in the instructions to Bidders. 15. /s/ ROBERT TERRIL ------------------------------------------------------ SIGNATURE OF BIDDER ROBERT TERRIL ------------------------------------------------------ NAME OF BIDDER (PRINT OR TYPE) MEADOW VALLEY CONTRACTORS, INC. ------------------------------------------------------ LEGAL NAME OF FIRM AS IT WOULD APPEAR IN CONTRACT P.O. BOX 549 ------------------------------------------------------ ADDRESS OF FIRM MOAPA, NEVADA 89025 ------------------------------------------------------ CITY, STATE, ZIP CODE 702-864-2575 702-864-2580 ------------------- ------------------------------ TELEPHONE NUMBER FAX NUMBER NEVADA STATE CONTRACTOR'S BOARD LICENSE INFORMATION: ---------------------------------------------------- LICENSE NUMBER: #0019258 -------------------------------------- LICENSE CLASS: A --------------------------------------- LIMIT AMOUNT: UNLIMITED ---------------------------------------- OCTOBER 4, 2001 ------------------- TODAY'S DATE 5-9 BOND NUMBER: 024-006-369 BID NO. 4968-01 CLARK COUNTY, NEVADA PERFORMANCE BOND IMPORTANT: SURETY COMPANIES EXECUTING BONDS MUST BE LICENSED TO ISSUE SURETY BY THE STATE OF NEVADA INSURANCE DIVISION PURSUANT TO NEVADA REVISED STATUTE 683A.090 ISSUED BY AN APPOINTED AGENT PURSUANT TO NEVADA REVISED STATUTE 6834.280. INDIVIDUAL SURETY BONDS ARE NOT ACCEPTABLE. KNOW ALL MEN BY THESE PRESENTS, That Meadow Valley Contractors, Inc. as Principal Contractor, and Liberty Mutual Insurance Company Surety are held and firmly bound unto Clark County, Nevada, hereinafter called Owner, in the sum of ($8,346,355.73) Eight Million Three Hundred Forty Six Thousand Three Hundred Fifty Five and 73/100 dollars for the payment of which sum well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents. WHEREAS, said Contractor has been recommended for award and shall enter into the contract with said Owner to perform all work required under the Bidding Schedule(s) BID NO. 4968-01 of the Owner's specifications, entitled FRANK SINATRA AT TROPICANA AVENUE. NOW THEREFORE, if said Contractor shall perform all the requirements of said contract required to be performed on their part, at the times and in the manner specified therein, then this obligation shall be null and void, otherwise it shall remain in full force and effect. PROVIDED, that any change order(s), alterations in the work to be done or the materials to be furnished, which may be made pursuant to the items of said contract, shall not in any way release said Contractor or said Surety thereunder, nor shall any extensions of time granted under the provisions of said contract release either said Contractor or said Surety, and notice of such change order(s), alterations or extensions of the contract is hereby waived by said Surety. SIGNED this 7th day of November 2001 (SEAL AND NOTARIAL ACKNOWLEDGEMENT OF SURETY) Countersigned resident agent in Nevada. Pursuant to Nevada Revised Statute Meadow Valley Contractors, Inc. 680A.300: ------------------------------------ - ---------------------------------------- ROBERT TERRIL, AREA MANAGER ------------------------------------ Suzanne J. Poole - ---------------------------------------- By: /s/ ROBERT TERRIL (Resident Agent) -------------------------------- (Signature) 36709 - ---------------------------------------- Surety: Liberty Mutual Insurance (State of Nevada License Number) Company ---------------------------- AON Risk Service Inc. of NV - ---------------------------------------- 1675 (Appointed Agent Name) ------------------------------------ (State of Nevada License Number) By: /s/ ILLEGIBLE Aon Risk Services, Inc. - ---------------------------------------- ------------------------------------ (Signature) (Approved Agent Name) Address: 2300 W. Sahara Ave 560 By: /s/ JERI APODACA - ---------------------------------------- -------------------------------- (Signature) Las Vegas, NV 89102 Jeri Apodaca, Attorney-in-Fact - ---------------------------------------- -------------------------------- Telephone: 702-227-0300 Address: 695 Town Center Drive, - ---------------------------------------- Suite 500 --------------------------- Costa Mesa, CA 92626 --------------------------- Telephone No. 714-641-8355 ---------------------- ISSUING COMPANY MUST HOLD CERTIFICATES OF AUTHORITY AS ACCEPTABLE SURETY ON FEDERAL BONDS AND AS ACCEPTABLE REINSURING COMPANY WITH LISTING IN THE DEPARTMENT OF TREASURY, FISCAL SERVICE, (DEPARTMENT OF CIRCULAR "570." CURRENT REVISIONS). A-4 EX-10.182 26 dex10182.txt LEASE EXTENSTION WITH THE CIT GROUP Exhibit 10.182 [LOGO] TYCO capital [LETTERHEAD OF TYCO CAPITAL] March 15, 2002 READY-MIX, INC. 3430 E FLAMINGO RD LAS VEGAS, NV 89121-5003 RE: Rewrite Account #00019122-00043835 Reference is made to the Lease Agreement dated February 24, 1997 between READY-MIX, INC., its leasee, and The CIT Group/Equipment Financing. You have requested and we have approved your request to term out your residual for 36 months. Your new payment stream will be as follows; Thirty-six(36) monthly payments of $10,979.72, beginning on April 1, 2002 plus applicable taxes and continuing on the same day of each month until the maturity of this loan. One (1) monthly payments of $1.00, plus applicable taxes, which shall be the final payment due on April 1, 2005. This renewal extension agreement and the other documents referenced herein or contemplated hereby represent the final agreement between the parties and may not be contradicted by evidence or prior, contemporaneous or subsequent oral agreements of the parties hereto. There are no unwritten oral agreements among the parties. Except as modified herein, the agreement and all documents executed in connection therewith shall continue in full force and effect. If the foregoing is acceptable to you, would you please indicate so by signing this letter where indicated below then fax a copy to us at 480-784-9514 and return the original via overnight mail to us. Sincerely, David Fanchi Portfolio Specialist 480-784-2313 Phone 480-858-1494 Fax By: Kenneth D. Nelson --------------------- Print Name: KENNETH D. NELSON --------------------- Title: VICE PRESIDENT --------------------- Dated: 3-18-02 --------------------- EX-10.183 27 dex10183.txt ASSET PURCHASE AGREEMENT WITH UNITED METRO MATERIA Exhibit 10.183 ASSET PURCHASE AGREEMENT ------------------------ THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered on this 22nd day of March, 2002 (the "Closing Date") by and between UNITED METRO MATERIALS INC., an Arizona corporation ("Purchaser") and MEADOW VALLEY CONTRACTORS, INC., a Nevada corporation ("Seller"). RECITALS Purchaser desires to purchase the Purchased Assets, and Seller desires to sell the Purchased Assets, pursuant to the terms and conditions hereinafter set forth. The Parties wish to set forth their understanding in this Agreement with respect to the purchase and sale of such Purchased Assets and with respect to certain other matters. NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties set forth herein, and for such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: AGREEMENT ARTICLE I Definitions Capitalized words and phrases not otherwise defined within the body of this Agreement shall have the meanings set forth on Exhibit "A" attached to this Agreement. Where the context of this Agreement so requires, the use of the singular includes the plural, and the use of the plural includes the singular. The use of any gender in this Agreement includes any and all genders. ARTICLE II Purchase and Sale Section 2.l. Agreement to Sell. Subject to the terms and conditions set ----------------- forth in this Agreement, Seller hereby sells, transfers, grants, conveys, assigns and delivers to Purchaser, all right, title and interest of Seller in and to the Purchased Assets free and clear of all Liens, with the exception of the Assumed Liabilities. Purchaser shall have the exclusive control and possession of the Purchased Assets from and after the Closing Date. Section 2.2. Agreement to Purchase. Subject to the terms and conditions --------------------- set forth in this Agreement, Purchaser hereby purchases the Purchased Assets from Seller, in reliance upon the representations, warranties and covenants of Seller contained herein. 1 Section 2.3. Purchase Price. The total consideration to be paid by -------------- Purchaser for the Purchased Assets shall be the Purchase Price. On the day prior to the Closing Date, Purchaser and seller shall inspect the Inventory and shall jointly prepare a calculation of: (a) the amount of Inventory as of the Closing Date using generally accepted industry methods; and (b) the Inventory Closing Value. Section 2.4. Payment of the Purchase Price. On the Closing Date, ----------------------------- Purchaser shall pay the Purchase Price to Seller by wire transfer of immediately available funds to an account designated in writing by Seller prior to the Closing Date. Section 2.5. Allocation of Purchase Price. The Parties agree that the ---------------------------- Purchase Price shall be allocated as set forth on Exhibit "B" attached to this Agreement. Seller and Purchaser each hereby covenant and agree that they will not take any position on any income tax return, before any Governmental Authority charged with the collection of any income tax, or in any judicial proceeding that is in any way inconsistent with the terms of this Section 2.5 and will provide such tax forms requested by the other Party necessary to reflect such allocation. Section 2.6. Taxes. To the extent the Transaction is not exempt from ----- Arizona state, county or municipal sales taxes, any and all of such taxes that may become due and owing by reason of the Transaction shall be the responsibility and liability of Purchaser. Any and all other Taxes that may become due and owing by reason of the Transaction shall be the responsibility and liability of Seller, and will be paid by Seller without any contribution by Purchaser. Section 2.7. Prorations. Seller shall be responsible for all utilities, ---------- lease payments, ad valorem, and other similar expenses relating to the Purchased Assets accruing prior to the Closing Date. Purchaser shall be responsible for such expenses relating to the Purchased Assets accruing on and after the Closing Date. Any of the same which Seller has prepaid for any period following the Closing Date shall be reimbursed by Purchaser within ten (10) days following receipt of an invoice therefor from Seller, and likewise, Seller shall reimburse Purchaser for any of the same paid by Purchaser for any period prior to the Closing Date within ten (10) days following receipt of an invoice therefor from Purchaser. To the extent that separate billings are not possible, the Parties will cooperate in prorating the expenses as of the Closing Date. Seller shall pay all costs and fees in connection with the preparation and issuance of the required title commitments and title policies with respect to the Leased Property. Section 2.8. Assumption of Liabilities. Purchaser hereby assumes and ------------------------- agrees to pay, discharge or perform, as appropriate and when due, the Assumed Liabilities. Except for the Assumed Liabilities, Purchaser assumes no liability or responsibilities for any Liabilities of any nature whatsoever of Seller or in connection with the operation of the Business or the Purchased Assets, including, without limitation, any Liabilities with respect to any Employee Benefit Plan. Section 2.9. Seller Employees. Seller shall be responsible for any and ---------------- all obligations to any and all of its employees, including, but not limited to, the payment of salaries, bonuses, vacation pay, retirement benefits, sick pay, insurance premiums and other fringe benefits, and Seller hereby agrees to pay all such obligations directly to or on behalf of its employees when 2 due. Seller agrees to pay in a timely manner all amounts (including but not limited to any and all withholding and unemployment compensation insurance payment) required to be paid with respect to the compensation and benefits of its employees. Purchaser shall have the right, but not the obligation, to employ as Purchaser's employees, any of Seller's employees directly employed in connection with the Business, and to continue such persons in the employ of Purchaser for such period of time, and upon such terms, as Purchaser, in its sole and absolute discretion, may deem appropriate. Section 2.10. Third Party Consents. To the extent that Seller's rights -------------------- under any agreement, contract, commitment, lease, or other Purchased Asset may not be assigned without the Consent of another Person which has not been obtained, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful, and Seller, at its expense, shall use its best efforts to obtain any such required Consent(s) as promptly as possible. If any such Consent shall not be obtained or if any attempted assignment would be ineffective or would impair Purchaser's rights under the Purchased Asset in question so that Purchaser would not in effect acquire the benefit of all such rights, Seller, to the maximum extent permitted by law, shall act after the Closing, as Purchaser's agent in order to obtain for it the benefits thereunder and shall cooperate, to the maximum extent permitted by law, with Purchaser in any other reasonable arrangement designed to provide such benefits to Purchaser. Section 2.11. Bulk Transfer. The Parties waive, if required, compliance ------------- with the Bulk Transfer Laws of the State of Arizona, and Seller agrees to indemnify Purchaser from and against and hold Purchaser harmless from any and all Liabilities arising out of any failure or alleged failure to comply with such laws in respect of the Transaction. ARTICLE III Closing Section 3.1. The Closing. The Closing shall take place at the offices of ----------- Purchaser, 701 N. 44th Street, Phoenix, Arizona, at 10:00 a.m. Mountain Time, on the Closing Date, or at such other place and at such other time as the Parties may agree. Either Party may terminate this Agreement if Closing has not been completed by midnight on May, 15, 2002; provided, however, that the failure to complete the Closing is not due to a breach by the terminating Party of any of its obligation under this Agreement. Section 3.2. Conditions to Obligations of Purchaser. The obligations of -------------------------------------- Purchaser to consummate the Transaction on the Closing Date are, at the option of Purchaser, subject to the satisfaction of all of the following conditions on the Closing Date: (a) the representations and warranties set forth in Article IV of this Agreement must have been true and correct on the date of this Agreement and must be true and correct on the Closing Date; 3 (b) Seller must have complied with its obligations and performed or observed its covenants under this Agreement; (c) Purchaser shall be satisfied, in its sole and absolute discretion, with the results of its due diligence examination of Seller, the Purchased Assets, the Assumed Liabilities and all related matters; (d) no Material Adverse Change shall have occurred with respect to Seller, the Purchased Assets or the Assumed Liabilities; (e) Purchaser and Seller must have received any consents, approvals, or authorizations of any Person or Governmental Authority, including, without limitation the Required Consents, which in the judgment of Purchaser, are necessary for or appropriate to the operation of the Purchased Assets and the consummation of the Transaction on the Closing Date; (f) no Litigation by any Person or Governmental Authority may be pending or asserted against any Party which could restrain, prohibit, or otherwise interfere with the consummation of the Transaction; (g) Seller must have delivered to Purchaser the documents contemplated by Section 3.4; and (h) Seller shall have entered into the Non-Compete Agreement. Section 3.3. Conditions to Obligations of Seller. The obligations of ----------------------------------- Seller to consummate the Transaction on the Closing Date are, at the option of Seller, subject to satisfaction of all of the following conditions on the Closing Date: (a) the representations and warranties set forth in Article V of this Agreement must have been true and correct on the date of this Agreement and must be true and correct on the Closing Date; (b) Purchaser must have complied with its obligations and performed or observed its covenants under this Agreement; and (c) Purchaser must have delivered to Seller the documents contemplated by Section 3.5. Section 3.4. Delivery of Documents by Seller. On the Closing Date, Seller ------------------------------- will deliver, or cause to be delivered, to Purchaser: (a) such bills of sale with covenants of warranty, assignments, endorsements, and other good and sufficient instruments and documents of conveyance and transfer, in form reasonably satisfactory to Purchaser, as shall be necessary and effective to transfer and assign to, and vest in, Purchaser all of Seller's right, title, and interest 4 in and to the Purchased Assets, including, specifically, all certificates of title for all motor vehicles included in the Purchased Assets, duly endorsed for transfer, and the transferable Permits together with all required Consents necessary for their transfer to Purchaser; (b) duly adopted resolutions of the Board of Directors of Seller, certified by the secretary or other appropriate officer of Seller, as of the Closing Date, authorizing and approving the execution and delivery of the Seller Documents, the consummation of the Transaction in accordance with the terms of the Transaction Documents and all other necessary and proper actions to enable Seller to comply with the terms thereof; (c) certificates from the Arizona Corporation Commission and the Nevada Secretary of State, dated not more than seven (7) days prior to the Closing Date, as to the legal existence and good standing of Seller, under the laws of such state; (d) a letter dated as of the Closing Date and addressed to Purchaser from the law firm of Jennings, Haug & Cunningham, counsel to Seller, in the form and content reasonably acceptable to Purchaser; (e) the Assignment and the Assumption Agreement, executed by Seller; (f) the Non-Compete Agreement, executed by Seller; (g) all of the agreements, contracts and other documents, books, records, customer lists and data which are part of the Purchased Assets; (h) the Required Consents; (i) the Estoppels; (j) a duly executed amendment to the Schaible Lease extending the term thereof through 2007 with a five (5) year option to renew in form acceptable to Purchaser. (k) commitment(s) for an ALTA lessee's title insurance policy with respect to the Leased Property issued in the name of Purchaser by a reputable national title insurance company, that shows marketable fee simple title to such Leased Property in the lessors named therein and agrees to insure the leasehold interest therein in Purchaser, provides coverage in amounts satisfactory to Purchaser, and has no exceptions other than (i) those approved by Purchaser, and (ii) those requiring a survey for removal. Such commitment(s) shall, contemporaneous with the Closing, be marked up by a representative of the issuer so as to (i) satisfy all requirements to the issuance of the policy pursuant to it, (ii) advance the effective date to a date not earlier than the Closing Date without the addition of any title exceptions other than Purchaser approved exceptions or those in the 5 commitment, and (iii) result in an unconditional binding obligation on the part of the issuer to issue final policies pursuant to such commitment(s); and (l) any other usual and customary closing documentation reasonably requested by Purchaser which is required to consummate the Transaction in accordance with this Agreement. Section 3.5. Delivery of Documents by Purchaser. On the Closing Date, ---------------------------------- Purchaser will deliver, or cause to be delivered, to Seller: (a) the Purchase Price in accordance with Section 2.4; (b) the Assumption Agreement, executed by Purchaser; (c) the Non-Compete Agreement, executed by Purchaser; (d) duly adopted resolutions of the Board of Directors of Purchaser, certified by the Secretary of Purchaser, as of the Closing Date, authorizing and approving the execution and delivery of the Purchaser Documents, the consummation of the Transaction in accordance with the terms of the Transaction Documents, and authorizing and approving all other necessary and proper corporate action to enable Purchaser to comply with the terms thereof; (e) a certificate from the Arizona Corporation Commission dated not more than seven (7) days prior to the Closing Date, as to the legal existence and good standing of Purchaser under the laws of such state; and (f) any other usual and customary closing documentation reasonably requested by Seller which is required to consummate the Transaction in accordance with this Agreement. ARTICLE IV Representations and Warranties of the Seller Seller represents and warrants to Purchaser that the following representations and warranties are true, complete and correct as of the Closing Date. Section 4.1. Organization and Power. Seller is a corporation duly ---------------------- incorporated, validly existing and in good standing under the laws of the State of Nevada. Seller is duly qualified as a foreign entity under the laws of the State of Arizona and the laws of each other jurisdiction in which it is required to be qualified in order to conduct its business. Seller has the corporate power and authority to own and hold the Purchased Assets and to carry on the Business as currently conducted. 6 Section 4.2. Authority For Agreement. Seller has the power and authority ----------------------- to make, execute, deliver and perform this Agreement, the Seller Documents and to consummate the Transaction. The execution, delivery and performance of this Agreement, the Seller Documents and the consummation of the Transaction have been duly authorized by all necessary action on the part of Seller. This Agreement and the Seller Documents constitute the valid and legally binding obligations of Seller enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, moratorium or similar laws affecting creditors' rights and subject to equitable principles. Section 4.3. No Default. Neither the execution nor delivery of this ---------- Agreement, the Seller Documents, nor the consummation of the Transaction by Seller will (a) result in a breach or violation by Seller of its organizational documents, any Contractual Obligation or Legal Requirement; (b) give to any Person any claim, rights of termination, cancellation or acceleration, in or with respect to any agreements, contracts or commitments to which Seller is a party which relate to the Purchased Assets, the Assumed Liabilities or the Business; or (c) result in the creation or imposition of (or the right or obligation to create or impose) any Lien upon any of the Purchased Assets pursuant to the terms of any indenture, mortgage, deed of trust, lease, agreement or other instrument to which Seller is a party or by which it may be bound. Section 4.4. Tax Matters. Seller has timely filed all necessary Tax ----------- Returns that would affect the Purchased Assets, the Assumed Liabilities or the Business, and all such Tax Returns are complete and correct in all material respects and accurately reflect all liabilities for Taxes for the related periods. No Governmental Authority with which Seller does not file Tax Returns has alleged in a written or oral communication received by Seller an obligation on the part of Seller to so file Tax Returns. Seller has paid or has adequately provided for, all Taxes payable by, or due from, Seller for all periods ended on or before the Closing Date, including any and all Taxes required to have been so withheld or paid in connection with amounts owed or paid to any employee, contractor or other third party. No Liens or pending, claims exist for failure or alleged failure to pay Taxes and there is no basis for any such claim. No deficiency or claim or dispute is outstanding, proposed or assessed against Seller or any property of Seller with respect to any Tax. No examination or audit by a Governmental Authority of any Tax Return filed with such Governmental Authority is in progress nor has Seller received notice that any such examination or audit is contemplated. Seller is not a "foreign person" for purposes of Section 1445 of the Code. Section 4.5. Title. Except for the Assumed Liabilities, Seller has good ----- title, free and clear of all title defects, objections and Liens of any nature whatsoever (except as provided in the following sentence) to all of the Purchased Assets. Seller has not pre-sold any of the Inventory. There are no existing agreements, options, commitments or rights with, of, or to any Person to acquire the Purchased Assets or rights or any interest therein. Section 4.6. Solvency. The Purchase Price is reasonably equivalent to the -------- fair market value of the Purchased Assets. After the Closing, (a) the fair market value of the remaining assets of Seller will be greater than the amount that will be required to pay the known Liabilities of Seller as they become due, and (b) Seller will be able to pay its debts as they mature. 7 Section 4.7. Assigned Contracts. Schedule 4.7 attached to this Agreement ------------------ ------------ sets forth a complete list of the Assigned Contracts. Seller has not breached, nor has Seller received notice of any (a) unresolved claim or threat that Seller has breached any term or condition of any of the Assigned Contracts, or (b) notice of repudiation or denial of the enforceability of any of the Assigned Contracts. All Assigned Contracts are in full force and effect and there is no Default under any such Assigned Contracts. Section 4.8. Leased Property. Schedule 4.8 attached to this Agreement --------------- ------------ sets forth a complete and accurate description of the Leased Property. Complete and correct copies of all leases, licenses or other agreements or instruments, and all amendments, modifications, extensions and renewals thereto, applicable to the Leased Property are attached hereto as Schedule 4.8. Except as set forth ------------ in Schedule 4.8, no such lease, license or other agreement or instrument ------------ applicable to the Leased Property has been modified or amended in writing in any material respect. Except as set forth in Schedule 4.8, none of the Leased ------------ Property is subject to any sublease, license or other agreement granting to any Person any right to the use, occupancy or enjoyment thereof. Seller has not breached, nor has Seller received notice of any (a) unresolved claim or threat that Seller has breached any term or condition of any of the leases, licenses or other agreements or instruments applicable to the Leased Property, or (b) notice of repudiation or denial of the enforceability of any of such leases, licenses or other agreements or instruments. All such leases, licenses or other agreements or instruments applicable to the Leased Property are in full force and effect and there is no Default under any such leases, licenses or other agreements or instruments. The zoning is proper for the use of the Leased Property for the operation of an aggregates mining and sales and ready mix and asphalt concrete business and such uses are permitted conforming uses under applicable Legal Requirements. All required certificates of occupancy have been issued and are in effect for the Leased Property. There are no violations of any Legal Requirements relating to zoning or land use laws with respect to the Leased Property. Section 4.9. Plant, Machinery and Equipment. Schedule 4.9 attached to ------------------------------ ------------ this Agreement sets forth a complete list of all of the Plant, Machinery and Equipment included in the Purchased Assets. All of such Plant, Machinery and Equipment are in good operating condition and repair, subject to normal wear and maintenance, are usable in the Ordinary Course and conform to all Legal Requirements in all material respects relating to their construction, use and operation. Section 4.10. Employees. Schedule 4.10 attached to this Agreement is a --------- ------------- true and complete list of the names and current salaries of Seller's employees directly employed in connection with the Business. Seller is in compliance with all Legal Requirements relating to employment, employment practices, terms and conditions of employment, occupational health and safety and wages and hours. Seller has not engaged in any unfair labor practice, and no unfair labor practice complaint is pending or, to the Knowledge of Seller, threatened against Seller. No labor strike, dispute, slowdown, stoppage or other material labor difficulty is pending or, to the Knowledge of Seller, has been overtly threatened with respect to Seller, and no such action has occurred within the last five (5) years. No formal grievance or arbitration proceeding is pending or, has been asserted against Seller, and no formal grievance proceeding has occurred 8 within the last five (5) years resulting in any loss or damage to Seller. The only Employee Benefit Plans currently maintained or contributed to by Seller for Seller's employees directly employed in connection with the Business are the 401(K) Plan and a medical insurance plan. Purchaser shall have no obligations or Liabilities whatsoever with respect to any Employee Benefit Plan. Section 4.11. Litigation. There is no Litigation pending or, to the ---------- Knowledge of Seller, threatened against or affecting the Purchased Assets, the Assumed Liabilities or the Business before any court or by or before any Governmental Authority or arbitration board or tribunal. To the Knowledge of Seller, no reasonable grounds exist for any Litigation. Section 4.12. Environmental. There are no civil or criminal actions, ------------- notices of violation, or administrative proceedings relating to any Environmental Laws pending or to the Knowledge of Seller threatened by any Governmental Authority or other Person, with respect to or affecting the Purchased Assets, the Assumed Liabilities or the Business. To the Knowledge of Seller, there is no Fact which may interfere with or prevent compliance with any Environmental Law. Seller has obtained all permits which are required in connection with the operation of the Business by any Environmental Law. There has not been any presence on or under, or any escape, seepage, leakage, spillage, discharge, or emission from the Leased Property of any Hazardous Materials during the period of ownership, operation or management by Seller. Seller has not performed or omitted to performing or suffered to occur any act which would reasonably be expected to give rise to, or has otherwise, incurred liability or potential liability to any Person under any Environmental Laws. No discharge or "release" (as such term is defined in 42 U.S.C. (S)9601(22)) of any Hazardous Materials exists or is occurring (or has existed or occurred) from, or upon, the Leased Property during the period of ownership, operation or management by Seller that is or was in violation of applicable Environmental Laws or that requires or required any reporting, assessment, monitoring or remediation under applicable Environmental Laws. There are no underground tanks situated on the Leased Property. Except as disclosed on the Disclosure Schedule, there are no above ground tanks situated on the Leased Property. There are no existing surface or subsurface soil, water, mineral, chemical or environmental conditions which presently, or which with the passage of time will, (a) require reporting to any Governmental Authority, (b) constitute a violation of any Environmental Law, or (c) otherwise adversely affect or threaten adversely to affect Seller or its property. No Hazardous Waste has been generated or shipped from, or stored or disposed upon, the Leased Property during the period of ownership, operation or management by Seller that is or was in violation of applicable Environmental Laws or that requires or required any reporting, assessment, monitoring or remediation under applicable Environmental Laws. Seller has not received notice or a request for information about any liability or Potential liability under any Environmental Law, or any claim therefor or submitted notice pursuant thereto to any Governmental Authority. Section 4.13. Permits and Approvals. The Permits have been validly --------------------- issued, Seller is in compliance with the Permits and no proceeding is pending or, to the Knowledge of Seller, threatened to revoke or limit any such Permit. Seller has not received notice from any Governmental Authority to the effect that any additional Permits are required. The Permits are sufficient and adequate in all respects to permit the continued lawful conduct of the Business in 9 the manner currently conducted and none of the operations of Seller are being conducted in a manner that violate, in any material respect, any of the terms or conditions under which any Permit was granted. Section 4.14. Brokers or Finders Fees. Seller has not paid, nor has or ----------------------- will incur any liability for, any fees, compensation or other expense to any broker or finder who acted on behalf of Seller in connection with this Agreement or the Transaction. Section 4.15. Consents. Except for the Required Consents, no permit, -------- Consent, approval, or authorization of, or designation, declaration or filing with, any Governmental Authority or any other Person on the part of Seller is required in connection with the execution and delivery by Seller of this Agreement, the Seller Documents, or the consummation of the Transaction. Section 4.16. Contractual Obligations. Seller is not in Default under any ----------------------- Contractual Obligation which relate to or affect the Purchased Assets, the Assumed Liabilities, or the Business. Section 4.17. Legal Requirements. Seller has complied in all material ------------------ respects with, and is in compliance in all material respects with, all Legal Requirements. Section 4.18. Disclosure. Seller has delivered to Purchaser the ---------- Disclosure Schedule attached as Exhibit "G" to this Agreement. A Fact will not be considered to have been disclosed as an exception to a representation and warranty set forth in this Agreement unless and to the extent that the Fact is specifically disclosed in the Disclosure Schedule as an exception to the representation and warranty. None of the representations, warranties, or statements contained in this Article IV or incorporated in the Disclosure Schedule or any certificate delivered herewith contains any untrue statement of a material Fact or omits to state any material Fact necessary in order to make any of such representations, warranties, or statements, in light of the circumstances under which they were made, not misleading. There is no Fact which has a Material Adverse Effect on Seller or the Purchased Assets and which has not been set forth in this Agreement or in the Disclosure Schedule hereto or delivered pursuant to certificates in writing furnished in connection with the Transaction. Copies of each document referred to in the Disclosure Schedule, which documents have been provided to Purchaser, are true, complete, and correct. Section 4.19. Financial Information. Seller has delivered the most recent --------------------- audited consolidated financial statements of Meadow Valley Corporation, Seller's parent, to Purchaser. Such financial statements are complete and correct, are consistent with the books and records of Seller (which books and records are complete and correct), present fairly (i) the financial condition of Seller as of the date indicated, and (ii) each item comprising the financial condition of Seller as of the date indicated, consistently applied throughout the period indicated. Seller has no Liabilities, except for (i) Liabilities set forth on or reserved against the face of such financial statements, (ii) Liabilities incurred in the Ordinary Course since the date of such financial statements (none of which relates to a breach of a Contractual Obligation or the violation of a Legal Requirement), or (iii) unknown Liabilities which would not have a Material Adverse 10 Effect. Since the date of such financial statements, the business of Seller has been conducted in the Ordinary Course and there has not been any event, occurrence, development, or state of circumstances or facts which has had, or with the giving of notice or the passage of time or both will have, a Material Adverse Effect with respect to the Purchased Assets, the Assumed Liabilities, or the Business. ARTICLE V Representations and Warranties of Purchaser Purchaser represents and warrants to Seller that the following representations and warranties are true, complete and correct as of the Closing Date: Section 5.1. Organization. Purchaser is a corporation duly incorporated, ------------ validly existing and in good standing, under the laws of the State of Arizona. Section 5.2. Authority For Agreement. Purchaser has the corporate power ----------------------- and authority to make, execute, deliver and perform this Agreement and the Purchaser Documents and to consummate the Transaction. The execution, delivery and performance of this Agreement, the Purchaser Documents and the consummation of the Transaction have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement and the Purchaser Documents constitute the valid and legally binding obligations of Purchaser enforceable in accordance with their terms, except as enforcement thereof, may be limited by bankruptcy, insolvency, moratorium or similar laws affecting creditors' rights and subject to equitable principles. Section 5.3. No Default. Neither the execution nor delivery of this ---------- Agreement, the Purchaser Documents nor the consummation of the Transaction by Purchaser will conflict with or result in a breach of or constitute or result in a Default under any of the terms, conditions or provisions of the articles of incorporation or bylaws of Purchaser, any Legal Requirement, or any Contractual Obligation. Section 5.4. Consents. No permit, Consent, approval, or authorization of, -------- or designation, declaration or filing with, any Governmental Authority or any other Person on the part of Purchaser is required in connection with the execution and delivery by Purchaser of this Agreement, the Purchaser Documents or the consummation of the Transaction. Section 5.5. Brokers or Finders Fees. Purchaser has not paid, nor has or ----------------------- will incur any liability for, any fees, compensation or other expense to any broker or finder who acted on behalf of Purchaser in connection with this Agreement or the Transaction. Section 5.6. Accuracy of Seller's Environmental Representations Regarding ------------------------------------------------------------ Asphalt Plant. Pursuant to an agreement with Seller, Purchaser currently - ------------- operates an asphaltic concrete batch plant at the Fain Lease portion of the Leased Property. With respect to Purchaser's operation of such batch plant, to the knowledge of Purchaser: (a) there is no Fact which would 11 make the representations, warranties and statements contained in Section 4.12 of this Agreement untrue or misleading in material respect; (b) there are no civil or criminal actions, notices of violation, or administrative proceedings relating to any Environmental Laws pending or threatened by any Governmental Authority or other Person with respect to or affecting the such batch plant; (c) there is no Fact which may interfere with or prevent compliance with any Environmental Law; (d) Purchaser has obtained all permits which are required in connection with the operation of such batch plant by any Environmental Law; (e) there has not been any presence on or under, or any escape, seepage, leakage, spillage, discharge, or emission from batch plant of any Hazardous Materials during the period of operation by Purchaser; (f) Purchaser has not performed or omitted to perform or suffered to occur any act which would reasonably be expected to give rise to, or has otherwise, incurred liability or potential liability to any Person under any Environmental Laws; (g) no discharge or "release" (as such term is defined in 42 U.S.C. (S)9602(22)) of any Hazardous Materials exists or is occurring (or has existed or occurred) from, or upon, such batch plant during the period of operation by Purchaser that is or was in violation of applicable Environmental Laws or that requires or required any reporting, assessment, monitoring or remediation under applicable Environmental Laws; (h) there are no underground tanks situated at the batch plant; (i) except as disclosed on the Disclosure Schedule, there are no above ground tanks situated at the batch plant; (j) there are no existing surface or subsurface soil, water, mineral, chemical or environmental conditions which presently, or which with the passage of time will, (i) require reporting to any Governmental Authority, (ii) constitute a violation of any Environmental Law, or (iii) otherwise adversely affect or threaten adversely to affect Purchaser or its property; (k) no Hazardous Waste has been generated or shipped from, or stored or disposed upon, the batch plant during the period of operation by Purchaser that is or was in violation of applicable Environmental Laws or that requires or required any reporting, assessment, monitoring or remediation under applicable Environmental Laws; and (l) Purchaser has not received notice or a request for information about any liability or Potential liability under any Environmental Law, or any claim therefore or submitted pursuant thereto to any Governmental Authority. ARTICLE VI Covenants Section 6.1. Further Assurances and Cooperation. Upon the request of a ---------------------------------- Party, each other Party will, at any time and from time to time, execute and deliver additional agreements and documents, including documents of conveyance and transfer, and any director consents, or powers of attorney, and take such other action as may be reasonably necessary or desirable to carry out the purposes of this Agreement or to consummate, confirm, or evidence the Transaction. The requesting Party will pay any reasonable third party expenses incurred by the other Party in complying with such request. Section 6.2. Non-Compete Agreement. It is expressly understood and agreed --------------------- between the Parties that the Non-Compete Agreement is an integral part of the Transaction, that Purchaser would not have entered into this Agreement in the absence of the Non-Compete Agreement and 12 that the sole purpose of the Non-Compete Agreement is to protect the value of the Purchased Assets being purchased by Purchaser from Seller. Section 6.3. Best Efforts. Until Closing, each Party will use its best ------------ efforts (i) to ensure that the conditions applicable to each Party as set forth in Sections 3.2 and 3.3 of this Agreement are satisfied, and (ii) to consummate the Transaction, subject to the terms and conditions set forth in this Agreement. Each Party will use its best efforts to take or to cause to be taken any and all actions reasonably requested by the other Party to consummate the Transaction. In connection with using its best efforts, it is understood and agreed that neither Party shall be required to make payments to third parties. Section 6.4. Access. Until Closing and subject to the Confidentiality ------ Agreement, Seller shall give Purchaser and its agents (a) reasonable access during normal business hours to any and all books, records, documents, contracts, properties, and assets of or relating to the Purchased Assets, the Assumed Liabilities or the Business, and any other information relating to or affecting the Purchased Assets, the Assumed Liabilities, or the Business which is requested by Purchaser or its agents, and (b) reasonable access during normal business hours to any agent of Seller with respect to the Purchased Assets, the Assumed Liabilities, or the Business. Seller shall cause all Seller's agents to cooperate with Purchaser in any investigation of Seller. Furthermore, Seller shall furnish to Purchaser copies of all documents, records, and information relating to the Purchased Assets, the Assumed Liabilities or the Business as Purchaser shall from time to time request, and shall permit Purchaser and its agents to make such physical inventories and inspections of the property, assets and liabilities of which relate to or affect the Purchased Assets, the Assumed Liabilities, or the Business as Purchaser may request from time to time. Section 6.5. Notices. Seller will notify Purchaser promptly of any event ------- or occurrence that would cause any representation or warranty set forth in Article IV of this Agreement to be untrue or incorrect. Purchaser will notify Seller promptly of any event or occurrence that would cause any representation or warranty set forth in Article V of this Agreement to be untrue or incorrect. Section 6.6. Conduct of Business. Until Closing, Seller shall conduct its ------------------- business which relates to or affects the Purchased Assets, the Assumed Liabilities, or the Business only in the Ordinary Course and Seller shall not, without the Consent of Purchaser, (i) make any substantive organizational or executive personnel changes which relate to or affect the Purchased Assets, the Assumed Liabilities, or the Business, including, without limitation, entering into employment agreements, or implementing any general or executive officer compensation increases not in the Ordinary Course, or (ii) make any purchase or sale of Inventory, Plant, Machinery and Equipment, vehicles, buildings, or other physical assets which relate to or affect the Purchased Assets, the Assumed Liabilities, or the Business not in the Ordinary Course. Furthermore, until Closing, Seller shall use its best efforts to preserve the goodwill of its customers, employees, suppliers and others with whom Seller has business relations which relate to or affect the Purchased Assets, the Assumed Liabilities, or the Business. Section 6.7. Exclusivity. Until Closing or termination of this Agreement, ----------- Seller will not, directly or indirectly, solicit, encourage, entertain, or negotiate with respect to any 13 acquisition proposal relating to the Purchased Assets or the Business and Seller will notify Purchaser promptly of the receipt of any proposal with respect to any such acquisition proposal. ARTICLE VII Survival of Representations, Warranties and Covenants; Indemnification Section 7.1. Survival. All representations, warranties and covenants -------- made by Seller and Purchaser set forth in this Agreement shall survive the Closing Date and remain in full force and effect indefinitely. Section 7.2. Indemnification by Seller. Seller shall indemnify, defend, ------------------------- and hold Purchaser harmless from and against any and all Losses suffered or incurred by Purchaser that result from or arise out of any misrepresentation by Seller set forth in Article IV, any breach by Seller of any warranty set forth in Article IV, or any breach by Seller of any covenant set forth in this Agreement. Section 7.3. Indemnification by Purchaser. Purchaser shall indemnify, ---------------------------- defend, and hold Seller harmless from and against any and all Losses suffered or incurred by Seller that result from or arise out of any misrepresentation by Purchaser set forth in Article V, any breach by Purchaser of any warranty set forth in Article V, or any breach by Purchaser of any covenant set forth in this Agreement. Section 7.4. Third Party Claims. ------------------ (a) If an Indemnified Party receives a Third Party Claim Notice, then the Indemnified Party will promptly notify the Indemnifying Party. A delay by an Indemnified Party in notifying the Indemnifying Party, however, will relieve the Indemnifying Party from an indemnification obligation only if and solely to the extent that the Indemnifying Party is injured by the delay. (b) The Indemnifying Party will notify the Indemnified Party within fifteen (15) calendar days after the Indemnified Party has given notice of the Third Party Claim as to whether the Indemnifying Party is assuming the defense of the Third Party Claim. If the Indemnifying Party assumes the defense of the Third Party Claim, then (i) the Indemnifying Party will defend the Indemnified Party against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party, and (ii) the Indemnified Party may retain separate co- counsel at its sole cost and expense. (c) An Indemnified Party will not Consent to the entry of any judgment or enter into any settlement with respect to a Third Party Claim without the Consent of the Indemnifying Party, which Consent will not be withheld unreasonably; and the Indemnifying Party will not Consent to the entry of any judgment with respect to a Third Party Claim or enter into any settlement which does not include a provision whereby the plaintiff or claimant in the Third Party Claim releases the 14 Indemnified Party from all Liability with respect to the Third Party Claim, without the Consent of the Indemnified Party. (d) If an Indemnifying Party does not notify the Indemnified Party within fifteen (15) calendar days after the Indemnified Party has given notice of a Third Party Claim that the Indemnifying Party is assuming the defense of the Third Party Claim, then the Indemnified Party may defend against, or enter into any settlement with respect to, the Third Party Claim in any manner it may reasonably conclude to be appropriate. Section 7.5. Equitable Relief. Each Party acknowledges that the other ---------------- Party may be irrevocably damaged if the Party fails to perform any of its obligations under this Agreement. Each Party, therefore, will be entitled to injunctive relief to prevent the breach of any of the obligations under this Agreement and may specifically enforce performance of those obligations. Section 7.6. Other Remedies. The indemnification provisions set forth in -------------- this Article VII are in addition to, and not in derogation of, any statutory or common law remedy which a Party may have for a Breach. ARTICLE VIII Miscellaneous Section 8.1. Amendment. This Agreement may be amended or modified only by --------- a written agreement executed by each of the Parties. Section 8.2. Waiver. A Party will be considered to have waived a right or ------ remedy under this Agreement, or with respect to a breach of this Agreement, only if the Party expressly waives that right in a writing delivered to the other Party. The waiver by a Party of a right or remedy with respect to a breach of this Agreement will not be construed as a Waiver of any right or remedy with respect to any subsequent breach, and any failure or delay in exercising any right under this Agreement will not be construed as a waiver of that right. Section 8.3. Expenses. Each Party will pay the other Party, upon demand, -------- any reasonable out-of-pocket costs or expenses incurred by that Party in successfully pursuing or enforcing any right or remedy against the other Party under this Agreement, including any reasonable attorneys' fees and other third- party costs. Each Party will bear its own expenses in connection with the Transaction. Section 8.4. Successors; Assignment. ---------------------- (a) This Agreement will inure to the benefit of and be binding upon the Successors and the permitted assigns of the Parties. This Agreement will not confer any right on any other Person. 15 (b) Except as provided in Section 8.4(c), a Party may not assign its rights or delegate its obligations under this Agreement without the Consent of the other Party. (c) Purchaser may assign its rights under this Agreement to any affiliate of Purchaser without the Consent of Seller. Any such delegation will not relieve Purchaser of its obligations under this Agreement. Section 8.5. Other Agreements. This Agreement supersedes all prior ---------------- agreements and understandings between the Parties and constitutes the entire agreement of the Parties with respect to the matters contemplated by this Agreement. Section 8.6. Notices. All notices or other communications which may be ------- given or are required to be given pursuant to this Agreement will be in writing and will be either (i) personally delivered, (ii) sent by registered or certified mail, return receipt requested, postage paid, or (iii) sent by nationally recognized express delivery service as follows: (a) if to Purchaser: United Metro Materials Inc. Kiewit Plaza Omaha, Nebraska 68131 Attention: Christopher J. Murphy with a copy to: Kiewit Materials Company Kiewit Plaza Omaha, Nebraska 68131 Attention: General Counsel (b) if to Seller: Meadow Valley Corporation 4411 S. 40th St., Suite D-11 Phoenix, AZ 85040 Attention: Bradley E. Larson with a copy to: Jennings, Haug & Cunningham 2800 N. Central Ave., Suite 1800 Phoenix, AZ 85004 Attention: Curtis Jennings Each Party may designate by notice in writing a new address to which any notice may be given, served, or sent. Each notice or other communication will be deemed sufficiently given, served, sent, or received only if it is delivered to the addressee (with an affidavit of personal delivery or the delivery receipt being deemed conclusive evidence of delivery) or when delivery is refused by the addressee. Each communication will be deemed to have been given on the second Business Day after it is sent by one of the methods specified in (i), (ii), or (iii) above. 16 Section 8.7. Announcement. Unless otherwise required by any applicable ------------ Legal Requirement, a Party will not issue a press release or make any other public announcement or disclosure regarding this Agreement or the Transaction without the Consent of the other Party. Section 8.8. Severability. If the final judgment of a court of competent ------------ jurisdiction declares that any term or provision of this Agreement is invalid or unenforceable, then the court making the determination of invalidity or unenforceability may reduce the scope, duration, or area of the term or provision to delete specific words or phrases or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement will be enforceable as so modified after the expiration of the time within which the judgment may be appealed. Section 8.9. Governing Law. This Agreement will be governed by and ------------- construed in accordance with the internal laws of the State of Arizona. Section 8.10. Arbitration. In the event of any dispute or controversy ----------- arising out of this Agreement, its performance or breach, the Parties are unable to settle the dispute themselves, then upon written notice (the "Arbitration Notice") of either Party to the other, such dispute shall be submitted to arbitration, and Seller shall designate one arbitrator and Purchaser shall designate one arbitrator within seven (7) days following such Arbitration Notice. The two arbitrators so chosen shall, within seven (7) days of their appointment, designate a third arbitrator. If the first and second arbitrators are unable to agree upon a third arbitrator within such time period, then the first and second arbitrators shall invoke the services of the American Arbitration Association to appoint a third arbitrator. This third arbitrator shall, to the extent practicable, have special competence and experience with respect to the subject matter under consideration. Unless otherwise mutually agreed upon by the Parties, a full hearing shall be held in Phoenix, Arizona, on or before the 90th day following the date of such Arbitration Notice, pursuant to the then current rules of the American Arbitration Association for the conduct of commercial arbitration proceedings, but without submission to the American Arbitration Association. The arbitrators shall render a written decision within twenty (20) days after the final submission of the matter to them, and a copy of such decision shall be delivered to each of the Parties. The decision of two of the three arbitrators shall be taken as the arbitration decision. The arbitrators by their award shall determine the mariner in which the expenses of the arbitration (including reasonable attorneys' fees of the Parties) shall be borne. Each Party shall accept and abide by the arbitration decision. The award of the arbitrators shall be final, except as otherwise provided by applicable law, and shall be enforceable by any court of competent jurisdiction over the Parties. Section 8.11. Counterparts. This Agreement may be executed in ------------ counterparts, all of which together will constitute one agreement. Section 8.12. Termination of Confidentiality Agreement. Simultaneously ---------------------------------------- with the Closing, the Confidentiality Agreement automatically shall terminate and be of no further force and effect. 17 Section 8.13. Incorporation of Exhibits and Schedules. This Agreement --------------------------------------- shall be deemed to have incorporated by reference all Exhibits and Schedules referred to herein to the same extent as if such Exhibits and Schedules were fully set forth herein. Each reference to "this Agreement" shall be construed to include each such Exhibit and Schedule. IN WITNESS WHEREOF, each of Purchaser and Seller has caused this Agreement to be duly executed on its behalf as of the day and year first above written. United Metro Materials Inc., an Arizona corporation By: John L. Fowler ------------------------------- Title: Exec. Vice President ---------------------------- Meadow Valley Contractors, Inc., a Nevada corporation By: Bradley E. Larson ------------------------------- Title: President ---------------------------- 18 TABLE OF EXHIBITS ----------------- EXHIBIT DESCRIPTION - ------- ----------- A Definitions B Allocation of Purchase Price C Assignment D Assumption Agreement E Inventory Cost F Non-Compete Agreement G Disclosure Schedule EXHIBIT "A" TO ASSET PURCHASE AGREEMENT DEFINITIONS When used in this Agreement, the following terms shall have the following meanings: "401(K) Plan" means the Meadow Valley Contractors, Inc. Plan, together with all amendments, supplements and addenda thereto. "Agreement" means this Asset Purchase Agreement by and between Purchaser and Seller, as amended from time to time. "Arbitration Notice" has the meaning set forth in Section 8.10 of this Agreement. "Assigned Contracts" means those certain leases, contracts and agreements that are included in the Purchased Assets, as more specifically set forth on Schedule 4.7, attached to this Agreement. - ------------ "Assignment" means the assignment between Seller and Purchaser with respect to Seller's assignment of the Assigned Contracts and the Permits, in the form attached as Exhibit "C" to this Agreement. "Assumed Liabilities" means all obligations under the Assigned Contracts arising subsequent to the Closing Date. "Assumption Agreement" means the Assumption Agreement dated as of the Closing Date between Seller and Purchaser, with respect to Purchaser's assumption of the Assumed Liabilities, in the form attached as Exhibit "D" to this Agreement. "Breach" means, with respect to a Person, (a) any misrepresentation by the Person set forth in any Transaction Document, in any Disclosure Schedule or in any certificate, (b) any breach of any warranty made or given by the Person in any Transaction Document, in any Disclosure Schedule or in any certificate, or (c) any breach by the Person of any obligation set forth in, or failure to perform or observe any covenant or agreement set forth in, any Transaction Document. "Business" means the mining and sale of aggregates and related business and operations of Seller in Prescott Valley and Chino Valley, in Yavapai County, Arizona. "Business Day" means any calendar day other than a Saturday, a Sunday or a legal holiday. "Closing" means the closing of the Transaction on the Closing Date. 1 "Closing Date" means April 12, 2002. "Code" means the Internal Revenue Code of 1986, as amended. "Confidentiality Agreement" means the Confidentiality Agreement dated March 4, 2002, between Purchaser and Seller. "Consent" means, with respect to an action and a Person, the written consent of the Person to the action given prior to the occurrence of the action. The Consent of an Entity may be given only by a Responsible Officer of the Entity. "Contractual Obligation" means, with respect to a Person, any obligation or covenant of, or restriction upon, the Person under any written or oral contract or agreement (including any lease, license, franchise, indenture, mortgage or security agreement) to which the Person is a party, by which the Person is bound or to which the Person or property owned, leased or used by the Person is subject, and with respect to Seller, which relate to or affect the Purchased Assets, the Assumed Liabilities, or the Business. "Default" means, with respect to a Contractual Obligation, any default thereunder, or any Fact which, with the lapse of a grace period, the passage of time, the giving of notice or any combination of the foregoing, would be a breach of, or a default under, or permit termination, modification or acceleration of the Contractual Obligation. "Disclosure Schedule" means the Disclosure Schedules attached as Exhibit "G" to this Agreement. "Employee Benefit Plan" includes all pension, retirement, disability, medical, dental or other health insurance plans or other death benefit plans, profit sharing, deferred compensation, stock option, bonus or other incentive plans, vacation benefit plans, severance plans or other employee benefit plans or arrangements, including, without limitation, any "pension plan" as defined in Section 3(2) of ERISA, and any "welfare plan" as defined in Section 3(l) of ERISA, whether or not any of the foregoing is funded, to which Seller is a party or by which it is bound, or with respect to which Seller has during the ten (10) years preceding the date of this Agreement, made any payments or contributions or may otherwise have any liability. "Entity" means any for-profit corporation, not-for-profit corporation, general partnership, limited partnership, limited liability company, trust, business trust, business association or other legally recognized association of persons. "Environmental Laws" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act of 1976, the Federal Water Pollution Control Act of 1962, the Clean Air Act of 1970, the Safe Drinking Water Act of 1974, the Toxic 2 Substances Control Act of 1976, the Emergency Planning and Community Right-to- Know Act of 1986, the National Environmental Policy Act of 1969, the Federal Endangered Species Act, the Clean Water Act (each as amended), or any other State, Federal or local law concerning or relating to emissions, discharges, releases or threatened releases of Hazardous Materials or Hazardous Waste into the environment (including without limitation ambient air, surface water, groundwater, or land), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Materials or Hazardous Waste, the prevention or minimization of pollution, or protection of the environment, human health or similar matters with respect to the foregoing. "Estoppels" means estoppel certificates dated not more than fifteen (15) days prior to the Closing Date, addressed to Purchaser from Fain Land and Cattle Company with respect to the Fain Lease, Robert F. Schaible and Aline M. Schaible with respect the Schaible Lease and the Town of Prescott Valley with respect to the Settlement Agreement, all in the form acceptable to Purchaser. With the Consent of Purchaser, the Estoppels may be combined with the Required Consents and the amendment to the Schaible Lease. "Fact" means any fact, circumstance, event, status, condition, practice, plan, occurrence, incident, action, transaction or failure to act which could form the basis for any consequence. "Fain Lease" means that certain Mineral Lease Agreement dated January 1, 1999, by and between Fain Land and Cattle Company and Guzman Construction Company, Inc. and that certain Assignment, Amendment and Assumption Agreement dated February 26, 1999 among Fain Land and Cattle Company, Guzman Construction Company, Inc. and Seller together with all the estates, rights, privileges, easements and appurtenances thereto. "Governmental Authority" means any nation or government, any state or political subdivision of a state, and any person, court, authority, agency, board or body exercising executive, legislative, judicial, regulatory or administrative functions pertaining to government. "Hazardous Materials" means any hazardous or toxic substances, materials or wastes, pollutants or contaminants, as defined, listed or regulated by any Environmental Laws, including, without limitation, (a) trichloroethylene, tetrachloroethylene, perchloroethylene and other chlorinated solvents, (b) petroleum products or by-products, (c) asbestos, (d) polychlorinated biphenyls, and (e) waste oils. "Hazardous Waste" means waste, material or substance defined, identified or which would be classified as a hazardous waste or regulated substance pursuant to the Resource Conservation Recovery Act of 1976 (as amended) and each regulation or other applicable law promulgated thereunder. "Indebtedness" means, with respect to a Person, (a) all indebtedness of the Person for borrowed money or the deferred purchase price of property or services; (b) all indebtedness secured by a Lien on property owned by the Person, whether or not the Person has assumed the indebtedness; (c) all amounts representing the capitalization of rental obligations with respect to 3 capital leases under which the Person is lessee; (d) all guarantees, endorsements (other than endorsements of negotiable instruments in the Ordinary Course) and other contingent obligations of the Person, whether direct or indirect; and (e) all other items which, in accordance with accounting principles consistently applied by the Person based upon past practices, properly would be included as a liability on the balance sheet of the Person as of the date on which Indebtedness is to be determined. "Indemnified Party" means any Party entitled to indemnification from any other Party pursuant to Article VII. "Indemnifying Party" means any Party obligated to provide indemnification to any other Party Pursuant to Article VII. "Inventory" means the aggregates (sand, rock, and gravel) and raw materials (including, but not limited to, cement, fly ash and admixtures)stockpiled at the Leased Property as of the Closing Date. "Inventory Closing Value" means the product obtained when the tons of Inventory, as of the Closing Date, is multiplied by the Inventory Cost per ton unit price for the respective categories of Inventory as set forth on Exhibit "E". "Inventory Cost" means, with respect to the Inventory meeting recognized industry specifications, Seller's actual cost of the Inventory as agreed upon by the Parties and which is set forth on Exhibit "E" attached to this Agreement. "Knowledge of Seller" means either (i) the actual knowledge of an officer, director or manager of Seller, including, without limitation, Bill Hudson and Sam Grasmick, or (ii) the actual knowledge such employee of Seller should have had in the reasonable and ordinary scope of his duties. "Leased Property" means that certain real property leased by Seller, together with all the estates, rights, privileges, easements and appurtenances thereto and improvements thereon, and all minerals in, on or under such real property, described on Schedule 4.8 attached to this Agreement. ------------ "Legal Requirement" means, with respect to a Person, any law, statute, rule, regulation, ordinance, code, order, decree, stipulation, injunction, charge, judgment, ruling, writ, award or other restriction of any Governmental Authority that is binding on the Person or to which the Person or property owned, leased or used by the Person is subject, and with respect to Seller, which relate to the Purchased Assets, the Assumed Liabilities or the Business. "Liability" means, with respect to a Person, any liability, Indebtedness or obligation of, or claim against, the Person, whether accrued, known or unknown, absolute or contingent, direct or indirect, deferred, liquidated or unliquidated, or matured, due or to be due, including any guarantee or other similar liability, obligation or claim with respect to the obligations of another 4 Person. "Lien" means, with respect to a Person, any valid lien, mortgage, security interest, pledge, mechanic's lien, contractor's lien, charge, encumbrance or similar liability or obligation of any kind with respect to the property or assets of the Person, other than liens for Taxes which are not yet due and payable. "Litigation" means, with respect to a Person, (a) any pending or asserted action, suit, charge, complaint, proceeding, investigation, hearing, claim, demand or notice, whether civil or criminal, against or affecting the Person or any property owned, leased or used by the Person, whether before a Governmental Authority, arbitrator or other dispute resolution tribunal, or (b) any unsatisfied judgment, order, decree, stipulation, injunction or charge against or affecting the Person. "Loss" means, with respect to the effect upon a Party of Facts, including the Facts underlying a Breach, any economic loss, damage or harm paid, suffered or incurred by the Party as a result of or arising out of the Facts underlying the Breach, including any punitive damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities, obligations, Taxes, Liens, losses, out- of-pocket expenses, administrative expenses, attorneys' fees (including any reasonable attorneys' fees incurred in connection with the successful pursuit of any rights or remedies under this Agreement), court costs, or other similar economic losses suffered or incurred by the Party. "Material Adverse Change" means, with respect to a Person, any Fact or Facts which have had or are likely to have a Material Adverse Effect on the Person. "Material Adverse Effect" means, with respect to a Person, a material adverse effect on (a) the ability of the Person to conduct its business in the Ordinary Course, (b) the assets, liabilities, financial condition, results of operations, business, properties or prospects of the Person, or (c) the ability of the Person to perform any obligation under any Transaction Document. "Non-Compete Agreement" means the agreement dated as of the Closing Date between Purchaser and Seller in the form attached as Exhibit "F" to this Agreement. "Ordinary Course" means, with respect to a Person, the ordinary course of the operation of the business of the Person consistent with its past custom and practice with respect to quantity, quality or frequency, as applicable. "Party" means Purchaser and Seller and their permitted successors and assigns. "Permits" means all permits, licenses and approvals held by Seller with respect to the operation of the Business and all water rights relating to the Leased Property and Business, and those permits, licenses and approvals currently pending, including such permits, licenses and approvals listed on Schedule 4.14, attached to this Agreement. 5 "Person" means any natural person, Entity or Governmental Authority. "Plant, Machinery and Equipment" means the plant machinery, equipment, vehicles, spare parts, tools and other tangible assets set forth on Schedule 4.9 attached to this Agreement together with the assignable warranties, rights and interests associated therewith, and any mining plans, surveys, reserves records, production records, operating records, customer lists, customer records, supplier lists, open purchase orders, bid books and other records which are used by or useful in the operation of the Business. "Purchase Price" means the sum of Three Million Dollars ($3,000,000) plus the Inventory Closing Value. "Purchased Assets" means the Assigned Contracts, Inventory, Plant, Machinery and Equipment, and Permits. "Purchaser" means United Metro Materials Inc., an Arizona corporation, and its successors and assigns. "Purchaser Documents" means the Transaction Documents to which Purchaser is or will be a party or by which Purchaser is or will be bound. "Responsible Officer" means, with respect to an Entity, an officer or employee of the Entity, or a natured person performing a similar function with respect to the Entity, who has primary responsibility for the matter in question. "Required Consents" means the Consent of the third parties listed on Schedule 4.15, attached to this Agreement. "Schaible Lease" means that certain Agreement dated February 24, 1997, by and between Robert F. Schaible and Aline Schaible, husband and wife, and Guzman Construction Company, Inc., that certain First Amendment to Agreement dated April 14, 1997, by and between Robert F. Schaible and Aline Schaible, husband and wife, and Guzman Construction Company, Inc., and that certain Assignment, Amendment and Assumption Agreement dated February 26, 1999 among Robert F. Schaible and Aline Schaible, husband and wife, and Guzman Construction Company, Inc., and Seller together with all the estates, rights, privileges, easements and appurtenances thereto. "Seller" means Meadow Valley Contractors, Inc., a Nevada Corporation, and its successors and assigns. "Seller Documents" means the Transaction Documents to which Seller is or will be a party or by which Seller is or will be bound. "Settlement Agreement" means that certain Settlement Agreement dated as of January 10, 2002, by and between the Town of Prescott Valley and Seller together with all the estates, rights, privileges, easements and appurtenances thereto. 6 "Tax" means, with respect to a Person, any general or special tax, assessment, fee or other similar charge of any kind imposed by a Governmental Authority, and any related interest, costs or penalties, that is assessed on, levied on, imposed on, becomes a lien upon or relates to the Person, any property of the Person, the rents or revenues from any such property, or the ownership, use, occupancy or enjoyment of any such property, including, but not limited to, all federal, state, local or foreign income, alternative minimum, property, school, license, ad valorem, sales, use, excise, franchise, added value, withholding, social security, payroll, receipts, capital stock, transfer, profits, unemployment, disability, and real estate or personal property taxes. "Tax Returns" means all State, Federal or local tax returns, tax reports, annual reports, franchise tax returns, payroll tax returns and other similar reports or returns of Seller required to be filed by any Governmental Authority with respect to any Tax that would affect the Purchased Assets, the Assumed Liabilities or the Business. "Third Party Claim" means any claim, charge, demand, complaint, action, suit, proceeding, hearing, investigation, or similar action which (a) is made or initiated by a Person who is not a Party, (b) is made against an Indemnified Party, and (c) is alleged to result from or arises out of the Facts underlying a Breach. "Third Party Claim Notice" means, with respect to a Third Party Claim, a pleading, complaint, registered letter, or other similar written notice or demand from a Person who is not a Party which specifically describes and makes the Third Party Claim. "Transaction" means the purchase and sale of the Purchased Assets. "Transaction Documents" means this Agreement, the Assignment, the Assumption Agreement, the Non-Compete Agreement, the Estoppels and any and all certificates and any other agreement, instrument or document contemplated by this Agreement or entered into in connection with the Transaction. 7 EX-10.184 28 dex10184.txt ENGAGEMENT LETTER WITH AMG FINANCING CAPITAL, INC. Exhibit 10.184 [LOGO] [LETTERHEAD] PERSONAL & CONFIDENTIAL December 17, 200l Bradley E. Larson VIA FAX (602) 437-1681 President/CEO Meadow Valley Corporation 4411 S. 40th Street, Suite D11 Phoenix, AZ 85040 Dear Bradley: It is my understanding that MEADOW VALLEY CORPORATION (MVCO) is interested in engaging AMG Financing Capital, Inc. (AMG) to find a potential purchaser and/or a new source of financing for a credit line and, perhaps, a new term loan. This source needs to provide a $10 million facility to allow MVCO more working capital. It is AMG's opinion that a suitable financing can be arranged as well as a purchase and is highly confident it can do so. Our opinion is based on our discussions with various banks and other sources. A. FEE SCHEDULE ------------ In consideration for the services performed and to be performed by AMG, MVCO agrees to pay AMG: 1. ENGAGEMENT FEE. MVCO will pay AMG an engagement fee of $30,000, paid -------------- as follows: $15,000 upon execution of this document; and $15,000 thirty days later. 2. Before the thirty day period between the first payment and the second payment, the second portion of our engagement fee is due and payable if a proposal is issued from any of our sources regardless if MVCO is acquired by another company. 3. SUCCESS FEE. MVCO, upon receipt of this financing or the completion of ----------- a purchase will pay AMG a finders (success) fee equal to the greater of $150,000 or a percentage of the gross amount of the financing. It is scheduled as follows: 6% of the 1st million dollars; plus 5% of the 2nd million dollars; plus 4% of the 3rd million dollars; plus 3% of the 4th million dollars; plus 2% of the 5th million dollars and any additional monies paid to MVCO. Mr. Bradley E. Larson December 17, 2001 Page 2 a. AMG is to be paid if CIT agrees to raise its line of credit, but only on the amount over the existing amount ($7 million). AMG is to be paid the aforementioned fee listed above if the term loan is replaced. b. AMG is to be paid a finder's (success) fee using the same schedule above if it introduces MVCO to a purchaser. The fee is paid on the gross amount of the value of the purchase. The engagement fee is to be deducted from the success fee. B. NON-EXCLUSIVE RIGHTS -------------------- In retaining the services of AMG, MVCO grants to AMG the non-exclusive right to act on its behalf for a period of 60 days, to find and help arrange a suitable financing or purchaser for MVCO. "Suitable Financing or Purchaser" is defined as a financing or purchase that is accepted by the company. AMG agrees to use its best efforts to find and introduce MVCO to appropriate financing sources and/or purchasers. However, AMG does not guarantee that a firm commitment or a suitable financing or purchase will take place or be offered to MVCO. If a financing source or purchaser is introduced to the company during this non-exclusive period (60 days), and a funding takes place within 24 months after the exclusive period expires, AMG is to be paid the finders (success) fee as described on page one (1) of this document. C. DISPUTES -------- In the unlikely event of a dispute under this agreement, the dispute shall be arbitrated by the American Arbitration Association at its Los Angeles office, with three arbitrators--one selected by AMG, one selected by MVCO, and one selected by the first two arbitrators. The prevailing party shall receive reasonable attorney fees and costs. The parties agree that the law of the State of California shall have jurisdiction over any dispute. D. EXPENSES -------- All accounting appraisal, insurance, legal fees, etc., in connection with this project are MVCO's responsibility. All necessary out-of-pocket expenses which are incurred by AMG on the company's behalf shall be reimbursed by MVCO immediately upon presentation of a statement or invoice. No expense will be incurred without prior consultation and with MVCO's approval. Mr. Bradley E. Larson December 17, 2001 Page 3 E. INSTRUCTIONS TO FINANCING SOURCE -------------------------------- This agreement and acknowledgment are sufficient authorization to any source providing a funding, purchase, or escrow to pay the finders (success) fee to AMG directly out of the proceeds of this financing and/or purchase. MVCO agrees that the payment of the finder (success) fee to AMG is an irrevocable and mandatory condition precedent to the funding of any financing to or purchase of MVCO going into effect. MVCO agrees that this letter instructs any source providing the funding or the escrow of purchase for them as a result of AMG's efforts, to pay AMG the fee due under this agreement at the time that the facility or proceeds are made available to MVCO. F. COMMENCEMENT OF SERVICES ------------------------ AMG will commence to introduce MVCO to financing and/or purchasing sources immediately upon receipt of this executed document and the payment of the engagement fee. G. EXPIRATION ---------- This letter expires on December 21, 2001 unless extended by mutual agreement. Sincerely yours AMG Financing Capital, Inc. /s/ Arthur M. Gelber Arthur M. Gelber President G. AUTHORIZATION AND ACKNOWLEDGMENT -------------------------------- This fee agreement is hereby approved and accepted by Bradley E. Larson, who is an officer of MEADOW VALLEY CORPORATION, and is sufficient instruction to the financing source provider to pay AMG directly out of the proceeds of the financing or purchase of the company. By: /s/ Bradley E. Larson Date: 1/15/02 ---------------------------------------- --------------- Bradley E. Larson, President/CEO Meadow Valley Corporation EX-10.185 29 dex10185.txt AMENDMENT 2 TO REVOLVING LOAN AGREEMENT Exhibit 10.185 [LETTERHEAD OF CIT] [LOGO] March 26, 2002 Mr. Brad Larson Meadow Valley Corporation 4411 South 40th Street Suite D-11 Phoenix AZ 85040 Re: Amendment No. 2 to Restated and Amended Revolving Loan Agreement (the "Agreement") dated July 27, 2001 between Meadow Valley Contractors, Inc. and The CIT Group/Equipment Financing, Inc. ("CIT") Dear Mr. Larson: The above Agreement is hereby amended as follows: Section 5. Interest. The rate is changed to "governing rate plus 1.50%". All other terms and conditions of the Agreement remain in full force and effect. Sincerely, /s/ Mark Saylor Mark Saylor The CIT Group/Equipment Financing, Inc. Agreed to: Meadow Valley Contractors, Inc. By: /s/ Bradley E. Larson Title: President -------------------------- -------------------- Guarantor Acknowledgement: Meadow Valley Corporation By: /s/ Kenneth D. Nelson Title: Vice President -------------------------- -------------------- [LETTERHEAD OF CIT] [LOGO] March 26, 2002 Mr. Brad Larson Meadow Valley Corporation 4411 South 40th Street Suite D-11 Phoenix AZ 85040 Re: Amendment No. 2 to Revolving Loan Agreement (the "Agreement") dated July 27, 2001 between Ready Mix, Inc. and The CIT Group/Equipment Financing, Inc. ("CIT") Dear Mr. Larson: The Agreement is hereby amended as follows: Section 5. Interest. The rate is changed to "governing rate plus 1.50" All other terms and conditions of the Agreement remain in full force and effect. Sincerely, /s/ Mark Saylor Mark Saylor The CIT Group/Equipment Financing, Inc. Agreed to: Ready Mix, INc. By: /s/ Kenneth D. Nelson Title: Vice President --------------------- -------------- Guarantor Acknowledgement: Meadow Valley Corporation By: /s/ Bradley E. Larson Title: President --------------------- -------------- EX-10.186 30 dex10186.txt NOTICE OF TERMINATION OF LETTER OF INTENT WITH RMI Exhibit 10.186 KEVIN B. CHRISTENSEN, CHARTERED KEVIN B. CHRISTENSEN Telephone (702) 255-1718 - -------------------- 7440 W. Sahara Avenue Fax (702) 255-0871 LAURA J. WOLFF Las Vegas, Nevada 89117 Email: KBChrislaw@aol.com EVAN L. JAMES ___________ DARYL E. MARTIN Gia McGillxxxx, Legal Assistant Via Facsimile and Regular Mail ------------------------------ March 26, 2002 Victor A. Pollak, McDonald, Carrano Law Firm Fabian & Clendenin Attn: Andy Gabriel, Esq. 215 So. State Street, 12th Floor 2300 W. Sahara Ave., Suite 1000 PO Box 510210 Las Vegas, NV 89102 Salt Lake City, UT 84151 Fax: 362-0025 Fax: 801-596-2814 Re: Meadow Valley Corporation and RMI Enterprises, LLC - Notice of Termination of Non-Binding Letter of Intent Dear Messrs. Pollak and Gabriel, As you are aware, this office represents Meadow Valley Corporation ("MVC"), a party to the non-binding letter of intent dated February 14, 2002 ("LOI") with RMI Enterprises, LLC ("RMI"). The Board of Directors of MVC has recently determined that the LOI transaction will not be approved in the best interests of MVC and its shareholders. This letter will constitute a notice of termination of the LOI, effective immediately. MVC will be issuing a press release and/or public statement later today regarding termination of the LOI, as required by its statutory public disclosure obligations. I will contact your offices by telephone prior to the press release and/or public statement to discuss its content. The information received by RMI, its agents, affiliates and principals, should remain confidential pursuant to paragraph 15 of the LOI. RMI should promptly return all documents, records, information and written material received pursuant to paragraph 8 of the LOI to Brad Larson, President and CEO of MVC, RMI, its agents, affiliates and principals should not retain any copies or summaries thereof. The Board of Directors' decision to terminate the LOI was primarily based upon their conclusions that the RMI purchase offer significantly undervalued the stock and business assets of Ready Mix, Inc.; that MVC could not obtain a clean opinion of legal counsel acceptable to the Board certifying that the transaction would fully conform to Nevada laws; and MVC has entered into a definitive agreement with a third party for the acquisition of certain MVC assets unrelated to the subject matter of the LOI, which the Board has determined will be more beneficial to MVC and its shareholders under the circumstances. If you have any questions, please contact me. Sincerely, /s/ Kevin B. Christensen, Esq. cc: Lionel, Sawyer & Collins (Mark Goldstein) Meadow Valley Corporation (Brad Larson) [LOGO] -----END PRIVACY-ENHANCED MESSAGE-----